The Federal Ministry of Industry, Trade and Investment says the establishment of commodity corporations in the country will promote greater private sector participation and ownership.
The Permanent Secretary in the ministry, Mr Abdulkadir Musa, said this in Abuja, at a consultative meeting of stakeholders on the proposed establishment of commodity corporations recently.
Musa said the forum was timely as government was concerned about issues bordering on agric-commodity development as a way of diversifying the nation’s economy.
“It is important to state that the global market conditions and unsustainable fiscal deficits show that the government can no longer sustain a high level of public expenditures.
“The liberalisation option of commodity trade should be sustained and encouraged in order to promote greater private sector participation and ownership,’’ he said.
Musa said the ministry was saddled with the mandate of developing agricultural commodities from processing, packaging, quality certification to standardisation, storage and marketing.
He recalled that commodity boards were established in 1977 as a key trade policy on export of agricultural commodities.
The objectives of the boards, he said, were to purchase agric-commodity from farmers and later sell to large buyers while providing incentives to farmers to enable them increase their acreage.
Musa said the boards also ensured that farmers adopted new technologies in production to increase yield.
“It was, however, clear that the operation of those boards involved very high administrative costs, unbearable taxation on farmers, gross under-pricing of agric commodities, political interference and non-sustainable infrastructure,’’ he said.
The permanent secretary said with the introduction of the Structural Adjustment Programme in 1986, government policy direction changed in favour of economic liberalisation that included the trading of commodities.
As a result of this, he said the liberalisation witnessed lack of requisite experiences which resulted in the loss of overseas buyers confidence in Nigerian agricultural produce for not meeting the minimum international requirement.
Musa added that in an effort to address the challenges, the dissolution of the marketing boards required the establishment of a market structure to fill the unintended vacuum created.
He further said that the Federal Government established the Export Commodities Coordinating Committee in 1989 as an inter-ministerial body with members drawn from different ministries.
He said the committee had brought sanity into the agric-commodity business with the introduction of standards in conjunction with key stakeholders.
“I am pleased to inform the gathering that the financial obligation of Nigeria to the International Commodity Organisation to which Nigeria is affiliated has been settled to date.