Establishment of the New Nigeria Commodity Marketing Company [NNCMC] last week by New Nigeria Development Company [NNDC] is one of the most important policy actions taken in recent years to boost agricultural production and control food prices. The announcement was contained in a statement published by NNDC, a regional development finance institution owned by the 19 northern states.
The new limited liability company was incorporated on July 31, 2016 and has its headquarters in Kano. It will operate as a private-public partnership with the private sector and institutional investors having the controlling shareholding of 65 percent. As part of the arrangement, daily field operations will be performed by private sector players comprising Project Management Consultants and State Implementation Consultants. The structure, according to the company, is designed for efficiency, professionalism and profitability.
NNDC explained that it has put in place a model to ensure that farmers get value for their products. The pricing model will include farmers’ cooperative societies and other stakeholders. It also said warehouses have been identified for the storage of purchased products. The Agreed Purchase Price (APP) will be widely publicized so that farmers are not shortchanged in the purchasing process. For now, the company said it will focus on maize, cowpea, groundnut, cassava, soya beans, sesame-seed, ginger and Shea-nuts. The procurement process of the company will involve appointed Local Buying Agents (LBAs) and the establishment of assembling or collecting points.
The new company would be seen to function like the erstwhile Nigeria Grains Board [NGB], one of the six Commodity Marketing Boards established by the military administration of General Olusegun Obasanjo in 1977. They all collapsed in the 1980s. NGB served as an intervention agency which made sure that surplus produce was bought from farmers by government with a view, among other things, to controlling commodity prices and encouraging farmers to continue producing through price guarantees.
Some of the basic gains of NNCMC shall include grains procurement directly from farmers; storage of such grains in strategic centers and sale of the grains to the public when prices of commodities are on the high side. NNCMC will also guarantee price stability and eliminate wastages usually experienced by farmers on an annual basis. Food security would equally be guaranteed. Besides, NNCMC would not only be able to promptly respond to changes in food prices to protect consumers but will also sustain agricultural production especially among peasant farmers.
Nonetheless, we are surprised that rice is not on the list of commodities to be covered at inception by NNCMC. The mass production of rice which was largely supported during the last farming season by CBN’s Anchor Borrower’s Programme is a strong reason for NNCMC to make it one of the target crops. Rice is also the most ubiquitous staple food in Nigeria. The eventual inclusion of rice by NNCMC into its list of target crops will not only add value for farmers but will also protect millions of its consumers from exploitative prices.
We support NNCMC’s private sector-inclined shareholding structure but we express some fears of the company’s use of consultants in its daily field operations. Although we do not have details of the composition of the consultants, caution must be exercised to forestall the consultants from becoming another set of ‘middlemen’ whose activities would be detrimental to the strategic goals of NNCMC.
The establishment of NNCMC by NNDC is a deliberate attempt at furthering the actualisation of the agricultural change agenda of the federal government. We therefore support this recent development in the agriculture sector, which is the most important non-oil segment of Nigeria’s economy. As the major pre-occupation of people living in the northern part of the country, agriculture certainly has the potential to boost the economy of this region and of Nigeria as a whole. We commend the owner state governments of NNDC for their wise and timely decision taken while farming appears to be regaining its lost glory in this country.
