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Nigeria Spends N430bn Annually To Import Palm Oil

In this interview, the president of the Oil Palm Growers Association of Nigeria (OPGAN), Mr Joe Onyiuke, who is a lawyer and entrepreneur, speaks on how the federal government can attain mass employment, food security and stop the $500m (N430 billion at N860/$) spent annually to import palm oil into the country.


1.     How has Nigeria, a net producer of palm oil remained an importer?

Governments in the past were not developing small business holders while they developed other sectors that they felt were more organized in the sense that they had collaterals to pick up single-digit and long-term loans and all that.


However, the critical mass that will create employment and generate revenue for the government in terms of taxation and GDP growth was neglected in a way that they began to have numerous problems.


First, they were majorly handicapped in the previous administration and system of the country. Secondly, access to high-quality seed materials has been very low and even almost impossible.


Thirdly, access to funding to acquire modern processing mills to process high-quality products was not available and so they suffered so many post-harvest losses.


Most times, what they produced was below standard because they are using their bare hands and post-harvest losses are so huge. The provision of these facilities could create very big incentives to any farmer because they are major issues.


Also, the inability of our state governors to issue certificates of occupancy for people’s farms remains a huge setback for agricultural development.


When you issue C of O to them, you unlock their potential to have access to funding. This is because there is no financial institution in the country that would not ask for the basics when you request a loan. The socio-economic impact of oil palm is so large that today, our body cream, margarine, butter, mayonnaise, and even vegetable oil, are all bleached palm oil. The pasta, noodles, and biscuits, all these are from palm oil.


In fact, the demand for palm oil in food industries is so huge that it has been found in other things including cosmetics, paints, polish, and even pharmaceutical industries. And these are things that will unlock the potential of this country. So, the government should refocus on these three crops.


In the 1960s, we were known for cocoa, oil palm, and rubber. The Chinese and foreign investors were able to come in because of the raw materials that were available in large quantities.


Countries like Thailand, Indonesia and Malaysia used their crude oil resources to develop their own palm oil sector to create widespread employment opportunities and all that. They have policies in place to safeguard local production. You must check your borders to ensure they are not porous.


Look at how much the country has lost in terms of importation. Today, people are importing polished palm oil and vegetable oil in the name of crude palm oil into the country.


2.     Do they pay duties for all these bad items?

I hope this new administration will focus properly on cleaning up our system because we cannot allow people to sabotage this economy. We have industries that produce a lot of things from crude palm oil and once you bring the bad oil, you are destroying their businesses.


For instance, our members are not encouraged because nobody is selling. And by the way, Nigerians spend about $500 million every year to import these things because the local demand is so big.


3.     What is the government doing?

In the past, attention was given to the big players who controlled only 20 per cent.


But how can you neglect the critical mass? Look at the level of youth unemployment. And this is one sector that has women inclusion majorly in the entire value chain; If the government is able to channel their resources into research.


NIFOR was set up in 1938 by the British known as the West African Institute for Oil Palm Research. Today it is called the Nigerian Institute for Oil Palm Research. We thank God for the executive director who has now renewed that decaying institution to a level that we can say we are proud of.


Before now, it was in a sorry situation but thank God for the new management, which has done a lot of work and our farmers have benefited so much.


In December 2020, we were given a total of 169,000 sprouted nuts as gift from the Ministry of Agriculture which we shared with our members. We looked at how the whole system was in disarray. And we needed to organize our members.  We then found out that we had only 24 states in Nigeria recognized by the Ministry of Agriculture as oil-producing states. But we had more than that, up to Taraba and Adamawa state.


So, we went to the minister, and we increased the number to 27 because we went there to make sure we can have oil palm production in other parts of the country so that the country can benefit. We have given back the sprouted nuts to NIFOR to help us raise them to the seedling level because that’s the most critical part of oil palm development.


So, we told NIFOR to help us groom them at a discounted rate. We are certain that before the end of this month, we will organize a town hall meeting to start distribution state by state.


Those seedlings are very expensive, but they have been highly subsidized. Now we are going to do a major distribution; going with NIFOR to teach our members how to take care of the seedless.


We need to sensitize our people to go back to farming because that is the future we have in this country to move people out of poverty completely.


Today, one ton of palm oil is about N1 million and so if a man is doing an average of eight to 10 tons on one plantation, he is already a millionaire. And if you sell the fruits to big mills that have the capacity to mill, and they pay you good money, they will have enough money to take care of themselves, their families and even the farms.


Again, we got nutcrackers from the Ministry of Agriculture, 20 in number. That has already been distributed to 20 states.


We are also talking to governors because they hold the key to helping these farmers access funding. We must commend the new governor of Cross Rivers State, he has shown deep understanding, passion and commitment to change the story in the state. But other state governments must take a cue from that. It is not about playing to the gallery, but it is about doing the critical work.


Nurseries are very key because without them you cannot have those certified seedlings. The problem we have today is that our trees were planted in the 60s, apart from the wide grooves. There must be a very systematic plan to replant the whole entire plantations of these wide grooves and semi-wide grooves.


And those plantations that are already very old have to be replanted. You can imagine that if the $500 million gap that we have is taken out, we would have enough money to meet our needs in the country.


4.     Why would a noodles manufacturer in Nigeria rely on imported crude oil palm when it can source it locally?

There are two reasons. One is that the supply in the country is lower than demand, so there is a big shortfall; a shortfall of over 500,000 metric tons. So, they have to look outside to remain productive.


If you go to Port Harcourt, our palm kernel shells that were discarded are being shipped out by foreigners.

The oil palm economy can unlock so much potential in this country, more than any other crop. You find palm oil in ice cream and chocolate; many people do not know this. Even in local medicines that you see in the villages, they use the oil to treat people who have seizures.


What our scientists have done to improve seeds/plants


The gestation period of oil palm is now three years, it used to be about seven years. This means that if you buy a seedling that is two years old, you begin to harvest it in one year. If you buy a one-year-old seedling, you begin to harvest in a maximum of two years.


However, the third year of the life of that sprouted nut, when you begin to harvest, is like when a child is maturing, so it has a very low yield. The fourth year is the main year. So, technically speaking as a farmer, the distance between you and harvesting is three years or two years.


NIFOR seedlings guarantee you eight tons per hectare when it begins full yield. Then it can go up to 25 tons. If you are able to adopt the best management practice, you can do up to 30-35 tons per hectare. So, if a farmer has 100 hectares, you are a multi–billionaire.


Our farmers have no business with poverty if only we can key into the system and do this business very well.


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