How Nigeria’s losing $6.5bn cotton export revenue
Stories by Steve Agbota [email protected] 08033302331
Cotton farming in Nigeria has received very little attention from various governments over the past two decades. This has however made the commodity to witness continuous decline in production. With its contribution to GDP dropping from 25 per cent to 4 per cent.
Lack of improved seeds, access to extension services and low prices of the produce have been noted as the major setback over these years as Nigeria is said to be losing about $6.5 billion export opportunities in cotton annually. It has also been revealed that the country spends $4 billion annually importing textiles and readymade clothing, which could have gone into the pocket of Nigerian farmers if the industry is revived.
Already, Nigeria is missing out among the selected 15 African countries on the share of cotton in product exports by the World Cotton Market on cottonguide.org, where Burkina Faso ranked number one along with Benin with exports of 71.5 per cent and 63.2 per cent while Mali, Zimbabwe and Togo possessed exports of 35.6 per cent, 12.4 per cent and 11.7 per cent respectively.
However, United Republic of Tanzania and Uganda recorded exports of 6.4 per cent and 5.7 per cent respectively while Cameroon and Zambia also accounted for exports of 5.6 per cent and 5.4 per cent respectively. Meanwhile, Malawi, Sudan and Cote d’lvoire have exports of 3.8 per cent, 2.5 per cent and 2.2 per cent while Burundi, Ghana and Central African Republic possessed exports of 1.8 per cent, 0.8 per cent and 0.7 per cent respectively.
Cotton farmers, especially in Northern Nigeria, have been lamenting over recording low yield and returns despite working hard and investing so much in the production of cotton. This development forced many farmers to divert attention to the cultivation of other crops like maize, sorghum, soybean and cassava.
Today, cotton which is essentially produced for its fibre, which is universally used as a textile raw material served as an important commodity in the world economy and is being used more than any other fibre. For instance, in the United States of America, cotton is a leading cash crop and at the farm level alone, the production of each year’s crop involves the purchase of more than $5.3 billion worth of supplies and service. It also stimulates business activities for factories and enterprises throughout the country.
However, processing and handling of cotton after it leaves the farm generates even more business activity. Annual business revenue stimulated by cotton in the US economy exceeds $120 billion, making cotton America’s number one value-added crop.
Considering the arable fertile land Nigeria possesses, with the important use of cotton across the country and the world, coupled with states like Kaduna, Kastina, Zamfara, Sokoto, Ondo, Ogun, Oyo, Osun and others where cotton grows, farmers say Nigeria can achieve 60 to 70 per cent of what America is getting today if government at various levels could provide improved seeds, fertilizer, modern equipment like tractors for clearing of land and give right supports.
In order to revive the cotton industry, stakeholders said Nigerian authorities must adopt biotechnology cotton, which they say has a high potential for added value.
On the fears of health implications of Genetically Modified Organism (GMO) products, the European Union (EU), World Health Organisation (WHO) and the Food and Agriculture Organisation (FAO), clarified that GMO has no adverse effect on humans and the environment.
The industry will continue to witness tremendous decline in production of high yielding, pest and disease-resistant variety such as the biotechnology cotton failed to be fully adopted by the Federal Government, according to stakeholders.
The biotechnology cotton, which is genetically modified by agricultural biotechnologists have some advantages such as bollworm resistance and high yield, was adopted by Burkina Faso, Senegal, Kenya and Mali, among other African countries, and they have benefited significantly from it, as farmers in these countries are earning millions of dollars from export markets.
Speaking with Daily Sun, Director General, Nigeria Textile Manufacturers Association, Mr. Hamma Kwajaffa, said government should be blamed for the decline in cotton production because of its policy summersault.
He said initially, right from colonial days, government had been involved in cotton production, adding that railway was built for cotton to be transported from the North to the coast for industrial revolution, which was very effective. He stated: “When Nigerian government took over, there was a cotton board and marketing board. During the economic liberalisation of 1986, government allowed everybody to be doing it on free business forgetting that cotton is a scientific crop and most of our farmers are illiterate and if anything happens, even if you over apply fertilizer or you over spray, your crops are definitely going to decline.
“When farmers are farming and their crops are facing decline in production, there are other cash crops they can grow, so most of them migrated from cotton production to other crops that were paying them better considering the level of scientific procedure involved in producing cotton.”
On reviving the industry, he said former Minister of Agriculture, Dr. Adewunmi Adesina, tried to revamp the cotton industry but his efforts were frustrated.
He explained: “The former Minister invited people from Australia to come and give him the roadmap on cotton production. The people recommended that they should have cotton corporation within the value chain as a board to guide the production. Adesina presented the plans to the government but at the Federal Executive Council, the Federal Ministry of Trade and Investment went against it arguing that Adesina was trespassing into its own schedule; that it was the industry ministry that should be talking about cotton corporation not agriculture. So that was how his efforts were frustrated and the whole thing declined.”
He said government should now graciously revisit those schemes and ensure that there is cotton corporation just like the board as a guide because there is no way farmers can produce cotton without government intervention.
Said he: “In America, farmers are literate and can read any template and follow the production of the cotton scientifically. Here in the North, most of the farmers are illiterate; they can’t produce cotton easily without the guidance of extension officers. So government must look extensively into the area of cotton and come out with a master plan. Once there is a master plan for cotton production, they should implement the master plan. When things are put in proper perspective in cotton production, people will be happier and the textile industry will buy enough of cotton locally.”
A cotton farmer from Zamfara, Dinladi Hassan Dinladi, said farmers are no longer cultivating cotton because of low yields, lack of competitive price and market, and no improved seeds to replace the conventional ones.
