17. A review of government objectives and policies for the LSS in Nigeria can be conveniently divided into 4 periods: the colonial period preceding independence in 1960, the immediate post-independence period up to the end of the Sahelian drought in 1974, the oil-boom period from 1975-85, and the period since 1986 marking the commencement of the structural adjustment programme. This section describes these four periods, highlights the main objectives and policies and offers explanation for particular government strategies.
The colonial era
18. Initial colonial objectives with respect to the LSS were not explicitly stated, but the commitment to expand exports of livestock products had emerged prior to World War II. Early documents (cited in Waters - Bayer, 1988) indicated that schemes for the collection of fresh milk from the Fulanis for cream separation and processing into clarified butterfat (CBF) for export began in the late 1920s in northern Nigeria. Exports of CBF rose from 10 tons in 1933 to 2,400 tons in 1939 (Waters-Bayer, 1988, p. 26). The early 1940s also witnessed the establishment of dairy herds and milk processing plants in Vom and Agege to meet expatriate population demand in Jos and Lagos (David-West, 1978).
19. The colonial government objectives were primarily implemented through a policy of investment in both physical infrastructure and basic research. By 1950 an extensive internal rail and road network system had been completed. A number of Livestock Improvement and Breeding Centres (LIBCs) were established in different parts of the country in the late 1940s and early 1950s to carry out cross-breeding experiments-primarily to achieve increased milk production - wing exotic bulls and artificial insemination. Studies were also carried out to evaluate the potentials of exotic and local pasture species. Between 1955 and 1960, over 270 grass and legume species were screened for their adaptability, growth performance and nutritive value (Federal Ministry of Agriculture, 1981). However, most of the schemes embarked upon during this period were oriented toward ranching and thus had little impact on smallholder or pastoral systems. Furthermore, attention appears to have been focused mainly on cattle, particularly dairy production, to the exclusion of other species.
Independence to 1974
20. The onset of independence saw both a continuation and a shift in livestock development policy in Nigeria. On the one hand, some of the programmes initiated during the colonial period such as the tsetse eradication and livestock breeding programmes were continued. On the other hand, driven by a desire to improve the rate of growth of the economy and to achieve a more equitable distribution of income, the new regional governments initiated a number of programmes in an attempt to improve smallholder and pastoral systems. Thus in 1962, a supplementary feed programme aimed at introducing concentrate feeding to cattle in order to reduce seasonal weight losses was introduced in northern Nigeria. The scheme was also viewed as an attempt to encourage settlement among the nomadic pastoralists. The supplementary ration, the cost of which was subsidised, took the form of equal parts of groundnut cake and cottonseed cake plus 2% common salt and mineral licks (Federal Ministry of Agriculture, 1981). Although the response of the pastoralists was favourable, the scheme did not have the desired impact due to inadequate supply and untimely distribution of the supplements.
21. Starting in 1965, grazing reserves were introduced into the same region to protect the traditional grazing lands from crop farming, to secure a year-round source of fodder for ruminants and to encourage the settlement of pastoral nomads. By 1980, 2.3 million ha had been acquired by various state governments (Oxby, 1982).
22. In the south-west, a smallholder steer fattening scheme was introduced in the early 1960s. Using semi-intensive management systems, participating farmers fattened trypanotolerant steers for supply to slaughter houses in the adjoining urban areas. The scheme proved successful and the experience led to the establishment of a Smallholder Fattening Scheme in 1979 as a component of the World Bank assisted First Livestock Development Project (Federal Ministry of Agriculture, 1981).
23. Apart from these regional programmes, trade and production investment policies were also emphasized during this period. Trade policy towards the LSS initially took the form of import duties 2. In 1960, imported meat, butter and cheese carried a 20% duty rate. Within the next 5 years tariff rates rose quickly, ranging between 35% for butter and cheese to 66.7% for meat. The 1961 budget speech provided a justification for what was to become the future direction of trade policy by claiming that "increases were imposed upon goods consumed by the better-off sections of the community". The statement added that "no one could reasonably maintain that imported meat, butter constitute indispensable or significant items in the family budget of the low-income groups which form the bulk of our population" (Federal Ministry of Agriculture, 1987). Thus, tariff increases were imposed to serve as an indirect consumption tax and raise revenue for the government.
