Agric productivity surge hangs on fixing value chain deficiencies

... experts call for investment in long-term solutions, linkage between farms and industry

For Nigeria to fully reap the benefits embedded in its agriculture sector and feed its 200 million people in the face of a changing climate, it must first fix structural deficiencies in the system, experts say.

The experts who spoke at the 2019 edition of BusinessDay’s Agribusiness and Food Security Summit on Thursday said that provision of critical infrastructure across the agricultural value chain is a prerequisite for enabling Nigeria stimulate economic growth and reach its target of diversification through agriculture.

“Infrastructure to support agriculture are not in place and nothing was put in place as replacement of the commodity board when it was abolished,” Godwin Obaseki, governor of Edo State, said in his keynote address.

“Land ownership and title is still a big challenge. Investors are still faced with challenges of taking over lands and resolving issues with communities even after the land has been allocated by the government,” Obaseki said.

He added that the linkages from farm to the market in the sector became blurred when the country neglected the sector to focus on the juicy revenue at the time of the oil boom in the 70s. He explained that the capacity needed to address critical issues that affect agriculture in a serious and sustainable manner is currently lacking in the government.

Nigeria’s infrastructural gaps are estimated at $300 billion, according to data from Africa’s Development Bank (AfDB).

Ayodeji Balogun, country manager, AFEX Commodities Exchange Limited, urged the government to make investments in long-term solutions to fix the structural problems in the sector rather than the short-term measure of financing currently in place.

“There are no significant investments in the system to ensure that investors have a smooth operation and this is why we have not made any much progress in the sector,” he said.
According to Balogun, apart from infrastructure, lack of quality assurance, weak financing and market information have continued to limit market access of agricultural commodities.

He noted that most government intervention initiatives have been focused on the supply side with little or nothing for the demand side.

“We cannot continue to finance the supply side without financing the demand side as this produces price fluctuations. We need to have a systematic structure that balances both finance,” he said.

Nigeria’s agricultural sector has been marred by several structural challenges ranging from poor road networks, inadequate storage facilities and low-quality inputs.

Data from the National Bureau of Statistics (NBS) show that the agricultural sector grew by 0.17 percent from 3 percent in Q1 2018 to 3.17 percent Q1 2019, while on a quarter-on-quarter basis it increased by 0.72 percent compared to the preceding quarter. While improvement has been seen, growth in the sector is still below 2014 level.

Undoubtedly, one of the greatest problems confronting the movement of agricultural commodities from one point to another is the absence of an effective rail infrastructure linking the north where the commodities are produced and the south where the markets are located.
Farmers continue to suffer low levels of agricultural productivity due to poor infrastructure to allow them to easily move their produce from farms to the market, reducing their profits and capacity to expand.

“We need to provide the infrastructure to move agric produce from where they are surplus to where they are needed and the most effective way to do this is through the rail,” said Sadiq Usman, deputy chief operating officer of agro-allied division, Flour Mills of Nigeria plc.
Usman stated that developing agriculture is very critical in the country’s efforts to diversify, which according to him can only be achieved if heavy investments are made in infrastructure.
He called for a linkage between agriculture and industry, which he said is the surest way to Nigeria’s industrialisation.

Mauricio Alarcon, CEO, Nestle, said that fixing the deficiencies across the value chain will ensure sustainability of agribusinesses in the country which in turn will reduce poverty by providing jobs, directly and indirectly, that will serve as a stimulus to the Nigerian economy and the agricultural sector.

“It makes more business sense to do backward integration but it requires lots of patience, time, hard work and evaluation of the entire value chain,” Alarcon said.

The success of any crop cultivation venture hinges on the quality of seed inputs, which account for 45 percent probability of good yield for farmers, but experts say lack of awareness, influx of fake seeds and poor research beset the sector.

“It is difficult for farmers to distinguish between seeds, grains and counterfeit seeds,” Kabir Ademoh, local coordinator, Seed for Change, said during a fireside chat at the agribusiness summit.

However, Ekum Ojogu of the National Agricultural Seeds Council said that the seed regulator has implemented measures to ensure that farmers can identify original seeds and discourage sales of counterfeits.



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