23 May 2018

Nigeria: Why Nigerians Must Consider Our 'Farm to Factory' Program

Agriculture is the main stay of several African countries, including Nigeria, where it contributes more to the country's GDP than even oil.

Well over 70% of the Nigerian labour workforce are employed either directly or indirectly along the agricultural value chain, making it a strategic sector capable of engineering meaningful growth. Its huge potential notwithstanding, the agricultural sector in Nigeria is struggling to live up to its true potential. Wrong policy choices, a widening infrastructural gap and inadequate commercial funding are but a few factors limiting the realization of the aforementioned potential of the agricultural sector.

Even though the agricultural sector employs far more direct labour, 82% of that number are mostly at the subsistence level, farming on less than two hectares of land and earning less than 30 dollars a month. These farmers sell most of their harvests to middlemen who squeeze them out of their profits largely because they lack the capacity to access major markets where they can negotiate better prices.

This infrastructural impediment has left millions of small holder farmers poor and unable to significantly climb the social ladder. For instance, to move a typical container from Lagos to Kano will cost the farmer about the same as moving that same container from Lagos to Osaka in Japan which is 13 times farther. Usually, drivers have to part with opaque fees at several check points across the country, many times even settling 'area boys' to allow for safe passage or risk losing the entire commodity being transported.

It is further worthy of concern to note, that though Nigeria has a cattle population of 33 million cows, we still spend a million dollars per day on imported milk powder. Worse is that when dairy products get to stores from our farms, they cost three times more than the price of milk imported from Europe. Except we bridge this huge infrastructural gaps and improve our supply chains, Nigeria will continue to create several jobs for hard working young people in Thailand, Indonesia, China and India.

Less we forget, asides our huge infrastructural deficit, the shortage in supply of fertilizers to farmers is a huge Impediment to productivity. A simple comparative analysis of the amount of fertilizers used per acre of arable land vis a vis several other countries will expose the fragility of our agricultural out-put. Averagely, Nigeria uses about 6kg of fertilizer per acre of arable land while China uses 180kg, India 182kg, Indonesia 550kg and even Ghana 18kg per acre of arable land. A lot more needs to be done in this regard in a bid to boost productivity and agricultural output.

The recent administration has extensively focused its agricultural policy on low value crops like rice and yams which can, in the long run, only provide a little more food for the farmer and his family to eat but can hardly significantly improve his livelihood.

Trust me, it is good to feed but I am more concerned about creating wealth and employment opportunities for hundreds of thousands of youths and not simply feeding them. This is why we have rolled out an ambitious program called "Farm to Factory", that will target high value crops like Cocoa, Cotton, Rubber, groundnuts and palm kernel to ensure that they are not exported as primary raw materials but are processed, packaged and distributed across the country.

Think about it, we produce 1.8 million metric tons of tomatoes and import 170million dollars' worth of tomato paste yearly. If we can ensure a state policy of processing and packaging most of the tomatoes we produce, we will succeed in creating thousands of jobs for young people around the country and possibly seek new markets outside the country in future.

Hence, there is also the need to provide institutional support for big commercial farmers to enable them boost their out-puts to meet the demand of the factories and the general consumers. Same would apply for other crops like groundnuts, cocoa and rubber.

The extension and investment in the agricultural value chain from 'farm to factory' will stimulate the economy so much that about 10 million jobs will be created in 8 years. Nigeria has an annual consumption of 301 billion dollars consisting of mainly consumer goods which a large chunk can be produced in the country by adopting an industrialization policy. In fact, by 2030, the annual consumption would have hit about 950 billion dollars creating a huge opportunity for industries producing consumer goods.

The question to answer is, will we reposition ourselves to capture a sizable amount of the market share by pursuing industrialization or will we continue to outsource our jobs to China, South-Asia and Europe.

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