Table
of Content
1.
Executive Summary.
2.
Main Report.
3.
Annex 1: Drivers of Agricultural Growth.
4.
Attachment 1: List of Participants.
5.
Attachment 2: Workshop Presentations.
EXECUTIVE
SUMMARY REPORT
Agriculture
in Nigeria is a key strategic sector for addressing the multiple challenges
that keep the country from achieving broad based economic growth, increasing
household incomes and employment, and reducing food/nutrition insecurity and
poverty. Agriculture employs about two-thirds of the country’s total labour
force; contributes 42% of the Gross Domestic Product (GDP) in 2007; and
provides 88% of non-oil foreign exchange earnings. Growing the agricultural
sector is important for Nigeria and the Government
has set a target of 10% annual growth rate for the sector. In order to achieve this
goal, the Federal Ministry of Agriculture and Water Resources (FMAWR) has solicited
development assistance from development partners and has engaged them in dialogue
to come up with appropriate policies and programmes for Nigeria’s agricultural development.
In furtherance of this goal, FMAWR in collaboration with the World Bank and FAO
organized a 2-day stakeholder’s forum on Sustainable Agricultural Development
Strategy and Food Crisis Response Programme at the Transcorp Hilton Hotel,
Abuja from 24th -25th of February, 2009.
The
meeting brought together a broad cross section of over two hundred participants
from the public sector, private sector, research agencies, academia,
development practitioners, donor organizations, and producer and marketing
associations. The overall objective of the Stakeholder forum was to assist
FMAWR to define a long term strategy for sustainable agricultural development
by providing inputs to strengthen the current National Food Security document
of government. The specific objectives include assessing the performance of the
agricultural sector in promoting non-oil growth in Nigeria, the potential
impact of global food crisis on Nigeria and articulating ways to mitigate them,
and proposing strategies to enhance productivity in agriculture and food security.
Keynote
Address by the Hon. Minister of Agriculture and Water Resources
In
opening the workshop, the Hon Minister of FMAWR delivered a keynote address
challenging the participants to come up with actionable suggestions to achieve
the twin objectives of the workshop which are (i) dealing with the impact of
the global food crisis in Nigeria; and (ii) improving government’s strategy to enhance
productivity in agriculture and food security. He also raised issues of concern
to his Ministry that he wanted the workshop to tackle. These include:
a.
branding and significant improvement in the value chain of agricultural production;
b.
access to production inputs (particularly credit and land);
c.
improvement in infrastructure;
d.
cooperative approach to production and access to input;
e.
enhancing public-private partnership;
f.
increasing agricultural production based on Nigeria’s comparative advantage;
g.
sustainability of on-going agricultural development programmes;
h.
commercialization of Nigeria’s agriculture; and
i.
climate changes and the availability of the water resources in the country.
The
Hon Minister made deliberate efforts at explaining the rationale behind the development
of the National Food Security Document, which is the plan of action or the Ministry’s
road map for driving agricultural development in Nigeria. The document touches
all the key areas, but there is need for improvement of the document and that
is why a forum like this is inevitable. He emphasized that while deliberating
on ways to improve the document, the participants should ensure that the
government’s goals for the agriculture sector are embedded in the document.
These include:
i.
import substitution based on increased competitiveness;
ii.
price support for critical farm operations such as land clearing by Federal and
State Governments;
iii.
improvement in storage facilities;
iv.
market infrastructure development;
v.
development of farmland to serve as collateral for farmers in accessing credit;
vi.
yield management; and
vii
research development.
The
Hon Minister’s keynote address guided the forum’s proceedings. It was agreed
that there is an urgent need to avert an impending food crisis given the
current global economic down turn and financial meltdown. This should be
supported by a sound
National
Food Security Document – a strategy for agriculture development. The proceedings
of the forum are divided into three sections: (A) Drivers of Agricultural
Growth;
(B) Impact of Global Food Crisis in Nigeria; and (C) Improving the Agricultural
Development Strategy (the National Food Security Document).
A. Drivers
of Agricultural Growth. The forum identified and deliberated on six key
drivers of agricultural sector growth in Nigeria namely: policy environment,
rural infrastructure, and agricultural finance and expenditure, reducing
vulnerability and enhancing food security, market access, and rural investment
climate. Each driver of growth was examined for what needs to be changed, why
the need for change, which institution should bear responsibility for
implementing the change, the expected outcome of the change, and the proposed
time frame for the change. It was proposed that the policy environment will
need to be made more consistent if necessary through legislation. There is need
for reformulation of fertilizer policy to reduce rent and leakage and increase
access by intended beneficiaries. Pricing and marketing policies need to be
designed in such a way as to provide needed incentives for farmers to expand
investment in agriculture. Agricultural research policy should be designed to
emphasize innovation systems approach in research formulation and
implementation and the engagement local government councils as primary actors
in a pluralistic extension delivery arrangement.
Under
agricultural financing and expenditure, there is an urgent need for the
maintenance of a minimum of 10% budgetary allocation to agriculture line with
the Maputo declaration. The forum noted and commended the 2009 federal budget
which allocated a
12%
share to the agricultural sector, a clear indication of government shift of
priority to agriculture. In addition, government should take immediate steps to
restructure the Nigeria
Agricultural Cooperative and Rural Development Bank (NACRDB) and provide with
adequate funding so that it could better serve the agricultural sector.
Rural
infrastructure, such as farm machineries, roads, electricity, water, storages facilities,
transports, communication and processing facilities require immediate attention.
