President Tinubu should formulate policy that will drive the development of palm oil industry beyond the ban of the importation. I want to appeal to President Buhari on the need to give a fresh and strategic mandate to revive the moribund Nigerian Institute for Oil Palm Research (NIFOR) in Benin to improve investment in research and production of quality oil palm seeds.
There is need to give a fresh mandate to NIFOR for meaningful investment to come into the oil palm industry, we have to think of other incentives to encourage manufacturers to turn oil palm to other things. There is need to give a fresh mandate to create incentives for those who are currently in the business to explore all the uses of palm oil to create job opportunities for our people.
In agriculture, Edo has attracted almost $500 million investment into palm oil cultivation having allocated the first phase of 60,000 hectares of land under the Edo State Oil Palm Production Programme (ESOPP). As part of Edo State Government’s expansion of oil palm revolution, Fayus Nigeria Limited has commenced the development of a 3,000-hectare plantation in Ugbeturu Community, Owan West Local Council, with a target of creating 5,000 jobs in the community at full capacity.
The project is captured under the Edo State Oil Palm Programme (ESOPP), rated as the largest oil palm development project in Africa. The ESOPP programme, backed by the Central Bank of Nigeria (CBN), is spearheading the development of over 100,000 hectares of land across the state.
I am worried over the recent low performance of Nigeria in the production of Oil Palm especially now that there is a great increase in the global demands for the product. Between 1964 and 2018 the demand for Oil Palm globally has increased from 1.2 million metric tonnes to over 73.3 million metric tonnes. There has been a great increase in the global demands for oil palm from 1.2 million metric tonnes in 1964 to over 73.3 million metric tonnes in 2018 and Indonesia and Malaysia are two leading countries in the sector currently growing over 60% of the world oil palm trees.
Nigeria which use to be a leading producing country in the 1960s is presently ranking 5th in the production, due to protracted neglect by the government. “Nigeria that ranked among the top five Palm oil producing Nations have a long way to go to be able to meet local demand and export”.
The fundamental challenges confronting the sector in Nigeria include, subsistence nature of cultivation, high cost of production and concerns for environmental compliance. Others, are low yields, unacceptable processing procedure, quality/certification issues, sharp practices, infrastructural deficiency, traceability, poor access to finance and high domestic price which has hindered export.
There is need for President Tinubu to give a fresh and strategic mandate to NIFOR for Smallholders to get access to the latest technology which have already demonstrated their ability to produce as efficiently as large-scale plantations. Local and national representative bodies are now growing in scale and stature, providing much-needed voice for smallholders in immediate business negotiations and wider policy dialogue.
The challenge now is to share good practice more widely. Real progress will require action from a range of stakeholders, including smallholders, smallholders’ associations, government agencies, plantation and milling companies, traders and retailers, and key third parties (e.g. people’s organisations, NGOs, banks, insurance agencies) – to develop and try out the variety of mechanisms that can help improve sustainability and equity in palm oil production.
There is need for President Tinubu to give a fresh mandate to NIFOR to Support smallholders: Growers who cultivate palm oil with the direct support of either government or the private sector. The basic concept is that the government agency or private plantation company provides technical assistance and inputs of seed stock, fertilisers and pesticides, on a loan basis, sometimes partially subsidised by government.
There is need for President Tinubu to give a fresh mandate to NIFOR to Support Independent smallholders: Growers who cultivate palm oil without direct assistance from government or private companies. They sell their crop to local mills either directly or through traders.
There is need to give a fresh mandate to NIFOR to close efficiency gap between large plantations and smallholders so that smallholders increase their annual yields and continue to keep the costs of inputs relatively low. However, there is huge variation in smallholder practice and results, mainly depending on how central palm oil is to their income strategy. Supported smallholders continue to achieve higher yields than independent growers, mainly because of access to better quality seed stock, but independent smallholders can in some instances achieve greater returns to their investments.
Smallholders face a number of constraints in maximising their potential from palm oil production while maintaining local choice and autonomy. There are isolated examples of innovations to deal with these problems and improve the contribution of smallholders to sustainable palm oil production.
There is need for fresh mandate in securing capital to meet upfront expenses: Smallholders typically cannot meet basic conditions of collateral and minimum loan size to secure bank financing. Micro-finance institutions are the main solution. These may include interest-free loans for specified inputs, renegotiable terms and equity based on forms of recognition of land ownership other than formal land title.
There is need for fresh mandate getting good technical, policy and market information: Access to trustworthy information – on prices and pricing policies, market opportunities, technical aspects of production and site management, and more fundamentally on rights and options under national law or formal agreements – is a also a major difficulty. Responses to this problem include access-to-information services from NGOs and international agencies, but their reach is geographically specific.
There is need for fresh mandate for the government to come up with an innovative policy to encourage a return to the farms to produce oil palm. Investors should be encouraged to take advantage of research findings of the Nigeria Institute for Oil Palm Research in Benin City to access improved high yielding seedlings to be able to cultivate oil palm at plantation level rather than the old methods of the past. There are already plantations in Imo, Cross River, Rivers and many other parts of the country.
Read also: As manufacturers order N241bn worth of palm oil
Smallholders are a vital part of the global palm oil supply chain, but they are often less productive and sustainable than big firms. There is need for fresh mandate to meet the standards required for exports and have improper documentation, certification, accreditation and product packaging. Additional challenges include: government owned plantation fields, weak milling infrastructure, challenges in accessing lands, community unrest, politics and rights activism. These all contribute to hindering growth and development of the palm oil sector, and ultimately discouraging private investors.
Edo has attracted investments valued at 531.2 million dollars in nine months to the oil palm sector alone via the Edo State Oil Palm Programme (ESOPP). It was created to bring opportunities to large, medium and small-scale investors in the oil palm sub-sector with the goal of de-risking investments in agriculture.
“The programme approach involves the use of Roundtable for Sustainable Palm Oil (RSPO) and Free Prior Informed Consent (FPIC) Guidelines to engage communities in land allocation. A total of 62,500 hectares have been allocated to investors. The programme is expected to create over 200,000 jobs across the value chain.
Inwalomhe writes via [email protected]
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
