(Editorial) Rethinking Agriculture

Agriculture has taken on some ethereal colour. It has become some sort of magic word that is a cure all for all Nigeria’s economic woes. The country’s finance minister Kemi Adeosun and the acting President, Prof. Yemi Osinbajo (SAN), recently admonished the country’s youth to go back to the farm, just at the synchronized time the country’s agriculture minister, Chief Audu Ogbe, catalogued the gains and strides the sector has made in the past two years ,particularly taking note of the massive rise in domestic rice production from under one million metric tonnes in 2014 to 5.7 million metric tonnes in 2017 which is about 81 per cent of the 7 million tonnes of milled rice required annually to attain self-sufficiency.

In a recent exclusive interview with Business Hallmark the managing director of First Bank of Nigeria, Dr Adesola Adeduntan, was thrilled by the strides the country was making in the agriculture sector and enthused that the country would son witness a more forceful and meaningful participation of once wary local banks in funding the sector. According to Adeduntan, ‘If we continue to take a frontal thrust at the sector and increasingly derisk it, we should see a larger participation rate of banks in the agro-industrial sector, and this should provide a robust basis for the restructuring of the economy’. Adeduntan has a valid point and Ogbe has a crucial message, but this newspaper believes that there is still a lot of lazy thinking backing the country’s agricultural foray.

First, there is a strong undertone that Nigeria’s agricultural advancement requires throwing a throng of human bodies at the sector. This is wrong.  The United States of America is one of the world’s largest agricultural exporters. If the criteria of third world were simply that of production of basic raw agricultural commodities then America would be the world’s number one third world nation. But here is the rub; America with a population of over 300 million people has only 3 % of its population engaged in agriculture. This means that just about 9 million Americans earn their living from arable American farmland. This reflects certain crucial factors in modern agriculture. Technology has made productivity less a function of the number of people tilling the soil in a laborious orgy of physical exertion. Machines and improved seed varieties have made it possible to improve yield per farm acre without a swarm of muscular farm workers. Nigeria needs to improve farm technology and battle the irritating persistence of low end value chain production where farmers simply produce unprocessed cash and food crops.

Secondly, apart from encouraging farmers to adopt less labour-intensive and more capital and technology-driven farm techniques and processes, the government needs to create commodity boards that smoothen out the income streams of farming communities. In periods of excess supply the boards should buy up surplus produce and protect farmer’s incomes while in periods of poor harvest the boards should step in to protect consumers by releasing stocks from strategic grain reserves. The best approach to encouraging agricultural participation is economic exigencies and not political platitudes. The law of the stomach is the toughest glue that ties output to input. If agricultural output and its multiple activities guarantee reasonable incomes beyond that which can be purloined from being a public officer, then economic agents will instinctively seek such opportunities.

Lastly the government must consciously do the unthinkable. The Buhari administration must be prepared to back the concept of short-dated production subsidies for agricultural output. Large scale farmers operating in certain strategic grain sectors should either be given tax holidays of not less than five years or be charged significantly lower taxes than for other companies that do not operate along any identifiable agricultural value chain. To think that Nigeria’s farming sector will grow without resistance from countries that traditionally export produce to the country is naïve. The push back from European and Asian exporters of processed agricultural goods will be firm and vicious. This is why government must be prepared to step in and support Nigeria’s big farming industries ready to take on their foreign counterparts. Business Hallmark is a firm believer in competitive markets and the principles of market competition, but it would be incredibly foolish to presume that other nations do not tinker with their commodity export support systems to promote domestic output and employment.

China deliberately undervalues its currency, the renminbi, to ensure that it sustains the international competitiveness of its various local industries. America and Europe have riled to no avail against China’s obvious manipulation of the exchange rate of its currency. But in the light of self-interest and real geo-politics China is simply doing just what it should be doing and Nigeria should take a cue. Agriculture constitutes 20 per cent of Nigeria’s gross national Product (GDP) and is, therefore, strategically important but not with body counts but farm planning and technology.