CALL FOR CONTINUED BORDER CLOSURE INTENSIFIES AMID COVID-19
One year on, major stakeholders in agriculture have intensified the call for the continued closure of porous borders abused by smugglers for sabotaging the economy of the country.
Before the closure of the land borders against free movement goods and persons from Nigeria’s neigbhouring countries, out of 184 countries importing rice from Thailand, Benin Republic was consistently the largest, doing great damage to Nigeria’s economy through smuggling.
With a population of about 12 million people, it imported more rice than China, for instance. Benin Republic imported nearly two million metric tonnes of rice in 2017 (1,814,014), while China imported 1,204,911. Also, data from the Thailand Rice Export Association indicated that the Benin Republic was the largest importer of rice till May 2019, a few months before the borders were closed.
In 2018, the country imported 1,603,285 tonnes while China imported 1,003,062; and it imported 695,854 tonnes from January to May 2019 while China imported 205,830. The tonnes of rice were allegedly repacked and smuggled into the Nigerian cities through the land borders. This posed threats to the efforts of Nigeria to become rice-sufficient.
Nigeria, which is larger than the Benin Republic almost 20 times, officially imported 23,192 tonnes of rice in 2017, 6537 tonnes in 2018, and 2,380 tonnes so far in 2019.
The porous borders, stakeholders lament, filled the demand gap in Nigeria from the Benin Republic.
“All goods, for now, are banned from being exported or imported through our land borders and that is to ensure that we have total control over what comes in,” Hameed Ali, comptroller-general of the Nigerian Customs Service told reporters in Abuja a year ago.
The rice value chain and Agricultural Transformation Agenda
Historically, a major component of the Agricultural Transformation Agenda (ATA) of the Goodluck Jonathan administration was the Rice Transformation Agenda (RTA), which led to two crops of commercial-scale rice yearly for the first time in the country. Total output of paddy in the 2012 wet season and 2012/2013 dry season from RTA interventions was an additional 1.409 million tonnes of paddies or 916,137 tonnes of milled rice from 403,222 hectares of land. By the 2013 wet season and 2013/2014 dry season, output more than doubled to 2.96 million tonnes of paddy or 1.92 MT of milled rice from 802,108 hectares.
Farmers in the 2012 wet season and 2012/2013 dry season were 403,222, and in the 2013 wet season and 2013/2014 dry season, 2,598,113 farmers participated in farming.
During the 2013 wet season and 2013/2014 dry season, jobs created by local rice production doubled to 751,248 rural jobs, while gross and net value doubled to N313,784,882,555 and N175,020,285,055 respectively.
The economic impact on the lives of farmers, unemployed youths, agro-dealers, of an inflow of N254 billion obtained from the 2012 and 2013 wet and dry rice season farming was documented to have increased household income, employment, and improved livelihoods.
At the beginning of RTA, there was only one functional integrated rice mill with parboiling capacity. With interventions in the rice value chains and the subsequent increase in paddy production, 19 new integrated rice mills with parboiling capacity, and a total combined paddy milling capacity of 780,000,000 tonnes came on board.
These investors were allowed to temporarily import brown or finished rice to bridge the present gap in supply and demand. They enjoyed a 10% tariff and 20% levy. On the other hand, mere rice traders imported at 10% tariff and 60% levy. This policy encouraged a leap in investment into a backward integration scheme aimed at phasing out rice importation by 2017/2018. The policy attracted more than $1.6 billion in private sector investments.
However, porous borders frustrated the efforts, as relatively cheaper bags of rice find their ways through land borders, discouraging home-grown rice, and avoiding tariffs and duty payable to the government.
Views on Anchor Borrowers’ scheme and border closure
The green alternative of the Buhari Muhammadu administration came up with the Anchor Borrowers’ scheme, specifically for rice and maize interventions for small-scale farmers holding fewer than five hectares of land. However, smuggling from the land borders flopped the objectives, leading to the decision to close the borders.
Expressing their views, most farmers and agricultural investors said though the impact of COVID-19 has been devastating on food production system, it could have been worse than now if borders were porous and the CBN had not intervened through the Anchor Borrowers’ scheme before the pandemic.
