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Strong Policies Needed To Stimulate Commodities Trading

Commodities	1350 VIEWS
Commodities
1350 VIEWS

Thursday, November 08, 2018 / 08:34 AM / by Ifeanyi Onuba of Punch Newspaper

The Managing Director, Nigeria Commodity Exchange, Mrs Zaheera Baba-Ari, has said there is a need for strong government policies to stimulate the level of trading on the commodities exchange market.

Baba-Ari, who spoke with our correspondent in Abuja, also noted that the Commodity Exchange Bill, when passed into law, would boost farmers’ revenues.

She said commodity exchange held the key to the diversification of the economy, adding that it would be difficult for farmers to get the right pricing for their products without the exchange.

She noted that other commodity exchanges in the world were thriving because of strong government policies.

Baba-Ari said the bill, which was first drafted by the agency in 2007, would also enable farmers to access loans from banks to increase their productivity.

She blamed the high prices of agricultural products in the country on activities of middlemen, noting that many farmers would not get the adequate value for their produce except something was done about the development.

Baba-Ari said, “The exchange provides a platform to enable people to buy and sell by giving them the real price for their commodities.

‘’What happens is that middlemen go to buy the commodities at a very low price and sell at a very high price to exporters. So, the people making all the profit are the middlemen, while the farmers remain poor. That is why we have a large percentage of peasant farmers in Nigeria.”

She added that commodities exchanges played a central role in facilitating economic development, especially by helping farmers to enhance their marketing and risk management capacity.

According to her, when the bill is passed into law, it will also assist farmers to reduce their exposure to price and other production risks.

Baba-Ari said, ‘’The bill will enhance the productivity of the farmers because after production, they will not be forced to sell the produce due to lack of funds or storage facilities.

‘’It encourages warehousing, which will also enable the farmers to deposit their commodities at an accredited warehouse. At the warehouse, a receipt will be given to the farmers and it will have all the details of the commodity deposited in the warehouse in the case of any loan from a bank.”