‘Mechanisation will help eradicate poverty among rural farmers’
Sani Dangote is the president of the Nigerian Agribusiness Group (NABG) and group vice president of Dangote Industries Limited. Dangote tells JOSEPHINE OKOJIE, in this interview, that the Federal Government must unveil a clear-cut blueprint if it wants to revolutionise agriculture and diversify the oil-dependent economy through the sector.
What is the specific mandate of the Nigerian Agribusiness Group (NABG)?
The NABG is an association for associations–rural farmers, traders, agro-industries, input suppliers, banks, insurances, logistics, women development centres, youth empowerment centres as well as research and development centers. All these associations within the entire value chain of agriculture are under its umbrella. The group provides a platform where every segment of agriculture and agribusiness, whether it is policy-making, regulations, rural farming processing and logistics, come together to discuss the entire problem in agriculture and to find solutions either within the group or through a public-private dialogue with the government. There are hundreds of associations within the agricultural sector which is focused on addressing issues affecting their own areas of concern, but NABG looks at areas that concern the entire value chain of Nigeria’s agriculture
How far has the Nigerian agribusiness gone in addressing challenges in the agricultural value chain?
NABG is not in the business of providing factories or storage facilities. There are lots of challenges which have to do with the farmers, out growers, logistics and ability to meet local demand. NABG will continue to seek ways to discuss with the government on how these challenges can be addressed. The Dangote tomato processing plants will address some of the issues of tomato wastage when they start 100 percent production of tomato paste in March this year.
The federal government is talking about diversification. How can agriculture play a leading role?
Government must make a desired effort to revolutionise agriculture. The government needs to engage all stakeholders in the agricultural value chain and NABG because it is the association of all agricultural associations, to discuss and come up with a blueprint on how they can put a marshal plan on agriculture. But if the government just sits down and keeps saying that agriculture is the key and just provides insurance guarantee for entrepreneurs who want to go into agribusiness, provides small loans for entrepreneurs and brings in some tractors and tractors loan arrangement, changes the tariffs, all these would not just change the fundamentals in Nigeria’s agriculture. The federal government need to dialogue with the private sector to find ways on how to mechanise the rural farmers, how to improve high yield inputs, how to improve fertilizers and the quantity required, how best farmers can harvest, how to guarantee economic value to primary producers, and how to ensure some price mechanism where agric processors can have some reliability on the pricing scheme. It is not a science or a difficult thing. It’s just having a retreat with key stakeholders. As long as government keeps talking without action, agriculture cannot play the leading role. Every government has been talking about diversification through agriculture but at the end of the day there is nothing to show for it. NABG believes the Buhari-led administration would be different because the president is an advocate of agriculture. But he has to hit the ground running because there is no time. All segments in the sector need to be revolutionised with a drastic approach, so that within four years there are significant results. Mechanisation is a very critical issue because it will help eradicate poverty of rural farmers. But if farmers continue to farm using crude equipments, their poverty can never be eradicated. Farmers are not looking for free fertilisers but a price that pays for all their inputs and labour. For me, let there be no subsidy in fertilisers, but government should give farmers better assistance by providing them with research and development, provide them with high yield seedlings , provide them with a free market of fertilisers and inputs where there will be competition, because competition drives price and then guarantees assistance for the farmers with mechanisation. Farmers need to farm using mechanisation and harvest their produce using mechanisation in order to increase production and profits. But if government continues to give farmers free fertilisers, and farmers continue to farm with crude implements, there will not be any profit to make. Farmers need the assistance of extension service workers to teach them better ways and manners of agricultural practices that will ensure better productivity. Continuous talk about diversification without mechanisation won’t make a difference.
What is NABG doing to attract youths into agriculture?
Some rural youths are engaged in some activities, but they are very poor because they don’t get any value addition since the whole primary production is still entangled in poverty with the issue of low productivity and high time spent on farmlands. As a result of these, the rural youths are eyeing the urban cities. Youths in urban cities are not envying farmers because they don’t see them getting better. And that is why NABG is advocating for a revolutionised agricultural sector by changing the practice. How can the youth go into agriculture when it is entrenched in poverty and losses? Until we move away from subsistence farming to commercial farming, irrespective of the scale, the youth will not find agriculture attractive. Giving a group of youths money to go into agriculture will only make few to be successful, but if the government wants the larger scale to be attractive, it must develop mechanisation and give the youths access to lands. With this, agriculture becomes attractive for the youth as a profession. Government should give assistance to farmers by giving them certification to their lands, which will give the land value so that farmers can use it to negotiate for loans.
