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Tag: smallholder

  • ‘Smallholder dairy farming model best for milk production’

    FrieslandCampina WAMCO Nigeria Plc Managing Director (MD) Ben Langat says the company is in Nigeria for the long haul. According to him, the firm’s investment in its Dairy Development Programme (DDP), in partnership with the Federal Government, attests to this. He says smallholder dairy farming remains the best model for dairy development in the country because of its immense job creation potential and other multiplier effects. The MD, in a chat with journalists in his Lagos office, unveils plans to replicate the success of the DDP in its pilot state of Oyo on others, if the government addresses infrastructure. Assistant Editor CHIKODI OKEREOCHA reports.

    What is your overview of Nigeria’s dairy sector?

    The economy is still slowly recovering hence the low demand across consumer goods. This has given rise to frequent purchase and top-up neighbourhood shopping trips (on need basis) particularly for dairy. Availability and affordability remain major determining factors for purchase decision-making given low disposable income. Having said this, affordability must be matched with quality to ensure adequate nutrition; this is the balance FrieslandCampina WAMCO offers our consumers. With increasing figures of malnutrition across the country, we consistently ensure consumers have access to quality dairy nutrition in various portion packs to reach deeper into the bottom of the pyramid. What is also important is consumer understanding of the various kinds of dairy options available (full cream, filled milk, ready to drink etc) and their nutritional content, so as to make informed decision on their nutritional needs. We have a mission to nourish Nigerians with quality dairy nutrition, hence our commitment of providing affordable dairy for families, even more importantly, offering informed knowledge on the goodness of milk to consumers across all life stages. We believe in Nigeria and we are here to stay.

    What is your ‘grass to glass’ initiative all about?

    FrieslandCampina is guided by the purpose: Nourishing by Nature. This represents our resolve to continually provide better nutrition for the world, a good living for our farmers now and for generations to come. This purpose aims at helping to solve three major global challenges, which is of high relevance to both consumers and the communities where we operate. These include: Growing world population: our company wants to help feed the growing world population, ensure food and nutrition security and provide affordable dairy nutrition. Ageing farmers: We want to make sure that our farmers earn adequate income to maintain their farms and to create a positive future for themselves and their children; and enhance attractiveness for young farmers. Scarcity of natural raw materials: we want to build a more sustainable dairy supply chain from farm to consumer, thereby reducing the usage of scarce natural resources. We know that milk and dairy products hold huge potential to meet these challenges. Dairy can improve nutrition for hundreds of millions of Nigerians as part of more balanced and sustainable diets. Our grass to glass story showcases our ownership of a unique milk chain: from the grazing of grass by well cared-for cows and the skill and professionalism of member dairy farmers, which forms the basis for good quality milk, to the transportation from the farm to our production facilities where it is processed to finished products- Peak or Three Crowns milk and making it available to consumers as part of a healthy diet. Throughout this process, we take our responsibility for quality very seriously and we have developed our own integral quality system: a single approach to guarantee the safety and quality of the entire chain, from the farm right through to distribution.

    How exactly does milk improve human nutrition?

    There is a lot of natural goodness in milk; a glass of milk daily makes a very big difference to the nutrition of children, adults and the elderly. Milk and dairy foods are nutrient-dense foods supplying energy and significant amounts of protein and micronutrients. The inclusion of dairy products adds diversity to plant-based diets. FrieslandCampina is extremely knowledgeable about milk and its derivative products. We believe that our products have a higher purpose than just being delicious and nutritious. Our product development process starts with a well-founded identification of the need for nutrients based on comprehensive nutritional research. Our Peak brand is extra-fortified with 28 vitamins and minerals to meet the Required Dietary Allowance. The Three Crowns range is a heart friendly portfolio and it is endorsed by the Nigerian Heart Foundation. The Peak 456 provides specialised nutrition for children 4-6 years old and Peak Choco, is our rich Chocolate drink. To drive the importance of dairy nutrition, these brands have designed flagship campaigns including: Pecadomo (Peak–can-do-more) to encourage versatility in the use of milk for improved nutrition.  We have the Three Crowns Fitness Challenge that communicates the importance of nutrition and exercise and Peak 456 under the “Drink. Move. Be Strong” campaign educates children and families on the importance of drinking milk combined with an hour of physical activity or play outside a day to fulfill the recommended daily intake of core nutrients including Vitamin D vital for helping children grow, develop and be strong

    How successful has your Dairy Development Programme (DDP) been?  Do you have plans to replicate this in other states across Nigeria?

    To be honest, the milk currently being sourced from cows by pastoralists who walk those long distances in search of food and water is too low; it is just about a litre per cow. To raise that to commercial quantities, we should be aiming for say 10 litres per cow. Iseyinland in Oyo State, where we currently operate the DDP with growing success, is not too far from our factory and headquarters here in Lagos. Secondly, there is a good concentration of farmers that have lived there for many years who have traditional knowledge of herding. Our truck load of milk from there, if it leaves in the morning, gets here in four hours in time for the milk to get to the factory fresh. We started with a Milk Collection Centre there in 2011 and now we have five milk collection centres and a Bulking Centre, which is where we pool all the milk into a truck and move it to the factory. There is still a lot of work to be done besides just milking the cow. To scale up milk volume per cow, you need the right kind of breed. We must acknowledge that other states have approached us to bring the DDP to them.

    Could you be more specific?

    We were humbled by the visit of the Governor of Kebbi State to seek support for his efforts in improving dairy in his state. We have sent our people to give technical support to the state. It is very difficult to move fresh milk from Kebbi to Lagos by road in time for processing. However, whenever sustainable fresh milk volumes are substantial enough in a particular location, FrieslandCampina WAMCO will be more than ready to start processing there.  There are huge infrastructural limitations to contend with, which only government can take care of. But we are ready to expand the DDP to other regions systematically because it is very expensive. We are not making any money out of it yet. When our pilot becomes even more successful and profitable, it will become easier to replicate. They are so many opportunities, for example, the school feeding programme initiated by government, the possibilities are endless.

    Are you satisfied with the level of support you and other dairy companies are getting from government on the DDP?

    Let’s be clear on this; FrieslandCampina WAMCO is the only multinational doing dairy development in Nigeria and we do this in partnership with the Federal Government. We have had the Honourable Minister for Agriculture and Rural Development, Chief Audu Ogbeh, honour our invitations and sometimes set out with me and my team as early as 6 o’clock in the morning from Ibadan to Fashola Community in Oyo State because he wanted to see farmers milking their cows. That tells you there is a huge support and commitment from the Federal Government. For similar reasons, we commend also Oyo State Government. Government would also do well to improve infrastructure; especially by providing good roads, water and power. You can’t do anything with cows without a good supply of clean water. So far, we have sank 45 solar-powered bore holes, which provides water not only for the cows, but all the five communities where we are already succeeding with the DDP – they are Fashola, Maya, Saki, Iseyin and Alaga-all in Oyo State.

    Why do you think other big players in the dairy sector are yet to follow your example?

    It is very simple. We are not making money from the DDP. Rather, we do it as a responsibility in line with our purpose of providing better nutrition now and for generations to come. FrieslandCampina WAMCO is here for the long run, not for short term gains. We are committed to our mission of providing quality dairy nutrition for Nigerians; and improving the living standards for our farmers now and for generations to come. Our shareholders are investing in the DDP because we are looking at the bigger picture and there is a point where the two cross. We are continuously investing in the DDP; we believe in the future of the programme.

