Food Security Receives A Boost, As FG Launches Silo Complex

Leadership Newspaper (PDF)

Food security is recognised as central to any nation’s security. The uncertainties that perennially beset any food-insecure nation derive, in part, from inadequacies associated with activities off-field, affecting food storage. On the flip side, developed countries devote quality policy support to food storage which, in turn, guarantees their all-year-round supply of food. Instances abound where and when the surplus supplies of food are either exported or given out as humanitarian and charity support for food-insecure countries.

Many cases of food insecurity are therefore due largely to storage inadequacies, in quality or quantity, leading to a substantial post-harvest wastage. Apart from discouraging many producers (who are mostly small-scale), significant business opportunities and revenues are lost. Under the Agricultural Transformation Agenda, however, the heightened emphasis on food storage lends further credence to the value chain intervention approach, in this case involving infrastructural support for storage.

Storage Capacity

Before the Goodluck Jonathan administration, 13 silo complexes, with a total storage capacity of 311,000 metric tons (MT), were existing and operational. Existing silos in more than 10 locations, spread across the country, were underutilised. Tremendous work has been done to ensure that additional 20 silo complexes are completed by the present administration, to bring the total to 33, with a total storage capacity of 1.336 million MT.

The commissioning of the completed 100,000 MT capacity silo complex in Sheda, Abuja, on August 25, 2014, by Vice President Namadi Sambo, was a testimony to the seriousness the government of President Jonathan attaches to the operations of the silos for people’s benefit. The vice president represented the president on that occasion. The federal government has indicated that there are plans to complete the 11 that are currently at different stages of construction to boost storage capacity and ensure that Nigeria’s strategic reserves are more than adequate in coming years.

The increase in number and sizes of silos in Nigeria is a demonstration of the federal government’s efforts toward revolutionising agriculture, building national resilience and responding to emerging food challenges. Since strategic food reserve is a first line of defence in case of food crises, Nigeria looks set to store enough food to cope with emergencies through the operation of our silos. The silo complexes have been a part of the storage infrastructure of the Strategic Grains Reserve (SGR) department in the Federal Ministry of Agriculture and Rural Development (FMARD).

The SGR department was launched in 1987 to prevent post-harvest losses, and to provide the first line of food relief internally and to friendly countries in times of disaster – natural or man-made – and to make food available at other times at affordable prices. The network of the SGR silo complexes was established to provide immediate food relief in times of emergency, provide appropriate mechanism, guarantee minimum price scheme to make farmers earn remunerative prices for their produce, provide a mechanism for price stabilisation and storage capacity for excess production, and reduce post-harvest losses.

Strategic Reserves

As a nation, Nigeria has to maintain at least five per cent of total food production in the strategic reserve. The policy objective of the SGR department is to store five per cent of the total food grains produced in the country for the purpose of building strategic food security stock. The department is involved in construction of silo complexes and maintenance of silo facilities. The department acts as a Buyer of Last Resort (BLR) through the guaranteed minimum price (GMP) that ensures remunerative producer prices for the farmers and ensures continuous beneficial production.

Silos provide platform for the purchase and management of grain stock at guaranteed minimum prices (made known to the famers before production) and stored at the national reserve silos or warehouses. The stored foods are released only at the approval of Mr. President during period of national disasters and to give assistance to friendly sister countries in their periods of needs. It collaborates with other relevant federal, state agencies and NGOs on commodity marketing and price stabilisation.

It coordinates state activities on the establishment and management of buffer stock. It is also involved in the development of market information system. There are other policy mandates of the department, including Codex Alimentanius Commission (CAC), On-Farm Project of Millennium Development Goals (MDGs). About a year ago, the Minister for Agriculture and Rural Development, Dr Akinwumi Adesina, disclosed that the federal government would privatise silos under construction across the country for proper utilisation. This, he stressed, would help stabilise prices, provide alternative commodity markets for farmers and ensure national food security. “The government does not have the resources to manage them. We therefore want the private sector to lease the huge storage infrastructures to improve their management, efficiency and profitability,” Adesina reasoned.

Not only is the ministry working hard towards attracting business opportunities into Nigerian agriculture, it is also trying to shed unwarranted burdens. “Running and managing the huge infrastructure is extremely expensive. At the current guaranteed minimum price rate, about N100bn will be required by the ministry to stock the silo complexes,” he added.

According to the minister, the privatisation would be implemented under a Public-Private-Partnership (PPP) arrangement, in which case the ministry would undertake the responsibilities of planning, coordinating, facilitating and monitoring. State governments that indicate interest to be part of the PPP arrangement would be considered, and a few of the silos would be reserved for use as strategic grains reserves.

Memorandum of Understanding

Moreover, during the signing of a memorandum of cooperation (MoC) between the ministry and the Infrastructure Concession Regulatory Commission (ICRC) on the concession of the silos, Dr. Adesina hinted that the ministry was going to embark on concessioning and leasing of silos in conjunction with ICRC, World Bank and private stakeholders so as to effectively involve the private sector in the utilisation of the excess storage space. The minister observed that the federal government would save N100bn from the concession of 33 silo complexes in 32 states of the federation including the Federal Capital Territory.

The MoC, according to the minister, was the continuation of the process of synergy with the private sector to manage and operate silo complexes across the country. The signing of the MoC would bring the capacity utilisation of the silos, which is currently less than 10 per cent, to about 100 per cent after the concession. Between the ministry and the ICRC, the roles and responsibilities of each party to the MoC towards the actualisation of the proposed concession exercise would be spelt out.

The department is also collaborating with African Exchange Holdings (AFEX) Ltd. for the commencement of the pilot electronic Warehouse Receipt system in seven locations in Nigeria. The Blumberg Food safety and Security Vaults (Warehouses) are also being introduced in nine states of the federation to address post-harvest losses of fruits/vegetables, roots and tubers.

The deliberate efforts to modernise agriculture under the transformation agenda is beginning to attract investors, opening up the agricultural sector to worthwhile and profitable engagement while at the same time boosting food security prospects.

Keywords: , , , , , , ,