Nigeria’s restrictions on agricultural exports could hurt the farmers and processors they are meant to protect unless government policy remains consistent and safeguards are in place, Tunde Banjoko, chairman of the agriculture group of the Lagos Chamber of Commerce and Industry, has warned.
Banjoko, who is also managing director of B.O Farms Limited, said government must ensure consistent policies, fair pricing, guaranteed offtake, improved storage, affordable credit and exports based on surplus production.
Speaking on BusinessDay Television’s Breakfast Show, he said inconsistency remains the biggest risk when Nigeria restricts commodity exports.
“The intentions of those policies are good, which is to encourage local production,” Banjoko said. “But the biggest threat to that policy is the consistency of the government to keep to that policy.”
On how to prevent local processors from exploiting export curbs to buy raw materials cheaply, Banjoko called for a commodity board to act as an umpire.
“The solution has remained implementing a commodity board, which implies having somebody stepping in between the processors and the farmers to say this should be the minimum benchmark to pay the farmers for them to remain in business,” he said.
“That also protects the processors so that farmers also do not exploit them during scarcity. So we need an umpire in between, and the only umpire in this scenario is the government.”
He warned that without fair returns, farmers will be discouraged from producing, leading to lower market volumes and higher prices at both retail and industrial levels.
To cushion farmers whose sales arrangements are disrupted by export restrictions, Banjoko called for guaranteed offtake.
“There must be a guarantee of take, and there must be a guaranteed offtake price,” he said. “If that is happening, farmers can produce knowing that their return is guaranteed, and then they can also scale knowing that this is already a certain transaction.”
“The guarantee is what will protect farmers and keep them in business, and that is what will also sustain both the industries, exports, and everything along the value chain,” he added.
On the most critical infrastructure investment, Banjoko singled out storage.
“Choosing one would be storage facilities,” he said. “There needs to be urgent investment in proper storage, especially for perishable crops so that produce can be kept longer and released gradually.”
“One critical thing that storage also does is that it prevents price fluctuation and seasonal availability of products,” he said.
Banjoko said Nigeria should learn from countries that built strong local processing industries without locking farmers out of international markets by exporting only surplus.
“One thing we can learn is that most exporting countries export out of their own excess volume, not from their inadequate or insufficient level of production,” he said.
“Nigeria must first produce enough for domestic and industrial needs by ramping up output through mechanisation, technology, favourable policies and long-term financing. Only then should surplus be exported,” he added.
He also stressed the need for affordable credit, noting that farmers in other countries access loans at one percent, two percent and sometimes zero percent interest.
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