The FMAWR is encouraged to work with other relevant arms of government to improve
rural infrastructure for farmers. Improving the effectiveness of market access
as a growth driver needs to focus on the establishment of effective market
institutions, associations and unions, commodity exchange, revenue collectors,
regulators, market information systems and the expansion of markets space. Reducing
Vulnerability and Enhancing Food Security is an important growth driver in
Nigeria because of the high level of poverty amongst the faming population. The
key changes that need to be made include making weather forecast available and
actually used by farmers, expansion of facilities for safety net and recovery
mechanism (such as strategic grains reserve), improve women’s contribution and
participation in the agricultural sector though better access to land, credit,
processing and marketing facilities, land tenure system reform and land
identification. Improving the rural investment climate is also considered to be
a key driver to agricultural growth. Key areas where changes are needed were
identified as follows: removal of disincentives in relation to high costs of
doing business, multiple/high taxes and levies, access to credit in terms of
ease, timelines and quantity; enhancement of security of lives and properties,
and risk mitigation through the introduction of insurance schemes and early
warning signal mechanisms to avert losses. For more on the drivers of agricultural
growth, see Annex 3 of the main report.
B. The
Potential Impact of Global Food Crisis in Nigeria. One of the major focus
of discussion at the stakeholders forum is the issue of averting food crisis in
Nigeria and putting in place a sustainable food crisis response programme. In
Nigeria, the prices of staples started to rise in 2006 and soared in 2007. This
was, in part, because of high oil prices which caused food prices to rise due
to increased bio-fuel demand. In addition, the unfavorable weather changes also
resulted in decline of agricultural productivity. For example, the food problem
in Nigeria was in 2007 when the rain ended abruptly in September and resulted
in substantial decline in yields. This seemed to be the first signals that
Nigeria was on the path to a food crisis. The forum did not, however, reach a
conclusive agreement on whether or not Nigeria is currently experiencing a food
crisis. This is because in countries experiencing food crisis, masses of the
population are faced with disequilibrium in the food market in which food
becomes widely unavailable, inaccessible or unaffordable. Some of those
countries experienced more than two production cycles during which there is
deterioration in food insecurity or a decline in quality and quantity of food
in-take. Such a situation did not exist in Nigeria. However, it was agreed that
there is an urgent need to avert any potential food crisis given the current
global economic down turn and financial meltdown. The Forum identified some key
indicators of food crisis and recommended the measures that the government
could take to avert a major food crisis in Nigeria. The identified indicators
to watch out for include: food price inflation correlation between domestic and international agricultural
commodity prices, food crop production variability, and Food demand-supply gap.
The
recommended measures to avert food crisis are spelt out in considerable details
in the main report and do include improving enabling environment for increasing
agricultural growth, boosting food supply, consumption and nutrition,
developing agricultural markets.
C. Improving
the Agricultural Development Strategy (National Food Security Document).
The Forum commended the government’s efforts in articulating its vision for
agricultural development through the National Food Security Document. However,
some critical gaps still exist such as lack of time frame for the
achievement of objectives, lack of reflection of regional diversity in
most of the programme objectives, lack of clarity on how many of the
intervention projects will be implemented, monitored and evaluated, and
the lack of articulation of clear strategies needed to give farmers the right
kinds of market oriented economic incentives to increase investment in
agriculture. It was also note that the current strategy lacks clear
articulation on how to attract private sector investment in agribusiness
and to enhance the flow of agricultural information. In addition, the
adoption of a PPP arrangement which relies on subsidy to the private sector operators
to facilitate project implementation is inefficient and will only expand opportunities
for corruption. The forum deliberated on the process of improving upon
the government’s sustainable agricultural development strategy (National Food
Security Document). The discussions focused on: What to be done, the major
constraints, how best to proceed, what outcomes to expect and what indicators
to use for measurement of success, and how will progress be monitored and
evaluated? Many useful ideas were generated in the various discussion sessions
on this subject (see annex to the main report for details). It was recommended that
the government should work closely with its development partners in updating
its strategy.
Main
Conclusions and Recommendations
The
Stakeholder Forum came up with a number of important conclusions and recommendations
which are captured in the main report, however, the key messages coming out from
the Forum could be summed up as follows:
The
Nigerian agricultural sector has performed well in the past five years with an average
annual growth rate of 6% but the Government has set a target of an average
annual growth rate of 10% in the next five years; Currently, there is no food
crisis in Nigeria but evidence of increasing prices of food crops points to a
looming problem of food crisis;
Even
though the Government of Nigeria has taken some steps such as increased food
importation, reduction of tariffs, release of strategic grains reserve and provision
for more storage to counter potential food crisis, there is need for additional
intervention in the area of domestic agricultural production and marketing; An
Agricultural Development Strategy exists, however, the Forum identified some
gaps that need to be addressed in order to improve the soundness of the strategy;
and The Forum recommended that FMAWR works closely with its development partners
to effect the needed changes in the current strategy document to make it more
effective and sustainable.
MAIN
REPORT
1.0 BACKGROUND
In line
with the Millennium Development Goal (MDG) of halving poverty and hunger by
2015,
Nigeria has identified agriculture as a key strategic sector for addressing the
multiple challenges that keep the country from achieving broad based economic
growth, increasing rural incomes and employment, and reducing of food/nutrition
insecurity and poverty. The Government recognizes that for agriculture to
perform the above roles, there is a need to create the necessary enabling
policy environment that is conducive for agricultural growth and development.
The Federal Government has made tremendous strides in reducing policy
distortions facing agriculture that have led to a promising overall performance
of the sector. Nigeria realized an annual economic growth of 6.9% and
agricultural growth of 8.2% in 2006 (WDI 2007). The government budgetary allocation
to agriculture as a percentage of the budget, has demonstrated an increase from
1.6% in 2002 to 3.3% in 2004.This allocation has been on the increase
subsequently. However, the Government needs to do more if it were to achieve
the MDG1 or its target of an average annual growth rate of 10% for agriculture
in the next few years. Nigeria runs the risk of not achieving the MDG1. The
economic growth attained so far has not yet improved the welfare of its
population, in particular, the rural poor. Data indicate that poverty incidence
is still high moving from 70% of the population estimated to earn less than
US$1 a day in 2003 to 56% in 2005. Even though the percentage has dropped, the
absolute numbers are still alarming. The majority of the poor depend on agriculture
for their livelihoods and 64% of the people in the rural areas are not able to meet
their basic needs. Of this, well over 50% of rural women still engage in
subsistence agriculture for survival (WB 2004). As such, improved agricultural
performance in Nigeria is critical to poverty reduction. In addition, the
potential impact of the global food crisis poses a great challenge which has
significant implications for the country’s ability to reduce hunger and
malnutrition. In spite of several interventions over the years, Nigeria has
remained vulnerable to the impact of global soaring food prices. The situation
is worsened by increasing population growth, the global economic recession and
decline in prices of crude oil. However, despite the perceived short term
negative consequences, the food crisis presents a tremendous opportunity for
Nigeria’s agriculture. The high food prices have the potential for increasing
the value of agricultural assets and for stimulating private sector investment
in agriculture, once the requisite enabling policy environment is in place.
