Nigeria’s farming reforms still face hurdles, say companies

Nigeria is reforming its farming sector to bolster production and draw investment but companies this week said more needs to be done to tackle entrenched corruption, poor infrastructure and rogue government agencies.

Nigeria’s annual economic summit focused on agriculture for the first time, in line with President Goodluck Jonathan’s commitment to fixing Nigeria’s biggest employer. Agriculture Minister Akinwumi Adesina, who has been praised by donors and businesses for his efforts, was keen to stress the success of reforms began two years ago.

He said subsidies used to reduced the cost of fertiliser for farmers were not longer managed by corrupt politicians but instead were given directly to farmers.He said food imports had fallen by 850 billion naira ($5.2 billion) and food production was up by 8 million tonnes, helping to create 2.2 million new jobs, Reuters reports.

The government wants to add 20 million tonnes of domestic food production by 2020 and rice, corn, sorghum, palm oil and cocoa have already increased, Adesina said. The world’s second-largest importer of rice, Nigeria aims to become self-sufficient by 2015 after introducing a 100 percent tax on polished rice imports this year, likely to mostly affect countries like India, Thailand and Brazil. Security sources and farmers have said one backlash has been a rise in smuggling of rice and sugar from neighbouring countries and into ports.

Higher cassava output has been used to make flour, reducing wheat imports mostly from the United States by almost 9 percent, Adesina who noted bank lending to agriculture had risen to 25 billion naira this year from just 3.5 billion in 2012
said.
Duties on agricultural equipment have been scrapped and tax breaks given to companies willing to invest in both farming and industrial processes, as well.
The country’s reforms have drawn new foreign investors such food giant Cargill, seed company Syngenta and brewer SABMiller, while Dangote Sugar and others are investing more.
However, many companies asked to speak at the summit gave a less rosy picture, saying state and local governments still extort unofficial payments, while officials at ports and customs either worked around government policies or outright ignored them.
Confusing laws on land, much of which is owned or claimed by government officials, also mean it is difficult to expand. That has left 60 percent of Nigeria’s arable land fallow, farmers say.
RHETORIC VS ACTION
“We’re still battling with the basics; visa processing times, port delays, access to credit, transport systems. Rhetoric is all we are getting. It’s time to walk the walk,” said Alan Jack, managing director of Shonga Farms, a mainly poultry and milk farming group which supplies the Lagos branch of Kentucky Fried Chicken, owned by Yum! Brands.
Jack said imported chicken from Brazil cost 135 naira per kilo, while a chick in Nigeria cost 180 naira, making government plans to emulate its South American rival unrealistic.
“Ports would scare the life out of anyone. It’s the worst thing about your system,” said Calvin Burgess, chief executive of Dominion Farms, a U.S.-owned firm looking to farm rice in Taraba state.
He said $10 million of agriculture equipment was delayed for almost a year because customs and other agencies sought bribes and noted Dominion had operated in Kenya for 10 years “without anything like these problems”.
The government says port reform is a key policy, but investors say progress is slow. Industry players were also critical of Nigeria’s dilapidated road network and
troubled power supply noting it is often more profitable to ship produce to the U.K. rather than transport it from Lagos in the south to the biggest northern city, Kano.
“We don’t benefit from any infrastructure put in place. We have to build our own roads and provide our own electricity,” said Gbenga Oyebode, chairman of palm oil firm Okomu Palm, said.
Nigeria is privatising much of its power sector, which should help improve electricity shortages that hurt the agriculture sector.
Nigeria’s reforms are needed to reduce reliance on a struggling oil sector and cut a $11 billion food import bill

Nigeria: Delta Donates 60,000 Hectares for Cassava Farm Project

To support the cassava bread and high quality cassava flour development initiative, the Delta State government has donated 60,000 hectares of land in Abraka for a mechanised cassava farm.
The Director, Press and Public Relations, Federal Ministry of Agriculture and Rural Development, Greyne Anosike stated this in Abuja on Friday.
The statement said the gesture was also part of the state government's support to Federal Government's Agricultural Transformation Agenda, adding that the state government also provided a 20-hectare farm land for flour factory in Abraka.

