Nigeria@61: Agriculture and the burden of diversification
With the current economic crisis and the fact that FX inflow has dropped owing to crumbling oil prices, the Buhari-led government had no alternative other than to diversify the economy.
Agriculture which was once neglected became an option for diversification owing to its vast potentials that can drive more sustainable economic growth in Africa’s most populous nation in terms of job creation, economic diversification, and foreign exchange earner.
The consensus among experts is that the Nigerian economy can survive without oil if the right policies and action are taken by the government to boost the agric industry.
Since taking over power in 2015, the Buhari-led government had devoted a lot of energy to deepening agriculture with initiatives such as the Anchor Borrowers Programme (ABP).
The government also restricted access to FX for importers of some agricultural commodities and shut down its land borders for fifteen months to drive local production in some agro commodities and self-sufficiency.
The Nigerian government also increased funding to the sector, a feat the Buhari administration has been applauded for by experts.
Similarly, bank credit to the sector has also increased consistently since the renewed focus on the sector. Credit by banks to the sector has risen consistently since 2015, from N1.9 trillion to N2.7 trillion in 2019, according to National Bureau of Statistics (NBS) data.
However, the government has not expended enough in driving technology and innovation in the sector as well as addressing some fundamental problems which have continued to limit farmers’ productivity. Some of which are:
Herdsmen attacks, kidnapping and banditry
Apart from the impact of Boko Haram in the North-East, which has displaced thousands of agrarian communities, farming activities have also come under threat in the middle belt region and other regions in Nigeria due to the escalating insecurity issues in the country.
As a result, growth in the agricultural sector has been inconsistent and constantly slowing since the third quarter of 2016 over worsening insecurity issues.
Second-quarter figures from the GDP report showed that growth in the sector slowed from 2.28 percent in the first quarter to 1.3 percent in the second quarter of 2021 as escalating issues of terrorism, banditry, kidnapping, and herdsmen attack continue to take a toll on farming activities.
According to a Mercy Crops 2015 report, Nigeria loses about $2.3 million (N1.3 billion) annually due to the conflict between farmers and herders and states where these conflicts take place lose an average of 47 percent of tax generated internally.
“We cannot attain food security when there is insecurity. Farmers should be able to carry out their farming activities without any form of fear and not having to pay bandits to harvest,” Abiodun Olorundenro, manager, AquaShoots Limited said in a telephone response to questions.
“The insecurity situation has forced many farmers to abandon their farmlands and this is impacting our national output. Also, it has created a shortfall that is leading to a surge in food prices,” he said.
One of the greatest problems confronting rural farmers and communities in Nigeria is the absence of critical infrastructures such as an effective rail system and motorable roads.
Owing to this, Nigeria continues to suffer low levels of agricultural productivity due to the deplorable state of roads that hamper the country’s food supply chain.
It has also accelerated post-harvest losses as lots of fresh foods get spoilt during transit as a result of many hours or days spent transporting the foodstuffs to where they are needed due to bad roads.
Meanwhile, urban dwellers have to spend a very large percentage of their income to buy food. This is because the food that gets to the towns and cities is far more expensive than what the poor struggling farmers would have sold them.
The high prices of these commodities are blamed on the middlemen but they are also quick to point out that they incur huge costs transporting the food as a result of bad roads.
“The roads are bad; it takes me two to three days to transport my yam produce from Benue (located in the middle belt of Nigeria) to Lagos (located in southwest). I lost more than 300 tubers of yam on my last trip to Mile Twelve market in Lagos because the trailer got spoiled on the road and my yam produce was stolen since the trailer slept on the road for a night,” according to Godwin Apak, a yam farmer in Benue state.
“There are times our yams get spoiled on the road; the sun will burn part of it even before we get to Lagos. This usually makes me sell cheaper than I was supposed to sell. If the roads were better, the goods would get to the market on time for me to sell without it getting spoilt” Apak said.
Yields have remained low
Despite growing concerns over food security, Nigeria has failed to make appreciable efforts in increasing its farm yields, as Africa’s most populous nation still records the lowest yields per hectare amongst its peers.
