By Adebayo Obajemu
Nigeria faces imminent food scarcity with the worsening insecurity in most farming communities in the northern parts of the country, which is gradually but steadily shifting southwards, and this negating most of the efforts and investments of the government to improve agriculture production, and means of diversifying the economy.
This situation is not helped by the dismal budgetary allocation to agriculture in 2021 budget. This year’s budgetary allocation has grossly underfunded agriculture as done in last 20 years, which seems to belie government desire to improve food production and the urgency of the problem.
Experts have said the 1.5 per cent allocation in the 2021 budget is significantly less than the 10 per cent African countries agreed to set aside annually for agriculture.
“The truth must be told; the total allocation to agriculture is a big shame, considering this government’s avowed commitment to the sector. How can we achieve food security with this kind of 1.5 percent or N170 billion allocation to agriculture; especially when we consider the underlying challenges the sector has ranging from farmers- herders’ conflict to insecurity”, Dr. Moritiwon Ayeni, an agricultural economist told this newspaper.
In the budget, the supervising ministry, which is the Federal Ministry of Agriculture and Rural Development and agencies under it will only have access to 1.5 per cent of the 2021 federal budget of N13 trillion.
The breakdown is N66 billion for personnel cost, N3.1 billion for overhead and N110.2 billion for capital expenditure. The 1.5 per cent allocation is less than the 10 per cent Nigeria and other African countries agreed to set aside annually for agriculture.
Recall that the country was part of the 2003 Maputo Declaration that mandated all African Union member countries to allocate at least 10 per cent of their total annual budgets to agriculture. This was done as one the ways to increase food sufficiency in the continent.
However, data show that in the last two decades Nigeria has consistently defaulted on this commitment. In the last 20 years, agriculture got its highest budgetary allocations during the administration of President Umar Yar’adua.
In 2008, that administration budgeted N2.92 billion for agriculture, which was 5.41 per cent of the total budget, and in 2009, it budgeted N3.101 billion again for the sector, about 5.38 per cent of the total budget.
The Obasanjo and Jonathan administrations never raised their agricultural allocations to those marks. The Buhari government, despite repeated promises to revive agriculture in the country, has budgeted some of the lowest figures to agriculture.
In 2020, the administration budgeted N79.79 billion for agriculture, which was less than 1 per cent of the total federal budget. An agricultural scientist, Biodun Oniselu told BusinessHallmark that agriculture has the potential to lift millions out of poverty if well managed.
He said the budgetary allocation to agriculture should have been next to defence, but it was not so.
“Considering the challenges farmers are going through in the north, especially the issue of insecurity and the destruction of farmlands by herders, one does not need a soothsayer to know that the budgetary allocation to agriculture was not enough”, Oniselu, of the Faculty of Agriculture, Nasarawa State University said in a telephone chat with BusinessHallmark.
According to him, the ongoing pandemic has made agriculture, health, education, security sectors among others, to suffer degrees of neglect. Without any iota of doubts, agricultural sector has suffered neglect since political independence about six decades ago.
“Successive governments have claimed to have made efforts to revive agriculture, part of the efforts they are quick to point out is allocating resources to diversify the economy, but in reality, each government has always focused on revenue from crude petroleum. And the economy has grown, not developed, around petroleum revenue.
There has been much reliance on crude oil exports, these have consistently accounted for over 50 per cent of the national revenue. But the unstructured intermittent funding interventions, policies, infusion of targeted funds, lowering of interest and moratorium extension of intervention credit facilities by the Federal Government through the Central Bank of Nigeria (CBN), though seen by many critics as tokenism have been described as moves in the right direction by some stakeholders.
On March 16 last year, in a circular to the money deposit banks and the public, the Central Bank announced that “All CBN intervention facilities are hereby granted a further moratorium of one year on all principal repayments, effective March 1, 2020.
This means that any intervention loan currently under moratorium is granted an additional period of one year.” The CBN has invested over N400 billion in agriculture interventions since 2016.
The bank also reduced the interest rate, indicating that “Interest rates on all CBN intervention facilities are hereby reduced from 9 to 5 per cent yearly for one year, effective March 1, 2020.”
This means that for the first quarter of this year farmers and beneficiaries will still enjoy this gesture by the government through the apex bank.
Another substantial intervention by the government which may produce good results this year is the creation of an N50 billion targeted credit facility for households and small and medium-sized enterprises, including the agro-allied industries.
