‘It is not in Nigeria’s interest to continue wheat importation’
In 2019, over N400billion was spent importing wheat into Nigeria. As the crop remains Nigeria’s highest agricultural good import, Sani Umar, director, Northern Nigerian Flour Mills PLC who is also the Coordinator for Nigerian Wheat at the Flour Milling Association of Nigeria (FMAN) in this Zoom interview with Caleb Ojewale, discussed the need and current efforts to boost local wheat production. He also highlights an offtaking arrangement where all local wheat production is bought. Excerpts:
Considering wheat is by far Nigeria’s highest agricultural import, how have flour millers been coping with this?
Wheat production has not been consistent over the years due to the non-availability of a National strategy for Wheat development. It is only the Flour Milling Association of Nigeria that is paying much attention to see how we can improve wheat production in Nigeria; all other stakeholders are not keen in making wheat importation reduced to the barest minimum.
For flour millers, we are not finding it easy and are not keen to continue importing because of the Forex and other logistics involved. We prefer to have our wheat locally sourced. However, if it is not available, what can we do? We have to keep our industries running by finding other ways to survive.
Looking at this point you just made about the importation not being sustainable. We don’t exactly have the dollars to continue importing with oil prices low because of the COVID-19 pandemic. How will this further affect your ability to get raw materials with 95 percent still imported?
The COVID-19 already had negative impacts on our operations because as you know, everything was at stand still for the last two to three months internationally. Also, the local production where we wanted to mop everything produced was also affected this season. This was due to restrictions of movement, and as all the markets were closed the farmers could not take their harvested wheat to the markets. There were also a lot of challenges in moving the goods from wherever we can source them.
However, we are doing our best and still buying whatever we can get from the farmers so that we keep our promise that whatever is produced locally we will make sure we mop up everything.
Considering the whole nation had to be on lockdown for so many weeks, this affected the Milling operation of our members. Also, the issue of foreign exchange, with sourcing and accessibility being affected seriously.
The dollar we were getting at a reasonable rate has now been reviewed upward. Whatever we are now getting to source our raw material is not like it used to be before the COVID-19. Also, people have been affected in terms of even purchasing power, because if you are not allowed to go out to do your business, then your ability to spend money and buy whatever you want to buy is affected directly. Of course, this is a worldwide issue, but we have to deal with it and we pray that it will soon be over so that life can return to normal.
With productivity taking a hit this year, don’t you think farmers would also need some sort of support?
We are already doing a lot in terms of giving the farmer support, in terms of research and development, good seedlings for them to get higher yields per hectare. This year we did some Anchor Borrowers’ Program with the farmers, giving them a lot of assistance in terms of inputs with the agreement that we are going to mop up everything that is produced.
Going forward we may do more than what we did last year when we supplied some fertilizer and other inputs so that they can produce more. In terms of support, I do not think the industry is in a good position to say that this is the support we are going to give right now. We have to look at the situation before we could say ‘ok, this is what we are going to do’. However, I am not ruling out the association making some support for the farmers for the losses incurred and to boost their production.
We prefer to have our wheat locally sourced. However, if it is not available, what can we do? We have to keep our industries running by finding other ways to survive
We tend to see on an average a difference of 20 – 40 percent in price difference, which is in favour of imported wheat. Occasionally local wheat prices can be as much as 70 or 80 percent more than imported wheat
In 2016 a Memorandum of Understanding was signed with the Wheat Farmers Association of Nigeria (WFAN) to offtake all wheat produced by farmers in Nigeria. Four years after, can you give some insights into how this relationship has fared over the last four years?
We have been in good terms with the wheat farmers association. The relationship over the last four years with them has been very cordial. In the past, it was more of antagonistic due to some mistrust on the side of the wheat farmers. However, after engaging them in regular discussions and extensive collaboration, the wheat farmers association can now attest to the fact that we have made significant impact and the level of our support has been both consistent and increasing. We have done a lot in terms of research and development. We have been trying to see how we can have good seedlings that give them more yields. We engage with the Lake Chad Research Institute to conduct necessary research and give us feedback, which we pass back to the farmers.
