By Siaka Momoh
In response to a recent petition sent to the Comptroller General of Customs by the Vegetable and Edible Oil Products Association of Nigeria, against massive importation of prohibited vegetable oil and palm oliens into the country, the Comptroller General has invited the association to a meeting billed for May 20 in Abuja.
This is not the first time that such a meeting is taking place between government and stakeholders in the oil-palm industry. It has become so frequent that you begin to wonder if a solution can ever be found to the problem bedeviling the industry.
We have an Oil palm transformation Plan in place.
The Oil Palm Transformation Value Chain Action Plan is targeted at transforming the ailing oil palm industry in Nigeria. The action plan has been prepared with clear objectives and strategies to meet the needs of transforming the industry in 24 States where oil palm is grown.
The specific objectives to achieve in the next four years (2012-2015) are as follows:
- Increase vegetable oil production in order to achieve import substitution and cancel the deficit of 350,000 metric tons which is annually met through import.
- Increase the yield and productivity of both the unorganised and organised plantings.
- Arouse greater interest and concern for engagement in competitive market activities within the oil palm value chain.
- Create employment especially for youth and reduce poverty in affected States.
The strategies for the transformation of the Oil palm value chain are as follows:
Annual production of 60,000 hectares with improved seedlings (totaling 240,000 hectares between 2012 and 2015). The above field planting will achieve between 30,063 metric tons of CPO in 2016 and 345,375 metric tons by 2021.
The Oil Palm Transformation Team is currently engaged in field visits to achieve the following;
- Secure commitment of the State Governments in the scheme
- Identify nursery operators to participate in dry season oil palm nursery operation from February 2012
- Identify oil palm production clusters around existing estate for smallholder activities in 2012.
- Register smallholder oil palm farmers for 2012 activities.
Since Obasanjo’s regime palm oil importation has been put under prohibition, but there is a problem. Side by side with this prohibition, waivers are issued to some selected companies. Stakeholders in the industry consider this as double standard. In fact Organised Private Sector bodies like NACCIMA. MAN and LCCI insist if waivers must be given it should be on sectoral basis not to selected individual companies. Is happening at all? Your guess is as good as mine.
It can be recalled that in 2013, the chairman of the Vegetable/Edible Oil Producers Association of Nigeria, Senator Iroegbu argued in a report about how the sector, which should have been the best revenue generator for the country after crude oil, was gradually being killed by the federal government’s policy of duty waivers, and activities of ECOWAS countries.
said he: “We don’t export palm oil anymore, neither do we export refined one from Nigeria because the sector is one of those that has been abandoned by the federal government. There is a lot of emphasis now on bio-fuel, there is a lot of alternative energy coming out but Nigeria as a matter of fact has not started developing this sector which eventually we may have to fall back on. So we have done our best but Nigeria economic policies are seriously been hindering the sector. The policies created in Nigeria as regards to the sector…you are aware that vegetable oil has been under prohibition.”
It can be recalled to that in May 2013, the Plantation Owners Forum of Nigeria (POFON) decried mass importation of crude palm oil (CPO) into the country by big time manufacturers who use palm oil in their production process, saying it amounted to dumping and threat to the nation’s Agriculture Transformation Agenda (ATA).
In a communiqué it issued at the end of its meeting in Benin, POFON said it had taken official notice of the announcement by PZ-Cussons that it had commenced trading in imported crude palm oil in Nigeria. “We are also aware of other companies like Olam, BUA and De United that are trading in imported CPO and have informed the Federal Ministry of Agriculture and Rural Development about the threat that mass importation and dumping of CPO poses to the Agricultural Transformation Agenda,” it said.
The plantation owners present at the meeting included Presco Plc, Okomu Oil Palm Company Plc, A & Hatman Ltd, IMC Ltd, Real Plantations Ltd, JB Farms Ltd, Dansa Agro Plantation Ltd., Eyop Industries Ltd., Biase Ltd., and Aden River Ltd. In attendance were representatives from NIFOR and smallholders; represented by the chairman of Edo State Oil Palm Growers Association of Nigeria (OPGAN).
POFON argued that from the January 2013 level, the local CPO prices dropped by 25-30 percent in May 2013. “Currently, prices are at incredibly low levels, thus threatening the profitability of oil palm businesses at both large scale and smallholder levels.”
The plantation owners said they had taken official notice of the announcement by PZ-Cussons that it had commenced trading in imported crude palm oil in Nigeria. “We are also aware of other companies like Olam, BUA and De United that are trading in imported CPO and have informed the Federal Ministry of Agriculture and Rural Development about the threat that mass importation and dumping of CPO poses to the Agricultural Transformation Agenda.”
POFON said it was disturbed by reports of concession and waivers being granted to traders to import CPO and refined products in spite of the 35 percent tariff and the ban on the respective commodities and in flagrant disregards to the assurances given by Mr. President in his budget speech not to grant concession and waivers to import commodities that we have the capacity to produce in the country.
“Both Federal Ministry of Trade and Investment and Federal Ministry of Finance have been implicated in granting concession and waivers to CPO importers. This practice undermines the Agricultural Transformation Agenda of this administration. POFON demands that it be stopped forthwith.”
The contemporary agricultural transformation agenda emphasizes the value chain approach to agricultural development. For the oil palm value chain, it presupposes that both the upstream and downstream of the value chain are complementary of each other.
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POFON therefore found the existing arrangement incongruent and inimical to ATA; where the downstream value chain enjoys extreme protection of imports ban, while the upstream value chain is protected with 35 percent tariff. POFON has therefore warned that any attempt to make the oil palm upstream value chain vulnerable will jeopardize the ATA.
POFON said its had embarked on the following projects aimed at increasing oil palm production and enhancing CPO supply in the country: NIFOR to continue and sustain oil palm seed/seedlings distribution to smallholders and estates under Oil Palm Transformation Agenda; The Okomu Oil Palm Company Plc to continue its milling capacity upgrade by 70 percent from 35 tons FFB/Hr to 60 tons FFB/Hr; SIAT Nigeria Ltd to continue and sustain the rehabilitation of former Risonpalm with a view to enhancing the local supply of industrial quality CPO immediately; PZ-Wilmar to achieve 50,000 hectares of plantation including their holdings in Biase Ltd & Eyop Industries Ltd plus accelerated small farmer schemes in short to medium term.
Others include Presco Plc to continue and sustain its plantation expansion at Ologbo; Dansa Agro Plantation Ltd to commence planting of its initial 10,000 hectares plantation this planting season; and JB Farms to complete its milling capacity expansion and embark on additional Greenfield development.
The plantation owners called on government to provide the necessary infrastructure and incentives to take Nigeria’s oil palm industry to global competitiveness; assist smallholders with bulk storage facilities, especially in areas with considerable smallholder clusters; impose a development levy of about 50 percent on all imported CPO irrespective of country of origin; and consider a bailout incentive or palliative for plantation owners who have experienced adverse market conditions in recent times.
A meeting is taking place again tomorrow. Will this meeting bring an end to the unending row? We are waiting.
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