Nigeria’s Palm Oil Import: How NIFOR Failed On Its Mandate

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The formal mandate of the Nigerian Institute for Oil Palm Research is to conduct research into the production and products of oil palm and other palms of economic importance and transfer its research findings to farmers. Nigeria has imported palm oil worth over $3.2billion in the last ten years. The greatest challenge in Nigeria is that NIFOR has totally disconnected from potentially small-scale and out-grower smallholder farmers of palm oil plantation and failed in its mandate. Today, NIFOR has failed in its mandate for allowing Nigeria to fall from being the largest producer of oil palm to net importer of palm oil. NIFOR failed in its mandate because there is no policy statement on how Nigeria can return back as the largest producer of palm oil in the world and the institute is always waiting for its annual subvention from Abuja. It lacks innovation. There is need to review the operations of NIFOR in the last fifty years and reposition it to deliver on its mandate. Today, the institute has no record on how many private individuals or organizations that have established palm oil plantations in the last 20years in Nigeria. NIFOR is located in Benin City and he does not even know the number of palm oil estates in Edo State. Rather there is always struggle for managerial positions in the institute. How can the institute deliver on its mandate when it has no records or database of palm oil estates in Nigeria? Federal Government should as a matter of urgency review the operations of NIFOR.

NIFOR has failed in its mandate for allowing Nigeria to produce only 1.7 per cent of the world’s consumption of palm oil which is insufficient to meet its domestic consumption which stands at 2.7 per cent. Thus, the question of net exports doesn’t arise; however, paradoxically, about 20.0 per cent of the oil palm produced domestically is considered of high quality and clears all the seventeen tests for being an exportable commodity.

Prior to the establishment of the Nigerian Institute for Oil Palm Research, some research on the husbandry of the crop had been undertaken by the then Colonial Department of Agriculture in Nigeria. NIFOR has failed in its mandate for not repositioning Nigeria as a major producer of oil palm through the development of high yielding and locally adaptable planting materials and promotion of technologies to enhance small holders contribution to Nigeria’s pool of high quality oil palm. The news that Nigeria imported more than N116 billion of palm oil in the last three quarters of 2017 is worrisome and failure of NIFOR. Some newspapers reported that Nigeria imported 450,000 tons of crude palm oil valued at N116.3 billion ($323.1 million) in the first 10 months of this year. The amount imported increased by 12 percent from July because of rising demand, thus pushing up the price from $663 per metric ton in July to $718 per ton as at November 2017.

For decades, palm oil industry, supported by the Nigerian Federal Government, has been struggling to expand its capacity. In the 1960s, the government started to heavily promote large-scale plantations and mass production. Smallholders were geographically dispersed but kept supplying nearly 90% of the yield. The government’s attempts got constantly denounced by civil society organizations for weak governance and high corruption that mostly resulted in failures both for the industry and the country’s rich biodiversity. These attempts include the 1960’s Cross River State project and1990’s EU-funded Oil Palm Belt project. In the end, both projects had to come to a halt due to strong local opposition despite considerable EU- and World Bank support.

Nigeria’s Palm Oil Import: How NIFOR Failed On Its MandateNIFOR has failed in its mandate for allowing thugs from local communities armed with dangerous weapons to have invaded the Nigerian Institute for Oil Palm Research (NIFOR), Edo State, sacking the Executive Director, before taking over his office. The thugs were alleged to have been led by a former top shot of the institute. It was noted that after retirement, the former executive director and some influential persons in the state went to the Federal Ministry of Agriculture and Rural Development where they got a letter reappointing him as Director/Chief Executive, a position which is not known to the Act establishing the institute. Host communities have almost taken over the management of NIFOR.

Without NIFOR, palm oil was among the first commodities of international trade, after the slave trade, between Nigeria and Europe. The world trade in palm oil at the turn of the 20th century and up to the Second World War, was dominated by countries of British West Africa (largely Nigeria), the Belgian Congo (later Zaire and now the Democratic Republic of Congo), and the Far-East Asia notably the Netherlands East Indies, (Sumatra and Java) now Indonesia

By 1950, it was realized that the work of the research station should be placed on a West African basis. Consequently after many discussions with all concerned, it was decided that a semi-autonomous institute be created as other similar organizations which had been set up to conduct research for the benefit of all the British territories in West Africa under the West African Research Organization (WARO). Thus the OPRS was taken over by WARO, by Ordinance No. 20 of 1951. Its scope of activities then extended to the then Gold Coast (now Ghana) and Sierra Leone.

NIFOR has however, since 1992 came under the aegis of the Federal Ministry of Agriculture. The thrust of work at NIFOR today, as in the past, derives from national goals as currently defined by the national policy on agriculture and the needs of farmers. Findings revealed that the nation imported a cumulative 4,760,000 tonnes of palm oil from 2007 to November, 2017. Palm oil, hitherto one of the nation’s major foreign exchange earners in the early 1960s is massively imported into the country from Malaysia and Indonesia. Recall that Nigeria was the largest producer of palm oil in the world with a market share of 43 per cent in the 1960s. But currently, it has a world share of 2.9 per cent, with Indonesia leading by 33 million metric tonnes, Malaysia, 19.8 million metric tonnes; Thailand, two million; Colombia, 1.108 million metric tons and Nigeria, 970,000 metric tonnes.

