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| Chief Audu Ogbe |
Monday 23rd November 2015, Director Food and Strategic Reserve (Engr. M. O. Adewoye) briefed the Hon. Minister of Agriculture and Rural Development (Chief Audu Ogbe) on activities of the Department at Minister's Conference Room. In responses the Minister pledged to add two mandate crops to the National Reserves.
Director Food and Strategic Reserve Department (Engr. M. O. Adewoye) briefed the Hon. Minister of Agriculture
The Department was formerly known as Strategic Grains Reserve Department, it was re designated as Food and Strategic Reserve Department in 2014 due to the reorganisation in the ministry. Its main function is the construction, rehabilitation, maintenance of food storage facilities and equipment, management of national / regional food security reserve. It presently has 33 Silo Complexes and 48 Warehouses with a combined storage capacity of 1.3 million MT.
To have a department devoid of bureaucratic bottlenecks, pragmatic in approach, maintaining and managing adequate and quality food reserve for the purpose of food security for the nation.
1.2 MISSION STATEMENT
§ Evolve relevant and dynamic policies that will ensure food security.
§ Prompt response to change in food prices to protect consumers, ensure remunerative producer prices and sustain Agricultural production.
§ Proper maintenance and management of storage equipment facilities and food in stock to be able to meet national needs in times of emergencies or Natural/Manmade disasters.
§ Preserve food commodities to meet National and International Standard to ensure food safety and fair trade practices.
1.3 DEPARTMENTAL ADMINISTRATIVE STRUCTURE
In order to achieve its core mandate, mission and vision statement, the Department, for administrative convenience has the following Divisions and units.
· Strategic Food Reserve Division
· Emergency Food Supply & Logistics Division
· Price Stabilization Programme
· School Feeding Programme
· Nutrition and Food Access Division
Other supporting units includes: Stores and Administrative units.
2.0 FUNCTIONS
The major functions of the Department are;
2.1 Construction and Management of Silo Complexes
Currently under the Food and Strategic Reserve Department there are Sixteen (16) Operational Silo Complexes. (These include three (3) newly completed ones).
Eight (8) newly completed ones awaiting test-running/commissioning. Ten (10) are presently at various stages of completion. One (1) No. requires re-design because of serious low lead carrying capacity of the site. Flat warehouses are also available in Hotoro, Kano State and all Silo complexes.
The total storage capacity when those under construction are fully completed is 1,336,000MT.
The location, capacity and status of each silo complex is contained in the table below:
2.2 Community Warehouses and Warehouse Receipt Operation
The Ministry has 48nos Community Warehouse. A memorandum of understanding was entered into with African Exchange Holdings (AFEX) to start a pilot phase of the Warehouse Receipt System (WRS) with Seven (7) of the forty-eight (48) units of the 2,000MT capacity community warehouses. The seven warehouses and their locations are:
1. Saminaka – Kaduna State
2. Tudun-Hatsi –Gombe, Gombe State
3. Pategi – Kwara State
4. Saki – Oyo State
5. Tsafe – Zamfara State
6. Dawanau – Kano State
7. Dutsin-ma – Katsina State.
The farmer will keep his produce with WHR operator, who will provide adequate storage for the produce and ensure quality and quantity guarantees. The electronic receipt generated from the transaction for the farmer in exchange for his produce will allow banks to lend against stored grains.
The scheme is expected to increase household income of over 100,000 farmers, enhance rural access to credit and penetration of banking products and alternative channels.
Other interested parties had been allocated some of the warehouses (attached is the table):
2.3 Establishment of Grain Aggregation Centres (GACs)
The overall goal of the Grain Aggregation Centres (GACs) is to aggregate grains from different farms to standardized measurement, right quality and good price for processors and integrated miller’s to have access to and procure good quality grain raw materials.
2.4 BLUMBERG GRAIN AND REFRIGERATED STORAGE WAREHOUSES
(ARCTIC FOOD SECURITY VAULTS)
In order to consolidate on the progress and gains achieved so far in transforming the Agricultural sector of the economy and reduce storage lost in storage of fruits, vegetables and livestock, new storage technology was procured. Blumberg Grain of United States was engaged as Original Equipment Manufacturer to Design, Supply and Install equipment in Nine (9) locations on Turnkey basis. The Nine locations were selected based on fact that they are a producing area, an existing fresh produce market or both. This will reduce storage loss of fresh produce and guarantee market access.
The location and production/market areas are:
1. Ijebu (Ogun State) – Market area
2. Benue – Producing area
3. Abuja – Market area
4. Kano – Market and Producing area
5. Edo – Market & producing area
6. Ebonyi – Producing & Market area
7. Bauchi – Producing & Market area
8. Ekiti – Producing& Market area
9. Ambursa –Market & Producing area
2.5 GRAIN STOCK MANAGEMENT
The Department manages stock of assorted grains (Maize, Sorghum, Millet) and Garri that were purchased by the Ministry.
Pest infestations in the Silo Complexes are controlled through the use of appropriate technology and Agro-chemicals.
The current total stock of grains in the silos is 42,108.57MT.
2.7 COLLABORATIONS OF FOOD AND STRATEGIC RESERVE DEPARTMENT WITH OTHER AGENCIES
The FSR Department undertakes collaboration and partnership with other relevant Federal, State Agencies and NGOs on commodity Marketing and Price Stabilization.
