To promote agriculture, the Federal Government has established the Staple Crops Processing Zones (SCPZ) to provide the critical infrastructure to boost production, improve market access and attract private sector investment in agribusiness. But experts are not impressed; they doubt the sincerity of the scheme. DANIEL ESSIET reports.
IN the past, the Federal Government announced several mega projects, which promised to drive job creation and technology development. The Minister of Agriculture and Rural Development, Dr Akinwumi Adesina, said in designing such projects, the government expects the primary beneficiaries to be the more than 10 million small farmers who make a living growing diverse crops and raising animals. These farmers, he explained, are also believed to be part of the value chain that maintains food production and thousands of jobless youths.
He said while agricultural growth will provide the base for increasing incomes for about 100 million rural persons that live below the poverty line, additional measures are required to make this growth inclusive.
Achieving this has involved many steps, which include tackling infrastructure, which threatens the agribusiness sector. This step is to encourage agricultural development and increase incomes for farmers.
To further boost efforts in that direction, the government has established Staple Crops Processing Zones (SCPZs). SCPZ is a vast zone where there is commercial production of food, which is expected to attract the private sector to set up food processing plant that would process agric products into finished items.
The minister said the SCPZs are designed to boost agricultural productivity, improve farmers’ linkages with agro-processors, and scale up resilience to current and future climate variability. Six staple crop processing zones are established in Kogi, Kano, Rivers, Niger, Enugu and Anambra states.
The sites are designed to be multi-crop processing zones, located near high agricultural production areas with cluster of agro-processing activities. The zones would help to process the raw foods produced by farmers into finished foods and other economic products that would benefit the area.
The successful implementation of the SCPZs is estimated to generate revenues of between N660 billion and N1.4 trillion per year to the economy and create estimated 250,000 jobs.
The direct beneficiaries include farmers, workers in the SCPZ processing areas, small and medium businesses.
According to the United Nations Industrial Development Organization (UNIDO), the first phase of the Staple Crop Processing Zones (SCPZs), will gulp estimated $1,063.1 billion.
In partnership with the Federal Ministry of Agriculture and Rural Development, UNIDO has developed master plans for establishing the zones. So far, the zones have already attracted investments totaling $350 million from different financial institutions.
The World Bank has committed over $100 million to develop sustainable institutions and infrastructure in the zones, while the African Development Bank has committed over $152 million to make available low interest loans to the government, specifically for the development of infrastructure within the zones.
The International Fund for Agricultural Development has also pledged $70 million to build capacity of small farmers to ensure inclusiveness and equitable wealth creation in the zones.
UNIDO representative in Nigeria, Dr. Chukwuma Ezedinma, said the funds would cover specialised and support facilities, including external infrastructure, such as road connectivity, highway strengthening, rail connectivity, air and seaport connectivity, power linkages and external water supply linkages.
He said the six staple crop processing zones are estimated to cost $1,063.1 billion. The breakdown is as follows: Niger State ($181.4 million); Kano State ($151.1 million); Anambra State ($186.6 million); Rivers State ($79.6 million); Kogi State ($314.7 million); and Enugu State ($149.7 million).
Already, private sector investors have been secured for the Alape, Badeggi and the Bunkure zones and they are Cargill USA, Nigeria Flour Mills, and Dangote Group.
Of the 14 SCPZs selected for development in the country, six are to take off in the first phase. There are Bunkure in (Kano State) for rice, tomato and sorghum; Agbadu-Alape (Kogi State) for cassava; Badeggi (Niger State) for rice; Ketu (Lagos State) for aquaculture; Omor (Anambra State) and Adani (Enugu State) for rice and Okorolo (Rivers State) for fisheries and aquaculture.
Alape SCPZ in Kogi will focus on the production of starch and sweeteners. It is expected to produce 62,000 tonnes of starch, 5,000 tonnes of sweeteners, 720,000 tonnes of cassava root and create income impact of about 90 million dollars to the economy of Kogi State.
Stakeholders’ view
For experts, it is a very good thing the SCPZs are being implemented but they noted that their prospects for success are as great as their chances for massive failure.
