Cheap funding, improved seedlings can help unlock Nigeria’s palm oil potentials – Onyiuke
Joe Onyiuke, national president, Oil Palm Growers Association of Nigeria (OPGAN) spoke to select senior journalists in Lagos including Iheanyi Nwachukwu, BusinessDay’s Assistant Editor. Onyiuke, a lawyer and entrepreneur whose business empire crisscrosses agriculture, hospitality and law said that Nigerian Institute for Oil Palm Research (NIFOR) has been the Association’s lifeblood. Excerpts
Why should noodles manufacturers in Nigeria rely on imported crude oil palm when they can source that locally? Also, what is the place of crude palm oil in Nigeria’s revenue generation?
There are two reasons. One, 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.
In essence, we are shipping our employment and the benefits of the economy outside. Take a look at all these disinfectant soaps we see around; a lot of international companies have made a lot of money from Nigeria. This is an industry that would normally have been sourcing locally and producing locally in Nigeria but you can imagine how much money over time that has gone out of this country.
The impact can never be over-emphasised because a product can feed many industries including the food industry, cosmetic industry, pharmaceutical industry and even biodiesel, and ethanol.
Today, Japan has amassed so much palm kernel shells to build a power plant across Japan. They discovered that palm kernel shell has the same thermal value as coal without any impact on the environment.
If you go to Port Harcourt, our palm kernel shells that were discarded are being shipped out by foreigners. Thank God that our local industries have started to use palm kernel shells to power a lot of their industries.
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, people use the oil to treat people that have seizures.
It is estimated that Nigeria can generate up to $ 20 billion from oil palm processing. What are the things that can be done now to realise this?
Fund the small, older farmers who are already organised and control 80 percent of the industry. Give them access to cheap funding, and access to improved seedlings, fertilizers and processing equipment.
The government should create access for smallholder farmers to have processing plants so that they can process. A World Bank report states that the reason why African farmers remain poor is their inability to add value to what they produce.
It can also benefit the creative industry and our local tourism industry. There is nothing that is a waste in oil palm, from the leaves to the root. Even when a palm tree is old, it begins to generate a drink, which is called palm wine.
Today we are drinking champagne from Europe. If palm trees were to be in Europe, we would be buying palm wine in bottles, these added values are lost including ethanol that people come from other places to get.
There is so much local capacity that we need to build. And governments must fund Nigerian Institute for Oil Palm Research (NIFOR) adequately for research purposes. And they must satisfy a company to produce seedlings and set up an oil council that would be able to regulate the industry.
We need a long-term loan of between 5 years and 10 years with single digits to help people build this capacity. Once you give them a Certificate of Occupancy (C-of-O), it helps them access funds. Because as a lender, once you know that a particular plantation can be valued, you would be willing to give a loan to the farmer.
Crude oil palm is a long-term investment with very little work. Just need to adopt those best management practices like pruning, clearing and applying organic manure. It would help create a lot of employment. The government should pay attention to the tree crops like cashew, cocoa, oil palm, and rubber. This is our future.
You have a presence in 27 states. Would it not be more advantageous if you concentrate your efforts within the belt where this oil palm yields are the highest?
It is not just about my ideas; it is also about people living in those areas who are making a living out of the products. We are already an umbrella for all of them. In the South-South, South East and South West, they are already producing it naturally. In the North Central; Kaduna, Benue, and Kogi are natural habitats for palm oil. Niger State is a border-line with Kogi, very rich in palm oil, even Taraba.
We have to encourage our citizens in this country because there is so much unemployment. A lot of youths sell their lands to go to Europe and when you see their condition over there, you pity them. The money they spent on buying the tickets, if they were properly advised, would have been used to start up a palm oil plantation.
We have engineers who have no work. If you go to some states, you see the oil palm mills are massive like refineries. If you see what our youths can do with their bare hands, you will marvel. All they need is little help. We can produce all the equipment we need in this country.
We have the hands who are saddled to build these industries. We have the people that can maintain them and distribute their spare parts. From that oil palm, you go to refineries. When you are refining oil palm, you are producing a lot of glycerine ethanol, palm olein and so many byproducts that can feed other industries.
Again, oil palm is a product that has the capacity to generate its own power so the oil mills can generate their own power and even for the villages around it. This is the only crop in the world that has two oils; red oil and palm kernel oil.
That is why, as a country, we need to begin to think properly, put our energy where our mouth is, put our resources and develop local capacity.
The advocacy for government assistance in agriculture cuts across all value chains. Over the years your sector has been advocating, how much assistance have you gotten and what impact has such assistance yielded?
The biggest problem with government policies in the past was insincerity. The real farmers do not get these incentives because of the roadblocks on the way but thank God we have a new government, a government that understands how business is done.
The biggest problem before was ghost farmers, but oil palm is an industry where you cannot have ghost farmers. Other crops take an average of between two months and six months to harvest, but oil palm takes harvest up to 30 – 35 years. So, your bio data is attached to the geography of where your farm is. That cures the risk of ghost farming.