    Which dairy models do you think will work for Nigeria?

    We need to get some definitions clear. There are different levels of how dairy farming or cattle-rearing is done globally. It starts with the smallest and very traditional one by pastoralists who graze their few cows on any space or land that is available, migrating from place to place in search of pasture and water. In Africa, the Masai and the Fulani are mostly pastoralists. Their cows produce very little milk because they rear them for meat and sale proceeds. Smallholder dairy farmers form the second level. They are usually a family with some acres of land and they can keep cows within that location and are able to feed them with pasture generated within that land or its surrounding. The cows are confined and easier to control and manage disease as well as collect their milk. The third level is commercial farming, which is now hugely industrialised. In countries like Saudi Arabia you’d find a farm with thousands of cows in air conditioned dairies, fully mechanised using robots, etc. Ranching is the fourth level, which is typically driven by the size of land available and typically focused on beef rearing. Ranches are large farms that are well secluded for thousands of cows to move in there.

    So which of them will work best  and do we have similar examples elsewhere?

    Smallholder farms have been the most successful dairy model so far and that is the model for FrieslandCampina WAMCO DDP. Every household that has some land can build a business on it with five to 10 cross breed cows. It makes it easier for us to collect milk. If you go to countries like Kenya, Zimbabwe, South Africa and Uganda, smallholder farmers are thriving. So in Oyo, our DDP is progressing from pastoralists to smallholder farms. With cross breed cows, you can get up to 10 to 15 litres of milk per cow instead of just one or two litres.

    How have you handled technology transfer as part of your ongoing DDP?

    We call it the ‘Farmer2Farmer programme’ where farmers from The Netherlands visit Nigeria, spend time with farmers in Oyo State, and interact with them to share global best practices with our local farmers. We organised Nigeria’s first ever Dairy Farmers Day late last year. Leading to the event, two Dutch farmers spent about two weeks in the DDP communities training local farmers on best dairy farming practices. This has yielded a lot of benefits and it will be a continuous thing. Farmer-2-Farmer language is well understood irrespective of where they are in the world. They got very practical, demonstrated what nutritious pasture is and what it isn’t, what is hygienic for cows and what isn’t, etc. (Gets up and points at a poster image of a local farmer on his conference room wall and says:) He is a smallholder farmer and a native to his location. His farm is now bearing similarities to what you will see in a commercial farm in The Netherlands with improved hygiene and proper keeping of farm records.

    What is your assessment of government’s policies, especially the ease of doing business?

    I can say clearly that government policies toward the ease of doing business in Nigeria are commendable, especially for new investors and this should help boost the economic climate. What also needs to be done is to strengthen the business climate to support old businesses to compete fairly and sustainably too.  

    Looking at your 2017 financials, what is your outlook for 2018 considering the gradual strengthening of the economy?

    Exchange rate impacts heavily on business operations. It’s not going to be easy for the exchange rate to go down again unless something drastic happens. What we need to do now is to remain stable. We have seen some stability and I will say that I am happy with the predictability, even though I see that the euro is getting stronger. So, for as long as things remain stable, I think we are going to have a strong result in 2018.

    What is your biggest challenge in Nigeria as a manufacturer?

    The consumer’s disposable income is reduced and pressured. During seasons like Ramadan and Christmas, manufacturers struggle with adequate supply because products sell very fast. Outside of such seasons, sales move very slowly because consumers still contend with economic pressures. Consumers buy smaller, some shift from premium full cream milk to filled milk. The biggest thing for me would be to see the economy bounce back to its booming days.

    What is the difference between Nigeria and Holland Peak milk?

    (Gets up again to bring samples of both products from a shelf) Both of them are Peak and full cream; one is Peak Gold made in Holland and the other is Peak Full Cream made in Nigeria. One is more expensive, being imported. Some high income earners may say ‘I want what is produced in Holland’. But it is the same milk. Indeed, Peak Full Cream has more content than Peak Gold.

    How many jobs do you see the dairy sector creating for Nigerians?

    Let me use our DDP pilot to illustrate the endless possibilities of job creation we bring to the sector. At the moment, we have about 3,500 dairy farmers, male and female. This has brought a very positive lifestyle change, particularly to the female farmer, who would typically petty trade her local cheese. But now she earns much more, her income is steady and growing. So is her husband’s. Among the 3,500 farmers, you will see one farming cluster depositing as much as 500 litres of milk to our collection centre because he and many others bring their cows together, live in one place, milk their cows together and deliver their milk as one. So, one man out of the 3,500 can actually represent a pool of 200 – 300 others. If you go to the five locations where we have the DDP – Fashola, Maya, Alaga, Saki and Iseyin, all in Oyo State, you will see a booming adjunct industry that wasn’t there before – suppliers selling dairy feed, minerals, milking cans, veterinary medicine, etc. What do you think will then happen as we further develop nutritious pasture, etc for the first 50 smallholder farms, which we have already identified? Imagine the multiplier effect.

    What makes FrieslandCampina WAMCO so resolute in pursuing this DDP for the long term? 

    We believe that our model is what can ensure success in Nigeria’s dairy development. This is what we have communicated from time to time to the Federal Government and they understand this as well. If every state government will adopt the smallholder dairy farming model, we could have local self-sustenance in the future. It is not something that can happen immediately, but even its gradual but steady progress would create huge and widespread impact on the livelihood of farmers, daily nutrition for all Nigerians and by extension, the overall health of the nation. We are committed to making a success of it.

     

     

  • NEPC partners Netherlands to empower smallholder farmers

    In its quest to build the capacity of smallholder farmers across the country, the Nigerian Export Promotion Council (NEPC) has entered into a partnership agreement with some local and international agencies, The Nation has learnt.

    Confirming this development recently was the Acting Executive Director/Chief Executive, NEPC, Mr. Abdullahi Sidi-Aliyu.

    Sidi-Aliyu who gave a keynote address during the Equipment Presentation and Training on Best Practices in Cashew Processing for value addition and Food Safety in Ogun State, while justifying the need for the programme, said it is part of concerted efforts by the federal government to support and enhance technological/technical skills of smallholder producers of agricultural produce using cocoa, cashew and sesame seed to complement the NEPC collaboration with the Centre for the Promotion of Import from Developing Countries (CBI) of Netherlands on value chain processes in the three products subsectors. Besides, he said the collaboration with the CBI will also ensure exposure to the Europe market.

    The NEPC boss who was represented by Mrs. Evelyn Obidike, Director, Policy and Strategy, NEPC, while justifying the support for smallholder farmers said, “The NEPC has established that the SMEs are the future of this country and that if we get it right from the base they are the people that would provide the ingredients, the finished products, the will be acceptable and will be a premium product of the niche market. So we want to start and tap it from the base.”

    On the possibility of creating over 6, 000 jobs from the initial pilot scheme, she said: “Definitely, cashew when you are talking about value addition in cashew, it’s a job spinner right from the cracking of the nuts, the gathering and the processing into kernels, and then the finishing is a whole chain that needs a lot of hands. And to let you know that about 85 per cent of the jobs are done by women. And you see that it is a sector that supports the vulnerable groups, and the bottom of the pyramid.”

