ARE AG FORECASTS GETTING LESS BLEAK?

Since the collapse of the agriculture boom in 2013, the start-of-the-year forecasts for the farm economy have been as uniformly dreary as midwinter in the Midwest: big stockpiles and the lowest season-average commodity prices in a decade. It’s hard to turn a profit, and USDA chief economist Robert Johansson says the stress is mounting for some producers.

One in 10 crop growers and an equal portion of livestock operators are highly leveraged, meaning they carry debts that exceed 40% of their assets, a rocky position. “It’s been picking up lately,” Johansson says. “It (had) been fairly flat for the last 10 years or so.” 

Highly leveraged operators tend to be growers with a high proportion of rented land and recent entrants to farming, who have limited reserves. Only 6.5% of crop farms and 6% of livestock operations were highly leveraged four years ago.

In a Successful Farming magazine interview, Johansson says delinquencies on farm loans are rising but bankruptcies remain low. The debt-to-asset ratio, a commonly used gauge of financial stress, was 13.2% in 2016 and “will tick up this year as land values fall,” perhaps as high as 14%. That would be the highest since 15% in 2002 but far below 22.2% in 1985 (at the worst of the agricultural recession). “The situation is much different than it was then,” notes Johansson.

The sector is also adjusting to expectations that commodity prices are not likely to improve much for years to come. Farmers are tightening the screws on production expenses and idling less productive land. Grain, soybean, and cotton plantings are expected to decline by more than 6 million acres from 2016.

Cash rental rates for farmland are likely to fall by 5% this year, says Johansson. “I don’t see land values coming down as quickly on a percentage basis.” Low interest rates support land values by making it easier for farmers to afford to buy land when it comes on the market.

It’s a common theme among agricultural economists that the farm economy this year will look a lot like last year. 

A University of Missouri think tank says farm income will be up by $1 billion, a marginal improvement. Crop prices may be slightly higher this year, but production will be smaller than last year’s record-setting corn and soybean crops, so revenue should be roughly similar. 

On the broader front, U.S. and world economic growth are forecast higher, pointing to higher demand for farm goods. The impact could be offset by rising inflation and interest rates as well as petroleum prices.

“There are a lot of things out there that could change” the economic picture, says Johansson. Exports account for 20% of U.S. farm income, so large-scale change in trade agreements could influence foreign sales, for better or worse. Since China is the number one market for U.S. exports, its decisions, such as opening the door to U.S. beef or throttling back on pork, could have an especial impact. Similarly, if economic growth overseas accelerates above the 2.7% assumed by USDA, U.S. farm exports could benefit.

There is the perennial question of how weather or disease will affect production. Brazil, the top U.S. competitor in soybeans, is on track for a record crop, due to large plantings and good conditions early in the growing season. The crop has a ways to go. February is the main pod-filling month with harvest mainly in March. If Europe, and particularly France, rebounds from the poor wheat crop of 2016, it could add to record-large world wheat stocks. South Korea culled its flocks of domestic fowl, cutting egg production by 30% because of an outbreak of avian influenza. As a result, it began importing U.S. eggs in January, a welcome outlet for U.S. egg farmers, who have rebuilt flocks from losses in the worst-ever U.S. bird flu epidemic in 2014-2015.

Around the world, there are key countries and markets where U.S. exports and, indirectly, farm income ride on local events. “In any given region, you could pick one,” says Johansson.

This article was produced in collaboration with the Food & Environment Reporting Network, an independent, nonprofit news organization producing investigative reporting on food, agriculture, and environmental health.

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PEANUT contains mono-unsaturated fatty acids especially oleic acid that prevents coronary artery diseases.

High Food Prices: Federal Govt to open Nation’s Food Reserve

As part of efforts geared towards reducing food prices in the country, the Federal Government has revealed plans to open the nation’s food reserve .

The Minister of Agriculture and Natural Resources, Audu Ogbeh, stated this while addressing journalists at the end of a meeting of the Federal Executive Council this week.

Ogbeh informed that the council had received the interim report of the task force committee set up last week to look at the issue of hike in food prices.

