Palm biofuel, agro-based pharmaceuticals, others can replace petroleum, says Ikuenobe
Oil palm can fetch Nigeria as much revenue as the crude oil can, so said the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele. But self-inflicted challenges that de-ranked the country from the largest producer in the pre-independence era to the fifth producer are getting compounded by insecurity and land tenure system, among others. The Executive Director of the Nigeria Institute for Oil Palm Research (NIFOR), Benin City, Dr Celestine Ikuenobe, in this exclusive interview with Head, Agro-Economy, FEMI IBIROGBA, X-rays some of the challenges, how the industry could be developed for maximum national benefits and how youths could play significant roles for agro-economic diversification.
Nigeria needs 1,250,000MTs to meet local demand
Nigeria’s economy is crisis-ridden as a result of dependence on crude oil export. Do you see agriculture becoming the largest revenue earner for the country?
Not necessarily. However, the country can grow more food to reduce its import dependence in such areas as sugar, rice, palm oil and fish, as well as derivatives of agricultural produce such as pharmaceutical and textile grade starch, dextrose and syrups for industrial use in the pharmaceutical and beverage industries. With shifts from whole petroleum energy products such as petrol and diesel, the country can also benefit from production of industrial and fuel-grade alcohol from cassava and sugarcane and biodiesel from palm oil. Aggregating these value chains as spinoffs from primary agricultural production, the country may earn such revenues to match its current revenues from petroleum.
How soon could these value chain developments happen?
With concerted investments in strategic agricultural areas and value chains, which take advantage of the opportunities mentioned previously, they will unfold soon.
The CBN governor Godwin Emefiele once said revenue from palm oil alone could be greater than crude oil income if we focus on it. As a professional in the oil palm industry, how feasible is this statement?
We may be far from the expectations. However, a highly diversified palm oil sector from basic plantations to refinery and oleo-chemicals may contribute to achieving this.
Nigeria has neglected cash crops and their value chain development for so long a period. How can it revive these in the face of the current challenges of scarce resources, insecurity and farmer-herder crises?
Insecurity caused by herdsmen is a serious one that needs to be tackled. It threatens even the basic issues of food security, as many farmers, including women, now fear to farm beyond their homes and cannot go out far afield as their regular farmlands because of fear of attack by herdsmen. This has also largely affected persons engaged in cash crop agriculture such as cocoa, oil palm, cashew and rubber. It is imperative that insecurity issues be tackled as we intend to revive and increase production of cash crops and even our regular food crops.
To meet up with the demand of crude palm oil used for vegetable oil and other products in Nigeria, how many more hectares of palm trees will the country plant yearly?
First, let us understand that the palm oil market and demand is segmented between industrial use quality and domestic cooking palm oil quality. The bulk of palm oil produced by smallholders is suitable for local cuisine. This oil often has high free fatty acid (FFA content) often greater than five per cent, which disqualifies it for industrial use. Palm oil desired for industrial refining should have FFA content of less than five per cent, with low dirt content less than 0.1% and low moisture levels also less than 0.1%. These qualities are difficult to achieve among smallholders largely because of the processing technologies adopted. If all the fruit bunches processed by smallholders were done by the large industrial mills, we could have better results.
Coming to the question of the area needed to be planted to meet national demand, especially for refining purposes, assuming an average of three metric tonnes of palm oil yield per hectare, the country will need an additional 580,000 hectares of mature plantings today. However, this may not be readily achieved in one year. There is currently a huge wastage in palm oil processing in the sense that most of the small-scale producers achieve far less the potential of palm oil extraction rates. If you assume that a 20 per cent extraction rate can be achieved, most of the smallholding producers achieve anything from nine to at best 15 per cent. So, you find that for every 100 metric tonnes of fruits processed, 20 metric tonnes of palm oil can be achieved, but smallholding processors achieve nine to 15 metric tonnes.
So, you find that five to 11 metric tonnes of palm oil is lost. If you add this to low yields achieved by farmers because of poor agronomic practices, you find that the country can achieve more quality palm oil right now without planting any more area.
How many tonnes of palm oil does Nigeria need yearly, and what percentage of it do we produce locally?
By present estimates, Nigeria requires about 3 million metric tonnes of palm oil. National production is about 1,250,000 metric tonnes.
Is it not a shame for the country to still import palm oil six decades after independence?
I will not use such words. We must first realise that economies are dynamic. Our much touted words that Nigeria used to be number one producer in the world is correct. We must, however, realise that much of that production at that time came from the wild and natural groves which abound in the country. Today, much of global palm oil comes from cultivated plantations, often in such huge industrial scales requiring large expanse of land. By the sheer fact of the land tenure system in most of the oil palm belt of Nigeria, large expanse of land is not easily available.
Where available, contentions around ownership can discourage any willing investor with capital. Let us also not forget that oil palm cultivation requires huge initial investment costs. Where people find alternative investment opportunities, they would not want to go into such investments as the oil palm. Oil palm requires what some people term patient capital, because returns to investments takes time to achieve with breakeven points sometimes as high as five to seven years, from initial investment. That quantum of capital for the scales we expect need to be available perhaps through some innovative funding mechanisms.
We hope that now that the awareness is catching on; that the country can achieve significant milestones in developing the sector. Much of that will require strong political and economic will and rely on re-planting moribund old plantations and new plantings in the existing natural groves.
Also, a deliberate policy of use of improved planting materials, improved processing technologies to assure good palm oil extraction can help achieve this. Overall, my take is that it is not a shame that we now import palm oil because population has increased tremendously from about 50 million in the 1960s to about 200 million now, and the area under production of palm oil has not increased at the same rate.
I will simply say that rather than romanticising Nigeria’s drop in the position of palm oil producing countries, we should brace up to produce more and address those issues which are disincentives to investment in the sector. Nigeria still ranks among the top five global producers. If you add the informal production that does not enter the national statistics of production, you may find that Nigeria could rank among the four top producers.
Low yield per hectare has been a challenge of palm production in Nigeria. Are there improved varieties and are their seedlings readily available to farmers?
Most of the small-scale producers still rely on planting unselected improved materials for various reasons, ranging from low awareness to the proliferation of poor seeds and seedlings by unscrupulous producers who unfortunately defraud these farmers. The Nigeria Institute for Oil Palm Research (NIFOR) has, over the years, developed improved varieties which yield high.
Currently, materials we give to farmers are produced under strict quality control and can yield as high as 25 to 30 metric tonnes of fresh fruit bunches at maturity per hectare under the Nigerian conditions even with the minimum of agronomic management. These materials come into bearing fruits in the field under 30 months from planting. In the first year of harvest, farmers can achieve about eight metric tonnes of fresh fruit bunches, adopting good agronomic practices. These improved seeds are easily available from NIFOR. Enterprising individuals, groups and state governments can obtain these seeds to raise nurseries close to farmers. As I speak, we have over 2.5 million sprouted seeds on ground awaiting collection. We plan to produce nine million seeds this year. We have a capacity to produce 20 -30 million seeds per year. Our production is subject to demand.
Is there a place for youths in oil palm seedling production, cultivation and processing?
Yes. The entire industry depends on energetic youths, from planting, processing and to marketing. Since it is a life-long investment, it is encouraged that youths start to engage in investments in the business early on in their life and can expect to make good profit after five to seven years of planting. The palms themselves are life-long assets. Also, specialist services, such as organised harvesting, are highly demanded in the industry. Such services can be rendered by enterprising youths. Other services in the value chain include input supply, toll milling and palm kernel cracking and marketing.