As attention gradually shifts to how to diversify the economy, stakeholders in oil palm plantation farming are seeking ways of giving life to the sub-sector. ELEOJO IDACHABA writes on one of such initiatives in Abuja at a recent session.
Recently, stakeholders in the oil palm production value chain gathered in Abuja to take another look at the place of palm oil plantation in Nigeria, how it was in the past, the present and way forward.
The participants, who were drawn from the Federal Ministry of Agriculture and Rural Development, Department of Climate Change in the Federal Ministry of Environment, the Nigeria Institute of Oil Palm Research (NIFOR), Oil Palm Growers Association of Nigeria (OPGAN), Solidaridad Network, West Africa in Nigeria and the media, noted that there is still a huge gap between actual production demand and availability of the product both for local and international markets.
The participants noted with dismay that Nigerian oil palm sub-sector has nose-dived from its enviable position as a top-earner export commodity in the 60s to what it is today behind countries like Malaysia, Indonesia, India and others.
A part of the communiqué signed by stakeholders at the end of the meeting indicated that, “In spite of palm oil being produced in 25 states in Nigeria, it is unfortunate that over 500 million USD goes into importation of oil annually, restricting the country to an unenviable fifth position globally.”
Inclusiveness
Worried that the potentials of the sub-sector hasn’t been sufficiently tapped to contribute to the economic growth of the country, the stakeholders therefore identified some nagging challenges to include insufficient budgetary allocation/releases both at the national and state levels, weak and poorly articulated sub-sectoral governance structure as well as a weak implementation of inclusive policies that enhance the oil palm resilience framework and other relevant international protocols.
Investigations by Blueprint Weekend revealed that as a producer country, Nigeria is a party to international treaties aimed at promoting sustainable development, Greenhouse Gases (GHG) emissions and conserving biodiversity in forest ecosystems. However, as treaties are translated into regulation and increasingly enforced, the inclusion and benefit sharing for smallholders which largely includes women and youth and large scale producers, who are important agents of change, are to a great extent lagging behind, thereby resulting in degradation of forest ecosystems. This contributes to GHG emissions and effluents which exacerbate climate change.
Environmental inclusiveness
Dr. Samson Ogallah, a senior climate specialist and Africa country technical lead in Nigeria, speaking on “Climate Smart Agriculture Principles: Implication for Oil Palm Development Policies in Nigeria,” said the whole essence of Climate Smart Agriculture is transforming livelihood and landscapes through climate smart intervention which Solidaridad provides by what he identified as the approach, transform and reorient principles. He said that most African countries are at the moment net importers of oil palm; therefore, he identified challenges in the sub-sector to include ageing oil palm, low soil fertility/changing climate, frequent harvest intervals, poorly accessible plantation, inadequate control of pests and diseases and inefficient processing which ought not to be if the sector needs to take a further leap.
Ogallah said, “Climate smart oil palm means optimising the productivity of existing plantations while preparing for and adapting to potential climate stress with a view to reducing emission through recycling biomass waste, reducing fuel consumption and refraining from expanding in high carbon areas.”
Encouraging farmers
In his contribution, Dr. Segun Solomon of the National Institute for Oil Palm Research (NIFOR), Benin City, while speaking on the topic, “Pathway to Inclusive Policies and Climatic Resilience in Oil Palm Development,” said although oil palm is native to Africa, it is predominantly domiciled in Nigeria with the country having the largest natural and semi natural grooves estimated to be between 2.1 to 2.3 metres hectares as at 2004. He noted that until 1965, Nigeria used to be the world leading producer and exporter of oil palm. According to him, as of 1961, the palm oil production from Africa came out of Nigeria.
Unfortunately, he noted that at the moment, only a few private investors are involved in oil palm production on an industrial scale except the small and medium holders dominating the industry. He therefore noted that the national refining capacity is largely under-utilised due to the quality of palm oil produced by the small holder farmers.
Dr. Solomon identified the problem of plantation development and processing in the country to include difficulty in acquiring large tracts of land due to the problem of land tenure system, huge capital outlay, weak rural infrastructure, low economies in the scale of production among small holder farmers and inadequate extension services.
On the growing opportunities in the sub sector, he said such exist in the form of available skilled labour, high demand for oil, adaptation of the crop to disease prevalence, internal market price of oil palm well over international market price, huge demand gap, competitiveness and return on investment.
Suggested efforts
According to Kene Onukwube, the programme manager, Lead Admin/Country Management, “The Nationally Determined Contributions (NDCs) under the Paris Agreement provides the framework for national climate action and commitments under ILO and environmental treaties (CBD, CCD) waiting for implementation.
