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Economic Crisis: Agriculture Not The Magic Solution By Simon Kolawole

Subsistence farmer work their field of maize after late rains near the capital Lilongwe, Malawi February 1, 2016. REUTERS/Mike Hutchings

Anytime I hear Nigerian presidents, ministers, governors, economists, analysts and commentators declare that agriculture is the alternative to oil, and that the solution to Nigeria’s economic woes is to return to the farm, I am tempted to jump up and ask at full volume: “Who has agriculture alone helped?” Some states have hilariously declared work-free days for civil servants to go to the farm. It would be nice to see those farms and how well the emergency farmers are doing. We’ve been told again and again that agriculture, as Nigeria’s biggest employer of labour, is the magic solution to unemployment; that we will export agricultural produce and earn plenty of forex; this is surprising.

I’ve been hearing this fairy-tale all my life. When I was a primary school kid, General Olusegun Obasanjo, then head of State, asked Nigerians to tighten their belts because the oil boom would not last forever. He added drama by tightening his military belt on television. He launched Operation Feed the Nation (OFN). My grandfather responded by setting up a garden in our backyard. President Shehu Shagari did Green Revolution. The Structural Adjustment Programme (SAP) by General Ibrahim Babangida was basically about diversifying into agriculture. In different shapes, forms, sizes and packaging, we have been talking about agriculture for years.

Since we love glamorising our exploits in the export of cocoa, coffee, palm oil and groundnuts before the oil boom doom, I will pick on just cocoa to dispel this ill-conceived notion and never-ending campaign that agriculture is the magic wand. We used to be the biggest producer of cocoa in the world. Chief Obafemi Awolowo utilised cocoa revenue to develop the South-West when he was Premier of the region in the 1950s. But we dropped the ball along the line and Cote d’Ivoire overtook us, and now, we are lamenting.

The solution, therefore, is for the South-West to revive the cocoa farms.

Okay, let us talk about Cote d’Ivoire’s fabled cocoa wealth. Cote d’Ivoire produces 33per cent of world cocoa and exports to manufacturers in the United States and Switzerland. This West African nation earns a whopping $2.5bn annually exporting raw cocoa. Unfortunately, one of the companies that buy cocoa from Cote D’Ivoire, Mars, according to the International Cocoa Organisation (ICCO), made $18bn in 2015. Don’t forget that Cote d’Ivoire’s gain was just $2.5bn.

We should wonder how just one company, which manufactures chocolate, can earn seven times more than a whole country, which farms and exports cocoa. On ICCO’s list of the world’s top 10 companies in net revenue from chocolate, we have three from the United States of America, two from Japan, two from Switzerland, and one each from Luxemburg/Italy, Argentina and Turkey. None from Cote d’Ivoire, Ghana and Indonesia — the world’s three biggest producers of raw cocoa. Surprisingly enough, most of these companies that process raw cocoa into chocolate do not have cocoa farms. We need to wake up, Africans!

I apologise if I have created the impression that agriculture is useless; that is not my intention, after all, agriculture is part of our culture. Millions of Nigerians are farming rice, beans, cassava and corn. That is huge employment. Also, we certainly can produce many food items that we are currently importing and burning precious forex on. But is that why governors are declaring work-free days for civil servants to go and plant melon and maize to solve Nigeria’s economic problem and stop the dependency on oil? If only these governors knew that Switzerland does not grow one tree of cocoa, yet makes the world’s most elegant chocolates!

Let us break this whole agriculture logic into pieces. If we really want to diversify from oil and create proper value chain, then agriculture must give birth to industry. If agriculture currently employs, say, five million Nigerians, agro-allied industry can employ 15 million in the value chain. So why do we spend so much time discussing farming and not industry? For example, how many graduates can a tomato farm employ, compared to a factory making tomato purée? The factory will employ or engage the services of engineers, technicians, chemists, marketers, accountants, communicators, lawyers, administrators, drivers, and so on. It may even have a clinic and employ doctors and nurses.

Sure, agriculture is very important in a primitive economy like ours. But we always miss the bigger picture. One, we need full optimisation of the sector to enhance productivity. A country like the US knows this much better: the percentage of the population engaged in farming is insignificant, but it is so optimised that the output is out of this world.

Therefore, we can do with better technology, storage, conditioning, packaging and transportation. Most importantly, our brains should focus on how industry can bring out the real value of agriculture and spark off a chain of economic activities that will create millions of good jobs and generate billions of dollars in revenue to investors, employees and government.


2 Responses to Economic Crisis: Agriculture Not The Magic Solution By Simon Kolawole

  1. CYRIL OKEMUO says:

    Yes, that is what Erisco Foods Limited has been trying to do. Still the govt cannot provide the enabling environment for Industry to thrive. But they can give import duty waivers worth billions of naira for cronies to import unnecesary luxuries.

    Shame on Nigeria

  2. I’m excited to really support Simeon Kolawole’s view on why agric may not provide the vehicle for giving the Nigeria’s economic miracle a push,if we keep doing things the same old way,then we should also expect same obsolete result in the years ahead.

    Further to this,permit me to make a solid isolated reference,as a case study for driving home my narratives,years ago,President Yoweri Museveni of Uganda,stated that and I quote; “African nations are doomed,if they fail to change from merely exporting agric farm produces, as raw materials without deploying value chain to produce finished products line and then export worldwide,to create generational wealth. Still continuing,nations that only export their raw materials, and mostly consume imported finished goods, their citizens will definitely live a poor life.

    He further underscored his valid point,when he posited that, if a kilogram of African cotton fetches $1.20 when sold at farm gate’s price and exported as raw material to the countries that has capacity for adding value,then when that same 1kilogram of cotton is processed into yarn,the value goes up three-times from$1.20-$3.60, when further weaved into fabrics,it fetches $7.20,while when finally produced as textile the value rise astronomically 12times to $15 USD.”

    Thus,if we truly want to really embark on a Project Fix Nigeria dream,there is the urgent need to embark on simultaneous promotion strategy of a primary and secondary agric farming value chain-technology-driven clusters’ linkage development financing along our rural-urban corridors,with an aggressive production and export-oriented transformation activities that will provide direct/indirect employment and empowerment for the over 30 million economic entities that would create “taxable wealth ownerships, earn multiple income streams as well as willingly pay income taxes,to help leap their home governments’ IGR by 40%, because presently,statistics has clearly indicated that agric farming represents 40% of our national economy and GDP,but pays no income taxes,because it is not profitable, due to the high cost of doing business in Nigeria.

    Olusegun Adegbite Kowontan, President, Project Fix Nigeria Platform,

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