How is NABG addressing the issue of market access for agricultural produce?
NABG is an association for all associations. So the issue of market access is being addressed by the trading and marketing segment of the association. We address every issue our members are facing in accessing various markets. We are currently building a website with all the data of our members, where youths can go and get the contacts of different markets that they want to access and discuss with them. If the issue cannot be addressed within the smaller groups in NABG, it will be brought before the larger body.
What impact does the current interest rate regime have on farmers’ ability to get loans from deposits money banks?
Interest in agricultural loans should be in single digit. The CBN’s recent rate cuts and call on banks to lend more to the agricultural sector show that the government is doing something. But this is not enough. The government needs to ensure that farmers have access to markets, good inputs, research and development to understand the major challenges and what to do to improve crop yields. There is the need to put a price mechanism in place that encourages commercialisation and profitability in the business. Telling banks to lend to critical sectors would not bring the desired change if challenges in the sector are not addressed.
What is NABG’s position on CBN forex restriction policy on manufacturers of some agricultural products?
NABG is encouraging its members to look inward because the central bank is saying the dollars are not available. So we need to start looking inward. Most of the items imported into the country are substandard products, especially the tomato paste, and that’s why the Dangote processing plant will start processing 100 percent tomatoes paste in the country. The government needs to address the issues in agriculture because the sector can provide a lot of materials for production where companies can start to substitute locally.
Is NABG in support of the call on government to ban the importation of rice?
The mixture of local integration and importation is the problem in the rice industry. Why should a company invest billions on rice and its equipment and wait for three months before harvesting. Coupled with the issue of management, if the same company can import rice at a cheaper rate, using just one assistance to import thousands metric tonnes of rice and make more profit, which do you think the company would want to engage in? That is why these companies will continue to deceive the government by showing them a small piece of land where they are doing something with a promise that they will do more next year and get quota to import rice. The government needs to ban the importation of rice and in two years Nigeria will be rice sufficient. Rice can be grown in every part of the country with a maximum window of 120 days. All government needs to do is to give capacity building to these farmers and put them in cooperatives, provide them with seedlings and production will shoot up in Nigeria and rice would be everywhere. The price of rice will become so attractive that Nigerians will start growing rice in their backyard. India, few decades ago, were importing rice but having banned rice and given incentives to rice farmers, they are now exporting rice. It doesn’t take science. Provided government continues to listen to these saboteurs who come in the disguise by participating in the economy, making nonsense of government policies by conniving with some other elements, telling government to give them permission to import rice on the grounds that there will be droughts which will affect production, we are not ready to be rice sufficient. If Nigeria can get it right in cement, we can replicate what we did in cement in rice, sugar and other products. Cement is more difficult than rice because you need to find the limestone, and setting up a cement plant is more expensive than setting up a rice mill and it takes 4 to 5 years to build a cement plant. Today Nigeria is exporting cement. If government bans rice importation today, Nigeria will be self sufficient in rice in two years or less.
How can the Buhari-led administration develop the agricultural sector?
The Buhari led administration needs to be firm about the change in the agric sector. The administration needs to bring immediate revolution in the sector because the longer it takes, the earlier it makes the government lose its trust in the sight of the people, given that they are not sure whether it will be sustained. We believe the Buhari administration can do it; it has the capacity to do it and it needs to be done immediately.
What is the future outlook for agriculture in 2016 and beyond?
If we do the right thing in agricultural sector quickly and with passion, I see a brighter tomorrow. The federal government should engage immediately the private sector to the table and make things start happening. With this there will be much relief in the economy because the agricultural sector will be revolutionised, which in turn will create jobs; prices of goods and services will be cheaper; Nigeria will be food sufficient, and some produce will be good for export. Manufacturing firms will start substituting locally.