The state governor, Emmanuel Uduaghan, who announced the donation, commended the Minister of Agriculture, Akinwunmi Adesina, for taking agricultural practice to a higher level.
The statement also said the Delta Government was determined to exploit the potential of the agriculture sector as part of its medium and long-term strategies, to curtail unemployment in the state.
Mr. Adesina commended the Delta Government for the gesture and called on other state governments to partner with the ministry to realise the ongoing transformation of the agriculture sector.
The statement quoted the minister as saying that partnerships in agribusiness would create growth and development and called for a synergy between state governments and the ministry the sector's potential in job creation and economic empowermen

After a long wait, land reform gets N45.5bn attention

While we wait for the finance minister’s 2009 budget breakdown, it is important we bring to the fore the provision of N91.8 billion for Land Reform and Food Security as, announced by the president. If our calculations are right, about N45 billion of the figure would be allocated to the former. This is important lest the minister forgets to interpret the provision of such bogus amount for land reform.
However, experts postulate that government may organise conferences to examine the Land Use Act as it affects development purposes in various parts of the country. But this is just conjectural.

Again, the explanation of the huge allocation for the land reform becomes crucial in the face of the president’s declaration that the government will seek to be more efficient in the use of public resources by eliminating or rationalising areas of waste and focusing on the critical sectors that would propel the growth of our economy and help us realise the objectives of the Seven-Point Agenda.
In 1978, precisely on the 29th of March of that year, the then federal military government of Nigeria promulgated the Land Use Decree. The law was maintained by the succeeding civilian administrations and the Decree was changed to act.

The act, as reported by Biodun Aluko and Abdul Aminu, purports to take over the ownership and control of land in the country thereby providing a uniform legal basis for a comprehensive national land tenure system. It was enacted to deal with problem of uncontrolled speculations in urban lands, make land easily access to every Nigerian irrespective of gender, unify tenure system in the country ensure equity and justice in land allocation and distribution and, amongst others, prevent fragmentation of rural lands arising from the application of the traditional principle of inheritance.

According to the experts who quoted other reports, the Land Use Act approaches the control of land through three strategies: the investment of proprietary rights in land in the state; the granting of user rights in land to individuals; and the use of an administrative system rather than the market system in the allocation of right, in land.
Primarily, therefore, the act vested the ownership of land rights in the state.
Under the act as outlined at FAO.org, control and management of land in urban areas becomes the responsibility of the state governor, while all other land (rural, public, etc.) is the responsibility of the local government of the area. It is noted that state governors are empowered to designate certain areas as urban land and to grant statutory rights of occupancy of fixed periods and rights of access to any person, subject to rental arrangements fixed by and payable to the state. The local government can grant a customary right of occupancy to land in the local government area (LGA) to any person or organization for agriculture, grazing, residential or other purposes. Land so granted should not exceed 200 hectares for agricultural purposes, or 2000 hectares for grazing purposes, for any single customary grant.

Certificates of occupancy are to be issued in respect of both types of grant.
The decree which turned into act in the democratic setting, has received criticism since its promulgation with experts stating that the Act is an urban legislation which only superficially touches the tenure problems in the rural areas in the country.

Without doubt, then, the granting of rights of occupancy under the Land Use Act has radically modified previously existing notions of ownership, control and other interests in land. This is particularly manifest in the granting of land rights to wealthy individuals, corporate bodies and cooperatives in the name of public purposes for development. Lasun Mykail Olayiwola and Olufemi Adeleye in their piece Land Reform: Experience from Nigeria, noted that the objectives of the land use act have remained largely unfulfilled 30 years after its enactment and title to land appears to be more insecure now than it ever was. According to them, the deficiencies of the land use act were aptly summarized by Justice Augustine Nnamani who, as Attorney General was responsible for drafting of the act and its incorporation into constitution. He said in the course of these years, it has become clear that due to its implementation, not its structure or intent, the objectives for which the land use act was promulgated have largely remained unfulfilled; indeed, they have been distorted, abused and seriously undermined.