We have purchased over N1 billion worth of wheat over the last four years. Therefore, I think the relationship has improved significantly compared to what the expectations were before.
In sourcing from these local farmers, how have they evolved in terms of meeting quality requirements? Is it there yet? And if not, what more needs to be done so that they can give not just the right volume, but also the right quality needed for processing.
We are not yet getting the quality we need, because the right seedling is not available. Over the years, farmers have been recycling the same seeds, planting it repeatedly and the yield has been declining. What is needed is to have good seedlings. We are hoping authorities can allow us to have some good varieties brought in from neighbouring countries. Specifically, we identified one seedling called Imam from Sudan, which is good for our environment.
If the authorities could allow, we are willing to bring in that kind of seedling so that the yield can improve much more than we are getting now.
This variety you are talking about in Sudan, what challenges have you faced in trying to get it adopted locally?
There is the Seeds Council which certifies all seeds produced in the country and we have to go through them. That is why I’m saying if the authorities would allow the importation of the seedlings from Sudan because we did our own investigations and confirmed the Imam variety can produce well in the northern part of Nigeria because we have a similar kind of weather. Still, we have to go through the process of getting the seed certified by the seed council and approvals from other necessary agencies.
Apart from this Imam variety you have mentioned and looking at the work you’ve been doing with the Lake Chad Institute, what efforts have you been spearheading in getting the local varieties improved so that they give some of what you expect in terms of output?
We are doing seed multiplication to see how we can develop an improved variety, for instance with the ‘Norman seed variety’ which we did about 25 hectares of land. We also did some research on durum wheat variety for production of pasta products. These are some of the things we are doing to see how we can improve on the seedlings being used by farmers.
What is the cost difference between imported and locally sourced wheat, and what is responsible for it?
The local variety costs more because the cost of production is always higher. Wheat is only grown in the northern part of the country mostly within Kano, Jigawa, Sokoto, Kebbi axis. The irrigation facilities are not available everywhere, limited only to some few regions of the country. The cost of course is always higher in terms of the locally produced wheat. You cannot compare with the imported wheat.
We tend to see on an average a difference of 20 – 40 percent in price difference, which is in favour of imported wheat. Occasionally local wheat prices can be as much as 70 or 80 percent more than imported wheat. Low yields per hectare is the primary reason for high prices.
Going forward, if we are to drastically improve on local sourcing, what strategy needs to be put in place and can you project a timeframe over which we can have a roadmap to make locally produced wheat cost effective and competitive with the foreign alternatives?
We are expecting all stakeholders to put hands on deck and to be involved in the mass production of wheat. We as millers and end users of the locally produced wheat are doing all we can to see how we can improve the situation. However, the federal, state and local governments, as well as financial institutions all have to be involved in making the environment conducive for local wheat production. Everybody has to be involved. The irrigation facility has to be provided. The financial sector has to come in with good subsidies for the farmers so that they can access loans to increase the acreage they are cultivating.
What we are doing from the Flour Milling Association of Nigeria, is to provide the necessary support in terms of training, capacity building and making sure that the right seedlings are available for farmers so that we have the best quality at the end of the harvests. It is supposed to be the collaboration of all stakeholders to make it a reality.
If all the irrigation facilities can be provided, other crops will also benefit this. It is the same area of cultivation for rice, wheat, vegetables etc. If the facilities are available, I think it will give us much hope that local wheat production will increase but it will be difficult for somebody to say within the next 2,3 or 4 years. We are only hoping that things will get better by the day with our involvement in the local production.
Do you think there is a lack of attention on Wheat in terms of government policy and finance from the CBN such as what is flowing to rice, the lack of which is probably limiting growth in wheat production?
I think the Central Bank of Nigeria (CBN) is doing its best in terms of assisting with local wheat production. The issue is probably not in terms of Finance as such but attention is being given more to the rice production than wheat because of many reasons. As I said, the areas of production is restricted to the northern part of the country. Wheat has a period of planting which usually starts from November and if you are late a day, your yield will decline. It is a very sensitive crop that requires specialization in terms of its cultivation.
