Food crisis looms as FG fails to offset N72bn fertiliser debt

The failure of the Federal Government to settle an outstanding N72 billion debt owed fertiliser suppliers may result in food shortages, BusinessDay investigations show.

Consequently, agro allied suppliers are not ready to supply seeds and fertilisers to farmers anymore, until the outstanding debt dating back to 2014 is resolved.

This will undermine the ability of farmers to buy  necessary farm inputs and impact negatively on farm yields this season.

Last year for instance, some of the farmers, including those who grow crops such as cocoa and palm oil, got seeds free of charge, while others paid  half the price of the seeds they bought.

But the Ministry of Agriculture is said to have attributed the delay in payment to the nation’s economic downturn.

“We are likely going to face a food crisis. Farmers cannot find seeds to buy because the government under Jonathan gave seeds to farmers free of charge. In the process the government racks up a debt of N72 billion to people who supply seeds and fertiliser since 2014,” said a source familiar with the matter.

As a result of this debt, the suppliers are not ready to deliver the seeds on credit and the Buhari government looks unlikely to offset the debt.

Currently, farmers are unable to get seeds and fertilisers in the country, even as the early planting season has commenced.

“So we now have a situation where farmers go from not buying seeds in 2014 to buying seeds which at the moment have gone up by 30 percent,” said our source.

Under the Growth Enhancement Support Scheme (GES), agro-allied contractors supply fertilisers and seeds to farmers, with the agreement that Federal and State governments pay 25 percent each, while farmers bear the remaining 50 percent of the cost.

But farmers of tree crops like cocoa and palm oil got seedlings for free.  The agro-allied contractors, who discharged their own responsibility by supplying fertilisers and seeds to various states, are now owed N72 billion, a source, familiar with the matter told BusinessDay.

“The impact of not paying is that it will affect input per hectare of farmers, reduce yield and harvest, and you know this has an implication for food security, said Tunji Owoeye, chairman, Farm Input Suppliers Association of Nigeria and national chairman, Rice Millers Association of Nigeria (RIMIDAN).

“Fertiliser and seedlings are much more important than fuel and transportation,” Owoeye, who is also the managing director and chief executive officer, Elephant Group of Companies, added.

The new figure is at variance with the earlier N32 billion debt figure given by the supervisory Ministry of Agriculture last year. However, stakeholders in the sector had said then, that the debt surpassed the figure offered by ministry.

However, BusinessDay findings show that the government at both levels is yet to honour their own side of the obligation, leading to the accumulated N72 billion debt.

  According to a source familiar with the matter, 2014 was the last time the agro-allied contractors supplied seeds and fertilisers to farmers.

Abiodun Olorundenro, chief executive officer, Green Vine Farms, said “the agro-allied contractors distributed the seeds and fertilisers last in 2014.”

The farmers who spoke with BusinessDay complained that they were not given quality seedlings and that the seeds were given to all farmers, including fish farmers who did not need them.

They pleaded with the new government to correct these errors of the previous administration and make it better. This, they said , would make more farmers register under the support scheme.

“The new government should improve on the scheme by ensuring that these agro-allied contractors distribute good and quality seedlings to farmers,” Olorundero added.

Nigeria has two planting seasons. The early planting season between March and June, while the late planting season is between September and November.

Currently, farmers are yet to commence planting because of extreme weather conditions. The Nigerian Meteorological Agency (NIMET) had earlier predicted that most parts of the country would experience less than normal rainfall, as well as delayed, and early cessation of rains across most parts of the country, compared to previous years.

“Most parts of Nigeria are likely to experience delayed onset of rains, early cessation and less-than-normal rainfall volumes, as well as dry spells. These are risk factors for farmers in the affected areas and must be carefully managed,” said Anthony Anuforom, director-general of NIMET during a recent presentation in Abuja.

While the government’s efforts to boost food supply by 20 million metric tons from 2011 to 2015 has seen the country’s food import bill drop by more than half to $5 billion from $11 billion two years earlier, a drop in agriculture output is likely to set this back.          

  According to Caroline Makinde, head, corporate services Notore Chemical Industries Limited, “It is going to have a negative impact on general operations of input manufacturers in particular and other suppliers in general, due to the numerous multiplier effects of huge amounts of their operating costs being tied down in the debt.”

Josephine Okojie