When Dangote’s $20 million investment in tomato processing factory hit the ground running in Kadawa, Kura Local Government Area of Kano state, two years ago, farmers heaved a sigh of relief for a significant set of reasons.
The 17,000 hectares of irrigated field with about 430,000 tonnes capacity was determined to make a substantial difference in the 900,000 tonnes lost annually to waste. Hence, growers saw a lush uptake channel as the group primarily sourced large quantities of the crop to feed its voluminous demand.
To boost cultivation, it also made an arrangement for farmers to get a guaranteed price of $700 per tonne compared to the then average price of $350.
“We have fully started operations today and the target is 1,200 metric tonnes per day. We are going to work with the farmers. They can afford to produce more because there is a processing factory and they don’t have to suffer losses like they did before,” Abdulkareem Kaita, the managing director, Dangote Farms Ltd. assured. The over 40 million tomato growers in the country also shared the same sentiment when processing firms like the Savanna Integrated Farms, Ltd., Erisco Foods Ltd., Manto Tomato Processing Plant and Wanunne Tomato Processing Plant, among others, came on stream.
In 2017, the federal government through the Ministry of Industry, Trade and Investment introduced a tomato policy to drive the Nigeria Industrial Revolution Plan (NIPR) and the administration’s focus on economic diversification.
The aim was to cut the economically and biologically unhealthy import of tomato concentrate by shoring up local production capacity of fresh tomato fruits that meet processing standard, efficiently raise the local output of tomato puree while eliminating post-harvest losses.
The goal was hinged on a 900 percent increase of import tariff from five percent to 50 percent and an additional $1,500 levy per metric tonne.
According to a document signed by Aisha Abubakar, the minister of state for Industry, Trade, and Investment, the government approved the specific trade measures to support the development of the sector, serve as a roadmap for the revitalisation of the tomato subsector and facilitate increased investment. It expected the policy to create opportunities for farmers, processors, packers and even fabricators of small-scale equipment while enhancing capacity for export to the ECOWAS sub-region and beyond.
“The trade measures include ban on the importation of tomato paste, powder or concentrate for retail sale; ban on tomato prepared or preserved by vinegar or acetic acid and others; increase in the tariff on the tomato concentrate and other concentrate from 5% to 50% and additional levy of $1,500 per metric tonne; restriction on the importation of tomato concentrate to the seaport to address abuse of ECOWAS Trade Liberation Scheme (ETLS),” the document said.
The policy further included tomato production and processing among industries eligible for investment incentives from the Nigeria Investment Promotion Commission (NIPC). Expectedly, the ban should increase patronage of local processors and by extension widen supply market for growers. But the policy has been handicapped on the altar of lack of implementation; availing importers of triple concentrate puree a field day.
Reliable sources told business a.m. that within the first six months of non-implementation, importers flooded the country with an equivalent size of a two-year regular import. The unbridled influx of the commodity into the Nigerian market has created a stifling environment for processors’ thriving.
Nigeria’s teeming farmers now writhe in the pain of huge losses arising from the shutdown of major processing factories, their prime hope of bridging the off-taking gap and plugging post-harvest leakages. The Tomato Growers Association of Nigeria (TOGAN) recently lamented that about N10 billion had been recorded in losses as poor market buoyancy and dismally low off-taking channels have driven their harvest to waste, at a conference in Lagos. They said the activities of tomato paste importers were crippling the patronage of local tomato farmers by off-takers. Sani Yadakwari, the national general secretary (TOGAN) at the conference tagged: “Save Nigerian Farmers: Customs Partner with Cabals to Keep Tomato Farmers Poor”, said tomatoes sold as low as N10 per kilogramme two weeks ago.
“The loss that we are encountering is more than 40 percent due to poor infrastructure like road, good handling practices and lack of warehousing. Yearly, during the Dry Season, the tomato sector experiences glut resulting from bumper harvest in all the tomato producing regions.
The lack of guaranteed off-takers for this produce results in even more loses to the farmers. Our farmers have continued to remain in perpetual poverty and the poverty level will continue to rise if the necessary steps are not taken,” said Yadakwari.
Farmer’s off-take arrangement with factories, he said, has been crippled by packers of triple concentrate damaging reliance on importation. The implementation of such policy ideally required the combined effort of key government ministries and agencies.
The policy itself was conceived from collaboration between the Ministry of Industry, Trade and Investment, Ministry of Agriculture, with prospects of generating about 60,000 jobs in the country. Similarly, all hands ought to be on deck from groups such as the Ministries of Finance and Water Resources; Central Bank of Nigeria, the National Agency for Food and Drugs Administration and Control (NAFDAC), among others. But unfortunately, the tomato policy, which followed the approval of the Federal Executive Council (FEC), to enable the implementation, has been greeted with ignorance since the pronouncement. After studying the trend of events since the policy flag-off, TOGAN believes the abandonment of the policy is being orchestrated in the interest of some cabal whose survival outweighs that of the millions of Nigerian farmers.
