Palm oil producers seek N100bn intervention fund

The association, in a letter to President Goodluck Jonathan on June 4, noted that oil palm has remained one tree crop that Nigeria has comparative advantage in its production over any other country but has so far lagged behind.According to the National Chairman, VEOPAN, Mr. Okey Ikoro, the intervention fund is needed to steer the […]

The association, in a letter to President Goodluck Jonathan on June 4, noted that oil palm has remained one tree crop that Nigeria has comparative advantage in its production over any other country but has so far lagged behind.
According to the National Chairman, VEOPAN, Mr. Okey Ikoro, the intervention fund is needed to steer the sector back to its glory days when it was one of the mainstay of the economy with Nigeria as the number palm oil producer in the world.
He lamented that in the 1960s, Nigeria was the leading producer and exporter of oil palm produce and allied products, accounting for 27 per cent of the global market with 167,000 metric tons in 1961 but has declined as at 2008 to 25,000 metric tons, while the world production increased from 629,000 metric tons to 33.3 metric tons within the same period.
He blamed Nigeria’s current situation on the discovery of oil in commercial quantities in the 70s and subsequent abandonment of other hitherto economic products like palm oil, cocoa, rubber and groundnut amongst others.
“It is on record that Malaysia, which is the second largest producer of palm oil after Indonesia, started its journey from Nigeria. Today Malaysia earns $18 billion per annum from palm oil production and export, while Nigeria produces about 1.3 million metric tons of palm oil and imports 350,000 metric tons annually amounting to about $500 million in foreign exchange.
“This is a situation that can be reversed by giving direct impetus to the development of the vegetable oil sector of the Nigerian economy.
“The oil palm although, can be grown massively in about 20 states of the federation, is also the only sector capable of providing an alternative revenue generation base for Nigeria in this impending era of dwindling oil revenue, has received little or no serious support in the same direction when compared to textile, cocoa and cassava”, he added.
Okey explained that the requested N100 billion will be used for the development of oil palm sector from nursery, cultivation, production, refining/fractionation and extraction to all its value chain.
He said that the fund will be disbursed through commercial banks and Bank of Agriculture at zero interest, with maximum of 2 per cent management fee; and a tenor of 7 years or more, to allow for the long period of gestation period involved in oil palm planting up to harvesting.