Business

Nigeria’ll continue to import milk, beef until it embraces ranching –Experts

…say Nigeria spent N1.3trn in four years on importing live animal

 

Though cattle grazing remains a source of insecurity and in the country and disharmony among Nigerians, it has been disclosed that Nigeria cattle owners will never be able to provide 50 per cent of the country’s dairy or beef needs until they embrace ranching and modern livestock farming techniques.

 

This, experts say is because cattle that walk long distances will remain emaciated, malnourished and unhealthy to produce quality meat and large quantities of milk to meet the nation’s needs.

 

Records show that Nigeria has been importing dairy products from Europe and elsewhere for over 60 years and spends from $1.2 billion to $1.5 billion on importation of the dairy products alone every year.

 

The country also was importing beef until a recent ban but despite the ban, the country massively (mostly unofficially) imports live cattle, goats and sheep from neighbouring countries, particularly from Niger, Chad and Mali.

Herder–farmer conflicts in Nigeria

 

Herder-famer conflicts’ in Nigeria have mainly involved disputes over land resources between mostly Muslim Fulani herders and mostly Christian farmers across Nigeria but more devastating in the Middle Belt (North Central) since the return of democracy in 1999.

 

Attacks have also taken place in northwest Nigeria against farmers who are mainly Hausa people. While the conflict has underlying economic and environmental reasons, it has also acquired religious and ethnic dimensions.

 

Thousands of people have died since the conflict began. Sedentary farming rural communities are often targets of attacks because of their vulnerability. There are fears that this conflict will spread to other West African countries but this has often been downplayed by governments in the region.

 

Attacks on herders have also led them to retaliating by attacking other communities. Since the Fourth Republic’s founding in 1999, farmer-herder violence has killed more than 19,000 people and displaced hundreds of thousands more.

 

It followed a trend in the increase of farmer-herder conflicts throughout much of the western Sahel, due to an expansion of agriculturist population and cultivated land at the expense of pasturelands; deteriorating environmental conditions, desertification and soil degradation; population growth; breakdown in traditional conflict resolution mechanisms of land and water disputes; and proliferation of small arms and crime in rural areas.

 

Insecurity and violence have led many populations to create self-defence forces and ethnic and tribal militias, which have engaged in further violence.

 

Making a case for the development of the Nigerian dairy sector

 

Halima is an adolescent girl who lives in a pastoral community in Northern Nigeria.

 

Each day she wakes up at 5:00 am to help her mum with house chores and to milk her father’s cows. At 7:00 am, instead of going to school, Halima departs on her hawking route, to sell fura da nono and maishanu (locally processed raw milk products), making between N500-N1, 000 per day.

 

She usually returns late in the afternoon, in time to help her mother prepare dinner for the family. Halima wants to go to school, but formal education is out of reach as her parents cannot afford it and need the income she contributes daily, though it is meager.

 

Also, every year the entire household migrates from the North to the South in search of pasture and water. This will be Halima’s routine until she is given away in marriage. Halima is not alone.

 

Millions of women and girls from pastoral communities in Nigeria are engaged in the informal dairy industry. Despite the labour-intensive nature of the work, the financial rewards are insufficient and will not move smallholder pastoralists out of the bottom of the wealth pyramid. This sad reality can be avoided if the Nigerian dairy sector is developed further.

 

Nigeria has over 180 million residents, consuming about 1.3 billion tons of milk annually. This is a huge market for locally produced milk and dairy products. Unfortunately, about 60 per cent of dairy products consumed are imported. According to the Central Bank of Nigeria (CBN), Nigeria spends between $1.2 billion and $1.5 billion annually importing milk and dairy products.

 

This huge import bill contributes to food insecurity and is one of the reasons behind the CBN’s decision to add milk imports to its restricted list for foreign exchange sales.

Livestock farming in Nigeria

 

According to experts, with the exception of poultry farming, livestock production in Nigeria remain stocked at archaic, traditional itinerant method of herding the animals in the bushes from place to in search of pasture, in most cases the pastoralists, otherwise known as herdsmen walk the animals over two thousand kilometers from north to south and back.