24. The civil war of 1967-70 brought a new dimension to trade policy. The dominant consideration during the war was the balance of payments position. A significant departure from the past was the introduction and liberal use of quantitative restrictions. Thus, between 1965 and 1970, importation of meat was controlled largely through import licensing. Freer trade did not resume at the end of the civil war. In fact, between 1971 and 1973, the use of quantitative import restrictions assumed greater importance as import bans were introduced to cover such products as beef and poultry meat. As discussed in the next section, these measures provided an implicit protection for domestic livestock producers.
25. During this period, the government attempted to provide a parallel production and marketing system. The NLMA was established in 1971 by the Federal Government, amongst other things, to operate abattoirs, cattle farms and wholesale meat markets; to manufacture animal feeds; to trade in livestock and hides and skins; to control and regulate the interstate activities of traders in livestock and livestock products; and to carry on any business connected with the livestock industry. For most of this period, investment in direct production was a major policy instrument. Intensive feedlot fattening for beef, based on high intakes of molasses with supplementary feeding of cottonseed and restricted grazing, was started in 1972 at the Mokwa cattle ranch owned by the NLMA (Federal Ministry of Agriculture, 1981). Bilateral assistance was initially provided by the Federal Republic of Germany. A significant development was the introduction of sugarcane molasses from the Bacita Sugar Factory. Under the scheme, local bulls and steers (mainly Sokoto Gudalis and Bunajis) were purchased as yearlings with average weights of 200-240 kg. Over a three-month fattening period, the animals averaged 300 kg liveweight. The dressed carcasses were sold through government-owned cold stores. Although the scheme was initially successful, the backward linkage with the sugar factory proved difficult to maintain and coupled with management problems at the ranch, only about 15,000 animals were fattened between 1972 and 1978 (National Livestock Production Company, 1980). Just like during the colonial period, it appears that little attention was paid to the other animal species, apart from cattle, during this period.
1975-1985
26. Policies instituted in the immediate post-independence period were largely continued in the 1975-85 period. The basic economic objective remained income growth with some new concern for increased animal protein intake. The rise in government revenue as a result of the oil boom initially led to a relaxation of livestock trade policy 3. Between 1974 and 1977, quantitative import restrictions were removed and tariff rates were reduced such that, once again, customs duties on most livestock products fell in the range of 10-30%.
27. The trade liberalization policy was, however, short-lived. With the sudden downturn in the world oil market between 1978 and mid-1979, customs tariffs were revised upwards and quantitative import restrictions were reimposed. Import prohibition orders covered fresh milk, eggs and live poultry, while frozen or chilled meat came under import licensing. These measures served to raise the domestic prices of imported livestock products well above world prices. Although the 1983 budget speech reiterated the "determination to make Nigeria self-sufficient in food production" and thus provided a further justification for the trade restrictions, it is now well understood that those responsible for trade restrictions together with those who had access to import licences and foreign exchange allocations were able to gain from the rents implied by the price differential between domestic and world prices. Thus, following Collier (1988), a reasonable inference is that rent-seeking was at least partly responsible for the restriction of imports of livestock products.
28. In addition to the direct effects of trade policy on the availability of livestock products, there were also important indirect effects operating through the government's exchange rate policy. Oyejide (1986) estimated that between 1973 and 1980, the real exchange rate appreciated by 61% partly as a result of massive capital inflows associated with the oil boom and partly due to government's failure to depreciate the naira to reflect Nigeria's relatively high inflation rate. The overvalued exchange rate was sustained by periodic import restrictions and exchange control regulations. As noted earlier, short-term variations in quantitative import restrictions caused price instability for several livestock products.
29. Meanwhile, previously introduced investment and technical policies were continued. The Nigerian Livestock Production Company (NLPC) was established in 1976 to provide credit and technical services for the development of the Mokwa and Manchok fattening ranches. Following the dissolution of the Nigerian Livestock and Meat Authority in 1979, the NLPC was reorganized and enlarged to take over the former's functions.
30. Various dairy processing plants were also set up as part of the government's strategy to encourage the domestic dairy industry. Among these were Madara Limited in Vom, Nigeria Dairy Company in Kaduna and Minna Dairy Plant in Minna. AU were established with daily capacities in excess of 20,000 litres of fresh milk, some of which was to come from associated government dairy farms and the rest from local collection from surrounding farmers. However, inadequate prices offered by the plants made local milk collection difficult and the plants resorted to basing their production activities on reconstituting imported powdered milk (Federal Ministry of Agriculture, 1981; Waters - Bayer, 1988). Very few of these plants now operate above 10% of installed capacity as a result of poor management, poor maintenance of equipment and increases in the cost of milk powder and import duties.
