Why Nigerian cows can’t produce more than one litre of milk – Ogbeh
The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, in this interview with Okwe Obi, explains why Nigerian cows do not produce the required quantity and quality of milk as well as why some of the policies he introduced received backlash from farmers. He highlighted some of the harrowing challenges the administration is facing and workable holistic approach that can be adopted to wriggle out of them.
CBN lending rate reduction
We have been advocating this for many years before we came here. I have always had this strong feeling that the lending rate in Nigeria simply could not sustain growth in the economy. Those interest rates before now have been responsible in a large measure for the slow growth and high incapacity of Nigeria to create jobs for young people in particular and for the economy to flourish. So we want to thank the Central Bank of Nigeria (CBN), the Bankers Committee for listening to our appeals and wish to assure them that this bold and revolutionary policy is deeply appreciated by farmers and manufacturers alike. I see it as the first major step we are taking towards reversing the horrible damage done to Africans by Structural Adjustment Programme (SAP) in the mid-80s. We congratulate President Muhammadu Buhari, and all those Nigerians who have been making this appeal over the last three decades.
READ ALSO: Falana asks CBN, FG to account for recovered funds
We want to also urge borrowers, especially farmers and industrialists, to ensure that whatever they borrow they repay because banks are not charity organisations. We in the Federal Ministry of Agriculture and Rural Development will join hands with the banks and CBN to play a major role in making sure that what farmers borrow they repay especially as we intend to use the cooperatives to move agriculture credit to the vulnerable segments of our population, namely women and the youths.
We believe that under these conditions our youths, women, big and small scale farmers can now have access to credit to fulfill their dreams and drive Nigeria towards self-sufficiency in food production and make Nigeria a major force in agricultural production worldwide. I will like to add a few details from CBN about where we stand in agriculture lending. In fact, the banking credit to agriculture has risen from N460 billion at the start of 2015 to N523 billion as at today. But you see, it represents only 3.241 percent of total credit to Nigeria’s borrowers. It is a distant cry from the lending to oil and gas which stands at 22.5 percent, while manufacturing received only 13.1 percent of total credit from banks as at the end of second quarter this year. This information is from the National Bureau of Statistics (NBS). This is why the recent policies championed by this ministry and CBN is very welcomed.
I urge you all to do your best to extend our hearty congratulations to the banks and would-be farmers because there is no excuse for lagging behind. The CBN warns, however, that this money is not for lending to traders and individuals who are under the guise of agriculture or manufacturing. Secondly, CBN urged banks to lend this money to farmers at 9 percent interest rate and nothing more. The CBN cautioned banks against putting invisible charges on the credit. We need to grow this economy and feed this country. The population is growing at a frightening rate and we cannot afford a situation in which some day Nigeria will have shortfall of food and we begin to experience the kind of problems Venezuela is facing. My heart goes out to Venezuela because not too long ago, the country supported Nigeria’s growth in our security with $4 million through the food and agriculture organisation. It is painful today to see what they are experiencing. Even though they too have an oil economy, things have got really rough for them. We must try hard not to let that happen anywhere on planet earth. We assure Nigerians that this ministry will continue to be in the vanguard of growth in agriculture, agro-processing, value addition and in particular, exports because the oil and gas era may not be with us for too long.
One project, which has benefitted from lower interest rate is sweetening sugar; the meals production saves this country around $100 million annually. That is the kind of stimulation we want for this economy; job creation, foreign exchange savings, foreign exchange earnings and in particular, employment for younger people. The plight of our youths is extremely worrying. The tendency for them to want to cross the desert to go through Libya to Europe is something that really bleeds the heart. They believe that when they go to Europe, they will find a paradise, which is not exactly true. It is not even fair for unskilled young people invading their population and experiencing all kinds of hardship. We need to create jobs here and keep our youths busy and replace the ageing population of farmers by younger ones who need money, technology and special skills to produce food. I appeal to farmers that if you want to take this loan you must swear to God that you will pay.
