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Prospects, challenges of Nigeria’s agriculture in 2020

In 2019, the Federal Government continued with its renewed focus on the agricultural sector in an attempt to diversify the economy away from oil.

The sector which was neglected had since 2016 became an option for diversification owing to its vast potentials to drive a more sustainable economic growth in Africa’s most populous nation in terms of job creation and revenue diversification.

To accelerate this growth, the government in the last five years had devoted a lot of energy at deepening agriculture with initiative like the Anchor Borrowers Programme (ABP), ban on the importation of some agro commodities and the shutting down of its land borders without addressing fundamental issues of mechanisation, irrigation, seeds, extension service, insurance, research and development, among others.

As a result, yields have continued to remain low and progress made initially is now on a downward trajectory as the sector’s growth rate has been slowed.

Data from NBS shows that the sector grew by 3.17 percent, in the first quarter of the year, it also grew at a slower rate of 1.79 percent in second quarter and picked up marginally to 2.28 percent in the third quarter of 2019.

Data for the fourth quarter is yet to be published by the bureau of statistics.

Similarly, during the year, agricultural export for the period experienced strong growth from January to September 2019 but this was fast eroded as the agricultural imports for the period far outweigh exports, thus, dragging the sector’s trade balance into deficit.

Nigeria imported N949.8 billion worth of agricultural goods in the period as against N180.7 billion of exports for the same period despite the ban placed on the importation of several agro commodities, data from the Trade Report shows.

Experts attributed the slow growth and trade deficit to the inability of the government to address fundamental issues.

They noted that the country can only drive growth in the sector when agricultural products become highly competitive.

The experts noted that the country must increase its mechanisation scale to meet the ever-increasing demand for food before the country can talk about earning foreign exchange through the sector.

Also, they added that the government must provide the needed infrastructures such as power and motorable roads to drive down production cost, 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.

With all this in place, they stated that the country’s agricultural products will be competitive as a result, importation will be discouraged.

Issues such as land ownership, infrastructural deficits, and inadequate access to finance, quality seeds and mechanisation among others are inherent problems the government is yet to address.

“We have increased our crop production of various commodities but the government has still not done anything in addressing fundamental issues. We still do not have sufficient seeds and seedlings, nothing in place to increase mechanisation,” said Abiodun Oyelekan, chief executive officer, Farm Fresh Agric Ventures.

“The only thing the government has done is shifting attention to the agricultural sector. People now want to invest in the sector than before and this is why there is an increase in production,” Oyelekan added.

He stated that the country cannot make further process if farmers cannot produce at a cheaper cost.

Also, lots of youths that invested in the sector through entrepreneurship are diverting into other sectors owing to the high failure rate caused by some underlying problems in the country’s agricultural sector.

Experts recommended the development of linkages between farmers and the market, stating that youths can only find agric attractive when such linkages are provided.

They say developing agriculture requires the rehabilitation of dams and irrigation facilities to boost farmers’ productivity and also drive down cost of production.

Border Closure

In an attempt to tackle issues of smuggling that has deterred growth in some subsectors under the agricultural sector, the Federal Government had since August 2019 shutdown the Nigerian borders.

The policy has spur demand in crop and livestock products across the country and created investment opportunities for potential investors across the various value chains in the agricultural sector.

Also, it made farmers and millers ramp up production especially for rice and poultry production to meet the ever-growing demand for food in the country.

“Lots of rice farmers are increasing their production areas because there is a huge market for paddy since the border closure,” said Aminu Goronyo, national president, Rice Farmers Association of Nigeria in a telephone response to questions.

“This is because millers are patronising rice farmers now and off-taking all that they produce immediately,” Goronyo said.

He stated that before the border closure, farmers had over 20,000 tons of paddy lying fallow because millers were not off-taking from them.

Similarly, the policy compelled Nigerians who generally have a high preference for foreign varieties to shift to local brands.

The Poultry Association of Nigeria (PAN) estimated local poultry production to have increased to 7,000metric tons since the policy took off.

“Since the closure, we have increased our local production to about 7,000metric tons and if it persists, we could cascade its production to 1.5metric tons within a short period,” said Onallo Akpan, director-general of Poultry Association of Nigeria (PAN).

This shows that there is a vast potential in the sector which the government must harness with sustainable policies.

But despite the gains made by the policy, food prices in the country have been on an upward trajectory since the border closure.

The inflationary pressure has reduced consumers’ disposable income, hence, making basic needs elude Nigerians.

“We cannot afford to buy the things we usually buy before because prices of everything have gone up,” said Blessing Orizu, a mother of three and buyer at Mile12 market.

“It has been really difficult for my family. We now buy little of what we feel is important. The painful thing is that my salary is still the same despite a high rate of inflation in the economy,” Orizu added.

Inflation in Africa’s most populous nation accelerated to 11.85 percent in November 2019 and was basically driven by food inflation, the National Bureau of Statistics (NBS).

The figure surpasses the Central Bank prediction of 11.7 percent for headline line inflation for the year-end.

The budgetary allocation for the agriculture sector over the last few years shows that the allocation to agriculture, as a percentage of the overall annual budget to all sectors increased from 1.25 percent in 2016 to 1.82 percent in 2017 and 2.23 percent in 2018.

However, the allocation to the sector as a percentage of the overall budget declined in 2019 by 1.56percent and a further decline to 1.3 percent in the 2020 budget.

 

Josephine Okojie

 

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