Nigeria: An Overview Of The Legal Framework Within The Nigerian Agricultural Landscape

It is no doubt that the agricultural landscape in Nigeria holds a lot of attraction for players within the space and even investors, especially now when the country is making conscientious efforts to look away from oil to her other natural resources.  Before the discovery of crude oil, agriculture was the mainstay of Nigeria's economy and accounted for an average of 57% of GDP and generated 65% of export earnings. Food output however declined after independence as focus shifted to oil. With the decline of oil prices, the Nigeria government introduced diversification with focus on growing the economy through agriculture.

Figures released by the National Bureau of Statistics (NBS) in April 2020, showed that the agricultural sector contributes about 21.96 per cent to the nation's GDP, which is the monetary value of all finished goods and services made in the country.

This paper aims to discuss the Nigerian agricultural legal framework with regards to regulation of the sector in order to enhance optimum productivity.

Nigerian Agricultural Policy

In 2011, under President Goodluck Jonathan's administration, an Agricultural Transformation Agenda was launched, managed by the Federal Ministry of Agriculture and Rural Development. The intended outcome of the agenda is to promote agriculture as a business, integrate the agricultural value chain and make agriculture a key driver of Nigeria's economic growth. To achieve this agenda the government put in place several measures, inclusive of; new fiscal incentives to encourage domestic import substitution; removal of restrictions on areas of investment and maximum equity ownership in investment by foreign investors currency exchange controls – free transfer of Capital, Profits and Dividends; constitutional guarantees against nationalization/expropriation of investments; zero percent (0%) duty on agricultural machinery and equipment imports; pioneer tax holiday for agricultural investments; duty waivers and other industry related incentives e.g., based on use of local raw materials, export orientation, amongst others.

The present administration, under President Buhari, GCON adopted the already set roadmap with the implementation of several agri-biz initiatives, one of which is the  Anchor-Borrowers Program, currently being driven by the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL).

Stakeholders in the Nigerian Agricultural Value Chain

An agricultural value chain is comprised of the several stakeholders who facilitate in getting the product to the end user. These will include; Input suppliers, Primary producers also referred to as farmers ,Wholesalers (agents or traders) and processors, Manufacturers, Retailers, Financial Institutions including Banks, Microfinance Banks, and other Loan Houses, Government owned or other institutions such as, the Federal Ministry of Agriculture & Rural Development, Central Bank of Nigeria (CBN), The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Regulatory Bodies like The National Agency for Food and Drug Administration and Control (NAFDAC) Standard Organization of Nigeria (SON), etc.

LAWS APPLICABLE TO AGRICULTURE IN NIGERIA

• The 1999 Constitution of the Federal Republic of Nigeria: The fundamental objectives and directive principle of state policy on food under the 1999 Constitution of the Federal Republic of Nigeria states that: The State shall direct its policy towards ensuring that suitable and adequate food is provided for all citizens subject to availability of resources. According to the Nigerian Constitution, every person has a right to life, and no one shall be deprived intentionally of his right. This right to life cannot be guaranteed in the absence of a sustainable agricultural sector. It takes efforts directed at reducing the number of people living in extreme poverty, attempts aimed at putting an end to hunger and the attainment of food security, improved nutrition and the promotion of sustainable agriculture to guarantee the right to life.

• Companies and Allied Matters Act (CAMA) 2020: For any entity to operate as a business in Nigeria, it must be incorporated and regulated by the Corporate Affairs Commission, a body established under CAMA. The recently passed law sets out options through which and the parameters within which a business can operate in Nigeria. Some of these options include – Limited Liability Company (Ltd), Limited Partnership (LP), Limited Liability Partnership (LLP) or a Business Name.

• National Agricultural Land Development Authority (NALDA) Act Cap. N5 Vol. 10 Laws of the Federation of Nigeria (LFN) 2004: The National Agricultural Land Development Authority Act seeks to provide strategic public support for land and development by establishing a corporate body known as the National Agricultural Land Development Authority. This Act defined “development” as the physical preparation of land for crop and livestock and includes actual stock and livestock production, storage, processing and marketing as well as the provision of social infrastructural facilities.
• National Agricultural Seeds Act Cap. N5 Vol. 10 LFN 2004: The Act seeks to regulate the development of the national seed system by establishing a council known as the National Agricultural Seed Council. This Council is given the responsibility for the overall policy guidelines and monitoring of the development of the national seed system. The Act aims at analyzing and proposing programs, policies and actions regarding seed development as well as the seed industry. The overall objective of the Act is to harmonize the seed industry with other agricultural input industry in order to meet the increasing demand of the agricultural sector.

• National Crop Varieties and Livestock Breeds (Registration, etc.) Act Cap. N27 Laws of the Federation of Nigeria (LFN) 2004: The Act seeks to provide for detailed identification of management training needs in agriculture and rural development organization, and to develop and implement training programmes to meet the needs of managers in the agricultural and rural development sector of the Nigerian economy.

• The Agricultural Credit Guarantee Scheme Fund Act Cap. A10 LFN 2004: The Act seeks to establish a Fund into which a certain sum of money is to be subscribed to in order to make provision for and guarantee loans granted for agricultural purposes by any bank. According to the Act, no loan granted pursuant to the Act shall not be applied for any purpose other than that for which such loan was granted. Criminal liability is prescribed for any person (including corporations) who applies such loans in contravention of the Act.

