Home Opinion Agricultural marketing boards: To be or not to be?

Agricultural marketing boards: To be or not to be?

21 min read

Last week, we highlighted certain cankerworms that have eaten very deep into the fabrics of the Nigerian society and which the in-coming Asiwaju Bola Ahmed Tinubu administration must address head-on and overcome if he is to succeed where the outgoing administration of retired Major-General Muhammadu Buhari has failed woefully. We mentioned crude oil theft: According to the Nigerian Extractive Industries Transparency Initiative (NEITI), Nigeria lost 619.7million barrels of crude oil valued at N16.25 trillion ($46.16 billion) between 2009 and 2020. A 13-member Senate ad-hoc committee set up to investigate crude oil theft and consequent damage to the nation’s economy said that Nigeria lost another $2 billion (N1.3 trillion) to oil theft between January and August 2022 alone. Conservatively, the country must have lost, between 2009 and this year 2023, nothing less than $50 billion. This is far above the country’s external reserves in 2023 which hovers around $35 billion.

Rudely woken up from its lethargy and desperate to now tackle the menace of crude oil theft in the face of dwindling revenue and skyrocketing debt servicing obligations, the Buhari administration in August 2022 awarded a N48 billion per year pipeline surveillance contract to Tantita Security Service Nigeria Limited, a company owned by a former warlord and leader of the Movement for the Emancipation of Niger Delta (MEND), Mr. Government Ekpemupolo (well known as Tompolo). MEND started the criminal activity of kidnapping for ransom and political gains during its agitation for resource control in the Niger Delta. Mele Kyari, Group Executive Officer of NNPC Limited, in reaction to the reservations expressed by many well-meaning Nigerians, defended the Tompolo contract as “the right decision”! Crime pays, doesn’t it?  The effectiveness of the contract in checking crude oil theft and its usefulness to the country’s balance sheet remains to be seen. As someone who has worked in the oil sector, Tinubu will have to take a long, hard look at the problem of crude oil theft. Will he stop the bazaar or will he and his henchmen simply fall in line and make their own kill?

In February this year, Kyari announced that fuel subsidies cost the country over $850 million (over N400 billion) monthly. According to NEITI, Nigeria has spent N13.7 trillion on fuel subsidies in 15 years. One report gave the following figures for the following years: 70 billion in 2015; N99 billion in 2016; N141.63 billion in 2017; N722.30 billion in 2018; N578.07 billion in 2019 and N134 billion in 2020. This is the same Buhari who, pouring scorn on the payment of fuel subsidy under the President Goodluck Ebele Jonathan administration, had said there was nothing like subsidy, describing it as a scam! According to the Nigerian Economic Summit Group (NESG), the amount paid on subsidy by the Buhari administration rose from N307 billion in 2015 to N1.77 trillion in 2021, representing a 477 percent increase in seven years! NESG, in its 2022 Macroeconomic Outlook titled “The Last Mile Reforms toward significant improvement in National Economic Outcomes”, said Buhari spent a total of N3.64 trillion on fuel subsidies between 2015 and 2021. Much of these figures have been disputed by knowledgeable Nigerians. Corruption is said to be accountable, in the main, for the humongous figures being churned out as payment for fuel subsidies. And Nigeria, we have been told, must make haste to kill corruption ere corruption kills Nigeria. It is reassuring that the in-coming president worked as an auditor in a multinational oil company. He must get to the roots of the matter and clean up the books – if he is not an accomplice!

Fighting insurgency and insecurity has become another bottomless pit into which national resources have been poured since the Jonathan era without any commensurate result to show for it. This sector has become the pot of soup of some people and rather than work to see an end to insurgency and insecurity, it serves their selfish interest to keep the problem festering. And without security and peace, there can be no meaningful development, especially in the theatre of war. Unfortunately, that theatre, which at a time was limited to the North-east, has now spread, engulfing the entire country in different dimensions. And even when insecurity is localised, the impact is not; for instance, with insecurity driving farmers off the farm in the rural areas of the country, the impact on the cost of foodstuffs – and the cost of living – is felt today all over the country, especially so in the urban areas.

According to reports, rising insecurity, import ban and other factors have added up to cause the price of one kilogramme of local rice to rise by 201.52 per cent. Beans, tomatoes, pepper, onions, yams and other food items have similarly experienced an astronomical jump of over 200 percent in their prices. Insecurity must be tamed; cost of living must be brought down. Tinubu patterned his presidential campaign – Hope Renewed – after the late MKO Abiola’s Hope ’93 presidential campaign, the rallying cry of which was “Farewell to Poverty”. To achieve that, the first enemy the people must bid farewell is hunger.