    On the modus operandi being deployed, she said, the Council is doing it on a need-basis. “We are taking three sectors as a pilot. Cocoa which is did last week in Akure, Ondo state and cashew in Ogun and sesame seeds in Nasarawa. These are all pilots and we are looking at the states to key in and then we will be able to expand to the rest of the 36 states and the Federal Capital Territory, Abuja.

    An elated Sidi-Aliyu who spoke overwhelmingly of the economic potential of the cashew subsector, said: “Best economic practices and the equipment are very critical in getting premium products for the niche market and that is why we are collaborating with the CBI, Netherlands to teach us about the processing and the way to do it in terms of certification, as well as exposure.”

    Also speaking at the occasion, Ogun state Commissioner for Commerce, Otunba Bimbola Ashiru, Ashiru, who was represented by the Director, Commerce, Chief Ogunti Kayode, Deputy Director of Produce, while lauding the organisers of the event, said such could have multiplier effects, especially in Ogun State which is gradually becoming the nation’s industrial hub as evidence in the growing level of businesses, especially foreign direct investment was enough motivation for the state government to continue to lend all necessary support.

    Also speaking in an interview, Tunde Odunuga, MD/CEO of Abod Investment Limited, a company that has pioneered innovation in cashew processing in the country, said he was inspired to go into cashew processing observed that: “The Indians were buying cashew nuts raw and taking it to their country and they now process and re-export to the US. And I just said let’s try and see what we can do in Nigeria. I’m an agriculturist and I also have engineering background too. I have done this for 20 years. I stated small. Now we have over 40 staff. We export to China, other distributors sell in Angola. We have distributors nationwide. In a year we do as much as 1, 000 tons, which is in excess of N200million.”

    The highpoint of the occasion was the official unveiling of the cashew processing machine by the NEPC boss.

     

  • ‘Smallholder farmers nationwide to enjoy better funding’

    ‘Smallholder farmers nationwide to enjoy better funding’

    Mr. Auta Appeh, Special Adviser, International Donor Funding to the Minister of Agriculture and Rural Development was part of a delegation to Lagos  recently on a fact-finding mission to inspect activities of the Rural Finance Institution Building Programme (RUFIN) jointly funded by the International Fund for Agricultural Development (IFAD) and the Federal Government. He spoke with Ibrahim Apekhade Yusuf on the proposed intervention funds dedicated to rural financing for agriculture across the federation. Excerpts:

    What is your impression of the Rural Finance Institution Building Programme (RUFIN) generally?

    The Rural Finance Institution Building Programme (RUFIN) financing system is very laudable. We understand it started in 2010 as a pilot project across 12 states. I’m highly impressed with the successes of the seven-year pilot programme thus far. RUFIN is a pilot programme and the funding stops in 2017. However, we are looking at how we can replicate the programme in all the local government areas in the 36 states of the federation. The real spirit and the education of RUFIN itself live on. It is not a financial system where we give out money to people per se. It is a programme that educates and builds the capacity of financial institutions and accredited groups in the rural communities to be able to access credit. The programme has done this very successfully and people in Benue, Lagos, Adamawa  and other areas are singing its praises. The testimonies we have had from the fields are very infectious.

    RUFIN does not only solve issues of financial accessibility to the rural poor society, it also helps to mitigate the myth of urban mobility. But now that we’re looking at it, it has to be a nationwide project. Now, it’s how do we graduate it into a nationwide project and we’ve to look at it from an holistic standpoint. Why the failures, why the successes. And as you can see, the successful people we’ve noticed one character with them; that is, they know how to build groups. They are people’s people and you can see their enthusiasm in wanting to see others doing well. And the ones that have failed are people who are really naysayers.

    From what you have said, it does appear that the Federal Government might be interested in scaling up the scope of the RUFIN programme. Could you be specific on the timelines?

    Well, I will speak for the Federal Ministry of Agriculture and Rural Development and the Minister. What we discovered is that we have quite a few programmes that have been in existence. You have probably heard of FADAMA. Part of FADAMA has got rural financing components. If you’ve heard of Commercial Agriculture, it’s a World Bank project and it also got a part of rural financing. And then we’ve what is known as the International Fund for Agricultural Development (IFAD). The IFAD programme, which is where the RUFIN programme came in, and then we’ve the West African Productivity Programme, which mostly focuses on research and aquaculture. Again, it has a financing project. What we’re looking now is how we will collate the financing components of these major activities in agriculture into one pot. And then one of the lessons we learnt from the existing programmes is the fear of the unknown. So there is need for massive campaign on financial literacy.

    The government is not resting on its oars. Just recently the CBN came up with the loan for farmers to be disbursed at an interest rate of less than nine percent. Then we’ve the Anchor Borrowers’ programme and that’s another N300billion. And then the World Bank and all of our other portfolios put together. So there would be enough money to go round, especially for smallholder farmers across the federation. Of course, I can also hint you that we’re meeting with the Bill & Melinda Gates Foundation around October later this year to finetune modalities which will most certainly lead to a synergy of cooperation amongst the existing donor agencies like the IFAD with the Federal Government contributing into a pool of resources. All these arrangements, I daresay,  would bring about improved funding for the agriculture sector ultimately. So to answer your question, we’re going to scale up the activities around the agriculture sector whilst still maintaining the RUFIN template.  And that means brighter days await our rural farmers and others involved in the agriculture value chain.

    The Federal Ministry of Agriculture recently launched a roadmap for agriculture, a move that has attracted a lot of criticisms by a section of the public because they believe it is most belated. How would you react to this?

    Well, the fact of it as they say is that it’s better late than never. Let’s start with that adage. However, as long as it is known, you know the ministers never took seat until January this year. However, from that time, there has been no excuse. The previous administration did certain things right and put agriculture in the map. So once you come in, what do you do, you have to get experts to come and review what’s on ground. What it is that they were not able to achieve? What are the low hanging fruits that you can pluck and build upon? And then tie the bolts and nuts    part of criticism. We came in and realised that during the previous regime, there were too many value chains. They had over 13 crops that they were going to target. Henceforth, we’ve come up with three pillars to pigeon hole all the things that they had which were a success which people couldn’t get a grasp on. And the three pillars are to discover why the Federal Ministry of Agriculture was set up in the first place. The first task, of course, is to empower both the rural and the farming communities, to promote financing and thirdly to provide research.

    So we’ve to now look for willing state governments and local governments who will pay their contributory funding and who would take agriculture serious and make sure that this research goes to them and make sure that access to financing that we’re promoting goes there.

    Of course, we have to make sure that they get the lobbying support for the interministerial collaboration. For instance, the Federal Ministry of Environment, the electricity, the roads and all of that works and then health. These are all interlaid. To make a successful farmer, you have to provide all these. So basically, what we did was take a step back and then plan and tell you this is how we’re going to go about it. If you truly take your time and look through it, nothing is new under the sun.

    Since Operation Feed the Nation in the 70s, we’ve been saying the same thing but it is the how-to and were we’re at any given time, taking a snapshot of that and continuing or not continuing and bending the flavour here and there. And I think this is why the alternative roadmap, which we call the Green Revolution to Agriculture was launched. And this is the first time that a roadmap went through the Federal Executive Council (FEC) to become a principled document. So it was adopted from there and was launched to the public. There was no rocket science to it. Nothing was reinvented. Only that it was streamlined for better understanding and accountability.

