Govt now running agriculture strictly as business, says minister

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 The Guardian's Abuja Bureau Chief, Madu Onuorah, and Joke Falaju spoke with the Minister of Agriculture, Dr. Akinwumi Adesina, on the changes in the agriculture sector. In this interview, the minister explained the challenges and prospects. Excerpts:

WHAT does Nigeria stand to benefit from this movement from a government-focused to private sector-led agricultural sector?

My mission as Minister of Agriculture is not to maintain or manage poverty in rural areas of Nigeria. My mission is to create wealth - stupendous amount of wealth - for farmers in the rural areas. Look, nobody can give me any reason for the level of poverty we have in our rural areas because agriculture accounts for almost 70 per cent of employment in this country and roughly 44 per cent of our GDP.

But the rural areas are decimated. People can't change their thatched roofs, or metal roofs, which have become so brown. We don't need rocket science to see that what we have there is serious poverty, serious structural poverty. That structural poverty is because of the poor performance and neglect of agriculture over so many decades. When we found oil, we forgot about agriculture.

We also have to recognise that Nigeria has huge potential for agriculture. We have over 84 million hectares of arable land, out of which we only cultivate about 40 per cent. And even the 40 per cent we cultivate, not more than 10 per cent is optimally cultivated. This means that not more than 10 per cent of cultivated land uses high yielding varieties, fertilizers, mechanisation and so on.

And God has blessed this country with so much water. With 273 billion cubic metres of water, we have more water than Israel. Then labour is cheap. We have 100 million youths all over the country; this means that agriculture, which is labour-intensive, would be able to absorb a significant part of this number. Finally, we have a large population of about 167 million people. We eat food, though it is imported, that's the problem. And that's why with this potential, Nigeria has absolutely no basis, no reason for being a net importer of food. It is just sheer neglect.

And when I look at it in my job as minister, what you don't feel ashamed about, you cannot change. I have worked globally and I know it is a shameful thing that Nigeria cannot unlock her potential. We must be a net exporter of food. We must diversify this economy, because the demand for oil is falling in the United States. Oil prices are falling; other people are finding alternatives to oil, like solar and thermal energy. They are finding alternatives in wind energy and ethanol. So, what are we going to do when the oil dries up?

What we need is a sense of urgency in bringing structural change to that sector. Without this, I see ahead of us nothing but an iceberg. Unless we take corrective measures today, we are going to hit that iceberg. With the structural change, we will begin to create wealth from agriculture, as opposed to managing poverty, and to do that means we must take agriculture as a business.

If you are producing food, whether you are using seed, it is business. Fertilizer is business, storage, processing and adding value is business. Transporting, warehousing, logistics - everything in agriculture - is business. That's why as government, we launched the agricultural transformation agenda. It is not a political agenda, it is a very serious structural strategy we have in place to unlock the potential of agriculture.

And so, agriculture must be where Nigeria would begin to compete with others. We used to be No.1 in palm oil production in the whole world. Today, we are importing crude palm oil from Malaysia. It is totally crazy. We have farmers with plantations all across the South East and South West that used to produce palm oil. The plantations are still there, why are we importing palm oil today?

We cannot continue to run a prodigal society where you have something but cannot use it, and you are constantly using other persons' things. Today, we spend N1 billion everyday buying rice from Thailand and India when we have vast, uncultivated land. That's why Mr. President said we must restructure and change this sector and we have done that.

We have taken it out of the development realm and put it strictly in the business realm. We are doing major policy reforms to make sure our agriculture is more productive, more efficient, more competitive, and that it leads millions of people out of poverty. So, our goal is to modernise the sector, not to maintain it as it is.

What is the way forward in modernising agriculture from a government-driven development issue to private sector business-driven?

First, the most important thing is for farmers in a country to get inputs. We have land in abundance. Fertilizer, quality seed, mechanization and irrigation are very important to farmers. Then the other side, you have the marketing system that would be able to absorb whatever surplus is produced, and that you have a system to reduce post-harvest losses as well have access to finance. Those are the things you need for agriculture to perform.

