…Importation of key products needed to address scarcity
…Says poultry industry shrank by 25 percent
By Charles Kumolu, Deputy Editor
Managing Director of Agri Supply Ltd and Chairman of Poultry Association of Nigeria, Ogun State chapter, Mr. Idowu Asenuga, in this interview, demands urgent action on food insecurity in Nigeria, saying 2021 may be dire for the nation in terms of food availability.
He also suggests measures to address the shortage of grains occasioned by the alarming insecurity in the North. Asenuga, who has spent more than two decades in agribusiness, explains how the poultry industry is badly impacted by the crisis.
Many reports, including those from National Bureau of Statistics, NBS, have said that an acute food crisis is imminent in Nigeria. Based on what you do, you should have a lot of information on this. How bad is the situation?
My only source of income is agribusiness and I will say that Nigeria is a country that has refused to be focused. The primary assignment of a government is to provide for its people. The World Bank has predicted crises in some developing countries and one of the countries is Nigeria. If we are serious, we should know that food is among the things that cause a crisis. When there is a food crisis, people get agitated, become violent and restless.
For instance, during the #EndSARS protests, people didn’t go to break banks. They went to break warehouses where palliatives were kept. And that showed how hungry people are in Nigeria. We have a population of over two million people and the food production growth rate is not even as high as the population. Our population is growing at about three percent annually. What is the growth rate of the agribusiness sector? Some of the foods are even exported to neighboring African countries. Nigeria needs to focus on food production aggressively.
I have tried maize production at the commercial level and what I realised is that productivity is a function of technological application. For you to be productive, you need to deploy technology. I often tell people that what made me excited as a young man whenever I went to my father’s farm was watching his egg graders.
The function of the egg grader is standardization. But today, I have a larger farm but there is no egg grader. And it cuts across. At the end of the day, consumers are being cheated because you are selling a product to them that you can’t quantify. No standard and technology to drive productivity in the agribusiness sector.
Productivity
We are just going backward. In Apoje, Ijebu-Ugbo, Awolowo built big farms more than 50 years ago, but the place is moribund. We can’t even maintain them. We just need to focus on productivity. A lot of people complain of lack of capital, but agriculture is not only about capital. The number one problem apart from insecurity is capacity.
The institutes of agriculture all over the country are not funded and it is obvious the federal government cannot fund agricultural research. Nothing is even going on in the universities of agriculture. Without capacity, we can’t achieve anything.
Therefore, if you throw money at a problem, your money, at best, will just disappear. Capacity building can only be done by the private sector. Even private universities do not take agriculture seriously. That tells how seriously the private sector takes agriculture in Nigeria. We need to attract youths to agriculture, but they will never come because the sector is unproductive. Technology and innovation are needed to transform agribusiness in Nigeria. That is the only way we can bring about productivity in the sector.
The problem at hand, which is food insecurity, has been attributed to insecurity, especially in northern Nigeria. As an authority in agribusiness sector, to what extent has the crisis affected food production?
My predecessor gave me a brief about the alarming nature of insecurity in northern Nigeria where farmers are expected to pay a bribe to plant their crops. And when they want to harvest, they are expected to pay a bribe to be given security to go and harvest. The only clear consequence of that is a food crisis.
When you disrupt a normal system by introducing bottlenecks, there will be a crisis. And the crisis, of course, is already affecting the poultry sector where I operate. Today, the cost of soya grain is N220, 000. The cost of grain/maize is about N170, 000. What that does is that it creates ripple effects because agribusiness is a value chain. It cuts across activities from the field up until the point where the consumer comes in. When a section of the value chain is disrupted, it affects the end consumer.
COVID-19
During COVID-19 lockdown, the purchasing power of the average Nigerian was eroded by inflation and devaluation. Inflation at 15 percent, which is primarily driven by food index prices and devaluation of the naira by almost 40 per cent affected the system.
When you add all these, an average Nigerian, if you look at the problem from an international perspective, is poorer than he has ever been in the last 40 years. Even if the food was available at the previous price, they can’t afford it. It is even made worse by food prices which have gone beyond the purchasing power of an average Nigerian. Definitely, there would be a food crisis. It is imminent, it is staring us in the face and the way it is looking, it is almost unavoidable.