    Some of the existing programmes in the agriculture value chain, such as the Anchor Borrowers Programme by the CBN have been criticised because many farmers are unable to access these funds. But you wonder where they get the success stories been bandied about?

    I think again, this goes back to our roadmap which we launched. The discovery is that all these programmes are not new. When we came in, we found these bottlenecks and we said to ourselves, how do you unbundle these bottlenecks? What are the risks the government needs to take to achieve a little bit of success story even if it’s 10 percent or 20% and then work out the modalities to get more people involved? The Anchor Borrowers’ programme, yes it’s true it was there. If you remember, one time, only state governments used to go and get a piece of the pie and promise the Federal Government they are going to distribute to local governments and all of that. Some of them used it for big farms and some never used it for anything at all.

    But now, we’re readdressing it. That is, bottom up approach. We’ve to recruit and sensitise banks to how that works. We’ve to have extension workers that have been in our books. Thankfully, the Federal Government has designed the N-Power Programme to drastically reduce youths unemployment. The focus is to provide our young graduates and non-graduates with the skills, tools and livelihood to enable them advance from unemployment to employment, entrepreneurship and innovation.

    The first phase of N-Power will target Nigeria’s critical needs in education, agriculture, technology, creative, construction and artisanal industries. N-Power is also preparing Nigeria for a global outsourcing push where our young Nigerians can export their services to work on global projects that earn Nigeria, foreign exchange.

    Specifically, what we hope to do with the N-power programme in the agric sector for starters is that we’re planning to recruit 100,000 young extension workers in the over 700+ local government councils nationwide. They will be residing there and they would be giving people information about the Anchor Borrowers’ programme, the RUFIN programme among others.So it’s just a new approach to the same problem that we all know. To cut the long story short, things are definitely going to look up for the agriculture sector going forward.

  • ActionAid, Oxfam make case for smallholder farmers

    International agencies, ActionAid Nigeria and Oxfam in Nigeria, have called on government to provide access to land, credit and crop insurance for smallholders’ female farmers.

    The agencies said that 60 per cent of female farmers in Nigeria lacked access to farm credit, inputs, and crop insurance.

    The Deputy Country Director, ActionAid Nigeria, Ifeoma Charles-Monwuba, during the celebration of this year’s International Women’s Day Celebration and launching of the Kilimanjaro Initiative in Abuja on Thursday, added that women were the most voiceless in influencing agricultural and land policies despite their roles in the agriculture sector.

    She added that around 55 per cent of female-headed households were landless, adding that 29 per cent of them own less than one hectare of land.

    “Women in Nigeria constitute 60 to 80 per cent of the agricultural labour force in the country. However, their access to agricultural related services of credit, inputs, training and advice, technology, crop insurance, etc is much lower than men’s.

    “The current government is also planning a land reform exercise and we all need to engage with this process in collaboration with other partners. This will include articulating a position paper that captures the interest of the smallholder women farmers for presentation to the land reform process and other duty bearers in Nigeria,” she said.

    The Head of Programme, Oxfam in Nigeria, Mr. Constant Tchona also said that despite the contributions of female farmers to agriculture, only 15 per cent owed farmlands.

    Represented by Livelihoods and Private Sector Manager, Dr. William Mafwalal, Tchona, called on government to make women leaders in the transition to sustainable agricultural and food systems.

    He added that the agency would continue to engage the Federal Government and private sector to provide secure access to land for small holder farmers especially for women.

    “There is no argument against the fact that rural women are a powerful drive for agricultural development. However, their potential is still hampered by disparities between men and women farmers.

    “They are the first victims of land and related natural resources grabbing. All these and more together threaten the capacity of communities to meet the challenges of sustainable agricultural and food systems today and tomorrow.

    “Research has shown that if women farmers had the same factors of production and opportunities as their male counterparts in the world, they would be able to increase their crop yields by 20 per cent to 30 per cent, thus helping to prevent millions of people from starving.

    “Women do not only play major roles in cash crops, staple-food production, processing or marketing, but as holders of local and traditional knowledge in farm seed conservation and natural resources management,” he said.

     

  • How BATNF is driving economic growth of smallholder farmers

    How BATNF is driving economic growth of smallholder farmers

    In Nigeria, as in most parts of Africa, rural areas are essentially home to smallholder farmers who produce the bulk of the food consumed locally thereby contributing in no small measure in ensuring food security for the nation, alleviating poverty, and helping government to actualise development goals.

    According to experts, smallholder farmers constitute over 70 per cent of the labour force in the agricultural sector. Unfortunately, their productivity has often been impeded by various factors some of which include inadequate credit facilities, poor policy implementation, poor access to market, lack of infrastructure, dearth of information on agriculture best/latest practices and shortage of improved technology along the value chain. Other inhibiting factors are inadequate cottage level processing facilities, preference for imported food ingredients to their local varieties, poor access to climate smart varieties and breeds, and conflicts between farmers and pastoralists.

    Regrettably, government’s effort at tackling the problem and mitigating the constraints faced by this category of farmers has not made far-reaching and lasting impact due to lack of funds and dwindling revenue from oil. Sometimes when the right policy framework exists and the needed infrastructure and initiatives are put in place, these well thought-out policies are usually not properly implemented or abandoned shortly after takeoff.

    For instance, the Cassava Bread initiative, which mandates 10 to 20 per cent inclusion of cassava flour, was part of measures intended to make Nigeria self-reliant in the production of some staple food crops thereby saving foreign exchange spent on flour importation.

    In spite of the pomp that greeted its inauguration by the previous administration and the publicity and media attention it received, the initiative is yet to get any traction.

    Reports indicate that Nigeria will save N300 billion annually from substituting wheat with cassava. This deliberate attempt at encouraging local production of staple foods, in the view of economists, is capable of expediting the resuscitation of the nation’s economy. Also, the initiative, apart from achieving import substitution and boosting export potentials and earnings, can help create more jobs and enhance the growth of agro-allied companies.

    Unfortunately, in recent years, import substitution strategy for development through agriculture has been repeatedly sabotaged by some agriculture produce importers under different guises, with the local farmers usually at the receiving end. The recent abuse of waivers on the importation of rice into the country readily comes to mind here.

    Determined to ensure that government policies and stimulus packages are inclusive of smallholder farmers, the British American Tobacco Nigeria Foundation (BATNF) recently organised a dialogue session on smallholder farmers and sustainable agriculture, which held in Lagos State. The session, themed ‘Agricultural Policies and the Nigerian Smallholder Farmers,’ was the climax of the activities of an executive working group set up by BATNF in January 2015 to undertake a careful multi-stakeholder review of the ATA and related agriculture policies and programmes.

    The group was also saddled with the responsibility of establishing the extent to which these policies support poor farmers and small and medium agribusinesses in wealth creation and increased productivity.

    In his opening address at the event, Director of Legal and External Affairs, British American Tobacco Nigeria (BATN), Mr Freddy Messanvi, described the Dialogue Session as “part of the BATNF’s advocacy platform aimed at facilitating access to policy-making decisions about smallholder farmers” who produce the bulk of the food Nigerians consume.