Let me start with the input system. When I became minister and came to this country, what I met on ground was a disaster on the input supply. We have been running an input supply system for several decades, where government was buying fertilizer, buying and distributing seeds. This had gone on for over four decades and not more than 11 per cent of the farmers were getting these fertilizers.

They were being hijacked by powerful people, few large commercial farmers and government officials. The fertilizers were getting legs and hands and walking away from our farmers to other countries. They go to Niger Republic, Chad and Benin Republic. All the fertilizers that were subsidised in Nigeria were not getting to Nigerian farmers, but government was essentially subsidising corruption and farmers in other countries.

People would wonder, how do you do that? I have been looking at the system since 1984. When I was doing my Masters and PhD thesis in the U.S., I lived for one year in a village called Maradi, close to Katsina in Katsina State, working on my research. All I saw were Nigerian fertilizers on trucks and trailers always moving to Niger Republic. So, I'm talking of something I have been looking at for a very long time.

And so, we decided that we have to end that corruption in the fertilizer sector so that we can reach the farmers. Nigeria cannot be the place where people look at us with ridicule as museums of poverty when we can do something better. So, I brought the issue to Mr. President and he said, go ahead and deal with it. I'm happy to mention and even let Nigerians know that it took us exactly 90 days to end a corruption of four decades of fertilizer in the country.

We took the government totally out of it. Now, I don't sign any fertilizer contract, I don't sign any seed contract, neither would I sign any until I am done with the job. Government doesn't buy coke or fanta, yet it is everywhere here. So, why was government buying fertilizer or seed except that some people were just making fat money from the system and denying the poor farmers what belongs to them?

And because we took the government out of it, dignity has returned to Nigerian farmers because they have access to the fertilizer. Contractors don't sell fertilizer to government anymore; the seed companies don't sell to us anymore. You go and sell your things to those that need it. Now, the importers or vendors sell directly to the farmers.

When we started, the fertilizer and seed companies had no supply chain, their only supply chain was to bring what they have to government. What do they bring to government? Most of the fertilizers had 50 per cent sand. When they were bringing seed to government and the Nigerian Government was paying for them, the seeds they were bringing were grain. They buy grains in the open market and sell it back to the government.

And you know that the price of seed is many times higher than the price of grain. So, it was the most corrupt thing going on in this country, the racket was serious. When I came here, I said I was not going to have any of that and we took it out. When we took the government out, I wanted to make sure that I could reach every Nigerian farmer directly. I don't need anybody to link me with them.

If you go to the bank and you want to collect money, you go with your cashbook and collect your money, you don't need your neighbour or any politician. So, why were farmers depending on political hangers-on, who come to say they are representing them and they don't represent them? We decided we have to meet the farmers directly and to reach them directly, I must know them. They are not ghosts or faceless people.

When I took over as minister, there was no record of Nigerian farmers. They were not known, yet they said they were spending money on them. The question is, who was the government spending money on? Someone they don't even know? You can't just spend government money like that. I decided that we must have a database of our farmers because if you don't know your customers, then you are doing bad business, except you are in the stealing business.

We started by registering them. By the first year, we registered about 4.2 million farmers. This year alone, we have already registered 10 million farmers. By next year we would register additional five million farmers. According to the Food and Agriculture Organisation (FAO), the estimated number of farmers in the country is about 14.2 million. Let's just give ourselves an estimate of 15 million. So, within two years we have registered all the farmers in the country plus their biometric information, which means I have all their biometric information with me.

Then, we decided to reach them directly via technology, which is the mobile phone. If I want to call you, somebody else doesn't pick it, I call you directly because you have a unique identification number that is yours alone. So, we decided on developed electronic wallets, a system where we reach farmers directly with electronic coupons, vouchers for seed, fertilisers and other inputs over their mobile phones.

It took us 120 days to develop the platform and roll out the whole country in our first year. In 120 days, we reached 1.2 million farmers. They started getting their seeds and fertilizers, many touching bags of fertilizer for the first time ever. This year, we have registered 10 million farmers and we are going to reach every one of them because we have more data.

