Unending Fertilizer Crisis Threatens 2016 Farming Yield

The scarcity of fertilizer has continued to cast a gloomy spell on the prospect of a good harvest from the 2016 farming season. Fertilizer has become scarce because of the new and very strict rules governing its procurement and distribution, no thanks to the insecurity brought about by the Boko Haram insurgency and in recent times, the renewed militancy in the Niger Delta region of the country.

A major crisis in the supply of fertilizer to Nigerian farmers has been looming since 2014 when funding of the Growth Enhancement Scheme, GES, the input supply component of the Agricultural Transformation Agenda of the immediate past administration ceased. Under the programme, government subsidized inputs especially fertilizer and seeds were distributed to farmers who paid a fraction of the cost but the scarcity of fertilizer began when funding of the input supply scheme stopped in the run up to the 2015 general election. Since then the cost of the soil nutrient has almost quadrupled from about N2, 700 under the subsidy scheme to about N10, 000 per bag in the open market today.

The fertilizer crisis has also been made worse by the current insecurity on the country because urea, a major ingredient for making fertilizer is also being used by Boko Haram insurgents to prepare explosive. This is the reason why its importation has been under strict control since the intensification of the fight against insurgency.

FM Monguno

Allegations of Sabotage

Recently, the National Security Adviser, Maj.-Gen. Babagana Monguno, accused two of the country’s foremost fertilizer manufacturers – Notore Petrochemical and Indorama Eleme Petrochemical – of sabotaging national security and the economy by being conduits for insurgents, especially Boko Haram terrorists and Niger Delta militants to obtain explosive materials in order to wreck havoc across the country.

Monguno warned that the federal government would no longer tolerate a situation whereby the security and economy of the country are threatened by the “unpatriotic” actions of the fertilizer companies, warning that his office will shut them down should the alleged acts of sabotage continue.

The visibly angry NSA, who did not entertain any explanation from the companies, also read the riot act to any company or individual engaged in economic, business or commercial activities linked to dissident groups operating within and outside the country.

He said: “I must say at this point that the goodwill shown by the government of this country should not be taken for granted. The fact that we are in a difficult and complicated situation in terms of our economy and security, does not mean that companies and individuals with vested interests should take the goodwill of this country for granted.

“The president came to power with a specific mandate, which is clear to all Nigerians and indeed the international community. We will view with very serious consequences whatever any company does to fall out of line and behave in a manner that will bring to its knees the economy of this country and indeed the security of this country.

“Like I said we will not hesitate and it is an action that will be taken with immediate effect. It is also important for us to also know that the local farmers are suffering in all communities all over the country.”

Monguno also revealed that the Office of the National Security Adviser (ONSA) and the entire intelligence community had discovered that the improvised explosive devices (EIDs) deployed by terrorists for their bombing campaigns were developed mainly from certain grades of fertilizer with particular reference to some nitrate based types including urea nitrate (synthesized from urea).

He explained that it was the discovery that the indiscriminate importation of urea nitrate by all and sundry, resulting in lack of control and ease in its availability to the terrorists, militants and other mischievous elements for use to perpetuate acts of violence that necessitated the licensing of only the two companies (Indorama and Notore) by the federal government to operate in the country.

He also noted that ONSA and the Ministry of Agriculture and Rural Development facilitated the necessary importation of raw materials and also secured distribution networks, which was “aimed at solving the national security problem, on the one hand, by easing control of the items, and on the other hand, boosting the economy by encouraging local production”.

Monguno said that the cumulative annual production of the two companies was estimated at 2.05 million metric tonnes, while Nigeria’s estimated consumption rate is 1.1 million metric tonnes, which is 53 percent of production and “opportunity to cumulatively export about 47 percent of their production”.

Monguno, however, noted that ONSA “has observed with total dismay some unpatriotic acts and abuse of the goodwill of government”, saying that “reports of activities of these companies have indicated that about 71 percent of the 2.05 million tonnes cumulative annual production is being exported at the detriment of our national economy”.

According to him, this has resulted in a spike in the price of urea-based fertilizer in Nigeria with obvious implications on food security in the country.

“In view of the foregoing, I wish to categorically state that government will continue to adhere to the rule of law. However, it must be noted that the rule of law is not akin to anarchy.

“Accordingly, this office will not hesitate to close and withdraw the operating license of any company that exports products without first meeting local consumption.

“This office and the Ministry (of Agriculture) will work to put in place measures to access production and determine exportable quantity by the respective companies.

“Please note that the well being of this country is the collective responsibility of all,” he said.

 

The Defence

Meanwhile the two companies Indorama Eleme Fertilizer and Chemicals (IEFCL) Company and Notore Chemical Industries have denied allegations that they are sabotaging the national economy and security through the importation of urea nitrate, a chemical used for fertilizer production and could be used illicitly to manufacture explosives, and the export of fertilizer to the detriment of farmers in Nigeria.

FM Indorama

In separate statements, both fertilizer-manufacturing companies stated that all their domestic supplies to customers were in accordance with the approval of the Office of the National Security Adviser (NSA) and the Farm Input and Supply Services (FISS) department in the Federal Ministry of Agriculture and Rural Development.

They were responding to the National Security Adviser (NSA), Maj.-Gen. Babagana Monguno (rtd), who had accused them of sabotaging national security and the economy by being conduits through which insurgents, especially Boko Haram terrorists and Niger Delta militants, obtain explosive materials in order to wreck havoc across the country.

In its statement, Indorama said: “Indorama Eleme Fertilizer and Chemicals Limited (IEPL) and its sister companies in Nigeria are not, and have not, and would never be directly or indirectly involved in any activities to undermine or sabotage the economy or security of the nation.”

