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Food Scarcity Looms As Lack Of Funds Threatens Agric Scheme

Vegetable farmers
Vegetable farmers
The Growth Enhancement Support scheme in its heyday was an insignia of pride and achievement for the Ministry of Agriculture and Rural Development, under the leadership of former minister, Dr. Akinwumi Adesina, who is now the President of African Development Bank.

The scheme, launched in 2012 as part of the Agriculture Transformation Agenda of the Goodluck Jonathan administration, was aimed at achieving food security, youth and women empowerment, increasing income for farmers as well as curtailing the activities of middlemen in the sale and distribution of fertilizers and seedlings in the country.

While speaking on the topic, “transforming Nigeria’s agriculture” at the inauguration of the Agriculture and Food Security Center of the Earth Institute of Columbia University in New York in September 2013, Adesina listed the gains from GES and ATA, noting that the agricultural sector had witnessed a major transformation since he became a minister.

He said, “Within the first 90 days of my term as minister, we ended four decades of fertilizer sector corruption. We launched the Growth Enhancement Support scheme to provide subsidised inputs to farmers. To reach farmers directly with seeds and fertilizers, we developed the Electronic Wallet System, which allows farmers to receive subsidised electronic vouchers for their seeds and fertilizers on their mobile phones. Nigeria is the first country in Africa – possibly in the world – to develop the electronic wallet system for targeting farmers with subsidised farm inputs.

“The system worked successfully. In 2012, 1.5 million smallholder farmers got their subsidised seeds and fertilizers using their mobile phones. This had an impact on 7.5 million persons. So far this year (2013), over 3.5 million farmers have received their subsidised inputs via the Electronic Wallet Scheme. We have expanded the GES programme beyond crops to provide support for fisheries, livestock and mechanization services. To reach even more farmers, we embarked on the nation’s first ever registration of farmers. This year, we registered 10 million farmers. Farmers now have identity cards that allow us to use their biometric information to target them more effectively.”

The scheme, according to the minister, accounted for food production which witnessed a boost in 2014/2015.

Unfortunately, as it so often happens with most government projects, GES appears to have been run on credit. By the time a new administration took over in May 2015, a backlog of unpaid debts to fertilizer and seed companies, running into billions of naira had accumulated.

Suppliers under the aegis of Farm Inputs Suppliers Association of Nigeria approached the new administration in May 2015 with an appeal to the government to pay its own portion of the subsidy.

According to them, the amount outstanding to date, being the subsidy portion of Federal and State Governments for which payment was yet to be paid to fertilizer suppliers was about N52bn.

Following the controversy and the huge debt surrounding the scheme, the Federal Government, exactly a year later, in May 2016, announced that it was withdrawing subsidy on fertilizer. The decision did not go down well with farmers as most of them withdrew from the farms.

The Director-General, Nigerian Textile, Garments and Tailoring Employers Association, Mr. Hammed Kwajaffa, said since the suspension of fertilizer subsidy to farmers, the price of cotton had escalated as the product became very scarce because cotton farmers had refused to go back to the farms.

The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, said the cost of GES scheme had become too heavy for government to bear.

According to him, the GES arrears were being paid by the government out of sympathy and responsibility towards agro dealers.

“We had to look for money from our own sources at the federal level to bear the liabilities of states,” he said.

Ogbeh, who spoke in reaction to an online publication alleging N2bn GES payment bribery against the ministry, said, “When we arrived here, we were told the bill for seeds alone was N9bn and I said, ‘No, I am a farmer, how could you have supplied seeds worth N9bn?’ We scrutinised the invoices and we were able to prune the bill down to N2.5bn. I am shocked that these same people who submitted fictitious invoices with over N6bn inflated claims are now smearing my name.

“The GES payment was a debt we inherited from the previous administration. The total debt was N57bn. When we arrived here, the agro dealers said they couldn’t operate because they didn’t have bulk money to carry on with their businesses and so we applied to government and appealed for help to raise some money to pay the debt.

“The Federal Government gave us N20bn to pay part of the debt to agro dealers and fertilizer suppliers. When the money got to the Ministry of Finance, they decided that they would handle the payments and the Accountant General of the Federation made the payments. The money never got to the agriculture ministry and we are happy they decided to handle the payment.”

The scheme suffered additional setback when the 36 states of the federation decided to pull out of it, according to a recent statement from the agriculture ministry which indicated that states had pulled out of the scheme, making it clear that they had no money to contribute due to their low revenue levels.

The development is bound to deal a blow to crop production thereby worsening the food scarcity situation and escalating cost of essential food stuff in the country, according to the Executive Secretary, Fertilizer Suppliers Association of Nigeria, Ahmed Rabiu-Kwa.

Already, major agriculture food produce which also serve as food staples for Nigerians, such as rice, beans, and garri had witnessed more than 50 per cent increase in price in the past few months with rice increasing from N7500 in 2015 to N18000 in May for 50kg bag. Yam increased from N400 a tuber to about N1500 while a measure of garri now sells for N450 against the former price of N250.

However, the Country Manager, Harvest Plus, Mr. Paul Ilona, has supported the move by government to end the subsidy payment.

Ilona noted that in view of the global oil slump and Nigeria’s poor financial state, it was not economically wise for government to continue bearing the cost of the scheme.

He said, “With the current economic situation in the country, it will not pay government to continue to support the scheme.

“The subsidy was meant to boost demand for fertilizers and make farmers appreciate the need to grow crops with fertilizers. It was not supposed to be a continuous programme.

“There are plenty seed and fertilizer companies in Nigeria and farmers who are serious about their crop yield will have to buy their fertilizers without waiting for government.”

According to him, although the scheme may prompt some farmers who have no means to buy fertilizers to go back to farming without fertilizers, there are also a lot of firms and individuals who are taking advantage of the global economic meltdown and investing in agriculture.

He said, “The global fall in crude oil prices has forced many people who hitherto kept their money in the banks to withdraw the money and invest in agriculture. These people will buy fertilizers and they will push food into the market. In a very short while the situation with food scarcity will ease.”

He added that the activities of these people will make up for the gap in crop production.

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