Last year, when we started, the farmers were like, 'well, we are not sure of it,' some even thought we wanted to tax them. Some thought it was for political reasons. But when they saw that 1.2 million of their neighbours got it, this year everybody came out to register. I deployed this year 11,000 people to the ward level all across this country to register the farmers. We have modernised the system.

Today as a minister, I can tell you which farmer got fertiliser, when he got it, where they got it, how much they paid for it and how much we paid, and how much the state government paid. It is a very transparent system. And as a result of that, the fertilizer companies last year sold N15 billion worth of fertilisers, not to government but straight to farmers. It had never happened before.

The seed companies changed. They sold N1.5 billion worth of high quality seed directly to farmers, not to government. Look at even the performance of the banks, last year I wanted them to lend N30 billion to farmers but they were hesitant. I am not blaming them, as it was the first phase of the programme. They started with lending N3 billion to farmers. When they did, the Governor of Central Bank asked them how much was their default rate. They said it was zero per cent. It had never happened.

So, this year, the banks are committed to lending N60 billion because they see that the system is working. One of the seed companies on the field got N400 million loan from First Bank last year. This year, they have given him N500 million. The firm, Massler Hard Seed, had never borrowed money until we started our programme. So, that tells you that a private sector-led, government supported effort is working. If it is not working, why would the banks be lending their money?

And what we are doing in the agricultural sector is not just the Federal Government alone, we have a very strong partnership with the state governments. Yes, the electronic wallet ended corruption in the procurement of fertilizers for farmers, but it also created a new partnership with state governments. The total amount that the electronic wallet saved the Federal Government was about N25 billion last year. These are savings that I would have signed off as contracts for the government.

Out of the N15 billion spent on the programme, N7.8 billion was contributed by farmers as participants in the project. They covered 50 per cent of the cost. Of the balance, we spent as Federal Government about N5 billion, while the balance of N3.7 billion was spent by state governments. So, it is a new partnership between the federal, state governments and farmers, where the beneficiaries also put something on the table.

However, I want you to also see what the private sector is doing. When we started over a year ago, we had only 21 seed companies. By the end of last year, we had a total of 77 seed companies. And because the fertilizer companies saw that they could sell directly to farmers and make their profit, look at the investments that have started coming.

Aliko Dangote is going to put up for this country the largest urea plant in Africa, worth about $3.5 billion. A group called Ndorama is investing about N1.5 billion in a new fertilizer plant in Nigeria. Notorium, which has the largest plant right now making urea, has signed a new agreement with Mitsubishi Corporation of Japan, which is putting in N1.3 billion. And they are doing this because the new policy on input is working. It is real business and everybody is making money directly.

What of the seed? When I became minister, we wanted to give our farmers in the North access to quality cotton seeds but could not find single kilogramme of quality cotton seeds in the country. We had to go Benin Republic and beg them. They said our President has to beg their President to give us the seeds. What a shame! How did we ever get there? And I said no, we are not going to do any such crazy thing.

We went to work and got a company called Wacot to develop for us certified cotton seeds. From them, we got 1,580 metric tonnes of high quality cotton seeds, which we distributed last year. The President said we should give it all for free all across the cotton-growing states of the North. The 35,000 farmers planted the cotton seeds on 75,000 hectares of land. We spent about N240 on every kilogramme of the seed. The one that farmers would get from the open market was N420 and it is bad quality seed.

So, the farmers all across the North got seeds free from the government. When was the last time such thing ever happened in this country? And they produced 240,000 kilogrammes of cotton. As a result of that, there is a group called Syngeta, the world's No.1 seed company. They are just about opening office in Lagos because they have seen what is happening in Nigeria.

Nobody can do agriculture with hoe and cutlass today and make progress. That is not farming, that is punishment. So, we brought in a company called Agco, the world's largest manufacturer of Mercy Ferguson tractors. And because of the reforms they see in Nigeria, they are investing $100 million to set up a tractor assembly plant here.

The ministry is putting up for this year a N3.5 billion mechanization service fund towards establishing several private tractor hiring service all across the country to give farmers access to mechanised services. And because of the electronic wallet system, this year, we are providing mechanised services support for farmers in this country through their phone.

