Experts guide Tinubu on plan to revive commodity boards, storage

During his inaugural speech, President Bola Ahmed Tinubu made a policy statement that his administration will use to drive the country’s agriculture.

The president said: “Rural incomes shall be secured by commodity exchange boards guaranteeing minimal prices for certain crops and animal products.

“A nationwide programme for storage and other facilities to reduce spoilage and waste will be undertaken.”

Michael Adedotun Oke of the Extension and International Department, Federal Capital Territory Agricultural Development Programmes, while reacting to the comments, said commodity exchange boards guaranteeing minimal prices will create food thinking that will be confronted with generated price control and values for money.

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He added that the “farmers, who are into crops and animal products will be able to make profit and different people will get into agriculture and make agricultural practices profitable.”

He however warned that there must be some policy and structure to leverage upon to make this come into realisation and also the distribution of inputs timely to the farmers and the issues of risk and uncertainty such as the weather forecast for farmers to know when to plant and avoid making lives difficult.

On his part, the president of All Farmers Association of Nigeria, Architect Kabiru Ibrahim, emphasised that addressing marketing and post-harvest loss may be the “elixir for prosperity among the smallholder farmers and the president has struck the right cord by this proposition.”

Kabiru agreed with the new president that this will better the lot of our smallholder farmers by creating economic opportunities for them.

He however hoped that President Tinubu will move further by appointing “a focused driver to do this and closely monitor the actual implementation” of the initiative to enhance the country’s agro-economy.

Also speaking with Daily Trust in Abuja, Dr Austine Maduka, National President, Community Allied Farmers Association of Nigeria (COMAFAS) and an agricultural consultant who highlighted the benefit of commodity exchange boards, said it has helped to enhance and promote large-scale agricultural production.

The consultant said it can contribute significantly to the stabilisation of agricultural product prices. To reduce the risks associated with price fluctuations, prices are fixed to be performed in trade at a pre-set time.

He also said the board can also aid in ensuring a sufficient supply of tradable commodities in the appropriate amounts and at the appropriate times on the global market. It has helped boost the supply and accessibility of raw materials to manufacturing sectors both locally and globally.

“It has helped to bring about the existence of an organisation of a standardised market where participants can exchange tradable commodities,” he said.

He warned, however, that the commodity exchange boards will fail unless “the new administration avoids engaging unskilled and inexperienced politicians, appointees, and contractors; we are already confronted with that problem, and it has led to low trading activities and investment.”

He also pointed out that the “idea of fixing prices ahead of the trading period often suffers certain fluctuations due to shortages or overproduction, which may warrant a change in already fixed prices of commodities.”

Dr Maduka, in particular, noted that Nigerian markets are not well-organised or specialised in dealing with commodities. The transactions are frequently suspected, adding that any committee with a purpose should include organisations like FACAN, AFAN, commodity association leaders and market associations, FMITI, NEPC and NAFDAC.

He added that agriculture-related tradable commodities, in particular, are impacted by weather and climatic circumstances as well as a lack of supply. The advent of year-round farming will lessen the unexpected difficulties.

The expert added that artificial scarcity is created when middlemen or agents are present. To reduce middlemen meddling, the government and organised private sector should establish a management board involving associations, commodity traders, and FACAN.

Dr Usman Ali Lawan, a young farmer, commonly referred to as “Farmer-in-Suit,” said Nigeria has made an attempt to organise the market through the Nigerian Commodity Exchange, but success has not been impactful.

He said the Nigerian Commodity Exchange started trading agricultural commodities on July 25, 2006. In July 2014, the NCX began trading electronic commodity receipts for cocoa, sesame, cashew, paddy rice, maize, sorghum, and soybeans to further develop the market and provide a new window in agricultural financing.

“Despite its laudable objectives, the Nigeria Commodity Exchange has recorded minimal success over the last 17 years with only 21 warehouses and 12 members trading only five commodities,” Dr Lawan said.

The farmer said that to target smallholder farmers, the exchange may employ straightforward technologies and fundamental phone features.

Farmers in a group can sign up to receive USSD SMS messages with information on market pricing, weather forecasts, and agricultural extension assistance. In addition to showcasing their output, this will guarantee that farmers receive the greatest pricing offers.

By giving farmers credits, the exchange can also offer warehousing services where a farmer should be able to obtain a loan to cover his immediate expenses while using his agricultural products as collateral for the loan if he puts his produce in designated exchange warehouses.

Due to the fact that the loan can be repaid when the rural farmer sells his or her produce, they will be able to manage their financial difficulties during the off-season, adding that this will improve rural farmers’ access to financing and their standard of living.

 “If the president’s speech is backed by the right political will and appropriate action plan, it is possible for Nigeria to have quality and affordable food in abundance. And farmers will earn more while the average Nigerian pays less,” he said.

On storage

Stakeholders say building storage in the rural communities needs adequate infrastructure, such as adequate roads, electricity, and an easy access point.

Mr Adedotun said focusing on storage facilities will be a positive development in the agricultural sector that will direct a positive course of action in food preservation and availability throughout the year, hoping that “they will be able to sustain this programme across the states of the federation.”

Experts said if the president achieves the dreams of storage, a credible market system, and spurring rural agro-economy, that will catalyse the attainment of affordable food for all and make food security a reality.