    The session provided an opportunity for agriculture experts and resource persons to dissect ATA, other extant agricultural schemes and matters related to agriculture business in Nigeria. It was noted that some of the critical areas that ATA has succeeded in affecting the lives and livelihood of smallholder farmers is in organising them into cooperative groups. There was also a consensus that government and the organised private sector should give impetus to the effort of smallholder farmers by providing for them the right incentives and financial support systems, as well as strengthening existing infrastructure to assist farmers in eradicating hunger and poverty.

    Prof Ben Ahmed of the Institute of Agricultural Research (IAR) and Ahmadu Bello University (ABU), while speaking on the impact of the ATA, noted that the contributions of the International Fund for Agricultural Development (IFAD)-assisted Rural Finance in Nigeria (RUFIN), which was integrated into ATA, helped in the formation of farmer groups that were linked to micro-finance banks (MFBs).

    ATA’s potential in diversifying the Nigerian economy and attracting foreign direct investment was also underscored by other speakers.

    Components of ATA and other agricultural policies reviewed by BATNF Executive Working Groups (EWGs) include the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Growth Enhancement Scheme (GES) and Climate Change, as well as the various Crops Enterprise Value Chain developments.

    Most of the presentations made by the various working groups looked at the current situation of ATA, the achievements made so far, the major challenges and shortcomings, and how they can be tackled. In their recommendations, they urged government to work with enduring policies that are well thought out.

    A notable concern raised by stakeholders about agriculture business in Nigeria is the ignorance of smallholder farmers of ATA as well as their exclusion from financial incentives offered by NIRSAL. It was observed that this barrier is due to the notion generally held by commercial banks that majority of smallholder farmers cannot meet their requirements and thus are not bankable.

    However, few banks, such as Stanbic IBTC, FCMB and UBA, were commended for being supportive to smallholder farmers. As a remedy, it was suggested that the traditional financial system, ‘Esusu,’ (thrift institution), which most of them have successfully practised for years, should be understudied and incorporated into the NIRSAL scheme so as to help meet the needs of the framework that is achievable for them.

    The Stakeholders Dialogue Session was necessitated by the need to provide a robust and expansive policy framework for the nation’s agricultural sector in line with the current administration’s resolve to enhance practices and output of the sector.

    It is the expectation of stakeholders in the agricultural sector that the findings made by the working groups and recommendations put forward to government on how to revamp the economy through small-scale agriculture would be critically examined by the incoming minister of agriculture so that it will not amount to another exercise in futility.

  • How BATNF is driving economic growth of smallholder farmers

    How BATNF is driving economic growth of smallholder farmers

    In Nigeria, as in most parts of Africa, rural areas are essentially home to smallholder farmers who produce the bulk of the food consumed locally thereby contributing in no small measure in ensuring food security for the nation, alleviating poverty, and helping government to actualise development goals.

    According to experts, smallholder farmers constitute over 70 per cent of the labour force in the agricultural sector. Unfortunately, their productivity has often been impeded by various factors some of which include inadequate credit facilities, poor policy implementation, poor access to market, lack of infrastructure, dearth of information on agriculture best/latest practices and shortage of improved technology along the value chain. Other inhibiting factors are inadequate cottage level processing facilities, preference for imported food ingredients to their local varieties, poor access to climate smart varieties and breeds, and conflicts between farmers and pastoralists.

    Regrettably, government’s effort at tackling the problem and mitigating the constraints faced by this category of farmers has not made far-reaching and lasting impact due to lack of funds and dwindling revenue from oil. Sometimes when the right policy framework exists and the needed infrastructure and initiatives are put in place, these well thought-out policies are usually not properly implemented or abandoned shortly after takeoff.

    For instance, the Cassava Bread initiative, which mandates 10 to 20 per cent inclusion of cassava flour, was part of measures intended to make Nigeria self-reliant in the production of some staple food crops thereby saving foreign exchange spent on flour importation.

    In spite of the pomp that greeted its inauguration by the previous administration and the publicity and media attention it received, the initiative is yet to get any traction.

    Reports indicate that Nigeria will save N300 billion annually from substituting wheat with cassava. This deliberate attempt at encouraging local production of staple foods, in the view of economists, is capable of expediting the resuscitation of the nation’s economy. Also, the initiative, apart from achieving import substitution and boosting export potentials and earnings, can help create more jobs and enhance the growth of agro-allied companies.

    Unfortunately, in recent years, import substitution strategy for development through agriculture has been repeatedly sabotaged by some agriculture produce importers under different guises, with the local farmers usually at the receiving end. The recent abuse of waivers on the importation of rice into the country readily comes to mind here.

    Determined to ensure that government policies and stimulus packages are inclusive of smallholder farmers, the British American Tobacco Nigeria Foundation (BATNF) recently organised a dialogue session on smallholder farmers and sustainable agriculture, which held in Lagos State. The session, themed ‘Agricultural Policies and the Nigerian Smallholder Farmers,’ was the climax of the activities of an executive working group set up by BATNF in January 2015 to undertake a careful multi-stakeholder review of the ATA and related agriculture policies and programmes.

    The group was also saddled with the responsibility of establishing the extent to which these policies support poor farmers and small and medium agribusinesses in wealth creation and increased productivity.

    In his opening address at the event, Director of Legal and External Affairs, British American Tobacco Nigeria (BATN), Mr Freddy Messanvi, described the Dialogue Session as “part of the BATNF’s advocacy platform aimed at facilitating access to policy-making decisions about smallholder farmers” who produce the bulk of the food Nigerians consume.

    The session provided an opportunity for agriculture experts and resource persons to dissect ATA, other extant agricultural schemes and matters related to agriculture business in Nigeria. It was noted that some of the critical areas that ATA has succeeded in affecting the lives and livelihood of smallholder farmers is in organising them into cooperative groups. There was also a consensus that government and the organised private sector should give impetus to the effort of smallholder farmers by providing for them the right incentives and financial support systems, as well as strengthening existing infrastructure to assist farmers in eradicating hunger and poverty.

    Prof Ben Ahmed of the Institute of Agricultural Research (IAR) and Ahmadu Bello University (ABU), while speaking on the impact of the ATA, noted that the contributions of the International Fund for Agricultural Development (IFAD)-assisted Rural Finance in Nigeria (RUFIN), which was integrated into ATA, helped in the formation of farmer groups that were linked to micro-finance banks (MFBs).

    ATA’s potential in diversifying the Nigerian economy and attracting foreign direct investment was also underscored by other speakers.

    Components of ATA and other agricultural policies reviewed by BATNF Executive Working Groups (EWGs) include the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Growth Enhancement Scheme (GES) and Climate Change, as well as the various Crops Enterprise Value Chain developments.

    Most of the presentations made by the various working groups looked at the current situation of ATA, the achievements made so far, the major challenges and shortcomings, and how they can be tackled. In their recommendations, they urged government to work with enduring policies that are well thought out.

    A notable concern raised by stakeholders about agriculture business in Nigeria is the ignorance of smallholder farmers of ATA as well as their exclusion from financial incentives offered by NIRSAL. It was observed that this barrier is due to the notion generally held by commercial banks that majority of smallholder farmers cannot meet their requirements and thus are not bankable.

    However, few banks, such as Stanbic IBTC, FCMB and UBA, were commended for being supportive to smallholder farmers. As a remedy, it was suggested that the traditional financial system, ‘Esusu,’ (thrift institution), which most of them have successfully practised for years, should be understudied and incorporated into the NIRSAL scheme so as to help meet the needs of the framework that is achievable for them.

