Nigeria’s food import bill of over N1.3 trillion which shows the country largely dependent on external sources to augment local production has been further highlighted by recent data suggesting 20.14 million tonnes in crop deficit and 60 million poultry birds deficit.
While the gap between demand and supply represents challenges in food security, it also presents an opportunity for targeted investments which will take advantage of the surging demand for various commodities such as rice, wheat, maize/corn, chickens, fish, milk/dairy, tomatoes and yams, among others.
“There are various opportunities in the agric sector, it now depends on the strategy adopted to handle it,” says Michael Aderohunmu, CEO of M&K Agro Limited. Aderohunmu further explains that the challenge of food security, occurring partly due to the huge deficit in demand and supply, can be surmounted by “supporting and encouraging farmers at the production level to produce optimally. We also have to look at value addition from production to processing and preservation, and how farmers can be supported to achieve sustainable production levels.”
For his part, Madu Obiora, CEO of Multilinks Export House, tells BusinessDay, “It is an opportunity for investment and also means that it is a priority to fill up the agro-production deficit. It however, also means incentives need to be created for people to invest in filling up the gap, because if you don’t, the implication is creating opportunities for illegal importation.
“There is already a lot of pressure on businesses in the economy, so in attracting people to invest, government has to create some incentives. This makes it more attractive for people to invest; but there has to be a deliberate policy along that line,” Obiora says.
Adeola Elliot, chairman of the agric group at the Lagos Chamber of Commerce and Industry (LCCI) also shares the views earlier expressed. Elliot says “the problem we have is that the abundance of investment opportunities are not matched with strategic thinking on the part of Government, in execution of agricultural policies and strategies.”
Elliot further explains that serious agricultural organisations are expected to participate in developing agricultural master plans, but this does not appear to be the case, as government often favours more of academia, which is not in itself wrong, but inadequate and not always practicable.
Storage units, such as those previously used by the now defunct marketing boards, are also expected to help with food preservation, which will invariably reduce the volume of food losses; particularly for tomatoes and vegetables.
Aderohunmu of M&K Agro believes opportunities abound in the agriculture value chain, such as for the provision of solar-powered cooling systems which will ensure more value is gotten on agricultural products which make it to the major Nigerian markets.
While the Agricultural Transformation Agenda (ATA) has been described as an important first step towards rediscovering agriculture, there is still a lot more work to be done, he adds.
The Federal Ministry of Agriculture asserts that “as a result of the Agricultural Transformation Agenda (ATA), many companies, individuals and donors are now keen to invest in Nigerian agriculture once again. Agriculture is viewed as a business that can provide a reasonable basis for further wealth and job growth in Nigeria.”
The policy and strategy document released by the ministry of agriculture shows that rice production in the country which stands at 2.3 million metric tonnes has a four million ton gap from the 6.3 million metric tonnes demand.
The deficit has been attributed to insufficient supply chain integration which remains a nagging issue in achieving sustenance. Wheat has a deficit of 4.64 million metric tonnes, driven by demand for various types of wheat (white, hard, durum), etc. for bread, biscuits and semovita.
One of the lowest deficits is for maize/corn with 500,000 metric tonnes, which has implied limited imports are required but can shift due to feed demand.
Soya Beans, which has the lowest deficit at 150,000 metric tonnes has its demand driven by animal feed and its usage as a protein cost alternative. Chicken production in the country has a deficit of 60 million birds, a gap filled by illegal imports that enter the market at lower price points than domestic products.
Fish supply in the country has a 1.9 million metric tonnes deficit, attributed largely to a fall off in ocean catch and weakness in aquaculture yields; due to cost of fish feed which is a constraint on growth. Milk / dairy production has a 1.4 million metric ton deficit, driven by insufficient milking cows and low yields (~15-25 liters/day versus norm of 35 – 40 liters obtainable in the Netherlands and U.S.).
Tomato also has a 1.4 million metric ton deficit, which is amplified by post-harvest losses of 700,000 metric tonnes. Yams, a 2 million ton deficit, Oil Palm, which refers to fresh fruit bunch (FFB) from which oil is extracted at a 10% – 15% efficiency rate has a 3.5 million ton deficit, and cocoa has a 3.35 million deficit.
In addition, cotton has 500,000 ton deficit, which it is also predicted could rise to 1 – 1.5 million tonnes, subject to textile sector revival.
Sorghum has an 800,000 deficit which is also expected to rise further as use in feed grows in 2016 – 2020. Import of malt extracts and glucose syrup is currently used to manage gap, hence a commercial threat for Nigerian farmers.
Aderohunmu observes that “Access roads are also a major challenge. Taking produce through farm roads to the major roads, and linking the cities is a challenge; a factor which contributes to a lot of food loss. Fixing access roads by farmers is capital intensive and not a venture for farmers to delve into.”
Caleb Ojewale