Blocking the country’s drain pipes and increasing our revenue base are two sides of the same coin. Both must go in tandem or pari passu, as the Latinos would say. At no time other than now is the latter very crucial; what with the Buhari administration having sleep-walked Nigeria into another debt trap worse than the one we exited in April 2006! Debt servicing obligations gulped 97 per cent of the Nigerian government’s revenue in 2020. According to BudgetIT, of the N3.42 trillion generated in revenue, the government committed N3.34 trillion on debt servicing. It got so bad that all the Federal Government salaries and overhead were financed with loans! In 2021, the figure came down to 83.2 per cent but went up again in 2022 to 96.3 per cent. We said it here last week that agriculture, which we abandoned after the discovery of crude oil, must be picked and dusted up from where we dumped it. This was the mainstay of the economy before the discovery of crude oil; it was agriculture that provided the resources with which the country’s founding fathers achieved the feats which, to this day, makes that age a watershed in the country’s annals. The in-coming administration must have a blueprint to revolutionise agriculture – both food and cash crops production. We must grow what we eat and eat what we grow; thereby conserving scarce foreign exchange. We must now aggressively produce the cash crops that we abandoned, like cocoa, coffee, groundnuts, palm produce, etc. We must no longer be exporters of raw cash crops but must now learn to add value to what we grow so as to make more money from them as well as create more employment opportunities for our teeming unemployed youths.

Last week, we also flagged off the debate on whether the agricultural/commodity marketing Boards of old should return or the open market policy currently in practice should remain. Those in favour of the return of the boards have argued that it protects local farmers from shylock buyers;  guarantees them stable prices and a fair deal as well as extend to them extension services in the form of training and provision of relevant information, supply of inputs and machinery; provision of consular services, among others. The other side of the coin, however, is that the very contrary has been known to be the case where the government arbitrarily fixes prices which mark down farmers so that the government can rake in enough revenue for itself. There is also the corruption of government officials who feather their own nests at the expense of farmers on the one hand and the entire agriculture business chain and the government itself on the other. Government also runs the risk of getting entangled in the politics of fluctuating world market prices for agricultural commodities, just as it happened in the old Western Region. Cocoa prices fell in the international market, leading to the then Western Region premier, Chief Samuel Ladoke Akintola, scaling down the price paid to cocoa farmers. This did not go down well with the farmers. The matter was made worse by the political divide of the time between Chief Obafemi Awolowo and Akintola. One event led to another and then the Wild, Wild West episode erupted.  The truncation of democracy and the coming of the military followed; and, then, civil war.

Besides, policy summersault stifles the economy, causes businesses to collapse and discourages foreign investment. No business grows in an atmosphere of uncertainty, where policies can be tossed out of the window at the whims and caprices of those in the corridors of power without considering its deleterious impact on investors and the economy as a whole. A free, independent and courageous judiciary that can adjudicate impartially when business disputes arise cannot also be over-emphasised. Judging by the level at which corruption is on rampage in this country today, handing over our agriculture to commodity boards may kill it off totally. Take, for instance, the humongous sums that the Central Bank of Nigeria has sunk into agriculture in the country: what have we to show for it if not that the prices of those same commodities keep skyrocketing? Of course, an oversight function for the government and or its agencies may be necessary but the driver’s seat should be manned by the private sector.

The debate has started already! Let it continue! Two interventions are published here today; more will follow next week.


RE: Will Tinubu bring back the marketing boards?

I support the bringing back of the Marketing Board not because I enjoyed the Cocoa Marketing Board bursary when I was in the university but because of the good work carried out by the board when it was in existence.  In the good old days in the then Western Region, when Chief Akin Deko and Mr. Aribisala were in charge of Agriculture, the Marketing Board made sure that our farmers produced the best quality cocoa for the world market and the farmers were guaranteed fair prices for their cocoa. The farmers were also supplied with inputs needed for high quality production. The revenues realised by the Marketing Board from cocoa and other commodities were used by the then government to carry out welfare programmes for the people. Those were the good old days when revenue was based on derivation, unlike the present oppressive situation where everyone depends on oil revenue doled out by the federal government based on an unfair and politically-motivated formula. The scrapping of Marketing Boards created wealthy middle men who profit from the sweat of poor farmers and deprive the government of revenues from our agricultural commodities. I support your call on the in-coming Tinubu government to carry out restructuring; together with the resuscitation of the Marketing Boards. – Prof. Olabode Lucas.

Thank you very much for broaching this topic on the resuscitation of agriculture in Nigeria. Many of today’s grandfathers grew up to know the groundnut pyramids of Kano, the cocoa plantations of the South-West, the rubber plantations of the Mid-West and the oil palm produce of the Mid-West and the South-East. The story was told of how Malaysia took palm produce seedlings from Nigeria and now they are the world leading producer of palm products. The moribund Odutola Dunlop tyres depended on local raw materials. Today, they are no more. If the in-coming Government can revamp agriculture in Nigeria, it will go a long way in repositioning the country and its economy. – Pa E. K. Odeleye, retired Head, ATM/COM School, Nigeria College of Aviation Technology, Zaria.

Former Editor of PUNCH newspapers, Chairman of the Editorial Board and Deputy Editor-in-Chief, Bolawole writes the On the Lord’s Day column in the Sunday Tribune and the Treasurers column in the New Telegraph newspapers. He is also a public affairs analyst on radio and television. He can be reached on turnpot@gmail.com +234 807 552 5533

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