How government can walk the talk in agriculture

Innocent Okuku is the Group Head, Commercial Services, Notore Chemical Industries Plc. In this interview with Daily Trust, he offer suggestion on how government can walk the talk in repositioning the Nigerian agricultural sector. Excerpts: Notore is a key player in the Nigerian agricultural sector. Tell us what you have been doing in the sector. […]

Innocent Okuku is the Group Head, Commercial Services, Notore Chemical Industries Plc. In this interview with Daily Trust, he offer suggestion on how government can walk the talk in repositioning the Nigerian agricultural sector. Excerpts:

Notore is a key player in the Nigerian agricultural sector. Tell us what you have been doing in the sector.
Like you rightly stated, Notore is a key player in the Nigerian agricultural space;actually not only in Nigeria, but on the whole continent of Africa. This is because we own and operate the only Urea manufacturing plant in sub-Saharan Africa.

We have had several agricultural programmes since independence. Why has it been more of rhetoric than implementation?
Well, for me, I think that there are two basic reasons why we haven’t successfully used any of these programmes to move our agriculture to the level where it needs to be. The first reason is that we don’t have consistency in programmes. So, like you rightly said, you begin an Operation Feed the Nation, you do something 1 to 2 years and the moment the person who started it is out of office, the next person comes and  throws everything away. He wants to do something new because he wants to have something called by his name. That is the major problem. We always have a policy somersault; that’s the major problem.
A development plan that works has to be long-term. It cannot be short-term; like two or three years long programmes. It has to be much longer than the life span of a government so that even when the government changes, the new government that comes in will actually plug in and say, well this is the overall goal and we are also working in tandem to achieving that goal.

So what can they do to walk the talk, to make agriculture as attractive as the oil sector?
Number one, it must be very easy to get into agriculture. For example, financing is a big issue; it must be easy to raise finance for agriculture. Today, if you go to our banks, it is somewhere around 4 percent of their total lending that goes to agriculture even though there has been some changes over the last 2 or 3 years, it was below 2 percent before.
But for a sector that employs more than 60 percent of the labour force and can create a lot more jobs for Nigerians to only be receiving lending at a level of 4 percent is completely skewed! It doesn’t make sense. So whatever needs to be done must be done well to make sure agriculture receives funds. I don’t think the banks should be lending less than 20 percent of their lending to agriculture. So the first thing is that government needs to reform that part of it so that it will be easy to find financing for agriculture.
Another action government needs to take is to make our education a lot more agriculture oriented and functional agriculture-wise.

So what needs to be done about fertilizer and seeds (agro inputs) because this is key too?
In the fertilizer space today in Nigeria, let me give an example. In 2014, the last GES programme had what they called suppliers–people who either manufacture, blend fertilizers or supply the market numbering around 58. Now there is an association called FEPSAN (Fertilizer Producers and Suppliers Association of Nigeria). FEPSAN that has less than 10 members went up to 58. How do you grow from an association with 10 members and you have a supplier base of 58 people? What it means is that you have more than 70% of the people who said they were suppliers but were actually briefcase people.  They have no channel; they don’t have any regular channel of supplying the product to the market.
In other words, they are people who cannot guarantee the quality of what they are producing; they are only there because the government subsidy programme is happening. Next year, they won’t be there if there is no subsidy programme. Therefore they have nothing to protect, there is no long term business they have to protect, they have no channel, they have no structure; what they are looking for is to dump their product somewhere. Those are the types of people that collude with those who are supposed to be regulating the space. They do shady things and call fictitious redemption data and all of that things.
So what government needs to do in the fertilizer space is to identify those people that have made investments and set up responsible businesses along these chains and work with them to expand the supply.
For example, let’s take Urea. Notore produces half a million tons of Urea today, and a new company (Indorama) is supposed to start production in another one month. Between these two companies, they have excess production for Nigeria. Why do we need somebody to import Urea into Nigeria again? Now for these companies, because they have investments in excess of a billion dollars in their plants, they cannot play game, because that investment cannot be recouped by playing game with regulators, if you are to have the business running sustainably for a long period of years. These are the kinds of partners you should support and to be able to sell product in the market they will definitely have channels.
Notore has over 4,000 retailers across the country and we are still adding more. But what the structure of government subsidies has done in the years is to me distorts that. When government brings out a subsidy programme, it appoints its own agro-dealers outside the distribution structure of these companies. So even those who are genuine fertilizer business people who are part of the distribution channel, once they see that subsidy programme, they jump into it and leave their regular supply channel, and government does not have enough budget to subsidize all the fertilizers that farmers need.

In what way do you think we can improve on extension services for farmers’?
To be honest, I believe that yes, the government has got a key role to play in terms of extension services, but I don’t think it’s a government alone thing. I think extension services need to evolve just the way everything has evolved on the globe.
Government extension is implemented by people whose pay is not tied to how much result they get from the extension that they are doing. If I am a government extension officer, I will earn my salary, and whether the farmers I am supporting have higher yield because I trained them or not, I will still get my salary. All I will do is just to make sure that I am there. That is not a productive strategy, but a private extension organization will be. For example, if you are showing farmers how a technology works and you are able to earn money and make a living from the farmers using the technology correctly and getting the result from it, you are likely to make sure that they get it right and use it correctly. So that is private extension and that is the way it should go. For example, in Notore, what we have done in the last five years is to create what is call a ‘village promoter network’ in which we have over 3,000 people across the country today who are doing extension work. They are not doing extension work based on salary, but they earn money from farmers using the technology that are extended to them.