In
response to these challenges, the Federal Government of Nigeria, under the
leadership of President Umaru Yar’Adua, has identified seven core areas of
focus which define the government strategic vision for growth and development2.
Agricultural sector is central to this agenda since four of the core areas
identified aim to revitalize the agricultural sector in order to attain food
security, increase production and productivity, generate employment, expand the
export base and reduce food imports. Recognizing the importance of agriculture,
as well as the challenges manifested by weak economic linkages and a disconnect
among stakeholders, weak policy environment and poor service delivery, the
Minister of Agriculture and Water Resources (FMAWR), Dr. Sayyadi Abba Ruma has
also embarked on improving FMAWR comprehensive agricultural evelopment strategy
that aims to transform the agricultural sector and achieve its targets and
policy objectives. This process will lay a solid foundation for a long term
response to achieving high agricultural growth and food security in the
country.
The
above concerns and the need to work closely with Nigeria’s development partners
form the basis for organizing this forum whose goal is to review government
current agricultural development strategy and develop measures for achieving
the desired growth rates in the sector. The overall objective of the
Stakeholder forum is to define a long term pattern for sustainable agricultural
development.
The
specific objectives are:
(i)
to review the performance
of the agricultural sector in promoting non-oil
growth in Nigeria;
(ii)
to assess the impact of the global
food crisis in Nigeria and articulate
strategies to mitigate
potential impact; and,
(ii)
to articulate strategies to
enhance productivity in agriculture and enhance
food security.
2.0
REVIEW OF PERFORMANCE OF AGRICULTURAL SECTOR
Agriculture
employs about two-thirds of the country’s total labour force; contributed 42% of
the Gross Domestic Product (GDP) in 2007; and provides 88% of non-oil foreign exchange
earnings. Crop production in Nigeria is dominated by cereal, and root and tuber
crops. In fact, Nigeria is the largest producer cassava, yam and cowpea in the
world and has a comparative advantage of exporting processed cassava. However
since labour constitutes a larger percentage of production cost (75%),
competitiveness can be improved by labor saving technologies. Also increasing
cassava yield above 15 tons/ha and value addition through processing will
increase competitiveness. Similarly, Nigeria has comparative advantage in rice
export if yield is above 2.4 tons/ha. Productivity and incomes can be enhanced
by improving farm management practices such as land and irrigation management
practices which vary substantially across agro-ecological zones. Furthermore,
increasing area under irrigation will expand output since crop yield under the
irrigation system is much higher than under rain-fed system (with the exception
of cassava, yams and leafy vegetables). The performance of the agricultural
sector has been uneven in the past. Its average annual growth rate ranges from
about 3.3% in 1990s to an average of 6% in the past 5 years.
President
Yar’Adua’s seven point agenda include:
i) Food
Security, ii) Wealth Creation, iii) Transport Sector, Iv) Power and Energy, v)
Land Reforms, vi) Education, vii) Security.
Most
of the current growth rate has been attributed more to expansion in cultivated
land area rather than increase in productivity. Most of the various programmes
and policies enunciated over the years and supported by Donor/Development
partners did not achieve their development objectives or desired impacts due to
policy inconsistencies, absence of thoroughness in planning, lack of
coordination and poor formulation and implementation. Federal Government
funding of agriculture from 2000 to 2007 never exceeded 2% of the total budget
of the country and this is far below the Maputo declaration of 10% share of total
country budget for agriculture, an indication of the poor priority previous government
had placed on agriculture. However, state level agricultural expenditure share
were observed to be relatively higher compared to the federal, while those of
the local government councils were highly erratic. Overall, it was observed
that Nigeria also falls far behind in agricultural expenditure by international
standards even when accounting for its level of income. Despite the low budget
allocation and release to agriculture, expenditure on fertilizer alone was over
50% of the budget. It was generally agreed that even though the Nigerian
agricultural sector has made some impressive stride in the past decade, these
gains may not be sustained if some of the following malignant characteristics
of the sector are not addressed. These include: low public investment in the
sector and focusing its resources more on fertilizer and other inputs rather
than research, extension, and infrastructural development of agricultural spending;
a very high budget concentration, neglect of important productivity enhancing activities,
inadequate planning and targeting, inadequate data generation and reporting systems
in the agricultural sector, poor monitoring end evaluation of agricultural
sector projects, lack of clarity in the roles of the three tiers of government
in agricultural spending and policy-making, policy inconsistency, pervading
presence of ambiguities of roles within the framework of the governance
structure of agricultural management, which engenders overlapping and
duplication of functions. The current Federal Government is committed to
reverse the past trends. It is wants to grow the agricultural sector and has
set a target of 10% annual growth rate for the sector. To achieve this goal, it
plans to put in place an enabling environment that is conducive for high
agriculture growth and enhancing private sector investments in agriculture.