“One of the things we found out is that the cost of transportation is becoming extremely high especially because most of our transportation is by road and diesel prices have gone up while trucks are finding it difficult to move from place to place at the old prices” he said.

To tackle the challenges, Ogbeh explained that while the federal government has considered the railway wagons as a viable alternative for transportation.

“So, we considered the following alternatives: using railway wagons along the current railway network. As we did before when we moved cattle from the North-West to Lagos, we brought down the cost and avoided the multiple taxation on transporters by local governments which delayed movement.” he added.

Speaking further on measures to address challenges of transportation, Ogbeh said the federal government would also ensure that trucks carrying food items would be labeled to enable them move smoothly on the highways without delays by the security agents.

“We are going to adopt what they have in Cote d’Ivoire. Trucks carrying foods are given labels. In fact, in Cote d’Ivoire, they cannot be stopped for more than 10 minutes anywhere. Even if something serious happens, the security agencies will follow them to their destinations and come back to investigate whatever has happened”, he assured.

The minister however expressed that the federal government will be looking into the food reserves if the current high food prices continues.

“Finally, we shall be looking into our reserves if in the next few days the situation persists, to see what we can bring out to lower the prices because another bumper harvest will be coming up again at the end of March” he noted.

EU may lift ban on Nigerian agricultural produce

There are indications that the European Union is considering reversing its ban on the nation’s agricultural produce. The Nigerian Agricultural Quarantine Service reveals.

The Coordinating Director of the agency, Dr. Vincent Isegbe, gave the hint in Lagos at the opening of a two-day training workshop on plant health inspection and certification of vegetables for exporters and farmers.

Isegbe informed that the EU had promised to reverse the ban if necessary measures were put in place before 2019.

He lamented that the European Union ban on Nigeria’s beans had a crippling  effect on the economy, emphasizing the need for Nigeria to avoid such rejection of the Nation’s agricultural commodities in the future.

According to him “We have had issues in the past concerning beans where the European Union suspended Nigeria for three years for beans export. That is not good for us because it means that all the farmers who are producing beans can no more export the quantity that they used to export”.

“The good news is that the EU said if we could put the process in place earlier than 2019, it will reverse its decision. So, that is where we are” he said.

The coordinating director informed that the two-day training was centered on vegetables because it was one of Nigeria’s major export commodities.

He noted that the training became imperative because of the sensitive processes involved in the handling of vegetables, as well as the  need to for strict monitoring and certification procedures that would sustain its export, especially at a time the government was stressing the need for diversification of the economy.

“Vegetable is a delicate product and because it is almost ready to eat, it needs more stringent inspection and certification procedures since most times, we eat it fresh” he stated.

36 JIGAWA COMMUNITIES LOSE FARMS TO CHINESE PLANTATION

Thirty six communities in Jigawa state have lost their farmlands covering 12,000 hectares to a Chinese company for sugarcane plantation.

The state government gave the farmlands to Messrs Lee Group- based in Kano for N2.1 billion.

The state government has confirmed most of the issues at stake to Daily Trust. However it failed to address some of the critical aspects raised, such as the project’s specific details, and whether it will include a processing plant and other value chain component or the sugar cane will be shipped to China to be processed into sugar and then sent back to Nigeria.

The Chinese firm has also declined comment more than four weeks after taking down questions from our reporter. Its spokesman, Dr. Umar Majia, who requested for the questions was not forthcoming since then.

The firm has already secured a ‘Letter of Grants’ from the government for the project billed to commence in 2022.

The communities are spread across three adjoining local government areas but majority of them are in Gagarawa axis.

The affected communities include fairly big settlements like Medu, Kanyu, Zaro, Danmadi, Kore Balatu, Garin Chiroma, garin Goto, Gagarawa Gari, Kagadama, Wadi Fulani, Garin Giwa Fulani, Saunawa Fulani and Goda. Others include Gayawar Malam, Mutumbi, Mejiwarwa, Furya and Malkaderi.

The communities have mounted strident opposition to the project which they argue will inevitably displace them from their ancestral home for good.

