The big players in the agric sector whose businesses thrive on importation now constitute a big threat to the Nigerian Agricultural Promotion Policy, and unless the Federal Government takes a decisive step to rescue the sector, the so-called economic diversification agenda may not materialise.
From rice millers, dairy processors to tomato processing, it is the same story of threatened businesses due to increased smuggling and importation. Farmers are now at the mercy of government to take the bold step to call the bluff of multi nationals, so as to increase local production.
The Rice Processors Association of Nigeria (RIPAN) at a recent media briefing in Abuja, raised alarm over massive smuggling of finished parboiled rice from the Republic of Benin, Niger and Cameroon. Of concern to them is that Nigeria is the only country on the West African Coastline that consume parboiled rice, however, they were frightened that 1million metric tonnes of finished parboiled rice now berth at the Republic of Benin, and if the rice is pushed into the Nigerian market, it would not only affect local investment, it will kill whatever intervention the Federal Government is making through programmes, to empower over 25million rice farmers.
RIPAN urged the Federal Government to engage governments of the neighbouring countries on joint anti-smuggling initiatives to tackle smuggling of rice into the country, stressing the need for the countries to increase their tariffs on rice.
They also advised that the Federal Government could threaten the countries with strong economic sanctions for aiding and abetting smuggling of rice into the country, saying it would go a long way in reducing the economic sabotage against Nigeria.
RIPAN stressed the need for Nigerian Customs Service to collaborate with the Directorate of State Security Service and other relevant security agencies to design strategies to track local collaborators and bring them to book.
They said the customs service need to investigate the roles played by some conglomerates based in Nigeria, who are at the forefront of importing and diverting rice cargoes to neighbouring countries, saying RIPAN would stand by to provide the Customs Service with necessary information at their disposal.
Indeed Dangote Tomato Processing Plants also had to shut down three months after opening their factory because of increased smuggling of Tomato paste into the country, despite ban by government.
The Vice Chairman of Dangote Group, Sani Dangote, while speaking to journalists alleged that some importers currently import the product from China and in the bid to avoid the payment of, they established large warehouse in Ghana in the free zone under the disguise of ECOWAS, where the importers warehouse the product, package it and push the commodity as retail packs into the Nigerian market.
He said: “Maybe we were not as smart as the importers; we shouldn’t have opened a factory, we should have just been importing and making our profit.”
He said if they continue to produce, they might continue to run at loss, adding that they have reported the matter to government, but are yet to get any result.
He explained that the Chinese government had reduced the price of the commodity by 50 per cent so that they would continue to benefit from the large Nigerian market given the increasing foreign exchange shortfall.
He lamented that government has been talking for the last one year and up till this very moment, there is no clear policy on where they are heading. He noted that the minister of industry, trade and investment has been talking about bringing the importers to the table with local producers, so as to fashion out a common ground, unfortunately, there is no way they can find a common ground when somebody’s business is about import and the other is producing locally.
Unfortunately, the high cost of factors of production has made the prices of locally produced goods high. Olam rice mill producers of Mama Pride rice said that electricity generation alone amounts to 90 percent of the production cost as the farm had to be run on generating sets, adding that if the government of Nassarawa State can be kind enough to provide them with electricity they may be able to slash the price of rice by half.
Chairman of dairy processor, L-AND-Z integrated farms, Mohammadu Abubakar said the plan by the Federal Government to increase milk production is not the best way to go as already, milk production is higher than the demand, but what is lacking is for government to enhance use of local milk.
He said: The best way to go is the enforcement of tariff to compel big players to use local milk. Nigeria produces 12million litres of milk daily, the total consumption is 10million, so we have an excess of 2million liters. People who say Nigeria does not have enough milk are liars, what is lacking is the collection of the milk and channeling it to the processing plant. The problem is not production but collection.”
Abubakar warned government to desist from relying on multinational companies to develop the dairy industry, rather, the ministry must take a bold step to compel companies to source their raw materials from the local market and imposing high tariff on imported milk to ensure that they comply.
He said processing plants of the multi national companies are fed with milk produced by farmers in their home countries and for most of the companies it is cheaper to import milk than buy from the local producers.
He said: “people think that placing ban on powdered milk may lead to poor nutrition and starvation, but that is not true, because most of imported milk are not good milk because they contain lot of fats, which is not good for consumption, so there is the need for the regulatory agencies to be more proactive.”