Joe Onyiuke :CBN’s Intervention in Oil Palm Production, a Major Boost

Crude palm oil is a major commodity being traded daily at the international market for billions of dollars, but Nigeria, hitherto, the home of edible vegetable oil, is only living in its past glory. In recent times, however, there has been a reawakening in the industry with the support of the Central Bank of Nigeria for smallholder oil palm growers, which form 80 per cent of the market, to upscale production and re-enact the boom days. President of the Oil Palm Growers Association of Nigeria, Mr. Joe Onyiuke, speaks with Kunle Aderinokun on the prospects of its collaboration with the apex bank and recent investment road show to Thailand. Excerpts:

Recently you were in Thailand for business exploration and meetings, fact-finding, and seeking investment opportunities, what was that all about, and what was the outcome?

I was in Thailand months ago because I wanted to look at what their farmers are doing and how Thailand, a country that is half the size of Nigeria and number three today in oil production in the world, is doing. Indonesia is the first and Malaysia is the second and they are the demand controller of about 80 per cent of the market. They have problems with RSPO, environmental issues, irrigation, and community-related issues like land grabbing- mostly environmental problems. But Thailand is number three followed by Columbia.  These two countries are like Nigeria. In Nigeria where smallholder farmers control 80 per cent of the market, in Thailand, farmers control 90 per cent of the market.  And you will find out that most farmers in Thailand, who are into rubber plantation and cocoa are now going into palm oil because of the return on investment- oil palm is way ahead because of return on investment. 

The question is, how can a country like Thailand which is smaller in land space and population, now do better than us in oil palm? And we found out that in Thailand, they have a lot of research institutions, and all the universities have very functional agricultural research development departments and work in conjunction with the farmers. Government-owned research institutions and other private institutions also work together and when they meet, they discuss the problems of the smallholder farmers because the government has to protect their interests. You cannot import one drop of palm oil into Thailand, it’s not possible so they have to protect the interest of the local market for the farmers to grow. It will shock you that over there, they have what they call Nigerian black as species. Nigeria black is a seedling (sprouted nut) taken out of Nigeria. When you go to their country, they did not just plant those nuts from Nigeria, but they take them to their lab, do research and also tailor it to fit their environment.  The problem is that we are too lazy in Nigeria. We allow all the universities of agriculture to die and pay lip service to oil palm promotion. We allow them to buy and we start importing and praising them without knowing the environments are the same. They told me the Nigerian black is doing very well. I visited their biggest oil palm-producing company which is privately owned, they sell a lot of their seedlings to Nigerian commerce and they are all doing well. Oil palm production is a big investment. After investing your resources and time for seven years and it begins to die from root rot disease, it’s a major loss. Most of these materials are brought from abroad, when you plant them, they do very well for some time, but some come with diseases that do not fit into our environment.

Those things we buy from abroad are the same thing we have here and they are at a giveaway price and they are more rugged and better. The lab where they produce the nut is massive. I was shown the process. I saw their massive mills and plantations. The ecosystem is there from nursing to shipping. We want to have a very, robust research relationship and they are ahead of us but we are very strong in different ways too.  I told the Thai guys, why don’t you come and work with NIFOR, our oil palm research institute? NIFOR (Nigerian Institute for Oil Palm Research) is very solid and has a lot of world-class scientists. Instead of selling sprouted nuts to us or we’re buying blindly, they would work with NIFOR and make more money and Nigerian farmers would be the end beneficiaries because they are left with the best seedlings that will give them maximum returns. They were excited about it. The ultimate beneficiaries are the poor oil palm farmers, who form the core of membership, across states of the federation,  because the biggest problem for oil palm farmers is the seedlings. Some have been masquerading and selling rubbish to our people. If we solve that, we will be able to solve 60 per cent of our problems.  With this, we would be able to have affordable seedlings for smallholder farmers, repopulate our ageing and old plantations and even establish new plantations. If we do that, Nigeria will go very far in the world market. The problem is the lack of fruits. We need to fund our research institution too. We found out that the institutions over there have a way of working with their farmers. I thank God we are making progress.  Again, in our oil palm growers association,  OPGAN, we are into production but our major challenge is how to increase local capacity training and production. Once we can do that, other investments will come in processing. These are two different businesses; on the processing side,  investment requirements are very rigid because of policies. And oil palm farming is a very medicinal, highly nutritional crop.

Have you signed any agreements with the oil palm institution(s) in Thailand? What are we expecting from OPGAN in the medium to long term?

Access to seedlings is the biggest problem. NIFOR is very solid but lacks funding and technical support. This is what we’re preaching now: bridging those gaps with NIFOR, in collaboration with Thai research institutes will help it to produce more. Every research institute in the world shares materials with its counterparts. We are asking them to share materials with us so we can exchange ideas, and increase our production. But one thing I noticed from these countries is that they will never give you their joker. They have different types of species that they produce, solving food insecurity.  I’m happy we discussed how we are going to share materials and work together. Every investment in Nigeria will belong to us.

Is there any update from your series of talks with CBN regarding support for OPGAN?

CBN is a very serious supporter of smallholder farmers in Nigeria. They have done so much for agriculture under this administration. However, for oil palm, it has not been easy for us because the CBN has supported the commercial farmers (the big holders) because of the type of structure that they have. But unfortunately, the smallholder farmers are not very well organised,  which is why we have put it upon ourselves to organise and re-organise our members to make us bankable. And to compensate for that, CBN approved in principle for us to do maintenance of the plantations, which is a major component of production.  If you look at the industry, oil palm is better than other crops because of its longevity, for the next 30 to 35 years we are producing. To produce to the optimal level, there is what we call best management practice which costs a lot of money and most farmers cannot afford it.  So the CBN has intervened to start small and later expand, but we’re starting with 200 farmers for the pilot stage. We are ensuring we are getting it right, so we don’t disappoint our financiers. It’s a major boost for us and our members are excited about it, but they wish that all of them would have benefited but it’s a work in progress.