Abdul Mohammed, a farmer, and businessman at the popular Mile 12 Agric commodities market in Lagos, for instance, has had to shuttle between southwest and north to sell his produce, and definitely not without parting with almost 50 percent of his harvest. Hitherto, he didn’t need to worry about that amount of waste since appreciable patronage came from the off-takers right in the north.
“I am a businessman and a farmer. I leave Lagos to farm in the north. My vehicle has been on the road for almost three days. This issue is affecting us because if we have these companies that buy these tomatoes there, we don’t have to bring it all the way from north. And you cannot predict, as far as lorries are concerned. We loaded it since Friday but, unfortunately, it broke down along the way and it’s been there for about three days,” he explained. Nwaneri Olubukola, Naija Pride Agribusiness Global Ltd. chief executive officer told business a.m. that the situation has been bearish on the firm off-taking, reducing its supply to smaller markets of individual clients.
“Some of the processors in the country are actually our major buyers. As off-takers we have Memorandum of Understanding (MoU) with clusters of farmers to grow specific varieties of tomatoes. We have a mandate to supply factories a minimum of 300 metric tonnes per day but when the factories are shut down, it affects our business. We cannot fulfill our potential and we are reduced to the open market and the individual clients. It has really cut our capacity, she said.
The monitoring body at the heart of the unbridled importation, Nigerian Customs Service has been particularly lax in its duties, according to TOGAN’s response to inquiries, which revealed that the service had disregarded the policy on grounds that it has expired. “Unfortunately, when we approached the Nigerian Customs Service regarding the motive behind the non-implementation of the policy, we were told that between the date the policy was approved and the date they were given the gazette of the policy for its implementation, it had exceeded the stipulated time of ninety days, hence they cannot work on it as it has expired. In other words, Federal Executive Council decision can be ignored by the almighty Customs Service,” Yadakwari said.
Meanwhile, a study by Nigeria’s Food Safety and Applied Nutrition (FSAN) department of (NAFDAC) had revealed that imported concentrates from China, fell below the national food safety standards.
A laboratory analysis of about 314 packets in Lagos to determine the volume of tomato content showed an alarming 9.1 percent of minimum 28 percent standard gauge, according to the Codex Alimentarius and Nigerian Industrial Standards. Emmanuel Ijiwere, vice president, Nigeria Agribusiness Group (NABG) said the non-implementation has continued to thrive on corruption.
He wondered why the service required the policy to be gazetted after the federal government had approved. “Some time ago, CBN came up with a list of items that cannot access foreign exchange and that affected some of these importers. They complained to the president and the Ministry of Agriculture informed us (NABG) and asked to find out whether they have a case on bringing them back on the list of those that can access the foreign exchange. When we met 12 of them, they put forward a very strong case.
They said they had 15,000 employees working for them, and that Nigerian tomato was not good enough for their processing. They said the price of Nigerian tomatoes will be a lot more expensive if they process them and the Nigerian housewife will suffer.
We have investigated their factories and not a single one of them can take tomato balls from Nigerian farmers to convert because their machines are configured to take the concentrate coming from China, pour water, mix and immediately package and sell. We asked why they couldn’t integrate backward and they said it would take them at least five years to integrate backward.
It means they would start the whole process over again. We did an analysis and discovered that for the cost at which they are bringing the tomato concentrate, vis-a-vis what they sell in a sachet, each of those companies was making an average of 300% profit because the Chinese have reduced the quantity of the tomato content. So they add things like soya and chemicals. We asked NAFDAC about their investigations and they gave us a report that those tomatoes from China are not fit for consumption. But why are you allowing it to happen, then they said it lies with their boss. But when they discover the production of fake items in Nigeria, they run to Onitsha market and collect them.
This cabal is so strong with the kind of profit they are making,” Ijiwere explained. Aggrieved farmers have consequently beckoned on President Mohammadu Buhari to intervene by respecting his commitment to the policy and call his men to order.
Their prayers entail robust implementation of the tomato policy by all concerned agencies; investigation of the Nigeria Customs Services decision to jettison the policy and NAFDAC’s deliberate ineptitude at regulating the activities of substandard puree.
“The tomato policy should be implemented. If they do that the processors can go to work and it’s easier for our NAFDAC to monitor what we consume in Nigeria because the produce is processed here. This keeps the farmers, off-takers, and the factories in business. So, all along the value chain we are creating employment and lifting ourselves from poverty,” Naija Pride CEO.
Energy December 27, 2019