Wednesday, April 11, 2018 /10:35AM /FDC
Wheat farming has been the most complicated area of Nigerian agriculture for the last decade, owing to high temperatures unsuitable for the crop. As a result, Nigeria has depended on imported wheat to meet the growing demands of its large population. However, since the oil shock of 2015/2016, wheat farming is experiencing renewed interest from policy makers who see Nigeria’s potential to be self-sufficient. There are still certain challenges yet to be addressed which pose a threat to the country’s aim of diversifying revenue and reducing its growing dependence on imported wheat. These challenges include low wheat production, insecurity in Nigeria’s wheat belt, a lack of mechanized and modernized farming techniques, and uncompetitive pricing. But if is able to improve its wheat output to a level of self-sufficiency, Nigeria can achieve non-dependency on imported wheat and reduce its trade deficit by approximately 3.06%.
Understanding Nigeria’s Wheat Market
Wheat is a cereal grain that is grown in al-most every country in the world. It was first grown in Lebanon and Syria but spread across countries through trade, followed by improved science and technology. It is the third most grown cereal in the world with global wheat production at approximately 755mn tons ($159.3bn) in 2016/17.1 Wheat production in the northern regions of Nigeria dates back centuries when it was grown on a modest scale.
With the construction of large-scale irrigation dams in the 1970s and growing local demand, production of wheat began on a commercial scale de-spite farmers being ill-equipped. However, due to the neglect of the agricultural sector, importation of agricultural produce was on the rise. Farmers were no longer encouraged to produce in commercial quantities as they did not have the necessary re-sources and government incentives. In 1976, Nigeria produced 18,000MT of wheat and imported 730,000MT at the cost of N97mn. This was a major cause for concern as it was a drain on the country’s forex revenues. The Federal Government, under the administration of General Ibrahim Babangida, sought to ad-dress the problem of wheat production.
In 1987, the importation of wheat was banned and the Accelerated Wheat Production Program (AWPP) was implemented to encourage local production. Farmers were provided inputs and necessary equipment at subsidized rates. Nigeria’s wheat production rose from 50,000MT to 450,000MT within three years of the pro-gram. However, the program failed due to Nigerian wheat millers, who were reluctant to patronize local-ly produced wheat. The importation ban was lifted in 1990 and the program ended abruptly. This led to an 87% fall in production to 60,000MT in 1991.3 Farmers switched to the production of other crops such as rice, maize and vegetables.
Today, food items made from wheat have gained popularity over traditional staples made from commodities such as maize and cassava. Nigeria is the second largest consumer of wheat in Sub-Saharan Africa - behind South Africa.4 The government spends approximately $1.5bn (2016) on wheat imports alone, and with the growing demand for non-traditional foods such as pasta, increase in wheat imports will lead to an increase in Nigeria’s import bill. While Nigeria produces approximately 60,000MT of wheat (2016) worth $12.66mn (only 0.004% of global production or 1.498bnMT), the demand is much higher at 4.63mn tons (2016/17). There is therefore a huge demand gap of 4.57mn tons, making Nigeria the least self-sufficient country in Africa when it comes to meeting its wheat demand.
Challenges hindering wheat production in Nigeria
To address this significant gap, Nigeria plans to cut importation of wheat by 50% in 2018, creating an opportunity for Nigerian farmers. However, several challenges will need to be addressed if farmers are going to be successful.
One of the major challenges of low-wheat production in Nigeria is the type of wheat grown and its growing requirements. The unfavorable local climate requires ex-pensive irrigation and makes Nigeria unsuitable to grow hard red winter wheat. This type of wheat is used for making bread and general purpose flour - mostly grown in the plains of the US and Canada. Instead, Nigeria grows hard wheat, which is bred for the tropical climate. It is heat tolerant and can be grown in many of the northern Nigerian states. However, hard wheat has lower gluten content than hard red winter wheat, making it ill-suited for bread; also, the particular variety available in Nigeria has a low yield.
A second major challenge is the turmoil that faces Nigeria’s wheat belt. Wheat is grown in the north-east region including Borno, Yobe and Jigawa states. Here the night temperatures range between 15-20 degrees Celsius (°C), which makes the land good for massive hard-wheat production. This is particularly true for Borno State which contributes approximately 30% of Nigeria’s total wheat output and is the largest wheat producing state.6 However, continued threats of Boko Haram and migrant herdsmen insurgencies in the area remain a major setback. The majority of wheat farmers have fled their farms and settled in camps as internally displaced persons living on donated food items. As a result, Borno State produces next to nothing. Allegedly, there are limited government funds to rehabilitate the massive destruction of farm-lands and infra-structure.
The third challenge is the lack of mechanized and modern farming techniques. Wheat farming in Nigeria is predominantly carried out by small-scale farmers who have outdated skills and limited access to finance and technology. Inadequate funding for research, mechanized farming, modern lab equipment and an unavailability of high-quality inputs continue to reduce local production. Ac-cording to the USDA, production costs for local wheat has doubled to approximately $420/ton due to high input costs such as quality seeds and ferti-lizers.7 Good quality seeds, when available, are not enough for distribution to farmers. In addition, private seed companies are not interested in wheat seed production as they mostly pro-duce cassava stalks or rice seeds. Available wheat seeds have been planted and replanted for over five years leading to deterioration in crop quality. As a result, flour millers have shifted to partial substitution of wheat flour with cassava composite flour (spurred on as well by the government’s initiative to promote cassava flour in bread). Farmers are also forced to abandon their plans of cultivating wheat farms.
Solutions and consequences of improved wheat production in Nigeria
Nigeria has to invest in research into new and improved wheat farming techniques, wheat technology and modern agronomy practices in order to improve crop yield and expand wheat production.
Nigeria has to boost its food security. The government could introduce a bill which would make it compulsory for flour millers to buy locally produced wheat as a substitute for imported wheat. The security situation in the northern regions of the country also needs to be addressed. This will encourage the much needed private sector investment.
Furthermore, to re-duce imports, Nigerian consumer price preference has to be satisfied. A minimum purchasing price, which is competitive against international prices, needs to be determined. This will ensure that local wheat produce stays cheaper in the Nigerian market.
Focusing on wheat farming will generate thousands of jobs and income for both farmers and millers. Agriculture’s contribution to GDP began to de-cline from 60% in the early 1960s to approximately 49% in the 1970s and 25.08% in 2017.8 However, with improved wheat production, and reduced reliance on oil, agriculture’s contribution to GDP has the potential to grow further. Consequently, it will boost economic growth and foreign exchange in-flows, as business activities will begin to expand and wheat produce is exported.
Looking forward at Nigeria’s wheat opportunity
Wheat is usually underestimated given that rice is the main food crop in Nigeria. However, the taste of the domestic market is changing and the importance of wheat has grown over the years. Although there are challenges hindering the production of wheat in Nigeria, It has become a profitable cash crop and the government needs to ensure that it is grown on a large scale. Nigeria needs to grow a great deal of its own wheat and take ad-vantage of its available market. This will reduce its exposure to exogenous shocks from depending on other nations for its food supply. Nigeria needs to produce its own wheat and free itself from decades of dependence on imported wheat.