3.0
DRIVERS OF AGRICULTURAL GROWTH IN NIGERIA
The
quest for a sustainable agricultural development strategy vis-Ã -vis a
responsive food crisis programme can only be realized if the key issues that
drive the growth process in the agricultural sector are identified. Apart from
identifying these factors, there is also the need to focus attention on them
and make pragmatic efforts at promoting them. In the course of the two-day
stakeholders’ forum, the following key drivers of agricultural growth in
Nigeria were identified. These include: Policy and Institutional Environment,
Agricultural Financing and Expenditure, Rural Infrastructure, Market Access,
Reducing Vulnerability, Enhancing Food Security and Improving Rural Investment
Climate. The syndicate groups at the forum were formed along the identified drivers.
Each group prepared its report and they are attached as annexes. The details of
the key issues, actors, expectations and deadlines with respect to each of the
drivers are presented in annex 1 but the highlight of the group discussions on
each of the key drivers are presented as follows:
3.1
Policy Environment
The
policy environment is considered to be the most important of all the drivers of
agricultural growth. The important thing to note here is that, if the policy
environment is not right, all other drivers cannot work. However, the policy
environment in Nigeria was observed to be plagued with three main problems:
Policy discontinuity, Policy Lawlessness, Policy Indiscipline. In other to
better stimulate agricultural productivity, there is the need to focus more attention
on some critical issues such as:
·
Reducing the overbearing influence of the Federal Government on
States and the Local Governments with regards to control over the sector.
·
Appropriate delineation of roles among the actors in the
agricultural sector.
·
Significant involvement of the Federal Ministry of Agriculture and
Water Resources in the formulation of macroeconomic policies.
·
Reformulation of the nations fertilizer policy to ensure
effectiveness and efficiency
·
Creation of an agricultural information system which will enhance
the flow of agricultural information at a low cost.
·
Revitalization of Farmers’ Associations to enhance their
bargaining power
·
Community Driven Development (CDD) approach should be employed in policy
formulation
3.2
Agricultural Financing and Expenditure
This
is another agricultural growth driver that is considered to be very important.
In
order to enhance productivity and stimulate agricultural growth certain issues are
considered important. These include:
·
Formulation of agricultural financing policy
·
Identification of alternative sources of funding agriculture
·
Maintenance of a minimum of 10% budgetary allocation to agriculture
n line with the Maputo declaration.
·
Adequate funding of the Nigeria Agricultural Cooperative and Rural
Development Bank (NACRDB)
·
Adoption of appropriate interest rate policy that does not
penalize agriculture.
3.3
Rural Infrastructure and Market Access
The
provision of rural infrastructure is considered to be of high priority if the agricultural
growth process is to be fast-tracked. Three types of infrastructures were identified
and these include: physical, social, and economic
Physical
Infrastructure
The
physical infrastructures that require immediate attention are as follows:
Machineries
(tractors and farm tools/implements), Roads, Electricity, (alternative power sources,
coal, fuel dumps etc), Water (irrigation, pipe born water), Storages facilities
(silos, warehouses, cold rooms), Transports (Trucks, canoes, boats),
Communication (phone, radios, TV, computers), Processing facilities (cold
rooms). The major problems associated with these infrastructures are
non-availability in some cases and poor/lack of maintenance culture among
others.
Social
Infrastructures
The
workshop identified the following social infrastructures as very crucial:
Cooperatives
societies, farmers organizations, commodity associations, research and extension
agencies, training institutions, recreational facilities, schools, hospitals,
and religious institution. These social infrastructures are expected to provide
the enabling environment for improved agricultural productivity as well as
improving their competitiveness.
Economic
Infrastructures
Lack
of access to credit especially in the rural areas and farmers’ empowerment to
adopt innovations and increase area under cultivation were identified as major
constraints to agricultural growth. Furthermore, the need to reduce risks
associated with agricultural production, provision of subsidy to enable farmers
to assess inputs and making agriculture competitive were also considered to be
germane. As such some economic infrastructures were considered as lubricants to
the engine of agricultural growth. These include, but not limited to, the
following: Financial institutions (banks, micro finance agencies and credit
agencies), Insurance agencies, Price support systems (GMP), Subsidy support
systems, Policy support systems etc.
3.4
Market Access
The
imperative of market development in the agricultural growth process was
outlined.
Emphasis
was on lack of markets, poor market infrastructure, marginalization of farmers in
the markets and low farmers’ share of the consumer prices. The importance of
market access as a key driver of agricultural growth will be enhanced if the
following issues are properly addressed: Markets space (Stalls, warehouses,
etc), Market institutions (brokers, commission agents, assemblers, packagers
and re-packagers), Associations and unions, Commodity exchange, Revenue
collectors, Regulators, Market information systems etc.
3.5
Reducing Vulnerability and Enhancing Food Security
The
vulnerability of agricultural production and farm households to vagaries of production
are considered to be very crucial to agricultural growth. It is imperative to note
that since most households are poor, they are more vulnerable to production variability.
As a result, for agricultural growth to be achieved on a sustainable basis, reducing
vulnerability of the resource poor farm households is imperative. The key
issues considered by the workshop to be addressed while attempting to reduce vulnerability
include the following:
i.
Weather and climate change
Need
to make weather forecast available and actually used by farmers;
Promote
irrigation for all-year round farming.
ii
Price support mechanism for agricultural produce:
Expand
Guaranteed Minimum Price regime to cover a wider variety of products grown by
the majority, i.e. Expand GMP outside Cassava;
Formulate
trade policy regime that will protect Nigerian farmers
iii.
Price support mechanism for inputs (subsidies):
Provide
smart subsidies for major inputs (seeds, fertilizers, tractors and other
farming tools);
Expand
the National Seed Service to include more States and LGAs
iv.
Economic recession
Expand
access to credit through the formation of cooperatives;
Create
a conducive environment to attract outsiders and Nigerians into agriculture (tax
incentives etc.)
v.
Pest, disease and natural disaster
Improve
crop protection through increased manpower and budget provision to the
Pest
and Control Services at Federal and state level;
Put
in place safety nets and recovery mechanism (strategic grains reserve, set-up favorable
pricing policies, etc.)
vi.
