• Wednesday, July 24, 2024
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N37bn debt threatens Nigeria’s food security


Nigeria’s food security will come under threat if a N37 billion debt owed fertiliser and seeds suppliers by both federal and state governments is not settled, BusinessDay investigations have revealed.

Farmers say the debt would undermine  their ability to buy other necessary inputs and that if not resolved, it would have a negative impact on farm yields this coming season.

The Federal Ministry of Agriculture has however attributed the debt to the dwindling fortunes of the Federal Government arising from the fall in oil price in the international market.

The recent change in government has also been fingered as another reason for the debt, as the Muhammadu Buhari government needs time to settle down before effecting payment.

Kayode Oyeleye, special adviser to Audu Ogbeh, Nigeria’s Minister of Agriculture and Rural Development , explained the delay to the general elections conducted last year, and the change in government, along with the short fall in the nation’s revenue .

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

BusinessDay further gathered that the government at both levels is yet to honour their side of the obligation, leading to the accumulated N37 billion debt.

“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 is much more important than fuel and transportation,”  Owoeye, who is also the MD/CEO, Elephant Group of Companies, added.

He, however said his association is talking with the Federal Government, which has promised to pay through the Ministry of Finance.

Caroline Makinde, head, corporate services Notore Chemical Industries Limited said, “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 operating costs being tied down in the debt.”

The GES is a Federal Government initiative aimed at transforming the agric sector. It involves cost sharing of major agricultural inputs, such as fertiliser and seedlings between the Federal Government, state governments, and  farmers. 

Oyeleye however insists that despite the current challenges, the government will not shy away from its responsibility.

“The new government is not saying it would not pay. The government is working assiduously towards beginning the payment of the money. The Minister of Agriculture has met with the group twice this year and has promised that the agro-allied contractors would be paid very soon,” he said.   

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

BusinessDay spoke with farmers who participated in the GES scheme. Some of these farmers said not all players who registered for the scheme benefitted from it.

“The agro-allied contractors distributed the seeds and fertilisers last in 2014. I haven’t benefited from the support scheme because we were given bad seedlings in Lagos and Ogun state,” said Abiodun Olorundero, a farmer in Oke-Odan, Ogun State.

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

The farmers also complained that they were not given enough quantity of seedlings and that the seeds were given to all farmers, including those who didn’t need them, such as fish farmers.

They pleaded with the new government to correct these errors of the previous administration and make it better, which in turn will make more farmers register under the support scheme.

According to Sanni Dangote, president,Nigeria Agribusiness Group (NABG), government needs to stop the subsidisation of fertilisers to farmers as they need to purchase it at a price that they can afford.