22 October 2018

Nigeria: Calls for Re-Introduction of Agric Marketing Boards Deepen

Femi Ibirogba, Head, Agro-Economy Desk, writes of divergent points of view on and imperativeness of the proposed re-introduction of commodity marketing boards.

Many Nigerians from all walks of life have called for the speedy re-introduction of various agricultural boards for cash crops such as cocoa, cashew, rice and maize, while several others have kicked against such a move.

Though the Nigeria Export Promotion Council (NEPC) recently disclosed, through its Executive Director, Segun Awolowo that the government had been working on introducing a private sector-led commodity aggregation board, it appears nothing has been done.

Realising the importance of coordinating aggregation of agricultural produce in the country, a former Minister of Agriculture, Akinwumi Adesina, proposed the establishment of commodity boards, but this could not work out well before the end of the administration.

The defunct marketing boards were emplaced to scale agricultural hurdles of poor financing, fluctuating prices and inability to access markets.

The marketing boards were of great help to farmers with relevant information and capacity building towards stabilising production and marketing of farm produce.

However, corruption, suspicion of shortchanging from the perspective of farmers, fear of external control and inadequate funding/poor management were strong factors leading to their collapse.

Arguments for and against marketing boards

There are two schools of thought on the idea of re-introducing commodity marketing boards in Nigeria, and the arguments have become more serious as the country finds it inevitable to diversify into agriculture on the account of dwindling crude oil revenue.

The school in support advocates that agro-products price stability attainable through the boards would serve as positive investment behaviour modification strategy to farmers, prompting developments, but the school that rejects the idea claims that the board could go the way of the defunct ones because of high level of corruption, lack of integrity and lack of regulatory frameworks, among other reasons.

Price stability, propensity to produce more and food security

Price stability is one of the reasons adduced for the creation of marketing or coordinating boards across various agricultural commodities by those who belong to the school of thought. It could serve as a stimulant that could attract many new investors in agriculture and could make existing farmers intensify and expand farm operations.

Following the pattern of the stimulus-response theory, the advocates of marketing boards claim that sure price stability that might follow the re-introduction would mean a positive reinforcement, and that farmers and investors would respond positively by revving up farm operations, which, according to them, would help Nigeria achieve zero hunger sustainable development goal, boost industrialisation through production of raw materials for agro-allied processors, create more jobs for rising number of the jobless and therefore, help in reducing extreme poverty.

Boards might prevent selling at give-away prices as it is now, the argument goes on, as selling at give-away prices is counter-productive, restricting subsequent investments in agricultural enterprises.

In a nutshell, stability in prices would stimulate a positive response to food and industrial crops production; food production would reduce food import bills, and if sustained, would eventually lead to food security and export (an improved GDP) through a national strategic reserve system.

One of the advocates of this school, the President of the National Palm Oil Producers Association of Nigeria (NPOPAN), Mr Henry Olatujoye, told The Guardian that the association had always expressed support for the re-introduction of marketing boards, but the constituents of the boards should be the private sector operators, not civil or public servants. The government, however, could have representatives in an advisory capacity on the boards.

He said apart from the boards, agricultural councils should also be formed. For examples, he said, in the oil palm sector, an oil palm agricultural council, an oil palm marketing board and an oil palm producers association should be formed, and should work together for checks and balances.

In this tripartite model, the agricultural councils would be in charge of policy frameworks and regulations; the marketing boards would aggregate produce and moderate prices, while the associations would protect the farmers' interests in major strategic crops.

Camping with the oil palm producers is the All Farmers Association of Nigeria (AFAN), saying, "We are in support of the marketing boards because there will be organised markets. Once the market is organised, everybody will know the price. And productivity will increase if price is stable," Ibrahim Kabir, who is AFAN president, told The Guardian.

Similarly, the Cassava Management and Agro-processing Project (CAMAP) Coordinator for African Agricultural Technology Foundation (AATF), Mr Ayodele David, expressed support for the proposed re-introduction of boards for major crops on the ground that the re-introduction could bridge the gap of fluctuating prices and help farmers to make projections for farm expansion and for securing financing based on the projections.

"The producers would be assured to produce more at the minimum guaranteed prices, and they would be sure where to sell, and writing a proposal for facilities would become easier. This would also encourage the financial institutions to lend to farmers," he said.

The boards could help the country in achieving food sufficiency through national strategic grain reserves, they claim, where paddies (unprocessed rice) and maize, which are about the most important national grains for now, could be stored and sold to processors.

The recent lease of silos, they say, was a wrong step, because the government could use the silos for rice and maize storage via boards. Also, the board would become the major off-taker of farm products.

Price stability through agro-marketing boards would ensure rice and maize security.

Mr Akin Olusuyi, Managing Director of Oluji Cocoa Products Ltd, in Ile-Oluji, Ondo State, a processor of cocoa beans for local industrial use and export, expressed support for marketing boards.

Specifically speaking on the cocoa industry, Olusuyi said nothing runs successfully without an institution coordinating it.

The problem of Nigeria, he added, and by extension the cocoa industry, is lack of institutions, saying, "That is why things don't work. The cocoa economy is not working because there is no institutional framework."

