According to the Food and Agriculture Organisation of the United Nation (FAO), the world risks a looming food crisis unless urgent measures are taken to protect the most vulnerable, keep global food supply chains alive and mitigate the pandemic's impacts across the food chain.1 As the rest of the world moves into a stage of economic recovery, countries unable to set up functional infrastructure and leverage technology to improve agricultural production and food supply chains will undoubtedly become more susceptible to the difficult times ahead.
Agriculture (and technology) as a Path to Nigeria's Economic Diversification
The agricultural sector in Nigeria remains a dominant economic force, contributing 25.2 % (N10.50 trillion) to the nation's GDP2 as at 2019. While this might seem impressive, according to estimates Nigeria has also lost up to $10 billion (ten billion United States Dollars) in annual export opportunities from groundnut, palm oil, cocoa and cotton alone, due to continuous decline in the production of those commodities3. Subsistence farming is insufficient to meet the challenges of the industry including rising cost of supplies, labor shortages, reduced productivity, changes in consumer preferences and so on. As a matter of national strategy, it is incumbent upon the federal government to facilitate the use of technology and innovation to boost agriculture as a means to speed up the economic recovery that it desperately needs post-COVID-19.
Major technology innovations have emerged in the agricultural industry including vertical farming, automation and robotics, precision agriculture and artificial intelligence, blockchain, cloud farming and so on. And while not every solution is suitable for every jurisdiction, there are some critical elements to sowing the seed of an agricultural revolution. Farmers require access to information and recommendations about soil, weather, and market conditions in real time. Other technologies that should be prioritized are those that can assist in maximizing yields, increasing efficiency and solving issues such as food fraud, safety recalls, supply chain inefficiency and food traceability.
Global Perspective on Utilization of Agriculture
Countries like India have essentially provided a blueprint for an economic recovery agenda driven by agricultural technology. Before the COVID-19 pandemic, India had invested in agriculture with about 55% of its population involved in agricultural activities, accounting for about 14% of the Indian GDP. 4 The pandemic has led the country to deepen its track record of innovation by including more technological advancements in farming. These include irrigation and air seeding technology which improve farm yields to levels superior to pre-pandemic levels. The Indian government also facilitates the use of technology for monitoring and controlling crop irrigation systems via smartphone, ultrasounds for livestock, crop sensors, mobile technology, and cameras on the farm. 5 Two major farming innovations however stand apart:
- The Electronic National Agriculture Market (eNAM) – eNAM is an online pan-Indian trading platform for agricultural commodities which was set up to connect all farm markets. The platform connects all small-scale markets with consumers to support the food-chain and ensure that the goods are available to the needs of consumers. The market facilitates online trading in commodities between farmers, traders and buyers to help in better price discovery and provide facilities for smooth marketing of their produce. Trading is enhanced through the use of trading computers or the eNAM mobile application which houses farmers, traders and mobile payment gateways.
- 'Uberization' of Farm Produce – lockdown measures and the closure of public transport led to an exodus of labourers and transporters from farming communities. This posed a problem because of the difficulty in getting goods from the farm to processing centres and to the end consumers. Also, online retailing increased exponentially to provide a platform for sales. The government assisted in resolving the problem of deliveries by launching an application, much like an 'uber' of the agriculture industry, that helps farmers and traders find transport vehicles to move their goods around. This system ensures that goods meet their customers quickly and efficiently. 6
Charting Economic Recovery Post COVID-19
To ensure a sustainable economy post pandemic, Nigeria needs to look into farming on a larger scale by adopting smart technologies. The Federal Government recently released its Economic Sustainability Plan 2020. Headed by the Vice President, Professor Yemi Osinbajo, the Presidential Committee charged with the development of the Plan, was given the mandate to develop initiatives in direct response to challenges posed by the COVID-19 pandemic. Under the Plan, key projects have been put forward by relevant Ministries to sustain economic activity, boost production, maximum jobs and conserve foreign exchange. One of such projects is known as the Mass Agricultural Programme.