    The Stakeholders Dialogue Session was necessitated by the need to provide a robust and expansive policy framework for the nation’s agricultural sector in line with the current administration’s resolve to enhance practices and output of the sector.

    It is the expectation of stakeholders in the agricultural sector that the findings made by the working groups and recommendations put forward to government on how to revamp the economy through small-scale agriculture would be critically examined by the incoming minister of agriculture so that it will not amount to another exercise in futility.

  • Govts neglect smallholder farmers

    Stakeholders in agriculture have accused government of favouring big-time farmers, while neglecting smallholders. They said governments at all levels grant multinationals and big organisations tax holidays on acquired land, leaving the small-scale growers to their own devices.

    The stakeholders who gathered in Ilorin, the Kwara State capital, included Actionaid, Centre for Community Empowerment and Poverty Eradication (CCEPE), the state government and Association of Smallholder Farmers of Nigeria.

    ActionAid’s Food and Agriculture Advisor, Azubuike Nwokoye said government’s preference to big-time investors in agriculture is worrying and that in some instances government gives a moratorium of between 10 and 15 years with low bank interest rate to such investors, neglecting the small holder farmers.

    Nwokoye said, “Smallholder farmers especially women farmers who produce the bulk of the food we consume in Nigeria are neglected. That is why we must put all hands on deck to protect [them]. That is why we must resist the [rich] from forcefully and illegally grabbing our land from us.”

    Director, Kwara State Bureaus of Land, Muideen Abdulkadir said the bureau will assist “organisations, associations and individuals in acquiring land for farming activities.”

    A woman farmer from Asa Local Government Area of the state, Iyabo Babatunde urged the state government to assist women in the state through provision of land and farm implements.

    Mrs. Babatunde said their plight is being compounded by the Fulani herdsmen whose cows invade their farmlands to graze destroying their crops.

    CCEPE Programme Officer, Abdulrahaman Ayuba presented the simplified versions of the United Nations voluntary guidelines on the responsible governance of tenure or land, fisheries and forests in the context of national food security.

    The guidelines contain rights of the farmers, states obligations to farmers, investors, judiciary, communities and agencies’ obligations.

    The guidelines stipulate that farmers have rights to hold and use land, fisheries and forests whether registered or not registered; farmers have the right to demand for justice; rights to be protected against eviction and rights to be informed of prior knowledge of any land deal.

    States obligations include providing necessary laws to recognize, respect and protect people’s land rights; providing access to justice; prevent tenure disputes; seek free prior informed consent of all community members and provide equitable land valuation mechanisms and fair tax systems for land, fisheries and forestry.

    To investors, UN guidelines stipulate disclosure at all times and in all settings, full information of their real investment and land use intentions; respect and recognise the land rights of all community members; seek agreement of all community members before any land contract is signed.

    The guidelines also urge communities to know their rights and how to protect themselves against corrupt behaviours from others; should demand full compensation where their rights are lawfully or unlawfully violated; to provide and promote a conducive environment for negotiations and interactions with investors and the government; provide and apply all available dispute resolution systems and should not discriminate against women on issues that relate to use of land, fisheries and forests.

    Judiciary’s obligations include application and enforcement of all laws to protect interest of farmers and other land rights holders; hear all cases without discrimination on basis of gender, ethnicity and religion and provision of prompt and efficient services without requesting for bribes.

     

  • ‘Smallholder farmers require subsidy to remain in business’

    Dr. Richard Okechukwu is Project Coordinator for International Institute for Tropical Agriculture (IITA) and  British American Tobacco Nigeria Foundation (BATNF) Cassava Project. At its launch at Otu Community Town Hall in Itesiwaju local government area of  Oyo State, he spoke with Bukola Aroloye on the project and the need for sustained public-private sector initiative in driving the agricultural revolution.

    How would you describe the partnership between IITA and BATNF?

    It has been very complementary. First, at IITA, we are technical experts and we always interact with farmers. We always listen to their complaints about what they would love to do and what they would love to achieve. From our findings, one major thing they have always lacked is the resources to getting inputs that they require to implement the technical knowledge they have acquired from the different trainings we have given to them. This, for many years, has been affecting adoption. It is easily discernible, owing to the fact that people assess farmers based on their outlook.

    Understanding that the main challenge confronting smallholder farmers is lack of resources to transform their farming operations, BATN Foundation stepped in to fill this gap by providing unique opportunity for these smallholder farmers to have access to the right inputs that cover everything, from land preparation, planting materials, technical resource persons to be on ground, herbicides and fertilizers. So, what is left is the actualisation of these findings, and results that we have got so far have been positive. It is no longer business as usual. It is remarkable that BATN Foundation has made it a grant, but it will turn out to be a revolving fund. The grant will always be there for this group of farmers to access as entrepreneurs. Also, there are some elements of sustainability which you cannot find in other relationships. But we have found it in this one.

    As partners, IITA will ensure that every missing gap like marketing, forming of cooperatives, group dynamics, conflict resolution between crop farmers and livestock farmers and all those kinds of hiccups are all addressed. The goal here is to ascertain the viability of the model and how this can serve as a useful tool for many other prospective farmers.

    For how long has this partnership on the distribution scheme been on?

    The collaboration started in 2014 and this is the second cycle. We just rounded off Cycle One and we are about moving to Cycle Two, where we believe that the cooperatives will be registered. And from the sales of some of their farm produce, they will pay back a certain percentage of this loan into their cooperative account. By so doing, it will be easy for them to manage the Cycle Two. Also, by the time they sell these farm produce in 2016, they will be able to save up more money for the sustenance of this initiative.

    We have also been able to watch the group grow. We have been able to help them resolve conflicts, considering the challenges that money presents. By the time we are exiting in 2016/2017, we believe that they would have got a good purse, as well as links to all the partners, the input, the suppliers, the fertilizer companies and the herbicide companies. With this unique opportunity, it will be easy for them to source for their raw materials in the right places. Another good thing about this is that these farmers are also linked to where they will sell their (cassava) roots. And hopefully, if the other investors that we have invited to come to Otu, Igboho and Ogboro finally yield by building micro processing centres this year, then we believe that this 110 hectares will be like a child’s play compared to what we will achieve. There will be a gross expansion.

    Are there lessons to be learnt from this partnership between BATNF and IITA?

    Yes, there are lessons to be learnt. A very good example is that agriculture requires patience and sustained support. For any smallholder farmer to do any business there has to be some sort of subsidy. There has to be some sort of support to enable him move forward. In advanced countries, smallholder farmers receive subsidies regularly. Even when they produce and there is a glut, government will buy it. Farmers here in Nigeria, don’t have any coverage.

    The lesson here is that of a foundation that is looking at agriculture and must be targeting this issue of sustainability so that when you give the fund, you should come back to see how they are faring and also see better ways you can support them, not that you should finish and go. It’s a very good lesson that is being learnt here.

    What impact has this scheme had on the benefiting families in terms of improving their productivity in subsidiary farming?

    As of the time we came in 2014, we found that many of these farmers didn’t really know what a hectare (of land) is. Many of them were mixing their crops, planting up to four types of crops on a piece of land, which is primarily subsistence farming. Any farmer you see doing that is just looking for what to eat and how to survive. They were not thinking business. Right now, there is a big shift. You will find out that their yields have gone up from those seven tons in a year to 20/21 tons. But we want to push these yields to over 25 tons. Now that we are getting the market sector doing very well, they will not be at the mercy of monopolists; they won’t be at the mercy of middlemen. Now, they would have a stronger power to negotiate. By so doing, we can start addressing the issue of income, hoping that their income will increase, and their productivity and livelihoods will change.