FSR is also an active member of the National Codex Committee (NCC) whose contact Head Office is domiciled in the Standards Organization of Nigeria (SON) that relates with the Headquarter of the Codex Alimentarius Commission (CAC) in Rome.
Other Agencies and NGOs in collaboration with FSR include: World Food Programme (WFP), USDA, NAFDAC, Nigeria Security and Commodity Exchange (NSCE), African Exchange (AFEX), Infrastructure Regulatory Commission (ICRC).
3.0 ACHIEVEMENTS
3.1 INCREASED STORAGE CAPACITY
· Out of the 20 new silo projects. Three 100,000MT capacity silo in Kebbi, Gusau and FCT and Six 25,000mt capacity silo complexes in Ilesa, Ikenne, Dutsinma, Gaya, Sokoto and Yola were completed, Thereby increasing the country’s storage capacity from 311,000MT to 711,000MT.
· Total No. of completed silo - 21
· Available total storage capacity – 1.3 Million MT (when all are completed)
· Release of 40,000MT of grains to states in 2013 to cushion the effect of flooding.
· Release of 19,500MT of grains/food items to the three Northeastern States (Adamawa, Borno and Yobe) when under the emergency rule.
· Introduction of weather moderated storage facility expansion of variety of food stock to include garri and yam products.
· Release of food items to friendly African countries. The most recent being Namibia (One million US Dollars worth of food items).
3.2 CONCESSION OF 33 NO SILO COMPLEXES
The Ministry 33 Silo Complexes with a combined storage capacity of 1,360,000MT, when those under construction are fully completed, means government will require huge fund to procure food to stock in silos and for associated overhead cost. Conservatively, it will cost 93Billion naira at current prices to fully stock the silo complexes at completion.
This can hardly be attained because this financial requirement far exceeds the annual budget of the Ministry. Therefore, the Ministry decided to put up the silo complexes for concession to stimulate private sector participation in Agricultural storage and marketing.
Concession the silos will free the Government from heavy financial burden; the participation of the private sector funds will bring in optimum and beneficial use of the silo facilities to create wealth for the operators, generate employment, and stimulates production.
The World Bank is funding the concession programme through Infrastructure Concession Regulatory Commission (ICRC) and Federal Ministry of Finance.
Update on Silo Concession:
The concession process saw to the appointment of Lion Head’s Group Partners (LHGP) as the Transaction Adviser for the concession after World Bank “No Objection”. This was followed by meetings with officials of Federal Ministry of Finance (FMF) and the Federal Ministry of Agriculture and Rural Development (FMA&RD) on August 26, 2014 and September 11, 2014.
4.0 CHALLENGES
4.1 Silo maintenance virtually suffers non budgetary provision for the maintenance and rehabilitation of the Silo complexes because the Budget Office treats it as a recurrent expenditure instead of a secondary capital expenditure. This has made it difficult to provide regular operational fund to the Silo Complexes for routine maintenance and management.
4.2 The Silo Contractors complained of delay in payment of
Valuation Certificates for work done. This has affected completion of the projects. However, eight silo projects are completed and ready for commissioning, while two others are completed, but not yet test run. Ten silo projects out of 20 have been completed.
4.3 Great potential exists to optimize the use of the available storage facilities. Nigeria has the largest storage facilities in the West African sub-region as revealed by the United States Department of Agriculture on Large Scale Handling of Agricultural Commodity. This should be explored in-line with the Lome, Togo, resolution of September 2013 by the Minister of Agriculture, Water and Environment that all member states should establish functional Food and Security Reserve.
4.4 This is also important in the current quest of the ECOWAS sub Region to have a Regional Strategic Food Reserve, where the region is relying on Nigeria to lead the way.
4.5 One major constraint to the implementation of the e-WRS is the high
cost of borrowing from commercial banks. AFEX has requested that the Development Finance Department of CBN and NIRSAL explore ways of increasing accessibility of development lending products to farmers groups, commodity traders and processing companies at affordable rates.
5.0 SUGGESTED WAY FORWARD
· In an effort to reduce financial commitment of government on managing and maintenance of Silo complexes and community warehouses, the Silo concession programme should be completed. It will ensure that available storage spaces are maximally utilized and the silos will still remain government assets.
· The Ministry should take decision on completion of On-going Silo Projects. All contractors that are yet to complete their projects should be given a time frame within which to complete and hand over. Failure by any of the contractor to complete within that period should lead to termination.
· To ensure proper and accurate record of Grain procurement and management, all the weigh bridges in old silo complexes should be replaced with digital weigh bridges that has inbuilt anti theft software.
· Routine maintenance of silo equipment should be carried out pending conclusion of the ing transaction.
· Enabling law to provide regulatory framework and institutionalise
Warehouse Receipt and Commodity Exchange operation in Nigeria should be enacted.
· Electronic warehouse receipt system could be integrated with the GES input distribution system to manage the supply chain more effectively. The ministry, Central Bank/NIRSAL and other players can have direct access to the inventory movement online and this will prevent exploitation by the Agro dealers.
· A model whereby farmers can exchange their grain stock valued at the guaranteed minimum price (GMP) or market price for input, is also being proposed. Pilot trial run is ongoing in Kaduna, Taraba and Adamawa states through the partnership of the department of Food and Strategic Reserve and AFEX Commodities Exchange Limited.
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