They would get the coupon over their phone stating the amount of money government is giving them for mechanised services to plough their field. They would now go to the tractor-hiring centre, where we already would have sent the information to, just like we do now for seed and fertilizer. That is the modernisation that we are referring to.

Part of it has to do with processing. We lose a lot of what we produce. Kadawa Valley in Kano State produces the largest quantity of tomatoes in Nigeria, and Nigeria produces 65 per cent of all the tomatoes in West and Central Africa. Yet, Nigeria is the highest importer of tomato paste in the world, from China and Italy. What a paradox! The irony is that 45 per cent of the tomatoes in Kano waste away every day.

Take citrus (for instance), Nigeria is the No.2 in production of citrus in the world, after China. But you go into any supermarket and pick up any juice you find there, the only thing that is Nigerian in local content is water. What is imported is citrus concentrate mixed with water in Nigeria and sold to Nigerians as juice.

To get out of this shame, we worked with Dangote's Dansa Group to put up a $30 million plant in Kano that would process the raw tomato into tomato paste. That would reduce a lot of the losses we currently have. Secondly, we worked with the Transcorp Group and Tony Elumelu Corporation and they set up in Benue State a new plant that is processing oranges that we have into juice.

The Dansa Group is working in the production of pineapples. Nigeria is now No.8 producer of pineapples in the world, but every pineapple juice you see in this country is imported. But now, Dansa Group is investing $40 million to produce and process massive pineapple juice in Rivers State. So, we are investing with the private sector to do processing and value addition to what we actually produce in abundance.

Part of the transformation efforts has to do with modernising the financial sector to support agriculture. Mr. President directed that we must get access to finance for the farmers at single digit interest rate. If you look at agriculture in the U.S. since 1915, American farmers have been getting credit at 4.5 per cent interest rate. That is why an American farmer is rich because they get very cheap finance. Their government supports them with very cheap subsidies.

But here, we have abandoned our farmers for decades and expect them to perform. It is like going to the Olympics without shoes and you are expected to win a race against Usain Bolt. I know that Nigerians like to pray, but God created man to work and you have to work because if you don't work, you are not expected to eat.  So, we cannot abandon farmers and expect them to suddenly become major players overnight. Miracles don't happen like that.

One of the things we have done is recommending that about N15 billion be given to the Bank of Agriculture to lend to farmers in single digit rate. My ministry is working with the Central Bank to develop a facility called NIRSAL. I was working on this with CBN Governor before I became minister. That facility would reduce the interest rate of banks for agriculture from 23 to nine per cent. And the banks have committed to lending about N450 billion.

I read in the newspaper about government distributing N450 billion, which is not true. The N3.5 billion would be leveraged from the balance sheet of banks. The banks would lend their own money, as Nigerian banks are awash with excess liquidity. What we are doing is providing risk guarantee to banks to lend their money. Government doesn't have N450 billion to lend, it is their money the banks are going to be lending.

Finally, on the modernisation of agriculture, the next crucial thing is storage capacity. When I took over as minister, there were about 100 silos across the country that had 35 per cent completion. Right now, almost all of them are completed. So, we have the food chain from seed, fertilizer, mechanisation, to finance and storage. But the things we are doing are not political. They are structural things that would make Nigerian agriculture productive and efficient.

How are you handling obstacles towards implementation of the new agricultural focus?

You know, if you have a slave you would not easily let your slave go. In the Bible, even when Pharaoh let the children of Israel go, after a while he said he wanted his slaves back. I was not appointed by the President to make the people who have been bleeding the economy happy. No! That is not my job.

My job is to make sure that dignity returns to the farmers of Nigeria, that we revive our rural economies, that we increase the incomes of those farmers. So, it is not about those people but about the masses. After all, it is the taxpayers' money that we are spending. In the case of fertilizer, for instance, people would say I am a large farmer. Why is the minister not giving me subsidised fertilizer?

But let's face it. Subsidy is not for the rich. It is for the poor, small farmers. My focus is to get fertilizer and seed to millions of small farmers across the country. So, if you are a very rich person and you are expecting the Federal Government to provide subsidy for you, I am sorry, that would never happen. The days when the rich take over the supply of fertilizer are gone.

