More dollars for farmers as Nigerian grains gain global traction – Businessday

dollar to naira

The fall in the value of naira against the US dollar is making local prices of grains attractive to foreign traders and has increased  demand for major grain crops in recent months.

The increased on Nigeria major grain crops such as millet, rice, and sorghum is making farmers smile home with the elusive foreign exchange, stakeholders say.

“Our grains are gaining a lot of traction now as a lot of foreigners are coming from neighbouring countries to buy from us. Local manufacturing firms are also sourcing locally,”said Abiodun Olorundenro, chief executive officer, Green Vine Farms.

“Farmers are making a lot of money as most of us now sell our produce directly on our farms without having to transport them,” Olorundenro said.

The foreign exchange crunch is forcing manufacturing companies to buy more of local grains to ramp up production.

Recently, Audu Ogbeh, Minister of Agriculture and Rural Development, had said in a YouTube message monitored by BusinessDay that Nigeria has huge harvest of rice and massive harvest of millet but is under pressure from neighbouring states.

“We find now that people are coming from as Algeria, Chad to load food from our markets. An average of 500 trucks is loaded per day. It is taking away the stock which we need to survive for next year. We have to start buying up grains to store because if the rains finishes in January, February to March before the next planting season you may find Nigeria very hungry,” Ogbeh said.

Farmers and experts faulted this line of thought, saying that what is needed is to put measures in place that will ramp up production.

“We should be talking about doing all-year-round farming and not depending on rain-fed farming. We have the arable land and population to make this happen. It takes three months to grow and harvest grains, so all-year-round farming is possible,” Muda Yusuf, director general, Lagos Chamber of Commerce and Industry (LCCI), said.

“The more opportunities we have for export the better for us as a country because of the dollar proceeds,” Yusuf said, adding that output can only increase when farmers have incentives and use mechanisation and modern farming techniques.

Nigerian major grains are rice, wheat, maize and sorghum with a production of 15.56 million metric tons and demand of 25.5 million metric tons per annum, according to the Federal Ministry of Agriculture. This shows a demand-supply gap of 9.9 million metric tons per annum.

A ton of maize sells for N130,000 on November 15 as against N57,000 sold in December 2015.  In January 2016, a ton of wheat was sold for N100,000, but this rose to  N140,000 in August 2016. The price is about N160,000 at the moment.

According to the Manufacturers Association of Nigeria (MAN), local input in the food and beverage sector has edged up to 73.36 percent since December 2015 as against 69.75 percent in December 2014.

Some farmers confirmed to BusinessDay that they repatriate their foreign exchange proceeds through the country’s land borders to circumvent the Central Bank of Nigeria’s (CBN) rule that exporters can only withdraw their foreign exchange at the official rate of about N305 to the US$. This way, they exchange their proceeds at the blackmarket rate which is currently hovering around N470 to the US$.