“Nigeria like all other African nations have embraced the ‘zero deforestation’ objective of Tropical Forest Alliance 2020’s Africa Palm Oil Initiative (APOI); therefore has accented to implementing deforestation commitments with regards to palm oil production.”
He added that broad and inclusive efforts at national scale implemented by state government agencies involving farmers and supply chain actors were necessary to go beyond existing certification-based efforts.
The underlying reason for the rapid growth in oil palm cultivation, he noted, is the increasing demand for vegetable oil for food, cosmetics, feed and fuel which are linked to the growing populations and a rising living standard.
In particular, he emphasised the need for improved productivity in the industry, wider adoption of improved planting materials, improved milling efficiencies, adoption of best practices that can significantly improve on the present production levels, evolution of higher productivity technologies to cut down labour inputs and reduce cost of production.
Policies
While speaking earlier on how certain government policies affect the industry, Dr Solomon noted some to include a deliberate investment promotion by the government to allows foreign investors to own 100% of shares in a Nigerian company with generous provisions for repatriation of dividends and capital, the Central Bank of Nigeria’s agricultural credit guarantee schemes, sustained ban on bulk importation of vegetable oils and fats with the extension to include imported packaged vegetable oils and fats, 35% tariff on imported CPO, reduction of import duty on plants and machinery, including implements, equipment and consumables up to 2.5%.
In conclusion, Dr. Solomon said a scientific understanding and public awareness of the enormity of the threat that climate change poses to humanity and the world’s ecosystems have grown rapidly during the past few years.
Therefore, he said the various policies on oil palm development should align with the three aspects of sustainable development represented in the sustainability triangle as it ensures better economic, social and environmental outcomes.
In a nutshell, he said for the country to harness the huge benefits inherent in the industry, oil palm policies should reflect on both local and international trade gains in the form of either increasing productivity or consumption at low opportunity cost or ensure welfare gains for the producers.
A text of the communiqué affirmed that the Agricultural Promotion Policy (APP) 2016-2020 and the National Adaptation Strategy and Plan of Action for Climate Change in Nigeria (NASPA-CCN) may have proposed solutions to some of the core issues at the heart of limited food production, climate change and delivery of quality standards, stakeholders were however convinced that although some of the objectives of the APP have been achieved, the policy hasn’t addressed sufficiently a strategy towards agriculture-driven economy. Also, it noted that the relationship between these policies and annual national and state level budgetary allocations and releases have been weak in articulation; therefore are yet to effectively address the lingering challenges experienced by smallholder oil palm farmers.
While canvassing for funding of relevant research institu
tes, it said the National Institute for Oil Palm Research (NIFOR) should receive more capital budgetary allocation above its overhead and personnel budgetary allocation as against what is currently the case. It said further that effective investment in the oil palm sub-sector would be an investment in the right direction that would contribute to a robust, green, inclusive and resilient national economy.
Recommendations
At the end of the two-day workshop, the government and private sector were urged to promote climate resilient interventions that would increase an inclusive use of technology, the adoption of Best Management Practice (BMP) and SLU in the sub-sector, while emphasising that the government and the private sector should promote Research-Farmers Linkages through increased funding to NIFOR and other research institutions.
It also recognised the role financial institutions and private investors would play in funding the sub-sector for increased productivity and by extension promotes policy direction towards a palm oil driven economy.
To that extent, it said the government in particular should deliberately dedicate a minimum of 60% of the agriculture budget (oil palm) to capital projects to encourage diversification of the economy on a large-scale.
“There should be a dedicated oil palm development fund. Hence, the government should use 20% of the 35% tariff on importation of fats and oils to improve productivity in the oil palm sector.
“Government should strengthen its monitoring and evaluation systems on all allocation approved for the sub-sector to ensure effective implementation of its activities and ensure that financial services of single digit interest rates should be provided to smallholder oil palm farmers to motivate increased productivity in the sector and that means the government should ensure that effective policies are in place to encourage local content in oil palm investments.
“Government, development partners, and the private sector should provide support for extension services and digitisation of the sector for enhanced performance and contribution to national GDP. Therefore, actors involved in the governance of the sub-sector must be transparent, accountable and promote inclusive policies to ensure a sustainable robust contribution of oil palm to the national economy.
“The federal and state governments should review the out-grower or contract farmer business model between big oil palm companies and smallholder farmers to eradicate exploitation and promote sustainable benefits to smallholder oil palm farmers.”