Financially I don’t think CBN is doing badly because they collaborated with the Wheat Farmers Association of Nigeria. They are doing all they can to ensure farmers get some assistance in terms of Anchor Borrowers, but probably we need to pay more attention more than what we are doing, judging by how the rice production has improved significantly compared to be local Wheat production.
I would like you to speak specifically to some of the interventions by FMAN in boosting local wheat production, what has been done over the years?
We have been assisting wheat farmers in the country in the last four years and our intervention has been over N250million. We made a donation of N20million to the Lake Chad Research Institute for research on improved technology and modern Agronomy practices in the year 2016.
We also donated water pumps and some wheat seedlings to farmers. In 2018, we procured 50 multi-crop threshers from outside the country and they were donated to wheat farmers in order for them to have a good harvest at the end of the season and also reduce post-harvest losses.
We also engaged over 400 farmers in Kano, Jigawa and Sokoto on the outgrower program and we have stationed our staff to be monitoring the program so that we can achieve what we want in increasing wheat production. With these interventions, improvement in off take price for wheat has been to the advantage of the farmers.
Looking at all the support given so far, what insights are you getting in terms of helping to scale up output?
The important thing for us is to have built confidence with the farmers. As I mentioned earlier, the farmers were looking at us as not being serious in terms of local wheat production. There was a lot of misunderstanding that they will produce and nobody will offtake the harvests. With our coming and all these interventions, the first thing we did was to give confidence to the farmers that we are around and willing to take whatever they produce.
This was the first thing we did and I’m happy to say that we have that confidence with the wheat farmers in the country. When we donated the water pumps and the seedlings, we saw an increase in terms of the output of wheat production in the country. We just donated the threshers in 2018, so it is now we are going to assess what level of improvement is recorded in terms of harvesting the wheat. Already, we have seen from what we are buying that it is much cleaner than what we used to get. This shows the threshers have contributed in terms of getting good variety of wheat, clean and without impurities.
You have spoken so much about what the private sector is doing to scale up wheat production. In all of this, isn’t there a role for government to also complement your efforts?
We look forward to the government coming in terms of providing the irrigation facilities because that is under the Federal Ministry of Water Resources, especially in the states where the crop is grown in good quantity and they have the land. We are also looking at investment in research and production of high yielding seeds variety, which can give us good baking quality at the end of the day. Also, major agricultural credit schemes like NIRSAL, CBN and the rest can give us more encouragement. Likewise, the federal ministry of agriculture and rural development will have to come in, in terms of providing capacity building and extension programs so that the farmers can get the latest information on how to grow wheat using the latest technology and maybe at a minimum cost.
When you say imported wheat has certain advantage over the local ones, in what ways exactly?
The foreign wheat has as an advantage in terms of coming in one particular variety. That is the first point. It is either soft wheat or hard wheat, which can give more gluten and more quality bread at the end of the day. Our problem locally is the wheat we are growing is a mixed one. You cannot get 100 percent soft or hard wheat, and by having a mixture of the two when you want to bake your bread you are not going to get the best out of it.
It is not that we do not want to buy or use the local wheat 100 percent, but quality of the variety being used in the mills is a challenge. The quality of wheat is what determines the quality of flour produced and then it goes to the Bakers who in turn get the best quality of bread. If we can have a good varieties (such as Imam and Norman), over a period of time I believe we can compete with the imported wheat.
Any final words you’d like to share?
I want to make an appeal to all the stakeholders to understand that local wheat production is very vital in feeding the nation. We have areas where we can develop and grow wheat. What we need is to have the necessary infrastructure in place. We the flour milling association are doing all we can in collaboration with the wheat farmers association. We always ask them of their challenges and intervene in whichever way we can so that we boost the local wheat production. It is not in our interest to continue buying wheat from outside, but because the wheat is not available locally, we have to survive.
We employ a lot of people, providing employment across the Nation and if these people are not employed then you are creating more problem for the society. Therefore, we need to keep our employees in place. We have to make sure the raw material is available for us to continue to produce. Bread is a staple food in Nigeria and there is hardly any house where in two days they do not eat bread. I believe bread is more consumed than rice because bread is consumed everyday regardless of position or status.