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Nigeria should export value-added yam products not the tubers 13 Jul 2017

The Sustainable Development Goal (SDG) 2 aims to end hunger and achieve food security by 2030. A key target of Goal 2 is also to double agricultural productivity and incomes of small-scale farmers through improved access to land, inputs, financial services, markets, and other opportunities.
    
In other words, increasing agricultural outputs is a major strategy in helping to end world hunger. In developing countries like Nigeria, this calls for an agricultural revolution that would involve the use of improved methods of cultivation, planting of high-yielding varieties of crops, and the industrialisation of agriculture.  

Nigerian agriculture remains mostly at a rudimentary stage and productivity is still very low. A lot of food is lost post-harvest and through waste. Access to credit, particularly by smallholder farmers, is a major challenge. The country is a net food importer and her food exports are not competitive.

The Agriculture Promotion Policy (APP) of the current administration of President Muhammadu Buhari aims to plug the productivity gap and fix the supply chains. Through this and other policies, the government is promoting import-substituting industrialisation (ISI) to achieve economic diversification. The ISI policy framework is expected to help achieve a more competitive exportation of manufactured goods.

But the government seems to have negated this policy with the yam export programme that commenced last month. According to the Minister of Agriculture, Audu Ogbe, about $8 billion is targeted in foreign exchange earnings annually from yam exports. This figure was bandied about without details on the projected quantity of exports vis-à-vis the country's total production and what would be available for domestic consumption. It was also unclear what efforts were being made to increase yam production or reduce post-harvest loss and waste.  

But while the objective of this plan is to increase supply of forex, placing much stock in it would derail Nigeria's agricultural transformation. The programme provides the sense that rather than driving industrialisation of agriculture, the government is prioritising low-hanging fruits of commodity exports, thereby perpetuating the narrative of Nigeria as a commodity dependent developing country (CDDC).

As a CDDC, Nigeria has a disproportionate share of primary commodity export revenue in total export revenue. It is a known fact that countries that export manufactured goods benefit more from trade than those that export primary products. Some research have also suggested that there is a negative relationship between commodity dependence and human development. But with the appropriate policy, Nigeria should have the comparative advantage – hence the ability to earn more – in the processing and utilisation of yam, being the world's largest producer of the crop. The same should go for cassava, another tuberous crop that Nigeria is a world leader in its production.  

There are other drawbacks to the exportation of agricultural commodities that can put a damper on the government's outlook for earning forex. According to the Food and Agriculture Organisation of the United Nations, the two dominant features in the global agricultural primary commodity markets over the last two decades are price volatility and declining trend of real prices. The markets are characterised by alternating short periods of boom and long periods of oversupply, caused by the gestation periods of many agricultural products.

According to historians, the Agrarian Revolution in Britain in the early 18th century was what paved the way for the First Industrial Revolution. Likewise, Japan, South Korea, China and other industrialised economies in Asia followed an agriculture development-led industrialization pathway.  

Like these countries, Nigeria can follow the path of agricultural development to achieve her industrialisation by ramping up investment in modern methods of agriculture. In the 21st century, when developed countries are increasingly adopting digital technologies like drones and apps in farming, Nigerian yam farmers – whether corporate or smallholders – use hoes to make mounds in order to plant yam. Inspite of the predominantly crude methods of yam farming, the country has been the top producer of the crop globally, with an output of 38 million tonnes in 2012. But by the time majority of yam farmers adopt mechanized alternatives to mounding, like 'ridging', the output would exponentially increase.

With over 70% of her land area arable, Nigeria has long been ripe for an agriculture revolution. Cassava, yam, maize, rice, sorghum, soybeans and many other farm produce are industrial crops. But the revolution cannot be realised simply by tapping export markets for primary farm produce. There has to be a modernisation of food production, processing and distribution methods. The supply chains, including logistics, marketing, and financing, have to be strengthened.

Instead of exporting yam tubers to be processed in Europe and United States or for consumption by the African diaspora, Nigeria should be exporting instant-pounded yam flour, livestock feed, spray starch and other value-added yam products. The effects of the value addition will not only be improved food security; job prospects will rise, incomes and living standards of farmers will also increase. Moreover, the transition to higher productivity in agriculture will help achieve the long-awaited structural transformation of the Nigerian economy.

Martins Hile is Executive Editor, Financial Nigeria magazine