The agricultural sector in Nigeria currently employs over 23 million people and has the potential to employ over four million more in the next couple of years. However if you live in Nigeria, you know there is a stark difference between being "employed" and being "gainfully employed".
Take a cursory look at any list of well-paying jobs in Nigeria, and you will hardly find anything related to agriculture. In fact, there is a popular conception that being a farmer is equivalent to being poor. Thus, despite the numerous contributions of the smallholders farmers, who constitute a reasonable percentage of these "23 million employed people", more than 70 per cent of them live below the poverty line of $1.9 per day. This does not have to be the case. If properly harnessed, the agricultural sector is one that has a huge potential to not only employ millions of Nigerians, but to also ensure that every single one of them is well rewarded. The sector can also contribute more significantly to the country's foreign exchange.
However, one of the most notorious reasons why the agricultural sector continues to perform below its potential is the fact that the country's heavy dependence on oil exports has caused laxity on the part of successive governments to implement policies that support the agricultural sector. The need to diversify the Nigerian economy has been repeatedly written and spoken about by several experts across different fields. Most of these tend to primarily answer the "why" and "where"- why should we diversify? Where should we diversify? A common answer to this latter question is the agricultural sector. The reason for this is not far-fetched. Nigeria is blessed with a good climate that makes it a fertile ground for cultivating different crops such as cocoa, cashew, sesame and soybeans in commercial quantities. However, our discussion needs to start shifting to "how"- how do we diversify into this sector? This article addresses this question and proposes that one way to do this through deliberate pro-poor government initiatives.
An example of such pro-poor initiatives was introduced in Malaysia. Known as the Federal Land Development Authority (FELDA) scheme, the state-led settlement scheme was established in 1956 by the government of Malaysia to support the development of plantation land for landless families as a strategy to alleviate poverty in rural areas and address the unemployment problems in the country. Under this scheme, FELDA developed land into plantations for crops such as oil palm and allocated 10 acres per household to poor settlers. Beyond that, FELDA also managed these plantations and the Malaysian government provided all associated costs in advance. All costs were then subsequently recovered in instalments from these settlers when their allocated plots began to yield income. The participants in this scheme were primarily those from poor socio-economic backgrounds. The scheme gave them an opportunity to own something since the ownership of the land was transferred to them after they settled all their debts. With the scheme, several settlers who were earning between 200-400 MYR ($42-85) were able to increase their earning to as much as 1000-3000 MYR ($212-638) monthly.
There is no contention that the FELDA scheme also marked a major turn around in the palm oil industry in Malaysia, a country which is the second largest producer and exporter of palm oil in the world. Malaysia now has 5.9 million hectares of land under oil palm cultivation producing 19.86 million tonnes of palm oil and 2.32 tonnes of palm kernel oil. The industry also employs over half a million workers which includes not only farmers but also farm support workers, and factory and milling experts that work in factories. All these benefits both for the people and the country as a whole flow directly from the enabling FELDA initiative.
Can Nigeria Borrow a Leaf from the Success of FELDA?
Yes we can. Of course, the FELDA model is not without its downsides which is why the model has continued to evolve in Malaysia. Thus, if we adopt this initiative in Nigeria, we have to make necessary adjustments to make it fit our local context. However, I have no doubt that this type of scheme can go a long way to drastically reduce the unemployment rate in Nigeria, give people a decent source of income and contribute significantly to the country's foreign exchange.
From studying the FELDA model, I have observed some interesting factors that contributed to its success, and some important lessons from its weaknesses.
The Need to Have Defined Priorities
If there is one thing that is clear from the establishment and operation of the FELDA initiative, it is the fact that the Malaysian government was very clear about its core priorities-diversify the economy from dependence on rubber and alleviate poverty while still maintaining traditional values. This clarity made it possible to determine those who qualified to be settlers(people within a certain age bracket and from various parts of the country), and even the choice of crop for these plantations. Bringing this home to Nigeria, beyond diversifying the economy and alleviating poverty, our government can prioritise issues such as designing the scheme to be attractive to young people, and focusing on crops such as cocoa, cashew, sesame, and soybeans which are vital export crops.
The Need to Focus on Consistent Growth
FELDA has evolved over the years, but it has prioritised consistent growth. From only 55,000 hectares in 1960 under oil palm cultivation, Malaysia now has about 5.9 million hectares of land under oil palm cultivation. Rome was not built in a day, and the success of the FELDA initiative is clearly a result of several years of growth. If such a scheme is implemented in Nigeria, Nigerians should not expect to see all the changes at once, but rather focus on the consistent improvement and indications that steps are being taken in the right direction.
The Non-Negotiable Importance of Engaging Competent Professionals and Experts
The pioneering professionals that ran the FELDA scheme did such a good job that the World Bank loan used to finance it was settled way ahead of time. However, when they left, they were reportedly replaced with less-competent hands which impacted the pace and overall success of the project. This shows how essential it is that for such a scheme to work, the best hands have to be on ground to lead it free from political influence. If the scheme is adopted in Nigeria, the selection of professionals to run it should be strictly based on merit and competence and with continuity in mind. They must be professionals who would prioritise important practices such as transparency and accountability while also ensuring that internal controls and regular audits are put in place to consistently deliver high-quality results.
The Importance of Government Commitment
Malaysia has been able to reduce its poverty rate from 49.3% in 1970 to only 1.7% as of 2012. This is largely because of the government's commitment to this goal evidenced through various Malaysian policies. The FELDA initiative was born out of one of such policies. The commitment of the government makes a lot of difference. It was why this scheme was introduced in Malaysia in the first place. It was also why certain measures were put in place to address some of the downsides of the initiative such as the competency issue. The Nigerian government needs to fully buy-in and support this initiative since the allocation of land will be done by the government. Their evident support also gives legitimacy to the initiative thereby making entities like the World Bank more willing to provide funding. The role of government equipped with the right political will is therefore highly essential because this initiative is a national agenda.
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A Focus on Promoting Investment in Research and Development
The success of the Malaysian strategy of estate management system and smallholder scheme relied heavily on investment in research and development to see what works and make improvements when necessary. Thus, investments in research and development to drive innovation and technological advancements must be a key part of the initiative, if implemented in Nigeria. It is particularly important in this century to enhance efficiency, product quality, and global competitiveness.
In conclusion, I have no doubt that a similar initiative can work in Nigeria, yielding benefits such as employment creation and increase in foreign exchange. However, it needs to be properly structured and the right people must be on board at all times. The best time for the government to start actively working towards diversification of our economy was several years ago, the next best time is now.
Olasunkanmi Owoyemi runs a commodities exporting company.