Olusuyi said: "A marketing board is supposed to coordinate the activities of the cocoa industry, starting from farmers and marketers to exporters and processors. There should be an institution that coordinates every stakeholder. But everybody does what he likes in the sector now.

"For example, there are so many global activities going on in the cocoa industry, but they would not come to Nigeria. If investors come to Africa, they either go to Ghana or Cote d'Ivoire. Why? There is no institution in Nigeria to work with," Olusuyi said.

He added that the country loses global cocoa investments, aids, seminars, conferences and technical inputs to other countries because there are no institutions.

"If they go through the government, you and I know what will happen. So, this board has been overdue. We have been on it since the Goodluck Jonathan-led administration," he lamented.

He made the clarification that he was not calling for a board that would control prices, saying, "I am saying we should have a board that will regulate the activities of the practitioners in the sector."

He criticised the position of the cocoa association against the establishment of a board or price regulation, saying that the association had not benefited farmers.

"Everybody wants to defend a position that is beneficial to him or her, but that should not be. They believe they have an association, but it is all a jamboree. What benefit have they brought to the farmers and exporters? In the real sense of it, who are the exporters? They are foreigners. Olam Group and Almajaro Group are the real exporters of the Nigerian cocoa. All our people do is just rent taking.

"So, what benefit has the association brought to the farmers? People don't want a board because they don't want to be regulated. An average Nigerian wants things that benefit only him, but some of us have outgrown that," he submitted.

Corruption, shortchanging and impoverishment of farmers

One of the arguments against re-inventing agro-allied marketing boards is high level of corruption.

The antagonists say the defunct boards were marred with corruption, and that corrupt practices are even more pronounced now than then.

Part of the argument is that liberalisation of the sale of agricultural products has given farmers opportunities to sell their products at the prevailing international prices and they are better off under the current condition.

They claim that marketing boards have the propensity to be corrupt, short-change farmers by buying far less than the prevailing global prices, and hence discourage direct investments into the productive agricultural sector.

Theoretically, this is a negative reinforcement that would discourage investment inflows into the sector, they claim.

The regional government that established marketing boards were initially focused, using such boards to source revenue for development, they claim, alluding to the Southwestern region and the Cocoa House, building of the first television station and University of Ife, now Obafemi Awolowo University (OAU), Ile-Ife, as examples of well utilised resources emanating from such boards, but corruption crept in and the boards derailed.

The president of the Cocoa Association of Nigeria, Mr Sayina Riman, while speaking with The Guardian on behalf of the association, rejected the idea of re-introducing commodity marketing boards on the ground of corruption, and in view of high earnings the libralisation has afforded the farmers.

"Even if I want to support the idea," Riman said, "95 per cent of the entire cocoa production value chains have refused to support the re-introduction of marketing boards. Most of the cocoa producers are 65 years hold on the average and they had the first-hand experiences from the defunct marketing boards."

He added that, "Even if the board will not market cocoa, it cannot work until corruption is subdued in Nigeria. After the scrap of the commodity boards, the government has not supported the private sector to develop the cocoa sector."

Riman claimed that in the entire sub-region, the Nigerian farmers earn the highest of the commodity prices because speculators would sometimes buy the cocoa beans beyond the international prices.

"The Nigerian farmers earn the highest in terms of cocoa prices in the sub-region. And nobody would want to leave such a libralised economy. However, has the government tried any other alternative since the scrap of the boards?" he demanded.

With a tone of finality, Riman said, "We and the entire cocoa value chains are saying no to any cocoa marketing board of any form."

Malachy Akoroda, a professor of Agronomy and former Executive Director of the Cocoa Research Institute of Nigeria (CRIN), admits the need for coordinating boards, but bewails lack of integrity and high level of corruption that may mar such boards.

"What made the first one fail? Integrity was not there. Whether you bring it back or not, would you bring back integrity? Is integrity valued? Whether you put a board or you don't is not the point. Ghana is operating a board till tomorrow and it is working for them because of differences in integrity. Many countries don't want to deal with Nigeria. Why? It is lack of integrity. There is low level of integrity, poor percentage of integrity, and low degree of integrity," Akoroda said.

Need for a common ground, going forward

The conflicting arguments have adequate reasons to back the views. In fact, the arguments are convincing. From the arguments of the opponents, corruption is a monster disrupting the progress of the country. Experiences have shown that corrupt elements would always subvert any system to enrich themselves and cronies. Integrity is a scarce commodity in Nigeria.

However, the business of food security and industrial development is too serious to be left without clear policy direction and proactive coordination.

Rice production, for an example, is too crucial for the country to be left uncoordinated.

Producing paddies without off-takers at relatively sable prices is a disincentive to farmers, and a negative behaviour modification instrument that would prevent farmers from serious production.

For the country to produce enough local rice, production has to be consistent, and new farmers attracted in the cultivation. Fair price stability through a board would serve as a wand to rev up production and productivity.

Absence of coordinating boards for major national food and industrial crops imply lack of organisation, carefree attitude towards economic diversification, and visionless leadership.

Finding a common ground to resolve conflicting points of view around corruption and interest of farmers becomes imperative, and therefore, the inevitability of clear policies and coordination in the post-harvest handling and management of agricultural products in Nigeria is a reality if food security, zero tolerance to hunger, employment generation and sustainable development through a truly diversified economy are the national goals.

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