August 18, 2022

How CBN forex, border policies impact on agro-economy, by Nigerian farmers

How CBN forex, border policies impact on agro-economy, by Nigerian farmers

Again, stakeholders in the agricultural sector have drummed up support for the Federal Government’s policies on the restriction of foreign exchange to food importers and the decision to close porous borders against smuggling and illicit trading.
The Central Bank of Nigeria has been preventing official forex services for a list of about 43 items, mostly raw materials, and food items, apparently to reduce pressure on the naira, prevent inflation, stabilize the exchange rate and stimulate local production.

Similarly, the partial and eventual closure of the borders has triggered local and international pressures on the government to re-open the borders, but the government has insisted, saying local production, agricultural development, and economic stability are at stake if the smuggling and importation sprees continue.

The CBN governor, Godwin Emefiele, fumed on Monday, expressing the readiness of the government to continue closing the borders as long as the neighboring countries remain adamant on being used for smuggling.“We are not saying that the borders should be closed in perpetuity, but that before they can be reopened, there must be concrete engagements with countries that are involved in using their ports and their countries as landing ports for the goods that are smuggled into Nigeria.

“These engagements must be held so that we agree on the basis under which we can ascertain the kinds of products that are landed in their country and if the said products are specifically for their consumption. “But if the said products are landed in their country and transshipped into our country, then I think it is something we should not allow because it undermines our economic policy and the desire to ensure that our industries are functional so as to create more employment opportunities,” Emefiele explained on Monday.

President of the Plantation Owners Forum of Nigeria (POFON), Mr Emmanuel Ibru, while explaining the long and the short-term effects of the border access restriction policy, said while in the short run, rice and poultry farmers have been feeling the impact positively in term of price stability and margin appreciation, oil palm producers have not.

However, he admitted that in the long run, and if all oil palm imports are routed through the ports with all duties accurately paid, the price of imported crude palm oil should be at par with that of the locally processed one. And, if the policy survives the onslaught of pressures, he added, the long-term implication could be aggressive investments in the agro-allied sector, economic growth and development and eventual food security and prosperity through improved Gross Domestic Product (GDP.

Executive Director of the Nigerian Institute for Oil Palm Research (NIFOR), Benin City, Edo State, Dr. Celestine Ikuenobe, also backed the policies, saying though Nigerians might have to pay some price initially, the long-term economic benefits would far outnumber the temporary setbacks. Dr Ikuenobe explained that inability of the big agro-allied industry players to import raw materials would compel them to utilize the available resources to produce the materials, and in the process, create more job opportunities and trigger a kind of agro-economic revolution

In the same vein, Professor Charles Arizechukwu Igwe, Vice-Chancellor, University of Nigeria, Nsukka, has advocated drastic policy reformations and directions, among which are inward-looking and maximization of renewable natural resources through agriculture.“The purpose of agricultural policies in the development of favorable and sustainable guidelines for the promotion of efficient agricultural practices that will guarantee food security, employment for the citizens and overall growth and development of the sector.

“It is expected therefore that agricultural policies should be able to harness the huge potential of agriculture in Nigeria in this regard,” Igwe said while delivering a lecture. Other benefits the stakeholders identified include the utilization of special intervention funding such as the Anchor Borrower’s scheme

The scheme, an initiative of the CBN, links farmers and off-takers of agricultural products together based on mutual agreement on the price of the product, quality, quantity and input supplies. Despite various challenges associated with the scheme, the farmer is helped to secure inputs, ready markets and pre-determined prices not affected by forces of demand and supply. Part of the challenges, however, include the relatively high cost of inputs and late disbursement of associated farming resources.

Chairman of Kebbi State Rice Farmers Association, Mr. Suaib Augie, told The Guardian that profitability is difficult as a result of the high cost of inputs from off-takers or third parties, though the scheme had empowered a good number of farmers to get back to the farm. Another rice farmer and processor in Iwo, Osun State, Mr. Ayoade Popoola, said as good as the scheme is, rice farmers in the zone had not benefited from it.

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