Nigeria's Wheat Plan Falters With Imports Set to Surge
(Bloomberg) -- Nigeria’s decades-old program to boost wheat production and reduce imports worth more than $4 billion a year has faltered with farmers cutting output because of soaring input costs, leaving foreign suppliers to meet rising domestic demand, officials and farmers’ groups said.
The latest harvest is coming in slowly and output will drop in the current season, Zakari Turaki, head of cereals research at the Lake Chad Research Institute, based in the northeastern city of Maiduguri, said in a phone interview. Many farmers say that the government of President Muhammadu Buhari, which took office in 2015, suspended a program to support strategic crops, including wheat subsidies, causing many of them to abandon the grain.
“The problem is that farm inputs, like seeds, are not subsidized and the poor farmer cannot afford to buy it,” said Mala Kachalla, a wheat farmer who spoke by phone from the northern city of Zaria. “Some of our farmers imported winter seeds as they’re cheaper. Unfortunately, this type doesn’t grow in this part of the world, because here we grow spring wheat.”
While 100 kilogram (220 pounds) of seeds of the spring wheat variety cost as much as 25,000 naira ($69), the winter types sell for just about a third at 8,000 naira, Kachalla said.
Nigeria produced an average of 80,000 tons of wheat a year for decades until the introduction of a new variety in the 2012-13 season that tripled the average yield as more areas were cultivated, according to the Lake Chad Institute. Output fell sharply to 60,000 metric tons in the 2016-17 season after reaching a peak of 350,000 tons in 2013-14, according to Turaki, with farmers also hurt by the Boko Haram Islamist insurgency in some of the growing regions. He sees a further production decline in the current season to 50,000 tons.
In contrast, Nigeria’s wheat imports, which reached 4.6 million tons in 2017, are expected to expand by 9 percent to 5 million tons next year and double from that by 2030, according to the U.S. Department of Agriculture, as demand surges for wheat-based foods such as pizza, pasta and bread. The West African nation estimates it spends $4 billion to $5 billion annually on wheat imports.
Agriculture Minister Audu Ogbeh didn’t respond to two calls to his mobile phone seeking comment. Buhari’s administration has said that it is seeking to diversify the oil-dependent economy by boosting agriculture.
Though wheat is a temperate crop, it grows in irrigated farms in northern Nigeria’s cool, dry season from November to April. Farmers like Kachalla say there’s enough land to grow all of the country’s wheat requirements with government support.
Such sentiments propelled the country to ban wheat imports in 1986 as the military regime then in power launched the domestic grower plan and experiments were encouraged to create alternative flour from cassava, corn and local wheat combinations. The ban was lifted six years later under diplomatic pressure from the U.S., the main source of Nigeria’s imports.
In the absence of government support, many farmers are leaving wheat and adopting other crops that are less expensive to grow. Those who persist are finding it difficult to sell as millers prefer the cheaper imported wheat.
Pasta and Noodles
“Flour millers prefer to buy foreign wheat because it is cheaper,” said Abdullahi Argungu, chairman of the wheat farmers association in northwestern Kebbi state. “But in terms of quality, our local wheat is better than the imported one.”
In Gombe state farmers have given up plans to plant 10,000 hectares (25,000 acres) of wheat while in Kano the cultivated area was reduced to 10,000 hectares in 2018 from 33,000 hectares in the previous year, according to Batari Dauda, chairman of the local wheat farmers association.
Wheat imports into Nigeria attract a duty of 20 percent, while flour is charged a 100 percent duty. Imports of wheat flour, pasta, noodles and spaghetti are banned.
©2018 Bloomberg L.P.