Of course, we are also not saying we are not going to support large or medium scale farmers. We are going to support them through the facility of finance, like the NILSAR, so that they can borrow money at single digit interest rate. With this, if they want to buy a trailer load of fertilizer for their farms, they can get access to finance such and not corner the subsidized fertilizer that belongs to the poor.

Now, take the case of rice. I am a believer that the best days of Nigeria are just ahead. But nothing comes without its own pain. You must have a little bit of pain if you are going to change something. How do you think the farmers of India and Thailand are producing rice? Indian Government spends $20 billion annually subsidising their rice producers. So, they are piling the rice and are selling it to us.

The real issue here is that it is those small rural farmers that we must focus on. Take the rice millers, if you look at many of the mills we started, they were set up to process brown rice. They bring it basically from India and some from Thailand, polish the rice and sell to us, that's all. The mills were not set up to process the paddy rice that is produced in Nigeria.

Now, as a government, we said no. We are doing rice transformation agenda in order to be self-sufficient in rice production by 2015. For that to happen, we can't let you continue to ruin our economy by bringing in brown rice from India or Thailand.

And 18 months after the President announced that policy decision that we are going to be self-sufficient in rice and that we would provide incentive for domestic producers of rice in the country, 14 new integrated rice mills came up with a total capacity of 240,000 metric tonnes. That tells you that even among those that were against government, they recognise that they were going to make more money and government is very serious about it.

The rice millers are located away from the areas where massive cultivation of rice is taking place. How do you evacuate the rice paddy from such long distance to the millers without pricing locally produced rice away from the average citizen?

First, I was convinced that we have to change the way we produce food in this country as we only support food production in the wet session. Nigeria is blessed. You can grow your crops in both wet and dry seasons because we have irrigation, but we have not been supporting dry season. This is the first time ever that we took a decision to support dry season rice production.

Dry season is always better for crop production because of the sunshine. We decided to support it in the states of Jigawa, Kano, Zamfara, Kebbi, Niger, Kogi, Nasarawa, Katsina and Sokoto. In these states, we gave them high quality seed, the Faro 44 and Faro 52. The rice that we want to replace is the long grained par-boiled rice and only Faro 44 and Faro 52 varieties can match the imported rice.

We worked with the millers to get those varieties and we deployed them all across the states in the dry season, doing 264,000 hectares in dry season alone. The yield in dry season is about six tonnes per hectare because of the amount of fertilizers that they use. But even if you take an average yield of four metric tonnes per hectare, that is 1.02 million metric tonnes of padding in one dry season across the states.

Yet, some people that never believed that Nigeria could amount to anything were saying there is no way Nigeria could produce rice on its own, as there is no padding in the country. There are miles of rice farms and paddies in Kebbi and other states, as far as your eyes can see. But the issue is how are we going to ensure that the millers buy from them?

A number of the millers have come to me and have gone to various places to put pressure on government that they can't find rice paddy in the country. Well, except you are blind, or mischievous, go to these areas and you will see them. Agriculture is not something you can hide. I told them that we are not going to change our policy because we are not going to let the people that have bled this country dry to continue what they had being doing by making misery of our farmers.

I have directed that we are going to pay subsidy to defray some of the transport cost for those millers to buy padding from all these areas where you have them. The states are working very closely with us. The Governor of Kebbi State has already put in place a price stabilisation programme where they buy every bag of rice paddy at N6,500.

The Governor of Zamfara State also said he would buy a bag of rice paddy for between N6,500 and N7,000, and the Federal Government would support through transport subsidy. We have been meeting with the rice millers for the last four days. But the long-term solution is for each mill to have a production zone around it. In Nigeria, when people say they want to set up mill, they set up a piece of metal in space and then they start roaming around looking for how to fix up the place.

So, we have decided to help them set up growers and farmers all around them that would produce padding for their own needs. It is part of the structural change that we have been doing, tagged 'staple crops processing zones.' Each of those mills will have structured production zones around them.