    In what areas do you think that government and the organised private sector can render more support?

    Government’s responsibility is basically policies. They must sustain policies that are pro-agriculture that are capable of empowering indigenous production. You must sustain those kinds of things. You must provide the enabling environment.

    Also, certain things like feeder roads, tractor hiring services, some basic water management systems, empowerment of the youths and soft loans for farmers, are areas governments can come in to motivate farmers. It is very important that these things are put in place in very good strategic places. The private sector firms are willing to participate but there is no way they can pay for the cost of everything. But once they find out that a good arrangement is in place, a lot of people from the private sector will love to come into that line of business because they need these raw materials for their production. Most of the starch we use in this country are imported. We can endeavour to produce starch from our cassava, maize, cocoyam and Irish potatoes for local consumption. We will not be importing any of these things anymore.

    The high quality cassava flour has become so useful today especially in the production of bread. Wheat, on the other hand, is so expensive. The high quality cassava flour has to be sustained. The private sector, I’m sure, is willing to support its production. A lot of young people, including those in the Diaspora, want to come home with their money but they need an enabling environment.

    How well does the Foundation’s initiatives resonate with the Institute’s and the farmers that have been helped so far?

    Well, all our contracts with the BATN Foundation have moved very smoothly. They have provided all that we agreed ab initio. I think that the free hand and the belief in us as the lead technical partner make the difference here. And it is a relationship we will like to sustain.

    In fact, IITA will like to work with them more in other areas such as yam, plantain, banana and maize cultivation, because these are all important crops in Oyo State and so many other places.

    Most companies in Nigeria often direct their corporate social investments towards providing social amenities, welfare support, etc. Are you satisfied with this kind of CSI in the area of agricultural support?

    Sincerely, I will tell you that most companies will like to go to places where they will have quick visibility. They always like to go to where they will have immediate results. Very few people like this long-term approach and agriculture is long-term business that requires patience. For a company to tread this line, there is some sincerity in helping people to grow. This is one very good thing I love about working with the BATN Foundation.

    Yes, the big ones are okay but agriculture needs something longer. If you are going to intervene in agriculture, you have to be there for a longer time. You have to be there to balance things. Naturally, the environment is changing, the climate is changing and there are challenges to it. The rains are not coming when we want them to come and these are things that farmers cannot control. Any investor who goes into agriculture has to plan bigger and has to be able to do this.

    From IITA’s perspective, what is the future of this scheme?

    The future is big. Now, Nigerians are realizing that agriculture is the way. The former minister of agriculture, Dr Akinwunmi Adesina harped on this. So IITA is fully on ground to support this process. And we will pool all our resources and technical knowledge together to make sure we support anybody who makes agriculture move forward; not only to produce food, but also to make money while producing the food.

    We have to make sure that we look at the entire value chain, from the market to the production; and most especially the young ones, the youth: they are our focus.  We need to get more and more people involved in this process. There is nothing we can’t produce in this country that there is no machine or expertise to do it. We must not continue to be the country that produces the raw materials for others to use.

    Addressing this whole food value chain is very important for Nigeria and IITA in conjunction with our partners like Africa Rice that is focusing on rice, and others that are focusing on cassava including the national research institutes. I think that we will do more now that more and more investors are looking towards agriculture.

    What are your challenges in managing the BATNF-IITA partnership while trying to help these farmers?

    Well, in partnerships there are always challenges. Organisations do have their own. The main thing is building harmony with the federal ministry of agriculture, and the state ministries of agriculture. The people that need it belong to the grassroots. This harmonisation is very important. The goals and objectives of the donor organisation have to be properly streamlined by targeting certain key value chains. The main challenge is getting all things to jell together. This also means connecting all the partners, connecting the research, the extension and getting the government policy to be functional in the way it should work.

  • A breather for smallholder farmers

    The Federal Government is planning to privatise the nation’s only commodity exchange, which has been inactive since inception. Asst. Editor Chikodi Okereocha writes that farmers can latch on the platform of a revitalised commodity exchange to cut post-harvest losses and increase earnings.

    Smallholder farmers and other agro-based business operators in Nigeria, such as agro-commodity processors and merchants, will soon heave a sigh of relief.

    In line with the liberalisation and commercialisation of its controlling equity investment in state-owned enterprises to pave the way for private sector participation, the Federal Government plans to privatise the Nigeria Commodity Exchange (NCX), formerly the Abuja Securities and Commodity Exchange (ASCE).

    By privatising the nation’s only commodity exchange, which has been inactive since 1998, the government, according to Vice President Namadi Sambo, who is also Chairman, National Council on Privatisation (NCP), hopes to attract private sector investment, innovations and management in the country’s commodity exchange operations.

    He explained that a privatised and revitalised commodity exchange would also enhance competition in the post-privatisation era and usher in a framework under which infrastructure like silos and warehousing facilities, modern trading platform and state-of-the-art information technology would be made available to farmers.

    It is also envisaged that a strong legal, regulatory and compliance framework, commodity grades and standards, among others, would push more possibilities into the hands of smallholder farmers. He said the role of commodity exchange is critical to the economic growth and development of any nation, as it serves as the ultimate platform for trading and marketing various agricultural produce and commodities.

    Citing China, United States, South Africa, Ethiopia and Kenya, among others, which he said leaned on the workability of their respective commodity exchange platforms as catalyst for economic transformation, regional economic strength and reckoning, even in the time of global economic meltdown of the past years, the Vice President noted that revitalising the Nigeria Commodity Exchange would “enhance employment creation that will engage the country’s teeming youth population, boost economic growth through non-oil exports, and improve tax collection as a veritable source of revenue. It would also contribute meaningfully towards strengthening the nation’s foreign exchange reserves and the naira, and improve cross-border risk rating in foreign direct investments in the sector.”

    The NCP Chairman said revamping the commodity exchange could not have come at a better time than now when the giant strides of the Federal Government under the Agricultural Transformation Agenda has begun to yield noticeable results in the global commodity market where Nigeria is determined to be a net exporter of food and cash crops such as sesame seeds, cocoa, rice maize, sorghum, palm oil, gold, and bitumen, among others.

    He explained that apart from strengthening local production, it is the administration’s earnest aspiration to place Nigeria on the global economic score card as a nation that has internationalised its revamp mechanism and regional economic prowess through non-oil exports.

    Sambo spoke in Lagos at a recent Stakeholders’ Workshop for the Privatisation of NCX organised by the Bureau of Public Enterprise (BPE) in conjunction with the Federal Ministry of Industry, Trade and Investment, and other relevant government agencies. The workshop with the theme, Towards achieving best standards and practices in the Nigerian Commodity Exchange Market was aimed at providing a platform for key stakeholders to discuss critical success factors that would drive robust commodity exchange operations in Nigeria.

    Specifically, the workshop seeks to entrench best standards and practices in Nigeria’s commodity exchange operations.

    As Emmanuel Ijewere, a member of the Technical Committee of the NCP, explained, one of the issues that have been agitating the minds of policy makers is how to link up the poor farmer to a market.