Again, we are on the ground, when we came into the office, we realised that you cannot be doing Association of Oil Palm without a physical office structure. So, the first thing we did was to establish offices across the states. Each state has its own executives, holds regular meetings, and a database of its members, some of them have even developed cooperatives doing business in one way or the other. We have our national office in Abuja because that is the centre. We furnished the secretariat with furniture, some of them with computers. All this comes from our pockets, not government funding. The only government agency that has helped us is the Ministry of Agriculture. And you know that the Nigeria Institute of Oil Palm Research is part of the Ministry.
What level of facilities would be handed to your industry to ensure optimum value?
The economics of production is not off-head, but the point is that we do not have the foundation and we want to lay that foundation. The foundation of sustainable oil palm production is nurseries. The government needs to help us to establish nurseries to be able to feed the plantation. The nurseries take a minimum of one year. So, if you don’t do that work, we are speaking grammar. Those nurseries will feed the old plantation that we have that must be replanted. This is because the yields from the older plantations are lower. Because the yields are lower, the supply is also low. This has generated or created room for adulteration in the industry. People are bringing in chemicals and people are dying from all sorts of diseases. So, the government really has to come to the aid of the oil palm industry in this country. The government has to empower our members.
The foundation I am talking about is nursery establishment and production. We have to go back to planting as our members are majorly farmers and the government has neglected it for so long, that is why we are suffering. They have neglected 80 percent, which is the core citizens of the people that will be able to put food on their table. This gives you security, gives you taxation and a lot of value chain stability as a country.
If the government has utilised the human resources that we have, especially now that farming is digitalised, it would go a long way. Technology has made things so easy, and our youths are high-tech inclined.
Farmers are regarded as poor people because the government has not paid attention. The system is so broken down that people are just recycling poverty everywhere. Some people now wait for the end product, they buy the ones from the farmers at the bottom prices, and then go and add chemicals to increase the quantity. They are the ones killing people and making all the money because they have no regulations. Governments must regulate. People that are producing seedlings have to be licensed and regulated to ensure that they have the knowledge and capacity.
The government must improve funding in NIFOR for research because without it, as a country you are going nowhere. How much is the research component that goes to agriculture? It is a no-brainer that this is the only way forward for the country. The government should just fund these things adequately, fund the farmers directly and make it easier for them, and remove all the multiple taxations. All these would encourage people to go back. Another thing is to close our borders from palm products coming into the country. Some people abuse this by bringing in palm olein in the name of crude palm oil.
What are the minimum requirements for a new person to come on board?
When I came in, I told my excos that registration must be free. I funded it. And in the aspect of farmer education, I have funded a lot of our members to go for NIFOR training. They go back to teach those people in the States. Some sort of train-the-trainer programme. Also, I talked to myself, I said that we needed to do an online radio and TV. I started making research, I registered and got a license. I have registered Oil Palm TV Limited and Oil Palm Radio Limited. We are the only association that has a secretariat in NIFOR today.
NIFOR has been our lifeblood, our heart and our soul. Without NIFOR, we are nowhere. They have been supporting our farmers even with bare resources. The Director General of NIFOR, Celestine Ikoenobe had done so much and has sacrificed so much.
We wanted our scientists to key into the knowledge industry, so at Oil Palm radio and TV, we have done the test run in our office, so we are now building a studio and in a couple of weeks, it would be ready for its official launch. It would be live and you can key in from anywhere in the world. This would benefit our members because everything would be about education. The value chain is so large that it cannot be exhausted. We would develop different programmes where we would have directors in various aspects including directors of nursery, extension services, production etc that would be invited live to train our people. And if our members have any questions, they will be asked immediately, and they will answer you.
What have your scientists done to improve the seeds/plants?
The gestation period of oil palm is now 3 years, it used to be about 7 years. This means that if you buy a seedling that is 2 years old, you begin to harvest in one year’s time. If you buy a 1year 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 3 years or 2 years.
NIFOR seedlings guarantee you 8 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.
What relationship do you have with the Edo State Government and what lessons can other states learn?
Edo State governor must be commended, and other state governors must learn from him. But there is still so much to be done to attract investors. There are still a lot of issues relating to insecurity and all that. They have communities who come and hijack people’s plantations. This is unbelievable. I have gone to meet the government agency in charge of this to make an official complaint. The governor, however, is doing his best.
Even the big players like Okomu Oil and Presco still experience these kinds of issues and the issues of multiple taxation. So, the government needs to do more. The most important thing is that the government must pay attention to smallholder farmers who have the key to unlock the potential because we cannot do it without them. They are well organised and they have structure. Imagine what they can produce, Nigeria would be able to overtake Malaysia and Indonesia again because of the number and land size we have.
What is your advice to the incoming Minister of Agriculture with regard to giving particular attention to this sector?
He needs to organise the smallholder farmers, unbundles and mitigates a lot of risks. Any foreign investor that comes into Nigeria to invest in any part of our agricultural chain that is hurting the local producers is not an investor. The Minister should go to the field and see for himself what the people are going through. He is the minister of Agriculture not the minister of boardrooms.
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