2018: Moderate growth expected in agriculture, if,…

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By Ayo Fadimu

The 2018 proposed budget for Agriculture and Rural Development is N118.98 billion.   This allocation appears insignificant considering the importance of agriculture to food security and provision of raw materials for the industrial sector.

In this era that national discourse centres on backward integration and resource-based industrialization especially in agric sector, it is important to pay better budgetary attention to the sector.

However, given N118.98 billion proposed allocation, it is imperative that such fund should be judiciously utilized for the development of the sector.  It will be difficult to achieve the growth target of 3.5% and inflation rate of 12.4% in the coming year without encouraging huge activities in the agriculture sector in 2018.

Allocation to the sector should strongly support more crop production, animal husbandry, construction of more silos for agriculture produce storage; and of course encouraging significant activities in the Agriculture processing value-chain.

In a chat with Nigerian NewsDirect, the Chairman of Agriculture sector of Lagos Chambers of Commerce and Industry (LCCI), Prince Wale Oyekoya said the sector has potential to grow but Stakeholders must be involved in the planning and implementation of government’s policies in agriculture.

This position was also corroborated by the Chairman of All Farmers Association of Nigeria (AFAN), Lagos State, Otunba Femi Oke. He lamented that many of the government’s empowerment programmes for farmers are being high-jacked by political, portfolio and emergency farmers. Therefore, he called on the government to take appropriate steps by stopping the trend in the coming year.

Non-Oil Export Sector  

The non-oil export sector was impacted positively by the depreciation in the Naira exchange rate. This led to improved performance of the non-oil export sector even in the face of recession and the fragile economic recovery. However, investors in the export sector expressed the following concerns;

The export stimulation fund promised by the CBN is yet to be made available to exporters. It is believed that the release of this fund will have a major impact on the export sector. The fund is N550billion.

Production cost by exporters remains high, largely because of infrastructure issues. This has affected the competitiveness and the profit margin of exporters.

Facilities for testing of the quality of the export products and the generation of quality reports are still lacking in the country. Reliable testing facilities are necessary for the generation of credible quality assessment report. The solid mineral sector is the most affected by this challenge. It is therefore very important that government puts in place standard quality t         ion of export products from the hinterland       to the cities has become astronomical. This is also a major factor affecting the competitiveness of export products. This is particularly the case for export products that have a lot of weight.

The incursion of foreigners into the export of primary products and the consequent crowding out of domestic exporters was a major concern for the exporting community in 2017. One example is that of the export of processed food.

Exporters expressed concern over the introduction of exorbitant handling charges by Terminal Operators at the Lagos port. N40,000 was imposed on 20foot container and N60, 000 on 40-foot container for export.

Agriculture sector benefitted from the inward-looking disposition which the recession created in the economy. In particular, the weak naira imports more expensive and local products more competitive.

However, the sector grappled with a number of challenges which constrained its growth in 2017. These include the following;

Acute scarcity of parent stock for turkey which severely constrained the capacity of poultry owners to expand the production of live turkey.

Cost of vaccines and micro nutrients for the production of fishmeal and other livestock feeds was very exorbitant. This contributed to the high cost of poultry products. The situation was further compounded by the Nigerian Customs Service that classified micro nutrients for the production of poultry feed as finished goods, rather than raw materials.

Investors in the sector could not access foreign exchange at the official rate of N305 to the dollar.

Multiple government agencies still pose problems for importers of agriculture inputs at Lagos ports.

Farm machinery and equipment as well as agro-chemicals were not accessible by many farmers during the year. The costs were prohibitive, and the expected support from the government (State & Federal) was not forthcoming.

Interest rate on loans for agriculture purposes was also prohibitive at between 25-30%

 

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