Will Nigeria Replace “the Oil curse” with “Agriculture curse”

Rebecca Roberts

Balogun market; the biggest market in west Africa!

Balogun market; the biggest market in west Africa

As oil price continues to drop, Nigeria is still struggling to stabilize the economy and could turn to biggest contributed to the GDP; agriculture to rescue the economy.Despite the dependency on oil, Nigeria is fundamentally an agricultural country, at least in terms of the population working on the land. 71% of the Nigerian labour force is engaged in agriculture. About 90% of Nigeria’s agriculture outputs is from rural farmers where 60% of the country’s total population of 170 million plus dwell. Nigeria cultivates over 25 million hectares of farming land, however, landholdings are generally small and scattered among the peasant farmers demography.

Despite all the abundant human capital and agricultural potentials, Nigeria still struggles to feed its rapidly growing population. Nigeria with all its agricultural potentials is the second largest importer of rice, one of the main diet staples in the country. Nigeria spends N517bn annually on rice importation and only produces 500,000 tonnes of its 2.5 million annual consumption of rice.

In the last decade, the Nigerian government’s attempt to harness the agricultural sector has mostly seen elite monopolizing and benefiting from the sector under the disguise of fight against hunger.

The agriculture as is other ministries have been designed to benefit the elite, while the peasants farmer remain the excluded; struggling to get land, fertilizer, access to market, capital and machineries that processes and preserves agriculture produces. In most cases, the elite farmers are middlemen that rely on peasant farmers; taking undue advantage of them as is mostly the case in a capitalist economy where the laws and policies seek to empower, equip and protect the elite at the expense of the most vulnerable.

An unstable fiscal environment ── a by-product of declining oil relevance’s saw the past government initiate efforts to strengthen the agricultural sector and position it to diversify the economy.

Traders from Neighbouring west African countries come to Balogun market for wholesale trade!

Traders from Neighbouring west African countries come to Balogun market for wholesale trade

The current of farming and dynamics of farmers shows that Nigeria has a long way to go with empowering agriculture to attain the intended goal of exportation and expanding the capacity to be self-sufficient.

Peasant farmers are key stakeholders to the country attaining its goals of exportation and self-sufficiency.  But first, the challenge such as road network, access to capital, agriculture illiteracy and agriculture subsidies facing peasant farmers is a huge hindrance to be overcome. The challenge of road network effect on peasant farmer’s access to the market, as such many of the peasant farming produce, end up rotten; never making it to the market. Such challenges could affect the incentives of rural farmer’s motivation to continue farming beyond personal usage.

Secondly, the issue of agricultural illiteracy sees a lot of peasant farmers unable to cope with farming challenges, thus, breaking out as commercial farmers.  Also, the government needs to ensure that the bureaucracy in the sector is broken and that the number of middlemen between the agricultural ministry and the peasant farmers is reduced to ensure that enhancing subsidies get to the appropriate source.

Private sector role and investment are crucial to Nigeria achieving its intended goal of exportation, however, downstream activity is required to balance the equilibrium and ensure the country can feed the very poor and vulnerable citizens.To boost the sector, last year saw one of Africa’s wealthiest businessman; Aliko Dangote pledged N165bn ($1bn) to farms, mills and agricultural infrastructure to support the country’s goal of becoming rice exporter in the nearest future.

This pledge saw the Dangote group acquire farmland in five key states in Nigeria for commercial rice farming with the goal of installing 240,000 tonnes of rice daily. In Ogun state, Funtuna farms, produces and sells over 120 million eggs per annum in key states in the country and plans a nationwide distribution expansion across Nigeria from 2016. Also in the north, Kebbi state in October got N5bn loan approval from the Central Bank of Nigeria to be invested in rice farming in Kebbi state.

First from the left; Funtuna Farm Commercial Operations Manager Ope Agbato at the trade-fair in Lagos

First from the left; Funtuna Farm Commercial Operations Manager Ope Agbato at the trade-fair in Lagos

The sudden interest in agriculture highlights the potentials of the sector, however, is a capitalist Nigeria able to remain highly involved and regulate the sector for the benefit of all Nigeria? What lessons can Nigeria take from oil commodity boom to harness redistribution and reduce inequality, as Nigeria prepares to harness agriculture to stabilise the economy; driving it to achieve its full potentials? Or is Nigeria going to trade the “oil curse” for the “agriculture curse”?

 

 

 

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