As part of former President Umaru Yar’Adua’s Seven Point Agenda for economic revival and accelerated growth, the commercial Agriculture Credit Scheme (CACS) was launched.
It was designed to provide concessionary funding to small farmers through credit guarantees and interest draw back support. Initial outlay for the scheme stands at a respectable $1.4 billion, to be disbursed through participating commercial banks. The Nigerian government envisions that the program would increase farmland output, diversify the revenue base, and provide vital resources and raw material to the manufacturing sector.
The idea of Agriculture and Agro- based industry as a strategy for accelerated economic growth is slowly beginning to take hold. The oil boom of the 1970s caused the marginalisation of Agriculture into a labour intensive, low productivity subsistence activity that eventually plunged large parts of rural Nigeria into abject poverty.
The redirection of Agricultural policies was affected since the return of democracy in 1999 proved more successful. Under a radical reforms programme, the government targeted rural development with integrated plans for Agriculture promotion, rural industrialization and infrastructure development.
This integrated approach has yielded tangible results: Agriculture now leads the country’s economic recovery, bouncing back to contribute 42% of the GDP by 2009, 40.19% in 2011, and 39.02% in 2012, 37.92% in 2013, while 36.79% by 2014, 35.75% in 2015 and 34.74% in 2016 also 33.86% by 2017(FSDH Research). Perhaps the most significant thought arising out of this recovery is Nigeria’s natural inclination towards farming.
Traditional involvement with Agriculture and the existence of diverse ecological conditions across the country offers strong potential for growth of a flourishing and suitably inter- linked agro allied industry. Nigeria’s ambitions for accelerated and inclusive economic growth are contingent on achieving a vibrant Agriculture sector that can support extensive down the line enterprise development and employment.
In line with this assessment, the UN Conference on Trade and Development (UNCTAD) expressly recommends the adoption of a national investment policy to diversify the Nigerian economy with a strong focus on agro allied industries.
The fact that this sector is primed to spark off rapid enterprise development in Nigeria is simply undeniable. Enterprise potential exists in almost all areas of local farm production.
According to FAO estimates, Nigeria currently produces over 100,000 metric tonnes of Kola nut, which finds use in the manufacture of beverages, liquor, and confectionaries. Yet, local processing units are rare and exports are largely limited to fresh and dry nuts with little value addition.
Cassava, likewise, has emerged as a major cash crop with untapped potential in industrial use and bio – fuel development. With adequate private sector involvement, commercialised Agriculture can not only aid industrialization and employment generation but also breach the productivity gap and reduce food costs.
The government’s intervention in the Agro – allied sector must essentially be aimed at creating the right environment for rapid expansion of locally – owned enterprises. However, there are serious challenges in this direction. Industries processing of agricultural product are almost negligible, existing standards being very basic and often incomparable with export requirements.
Post – harvest losses are also very high, assesses at near 50% of total production.
(Van Buren) Labour saving production and advanced harvesting and processing technologies are therefore critical for sustained revival of Nigerians Agriculture. Moreover, efficient production and marketing systems will prove vital in ensuring high quality standards and competitive prices for both domestic industries and export markets.
In term of broad parameters, policies for effective development of the Agro –allied sector in Nigeria must focus on a number of key considerations: Ensuring food security by increasing supply and lowering prices with the specific aim of curbing inflation.
Enhancing credit access to small farmers and Agro – based enterprises at low rates of interest. For more on this, get my book “The Entrepreneurial Revolution”.