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Nigeria needs to diversify into agriculture, Nigeria used to be the leader

Discussing with Dr. Akinwumi A. Adesina, vice-president, Alliance for a Green Revolution in Africa, is always a delight. In this interview with Jimoh Babatunde at the Federal Palace Hotel,  Lagos during the just concluded African Media Owners Forum organised by ThisDay Newspapers, he said Africa faces a huge food challenge as it is the only region of the world where per capita food production has been declining.

*Dr. Akinwumi A. Adesina
*Dr. Akinwumi A. Adesina

He shared his views on African Agriculture and what AGRA is doing to uplift small farmers
Excerpts:

On the decline of food production in Africa
You know the trend in the decline of the per capita food production has been there for 30 years so obviously, you are not going to turn that around in one day. What I can tell you is that since 2008, Africa seems to be on the rebound, food production per capita grew about 3.8 % last year in Africa.

The first time that per capita food production has risen in almost 30 years. It is not just about anything, strange things, a lot of things were being done and were done right.

First is that AGRA has been investing in the development and dissemination of improved varieties of crops that are adapted to different agro ecological conditions of Africa.

In the last one year alone, we have helped to release 65 new crop varieties that are adapted to different agro ecological condition.

Secondly, many of these varieties include new varieties of rice, upland rice; low land rice; high yielding varieties of cassava; high yielding varieties of sweet potatoes, it is called orange sweet potato which has been adopted massively in Mozambique. It also includes a lot of work in soya beans. We have released a lot of beans varieties and maize; new maize varieties in east and southern Africa.

In the last 18 months, we have supported the development of new seed companies in Africa that are able to commercialise these new varieties to farmers. Last year alone, these new seed companies sold about 6000 metric tonnes of seeds to farmers.

One of the reasons these farmers are rapidly using this new technology is because it is easier for them to get. We have in the last two years helped to develop and certify roughly 5000 plus agro_dealers, these are small shops that sell seeds and fertilizers in rural areas and last year alone, in three countries – Malawi, Tanzania and Kenya – they sold $45m worth of seeds and fertilizers.

In the last 18 months, we have also helped to mobilize about $160m of farm credit for farmers, so basically, a lot of these initiatives are beginning to have impact on the ground, but I must credit African governments, they are beginning to take agriculture seriously. About six or seven of them now are putting 10% of their budget into Agriculture as the heads of state agreed in 2003.

So I think we are turning things around.
Talking about the increase in budget allocation, is Nigeria among such countries that have done so.
You know Nigeria used to put in only 2% of its budget into agriculture and yet you have 60% of the population dependent on agriculture, but that has turned around now as Nigeria for the first time put over 10% of its budget into agriculture, which is major development for us and rightly so.

If you look at the way Nigeria has been developing, it is based on only oil resources and with oil resources you saw what happened two years ago when the prices of oil fell with huge implication  for our budget and development programmes.

So Nigerian government needs to diversify to agriculture of which Nigeria used to be the leader in the world in the late 60s and early 70s, so I think the new government has done it right. It started with the old government and the new government has put in more than 10% in agriculture and they want to do more.

Other countries like Malawi for example, Rwanda, Mali, Niger, and Tanzania are investing heavily in agriculture. You know after three decades of neglect, almost every single dollar you put into agriculture, the rate of return is going to be very high and I am happy and proud as a Nigerian that Nigerian government is realizing that agriculture is not about hoes and cutlasses, that agriculture is money.

On the Agricultural policies of African government.
You know it is an excellent question you raised. You know since the late 80s, the policies that have been used in African agriculture I call them policies of abandonment; they are not policies of support.

Take a look at farmers everywhere in the world, in Europe, in the United States and particularly, Japan, all those countries spend heavily on supporting their farmers. The OCCD countries are spending about $273 billion a year on farm support. For a farmer in America to be able to get access to the subsidy, his income should not exceed $2m from farm sources and non_farm sources.

So you can see that they are supporting farmers and the farmers they are supporting are millionaires, but you come to Africa, majority of our farmers are poor, many of them cannot afford seeds, many cannot afford fertilizers and yet the kind of policies that the World Bank and others put in place in structural adjustments in the 80s were disastrous policies.

We abandon extension, they
said they could not get access to credit, you could not get access to price stabilization, there was hardly any money to support research, most of our research institutes have no money for research.

Those in my view were terrible policies and what Africa needs today are not those kinds of policies, we need policies that improve assess of farmers to new technology, policies that recognise that our farmers are poor and therefore need support, policies that recognise that our farmers are not different from farmers everywhere in the world.

The only difference is that everywhere in the world they support their farmers and we don’t support our farmers and then we are surprised, they supply food for us and we are hungry, that for me does not make any sense.

We have majority of our people in agriculture, we must support these farmers and  not see agriculture as a way of life, they should see agriculture as a business they can earn from and send their kids to school with and have good lives like you and me. I don’t see why we should not be doing that.

So for AGRA, we have been supporting a lot of countries to do that. In Malawi for example, we work with Malawi government. Three years ago, Malawi was on the side of starvation, but we advised the government to provide support, subsidies for their farmers to have access to seeds, and fertilizers.