The Mass Agricultural Programme was conceived to span the entire agricultural value chain, from 'farm to table' with an estimated cost of N634,000,000,000.00 (Six Hundred and Thirty-Four billion Naira). The programme is expected to bring between 20,000 and 100,000 hectares of new farmland under cultivation in every State of the Federation through a multi-layered approach. Smallholder farmers will receive support directly or through out-grower schemes. This will be by way of services and inputs including land-clearing, ploughing, provision of seeds, saplings, fertilizers, pesticides as well as extension services, storage to mitigate post-harvest losses and equipment. Farmers will also be linked to low-interest input financing. The increased production will be purchased by private sector anchor purchasers (e.g. large conglomerates), agro-processors, commodity exchanges and procurement for government strategic reserves. 7
The Mass Agricultural Programme is expected to create millions of direct and indirect job opportunities over 12-months as a significant number of Nigerians are incentivized to engage in farming and agro-processing. Any unsold produce will be purchased at a reserve price by relevant agencies on behalf of the Federal Government. To facilitate access to farms, there will be extensive construction of rural roads, using locally sourced materials like granite and rocks. In sum, the project will expand production and output by working closely with the private sector to address all issues along the agricultural value chain, including production, harvesting, storage, transporting, processing, and marketing. 8 The Plan unfortunately does not factor in projects that will involve the introduction of technology to expand production and output. It is advisable that the government expands the Mass Agricultural Programme to include technology like vertical farming and robotics automation in its implementation
The Central Bank of Nigeria (CBN), also in response to the severe effect of the COVID-19 pandemic on the economy, particularly in agriculture, has introduced the CBN/NIRSAL Agri-Business/MSME Investment Scheme (AGSMEIS). 9 The AGSMEIS provides funds up to Ten Million Naira (N10,000,000) at 9% per annum for up to 7 years to eligible start-ups and existing businesses and entrepreneurs. 10 The facility is intended to provide liquidity for businesses including agri-businesses and to slowly steer the economy to normalization. 11 It is hoped that the initiative will complement the Federal Government's efforts to promote agriculture, by leveraging small/medium enterprises (SMEs) as vehicles for sustainable economic development and employment generation. 12
Mr. Abubakar Kure, the Managing Director of the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance bank, on behalf of the CBN, noted that the disbursement of the N50 billion Targeted Credit Facility (TCF) to the beneficiaries has commenced. 13 The CBN Governor, Godwin Emefiele also noted that the only way for the country's economy to bounce back is to ensure aggressive investments in manufacturing and agribusiness sectors, post COVID-19.
The following measures have been recommended by experts as essential to seeing a sustainable revival of the economy through agriculture: 14
i) Increasing budgetary allocation to agricultural sector by 30% of current allocations.
ii) Reducing interest rate on investment in agricultural production, and extension of moratorium periods on existing intervention facilities.
iii) Strengthening institutional frameworks for rural agricultural development including research on improved inputs and technologies.
iv) Improving maintenance and provision of rural infrastructure to minimize post-harvest losses and enhance product evacuation.
v) Establishing regulations to put in place standard pricing to ensure farmers are not at the mercy of purchasers and also engendering a ready market structure.
vi) Investing in and adopting the use of technology to advance farming activities.
vii) Reforms in input procurement and timely distribution to reduce dependence on import and ensure price stability, among others.
If Nigeria is able to implement these measures, execute the Economic Sustainability Plan and infuse technology into its farming activities, it may well provide the adrenaline boost to an economy in need of new ideas.
Footnotes
1 FOA, "Q&A: COVID-19 pandemic – impact on food and agriculture" http://www.fao.org/2019-ncov/q-and-a/impact-on-food-and-agriculture/en/ accessed June 15, 2020.
2 BUSINESSDAY, "The leading contributing sectors to GDP in 2019" https://businessday.ng/research-reports/article/the-leading-contributing-sectors-to-gdp-in-2019/ accessed June 15, 2020.
3 FOA, "Nigeria at a glance" http://www.fao.org/nigeria/fao-in-nigeria/nigeria-at-a-glance/en/ accessed June 15, 2020.
4 https://www.jagranjosh.com/general-knowledge/importance-of-agriculture-in-indian-economy-1446805370-1; Accessed June 19, 2020
5 https://www.downtoearth.org.in/blog/agriculture/applying-modern-tech-to-agriculture-66017#:~:text=As%20time%20passed%2C%20more%20technological,and%20fibre%20that%20was%20grown., Accessed June 16, 2020
6 https://www.agroberichtenbuitenland.nl/actueel/nieuws/2020/05/12/covid-19-impact-on-indian-agriculture, Accessed July 7, 2020 at 1:00pm
7 https://media.premiumtimesng.com/wp-content/files/2020/06/ESC-Plan-compressed-1.pdf Accessed June 18, 2020
8 ibid
9 https://nigerianamericanchamber.org/sme-msme-opportunity/, Accessed June 16, 2020 at 7:29am
10 See 8 above
11 https://www.cbn.gov.ng/Out/2020/CCD/EDITED--Turning%20Covid%20Tragedy%20into%20Opportunity%20for%20New%20Nigeriat-- OpEd%20by%20Gov%20Godwin%20Emefiele--Tue14April2020%201.pdf, Accessed June 16, 2020
12 https://nigerianamericanchamber.org/, Accessed June 16, 2020 at 7:17am
13 https://nairametrics.com/2020/05/02/cbn-starts-disbursement-of-n50-billion-covid-19-intervention-fund/; Accessed June 16, 2020 at 7:40am
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