• Agricultural Research Council of Nigeria Act Cap. A12 LFN 2004:  The Agricultural research Council of Nigeria Act provides for the establishment of research institute by the Council. To this end, Nigeria has quite a number of agricultural institutions scattered all over the country such as the International Livestock Research Institute, the Federal University of Agriculture, Abeokuta, the National Root Crop Research Institute etc.

• Agricultural (Control of Importation) Act Cap. A13 LFN 2004: The Act made provision for the regulation of importation of articles for the purpose of controlling plant diseases such as those caused by fungus, bacterium, virus or any other organism injurious to agricultural or horticultural crops and pests such as insect or other animals which are injurious to agricultural or horticultural crops. The Minister of agriculture is mandated to make regulations prohibiting, restricting or laying down conditions for the importation from any or all countries, of plants, seeds, soil, containers, straw and other packing materials, artificial fertilizers, and any other similar goods or things, which on importation, are found to be or suspected to be infected with any plant disease or pest.

• Nigerian Agricultural Insurance Corporation (NAIC) Act Cap. N89 LFN 2004: The Act seeks to provide a scheme to protect the Nigerian farmer from the effect of natural hazards by introducing measures which ensures sufficient indemnity to keep the farmer in business and to establish the Nigerian Agricultural Insurance Corporation. This Corporation is responsible for the implementation, management, and administration of the Agricultural Insurance Scheme in Nigeria.

• Environmental Impact Assessment Act Cap. E 12, LFN 2004: Environmental Impact Assessment contains explicit and detailed procedural requirements on proposed activities (agricultural activities inclusive) likely to have significant impacts on natural resources and the environment. The primary purpose of the EIA is to make EIA mandatory by ensuring that the potential environmental impact of a proposed activity is identified and evaluated before given approval to proceed with the planning and implementation of such activity. To this end, activities that are likely to have serious or significant environmental effects are neither to be approved nor undertaken by the private or public sector. As to what constitutes significant or serious effect is a mixed question of law and facts to be determined by the courts.

• The Land Use Act Cap L5 LFN 2004: The Act vests the ownership of all lands comprised in a State on the Governor of that State. The Governor is empowered to appropriate such land in the overall public interests. As a result of this Act, Agricultural is granted to the wealthy in the Nigerian society to the detriment of the true owners of such land As a result, farmers' rights to land is limited, thereby leading to the fragmentation of land with its negative consequences on agricultural sustainability, and often serves as hindrance to small scale farmers as well as leading to environmental injustice in Nigeria.

• The Sea Fisheries Act Cap S4 LFN 2004): The Sea fisheries Act provides for the regulation, control and protection of sea fisheries in the territorial waters of Nigeria. The Act places the responsibility of the registration of vessels for fishing or shrimping purposes on the Federal Ministry of Agriculture.

• The River Basins Development Authorities Act 1987: The purpose for the above Act is to promote effective management of Nigeria's water resources. The Act created several authorities with the responsibility of keeping a comprehensive and up to date water resources master plan and to identify all water resources requirements and to develop lands suitable for irrigation which is to be handed over to farmers, amongst other functions.

• Agricultural and Rural Management Training Institute Act (Cap A10 LFN 2004):  This Act makes provisions for detailed identification of management training needs in agriculture and rural development organisations as well as the development and implementation of training programmes to meet the needs of management teams in the agricultural and rural development sector of the Nigerian economy.

REGULATORY AUTHORITIES

• The National Agency for Food and Drug Administration and Control (NAFDAC):  It regulates the quality and safety of food, drugs and other regulated products consumed by Nigerian consumers (whether locally or internationally produced and whether they emanated from conventional or biotechnological processes) and protection from health risks.

• Standard Organisation of Nigeria (SON): It is the body in charge of standardization of products in Nigeria. They are in charge of all the products, processes and scientific study of measurement standards in Nigeria. The primary responsibility of Standard Organisation of Nigeria is to make sure that products that are locally manufactured in Nigeria have the required level of satisfaction desired by consumers.

• Federal Ministry of Agriculture & Rural Development (FMARD):  It is responsible for developing the agriculture sector of the Nigerian economy, with a view to growing the sector, driving income growth, accelerate food and nutrition security, generating employment and transforming Nigeria into a leading global food market, through the commodity value chain concept of the Agricultural Transformation Agenda (ATA). The Federal Ministry of Agriculture and Rural Development (FMARD) is a Ministry of the Nigerian government that regulates agricultural research, agriculture and natural resources, forestry and veterinary research all over Nigeria. The Ministry has the responsibility of optimizing agriculture and integrating rural development for the transformation of the Nigerian economy, with a view to attaining food security and positioning Nigeria as a net food exporter for socio-economic development.

• Central Bank of Nigeria (CBN):  The CBN regulates the financial institutions involved in the Agricultural Value Chain and fixes the interest rate on agricultural loans.

• Nigerian Custom Service: The Nigerian Custom Service is the body charged with the responsibility of ensuring the products that come in or go out of the Country meets the required standards.

CONCLUSION

As a country, Nigeria is blessed with several natural resources which, if well managed, could be a gold mine contributing far more than the present to the nation's GDP. A major and identifiable set-back for the agricultural sub-sector is proper regulation. This may not unconnected with a dearth of an extensive legal framework for this purpose.

The increased interest in the agricultural landscape must be matched with a reciprocal increase in the regulation of the sector. It is opined that the time has come to harmonise the existing laws into one formidable body of laws for the purpose of establishing a legislation which is not only functional but recognized by all actors within the sub-sector with a view to making agriculture even more attractive and profitable and thus enhance the economic growth of the country.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.