That is the reality on the ground. In my sector, a bag of feed is almost N5, 000 per 25kg. Farmers are closing down their farms. I had a meeting with a member of my association who has been in the business for a while and he was telling me that he wants to leave the business. This is a young man of about 40 years. My industry has shrunk to about 25 percent. People are leaving the business. Some want to sell their birds but consumers cannot even afford them. The price of a spent layer is going for about N1, 500 and the people maximising the returns are the market women. I am wondering why a spent bird should be N1, 500.
The consumer is not going to get it at that price anyway. The crisis is real. Farmers are not allowed to plant their crops in the North. Farmers are closing their livestock business in the South. At the end of the day, I don’t even know what 2021 will look like. A lot of people are saying 2020 is terrible but I am saying that 2020 is just the tip of the ice bag. 2021 is really going to be terrible in terms of food production.
Are you saying it is not only insecurity in the North that is driving the food crisis?
The point I am making is that when you disrupt the value chain of grain production in the North due to insecurity, production has gone down because people can’t go to farms. If production goes down, it means more people are chasing few goods. What happens is that demand and supply will come set in and prices will go up.
When the price of grain goes up, it affects feed production for livestock. And when the price of feed production gets to a particular level, the farmer cannot pass that burden to the consumer. When there is consumer resistance, the option available to the farmer is to shut down. And this will lead to unemployment and less purchasing power. When people are laid off, there will not be enough money to buy the available few goods.
Is there a quick fix since Nigerians are already bearing the brunt?
The only quick fix to the food crisis is importation. Unfortunately, circumstances in the country make that impossible. At the moment, I want to import technology but my bankers told me I can’t get forex. They said they can only give me naira.
They said if I want to use my naira to buy the goods, they can give me but they can’t give me forex. They said I should search for forex myself. Even as a business owner, you can’t import because forex is not available.
The only available option is the black market. But you can’t buy from the black market and pay into your domiciliary account. I have borrowed money from a bank, which I am paying interest on but I can’t even buy forex to bring in my equipment. The building for the equipment is almost ready on my farm but the equipment is stranded in Europe.
But government has a lot of policies that seek to assist local farmers…
My association is writing a letter to the President, Senate President, Speaker of House of Representatives, governor of Central Bank of Nigeria, CBN, and Minister of Agriculture, just to raise the alarm that we need to save the poultry sector.
If the chickens are gone, the grain producer cannot even find anywhere to sell his grain. Government needs to do something to save the poultry sector. We have been shouting in the last three weeks for the sector to be saved but no one seems to be listening. We haven’t even seen a statement from government to show that they are actually aware of the situation. That is why we decided to write to them personally to see if we can get a different outcome.
The only quick solution is to import and government needs to provide the forex needed for importation. However, it is suicidal to be importing food for more than 200 million people. What I am suggesting is that since there is a crisis in the North, the South-West governors can talk to poultry farmers to see how we can grow grains in the South-West.
Maize can grow in Ogun State, Oyo State, Ekiti State, Osun State and Ondo State. Understandably, Lagos does not have land. This is an opportunity for our governors to focus on agriculture, especially grain production.
A copy of our letter will be dispatched to Ogun State governor. The long term solution is to ensure that every region produces food so that if there is a crisis in a particular region, the whole country won’t go down. For example, the Netherlands is one of the largest food exporters in the world, but Niger State is bigger than Netherland in landmass. Another option we have is to innovate by deploying technology to optimise our productivity. I tell my members that if they step up their productivity, even if the feed is N5, 000 per bag, they can still make profit. We just need to optimise.
Should the importation you are proposing cover only products that are already threatened?
The way to go about it is to look at each of the products and their impacts. For instance, maize is an industrial product that is used in making many products. It is also used for human consumption and animal consumption. Maize is critical. A product like soya is critical because it is for human and animal consumption. For a product like cassava, you don’t need to import it.
There is no crisis in the South where cassava is grown, so producers should be encouraged to cultivate more. The reality about maize is that the insecurity from the source of production is not something government can solve in nine months.
The only option in such a situation that affects a staple product like maize is to import. Government should provide the forex for import and it should not be given to a few companies. If my opinion is going to count, I would like them to prioritise maize and soya because that is impacting us very seriously in our industry.