Within one year, Malawi became a food self_sufficient country and for the last three years, Malawi has become a net exporter of food. Rwanda is the same, agriculture in Rwanda grew by 15% last year and this year, the growth is about 17%.

So what I am saying is that African farmers can respond to incentives if we give them support and at AGRA, our work is to support Africa governments to abandon those policies of the past that have not worked and develop comprehensive policy support for our farmers.

You just talked about what you did in Malawi, have you made attempts to do that in Nigeria.
Well, we are beginning now to discuss with Nigerian government, I think we have a very smart minister of agriculture, it started with the former minister, that continuity is good, a lot more money is coming into agriculture.

We are supporting Nigeria, we put in $3.5m in helping to redesign the fertilizer support programme in Nigeria.
You know the government normally imports fertilizers. High level of corruption, the subsidies don’t go to farmers, they go to the big people and that is not the best way to use money. What we are saying is that what the government should do is to  move to a voucher-based programme.

A legitimate farmer gets a voucher, takes it to an agro dealer, redeems it for seeds and fertilizers with the agro dealers, so you build markets and at the same time, you target it at farmers that need it, that is what turned Malawi around, that is what turned Tanzania and Rwanda around and Nigerian government is very open to that and the pilot that has been done in about four states with the Federal Government of Nigeria is producing significant results.

They are in the Nasarawa area, in
the north and they are basically farmers growing maize and sorghum.  Zamfara is one of them, Kaduna State is one of  them, but you find out that in all these areas, the farmers have access to voucher. They are able to triple yields.
So basically, we are now going to be working with the Nigerian Government to scale that up across the country.
On how to assist poor farmers to access credit facilities.

Access to finance is one that is very bizarre for farmers in Africa, even though we have agriculture accountings for anything between 35 to 60% of the GDP of many countries and you have anything between 70 to 80% of the population dependant on agriculture, agriculture income and livelihood, less than 1% of total capital available goes to agriculture.

It means that African countries are not investing where the bulk of the people really reside, which is agriculture and you look at Africa, the stock exchange markets are booming from Lagos to Johannesburg, to Nairobi and so on, but the only thing that is not booming is financing for farmers to be able to access new technology.

AGRA has decided to turn that around, you know in the last 18 months we have developed a programme we call innovative financing programme for agriculture. Basically, what the programme does is to reduce the risk of lending by banks. The banks will tell you that they don’t want to lend to farmers because they are poor, they are not organised and  the risk of default is high.

Most of those are out of justification, but I want to tell you that majority of those who default in banks are not poor farmers, they are millionaires, they are the big people who default in banks. You saw what happened in the Nigeria situation.

The farmers, if you can get the proper products to them, most of them don’t default. Let me give you an example, we worked with Equity Bank in Kenya, which is the largest bank in Kenya. We put in a loan guarantee programme for $5m, that is AGRA, and the International Fund for Agricultural Development (IFAD). We were able to leverage $50m  from Equity Bank for small holder farmers in Kenya.

Right now, it is working across the value chain in the whole country. We worked in Tanzania with the National Micro Finance Bank, we put up $1.1m for a loan guarantee programme to reduce the risk of lending by the bank, the bank is lending today $10m to small farmers, agro dealers and rural businesses.

Then we moved last March to standard banks, which are the largest banks in Africa, we at AGRA and partners put up $10m in loan guarantee schemes. We leverage $100m for small holder farmers from standard banks.

The true critical part of it is that we are able to reduce the collateral demand that are put for small holder farmers, we are also able to reduce interest rates that farmers have to pay. Now AGRA’s target is to help leverage $4b into small holder agriculture and value chain that supports them in 2015. Clearly, if we can do that, our farmers will have assess to seeds, assess to fertilizers, they will be able to have warehouse system for storage facilities, we will have farmers being able to take their produce to the market, because they have the finances to produce what the market needs.

So what we need for financing for agriculture is a revolution and that revolution is on its way, we need to get most of our commercial banks to lend to small holder farmers and recognise that unless we do so, Africa will continue to be poor and so we must take the money to where it is most needed which is agriculture.

On  AGRA partnership with Ebonyi State University.
Nigeria is my country and it has a huge potential and I think we have a huge potential to be a food basket not only for ourselves but for the world, but we have not tapped that potential. You look at Ebonyi where the university is.

It produces rice. The Ebonyi University is working on rice, we are supporting them with a grant of about $150,000 to develop new crop varieties for farmers, different varieties that are adaptive to different ecological conditions and these new rice varieties are very high yielding, you know most of the farmers in that area grow rice and we are building their capacity to do that.

Nigeria has real first class research institution, we have not been funding them, they don’t have money for research, most of them  don’t even have petrol in their cars to visit the farmers, so when we talk about turning agriculture around in Nigeria, we have to recognise first and foremost that there is no substitute for knowledge, knowledge gives you power and we get to invest in research and development, provide good incentives to retain the best minds in the university and research institutions and also support extension system because at the end of the day, even if you do all the research and it does not get to the farmers, what good is that?