31. Institutional policies involving land and credit were introduced during this period. The 1978 Land Tenure Decree vested all rural land not under active exploitation in state governors. Although an official title to land (i.e. certificate of occupancy) can be obtained through this decree, the process is both time consuming and expensive and, thus, out of the reach of most pastoralists. Further, it has been argued that the decree with its recommended high levels for land compensation has militated against land acquisition for the establishment of new grazing reserves (Waters-Bayer and Taylor-Powell, 1986).
32. The Agricultural Credit Guarantee Scheme (ACGS) was also introduced in 1978. The scheme was established to guarantee loans granted by commercial and merchant banks for agricultural purposes. As Table 2 shows, lending to the LSS has featured prominently since the inception of the scheme. The lending, however, has been lopsided and has tended to favour mostly the modem poultry sector. Loan guarantee statistics showed that between the inception of the scheme in 1978 and 1986, total guaranteed loans amounted to N316.86 million. Out of this total, N173.90 million or 54.9% went to livestock and out of the livestock loans, N149.04 million or 85.7% went to poultry production. Commercial banks were willing to lend for poultry projects not because such projects were intrinsically more profitable, but due to the short interval between loan advance and repayment. The scheme also appeared to have catered mainly for the large commercial producer. In 1986, for example, borrowers of over N50,000 accounted for only 2.4% of all borrowers but received 60.1% of the total guaranteed loans valued at N68.4 million, while the small and medium scale borrowers of under N50,000 represented 97.6% of all borrowers, but received only 39.9% of total loans. Nonetheless, the expansion of commercial bank credit for livestock production has been due, in large measure, to the introduction of the ACGS. In general, government effort to assist private producers engaged in modern commercial poultry production became evident during this period.
Table 2. Average annual percentage distribution of guaranteed agricultural loans in Nigeria, 1978-86
|
Activity |
1978-80 |
1981-83 |
1984-86 | |
|
Livestock |
- |
|
| |
|
|
Poultry |
57.6 |
58.9 |
33.0 |
|
|
Cattle |
1.9 |
4.3 |
3.9 |
|
|
Others |
2.3 |
3.1 |
2.3 |
|
Total Livestock |
61.8 |
66.3 |
39.2 | |
|
Fisheries |
- |
1.5 |
2.5 | |
|
Mixed Farming |
9.8 |
3.0 |
3.1 | |
|
Food Crops |
21.4 |
20.2 |
33.7 | |
|
Cash Crops |
7.0 |
9.0 |
21.6 | |
|
Grand Total |
100.0 |
100.0 |
100.1 | |
Source: Central Bank of Nigeria, Annual Report and Statement of Accounts (various issues).
Post - 1986
33. The Structural Adjustment Programme (SAP) initiated in September 1986 has brought about a variety of sectoral reforms in the Nigerian economy. As it affects the LSS, it involves a reduction in the role of the state in production activities with a corresponding emphasis on using the private sector as an instrument for production and input supply. It has led to the scrapping of the NLPC and its subsidiaries. Following the massive devaluation of the naira from around parity with the U.S. dollar to the rate of 4.6 naira to the dollar in September 1986, prices of imported livestock products, particularly dairy products, rose substantially.
34. In general, the new programme has not led to freer trade. When the programme started the ad valorem duty on imported meat was 30%. Since early 1988, a ban on imports of fresh, chilled or frozen meat has been applied to protect domestic producers. For live animals, except poultry, import duty rose to 20% in 1986 from the 15% duty applied in 1984. However, since most live animals are trekked across the border from neighbouring countries, the herders avoid official crossing posts and the animals are, therefore, not directly affected by these tariff rates. Live poultry imports were banned in 1986, except for foundation and grandparent stock used for research or multiplication purposes.
35. Increased interest rates since 1987 have also limited the number of livestock producers applying for loans from commercial banks.
36. In summary, the history of livestock development in Nigeria reveals a longstanding effort to find A strategy to improve productivity and raise output. Policies that have been instituted to achieve these goals have not been totally consistent. Trade and exchange rate policies, in particular, appeared to have been driven by macro-economic concerns rather than by a desire for livestock development. The support given to various categories of producers and to different livestock species has also been lopsided. Large commercial producers appeared to have benefited at the expense of the bulk of small-scale pastoralists, while small ruminants seem to have been neglected. These problems put the attainment of government objectives into question.