    “If you create a situation where all parties meet you have more effective utilisation of your economic resources including those hard working farmers. But where you have pockets of people who do things in their own private way, the farmers are the most vulnerable. I am talking about the economy of inclusion. Right now the poor people in our society are not included in the economy. There is a huge market for farmers’ produce, but the farmers are so small that they have no access to it,” he told The Nation.

    Ijewere argued that there is no better way of creating that link between those who have been excluded from the economic enterprise of Nigeria and those yearning for the products.

    “This commodity exchange will now force us to improve on those infrastructure like warehouses that will help reduce the losses suffered by the farmers, give information through the electronic wallet which means that each farmer will know what prices are in the market, he knows what prices that has been in the past two or three years, he knows where the demand is, he knows where to sell it. Through the electronic wallet he can do that so, we are trying to modernise these farmers, modernise the entire system and the entire value chain,” he explained.

    Ijewere noted that the commodity market originally created was being run by government, but in line with the new thinking that government has no business in business, it should be a private sector driven thing. “Today we are in the process of taking it from government through BPE and handing it over to the private sector and creating the environment for everybody to be inclusive in the economy of Nigeria,” he said, adding: “The biggest problem for banks is knowing where to put their money to ensure that it comes back to them. The banks want to be part of the real economy, but have no knowledge in the sense that they have no way of getting to the small farmer. So, we are creating an environment, a platform where banks and farmers can talk to each other.”

    The planned privatisation of the commodity exchange must be music in the ears of smallholder farmers most of who have had to contend with a multiplicity of challenges associated with production and marketing of their produce. The most daunting of these challenges is perhaps, the lack of proper storage facilities such as warehouses and silos. Without an efficient warehouse receipts system allowing smallholder farmers to deposit their agric produce in registered warehouses, farmers incur post harvest losses on account of damage to their harvests by pests and other crop diseases. This has adverse affect on the earnings of smallholder farmers thus, limiting their capacity to contribute to the realisation of the Federal Government’s Agricultural Transformation Agenda. The warehouses and silos would have served as storage facilities for farmers’ produce and commodities until they are sold through mutually beneficial contracts.

    That Nigeria is blessed with huge agricultural potentials makes the need for a virile commodity exchange critical. As Benjamin Dikki, the Director-General of BPE, pointed out, there is need to complement the giant strides that are being recorded in the agricultural sector by a functional commodity exchange in order to add value to the economic value chain. This, he said, would pave way for competitiveness and stability in pricing of agricultural produce and commodities, as information would be available to market participants on sustained basis through modern information technology infrastructure. He also said that vast liquidity potentials would be available to farmers as warehouse receipts become tradable and negotiable; the commodity exchange sector would be guided by the enactment into law of the Warehouse Receipt Bill and market rules to be introduced by an independent regulatory body to be set up, among others.

    Already, some companies, including Nigeria’s Heirs Holdings Limited, a Lagos-based investor with interests across Africa in banking, energy, real estate and agriculture, plans to acquire or set up a commodities exchange in the country. The Chairman, Heirs Holdings, Mr. Tony Elumelu, reportedly said he wants to acquire the state-owned Abuja-based exchange when it is sold. If it’s unable to buy the exchange, Heirs Holdings would apply to the Securities and Exchange Commission (SEC) to set one up.

    The firm, through its African Exchange Holdings Limited unit, has stakes in Kigali, Rwanda-based and Lagos-based National Association of Securities Dealers trading platform. In collaboration with the Nigerian Grain Reserve Agency and the Agriculture Ministry, Heirs Holdings in November, last year established an electronic warehousing system linking farmers and traders as part of the groundwork to set up a commodities exchange.

    “We have a number of both domestic and international players who are very interested,” Aruma Oteh, director-general of SEC, was quoted as saying. “They’d rather acquire the privatised exchange, so they’re trying to see how far the government is going with this initiative and if not they’re prepared to seek a registration for a new commodity exchange,” she added.

    As part of the revitalisation of the exchange, the Federal Ministry of Trade & Investment in collaboration with other key stakeholders has initiated a pilot scheme of electronic warehouse receipt system (e-WRS) which, when it goes live, would facilitate seamless trading, bankability of the warehouse receipts and availability of liquidity, among others, among market players. For this, an executive bill, the Warehouse Receipt Bill, is in the second reading in the Senate.

    Senator Olugbenga Obadara, Chairman, Senate Committee on Privatisation, said since the Bill is in the second reading, which is the most critical, “there is high hopes of getting the bill acceptable not only to the members of the National Assembly, but to everybody.”

    Obadara, however, said the bill still has to go to the House of Representatives for concurrence and possibly public hearing, third reading and passage. “We will work in the best interest of Nigeria. We want to make sure we bring entrepreneurship to the doorstep of everybody. We want to consult widely, we want to involve the generality of Nigerians, we want to make sure that we have the enabling law that will guide this commodity exchange privatisation. What we are doing now is interfacing with stakeholders; this has to be driven by them. We will give the desired impetus at making sure the bill is well looked at, well harnessed, and well discussed in the best interest of the nation,” he said.

    However, the plan to privatise the commodity exchange may not come without opposition from some operators and stakeholders. For instance, Commodity Brokers’ Association of Nigeria (CBAN), views the privatisation process with some elements of suspicion and mistrust. “We have really been thinking, what is Federal Government’s plan? Why do they want to privatise it?,” Altine Shehu Kajiji, President, CBAN, asked, adding: “For us we think that the privatisation is not the issue, the issue is that there are so many things left undone and that is why the system has not been working.”

    Kajiji said the government should have first set up the exchange and get it working before selling it. “What is government selling when nothing is working. What is the aim of this privatisation? What does government aim to achieve? I think government needs to do certain things at least to set up a working exchange before it is sold,” he fumed.

    Since its establishment in 1998, as part of efforts at developing the capital market and with an initial primary objective of dealing in securities trading, ASCE, now NCX, has been bogged by some operational challenges. Dr. Vincent Akpotaire, Acting Director, National Facilities & Agricultural Resources, BPE, listed some of the challenges hampering the ability of the exchange to deliver on its mandate to include poor funding and stakeholders’ buy-in, lack of enabling legal and regulatory framework, erosion of shareholders’ funds, poor sensitisation mechanism, and absence of trading platform/infrastructure, absence of WRS, and electronic warehouse receipt system (e-WRS), among others.

    Akpotaire, however, pointed out that in spite of the numerous challenges, “the exchange could indeed, be the ‘beautiful bride’ through value addition to the agricultural value chain, enhancement of export of produce and commodities”.

    He said as part of the government’s commitment to strengthen the operations of the exchange, a Steering Committee was constituted to recommend the best options for revitalising its operation. Also, the BPE, as part of its normal reform and stakeholders engagement framework, has embarked on active liaison with various stakeholders on ways of revamping the operations of the exchange.

    Already, stakeholders and experts in agro-business see a silver lining on the horizon for farmers, as a private sector-driven commodity exchange would hopefully liberate farmers from poverty through exposure to reliable domestic and export markets. It will also serve as a veritable platform for farmers to mitigate the inherent risks in agricultural production and marketing. But the ability of farmers to leverage the opportunity, experts say, depends largely on their ability to participate through commodity associations or farmers’ associations who aggregate the hedging needs of several small-scale farmers and execute the trade on the exchange.