However, critics claim that the country needs more than tokenism called special interventions by the apex bank. Another move by the government which some have said helped farmers was the border closure against smuggling in the last one year, which were only opened two weeks ago.
This policy actually helped farmers, especially those producing rice and poultry meat.
These farmers actually commended the closure, appreciating that the move gave them a huge market opportunity to feed Nigerians with locally-produced foods while getting value for their investments and labour.
Prof. Olu Atteh of the Faculty of Agriculture University of Ilorin told this medium that there has been little improvement in the agricultural sector, pointing out that “the closure of borders helped many farmers to sell their products at fairly competitive prices, particularly poultry and rice.”
He admitted that though the government had made a lot of efforts in terms of resources invested in the sector through the CBN, particularly the Anchor Borrowers’ scheme, with 9% interest rate, the outcome is a far cry from the resources given out to the farmers.
“This interest rate is still too high. Interest rate for money borrowed for agriculture and aquaculture should not be more than three to four per cent. Other major problem still such as remains access to finance at the right time and market access for the farmers’ produce at reasonable prices”, Atteh said.
Recall that the Covid-19 outbreak has pushed up prices of some farm produce such as cassava, maize and turmeric, but the government would have to do more in terms of policy that would favour agribusiness as a major economic driver to prevent hunger post-COVID-19 damage since the pandemic is still around, he says.
One of the greatest challenges to agriculture according to Dr. Ayo Olude of the department of Agriculture, Kogi State University is that “infrastructure to rural areas where farming activities take place is still very poor, and access to farm machinery for commercial agriculture is still very expensive or non-existent in some localities.
For instance, he said, “To plough, one hectare of land is about N13,750 – N17,500. Access to quality seeds and other inputs are still major issues, while productivity in term of yield per hectare is very low and labour is too expensive for farm operations.”
The purchasing power of the people is also very low and getting lower, Atteh said, making it difficult for most Nigerians to buy farm produce at unreasonable prices, and post-harvest loss is still high because very few companies are involved in value addition.
He recommended that “All the value chains need to be strengthened at every node.”
He also listed other challenges to include the comatose state of the Bank of Agriculture.
Inability of the government to restructure Bank of Agriculture (BOA) for coordinated, structured and country-wide sustainable medium to long-term agricultural credit facilities and other transactions, despite the current government’s plan to do so, has incapacitated agricultural financing significantly.
The plan is to make farmers have over 40 per cent shares of the bank while the government (CBN) and the public would hold the remaining shares, managed strictly as a private sector institution for efficiency.
Mr. Kola Onitiri, an agro-produce exporter said in the last one year, there has been a loss of drive and enthusiasm in the agricultural sector with several distractions.
“The Fulani herdsmen constitute a major distraction and big disincentive to agriculture, border closure issues in the southwest only and smugglers coming in through northern states, non-existence of the Bank of Agriculture are difficulties in the sector,” he said.
However, experts believe government has to do more if this current year is to produce better result. However, some believe there have been positive developments.
Ahmed Taofek, a farmer said there has been increase in rice production, “which is not sustainable and may collapse by 2022 if government does not do the needful, especially in the area of insecurity.
In a recent media parley, Prof. Lateef Sanni, ex-Deputy Vice-Chancellor, Federal University of Agriculture, Abeokuta (FUNAAB), said the agricultural sector achieved growth in the production of some commodities, especially rice, due to border closure and forex restriction against food-related importation.
He also identified more specialised financing and interventions through the government’s Anchore Borrowers’ programme as good steps, saying, “The commercial banks are also working with the CBN.”
However, Prof. Sanni admitted that there is little or total neglect of the development of post-harvest sectors, saying, “We need to reduce post-harvest losses of tomato, mango, oranges and other root crops.
However, Professor Atteh said “We need to integrate and harmonise agricultural interventions by inter-governmental agencies. Donor-driven agricultural projects should align with the private sector for maximum impact. COVID-19 is challenging us to ramp up more production, processing and marketing of immune-boosting agricultural crops
The factional president of the All Farmers Association of Nigeria (AFAN), Mr. Ibrahim Kabir, in a chat with an online medium said that the sector has performed abysmally low in the last one year due to incompetence, inexperience and inability to utilise good advice or professionals in the public administration of the sector.
“To candidly answer your question, I must say that in the last nine months since the current Minister of Agriculture assumed duty, we have not seen any achievement. The rhetoric about mechanisation through the loan-in-kind from Brazil is yet to materialise. So also is the training of 50,000 extension agents,” Kabir said.