Externalities as constraints
Relax
constraints relating to unfavorable agric pricing and marketing policies, inadequate
research, manpower and the use of traditional farming tools;
Increase
funding for research institutes and agricultural training colleges and universities.
vii.
Land availability and soil fertility
Land
tenure system reform
Land
consolidation
viii.
Extension gap
Increase
the number of extension agents in order to reach the (acceptable ratio of extension
to farmers)
Better
contracting arrangements to retain the extension agents, eg putting the extension
staff on pensionable appointment.
ix.
Gender
Improve
women’s contribution to and participation in the agricultural sector, including
better access to land, credit, processing and marketing facilities
3.6
Improving Rural Investment Climate
Improving
the rural investment climate is considered not only to be a key driver of agricultural
growth, but a major contributor to reduction in unemployment and drudgery.
The
group noted that for any meaningful strategy aimed at enhancing food security
and that ensures agricultural growth, the rural investment climate is crucial
and adequate attention must be focused on it.
The
key issues discussed for improving rural investment climate include the
following:
Infrastructure:
Road, Water and Rail Transportation; Electricity, ICT, Land, in terms of
availability,
ownership, tenure system, etc, Labour, in terms of Availability, Cost and
Quality, Provision of water and irrigation facilities, Removal of disincentives
in relation to Multiple/high taxes and levies, inadequate access to credit,
etc., Enhancing of security of lives and properties as well as investments,
Risk Mitigation and prevention through the introduction of insurance schemes
and early warning signal mechanisms to avert losses.
Generally,
all the drivers of agricultural growth entail cross-cutting issues, which may
not be achieved in isolation. It is important that the evolving strategy be
holistic and should be designed to address all the key issues raised
simultaneously.
4.0
FOOD SECURITY STATUS
Food
security refers to physical availability, economic affordability and functional
usability of food and associated products on a year round basis in a
sustainable manner. Available statistics supports the fact that Nigeria is yet
to achieve food self-sufficiency. For example, Nigeria spends $3 billion
annually on the importation of staple food such as wheat, rice, sugar, and
fish.
4.1
History of food security policies and programmes in Nigeria
In
an attempt to achieve food security for her people, The Nigerian Government
has, in the past 7 decades, executed a number of measures aimed at relaxing the
supply side constraints to the food availability problem. These include:
establishment of cooperatives (1935 to Date); commodity Boards (1947 to 1986);
Agricultural Research Institutes (1964 to Date); National Accelerated Food
Production Project (early 1970s); Nigerian Agricultural Cooperative Bank (1973
to Date); Agricultural Development Projects (1975 to Date); Operation Feed the
Nation (1976 to 1979); River Basin Development Authorities (1977 to Date);
Directorate of Foods; Roads and Rural Infrastructure (1986 to 1993); National
Agricultural Land Development Authority (1991 to 1999); and Presidential
Initiatives on Cocoa, Cassava, Rice, Livestock, Fisheries and Vegetables (1999
to 2007).
These
programmes have, however, failed to achieve their full potentials due to the following
identified weaknesses: Policy inconsistency and administrative dislocations; Instability
of Research Institutes and lack of funding; Lack of political support; Non provision
of counterpart funds in the case of ADPs; Lack of qualified manpower to provide
effective leadership; Lack of continuity and shift in approaches by successive governments;
and Lack of institutional arrangements for implementation
2.2
Key Challenges facing food security in Nigeria.
The
following were identified as the key challenges militating against food security
in Nigeria.
i.
The food sector consist mostly of subsistence small farmer plots which are not
collateralizable
.
ii.
There is limited supply of new improved seed and low yield per hectare for most
staples
iii.
The nation’s soil resources consist of a large variety of soil type with unascertained
nutrient status
iv.
99% of food production is rain-fed and 1% of cultivated land area(say about
200,000
Ha or less than) is irrigated
v.
Inconsistent agricultural policies
vi.
There is a dearth of reliable planning statistics and poor research uptake
vii.
Extension service network is poorly resourced with low morale of staff.
viii
Food crop farmers are aging with most farmers above the age of 45 years;
ix
The food production sector is characterized by inadequate access to credit and poor
credit management
x.
Poor rural infrastructure
xi.
Livestock are characterized by poor breed attributes and low milk yield
xii.
Livestock production is characterized by limited artificial insemination (AI), and
limited sources for top quality chicks;
xiii.
Limited irrigation facilities
4.3
The Food Crisis in Nigeria
A
major focus of discussion at the stakeholder’s forum on food security is the
issue of averting food crisis in Nigeria and putting in place a sustainable
food crisis response
programme.
In Nigeria, the prices of staples started to rise in 2006 and soared in 2007. A
major reason was the rising oil prices which resulted in rising food prices due
the increase in biofuel demand. Another related reason was the unfavorable
weather climatic changes which resulted decline in agricultural productivity.
For example, the food problem in Nigeria was in 2007 when the rain ended
abruptly in September and resulted in substantial decline in yields. This
seemed to be the first signals that Nigeria was on the path to a food crisis. The
forum did not, however, reach a conclusive agreement on whether or not Nigeria
is currently experiencing a food crisis. This is because in countries
experiencing food crisis, masses of the population are faced with
disequilibrium in the food market in which food becomes widely unavailable,
inaccessible or unaffordable. Some of those countries experienced more than two
production cycles during which there is deterioration in food insecurity or a
decline in quality and quantity of food in-take. Such a situation did not exist
in Nigeria. However, it was agreed that there is an urgent need to avert any
potential food crisis given the current global economic down turn and financial
meltdown. The Forum identified some key indicators of food crisis and
recommended the measures that the government could take to avert a major food
crisis in Nigeria. The identified indicators to watch out for include:
food price inflation,
correlation between domestic and international agricultural commodity prices,
food crop production variability, and
Food demand-supply gap.
