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Examining Oil Palm Industry for Wealth, Jobs Creation(AllAfrica Via Acquire Media NewsEdge) In the 1950s till mid-1960s, Nigeria was said to have remained the largest producer of crude oil palm in the world with a market share of 43.0%, supplying 645,000 Metric Tonnes of palm oil, on annual basis, across the globe. The story is not the same now, from being the largest producer of oil palm, Nigeria is now a net importer of palm oil. According to Index Mundi, a data portal, the domestic palm oil produced totaled 850,000 metric tonnes in 2012, noting that the growth in oil palm has stagnated at 850,000 MT since 2009. The report noted that the consumption of palm oil in Nigeria amounts to 1.0 million metric tonnes per annum, while the official figures states that the shortage in oil palm industry is estimated to be around 150,000 metric tonnes annually. Analyst said Nigeria today produces only 1.7% of the world's consumption of palm oil which is insufficient to meet its domestic consumption which stands at 2.7%, but noted that though the question of net exports might not arise, but about 20.0% of the oil palm produced domestically is considered of high quality and clears all the seventeen tests for being an exportable commodity. According to an expert, the civil war which began in 1967 and lasted till 1970, was mainly responsible for the dwindling fortune of the sub-sector as it destroyed almost all the oil palm plantations and dispersed the small land holders of oil palm, which accounts for 80.0% of the oil palm produced locally. Global perspective on oil palm potentials: On a global basis, the value of the oil palm industry amounts to $40 billion - $50 billion. Presently, global demand for oil palm consolidates to 49.5 million tons. The production of CPO is expected to grow by 8% - 10% in 2013 achieving a total volume of 57 million MT - 58 million MT. Indonesia is expected to produce 30 million MT and Malaysia is expected to produce 18.9 million MT between 2013 and 2015. The industry is expected to reach 62.5 million tons by 2015 attributed to the increasing demand from food, chemical and bio-diesel industries. The European Union (EU) requires that by the year 2020, 20% and 10% of energy and transport fuel, respectively, should be derived from renewable sources of energy. This regulation is also expected to act in favor of the oil palm industry as oil palm serves as fuel for biomass plants. 50% of packaged foods and cosmetics use some form of palm oil as inputs. In addition, the rising income-levels in Asian nations also add to the demand of packaged food which has higher content of palm oil. According to United States Department of Agriculture (USDA), palm oil accounts for 40.0% of the edible oil world over which is much higher than the next in line, soy, which accounts for 22.0% of the world market. 63.0% of the global export of vegetable oil is accounted for by palm oil. Its dominance in global market is expected to continue because of the advantages it offers compared to the sources of other edible oils. Oil palm yields highest vegetable oil per hectare when compared to other sources of vegetable oils. In addition, it becomes indispensable because it produces two different types of chemical oils which add to the multiple uses it could be put to. However, it was as a result of the dwindling fortune of the oil palm industry in the country that led to the recent 3-day 1st International Palm Produce Conference (IPPC) jointly organized by the Federal Ministry of Industry, Trade and Investment and the Federal Ministry of Agriculture and Rural Development in collaboration with the National Palm Produce Association of Nigeria (NPPAN) held at the Le-Meridien Ibom Hotel and Golf Resort, Uyo, Akwa Ibom State. According to the organisers, the objective of the conference was to bring global stakeholders in the Palm Industry together for the purposes of sharing ideas and exchanging information on new technologies and all related issues aimed at improving production, processing and marketing of oil palm along the entire value chain. Minister of State for Industry Trade and Investment, Dr. Samuel Ortom lamented that Nigeria now ranks 26th in the world production of palm oil and hardly satisfies her domestic demand. Ortom said that the inability of meeting local demand in palm oil production was a clear indication that the fortunes of the Palm Oil Sub-Sector have declined significantly. President, National Palm Produce Association of Nigeria, Engr. Henry Olatujoye, said, "Palm Produce is a business in 24 States of the Federation. We cannot say we have had a synergy of