Mixed reactions trail FG’s ban on foreigners’ purchase of agric commodities

By Onome Amuge.

The Federal Government of Nigeria recently reaffirmed its ban on the direct purchase of agricultural produce from local farmers by foreign merchants, maintaining that only licensed and duly registered local buying agents can buy products directly from farmers in the country.

Mohammad Abubakar, minister of Agriculture and Rural Development, made the announcement during the 4th edition of a two-day Women Enterprise Alliance (WENA) conference in Abuja with the theme “Rethinking Paradigm Shift in Agriculture and Initiatives to Enhance Food Security”.

Abubakar explained that the Federal Executive Council (FEC) approved the ban because most foreign merchants in Nigeria who purchased agro-commodities at farm-gate prices were taking advantage of local farmers by paying less for their produce.

“On allowing foreigners to buy produce from farmers at farm-gate prices, about a month or two ago we were able to get a memo approved by the Federal Government through the Federal Executive Council on this issue,” the minister said.

“So no foreign merchant will come and buy at farm-gate prices. That memo has been approved. And why is this so? When they (foreign merchants) buy at farm-gate price, the farmer gets much less than what ordinarily he or she should receive,” he said.

Three months prior to the minister’s announcement, the Federal Executive Council had approved a memo banning foreigners or their agents from purchasing agricultural commodities at farm gates across the country.

Niyi Adebayo, minister of industry, trade and investment, said foreigners have been going to the farm gates to buy produce from the farmers at low prices, thus discouraging the farmers from continuing with their trade.

The implementation of the policy, Adebayo noted, would ensure that the foreign traders go through accredited local agents to buy farm produce.

He further explained that the ban was necessitated by the need for the government to establish an appropriate mechanism that would protect local farmers in terms of achieving the right prices for their goods and commodities.

“The policy is part of the mechanisms to ensure competitive prices for commodities of indigenous farmers in a bid to protect them from exploitation and also ensure that they have the appropriate incentives to guarantee their continued participation in their trade,” he added.

Following the ban, some experts in the agricultural sector have commended what they described as the government’s quest to restructure the local commodities market. They expressed optimism that the move would consequently enhance a better pricing system for the benefit of local producers, especially farmers in the rural areas who make up the vast majority of indigenous farmers.

Commenting on the development, Ibrahim Kabir, president, All Farmers Association of Nigeria (AFAN), voiced his support for the government’s action, noting that the foreign middlemen pay farmers low rates at the farm gate.

“I know in the Kano areas, some Lebanese go to our farms to buy things and some Chinese also go to buy from the farm.

“So, once you buy from the farm gate the farmers sell at a low-bottom price but if you come to the market and sell directly that means you will get your small profits, ” he said.

Speaking in a similar vein, Olanrewaju Akintobi, agriculture expert and chief executive officer of Lanse Farm, Abuja, said the federal government’s decision would help local farmers maximise profits.

He, however, pointed out that the ban would achieve the desired result if supported with the much-needed advisory and proper execution.

“It is at this point that the commodity exchange commission needs to come into play because these farmers don’t even know the actual value of their produce now. If you are saying that foreigners should stop buying from farmers, then the exchange commission needs to come in to help the farmers understand the pricing for their produce so as not to be shortchanged at the end of the day,” Akintobi said.

Olusola Azeez, a commodities trader based in Ilorin, Kwara State, commended the government’s action, saying that a lot of foreign farmers had in the past exploited and under-compensated local farmers by buying their produce at ridiculous prices.

Azeez further noted that the ban would lead to an improvement in the local value chain and also curb scarcity of food items.

The implementation of the new policy has, however, been greeted with criticisms by other experts and stakeholders in the agriculture sector, who argued that it is likely to result in a limited market for the local farmers.

Angel Adelaja, founder of Fresh Direct Nigeria, an agro-allied services company, in a Twitter response to the ban announcement, noted that the government’s decision may affect Nigeria’s competitiveness in the global market except if the farmers have priority to register as agents in a subsidised/free manner.

“While I understand the fear of foreigners coming in as middlemen and low-balling farmers, we need to see that we might just be adding more middlemen which may pose more problems for the farmers,” she added.

Wale Oyekoya, former chairman, agriculture and non-oil sector at the Lagos Chamber of Commerce & industry (LCCI), described the ban as counterproductive, saying that it would make many farmers lose their produce to wastage if not sold in good time.

According to Oyekoya, about 60 percent of what local farmers produce in Nigeria are at risk of post-harvest losses due to numerous challenges in the agriculture value chain.

“These people (the foreigners) that you are trying to ban from buying our farm produce add value to what we cannot add value to and indirectly help in curbing crop spoilage and its resultant losses for the farmers,” he said.

The CEO of Bama Farms Ltd, a Lagos-based food service outlet, opined that restricting foreigners from directly purchasing agro-commodities at the farm gate is the least of the problems of farmers nowadays.

He added that the government should, instead, intensify efforts towards addressing more pressing issues such as infrastructure deficit, insecurity, lack of storage facilities, among other major factors affecting prices of agric commodities locally.

“What happened to commodity price control? There is nothing like price control in Nigeria. That is why you see all kinds of stuff just coming into the market without price regulations.

“Foreigners coming to mop up what we have at the farm gate is not the issue here, but the policy that is going to be sustainable to really assist the farmers and to bring the price of goods down completely is what the government should pursue,” he said.

Iyare Harrison, CEO, Harry Portal Farms in Benin, Edo State, also frowned at the federal government’s ban. According to Harrison, the local middlemen who the government is now making farmers’ only source of trading have done more harm in exploiting local farmers compared to the foreigners.

He added that the foreign traders blamed for the exploitation of indigenous farmers actually engage in a smaller amount of trade with the local farmers compared to the middlemen who are responsible for most of the direct trade engagements with the indigenous farmers.

Harrison further noted that local farmers have the right to sell their produce to foreign buyers in the market if the foreigners offer better deals than what local buyers are offering.

“If the government is really interested in helping the farmers, it should concentrate on making investments that would improve farm productivity, which will not only bring down the cost of production but also lead to better pricing for local farmers,” he said.

Harrison encouraged local farmers to build and adopt innovative marketing strategies and execute effective marketing plans while maintaining their daily farm operations. This, he said, would enable them to enjoy a beneficial pricing for their commodities.

He also urged farmers to make a push towards online marketing, saying it is likely to turn out to be a long-term boost for farmers, given that the commodities market is fast becoming a digitalised affair.

“This moment presents a glaring opportunity for local farmers and individual producers to scale up their online presence and connect with buyers who are readily available online,” he said.