Advocating for less interest rate
Yes. We are pushing for 5 percent. CBN has given us 9 percent and we are grateful to them. We are talking to Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL); they do de-risking. By the time NIRSAL comes in and we discuss the details, we may get lesser figure. I don’t know if we will get 5 percent but we will definitely get something less than 9 percent. But 9 percent is a far cry from 20 percent.
READ ALSO: NIRSAL distributes N2.9bn to sustain rice revolution
Commencing full implementation
Almost immediately. We have appealed to banks to facilitate the process. Fresh agreement
is in this new arrangement. It does not cover old loans, unfortunately.
Agriculture taking over oil and gas in job creation
Yes. It is quite obvious now. Oil and gas may not endure for much longer. There is so much volatility and research in the world that new sources of energy are being found. If you go to Germany or France, they have set date to stop hydrocarbons usage. Then you find a company like Tesla in the United States building vehicles that run totally on battery. So it is very likely that diesel and kerosene will seize to be in much use in the near future. Even India has fixed a date to stop the use of hydrocarbons and they are working hard on it. So if we continue to depend on petroleum, we may wake up one day and find out that those revenues we are getting are no longer there. Yes, agriculture will be the in-thing. Right now, the rice sector alone in this country employs 12.2 million people up from five million in 2015. I am quoting the rice farmers association. Not to talk of nearly 300,000 in the rice mills and yet we have not achieved sufficiency in rice production. We are looking at another year and a half and another 20 big rice mills before we can get to what we want to do. And the beauty of it is that we must eat. So the future for agriculture simply cannot be exhausted.
Agriculture growth rate 1 percent
We have just ended the season and the next harvest is beginning in about a month. During the dry season, farming is very low and we don’t have much irrigation. You will find the figures in October and November much higher than what you saw. When we go through that spell, we will climb in the rainy season, which makes agriculture 90 percent and that is the reason. But 22 percent is big. One of the factors is what we mentioned just now, which is the interest rate. People want to go into processing and value addition. We lose a lot of what we grow to post-harvest catastrophe due to lack of storage facility, transportation and village roads are simply not maintained because the local government system has collapsed. So farmers can’t even move their crops to centres where they will sell them. We have things in demand in Europe but we haven’t yet arrived at standards demanded by our buyers. Even the packaging and the processing for us to be able to hit the European market and do what others are doing, like Kenya in East Africa, Cote d’Ivoire and Ghana on pineapples and all kinds of crops they export.
So agriculture will remain at 22 or 25 percent for a while until we intensify irrigation and production and also deal with the question of cattle, which represents 7 percent of GDP and yet a cow walks from Adamawa to Lagos and loses 40 percent of its weight. The Nigerian cow gives you one beer bottle
of milk per day and cows in Europe are producing 40 litres. The reason is simple: our cows walk too much. They don’t have water to drink and proper grass to eat. It is not just any kind of grass. There are special kinds of grass for cows producing milk or beef. Now, when you talk about it, social media will go to war. I forgive them because they are ignorant of the processes. But they need to learn more. We are professionals here and when we say these things we know what we are talking about.
So we have to grow our agriculture and to grow agriculture we need cheaper credit; 18 percent, 25 percent and 35 percent is for traders not producers. I have complained about this since 1986. I was travelling to Hong Kong and when I phoned home I was told that the Structural Adjustment Programme (SAP) had started. And the dollar was being auctioned. That day, I said to my friend that this is Nigeria’s journey to disaster. We carried on devaluing our currency for 32 years. I don’t know where the economists discovered this marvellous formula.
I have never seen any country practicing that kind of nearly insane monitoring policy. As a result, it was better to import than to produce. Then interest rate went up to 35 percent. A friend of mine told me he borrowed at 45 percent. I keep saying this because economics is 90 percent common sense. We committed suicide then. And this is the first major attempt to redeem that disaster. That is why I am so excited about it.