By Kadiri Abdulrahman
The Federal Government recently announced plans to allow a five-month duty-free window for staple food items like rice, wheat, maize.
The government also expressed plans to partner with state governors and the military to cultivate arable lands and support smallholder farmers
These plans are designed to bring down the skyrocketing prices of food items, and moderate heightening food inflation, which, at 40 per cent, is the worst component of the 34.19 per cent headline inflation.
Significant rise in Food prices in June – NBS
The government, therefore, intends to suspend duties, tariffs, and taxes for the importation of those food commodities through land and sea borders.
The move is also expected to drastically reduce demand for foreign exchange by food importers, from the 2.13billion dollars Nigerians spent to import food items from foreign countries in 2023.
Speaking at a recent forum on food security, the Minister of Agriculture and Food Security, Abubakar Kyari, said that 150 days of duty-free imports would be valid for commodities including maize, husked brown rice, wheat, and cowpeas.
Kyari said the initiative, which is part of the Presidential Accelerated Stabilisation and Advancement Plan (PASAP), would also enable the Federal Government to import 250,000 metric tonnes of wheat and 250,000 metric tonnes of maize.
He said that the imported food commodities in their semi-processed state would target supplies to the small-scale processors and millers across the country.
“To ameliorate food inflation in the country caused by affordability and exacerbated by availability, the government has taken a raft of measures to be implemented over the next 180 days.
“This includes a 150-day duty-free import window for food commodities, suspension of duties, tariffs, and taxes for the importation of certain food commodities through and sea borders.
“These commodities include maize, husked brown rice, wheat, and cowpeas.
“Under this arrangement, imported food commodities will be subjected to a recommended retail price,” he said.
He assured that the foods to be imported would be subjected to thorough quality control measures to ensure safety.
“I am aware that some good citizens might be concerned about the quality of the would-be imported food commodities as it relates to the trending worries around the genetic composition of food.
“I am glad to reiterate that the government’s position exemplifies standards that would not compromise the safety of the various food items for consumption.
“These semi-processed commodities will be supplied to small-scale processors and millers across the country,” he said.
For a country like Nigeria that has a large agricultural sector, the already high food import bill is a concern for stakeholders.
Experts say the directive is a clear demonstration that the Nigerian government is yet to put the nation on the right path of eradicating hunger by 2030 as stipulated by the United Nations Sustainable Development Goals.
Mr Akinwunmi Adesina, the president of the African Development Bank, said that the decision to allow large-scale food importation risks destroying the country’s agriculture sector.
Adesina, who is also Nigeria’s former minister of agriculture, said the announcement of the policy just to tackle short-term food price hikes, was depressing.
He warned that the policy could undermine private investments in Nigeria’s agriculture sector.
“Nigeria cannot rely on the importation of food to stabilise prices.
“Nigeria should be producing more food to stabilise food prices while creating jobs and reducing foreign exchange spending that will further help stabilise the Naira,” he said.
The All Farmers Association of Nigeria (AFAN) said the policy was not a sustainable approach to tackle food insecurity in the country.
The National President of AFAN, Kabir Ibrahim, said only guarantee to a sustainable solution was to ensure that farmers were given subsidies on all imports so that they would boost productivity in the country.
“We will patiently wait for the suspension of import duty to happen, but it is not sustainable.
“The sustainable solution is to ensure that farmers are given subsidies on all imports so that they will escalate productivity and have a sustainable food system.
“Importing anything will not give you sustainable food security,” he said.
According to Dr Muda Yusuf, CEO, Centre for the Promotion of Private Enterprise (CPPE), adopting this policy stance without addressing gaps in the domestic agriculture value-chain might not yield the needed output as envisaged by the Federal Government.
“Insecurity across the agrarian belt remains a significant catalyst to the prevailing food crisis.
“Over the years, states such as Benue, Nasarawa, and other regions in Northeastern and Northwestern Nigeria, traditionally key agricultural areas, have become increasingly unsafe due to the presence of bandits and terrorists.
“Farmers in these regions face extortion, with bandits demanding taxes before farming and at harvest time,” he said.
The food importation policy appears to negate past government initiatives to support local food production.
Stakeholders agree that intervention in the agriculture sector, as done in the recent past, would be more rewarding than encouraging importation of food.
They cited the Anchor Borrowers’ Programme (ABP), which was launched in 2015 to provide farm inputs in cash and kind to Small Holder Farmers (SHFs).
The programme was intended to create a linkage between Anchor Companies involved in food processing and SHFs of the required key agricultural commodities through the commodity associations.
The ABP was designed to help the nation achieve self-sufficiency in food by, at least, “growing what we eat,” and then, putting a stop to the reckless importation of food items.
This was supposed to help save scarce foreign exchange, which can then be used for other more pressing needs.
The ABP was funded and managed by the Central Bank of Nigeria, (CBN), through its development finance initiative.
It commenced with a take-off grant of N220 billion Micro, Small and Medium Enterprises Development Fund, MSMEDF, through which farmers got loans at nine per cent interest. They were expected to repay based on the gestation period of their commodities.
Two initial beneficiaries of the agriculture revolution of the federal government, and the ABP were Kebbi and Lagos states.
The two states went into a collaboration that birthed the LAKE Rice initiative. That initiative has now resulted to the construction of a multi-billion Naira 32 metric tons per hour capacity rice mill by the Lagos state government.
By 2022, the Central Bank of Nigeria (CBN), which was the major driver of the ABP revealed that at least 4.8 million farmers had benefitted from the programme.
But the programme was marred by loan default, even as food prices rose significantly within the years it took effect.
According to the International Monetary Fund (IMF), 76 per cent of the loans collected by beneficiaries were yet to be repaid.
The IMF in a report said that agricultural credit in the country had not succeeded in increasing production due to the difficulty in reaching the targeted farmers.
It said that although the CBN allowed farmers to pay in cash or give the central bank produce of the same value under the ABP, repayments had been very low.
“For the ABP, repayment is also low at 24 per cent, especially since repayment can be made in kind, thereby limiting the tenor of the loans to one year.
“Part of the problem is that the incentive structure for repayment is weak, the recipient loans are not always well targeted and occasionally the funding is used for other purchases,” it said.
Various farmers associations also said that the loans were not disbursed adequately, hence the difficulty in ensuring repayment.
The various challenges of running the ABP saw the new leadership of CBN led by its Mr Yemi Cardoso discarding it and other such interventions.
However, Nigerians express preference for an initiative that would encourage massive local food production as against importation.
News Agency of Nigeria (NAN)
