Agri Business

Nigeria was a leading exporter of three major cash crops namely palm oil, groundnuts and rubber. Today however little or nothing is heard about these sources of foreign exchange.

Rubber, which used to be the fourth largest foreign exchange earner for Nigeria after crude oil has since been neglected by successive governments despite the fact that rubber plantation is one of the resources that thrive in Ni-geria.

The country’s sole dependence on crude oil has rendered the rubber industry unattractive. Most rubber plantations still existing in parts of the South West of Nigeria today were planted during the days of late Chief Obafemi Awolowo. The research institute mandated to develop hybrid rubber seeds for farmers have also gone comatose.

Experts say capacity in Nigeria’s rubber industry has fallen from well above 130,000 metric tonnes per annum to 60,000 and 55,000 respectively on account of the failure to replenish old plant and establish new ones.

Despite rubber being one of the most used plant products in virtually every industry, the cash crop has gone extinct in Nigeria as a result of government neglect. This has also led to $6 billion revenue loss annually in the international market.

In some other countries, rubber is regarded as a money spinner because the demand is very high due to its various uses ranging from aviation, education, sports, engineering and health, among others. Rubber actually finds its way into tens of thousands of different products such as elastic bands, car tyres, boots, condoms, pencil, erasers, swimming caps, raincoats, rubber stamps, waterproof shoes and dishwashers, among others.

Daily Sun findings revealed that the rate of automobile industry mopping up natural rubber around the world explains how highly invaluable natural rubber is in human activities. 

Farmers said that, “natural rubber performs three main functions in our national economy, provision of raw materials for the agro-based industries, provision of foreign exchange, placing Nigeria in the world map as a net exporter of rubber and offering employment  to a sizeable segment of the Nigerian rural farming population.” 

According to the farmers, rubber is grown in Edo, Delta, Ondo, Ogun, Abia, Anambra, Akwa Ibom, Cross River, Imo, Rivers, Ebonyi and Bayelsa states where the amount of rainfall is about 1,800 mm to 2,000mm per annum. They added that many farmers had left rubber farming for other cash crops that are getting attention from the government.

Stakeholders also attributed the decline in rubber production to the dearth of modern equipment necessary for converting the raw material into value added products of international standard.

They however, called for government and private sector partnership to revive the industry with a view to exploring the economic potential of the agricultural commodity for national development. They also called on the research institutes to undergo reforms aimed at strengthening its obligations, especially for rubber farmers.

The operator of Abo Rubber Farm, Mr. Tunji Oyewamiwa, said lumps from trees are in short supply because most of the rubber trees being tapped today were planted in the 1960s and 1970s, noting that the trend has continued because the trees have a lifespan of about 30 years and needed to be replenished.

According to him, rubber farmers, processors and players are having hard times because the business often have a gestation period of six to seven years. He added that rubber farmers and processors have had difficulties accessing funds from financial institutions and the government, stressing that rubber has been facing series of challenges, which eventually forced companies that used local rubber to manufacture tyres to suspend operations in Nigeria.

He said Michelin, a French tyre maker, closed down its manufacturing plant in Port Harcourt in 2007 owing to harsh business environment, increase in second-hand tyre importation, smuggling and high energy cost, among others.

Also in 2008,  Dunlop, now DN Tyre, shut down its plant after recording a N2 billion loss due to infrastructural challenges, which made it difficult for the company to cover overhead and variable costs in order to repay back bank loans.

Speaking with Daily Sun, the Managing Director of Habibcom Farms, Mr. Habib Stephen, said the government neglected the agriculture sector due to oil discovery.

He said: “Agriculture then is not the way it is now because if you want to have a rubber plantation it takes a longer time before it gets matured and you start tapping your latex. Even the rubber plantations we have in Ikenne axis in Ogun State were planted in the days of Awolowo and are already old. Rubber has very good value internationally but unfortunately, people have neglected it. 

“I don’t think anybody would want to cultivate rubber and wait all the years before reaping the benefits. Apart from rubber being neglected by government, private investors should be involved in cultivating rubber because government cannot do it alone.”

He explained that rubber plantation is a long term investment that requires huge capital and support such as loans with very low interest rate that will have a very lengthy moratorium and a pay back time of at least 10 years. 

“We need to take agriculture serious because there is a time that oil will not be able to sustain the economy. In some advanced countries, they are changing to more fuel efficient engine for their cars, some of them are using green energy, unified fuel, they are not using hydrocarbon like we are using in Nigeria. They are phasing out the combustion engine. The implication is that we should not expect the price of oil to increase; the price would go down. If we are wise, it is time we started embarking on the large scale cultivation of cash crops so that when oil fails, the export of cash crops will not fail us, which is the way to go now,” he said.

He noted the need for research for a specie of rubber with shorter maturity time just as farmers have cocoa that grows and matures in two to four years, adding that the shorter the maturity time, the better for farmers as it will make it viable because Nigeria already has the vegetation, climate and the favourable condition for rubber plantation.

Agribusiness Information

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