President Muhammadu Buhari should formulate a policy that will drive the development of the palm oil industry beyond the ban on importation. I want to appeal to the President to give a fresh and strategic mandate to revive the moribund Nigerian Institute for Oil Palm Research (NIFOR) in Benin, to improve investment in research and production of quality oil palm seeds. There is need to give a fresh mandate to NIFOR for meaningful investment to come into the oil palm industry, and we have to think of other incentives to encourage manufacturers to turn oil palm to other things. There is need to give a fresh mandate to create incentives for those who are currently in the business to explore all the uses of palm oil to create job opportunities for our people.
I am worried over the recent low performance of Nigeria in the production of oil palm, especially now that there is a great increase in the global demand for the product. Between 1964 and 2018, the demand for oil palm globally increased from 1.2 million metric tonnes to over 73.3 million metric tonnes. There has been a great increase in global demands for oil palm from 1.2 million metric tonnes in 1964 to over 73.3 million metric tonnes in 2018, and Indonesia and Malaysia are two leading countries in the sector currently growing over 60% of the world oil palm trees.
Nigeria which used to be a leading producing country in the 1960s is presently ranking 5th in the production, due to protracted neglect by the government. “Nigeria that ranked among the top five palm oil producing nations have a long way to go to be able to meet local demand and export.” The fundamental challenges confronting the sector in Nigeria include subsistence nature of cultivation, high cost of production and concerns for environmental compliance. Others, are low yields, unacceptable processing procedure, quality/certification issues, sharp practices, infrastructural deficiency, traceability, poor access to finance and high domestic price which has hindered export.
There is need for President Buhari to give a fresh and strategic mandate to NIFOR for smallholders to get access to the latest technology, which have already demonstrated their ability to produce as efficiently as large-scale plantations. Local and national representative bodies are now growing in scale and stature, providing much-needed voice for smallholders in immediate business negotiations and wider policy dialogue. The challenge now is to share good practice more widely. Real progress will require action from a range of stakeholders, including smallholders, smallholders’ associations, government agencies, plantation and milling companies, traders and retailers, and key third parties (e.g. people’s organisations, NGOs, banks, insurance agencies) – to develop and try out the variety of mechanisms that can help improve sustainability and equity in palm oil production.
There is need for President Buhari to give a fresh mandate to NIFOR to support smallholders: growers who cultivate palm oil with the direct support of either government or the private sector. The basic concept is that the government agency or private plantation company provides technical assistance and inputs of seed stock, fertilisers and pesticides, on a loan basis, sometimes partially subsidised by government.
There is need for President Buhari to give a fresh mandate to NIFOR to support independent smallholders: growers who cultivate palm oil without direct assistance from government or private companies. They sell their crop to local mills either directly or through traders.
There is need to give a fresh mandate to NIFOR to close efficiency gap between large plantations and smallholders so that smallholders increase their annual yields and continue to keep the costs of inputs relatively low. However, there is huge variation in smallholder practice and results, mainly depending on how central palm oil is to their income strategy. Supported smallholders continue to achieve higher yields than independent growers, mainly because of access to better quality seed stock, but independent smallholders can in some instances achieve greater returns on their investments.
Smallholders face a number of constraints in maximising their potential from palm oil production while maintaining local choice and autonomy. There are isolated examples of innovations to deal with these problems and improve the contribution of smallholders to sustainable palm oil production. There is need for fresh mandate in securing capital to meet upfront expenses: smallholders typically cannot meet basic conditions of collateral and minimum loan size to secure bank financing. Micro-finance institutions are the main solution. These may include interest-free loans for specified inputs, renegotiable terms and equity based on forms of recognition of land ownership other than formal land title.
There is need for fresh mandate getting good technical, policy and market information. Access to trustworthy information – on prices and pricing policies, market opportunities, technical aspects of production and site management, and more fundamentally on rights and options under national law or formal agreements – is a also a major difficulty. Responses to this problem include access-to-information services from NGOs and international agencies, but their reach is geographically specific.
There is need for fresh mandate for the government to come up with an innovative policy to encourage a return to the farms to produce oil palm. Investors should be encouraged to take advantage of research findings by the Nigeria Institute for Oil Palm Research in Benin City to access improved high yielding seedlings to be able to cultivate oil palm at plantation level rather than the old methods of the past. There are already plantations in Imo, Cross River, Rivers and many other parts of the country.
Smallholders are a vital part of the global palm oil supply chain, but they are often less productive and sustainable than big firms. There is need for fresh mandate to meet the standards required for exports and have proper documentation, certification, accreditation and product packaging. Additional challenges include: government owned plantation fields, weak milling infrastructure, challenges in accessing lands, community unrest, politics and rights activism. These all contribute to hindering the growth and development of the palm oil sector, and ultimately discouraging private investors.
The formal mandate of the Nigerian Institute for Oil Palm Research is to conduct research into the production and products of oil palm and other palms of economic importance and transfer its research findings to farmers. Nigeria has imported palm oil worth over $3.2billion in the last seven years. The greatest challenge in Nigeria is that NIFOR has totally disconnected from potentially small-scale and out-grower smallholder farmers of palm oil plantation and failed in its mandate. Today, NIFOR has failed in its mandate for allowing Nigeria to fall from being the largest producer of oil palm to a net importer of palm oil. NIFOR failed in its mandate because there is no policy statement on how Nigeria can return back as the largest producer of palm oil in the world and the institute is always waiting for its annual subvention from Abuja. It lacks innovation. There is need to review the operations of NIFOR in the last 50 years and reposition it to deliver on its mandate. Today, the institute has no record or data online on how many private individuals or organizations have established palm oil plantations in the last 20years in Nigeria. NIFOR is located in Benin City, and it does not even know the number of palm oil estates in Edo State. Rather there is always struggle for managerial positions in the institute. How can the institute deliver on its mandate when it has no records or database of palm oil estates in Nigeria? The Federal Government should as a matter of urgency review the operations of NIFOR.
NIFOR failed in its mandate by allowing Nigeria to produce only 1.7 per cent of the world’s consumption of palm oil, which is insufficient to meet its domestic consumption that stands at 2.7 per cent; thus, the question of net exports doesn’t arise. However, paradoxically, about 20.0 per cent of the oil palm produced domestically is considered of high quality and clears all the seventeen tests for being an exportable commodity.
Without NIFOR, palm oil was among the first commodities of international trade, after the slave trade, between Nigeria and Europe. NIFOR has however, since 1992, come under the aegis of the Federal Ministry of Agriculture. The thrust of work at NIFOR today, as in the past, derives from national goals as currently defined by the national policy on agriculture and the needs of farmers.
Inwalomhe Donald writes from Benin City, Edo State.