They argued that the position today is that land is less available to the ordinary Nigerian than it was before the Land Use Act, thus holding most of the citizens to inevitable state of perpetual tenancy.
It is also noted by the authors that the allocations policy of various governments particularly during the civilian era has been scandalous. The land use and allocation committees, which are no more than appendages of the governors merely, endorsed lists approved by them. Sometimes, as observed by the duo writers, the civilian governor, who has vowed to repeal the act before entering into office, grabs it with both hands on getting into power. The result to be expected were allocations of land mostly to friends, relatives and party faithful; land become indeed an item of patronage. Worse still the patronage was withdrawn as one government succeeded the other.
Land is usually taken to include not only the physical soil, but also everything beneath it (minerals and water) and everything extending up to the sky above it. The 1979 Constitution of the Federal Republic of Nigeria recognizes and stipulates that all interests in mineral resources belong to the owner of the land and water resources containing them.
The allocation of land was hardly made to the low-income earners as Lasun Mykail Olayiwola and Olufemi Adeleye further noted. No government has yet earmarked a percentage of land available for allocation to this category of Nigerians as a deliberate policy. Nor has there been allocation of a percentage of land available forallocation to the community or family that previously owned the land now acquired by government.
On compensation to those whose lands were taken for development activities, Olayiwola and Adeleye said it seems that no amount of compensation can assuage the feelings of an average Nigerian to whom land has profound cultural and social-political values and spiritual aspects. To the subsistence farmer, land is the basis of his survival; it is to him life given. Thus to take land away from him for a public purpose, with which he cannot identify, without prompt payment of adequate compensation or resettlement, is to ask for trouble.
They say besides, the title is a misnomer; it should have appropriately been titled Land Allocation Act.
The act, according to them, has not eliminated speculation in land; it has only driven it underground or fueled it and it concentrates both economic and political powers in the hands of governors, military elites and rubber barons’ who use it to dispossess their political opponents and/or peasant farmers through large-scale acquisition of land for commercial agriculture, paying only for unexhausted improvement, stipulated by the act.
It is further said that it has not succeeded in removing the uncertainties in title to land. Instead, it seems to accentuate it. For example, a certificate of occupancy can be revoked for public purpose or a contravention of the act.
With all these contradictions against the Land Use Act, what does government intend to do with the budgeted amount. We wait for explanations from the budget breakdown.
On reform, what would happen then? Uwakonye, and Gbolahan S. Osho, say land reform is concerned with changing the institutional structure governing men’s relationship with the land, involving intervention in the prevailing pattern of land ownership, control and usage in order to change the structure of holdings, improve land productivity and broaden the distribution of benefits.

According to them, land reform is an aggregate of ideas and courses of action designed to resolve tenure problems. Nigeria is an agrarian nation with over 56.8 percent of her working force engaged in farming.
Doner and Kanel emphasize the significant contribution of the agricultural sector towards the overall economic development of underdeveloped countries, such as Nigeria where more than 50percent of the working population is engaged in farming. Agricultural reform has the advantage of provision of more employment, more equitable income distribution, a wider relevant structure for the growing manufacturing sector, a better base for farm financed welfare, and more rational investment policies in both the agricultural and non-agricultural sectors of the economy.

In order to consolidate this gain and to make the operation and implementation of the Act achieve the objectives for which it was promulgated, Olayiwola and Adeleye suggestion that the act be removed from the constitution is subject to the cumbersome provision of amending so that amendments to it can be effected.

Since the Act Constitution under section 5 of the constitution, no meaningful amendment can be carried out to it in a civilian democracy. Because the Act has become in incident of political power, the threat of abrogation which necessitated its entrenchment in 1979 is no longer present.

Innovative Finacing in Land Ownership for Small Holders - Lessons From Shonga Farms

Press Release

Being a Paper presented by His Excellency, Senator (Dr.) Abubakar Bukola Saraki(CON) at the occasion of 6th Africa Agriculture Science Week and FARA General Assembly, Accra Ghana on the 19th of July 2013.
INTRODUCTION:
Small holder farmers are among the poorest and most food insecure people around the world (Nigeria inclusive), they reside in the most ecologically and climatically vulnerable regions and must draw their livelihood from these same conditions. With all these challenges, it is these small-scale farmers who feed the majority of the world, producing food for about 70% of the world population (FAO2009). For many of these farmers, scarcity scenarios of so many things are nothing new.

In Nigeria, because of the neglect of agricultural development over past decades, secure land tenure and access to safe water has remained out of reach for many people, while national agricultural sector have suffered structural deficits and low productivity.

According to (FAO right to food, 2008) "Equitable access to land and natural resources is an essential element of the right to food for rural population in general and for vulnerable and marginalized groups in particular" All these emerging scarcity scenarios have helped push agriculture to the top of the global policy agenda forcing most forward looking governments and responsible international institutions to rethink the ways in which agriculture is practiced (i.e the way food is produced and distributed).