Data from the Food and Agricultural Organisation (FAO) shows that Nigeria has the least average yield per hectare of five selected crops, among its African peers like Ghana, Kenya, South Africa, and Ethiopia.
For tomatoes, the average yield per hectare in Nigeria is 7 metric tons (MT), Kenya’s average yield for the crop is 20MT, Ghana’s tomato yield is 8.6MT and South Africa’s average yield for the crop is 86.8MT.
Similarly, for maize, which is the most consumed grain on the continent, Nigeria, Kenya and Ghana have the same average yield of 2MT per hectare, while Ethiopia’s average yield for the crop is 3.8MT per hectare and South Africa’s average yield is 6MT per hectare.
Also, for groundnut, which is widely grown on the continent, Nigeria’s average yield for the crop is 1.2MT, Ghana groundnut average yield is 1.4MT, South Africa is 1.6MT, Kenya’s average yield is 1.8MT, and Ethiopia with the highest average groundnut yield among countries compared of 2.4MT.
For potatoes, which is the most well-rounded and nutrient root in all of Africa, Nigeria’s yield per hectare for the crop is 3.7MT, Ethiopia potatoes average yield is 15.1MT, Kenya average is 15.5MT and South Africa average yield for the crop is 38.8MT.
Nigeria’s average yield per hectare for soybeans is 1.1MT, Ethiopia’s soybean average yield is 2.3MT, Kenya average is 1.6MT and South Africa’s average is 2.1MT per hectare.
Low use of technology
The low level of agricultural mechanisation on farms across the country has continued to limit the capacity of farmers to expand their cultivation areas, perform timely farming operations and achieve economies of scale in food production.
Available statistics show that Nigeria is one of the least mechanised farming countries in the world with the country’s tractor density put at 0.27 hp/ hectare which is far below the Food and Agriculture Organisation (FAO)’s 1.5hp/hectare recommended tractor density.
With the continual drift of the young population from the rural to urban centres in search of white-collar jobs and away from the drudgery of manual farm labour, self-sufficiency in food production is becoming a herculean task.
“Currently, more than 70 percent of farm labour is provided by human power; over 20 percent is provided with draft animal power and less than 10 percent by mechanical power,” Elesa Yakubu, national president, Tractor Owners and Operators Association of Nigeria (TOOAN), told BusinessDay.
In Nigeria, a significantly higher proportion of the farming area is still cultivated by hand tools. The International Food Policy Research Institute (IFPRI) reckons that Nigeria is still at the early stage of agricultural mechanisation. But experts acknowledge that mechanisation of power-intensive operations has been slow.
When measured in 2003, 12 years ago, Nigeria had only 30,000 tractors. Africa’s largest economy is currently adding 1,000 new ones each year, which is still not considered sufficient in replacing the aging, worn out, and broken down ones.
This means on a per capita basis, Nigeria ranks 132nd out of the 188 countries worldwide measured by FAO / United Nations in terms of the number of tractors in the country. Nigeria has fewer tractors than minnow countries like Serbia & Montenegro, with 400,000, Pakistan with 320,000, or Uzbekistan with 170,000 tractors.
For agriculture to effectively diversify the Nigerian economy from oil, the government must address the fundamental issues hindering productivity, experts say.
Experts noted that the country must increase its mechanisation scale to meet the ever-increasing population needed to be fed before the country can talk about earning foreign exchange through the sector.
They added that the government must provide the needed infrastructures such as motorable roads, effective and efficient rail transportation linking where the food are produced in the north and markets in the south as well as irrigation facilities to aid all-year farming.
Rotimi Fashola, senior partner, OIT Fash Consults, told BusinessDay that agriculture can only diversify the economy when there is higher productivity and investments.
“Until there is an aggressive increase in production, we would not see the effect yet. This will require us to do a lot more in terms of increasing productivity per unit area and increasing our land areas,” he said.
“We must increase our yield per hectare, which means we must use more fertilisers than we are now. It means we must increase our tractorisation, it means we must increase our water management system and introduce more irrigation,” Fashola added.