The Institute failed because it is presently managing only two oil palm estates namely the Federal Oil Palm Estate Obotme (525ha) and the Federal Oil Palm Project, Erei (720ha) on behalf of the Federal Government of Nigeria when many other palm oil estates have been taken over by forest. The Institute also runs advisory services relating to palms management, analytical services and quality assurance and diagnostic services to the palms industry in Nigeria. In this respect most of the fertilizer recommendations and policies of some major oil palm companies in Nigeria are based on the yearly routine soil and foliar analysis carried out for them by the Institutes consultancy service.

That Nigeria, just this year alone, has imported 450,000 tons of palm oil to the tune of N116.3billion, is as grim a reality as it is worrisome and failure of NIFOR to deliver on its mandate. With an ever increasing population, a steady decline in palm oil production, and a proliferation of the uses of various products from palm oil, it is an economic fact that there is high demand for palm oil in Nigeria. Therefore, it is a tragedy that Africa’s greatest potential is spending so much money on the importation of what it can produce. Buhari’s Farming Is Bad Propaganda —Abimbola Adelakun


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  1. Nigerians should understand the objectives of the Act setting up NIFOR as a research Institute to provide technical backstopping for the oil palm industry in Nigeria and to a large extent NIFOR has performed very well. Prior to the establishment of NIFOR it was common knowledge that you dont live to eat the fruit of oil palm tree that you planted because of the long gestation period. There were reported cases of 10years gestation period in the oil palm especially in the South-East. Today through the scientific prowess of NIFOR, the oil palm gestation period has been reduced to 2-3years. Three years after planting, a farmer can begin to harvest oil palm fruits and this performance is same with any seed from any country in the world. We should understand that oil palm performance is highly dependent on the environment and that is why the palm that produces 28tonnes fresh fruit bunches per hectare per year in Malaysia will produce 16tonnes fresh fruit bunches per hectare per year in Nigeria. Results from private estates have shown NIFOR materials achieving 22tonnes fresh fruit bunches per hectare per year.
    During the cradle of the oil palm industry in Nigeria, we were using canoes, cooking pots and other culinary items for processing which led to production of palm oil high in moisture, dirt, oxidative parameters and other poor quality factors. The Government responded by importing pioneer mills which improved processing and Nigeria was exporting high quality palm oil (<3.5% free fatty acids). Following the civil war with the attendant decimation of the industry and livelihood in the South-East the Pioneer mills became unaffordable and NIFOR responded with a Small Scale oil palm processing technology which revolutionized oil palm processing in Nigeria especially among small holders that contribute more than 80% of the palm oil pool in Nigeria. Through the collaboration of NIFOR with the private sector and International Development Agencies, a critical assessment of the Nigerian oil palm sector was carried out in 2009 and we found that local production of palm oil was about 550,000tonnes per annum while palm kernel oil was about 200,000tonnes. If our consumption of palm oil and palm kernel is in excess of 2.4million tonnes per annum, there will certainly be despirate importation. This data collection was an expensive process for all the stakeholders and needed to be revised. Our local production has not substantially increased since then and we wonder where the fixed figures of 850000tonnes, 970,000 were emerging. Obviously, these data are being cooked in the absence of official reliable data. It is the responsibility of several Government organizations to ensure release of accurate official data on domestic economic activities.
    NIFOR as a research organization manages some estates on behalf of the Federal government. These estates have either been privatized or forcefully acquired by the host communities. NIFOR also provides technical assistance to small and big farmers in good oil palm agricultural practices.
    Oil Palm farmers in Nigeria face several challenges including difficult land acquisition which takes a minimum of two years, short term fiance programme of Government intervention schemes, high interest rate and short moratorium unsuitable for oil palm cultivation, high and multiple taxation, host community hostility, poor infrastructure and in some cases non-existent, e.t.c. NIFOR can only advocate for the amelioration of these conditions by Government where necessary and not in anyway equipped to correct these production constraints. The best Federal Government finance for agriculture is the commercial agriculture guarantee scheme which provides a loan term of seven years renewable at an all-inclusive interest rate of 9% and a moratorium of 12-14months. The gestation period for oil palm is 36-48months. This indicates that the government fiance is not suitable for green projects in oil palm. How else can potential farmers secure funds for oil palm cultivation? If farmers cannot secure funds, how can the country expand its oil palm holdings and produce to meet local requirements of fats and oils? if we cannot meet local requirements how do we export? Do you know palm oil is more expensive in Nigeria than any country in the world? Nigeria consistently maintain the highest global price per tonne of palm oil annually.
    In Malaysia, the Government is currently promoting a replanting programme to rejuvenate old oil palm areas at 175,000hectares per annum. The Government is mobilizing fiance at USD4000 per hectare. Several innovative finance models are being used to deliver finance solutions to smallholders. This is because of deliberate effort by the Malaysia Government to sustainably increase palm oi production from less than 4tonnes of palm oil per hectare to more than 6tonnes of palm oil per hectare per year without deforestation. What is our programme in Nigeria?
    NIFOR is one of the few Government establishments that despite the long period of neglect has remained focused within available resources. We expect all Nigerians that constitute the local fats and oils consumer market to positively advocate for the transformation of the oils and fats economy of Nigeria towards self sufficiency and industry efficiency by lobbying the CBN to provide customized financial solutions especially for smallholders and state Governments to promote conducive business environment. This publication by Mr Abdulsalam Olawale is only directed to defame NIFOR and will lead us nowhere.

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