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Nigeria: Food Security - FG to Float N200 Billion Bond
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This Day (Lagos)
24 July 2008
Posted to the web 24 July 2008
Kunle Aderinokun
Abuja
The quest to attain self-sufficiency in food production got a boost yesterday when the Federal Government said it would float a N200-billion bond in the Nigerian capital market, for on-lending to commercial farmers.
The bond is expected to be used to fund farm set-up on the basis of soft loans, construct large dams and associated irrigation facilities and fiscal incentives, such as tax credit schemes on agricultural inputs.
Minister of Agriculture and Water Resources, Dr. Abba Sayyadi Ruma, who disclosed this in Abuja at an International Conference on Food Security, also posited that the current global food crisis was an opportunity for Nigeria to exploit the full economic potentials of agriculture in the country.
Ruma said at the conference organised by First Bank Nigeria Plc in collaboration with the Nigeria Economic Summit Group (NESG) that the Federal Government moved to focus on commercialisation of agriculture having realised that that was the way forward.
According to him, "the commercialisation of agriculture would create a lot of economic opportunities especially for private investors. The planned commercialisation is taking an agricultural value chain approach."
He said the Federal Government was promoting private sector-driven large scale commercial agriculture of at least 500 -3000 hectares, with direct tie to the small scale farmers.
Ruma said the arrangement would boost private-sector-driven commercial farming in the country, adding that the state governments would facilitate land acquisition and clearing as well as provide support and infrastructure.
The commercial banks, he added, would provide the Federal Government guarantee funding for farm operations in the commercial farming scheme, in which focus would be on growing "rice, wheat, tomatoes, cassava, livestock, fisheries, cocoa, cotton and jatropha."
Ruma also noted that under the scheme, farming inputs would be implemented through public-private partnership (PPP) in areas of tractorisation, fertilisers, storage and processing.
"The ministry in its investigation on the status of food security realised that one of the key factors responsible for low productivity is the low level of mechanisation. This led to the plan to implement a tractor service scheme (and other agricultural equipment) to ensure availability of, at least, additional 20,000 tractors per annum through public private partnerships with 25 per cent FGN; 15 per cent state, and 60 per cent of private sector equity participation respectively. This is to act as a catalyst for large scale commercial farming.
"The ministry has reviewed the role of the Federal Government in processing of fertiliser procurement and has concluded that the way forward in fertiliser procurement is to completely deregulate inputs and encourage the setting up of fertiliser plants in the country. The developed strategy involves promoting the establishment of fertiliser manufacturing plants by private investors. This is a viable investment opportunity due to the enormous gas reserve in the country, the available human and other material resources," he said.
According to him, "The overall objectives of improving food storage in Nigeria, as a means of guaranteeing food security, are to ensure stability in food supply and avoid price volatility post-production, improved food quality and adequate local supply of products for industrial processing, local and international.
"A private sector-led initiative will be pursued to build an additional 200,000 metric tonnes capacity of product warehouses as well as capacities for silos and conditioning centres in Nigeria."
He said the conditioning centres would be built near points of evacuation as possible.
"The role of processors in achieving food security cannot be over-emphasised, especially in ensuring the availability and affordability of food. Key initiatives will be commissioned to improve the food processing capacity in Nigeria," he said.
Disclosing that the states and Federal Government through PPP would collaborate to establish agro-industrial parks, which would be established in every senatorial district nationwide, Ruma, however, said such would be private sector-managed.
The planned government equity, he noted, is 30 per cent maximum.
"Each will house industries, which in total will employ up to 20,000 workers in each state. It will include well-structured modern factories and processing plants with grading systems and standards, quality controls, quarantine services, power security and water," he said.
Ruma said the agro-industrial parks would be situated near the production areas as possible to reduce the logistical constraints distance might pose.
The planned locations and features, he said, include FCT (Crops, Livestock, Fish); Taraba (Livestock & Dairy); Katsina (Tomato, Cotton & Vegetable); Bayelsa (Fish, Shrimps & Rice); Ondo ( Cocoa, Cassava) and Ebonyi/ Benue/ Niger (Rice).
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However, Ruma said the opportunity available to Nigeria in the current global food crisis, was due to the country's "highly diversified agro-ecological condition, which makes the production of a wide range of agricultural products possible."
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