The Federal Government plans to spend N472 billion to fund its mass agricultural scheme it bets will create jobs, increase local productivity, and stimulate growth, according to the government’s new Economic Sustainability Plan (ESP).
But the mass agricultural scheme will yield little or no result if the government fails to address lingering problems that have continued to limit productivity and have led to the collapse of previous programmes, experts say. The experts say low scale technology use, ineffective credit model, lack of competitiveness in the agricultural sector, among others will hamper the Federal Government’s push to fast-track economic recovery post-COVID-19 through the sector.
“No matter the number of programmes we create, Nigeria’s agriculture will not foster growth and create jobs until we address the fundamental issues limiting productivity,” said Kolawole Adebayo, professor at the Faculty of Agricultural Extension and Rural Development, Federal University of Agriculture, Abeokuta.
“We need to increase our mechanisation use on our farms, run an effective credit model, improve our infrastructures and make our marketing structure more reliable to foster growth and attain food security,” Adebayo said.
He added that until Nigeria fixes these lingering problems in its agricultural sector, the country would continue to waste resources and time without a substantial result.
Agriculture in Africa’s most populous country has long been touted as a remedy to the country’s oil dependency owing to its attendant exponential gains by way of earnings, employment, and other spin-offs.
But despite the potential of changing the fortunes of the Nigerian economy, the agricultural sector still grossly falls short of its potential.
Low level of agricultural mechanisation on farms across the country still persists, limiting the capacity of farmers to expand their cultivation areas, perform timely operations, and achieve economies of scale in food production.
“How do we boost productivity, create jobs, and attain food sufficiency when we still farm with hoe and cutlass?” AfricanFarmer Mogaji, head, agribusiness group, Lagos Chamber of Commerce and Industry, asked.
“It is not about bringing new programmes, it is about addressing the issues preventing us from getting the results we desire,” Mogaji said.
Data from the UN’s Food and Agricultural Organisation (FAO) 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 FAO’s 1.5hp/hectare recommended tractor density.
Although agriculture accounts for over a quarter of the country’s GDP, Nigeria still spends a whopping $22.5 billion yearly on food imports.
As a result, the country is not food secure. Low yields per hectare and wastage levels remain high in farming areas, reducing supply to processing factories and markets, requiring them to keep importing supplies.
The net effect is limited job growth across the value chain from input production to market systems, and the continued use of limited foreign exchange earnings to import food.
Also, Nigeria loses billions of dollars annually in export opportunities from cocoa, cotton, groundnut, and oil palm. This is largely a consequence of declining production and low-value addition.
“We need to relook at our export crops. Where are we now in cocoa production? It used to be our largest export cash crop but not anymore. What happened?” said Ayodeji Balogun, country manager, AFEX Commodities Exchange Limited.
“There must be commercial farming and value addition to have a sector that can create new jobs. Our products must also be competitive,” he said.
According to FAO data, the country’s agricultural value-added per capita has grown at less than 1 percent in the last two decades.
Despite the President Muhammadu Buhari government’s emphasis on the sector, it has faced significant underfunding for many years.
The federal and state governments have spent less than 2 percent of their total budgets on agriculture, falling short of the 10 percent Maputo Declaration which Nigeria is a signatory.
Credit to the sector has still remained low as banks are unwilling to lend to agricultural players. Financing to the sector has been one-sided and at an annual average of N400 billion, data from the National Bureau of Statistics (NBS) show. But experts say the country will need an average of N2.5 trillion financing to have an agricultural sector that thrives.
“There has to be a total review of the financing solution of agriculture. It cannot be a piecemeal that is only taking one side of the market. It has to be holistic,” Ayodeji said.
“Instead of banks to lend to the sector within their portfolios, they just wait to take Anchor Borrowers Programme facility to lend to the sector and such funds are not as efficient as the private sector funds,” he added.
The sector is currently hampered by a number of other issues, which include logistical challenges, land tenure problems, and input challenges that constrain productivity, among others.
