(4 minutes read)
- Nigerian farmers hope to cash in the government’s drive to revive the country’s once thriving palm oil business
- There are many small plantations scattered across southern Nigeria, which are struggling to survive
- The government is investing heavily in palm industry as part of its drive to diversify away from petroleum and help create jobs
- But small farmers complain that he benefits are mostly reaching the large farmers.
Nigerian farmers hope to cash in the government’s drive to revive the country’s once thriving palm oil business. There are many small plantations scattered across southern Nigeria, which are struggling to survive. The government is investing heavily in the palm industry as part of its drive to diversify away from petroleum and help create jobs. But small farmers complain that the benefits are mostly reaching the large farmers.
Oil prices since 2016 have been falling putting the oil dependent African countries in a disarray. It has been further aggravated by the Covid-19 pandemic in Africa’s most populous country. Nigeria has decided to invest massively in palm oil. It was the world’s leading producer of palm oil in the 1960s. Now, it is pushed to the fifth place in palm oil production, so much so that it imports nearly half of the two million tons consumed annually in the country. It further depletes the foreign exchange reserves.
However, the farmers having smallholding say that they are not benefited by the government’s loan schemes. Only large farms can avail of such benefits since the loans are tailored to meet their needs. Plam oil sector needs a lot of capital. But those who have larger farms also are complaining about extraneous issues that stumble them in their efforts.
For instance, in Edo State, the palm and rubber trees of the Okumu Oil Palm Company cover more than 33,000 hectares of land, which are partly financed by a loan of 14 billion naira (29 million euros). The plantation was founded in 1976 and produces 40,000 tons of crude palm oil (CPO) per year. It is hoping to double its production by 2025, with the commissioning of two new plants by next year. However, it is stung by lack of infrastructure, the deplorable state of the roads or the incessant power cuts are holding back the development of this sector, like many others in Nigeria.
The palm oil industry has come under fire around the world for contributing to deforestation and the loss of community land. But its supporters say it contributes to local development and creates jobs.