This effect is resulting in a renewed emphasis on the potential of agriculture, and government in recent years have intensified efforts to commercialize their agricultural sectors, thereby indirectly strengthening the small holders through an effective technological transfer from the developed commercial farming ventures.

LAND TENURE/OWNERSHIP
Land Ownership /Tenure are important issue for farmers as it affects fundamental factors of investment security and the consequent ability to be able to repay and also, the issue of using such security as collateral.
It is a common fact that in Africa, private ownership of land is not real. It is rare for a small holder to be able to lay claim to title to his or her land and dispose same freely. The current land tenure system as it is being operates does not guarantee or provide necessary security. This is impossible due to some social pressure as land tenure is being deemed as prerogative of authorities concerned. It is equally known that even where land tenure operates, land registration are not available and where it does, it is not perfect.

The rights, responsibilities and or obligation of smallholder farmer vary according to religion, region, ethnic group, age, social status, education and economic power. It must be noted here that women in particular often do not have their right asserted through land registration system where it exists.

It has been posited in several forum that freehold or long leases could provide basis to encourage productive term investments and to permit col-lateralization of land. Therefore, it is believed that creating a legal framework to support traditional ownership of land maybe the best method. Another school of thought are of the opinion that, registration of the security for use is the key rather than registration as ownership of land.
Therefore, from the perspective of financial institutions or donor agencies, to be able to lend will depend on the level of information available to evaluate the capacity and or capability of the lender to repay as at when due and utilize such fund wisely.

FACTORS MILITATING AGAINST FINANCING LAND OWNERSHIP FOR SMALLHOLDER
Uncertainties regarding land tenure system (insecurity of land tenure)
Inadequate and unequal access to land
Lack of mechanism to transfer rights and considerate plots
Overly subdivision of land into small and uneconomic units
Food insecurity - low productivity
Improper management of land (land degredation, erosion and loss of fertility).
Lack of collateral and or credit facility - farmers relies on many informal lenders.
High interest rates- this is one of the major challenges to smallholder productivity
Lack of influence on agricultural policies and budget-(smallholders are not part of policy making, as a result, their interest are not captured).
Poor quality of land
Reliance on basic farming equipment
Poor access to local market and extensive services
Generally, lack of capital and access to affordable credit by smallholders has been the factor behind low agricultural productivity. Most farmers could not be assisted by commercial and micro-credit banks, thereby, commercial banks support towards agriculture has been very low compared to manufacturing, trade and other sectors of the economy where they can recover their interest on time. Budgeting allocating by most African government are very low. Most government have not been implementing the Maputo declaration which is 10 percent of their yearly budget allocation.

INNOVATIVE WAYS TO ADDRESS THE FINANCING LAND OWNERSHIP FOR SMALLHOLDER
African countries should go the way of South Africa's standard Bank which signed a million dollars deal with Alliance for a green Revolution in Africa (AGRA) in March 2000.
- Objectives - To provide financing to small holder farmers and agric business where certain percentage default guarantee are provided by the state on the loans to be given for a certain period of years
- Standard Bank identified and factored in most risk assessed and problems, for example, reduce risk on farming inputs, mitigate losses on drought-prone areas, reduce transaction costs and abolish collateral requirement and instead, mobilize large cooperatives to commit to buy the upcoming crops.
Expansion of saving groups and use of remittances to fund profitable agricultural sub-sectors.
Private sector participation, for example providing transport, logistics, credit, warehousing services, leveraging on technology to bring down cost.

Facilitating of projects that can help farmers to make money through better linkages to value chain actors.
Producer organizations - cooperatives and farmers Associations to offer support to small holders through collective action to secure land rights and better market opportunities.
Government to subsidize credit scheme (providing loan guarantee to private banks who are willing to support smallholders).

Exploration of government and donor backed schemes to increase provision of rural credit to small holders. For example, providing subsidies to credit scheme or loan guarantees to banks.
Pre-financing of agricultural initiatives-tractorisation scheme in Nigeria.
Business groups to ensure that credit offers made available are appropriate for smallholders operating within supply chains.

