Regional commodity exchanges as panacea to rural poverty, low agricultural productivity by Taminu Yakubu
Editor's note: Dr. Taminu Yakubu, a former economic adviser to late president Yar'Adua, explains why the regional commodity exchanges is the ultimate panacea to rural poverty and low agricultural productivity.
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He made this known in Lagos on Tuesday, November 1, while presenting a paper at the meeting between Asiwaju Bola Ahmed Tinubu, the APC presidential candidate, and the business community.
Nigeria has 75 million hectares of land for farming. Of these, only 44% or 33 million has been deployed into production with a yield hardly up to 20% of the average standard threshold. Nigeria has 1.2 million hectares for irrigation, with only 25% of it, or 300,000 hectares under cultivation.
The observed suboptimal output is certainly due to low productivity exacerbated by massive underinvestment. And there is a historical setting to this conclusion, among other reasons.
Source: UGC
The abrogation of state-owned commodity boards in the wake of the Structural Adjustment Program (SAP) disconnected Nigeria’s agricultural and rural sectors from international trade by destroying the quality assurance scheme that had made both to thrive.
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Asiwaju Bola Ahmed Tinubu correctly believes that the final solution to the challenges in agriculture and the rural areas lies in reconnecting our agriculture to the global markets to overcome the crippling effects of the sectors’ undercapitalization.
Asiwaju Bola Ahmed Tinubu, again, correctly believes that there is no better way to attract the needed investment to these two interrelated sectors than through regional commodity exchanges.
The regional commodity exchanges would come with Institutions, Infrastructures and Instruments that would address the enduring challenges of low agricultural productivity, negate the lack of financial inclusion among 40 million farmers and rural dwellers, stop the arbitrage which keeps our farmers in perpetual poverty, reverse the absence of a national food security program, open up the global markets for our agricultural commodities, turn around the lack of standardization and ultimately guarantee an endless flow of liquidity from the global financial markets for the proper capitalization and substantial improvement of yields in agriculture in Nigeria.
There are very compelling macroeconomic factors why commodity exchanges should start as regional entities. Asiwaju Bola Ahmed Tinubu, a strong advocate for the political reorganization and economic restructuring of the country, believes that the federating units require solid economic institutions that would engender commercial competition and capital accumulation among them.
In parts of the country where agriculture and rural areas are the major components of the informal sector, the praxis of a warehousing receipt system will shrink the sector and make deposit money banks viable enough to extend financial inclusion to rural inhabitants including women farmers.
A warehousing receipt system will also turn the huge farming population of 40 million people into taxpayers. Asiwaju Bola Ahmed Tinubu subscribes to the profound worldview that, it is this transformation of farmers into taxpayers that will make our subnational governments finally financially viable.
Source: Legit.ng