According to him, since the dissolution of the Marketing Board, there has been no particular cotton market in Zamfara where farmers can take their cotton to be graded to determine the levels of the quality.
He explained: “Before the dissolution of Marketing Board, cotton used to be graded and rated A, B, C and D according to its quality. This is because any contaminated cotton will be rejected right at the spot. These are done for farmers to get value for their produce.
“Zamfara alone has about 15 ginneries and only four are working because of the lack of cotton in the market and most of these ginneries have sacked their workers. And each ginnery has the capacity to employ about 300 workers. Most of these ginneries have gone comatose and many people lost their jobs.”
He urged government to provide special intervention funds for cotton farmers, which would enable them to be committed to cotton farming and production.
A cotton farmer in Katsina, Alhaji Muhammed Jubri, said the major challenges facing cotton production in Nigeria include lack of access to credit facility, improved seeds and low price of the commodity. He said that cotton farmers are not getting returns for their hard labour and investment and blamed government for its inability to create standard cotton market, which has affected cotton production in the country, saying Nigeria’s cotton used to export to countries like US, China, Pakistan and Indian.
He added: “Past and present governments are blind to the potential in cotton industry in this country. Look at what US, China are getting every year from cotton production. At the farm gate, US makes billions of dollars and it makes more when the commodity leaves farm gate. Without mincing words, Nigeria is loosing about $6.5 billion from this commodity because the demand is huge at exports market. The abandoning of cotton resulted to our textile industry in Nigeria going moribund. If cotton industry is revived, the textile industry will come alive and if the textile industry is revived, cotton production will be on the rise. You see how the two industries need each other. So government must do something about it as a matter of urgency.”
Cashew farmers earn $300m revenue in 2016
Nigeria’s cashew farmers under the auspices of the National Cashew Association of Nigeria (NCAN) recorded revenue of $300 million in 2016, which represents an increase of 20 per cent from $250 million in 2015.
Speaking at the Annual Cashew Logistics meeting in Lagos recently, President of NCAN, Tola Faseru, said: “We produced about 170,000 metric tonnes this year and with what we have seen so far, 2017 is going to be better.”
According to him, in 2016, Vietnam, the world’s largest cashew exporter, experienced its worst drought in a century, which reduced the country’s export by 11 per cent and created market for cashew nuts from other countries.
As a result, the demand for Nigeria’s cashew by foreigners increased and this pushed up the prices of local cashew nuts by 15.4 per cent.
Also speaking at the event, Publicity Secretary, NCAN, Anga Sontoye, said 2016 was a wonderful year for cashew farmers and exporters, adding that Nigerian cashew farmers would make more money in 2017 because output will increase by 10 per cent and prices are going to increase owing to lower value of naira against the dollar.
He added: “Having done our cashew survey for key producing 24 states, we realise that some cashew trees have started producing nuts and this implies that we are going to see an early crop from January and by February serious export will commence.”
However, he hinted that the price of a metric tonne of cashew in the international market sells between $1,000 and $1,200, adding that Nigeria’s cashew industry will experience its greatest price regime in 2017 as the value of naira continues to drop against the dollar.
Meanwhile, Chief Executive Officer, Agri Commodity Inspection Limited, Zacheaus Egbewusi, said the demand for cashew has gone up and a lot of foreigners are calling and asking for Nigeria’s cashew currently, which is why the price has gone up.
Said he: “Cashew is being sold for N450,000 per metric tonne. It was sold between N370,000 and N390,000 per metric tonne a month ago.”
Nigeria’s cashew is usually harvested between February and June, though farmers stock the crop and export it all year round. The stakeholders complained about foreign traders who are moving into farmlands to purchase produce directly from farmers and called on the government to address the issue. The President lamented: “It is not done anywhere in the world, that foreigners will come into the country and source their produce directly from farms. Government at all levels need to regulate their activities,” said Faseru.
The stakeholders also requested for the grant of waivers for the importation of jute bags, which is used in packaging cashew for export.
20,000 farmers register for anchor borrower scheme in Bauchi
Over 20,000 farmers have registered for anchor borrower’s scheme in Bauchi, after state government flagged off the scheme recently.
Bauchi State Governor, Mohammed Abubakar, who officially launched the scheme at Gadar-Maiwa town said his administration will give priority to programmes like the Anchor Borrowers Scheme, saying the government will, in addition to other supports, agreed to pay off the 9 per cent interest on the loan to be granted farmers in the programme.
According to him, the government has placed a high priority on agriculture, especially laudable programmes like the Anchor Borrowers Scheme, as part of efforts to empower the people, create jobs and tackle the challenges of food security in the state.
However, the lead consultant in charge of the programme in Bauchi State, Dr. Abdulmalik Nura, hinted that out of the 20,000 registered farmers, 10,000 have so far been screened by field officers and representatives of participating banks. He added that they have concluded all input assessment of irrigated rice production module for the state, which currently stood at N370,000 per hectare.
He explained: “The aim of the scheme is to create economic linkage between small holder farmers and reputable large scale processors. Each bonafide farmer is now expected to deposit N18,500, which is his mandatory 5 per cent equity contribution as prescribed by the Anchor Borrowers Programme (ABP) guideline.”
Meanwhile, Bauchi Branch Controller of CBN, Musa Muhammad, said the target of the programme in the state was to create economic linkages between over 100,000 small-holder farmers and reputable large scale processors in the state.
The scheme was initiated by the Federal Government through the Central Bank of Nigeria (CBN) as an agricultural intervention to help farmers boost production.