 

The refusal of Nigeria to embrace the modern methods of livestock farming, ranching and acquiring improved and productive breeds for more milk and beef; has made the country incapable of producing up to 50 per cent of the national needs and made Nigeria import dependent on milk and beef.

 

This is even as it has been disclosed that though the Federal Government has banned importation of processed beef, the country imports live cattle, sheep and goats from the neighbouring countries.

 

Despite this setback, livestock farming described as basically rural, still plays a very important role in Nigerian agriculture contributing about 12.7 per cent of the agricultural GDP with the livestock population comprising about 14 million cattle, 34 million goats, 22 million sheep and about 100 million poultry.

 

Other livestock species of economic importance are donkeys, pigs and camels. The livestock subsector is dominated by traditional systems of production, processing and marketing.

 

Would restricting food imports boost local production?

Many experts believe that the policy of restricting food imports does have some merits, but the policy cannot be introduced in isolation. Agricultural economist Idris Ayinde argues that restricting food imports should be a gradual process since the country cannot yet meet domestic demand for most food commodities, and the policy risks increasing food price inflation further.

 

Also Kalu Aja, a financial planning expert on his twitter handle said a ban on forex for milk imports will make milk become more expensive as what is produced locally is grossly insufficient.

 

He said: “Most of the cows in Nigeria processed for beef are imported. Nigeria also imports raw hides, leather and fur skins. From 2014 to 2017, Nigeria spent N1.3trillion on live animal imports.

“Just like banning rice, a ban on forex for milk imports will make milk become more expensive locally. As long as local supply cannot meet local demand, there will be imports. Nigeria has no cold chain thus a ban on milk means bulk of milk produced will be powdered.”

Also an economist, Tunji Andrews, on his official and verified Twitter handle, said what a FX ban will do, is take away the last source of fortified nutrition from poor Nigerian children.

 

CBN’s revised policy on the dairy industry

 

Due to a massive outcry, what the Central Bank finally did was to reduce the number of companies involved in the importation of milk, its derivatives and dairy products to six. In a recent circular signed by the Director, Trade and Exchange, Dr Ozoemena Nnnaji, the CBN restricted the number of companies involved in the importation of milk, its derivatives and dairy products to six.

 

The companies include FrieslandCampina WAMCO Nigeria, Chi Limited, TG Arla Dairy Products Limited, Promasidor Nigeria Limited, Nestle Nigeria plc and Integrated Dairies limited.

 

This circular is sequel to a prior one released in July 2019 which banned commercial banks and other authorised dealers from accepting Form M for the importation of milk and other dairy products.

 

The CBN noted that the decision was a fallout of its efforts at stimulating local production of milk, revealing that the aforementioned companies showed willingness and had keyed into the apex bank’s backward integration programme to enhance their capacity and improve local production. Nigeria’s dairy industry is cultivated on a subsistent basis and characterised by low productivity.

 

Despite the abundance of natural resources required for milk production, Nigeria’s milk production estimated at 600,000 MT accounts for only 13 per cent of West African production.

 

Currently, domestic production dwarfs local demand (estimated at 1.3MMT), leading to a shortfall that has often been met by imports.

 

According to the CBN Governor, importation of milk gulps about US$1.2 billion- US$1.5 billion annually. Asides low level of production, the productivity of cattle breeds has been hampered by long distances covered for grazing, inadequate supply of feed and water, alongside poor rearing practices by dairy farmers.

 

This has resulted in lower milk yields, making local milk manufacturers shun sourcing of raw milk locally and ultimately reducing the commercial viability of local cattle rearing. In recent years, episodes of conflict between herders and farmers over encroachment on land used for crop farming have deterred local producers from pursuing backward integration.

 

Last line

 

According to Niranlytics, the recent measure permitting six companies to import milk will ease the upward pressure on prices of domestic dairy products in our view. It said however, that the Federal Government needs to compliment the efforts of CBN by improving critical infrastructure (feeder roads and water resources) that encourage investment and more importantly, establish a framework to resolve the long-standing herder- farmer conflict so that local producers will be encouraged to embark on backward integration.

 

“We believe that sourcing milk locally will reduce the cost of production for domestic players and in turn lower prices for milk, making it more affordable to Nigerians,’ they said.

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