The statement issued by the company’s head of corporate communications, Dr. Jossy Nkwocha, noted that its “brand new, world class” fertilizer plant built at a cost of $1.5 billion — one of Nigeria’s largest foreign direct investments in the downstream sector — started pre-commissioning production only recently at only 75 per cent capacity, and in the past one month has been giving priority to the domestic market.

According to the statement, “The plant is still awaiting official inauguration. Our brand new fertilizer plant has capacity for 1.5 metric tons of fertilizer per annum which is designed to serve Nigeria’s entire domestic requirement and the surplus is for export markets.

“However, our primary focus is to serve the interest of our domestic market and this we have been doing with a great sense of responsibility and commitment to the Nigerian economy.

“It is also a matter of national pride that the surplus production would be exported to enable the generation of foreign exchange for the country at this time of huge deficit of foreign exchange, as well as branding Nigeria’s global reputation as a producer and exporter of petrochemicals and fertilizer, thereby encouraging more foreign investors to come and invest in Nigeria.”

Nkwocha stated that Indorama has been loading and distributing an average of between 90-100 long trailers of fertilizer, each carrying 600 bags of 50kg each, totaling over 57,000 bags of Indorama urea fertilizer daily over the past one month for the benefit of Nigerian farmers across the country.

Indorama said as a responsible corporate organisation, it was constrained to state the facts for the benefit of the Office of the National Security Adviser (ONSA), the federal government, international partners, other critical stakeholders, and the general public.

In its own statement, Notore yesterday also completely denied allegations that it was involved in activities that sabotage Nigeria’s security and economy, stressing that the allegations in “no way represented the character and operation of our business”.

FM Notore

According to Notore, “Our attention has been drawn to various publications in the media containing serious allegations about Notore Chemical Industries Plc.

“In the publications, Notore was alleged to be sabotaging Nigeria’s national security and economy by being a conduit for explosive materials as well as being ‘unpatriotic’.

“Notore is constrained to refute the allegations in the strongest terms. Notore has not been, is not, and has no intention whatsoever of engaging in any activity that is detrimental to Nigeria. As a Nigerian company with predominantly Nigerian beneficial shareholders, Notore has always been committed and is focused on supporting initiatives of the Federal Government of Nigeria and championing the African Green Revolution with a focus on Nigeria.

“Notore is the premier producer of urea fertilizer in sub-Saharan Africa and has been in production for over six years. As the champion of the African Green Revolution, Notore has as its core goal the enhancement of food production and food security in Africa, particularly in Nigeria.

“Part of its strategy to achieve this goal is to focus on sales in the local market via Notore’s extensive, controlled and award-winning distribution channels.

“In addition, Notore has and uses extension workers who are committed to the training of local farmers on best practices and the creation of ‘test plots’ to showcase the benefits of effective use of fertilizer on crops, the creation of an effective and efficient distribution channel to ease access to fertilizers for the farmers, as well as boosting production capacity to meet the ever increasing demand of the Nigerian farmer.”

The Onne-based fertilizer producer and distributor said over the past several years, through its private extension services and controlled distribution channels, which include over 2,500 village promoters, it has reached over three million Nigerian farmers who have been impacted positively with increased yields.

It added that as estimated by a 2013 report by Propcom-DFID, an innovative, market-driven initiative of the United Kingdom’s Department for International Development (DFID) that aims to reduce poverty in Nigeria, over 33 per cent of smallholder farmers in seven selected northern states learned at least one improved farming practice from Notore’s activities, leading to increased yields and income.

Notore said it had also worked with the Federal Ministry of Agriculture and Rural Development, some selected states, and International Fertilizer Development Center (IFDC) in designing and implementing the fertilizer voucher program between 2009 and 2012, which greatly improved the administration of the fertilizer subsidy programme by increasing the reach to target beneficiaries from a previous 11 per cent to as much as 60 per cent.

“The success of this voucher programme became the basis on which the Federal Government created the Growth Enhancement Support Scheme (GESS) e-wallet programme, which sought to improve agricultural productivity through the effective and efficient delivery of farm inputs such as fertilizer, which increased yields.

“It is through these and other activities that Notore has helped and continues to help build Nigeria’s agricultural and economic landscape, which has a direct impact on the country’s GDP.

“As part of its commitment to Nigeria, the bulk (about 75 per cent) of Notore’s production of fertilizer is focused on the Nigerian market, and because Nigeria largely has only one planting season, the majority of this production is sold locally during this peak season.

“Notore only exports limited amounts of fertilizer during the dry season — when there is essentially zero demand for fertilizer in Nigeria — yet continues to work aggressively with the Federal Ministry of Agriculture and Rural Development to encourage and stimulate farming in Nigeria during the off-season in order to further its core goal of increased food production and food security in Nigeria.

 

The Implications.

The implication of this development is that the scarcity of fertilizer will worsen while the cost will further increase, making it inaccessible to Nigerian farmers who need it for the on-going cropping season. Already farmers across the country have been complaining about the high cost of the fertilizer, especially the urea based soil nutrient.

Tervershima is the chairman of the yam traders in Zaki Biam, the headquarters of Ukum Local Government area of Benue state and a major yam production centre in the country. Tervershima is also a yam farmer with over 30 years of experience. He predicts that yam is likely to be scarce and expensive next year because farmers in Zaki Biam did not have access to fertilizer for this years cropping season. In his words;

 “This year, there is no support from government for farmers to procure fertilizer. The cost is so high that we pay up to N10,000 for a bag. Apart from that, the only fertilizer you can find is Zaki Biam is NPK. There is no Urea and NPK is not good for our soil”.

The fear of many farmers like Tervershima is that food insecurity looms unless government tackles the fertilizer crisis.  

 

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