US, Canada, Australia, Brazil are Successful Agricultural Producer because they spend much on funding – Hon. Ademorin Kuye
BY OBUTE JAMES
A Bill for an Act to Provide for Establishment and Composition of Agricultural Development Trust Fund and for Related Matters (HB. 948) has passed Second Reading in the House of on Wednesday 9th February, 2022.
The bill is being sponsored by Hon. Ademorin Aliyu Kuye, Vice Chairman, House Committee on Rules and Business and Representive of Somolu Federal Constituency of Lagos State.
In his lead debate, Kuye said Nigeria has an arable land area of 34 million hectares: 6.5 million hectares for permanent crops, and 28.6 million hectares on meadows and pastures.
“Agriculture accounts for about 24 percent of Nigeria’s GDP, in Q4 2021 it contributed almost 30% to GDP. The country is a leader in various types of agricultural production, such as palm oil, cocoa beans, pineapple, and sorghum. It is the largest producer of sorghum in the world just after the United States, and ranks fifth in the production of palm oil and cocoa beans. Nigeria is also a large global exporter in this sector. Oil, fruits, nuts, seeds are among the ten best performing export categories.
“Agriculture is a key activity for Nigeria’s economy after oil.
“Agricultural activities and the agric value chain provide livelihood for many Nigerians, whereas the wealth generated by oil reaches a restricted share of the population. According to a recent survey, some 70 percent of households in Nigeria participate in crop farming activities, while about 41 percent own or raise livestock and 30 percent are involve in transport, processing or marketing of agricultural products,” Kuye said.
According to him,
One of the major problems of Agricultural Development in Nigeria is that of developing appropriate Organization to mobilize and induce members of the rural sector to a greater productive effort.
He said “Rural farmers who are characterized by low income, low resources utilization, small farm holdings and scattered nature of farmlands, finds it difficult to pool their resources together in order to raise their farm income and substantially improve their living conditions.
“The United State of America, Canada, Australia, Brazil, European Union etc. are very successful Agricultural Producers. These countries have consistently and massively subsidized their Agriculture. They spend huge sum on Agriculture as a matter of fact, most of these Countries spend more on Agricultural sector except Defence. The funds they expend are non-repayment grants, thus, their farmers and Agricultural processors enjoy almost free financing.
“The Federal Government in America spends more than $20 Billion a year on subsidies for farm businesses. About 39% of the Nation’s 2.1 million farmers received subsidies in 2017 with the lion’s share of the handouts going to the highest producers of Corn, Soya beans, Wheat, Cotton and Rice. The US Government protects farmers against fluctuations in prices, revenues and yields. It subsidizes their conservation efforts, insurance coverage, marketing, exports, sales, research and other activities. In a nutshell, federal aid for farmers is deep and comprehensive in America.
“It is therefore imperative that there should be a focal development fund in the country for the agricultural sector and its value chain to coordinate efforts of agencies like the CBN, NIrsal MFB etc and provide sector specific interventions to maximize benefits like employment, economic empowerment and diversification that should accrue to Nigeria and Nigerians.”
The bill seek to among others
Establish an AGRICULTURAL DEVELOPMENT TRUST FUND to give grants to Agricultural units directly, with emphasis on financing farm units.
Using the instrument of the AGRICULTURAL DEVELOPMENT TRUST FUND to procure Agricultural Equipment for onward transmission to Agricultural units in a subsidy arrangement.
Source finance for the AGRICULTURAL DEVELOPMENT TRUST FUND by a 1% surcharge on all revenue of the Federal Government revenue generation agencies such as the Federal Inland Revenue Service, the Nigeria Customs Service, Nigeria Ports Authority etc.
Kuye atgued that 1% surcharge on all revenue of the Federal Government revenue will conveniently generate, at least N300 Billion annually.
The fund will also finance Crop Research, Agricultural Extension and Training services.
The fund will directly develop Agriculture and procure equipment for land clearing, land development, earth moving, drainage development, water drilling rigs, local and farm road building, specialized and non-specialized input and produce transport, specialized and non-specialized storage facilities, human transport, quarrying, cement batching, cement form plant, building construction, Farm tractors and Implements, combine harvesters, other harvesters, planting and Fertilizer , drilling Irrigation systems, wood chipping and grinding, chemicals and insecticides spraying, ATV ‘s, workshops, electric generators, solar panel & electric systems, wind turbines etc.
The fund will organize farmers in the country into four types of cooperatives namely: Farmers Multipurpose (crop, livestock etc.) processing, storage and produce marketing cooperatives for direct benefit of the subsidy.
He said “When approved the bill will help us track effectively government spending in agriculture and provide measurable indices for growth and improvement. It will also amongst others “provide effective funding of Agriculture and its value chain with a robust subsidy system;
“provide cumulative and consistent funding of Agriculture, every year as funds will be available so that development will be continuous and cumulative;
“reduce cost of equipment by huge single orders from Equipment brokers and manufacturers;
4. reduce cost of development of large scale farm units (Ranches inclusive);
“Improve the funding for Crop Research, Agricultural Extension and Training Services.
6. ensure cultivation and development of millions of Hectares of Land for Farming and Ranching;
“Create millions of stable and secure direct jobs on farms and ranches;
“Create millions of indirect jobs in the development of support facilities for farm settlements and Ranches;
“Increased food production and food security;
“With Agricultural production in full throttle across the Country, millions of farmers and farms support staffs will gladly join the Government’s Tax coverage thereby increasing the Government’s revenue through Tax collection. Tax can be the top earner for Government in no distant time considering the agitation for less of fossil fuel usage across the World that can potentially affect Government’s oil sales significantly in the nearest future;
“Improve and increase source of raw materials for ago-allied outfits;
“Avenue for economic security for a large number of Nigerians;
“Reduction and possibly, reversal of RURAL-URBAN MIGRATION”
Hon. Kuye argued that the establishment of the Agriculture Development Trust Fund will go a long way in coordinating, articulating and actualizing the Federal Government efforts at boosting local food production at affordable prices, incentivizing farmers and players in the agric and agro-allied value chain and diversifying the economy.