relationship in the area of cooperation within ourselves to promote and drive the value chain in the sector and we in the private sector were apart." He was hopeful, however, that the conference would bring the farmers and stakeholders together to contribute to the process of policy development by government. He noted that Nigeria produce 1.2 million metric tons which were consumed locally with local shortage of 700,000 metric tons. Obstacles to the development of the sector: Participants at the conference, however, noted that the oil palm industry has suffered neglect over the years due to over dependence on crude oil revenue, inadequate improved planting materials and low investment in large commercial farms. Participants urged the Federal Government to sustain the initiatives in the Transformation Agenda of the present administration, especially the Agricultural Transformation Agenda (ATA), National Industrial Revolution Plan (NIRP), and the Nigerian Agric-Business and Agro-Industry Development Initiative (NAADI). Participants at the conference also appealed to States and Local Governments to make land available to oil palm farmers without many encumbrances as well as the provision of adequate infrastructure in the rural areas to encourage youths who would want to take to farming as a business. Participants also urged Government to sustain the ban on importation of vegetable oil, intensify monitoring and maintain the 35% duty on importation of Crude Palm Oil, while also calling on government to encourage farmers and farmer groups in the palm oil sub sector to be properly registered as Co-operative Groups to enable them benefit from the on-going NIRSAL credit facility of the Federal Government. Participants at the conference implored farmers to explore the various funding windows of Government for Agricultural Development, for instance, NIRSAL, which is domiciled with the Central Bank of Nigeria (CBN), while they also appealed to Banks to de-emphasize the requirement for collaterals from farmers seeking loans from them since the farmlands and the farmers themselves are enough collateral, while they also emphasized the need to adequately fund NIFOR and strengthen its seed production capacity to enable it continue to produce and deliver improved Tenera Sprouted nuts/seedlings to farmers. Participants called for the establishment of special fund for Oil Palm Development to be managed by Bank of Agriculture (BOA), Bank of Industry (BOI), or NIRSAL that will offer 5 - 6% interest rate to effectively assist entrepreneurs in the industry, while they also advocated for vigorous enlightenment campaigns to be undertaken by Banks to educate farmers on the availability of various funding windows available to them. Participants agreed that there is the Need for adequate advocacy/sensitization by NAFDAC and other regulatory institutions to discourage adulteration of Crude Palm Oil (CPO) by bulk marketers and encourage proper branding and labeling of palm products to enhance traceability. They said there is also the Need for entrepreneurs to invest in utilization of 90% waste (Bio-mass) from the oil palm industry to generate wealth, while they also advocated for the use of modern processing equipment for processing premium Crude Palm Oil (CPO) and other derivatives. Participants also called on the National Plant Quarantine Service (NPQS) to intensify efforts to check importation of diseased seeds/seedlings into the country to forestall introduction of fusarium wilt disease. They said there is the need to train Produce Officers and establish quality control laboratories across oil palm producing States as well as discourage transportation of palm produce at nights. Participants at the conference urged the Federal Ministry of Industry, Trade and Investment to prepare a roadmap for the development of the Oil Palm Industry in Nigeria, noting that a Technical Committee had already been set up for that purpose by the Minister for Industry, Trade and Investment, but advocated for an expeditious conclusion of the assignment. Government intervention: Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, said the oil palm value chain activities of adding 20 million metric tonnes of food to the National domestic supply by 2015, and generating 3.5 million jobs within the various commodities value chains are part of an overall effort in the Agricultural Transformation Agenda (ATA) of the President. The oil palm belt includes the states of Abia, Anambra, Bayelsa, Akwa-Ibom, Cross River, Delta, Eboniyi, Ekiti, Enugu, Ondo, Ogun, Osun, Oyo, Imo and Rivers. Copyright Daily Independent. Distributed by AllAfrica Global Media (allAfrica.com). |