According to Nairametrics, out of the N44.54 trillion loans advanced by commercial banks to the private sector in 2023, only N2.26 trillion was deployed to the agricultural sector, and thus amounts to a meagre 5.07% to a sector that contributes over 20% to GDP. That is why this article, which is the ninth in the series aimed at advising the President of the Federal Republic of Nigeria on the necessary actions to increase the non-export volume to levels that match or even exceed those of crude oil and gas exports. In this edition, the focus will be on the policies relating increasing volume of production of exportable agricultural commodities to boost the volume of Nigerian raw agricultural commodities and processed Agro products that are exported to different markets around the world
This policy is therefore aimed at growing the non-oil export volume by increasing the production volume of Agro commodities in order to make Nigerian agricultural commodities contribute significantly to the Nigerian export basket. This, therefore, will require putting together different programs that will support and help the farmers increase the output from their agricultural activities and consequently the export volume. This involves the provision of different incentives and support to reduce the cost of production through an increase in the yield per hectare.
The vital components of the recommended policy to boost the production volume of Nigeria’s Agricultural commodities and thus increase the non-oil export volume should include: Improved Access to Credit, Investment in Research and Development, Enhanced Irrigation Systems, Government Incentives, Capacity Building and Training in the area of Sustainable Agricultural Practices and Modern Agricultural Techniques
A very important aspect of this policy is access to credit. This involves funding the government agencies and private sector participants that are in the value chain of agribusiness financing, like commercial banks, Bank of Agriculture, and Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), etc. This policy is to ensure the provision of farmers with sources of funding that are cheap and at the same time easy to access. This is very necessary to help the farmer acquire more land and thus increase the size of cultivated lands, purchase improved seedlings with higher yield per hectare, hire the machinery required to cultivate the land, and pay the labour required.
One of the major challenges causing low volume of production in the agricultural sector is the outbreak of diseases and infestation of pests on the farms. That is why this policy on investment in agricultural research and development must be taken seriously. Increasing funding for agricultural research can lead to the development of high-yielding and disease-resistant crop varieties. Collaborating with universities and research institutions will foster innovation in agricultural practices and enhance productivity.
Another factor that has significantly contributed to the low agricultural output in Nigeria and consequently reduced exportable Agro commodities is the fact that over 95% of the cultivated lands in Nigeria are rainfed. According to the Federal Ministry of Water Resources, the actual irrigated area in Nigeria currently is 5.4 per cent as of 2022, leaving over 94 per cent or 2.97 million hectares of farmland without irrigation nationwide. That is why this policy must include the development and upgrading of irrigation systems across the country. This will help farmers manage water supply more effectively, increasing productivity in regions affected by seasonal droughts or irregular rainfall. This can ensure a more stable food supply for year-round farming and higher-quality produce.
Even though government policy on fuel subsidy is gone, the need to subsidy the production of agricultural commodities, particularly for export, cannot be overemphasized. In order to enhance the competitiveness of Nigerian agricultural commodities, the government policy on growing agricultural production volume must include some incentives. It has been reported that China accounted for 37% of global agricultural support, driven by policies aimed at increasing production and self-sufficiency, India provided 14% of global agricultural support, also motivated by production goals, while the US and EU, once major contributors, now account for 15% and 13% respectively. This is why this policy must provide supportive agricultural policies, such as subsidies for farmers, tax incentives, and reduced tariffs on agricultural inputs.
This policy should also contain capacity building for farmers. This should involve the provision of ongoing education and training for farmers on best practices, pest management, and post-harvest handling can improve the quality and quantity of produce. Extension services can play a critical role in disseminating this knowledge. This should also include the training on modern farming techniques, which can help them to significantly increase crop yields and empower them to adopt more efficient practices. In addition to this, the policy on capacity building should also cover sustainable agricultural practices because this will help them to improve long-term productivity while protecting the environment. This will also help to enhance the soil health and increase exports of eco-friendly products.
In conclusion, I firmly believe that if the policies outlined in this article are taken into account and successfully implemented by the government, they will significantly increase the export volume of both raw and processed agricultural products from Nigeria. This improvement will support the government’s goal of increasing the volume of non-oil exports in the country, ultimately positioning this sector as a major contributor to the nation’s foreign exchange earnings.
Bamidele Ayemibo, Ph.D
International Trade Consultant/Member, BoT Network of Practicing Non-oil Exporters of Nigeria
(NPNEN)
For questions, send an email to [email protected]