4.3.1
Key Drivers of Food Prices in Nigeria
The
key drivers of food prices increase in Nigeria were identified as:
i.
bourgeoning food deficit due to rising population and compounded by the competition
between growing human consumption, animal feed production, and industrial usage
for cereals and grains, consequent upon import restrictions as well as local
content guideline for industries and export promotion of all commodities,
ii.
Critical supply shortages implicated by lack of significant expansion in land
area under cultivation and low level of use of modern inputs, inadequate
credit, labour shortages, low technology and policy failure with respect to
inputs like fertilizers and credit,
iii.
Production variability has also been reported, indicating instability in the
input and output market. By and large, supply-side constraints are more strongly
pinpointed in the price hike than other factors,
iv.
High cost of production and of doing business in general and agribusiness in
particular,
v.
Market imperfections leading to poor performance of essential marketing functions
and high transactions. There are unfair practices which continue to restrict
market entry in some parts of the country. These include imposition of levies,
taxes and other restrictions in the market places and
vi.
Climate change, natural disasters and conflicts which have in the past couple
of years aggravated the food supply shortages in some parts of the country.
vii.
High international food prices transmitted to domestic markets
viii.
Naira depreciation: rise in price of imported food and household items
4.3.2
Vulnerability within the context of a Food crisis situation
A
number of socioeconomic groupings were identified as most vulnerable to food
crisis situation in Nigeria. These include:
i. Resource
poor subsistence farmers: have low production capacity, limited off farm income,
high dependence on markets for 6 to 7 months/year
ii. Landless
households: have limited resources, low resilience
iii.
Family headed by women: have difficulty with access to land, loans, etc.
iv. Pastoral
Households: (small livestock breeder) are affected by high food prices/low
livestock price, unstable lifestyle
v. Urban
poor: are net consumers, highly dependent on imported food, vulnerable to
domestic/global economic down slow;
4.3.3
Impact of Global Food Crisis in Nigeria
A
recent study on the short term impact and policy implications of the global
food crisis in Nigeria revealed the following:
i.
All crops recorded positive growth rates between 2007 and 2008. Output of yam, cassava,
rice, sorghum, maize, millet, cowpeas, cocoyam increased by 26.84, 7.18, 19.38,
65.24, 20.87, 2.03, 27.06 and zero percent respectively.
ii.
Between 2007 and 2008, area cultivated to yam, rice, sorghum, cowpeas and millet
increased by 31.9%, 8.71%, 9.29%, 13.98%, 1.18% respectively , while that of
cassava, maize, and cocoyam declined by 17.3%, 6.6%,and 2.15% respectively.
iii.
Labour utilization between planting and harvesting increased substantially
during the period. Specifically, labour utilization in land clearing, tilling,
planting, weeding, and harvesting increased by 8.64, 23.02, 34.04, 19.91 and
9.82 percent respectively.
iv.
The usage of farm inputs increased significantly during the one year period
under consideration. Seed use increased by 56.8%, fertilizer by 15.38%,
insecticide by 60.12%, traction by 44.33% and credit by 40.89%.
v.
Farm gate prices increased for yam (34.55%), cassava (33.77%), maize (7.54%), cowpeas
(6.57%), cocoyam (30%) but declined for rice (-0.28%) and maize (- 5.09%).
vi.
The food production sector also experienced growth in profitability during the period.
Specifically, Gross margin/ha increased for yam (17.4%), Cassava (89.84%), Rice
(9%), sorghum (276%), maize (37%), and cocoyam (55%), but declined for Millet
(-31.2%) and cowpeas (-44.6%).
vii.
Producer prices were less than 50% of the final price of food crops implying
that most farmers do not benefit from the observed rise in food prices.
viii.
Increases in food prices could be associated more with inefficiencies in market
conduct, such as high transportation costs, poor storage and processing facilities,
poor access to business capital, high levies and taxes by LGAs and unions;
dominance of large buyers (industrial users especially for maize, cassava)
From
the foregoing, the sharp increases in food prices observed between 2007 and 2008
may be due more to demand side rather than supply side factors.
However,
a number of issues would need to be addressed by a strategic food crisis response
plan. These would include:
i.
How can farmers’ benefit from the crops value chain being enhanced?
ii.
How can rural marketing functions be revived to generate employment and income?
iii.
How can the high rural-urban transportation costs be moderated?
iv.
How can small marketers gain access to more capital so as to reduce unit cost
of marketing functions and high prices, inter alia?
4.4
The National Food Security Programme
The
Federal Ministry of Agriculture and Water Resources, as part of its quest to achieving
the objectives of the present administration’s 7 Point agenda, has developed a National
Food Security Programme. The vision of the programme is to ensure
sustainable access, availability and affordability of quality food to all Nigerians
and for Nigeria to become a significant net exporter of food to the global
community. The major objectives of policy are to: achieve substantial import
substitution, achieve sustainable food security, and attain gainful employment,
promotion of modern agricultural practices, and natural resources conservation
and management. The goals of the National Food Security Programme are, in the
short term, to significantly improve Nigeria’s agricultural productivity,
medium term - expand and improve large-scale production, improve storage/
processing capacity as well as required infrastructure to achieve food stability
and in the long term - derive over 50% of the nation’s foreign exchange through
agricultural exports.
In
achieving the objectives of agricultural policy stated above, the government of
Nigeria
has put in place certain initiatives. These Initiatives include intervention measures
that are aimed at addressing supply-side constraints, agricultural market development,
storage and price stabilization, livestock development, and fisheries development.
However, these measures are yet to be tested and Government should implement
them with care to ensure both financial and technical sustainability.
4.4.1
Measures to Address Supply-Side Constraints
i.
Establishment of Agricultural Seed Centres (ASC) Capacity Building. All the
out-growers involved in the ASCs will be trained on improved seed production
practices for maize, rice, sorghum, millet, cowpea and soybean Establishment of
Agric Seed Centres.
ii.
