Interview: Akinwumi Adesina
What are the fundamentals behind the government’s Agricultural Transformation Policy?
AKINWUMI ADESINA: Agriculture in Nigeria accounts for 44% of GDP and 70% of employment. The sector has always been treated as a development activity and thus it does not generate wealth at the potential that it should. Only 40% of Nigeria’s land is utilised. The necessary key for successful reform is to turn agriculture into a business that makes money, with a focus on investments as opposed to aid and development. Nigeria benefits from the availability of a large potential labour pool and very low wage rates in the agricultural sector. We need to move toward focusing on particular value chains in which we have a traditional comparative advantage.
What are the short- and medium-term priorities for the reform of the agricultural sector?
ADESINA: For 2012 the primary issue is to reform the fertiliser and seed sectors. These have traditionally been controlled by the state, which has procured and distributed the produce. This system was expensive, inefficient and corrupt, and it displaced the private sector, thereby generating more poverty. For example, only 5% of Nigerian farmers are using seeds, accounting for 8000 tonnes for the country. Kenya has a population of 30m, compared to Nigeria’s 150m, and uses 40,000 tonnes of seed. I have dismantled this system and put it fully in the hands of the private sector. As a result, our private sector firms are growing and foreign direct investment is increasing.
In the medium term, we must grow the agricultural sector by diversifying the economy from oil and reducing our dependency on food imports, which allows us to conserve our foreign exchange and create jobs. Over the next five years, we plan to add 20m tonnes of additional food to the domestic food supply to create 3.5m jobs in the sector, and to replace up to 40% of wheat flour imports with high-quality cassava flour. Self-sufficiency in rice production is set for 2015. Local rice is good but it has not been milled properly, so it is difficult to compete with imported rice. We are therefore concluding arrangements to acquire 100 large-scale integrated rice mills that would mill 2.1m tonnes of rice, substituting our entire imports. The mills will be running within 18-24 months and produce high-quality, par-boiled, long-grain rice, which is what the consumers here demand. We are hoping to add some $2bn worth of income back to the farmers of the country.
How can the private sector participate in reforms?
ADESINA: The financing for the fertiliser and seed programmes is provided by the private sector. In 2012 alone N30bn ($192m) of financing has been generated without one naira of government money. Our banks have money and excess liquidity. The Finance and Agricultural Ministry simply provides guarantees to the banks, allowing them to reduce their risk of lending, leading to a reduction in interest rates from 15% to 7%.
What is the outlook for technology-based financing and insurance solutions?
ADESINA: The electronic wallet system for farmers will be introduced in 2012. Our aim is to increase the total percentage of farmers receiving subsidised inputs from 11% to 90% through the use of mobile phones. Using mobile technology, we update our database with farmers’ biometric information and distribute subsidies via the network. Farmers can go to their local input retailer, who is also on the platform, pay the balance and collect their inputs without money changing hands.
In what ways is the gender gap in farm labour currently being addressed?
ADESINA: Women form 80% of the farming population. All of our work in reforming the sector aims to increase their incomes. We are taking steps to create better access to finance for women. We are revamping the extension services system by promoting a more gender-sensitive approach. This is because female extension workers can reach women better than men.
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