Government to re-commit to allocating 10% of their national budget to agriculture- e.g Nigeria.
KWARA STATE INNOVATION AND LESSONS FROM SHONGA FARMS
In Kwara State, some of the above initiatives can already be observed where the shonga farms and their various partner cooperate with farmers, the local communities and the government in the areas of agriculture, rural development and food security.

In this regard, Kwara State government adopted initiatives to accelerate agricultural growth through both the commercialization of small holders and promotion of large-scale corporate farming, all through the Shonga Farms Holdings Nigeria Limited.
As these laudable initiatives gather pace, the situation of the small holders producers improves considerably through the constant transfer of knowledge among them other benefit

SHONGA FARMS
To effectively deal with low productivity and increase access to modern method of agricultural production, kwara State government set out early in 2004/2005 at promoting agricultural modernization through the commercialization of agriculture at Shonga, building its foundation on existence of vast land areas and numerous small holders farming families already in existence in the area.

A new emphasis on large-scale, commercial agriculture with these small holders also emerged, with the government providing a conducive, and an enabling environment taking the communities into confidence so as to attract these foreign joint investment in agriculture as witnessed with the Shonga farming ventures.
With this bold initiatives by the state government and having built sustainable confidence with the local communities, the most difficult aspect of land acquisition became surmontable as "easy access to land with smooth facilitation process" was achieved after series of various levels of consultation was arranged between the government, local communities, small holder formers and the investing commercial farmers on the other hand between 2004-2006.

The state government engage the service of 13No. Zimbabwe farmers who were established around Shonga Emirate in what is now known as Shonga's farms (Holding). Each of these 13 farmers were allocated 1000 hectares of land to engage in various forms of agricultural ventures. (Mixed croppers, Poultry groups and dairy groups).

In between these 13 settled commercial farmers, 200 hectares of land were earmarked and reserved for the local farmers. These initiatives became necessary because about 90% of the work forces of these commercial farmers are from the local communities who are expected to be empowered for the sustainability of the whole concept.

Each of these local farmers are then allocated with 2-5 hectares of land within this reserved 200 hectares in between the commercial farmers. The essence of this is to enable these local farmers benefit from the inflow of inputs, information, plants and machinery, off taking of proceeds and all other forms of technological transfer from the commercial farmers. It is envisaged that at the end of the day all these local farmers would have benefited immensely and became empowered to transform to commercial farmers, after which, is our intention to move them to a different location in form of Shonga Farms Holdings phase II in conjunction with grandaunts from Integrated youth farm institute in Kwara state.

Kwara state integrated youth farms was actually established to breed new generation of successive farmers, as they are adequately exposed during their training to both theoretical and practical aspects of modern agriculture.

Our intention therefore, is to bring some of these grandaunts and the local farmers that have benefited from the empowerment from the commercial farmers to work together prior to their movement to phase II. It is this particular concept which is novel that has caught the attention the Federal Government of Nigeria and the Bank of Agriculture, for financial support especially in the area of cassava production.
Against this backdrop, the experiences of Shonga farms Holdings show that with adequate support, small holder agriculture has commercial potentials that goes beyond increasing food availability in local, state, national, or even international markets.

This farms holding is a deliberate strategy designed to empower both small holders and large-scale farmers to make a commercial success of farming through partnership that works and sustainable, with governments, local communities and various business concerns.

Over time, this laudable initiative is likely to have a significant impact on small holder farmers as commercial enterprises look to invest in the state. Ensuring that those farmers have secure tenure as is done here is an important step in strengthening their position in future.

CONCLUSION
It is a fact that adopting a financing structure from one country to another maybe difficult to implement. It is suggested that a financing arrangement that can work well in peculiar cases should be designed to encourage other countries. The most important consideration here is to ensure that such structure provides practical solutions to the financing needs of smallholders.

There is also the need for African countries to contribute enough budgetary allocation to agriculture and support farming. Along this initiative, government must ensure improvement on land tenure security. This will increase food security as farmers are encouraged to invest more in their land and enable access to services as finance and prevent farmers for being displaced from their lands.

Furthermore to the above, laws that promote secure land tenure for all should be enshrined in most countries legal system. Smallholders need innovative financial services to support and encourage them in prioritizing sustainable management. The economies of African countries are developing and it is high time we brace up to the challenges of how to ensure innovative financing methods for purpose of food security.
Africa, it is time for action and enough of rhetorics, seminars and workshops. What we need now is action and commitment to eradicate hunger and poverty in the continent.