Procurement of 500,000 MT of fertilizers for the 2009 production season to be
sold at 25% subsidy amounting to about N15 billion. Fertilizers are expected to
be distributed between March and May, 2009.
iii.
Tractor Service Delivery Programme. This involves provision of 10,000 units of
55-75 HP tractors and implements within three years under PPP arrangement
4.4.2
Measures to Agricultural Market Development
i.
Establishment of 200 Cottage Cassava Processing Plants in 22 states and FCT
through PPP with FG contributing 40% as grant to the private investor who will
contribute 60% of the total cost of the project. Each will cost N16.2 million.
ii.
Establishment of export crop handling, preservation and conditioning centres,
at the airports, for hygienic packaging of fresh produce for domestic and
export markets to be implemented through PPP arrangement using Design, Build,
Finance and Operate (DBFO) delivery (turnkey) model.
iii.
Establishment of 25 rice processing mills in 13 states in partnership with private
investors. Total cost of the project is N25 billion.
iv.
Development of market infrastructure for fruits and vegetables. The project is
to be implemented through PPP arrangement.
4.4.3
Storage and Price Stabilization Measures
i.
Strategic Grains Reserve (5%) and Buffer Stock (10%).
ii.
Construct Comty Warehouses in 23 States
iii.
Construction of Commercial Warehouses as a way of promoting commercial storage
as a business. Sixty (60) warehouses are to be constructed in 13 states under
PPP arrangement with BO model.
iv.
Guaranteed Minimum Price. This is a predetermined minimum price the farmer will
get for a given unit of produce in a season. The key participants are farmers,
LBAs, Commodity Development and Marketing Companies, ASCE, cooperative
organizations, NFRA, State and local governments and commercial banks.
v.
Suspension of import duty (100%) and levy on rice for 6 months.
4.4.4
Assessment of the Livestock Development Programmes
i.
Disease Control Programme
ii.
Grazing Reserve and Pasture Development
iii.
National Pest Control Programme
iv.
Livestock Market Development
v.
Abattoir Development
vi.
Livestock Breeding and Multiplication Centres
4.4.5
Assessment of the Fisheries Development Programmes
i.
Establishment of Integrated Fish Farm Estates
ii.
Cage and Pen Fish Culture Development Programme
iii.
Fish Farm Certification and Standardization Programme
iv.
Sustainable Aquaculture Programmes
v.
Coastal Industrial Fisheries
4.5
Recommended food crisis response program
The
following measures are recommended responses needed to avert a major food
crisis in Nigeria. The measures are grouped into short, medium and long term
measures.
4.5.1
Short term measures
4.5.1.1
Measures to boost food supply
Effective fertilizer distribution.
25% Federal subsidy on fertilizer.
Establish Tractor hiring Services Scheme
Establishment of crop processing companies through PPP.
Infrastructure development projects.
Restructure, commercialize and recapitalize NACRDB.
Privatize and completely depoliticize the distribution of fertilizer
Promote commercial agriculture through appropriate CF models
Develop livestock fattening programmes
Promote development of aquaculture
Effective use of meteorological information and forecasts from NIMET
Promote formation of fishing cooperatives
Capacity building for all stakeholders in crop, livestock and fisheries value
chains
4.5.1.2
Agricultural Market Development Measures
Support
contract farming models for value added agriculture
Develop
marketing infrastructure
Set
up Commodity Boards
Finance for agricultural marketing functions through the NACRDB.
Develop market information for crops, livestock and fisheries
4.5.1.3
Food Consumption and Nutrition Measures
Promote Healthy Eating Habitat through NOA
School feeding/lunch programme
4.5.1.4
Macroeconomic Policy Measures
Reduced interest rate for agricultural loans to smallholders
4.5.2
Medium term measures
4.5.2.1
Measures to Boost Food Supply
Establish
medium-scale fertilizer production plants through PPP
Conversion of wastes into organic fertilizer
Redefine the mandate of Agricultural Research Institutes to ensure that the
technologies
being developed are relevant, appropriate and reflect contemporary
development
priorities in respect of the particular commodity.
Adopt value chain approach in crop and livestock development interventions with
specific
commodity focus
Complete withdrawal of government from fertilizer procurement and distribution
Promote mechanization of artisanal fisheries
4.5.2.2
Agricultural Market Development Measures
Establishment of community warehousing scheme to promote crop storage across
the
country
Establishment of conditioning centres for the storage of perishable commodities
Development of livestock and fish markets
4.5.2.3
Macroeconomic Policy Measures
Reduced interest rate on credit/loan for agriculture
4.5.3
Long term measures
4.5.3.1
Measures to Boost Food Supply
Establish more tractor assembly plants through PPP
Commercialization of prototypes of improved technologies developed in various
research
institutes.
Development of cattle ranch
Fish canning
Development of commercial land market
Remove hoe and cutlass as basis for small-scale agriculture in Nigeria
Sedantarize nomadic herders and commercial large ruminant production
4.5.3.2
Agricultural Market Development Measures
Development of conditioning centres for livestock products
Agricultural export market development
4.5.3.3
Macroeconomic Policy Measures
Competitive agricultural finance market
5.0
Nigeria Agricultural Development Strategy
5.1
Analysis of Gaps in The Current Agricultural Development Strategy
Currently,
The Nigerian agricultural development strategy is defined in terms of the
National food security programme of the Federal Ministry of Agriculture. Even
though the programme contains commendable intervention measures, certain gaps
have been identified that are likely to make the implementation of the strategy
less effective. These gaps would need to be filled in updating the current agricultural
development strategy. Some of the observed gaps can be summarized as follows:
i.
The objectives of policy are generally acceptable but have no clear time frame.
It
is
suggested that a period of 3 years be specified for achievement of objectives
ii.
Most of the programme objectives do not reflect any form of regional diversity.
It is suggested that a sustainable strategy document must incorporate regional diversity
issues into its formulation
iii.
