Chinyere Anyanwu, [email protected]
The agriculture sector, which the Federal Government is determined to transform and make the economic staying power of the country in place of oil, witnessed some major issues in the outgone year.
The sector, touted by the Federal Government to be instrumental to the fulfilment of its economic diversification plan, experienced major shocks as well as advancements in some quarters. A review of the year reveal the following:
Budgetary allocation
Federal Government budgetary allocation to agriculture in 2019 was N138 billion. The allocation, as a percentage of the overall annual budget to all sectors in the 2019 proposal was 1.56 per cent.
With such percentage allocation to agriculture, stakeholders in the sector were sceptical about the sincerity of government’s professed intensions to diversify the economy away from crude oil and into critical sectors like agriculture.
According to the government, it had the intention “to facilitate access to inputs, set up a one-stop shop for small farmers, fast-track the development and execution of irrigation projects, improve access to finance, extend the Anchor Borrowers Programme (ABP), recapitalise the Bank of Agriculture (BoA), encourage the development of investment vehicles by the private sector, encourage research to support agricultural productivity, and increase crop value,” with the budgetary allocation.
RUGA suspended
On May 21, the Federal Government approved what it termed the Rural Grazing Area (RUGA) settlement scheme aimed at settling herdsmen in locations across the country where they could do their cattle business in dedicated and enclosed spaces with facilities provided for ease of the business.
Explaining the scheme, then Minister of Agriculture and Rural Development, Audu Ogbeh, said, “cattle colony is not using herdsmen to colonise any state. It is going to be done in partnership with state governments that will like to volunteer land for it,” adding that, “the Federal Government will fund the project and those wishing to benefit from it will pay some fees. Already, 16 states have volunteered land.”
According to the Presidency’s spokesperson, Garba Shehu, “the overall benefit to the nation includes a drastic reduction in conflicts between herders and farmers. No state is compelled to partake in the initiative.”
The programme was viewed, however, with distrust and scepticism giving rise to heightened call for its termination from the greater percentage of the people. Despite government’s assurances that the programme was for the good of all stakeholders and the public at large, it did not succeed in dousing the tension raised by the programme.
On July 3, therefore, the Federal Government suspended the programme even before take off, a move that was hailed by many as a step in the right direction. In a statement through President Muhammadu Buhari’s media aide, Bashir Ahmad, the government said, “the Federal Government, after consultations with stakeholders, has suspended the RUGA Settlement Project for now.” Majority of stakeholders were unanimous in their opinion that the continued implementation of the programme was an evil wind that would blow no one any good.
Ban on forex for food importation
The Federal Government, on August 13 of the year under review, directed the Central Bank of Nigeria (CBN) to stop providing foreign exchange for importation of food into the country. President Muhammadu Buhari was quoted as saying: “Don’t give a cent to anybody to import food into the country,” In order words, any importer of food products will have to source forex from unofficial windows at higher rates.
Government, defending the move, had explained that improving agricultural production and ensuring the attainment of full food security in the country informed the decision. CBN, also corroborating the Federal Government, said there was no sense in allowing the importation of food that can be produced in the country. According to CBN, Nigeria spent about N1.3 trillion on the importation of rice, fish, sugar and wheat between January and December 2019.
Stakeholders were, however, of the opinion that there shouldn’t be a blanket ban on forex for food importation as the country was yet to achieve full food sufficiency. They urged government to exempt food items that are used as raw materials in manufacturing industries from the forex ban.
Reacting to the ban, Managing Director of Financial Derivatives Limited, Mr. Bismarck Rewane, stated that, “restrictions don’t really help economies while protectionism, to me, is a Trump style that does not, in any way, help economies.”
Border closure
Coming on the heels of the ban on forex for food importation was the closure of land borders in the country. On August 20, the Federal Government closed all land borders with its neighbours – Benin Republic, Niger and Cameroon – to check smuggling of rice, poultry products, among other food products, and illegal movement of light arms.
The closure triggered a chain of events that have rubbed off adversely on the common man, including gross scarcity and price increase of rice (both local and imported) and poultry products, which are the major food items smuggled into the country.
Following the border closure, a 50kg bag of local rice that was sold for between N12,500 and N13,000 began to sell for between N24,000 and N27,000 while a 50kg bag of imported rice that was sold for between N14,000 and N16,000, depending on the brand, began to sell for around N28,000 or N29,000. The prices of poultry products also went through the roof as a 10kg carton of frozen chicken that sold for around N10,000 began to sell for between N12,500 and N13,000.
Stakeholders had expressed concern over the timing of the border closure especially as the yuletide season was drawing near. To stave off the fears of the public, Nigerian farmers had assured that they were equal to the task of flooding the market with these food items, especially rice. Though availability of local rice improved, prices were still on the high side.
As at this write up, the borders are still officially closed though foreign rice is still being smuggled into the country and the government seems not to be in a hurry to reopen them with the excuse that the country’s neighbours were still not complying with agreements guiding bilateral relations between the countries.
Loan facilities
The CBN has, through the Anchor Borrowers Programme (ABP), provided agriculture loans to farmers at a single digit interest rate of 9 per cent though stakeholders are calling for nothing more than 5 per cent.
Farmers in different value chains received a boost to their farming activities within the year. For instance, 5,814 rice farmers were presented with various farm inputs under ABP for the 2019 dry season rice farming in Plateau State.