They also accused the government of betrayal of a pre-election promise made by present Governor Muhammadu Badaru Abubakar, when he was running for office not to go ahead with the project initiated by his predecessor, Sule Lamido.

The project started in 2014, when the Chinese company, Messrs Lee group, on the invitation of Lamindo’s administration, surveyed and sought the farmlands in the affected communities for sugar cane plantation.

Concerned residents were at first surprised that the firm settled for the land even though it is not swampy nor is there a river or dam, a common feature of sugar

cane farms.

But they later found out that the seismic survey the company conducted shows the farmlands have enough underground water to serve their purpose for a long period.

At the height of the campaigns for 2015 general elections, then candidate Muhammadu Badaru Abubakar along with others political office seekers visited the communities and were told they could only get the communities’ votes if they would halt the project, a pledge they all agreed to, residents say.

After the election and the subsequent triumph of the APC, the governor reviewed his position on the matter and issued the Chinese company a ‘Letter of Grants.’

The issue generated heated debate and escalation of tensions leading to the suspension of several local chiefs (Known as dakatai) in the affected communities.

They were later reinstated on the condition that they should drop their hostilities and support the project, some farmers said, preferring not to be named.

To reduce tension, the state government through Ministry of Land & Survey also offered to pay what the farmers called ‘insignificant compensation.’

In addition, the communities said the state government’s plan to resettle them in areas already designated as forest and grazing reserves is potentially explosive at a time of recurring deadly farmers and herders clash.

They argued that the government should instead give the Chinese the reserve areas.

Initially the communities under the aegis of Sugarcane Farmers Cooperative Society made effort to negotiate with both the company and the state government, but it did not work out as some of their demands were not met.

In a letter dated 24 October 2016 to the Secretary to the State Government signed by its chairman, Bulama Sunusi Abubakar and the secretary, Muntari Adamu, they appealed to the state government to reconsider the size of the land (12,000 hectares) grabbed for the project stressing that it is too large and not proper to displace all the villages.

Secondly, they considered the compensations (N18, 000 to N60, 000) by the Chinese Company through the Jigawa State Ministry of Land &Survey offered to some farmers as too small. They lamented that the government they elected is promoting the interest of the Chinese over the citizens who own the land.

Last month, hundreds of farmers gathered at Sani Zorro Square in one of the affected communities to express their anger and reaffirm their opposition to the project.

Aminu Mohammed Danmatsayi, one of the communities’ leader told Daily Trust that the opinion of the farmers was that the project has no direct bearing on their lives because no staple food will be cultivated.

He stressed that displacing thousands of farmers and their families from their ancestral land across these communities for one Chinese investor would be a colossal mistake.

They cultivate food crops like millet, sorghum and commercial plants such as sesame and hibiscus which fetch them better money than the sugarcane the company wants the land for.

“We have inherited the farmlands from our forefathers and would like to bequeath it to our children as the custom demands, which Islam also recognises,” he stated.

In the same vein, Ibrahim Aminu from Gagarawa said all the communities do not want the project because it would amount to complete displacement from their homes to unknown lands and throw them in an uncertain future and would distort their lives forever.

He accused their representatives at the state house of assembly for abandoning them despite election promises to halt the project.

Mallam Wada Bello a Fulani man told Daily Trust that he has never seen where government would walk into a land (12,000 hectares) belonging to its people and grab it, not for government development purposes, but for just one private foreign investor.

Mallam Bello said government did not make any effort on resettlement only to recently ask them to relocate to grazing and forest reserves over 20 kilometres away which were designed to solve the farmers-herders conflict.

“We have buried our fathers and our children on these lands which we inherited. I swear we will not watch anybody come with bulldozer to destroy those graves. We are ready to protect and die on our land even now,” he swore.

On his part, Alhassan Gawa lamented that government wants to force them to migrate to the neighbouring state of Bauchi, or even across the border into Niger Republic to live as refugees.

“We have seen how displaced persons are suffering in this country and they want to throw us in that condition, we will not accept it,” Mallam Gawa said.

He pointed out that every effort to get the relevant stakeholders to help them did not yield any result