I believe we have the opportunity of asking ourselves as Nigerians why is Nigeria not the breadbasket of the world? I think we can. A place like the Ebonyi University through our support and the support we are giving to the University of Ibadan and several others we are supporting, these have to be the leading institutions in driving change in Nigeria.

On how Nigeria can be self-sufficient in rice production

There is no reason for Nigeria to import rice in the first place because we have vast amount of land that can produce rice, whether it is upland rice; lowland rice; or irrigated rice all across the country. The problem with Nigeria is dependence on rice import . You have free subsidized rice import to come into Nigeria which make local production of rice not competitive. That is one of the major problems we have.

We have a lot of people making money out of importing cheap rice and not investing in local rice production. And that was a tragic mistake. We have the Cereal Research Institute, we are not supporting those institutions and yet we are buying cheap rice from Thailand; from Vietnam and all that.

My own personal view is that we need to recognise that rice is money today. When the food crisis came, everybody was thinking that agriculture was all about little food, but no, even if you were looking for the food, you could not buy it because the exporting countries were not exporting food, so I believe Nigeria cannot put itself in a situation where its national security on food is dependent on food import.

Nigeria has the agro_ecological zones, it has the resources; it has good weather and Nigeria should be a giant in food production. As for the case of rice you mentioned, firstly, Nigeria has to rapidly multiply the NERICA varieties developed by WARDA, and get it to farmers.

Secondly, the government has to accelerate action on fertilizers. If you use fertilizers on many of these varieties, you can triple yield. The third thing government has to do is to invest in irrigation, because with climate change, we know that many of the streams will get drier, frequency of drought will increase and there is no reason why Nigerian government should not invest in irrigation, so I know the present minister is very committed to that.

And finally, one area that is very critical is that Nigerians like good things, they like Uncle Bens rice that is well cooked, but that is because we have poor processing and milling quality for our local rice. We need to invest in that and most of these have to be done by the private sector.

I think we have a lot of private sector people that will get into rice but I think we first have to set a target, make Nigeria a net exporter of rice and not a net importer of rice. I think we can do that.

On the aftermath of the fertilizer summit held in Abuja 2006
I hold a lot of gratitude to the former President, Olusegun Obasanjo for agreeing to chair that particular summit in 2006 in Abuja and it was a landmark meeting.

The reason is very clear; Africa uses 8 kilograms per hectare average of fertilizer. The global average is 100 kilograms per hectare and so you can see the yield of our crops is one fifth of the global average, much more areas in Africa, the average yield is less than one ton per hectare. So what we did at that time was that the former president took up the challenge for Nigeria to help turn this around.

Now five things were agreed on at that meeting, the first thing was the need to develop agro dealer networks. These are networks of rural input shops that will supply seeds and fertilizers to rural areas. The second thing that was agreed on was the need to start subsidy support for farmers to be able to access the seeds and fertilizers.

The third thing that was agreed on was to have regional procurement of fertilizers instead of each country importing, let us have bulk order, let’s have comparative advantage and economy of scales in import. The fourth thing was to promote local manufacturing of fertilizers and the fifth was to set up Africa fertilizers financing facilities.

I will tell you what we have done in the five areas. Let me start with the Africa fertilizer financing facilities. It has been established, it is functional at the Africa Development Bank. And as I am talking to you now, in East Africa, Rwanda, Tanzania and Uganda are going to have their first regional procurement of fertilizers.

In terms of agro dealers, which was the first one that I mentioned, I just told you we have several thousands of agro trained in Malawi, in Uganda, in Tanzania, in Nigeria, Ghana and these are moving now tens of millions of dollars worth of seeds and fertilizers to our farmers.

In Kenya alone, the distance farmers travel to get fertilizer has come down from average of 17km to 3km and that is what you find in several other countries.

Now in terms of providing subsidy for farmers for fertilizers, Malawi has done that; Rwanda has done that and Tanzania is doing that. They are doing it in a smart and market-friendly ways, provide vouchers to farmers which the farmers use to buy seeds and fertilizers from agro dealers, very successful probably the most revolutionary thing you see going on right now in African agriculture.

In terms of local manufacturing of fertilizer, we have been very supportive of the establishment of a number of fertilizer companies. Here in Nigeria, you have Notore which is producing urea and Notore again has the capacity to produce to meet the needs in all of West and Central Africa and you begin to see huge investments in companies producing fertilizers.

On AGRA’s vision in the next 5_10 years.
I think in the next five, ten years, you would have seen a radical change in small holder agriculture and I keep emphasizing small holder agriculture because for agriculture to work, it has to work for small holder farmers.

I believe by that time, you would have seen many countries like the examples I just gave you about revolution going on in agriculture in Rwanda, Tanzania through our support to the government last year. In southern highland of Tanzania, 700,000 produced over 5m tonnes of maize as you begin to see that kind of change, you will see that most governments will begin to put more money into agriculture.

We are going to be working closely with NEPAD on the comprehensive Africa agricultural development programme, so jointly we are going to put a lot of pressure on government; we are going to be working closely with parliaments all across Africa.

It is very odd, Africa is the only continent I know where you have almost 80% of the people in agriculture. I see us working more closely with the government and the private sector to turn Africa to the food basket of the world.


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