What level of support are you getting from the donor agencies?

When we started the agricultural transformation agenda, we wanted to put our house in order, as no one would want to put money where something is not working. When the donors saw the agenda, I addressed the board of the African Development Bank, the World Bank, International Fund Agricultural Development (IFAD), USAID, DFID and others.

Based on what we are doing, the World Bank approved $1 billion to support agriculture and water irrigation. IFAD is also putting down $100 million. USAID has put up a new market programme for rice in Nigeria worth about $60 million. The ADB is putting in $500 million to support the agricultural transformation strategy of Nigeria. The Bill and Melinda Gates Foundation is spending millions of dollars to help us with technical assistance.

The United Kingdom Government is working with us on rice and cassava, and is going to help us scale up the electronic wallet so that with time, we can reach our farmers at lower cost. What they are telling us is that they have never seen a better strategy in any African country than they are seeing n Nigeria.

The president of Africa Development Bank said he wanted the Nigerian strategy to be replicated in every other African country. So, it is serious business. International organisations don't give you money because you are talking or kneeling down, but based on what they see on ground.

Nevertheless, the private sector is also putting in a lot of money. The role of government is to provide the enabling environment to catalyse the private sector into growth. In the last 18 months, we have been able to leverage $8 billion as commitments into this country. Unilever has just agreed to invest in cassava to process sorbitol, which is used in making toothpaste. Nigeria is the largest producer of cassava in the world, so, why can't they use starch to go into sorbitol make toothpaste?

They would be buying 100,000 metric tonnes of cassava. Cargil is the world's largest producer of starch. As we speak, work has started in Agbadu in Kogi State, where the governor is helping to clear 3,500 hectares of land for starch production. They would also produce sweeteners there, and we already have buyers for the products, like Flourmills of Nigeria, Coca Cola and so on.

How feasible is the plan for Nigeria to be self-sufficient in rice production by 2015? Is this all talk?

The total amount of rice that we import is 2.1 million metric tonnes of milled rice. To get that, you need 3.2 million metric tonnes of additional rice paddy. We have already set the goal for 2015 to be self-sufficient in rice. To do that, we are working on three things. One is to ramp up production of rice paddy. Second, to make sure that the rice we are producing is of quality so that it can compete with foreign rice, and third, to make sure that we have the milling capacity for industrial scale, so that we have rice that can compete with those coming out of Thailand and India. These are the three core areas of the strategy.

Last year, we did 690,000 metric tonnes of paddy production for the main session. Unfortunately, we had flood and it affected it. The President directed that we must go into dry session and he released about N9.6 billion to compensate farmers who lost some of their crops. As we go into the main wet season, I don't see why we cannot do 1.02 million metric tonnes of paddy.

But I am fully committed that as we enter the dry season of 2013 to 2014, we would do three times what we did last season. So, I am confident that we would be able to get that 3.2 metric tonnes of rice paddy by 2015. However, the milling capacity has to be there as well to turn that paddy into milled rice that can compete with other imported rice in terms of quality.

The long stretch of paddy in the North does not have millers nearby. So, it would amount to failure on the side of government to sit and watch other people come and buy rice from Nigeria and take it to Chad, Benin and other countries and yet we are not able to feed ourselves.

We have decided to get access to cheap finance to buy all that is needed to get the quality of rice we want for our people. Government is doing its role to compensate for a market failure problem to ensure that we get these industrial mills that can process all the rice for us. We are producing better rice in Nigeria. A lot of the rice being imported is 15-year old rice that they have poured chemicals on. They are dumping them here. You have to ask the question, why is cancer rising in this country?

We have in this country banned the importation of frozen chicken, but you find chicken legs and wings, all the bad parts that nobody wants. They are throwing that into Nigeria. Benin Republic is importing over 50 times what that they can eat. They are selling them in Nigeria. We must take ourselves out of the shackle of those that have kept us down.

I am the farmers' minister and that entails I must ensure that the business of agriculture is successful. It would be a good thing that we extricate ourselves from the shackles of detractors. Nigeria should be exporting rice all over the place. I believe we can.



The Guardian

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