Speaking with The Nation, the Programme Coordinator, Farmers Development Union (FADU), Mr. Victor Olowe, said there are fears the projects will go the way of other white elephant projects if the government is not able to create a distinctive conducive ‘localised’ business environment for implementation and management of the SCPZs.
While there are high hopes on paper, Olowe’s concern is that most of the zones lack critical services and incentives to help them take off successfully within the scheduled timelines.
He said the critical services that will enable the clusters work effectively include uninterrupted supply of electricity and good roads constructed in zones. This, according to him, would reduce losses of products on transit and reduce cost of transportation faced by farmers supplying the raw materials to the plants. These are almost nonexistent in some of the zones.
Without access to land, key inputs such as fertilizer, seeds and loans, by the vast majority of small scale farmers who own one or two acres on average, serious commercial activity will become virtually impossible.
He lamented that the zones lack basic rural infrastructure to bring produce to towns or to store them, which make trading difficult. Without connecting the rural areas to larger infrastructure and small holders’ produce for better access to input by farmers, attracting large investment to the zones will be difficult, he added.
While supporting clustering of smallholders and investment in specific value chains, he expressed concern that if basic interventions for small farmers are not prioritized over trade facilitation and large infrastructure, corridors may end up helping mostly large companies.
Like the Growth Enhancement Support (GES), he is concerned farmers within the zones would be deprived of funding to access machinery and parts as well as modern inputs at affordable rates to improve their farming. Such inputs will include fertilizers, insecticides, other pesticides or chemicals, implements/medium term machinery.
The other issue is how the government will implement the SCPZs to be effective and not end up as the farm settlement schemes, industrial estates among others. He raised doubt that the SCPZs will be implemented in such a way to ensure synergy and maximize social and economic benefits with other existing programmes under the Agricultural Transformation Agenda.
In his contribution, World Bank consultant, Prof. Peter Okuneye, said the programme was a good one as it was meant to increase production capacity and reduce post-harvest losses. According to him, the policy would enhance food security, create jobs and stimulate rural agro-industrialisation, only that the poor state of the nation’s infrastructure would not let it work.
He explained that the deteriorating infrastructure for the marketing and movement of produce, such as roads and telecommunications, as well as overall production capacity (including lack of fuel, electricity and input manufacturing industries), will lead to high cost of production across the zones.
He said nothing has been done to improve investment on the state’s roads, bridges and multi-modal transportation systems let alone supporting public transit systems across the state.
He said one reason the programme may fail is that government may not able to improve the transportation of produce and inputs to and from markets for small-scale rural farmers, particularly in remote areas, as well as major industries.
Currently, Nigeria is characterised by poor post-production and marketing infrastructure, he said. For instance, the nation lacks good commercial grain handling and storage system. He said inadequate storage facilities in rural areas, coupled with poor handling and poor post-harvest technologies, have caused exceptionally high post-harvest losses, particularly for many resource-poor rural farmers. Essential public sector post-production and marketing infrastructure across the country, he added, has been deteriorating because of lack of public investment.
In addition, the collapse of the rural economy made it unviable for these services to be performed by private sector stakeholders
To succeed, the World Bank consultant, said the government will have to address multiple hurdles in the context of limited human resources, corruption, political pressures, shifting priorities, and inadequate infrastructure.
He said the government should therefore make its plans as targeted and explicit as possible. They can concentrate investment on a value chain (all economic activity, from inputs to market associated with a crop), on a “breadbasket” region positioned for large productivity increases, or on an infrastructure corridor.
He said close collaboration between the government and the private sector will enable strong year-on-year growth in an otherwise stagnant agricultural sector.
To carry out an agricultural development strategy, he said government officials must work with farmers and the private sector across departments, from the central ministry to extension workers.
The evidence suggests that agricultural development programmes also require the active engagement of the private sector because they typically have access to capital and organisational know-how.
According to him, several issues are hampering the initiation of a solid positive growth path for agriculture. He said Nigeria needs a structural paradigm shift and transformation towards sustainable agricultural production based on in-depth structural and broad policy changes.
To make the zones work, he said there is need to support rural traders, develop and catalyse local supply chains, creating effective demand for the produce of smallholder farmers. The establishment of rural centres and agri-dealers is essential. Including input and output markets, production services, and transporters, among others, is vital.
