Inwalomhe Donald

President Muhammadu Buhari should formulate policy that will drive the development of palm oil industry beyond the ban of the importation. I want to appeal to President Buhari on the need to give a fresh and strategic mandate to revive the moribund Nigerian Institute for Oil Palm Research (NIFOR) in Benin to improve investment in research and production of quality oil palm seeds. 

There is need to give a fresh mandate to NIFOR for meaningful investment to come into the oil palm industry, we have to think of other incentives to encourage manufacturers to turn oil palm to other things. There is need to give a fresh mandate to create incentives for those who are currently in the business to explore all the uses of palm oil to create job opportunities for our people.

President Muhammadu Buhari recently directed the Central Bank of Nigeria to blacklist any firm, its owner and top management caught smuggling or dumping palm oil into the country. The presidential directive was disclosed by CBN Governor, Mr Godwin Emefiele, at a meeting with oil palm producers recently, in Abuja.

Emefiele warned that henceforth, those caught smuggling palm oil into the country would be blacklisted from all banking businesses and would also be blocked from the foreign exchange market. He said that this also included those who tried to smuggle in palm oil through Customs as “hydrogenated vegetable fats”.

He disclosed that close to about N30 billion had already been disbursed to those currently involved in oil palm farming. The apex bank governor said that for those coming newly into the oil business, credit facilities would be extended to them through their banks and that Out-Grower schemes would also be organised.

There is need for President Buhari to give a fresh and strategic mandate for Smallholders to get access to the latest technology which have already demonstrated their ability to produce as efficiently as large-scale plantations.  Local and national representative bodies are now growing in scale and stature, providing much-needed voice for smallholders in immediate business negotiations and wider policy dialogue. The challenge now is to share good practice more widely.  Real progress will require action from a range of stakeholders, including smallholders, smallholders’ associations, government agencies, plantation and milling companies, traders and retailers, and key third parties (e.g. people’s organisations, NGOs, banks, insurance agencies) – to develop and try out the variety of mechanisms that can help improve sustainability and equity in palm oil production.

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There is need for President Buhari to give a fresh mandate to NIFOR to Support smallholders: Growers who cultivate palm oil with the direct support of either government or the private sector.  The basic concept is that the government agency or private plantation company provides technical assistance and inputs of seed stock, fertilisers and pesticides, on a loan basis, sometimes partially subsidised by government.

There is need for President Buhari to give a fresh mandate to NIFOR to Support Independent smallholders: Growers who cultivate palm oil without direct assistance from government or private companies.  They sell their crop to local mills either directly or through traders.

There is need to give a fresh mandate to NIFOR to close efficiency gap between large plantations and smallholders so that smallholders increase their annual yields and continue to keep the costs of inputs relatively low.  However, there is huge variation in smallholder practice and results, mainly depending on how central palm oil is to their income strategy.  Supported smallholders continue to achieve higher yields than independent growers, mainly because of access to better quality seed stock, but independent smallholders can in some instances achieve greater returns to their investments.

Smallholders face a number of constraints in maximising their potential from palm oil production while maintaining local choice and autonomy.  There are isolated examples of innovations to deal with these problems and improve the contribution of smallholders to sustainable palm oil production.  There is need for fresh mandate in securing capital to meet upfront expenses: Smallholders typically cannot meet basic conditions of collateral and minimum loan size to secure bank financing.  Micro-finance institutions are the main solution.  These may include interest-free loans for specified inputs, renegotiable terms and equity based on forms of recognition of land ownership other than formal land title.

There is need for fresh mandate getting good technical, policy and market information: Access to trustworthy information – on prices and pricing policies, market opportunities, technical aspects of production and site management, and more fundamentally on rights and options under national law or formal agreements – is a also a major difficulty.  Responses to this problem include access-to-information services from NGOs and international agencies, but their reach is geographically specific.   There is need for fresh mandate for the government to come up with an innovative policy to encourage a return to the farms to produce oil palm. Investors should be encouraged to take advantage of research findings of the Nigeria Institute for Oil Palm Research in Benin City to access improved high yielding seedlings to be able to cultivate oil palm at plantation level rather than the old methods of the past. There are already plantations in Imo, Cross River, Rivers and many other parts of the country.

Smallholders are a vital part of the global palm oil supply chain, but they are often less productive and sustainable than big firms. There is need for fresh mandate to meet the standards required for exports and have improper documentation, certification, accreditation and product packaging. Additional challenges include: government owned plantation fields, weak milling infrastructure, challenges in accessing lands, community unrest, politics and rights activism. These all contribute to hindering growth and development of the palm oil sector, and ultimately discouraging private investors.

Donald writes from Benin City, [email protected]