COMMODITY ASSOCIATIONS AND THE FOOD CRISIS
Today, Nigerians and the Nigerian government are alarmed by the food crisis the country is facing. According to the Cadre Harmonisé report, over 31.8 million Nigerians are suffering from acute food insecurity.
Reflecting back, how did Nigeria manage to avoid a food crisis during the COVID-19 pandemic?
What saved Nigeria and Nigerians from a food crisis during COVID-19 were the efforts of commodity associations through the Anchor Borrowers Programme (ABP). But how did the commodity associations achieve this? What are the roles and objectives of these associations? Many Nigerians would be interested in understanding that. Furthermore, what lessons can the current government learn from the methods employed by the commodity associations during the COVID-19 pandemic to prevent another food crisis?
Commodity associations in Nigeria play a crucial role in organizing and representing the interests of stakeholders in specific agricultural sectors. These associations are typically formed by producers, processors, marketers, and other stakeholders within a particular commodity value chain, such as rice, maize, cassava, cocoa, and palm oil. They advocate for better policies, provide training and support, and contribute to the overall development of their respective sectors.
Commodity associations engage with government bodies and policymakers to advocate for favorable policies, subsidies, and regulations that benefit their members. They work to ensure that government interventions, such as subsidies or support programs, are effectively implemented.
These associations also provide training and capacity-building opportunities for their members, helping them adopt modern farming techniques, improve yields, and enhance product quality. Furthermore, they help their members gain better access to markets by facilitating connections with buyers, processors, and exporters. They also assist in negotiating better prices and terms of trade for their members.
Some commodity associations are involved in the bulk purchase and distribution of essential inputs like seeds, fertilizers, and pesticides to their members at subsidized rates. They often collaborate with research institutions to develop and promote improved crop varieties, pest control methods, and farming techniques. Additionally, commodity associations act as mediators between their members and other stakeholders.
On the other hand, the Anchor Borrowers’ Programme (ABP) is an agricultural initiative launched by the Central Bank of Nigeria (CBN) in November 2015. It is designed to provide farm inputs, such as seeds, fertilizers, and pesticides, to smallholder farmers to boost agricultural production. The program also facilitates access to credit, ensuring that farmers have the financial support needed to grow their crops.
Through participating financial institutions, the CBN disburses loans to farmers. The loans are often given in the form of farm inputs rather than cash, ensuring that funds are used for their intended purpose. Farmers are required to repay the loans in kind after harvesting their produce. The repayment is typically in the form of harvested produce, which is then sold by the CBN or designated agents to recover the loan value. The program targets a variety of crops, including rice, maize, and wheat.
So, how did the commodity associations save Nigeria from a food crisis during the COVID-19 pandemic? And what lessons can be applied now to avoid plunging into an unmanageable food crisis?
During the COVID-19 pandemic, commodity associations in Nigeria united large interest groups, including individual farmers, to create synergies that achieved the common goal of ensuring the Nigerian commodity market was flooded with affordable food. As a result, during that period, Nigeria did not face any food scarcity. The commodity associations also made significant efforts to sustain information provision, quality assurance, food export management, food traceability, and environmental management.
Zayyad I. Muhammad, Abuja
