The Chairman, Harvest Feeds Agro Processing, Goke Adeyemi,have said that the activities of herdsmen have increased the cost of agro-processing of cassava tubers by 300% he state this in an interview with newsmen
”As at February 2020 just before the Covid-19 started in Nigeria, cassava tubers price in the factory was N25,000 per ton. Recall that the restrictions and the stay-at-home order took effect around third week of March 2020 and by May, there was partial opening, but all these while, agro production and other essential services were given opportunity to be running.
As at now, cassava tuber price is N75,000 per ton, sometimes it goes for N80,000 per ton which is over 300 per cent increment within 12 months. It is a disaster.
Covid-19 actually played a part in the increment because farmers couldn’t do anything for three months last year and that fell within the planting season for last year, that means the hectarage cultivated last year was partly affected because of the pandemic.
But on top of that was the socio-political problem in Nigeria which is the herders and farmers crisis that escalated last year during the partial opening of the economy after lock down around June and July.
There was massive destruction of farms, massive killings and kidnapping around, farmers became apprehensive and ran away, cassava tubers cultivated between the previous year and last year were damaged, all these cumulated to acute scarcity of cassava tubers.
Also on top of that was the aftermath of the micro economic indices, devaluation of Naira, inflation and the rest of them.
There are so many factors, but I think those three became huge on the business, as I speak to you now, most of the Agro-processing companies barely can run on 40 per cent capacity daily, and that is complete disaster.
he also explained the impact of all this on the economy
The economy is bleeding seriously, the effect is that even the revenue to government is completely eroded because if the industries are not producing, of course they cannot pay tax on what they did not produce.
The infrastructural challenges of government will continue because government requires money to put infrastructure and if the money is not there, the infrastructure will continue to suffer and that is the infrastructure that we need to continue to grow the economy.
As I speak with you now, for the past five days there has not been power supply in my factory, we have been running on generator, and any time we run generator, we use about 3000 litres of diesel on our 1000kva generator at N265 per litre which was sold for N180 per litre by December last year. As at February last year it was around N155 to N160 per litre, so the diesel cost is so high.
The implication is that less revenue goes to government, impoverishment of Nigerians will continue because if we cannot get cassava tubers to buy, of course money cannot exchange hands with farmers, but if the usage of agro products continue to expand, the country will continue to expand. Even some agro-processors who borrowed money to put their factories in place will not be able to service the loans.
he also talked about problem encountered and their ways around it
We have several strategies of getting cassava, for my own factory, we travel as far as almost 200 kilometres to get cassava because we have a lot of trucks. The second thing we are doing is that right now are cultivating more farms than we did last year, this year we are expanding from 400 hectares to 700 hectares of cassava farm, am using the women and youth around our factory to start growing more cassava which is close to our farm.
But the investment of this year in cassava business will manifest next year, it’s a 12 months product, whatever we are doing now, we will not feel the impact until next year.
We are also doing research on how we can use other crops, for example potato. I have made some trials on potato, it is possible for me to use potato and produce my starch but I am still evaluating the cost implications because it is likely seen in Kogi, Niger and other places. I am doing some other research on what else I can use.
And I am looking on the issue of power, is there a way I can begin to look at solar or gas which will also impact on our cost of production, these are the things we are planning to do now.
he also talked the implication of factories not working in full capacity?
They will be below break even point, if you are running your factory at less than 40 per cent capacity, you will not make profit, you might run it but it won’t be profitable. The productivity will be very poor, don’t forget you have salaries to pay, even if you have done downsizing, the remaining staff are still under you.
The second thing is that you may not be motivated, people that are supposed to work for 6 days in a week are now working for two days or three days, their motivation will be very low, and an idle hand is the devil’s workshop.
Another one is that you will not be able to give your customers what they want and they will source the product from another place. It has a whole lot of impact that are not positive for the economy.
How do you want the government to intervene?
We plead with them to face the issue of farmers and herders crisis, solve it, let farmers be free to go to their farms, let herders be free to do their business but under a regulated system. The way herders walk around and destroy farms, fight and kill farmers is suppression. I think government needs to come into that, no matter what it costs the government to stop the herders from disturbing farmers. Herders should ranch their cows in regulated system, and nobody should be above the law.
Secondly, the economy is not stable now, they just did another devaluation of Naira, we have not come out from the first devaluation, they have done another one, so it means that things will be more expensive, so if things are expensive, it erodes working capital, and if working capital is eroded, the manufacturers will be running around to look for money to run their business.
I think we need palliative from government. They (government) should deliberately come out and give palliative to true agro-processors, those who have structure that we see running. They should give palliative as grants to us.
I think bureaucracy around many things we do should actually begin to reduce. If you want to take your land document from government, it takes years to regularise your farm land permit or your factory Certificate of Occupancy, it takes years.
The bureaucracy is rather too long and I think government should do something about it, the civil servants need to help the industrialists, they need to help the agro-processors so that we can contribute our quota to grow the Nigerian economy.