Dr (Mrs) Nike Olagunju, a rice processor and lecturer at Lead City University, Ibadan, said the statistics of rice farmers in Nigeria in recent times had shown that the closure “is a decision taken in the right direction. Suffice to say that it’s an indication that the growth of our economy is in our hands.”
She said Nigerians are getting used to eating locally produced rice, and farmers are now confident that there is a steady market waiting for their produce unhindered and they could go all the length in production of paddy rice.
“The COVID-19 pandemic has also taught us a great lesson that we can look inwards and better our economy without foreign interventions, even now that the whole world is in great crisis, economic and food-wise. The border closure on rice importation has also favoured employment of labour in the various rice production chain, invariably enhancing the GDP of our nation,” she argued.
Local rice farmers are getting better by the day and closing the quality gap between imported and Nigerian rice.
President, All Farmers Association of Nigeria (AFAN), Mr Ibrahim Kabir, explained that when the border closure happened, Nigeria did not know there would be a pandemic, but luckily, the border closure prevented food items from going out of the country informally as they used to, especially in Katsina.
Kabir added that as time goes on, the borders will have to be reopened “because we have signed the African Continental Free Trade Agreement (AFCTA), but the misbehavior of our neighbours indicated they were not there for us. They were working with some unscrupulous Nigerians to smuggle in what we have comparative advantages in. We were forced to close the borders.”
Drought, COVID-19 and insecurity of farmers are challenges preventing maximization of benefits of closing the borders, he said, adding: “And these factors might not make it reasonable to open our borders now. We need more discipline; we need to get more organised.”
Kabir added that if Nigeria does not increase food production and productivity, prices will continue to soar because the exchange rate is not friendly.
“Farmers,” he explained, “have not been getting value for their labour and investments,” and this appears to the first time chicken and rice producers get value for their investments.
“If you go to a restaurant in the US, you would eat food worth about $100, and that is equivalent of a bag of rice in value here in Nigeria. So, we have not been fair to farmers here,” the AFAN boss said.
Regional Coordinator, Africa Rice Centre, Dr Francis Nwilene, while analyzing the situation, said: “Despite COVID-19, the policy has spurred farmers and agricultural investors to become proactive in food production and processing, especially in rice and poultry.”
He added that it is left for the government to emplace security either through vigilante or military forces for farmers during farm operation periods so they can cultivate crops because Nigerians must eat and so, must produce food.
He advocated irrigation facilities for farmers in the southern zones to make food production possible throughout the year and complement the irrigation farming in the north.
Rain-fed agriculture, he argued, is not adequate to produce food demand of the growing population, and so south-west, south-south and south-east state governments should make efforts to invest in irrigation facilities.
The rice specialist Nwilene also objected to reopening the land borders.
Mr Ajibola Adebutu, Managing Director, JB Farms, Odogbolu (a processor of vegetable oil) in Ogun State, said: “Demand for local palm oil and vegetable oil has gone up. Price has also gone up. Good outcome from this is massive investment in plantation development at the moment.”
He said the policy would, in the long run, pay off for Nigeria in terms of a diversified economy, employment opportunities, and improved gross domestic products.
“So either the borders remain closed or importation of palm oil and vegetable oil should be stopped if smuggling can be controlled. Please tell them not to open the borders,” the young Adebutu said.
Afiz Oladejo, Managing Director of Vertex Rice, Lokoja, Kogi State, said the border closure is actually working for the economy, not only the farmers because Nigerians are being forced to inward. “The only challenge,” he added, “is that we have not been able to plan for sustainability.”
Corroborating Dr Nwilene, Oladejo said: “Rains we have this season have been staggering, which should clearly open our eyes to irrigation farming that we are very poor at. So, this situation we experience now will create a little discomfort, but the moment we get it right by investing in the next dry season, the output we are going to get will be enormous.”
Chairman, Rice Farmers Association of Nigeria (RIFAN), Oyo State, Pa Akinade Samuel, said the CBN/Federal Government scheme for rice farmers and border closure are forces driving rice production and investments in the country. Though there are challenges, in the next few years, Nigeria would become a major rice-producing hub exporting to, at least, other African countries. However, high production costs coming from inputs, low-quality seeds, and poor infrastructure make domestic prices of local rice brands uncompetitive for now.