Even though inadequate storage is acceptable as a challenge, the current
strategy which emphasizes subsidy does not have a sustainable way of creating
the needed additional capacity.
iv.
The current strategy document places the PPP arrangement as a major means of facilitating
the implementation process. Even though the principle of PPP as a major
strategy for success is acceptable, it is argued that the PPP arrangement as stated
in the document emphasizes some degree of subsidy and this is likely to give
room for corruption. The level of subsidization of the private operators should
be calibrated to minimize abuse.
v.
The current strategy does not emphasis giving farmers the right incentives to produce.
Given the right incentives, farmers will intensify production. So finding strategies
that provide appropriate incentives, including increasing farm gate price may
be a way to go since it will encourage farmers to adopt improved technologies
of production.
vi.
There is need for a clear strategy to attract private sector investment in agribusiness.
As shown in the NISER presentation (see annexes), “higher returns to investment
in agriculture can only be realized if farmers have easy and ready access to
inputs, information and markets and if they have the right incentives”. So
agricultural strategy must have a clear blue print on how to achieve this.
vii.
The current strategy document does not have specific intervention for
agricultural information. A liberalized and cheap agricultural information
market is very important for the realization of increased productivity and
profitability along the value chain.
5.2
The Building Blocks for updating the current Agricultural Development
Strategy
The
forum deliberated on how best to improve the current agricultural development strategy
for Nigeria. In order to produce a sound agricultural development document for
Nigeria,
it is important to identify the following: What needs to be done, the major constraints,
how best to proceed, what outcomes to expect, what indicators to use for measurement
of success, and how will progress be monitored and evaluated? Many useful ideas
were generated in the various discussion sessions on this subject which are included
in the annexes, including the following steps.
The
first is an overview of the basic macro messages about the role of agriculture
in Nigeria. This would involve the characterization of the sector including
competitiveness; recent performance and determining factors; sectoral linkages
and contribution to growth and poverty reduction.
Secondly
there should be a clear statement of objectives of strategy formulation
process.
This
would involve a clear statement of what needs to be done or put in place or
changed.
This
would require a review of past policies to isolate gaps. Under the statement of
objectives, it is important to have a clear statement of Vision, short term
objective, long term objective, and policy thrust.
The
vision of sustainable agricultural development and food security in Nigeria
would be to ensure sustainable access, availability and affordability of
quality food to all Nigerians and be a net provider of food to global
community. The short term objective would be to significantly improve Nigeria’s
agricultural production, while the long term objective would be to improve
productivity and expand large scale production. Policy thrust should be import
substitution, food security, modern agricultural practices, and resource conservation.
Major factors that need to be focused on in defining the objectives statement
are: Competitiveness/potential opportunities, Spatial/regional differences, and
Regional complementarities.
Third,
the strategy formulation process must involve the identification of constraints
to the achievement of the objectives of Policy. These identified constraints
must not be generic but have particular relevance to the existing local
conditions in the country at the time of strategy formulation. These
constraints can be grouped under the following categories: policy and institutional
environment, Agricultural financing and Expenditure priorities, rural
infrastructure, Market environment, technology, extension, and vulnerability.
Fourth
is the assessment of the Investment climate and private sector
development. It is important that the principle of private public partnership
feature prominently in the design of development strategy. Issues relating to
agribusiness climate, and legal and institutional reforms must be adequately
addressed.
Fifth
is the action plan. Here the strategy document will focus on addressing the
question
“How
to do what needs to be done”. It will address how the identified constraints
would be overcome. This would require the review of experiences with past
action plans to identify the reasons for successes and failures, which will
guide the formulation of a new action plan. Careful evaluation of past public
sector initiatives such as agricultural research and development, extension,
market information system, irrigation infrastructure, transport infrastructure and
other interventions such as labor saving technologies to identify what works
and what does not would be needful. The sixth building block of a good
agricultural strategy is Governance. Issues relating to public expenditure
priorities and financing of the sector as well a policy consistency would need
to be addressed. The strategy would need to address issues relating to public expenditure
in the sector, estimates of resources requirements, and potential sources at different
levels. It would have to critically assess the reasons for policy inconsistency
in Nigeria and consider whether or not to legislate policies to address the
problem. Efforts to link agricultural spending to oil revenues are welcome, but
smoothing out expenditure is important. It is also important to build political
support for agriculture, taking advantage
of the Comprehensive Africa Agricultural Development Project (CAADP).
Finally,
it is important in the strategy formulation process to specify as accurately as
possible how to keep track of implementation. This would include the setting of
realistic targets to be met at specified time interval, the identification of
indicators for measurement of progress, the setting up of a monitoring and
evaluation plan which should include strategy for effective data gathering.
6.0
CONCLUSIONS and KEY MESSAGES.
The
Forum discussed the next steps to be taken to achieve an action plan for
National
Food
Crisis Response Program and for the preparation of a strategy document for Sustainable
Agricultural Development in Nigeria. The process, including the next steps and
timeframe, would be coordinated by the Government in partnership with
interested donors. The Stakeholder Forum came up with a number of important
conclusions as discussed above and the details contained in the annexes but key
messages coming out from the Forum could be summed up as follows:
The
Nigerian agricultural sector has performed well in the past five years with an average
annual growth rate of 6% but the Government has set a target of an average
annual growth rate of 10% in the next five years; Currently, there is no food
crisis in Nigeria but evidence of increasing prices of food crops points to a
looming problem of food crisis;
Even
though the Government of Nigeria has taken some steps such as increased food
importation, reduction of tariffs, release of strategic grains reserve and provision
for more storage to counter potential food crisis, there is need for additional
intervention in the area of domestic agricultural production and marketing;
An
Agricultural Development Strategy exists, however, the Forum identified some
gaps that need to be addressed in order to improve the soundness of the strategy;
and
The
Forum recommended that FMAWR works closely with its development partners to effect
the needed changes in the current strategy document to make it more effective
and sustainable.