08/09/2012 (BusinessDay) - The Palm Oil Plantation Owners of Nigeria (POFON) has cried out against the scheming of some interest groups in the country to make the Economic Management Team (EMT)   endorse their failed move to effect a reduction of the current tariff on the importation of Crude Palm Oil (CPO) from 35 percent to 10 percent. A statement from POFON, made available to BusinessDay, said this botched move is very worrisome as it has exposed the desperation and “do or die” disposition of the promoters of Malaysian companies in Nigeria. “These ‘agents’ are clearly hell-bent on making our country a dumping ground for “cheap” foreign palm oil,” the statement said.

Not too long ago, the Federal Government lifted the ban on importation of crude palm oil. The Plantation Owners Forum of Nigeria (POFON) kicked against it.  POFON found it illogical for the Federal Government to lift ban on importation of crude palm oil “when palm oil is now grown in 24 states of Nigeria”  and  wondered why Government was taking this step when that “there is no shortage of palm oil in the country”. The Federal Government made provision for importation of crude palm oil at 35 per cent import duty. This replaced the former regime of total ban on the importation of vegetable oil into the country. POFON was not comfortable with this and so petitioned the Presidency, the Federal Ministry of Agriculture and Water Resources and the Federal Ministry of Commerce and Industry as it was known then. Now there is move to reduce the duty payable on imported CPO to 10 percent.

The issue raised by POFON  brings into surface once again,  the much-talked –about policy inconsistence of government as reflected in the past in cases relating to cassava, , Michelin and Dunlop.

“One of the major shortcomings of economic governance in Nigeria is the formulation and management of trade and tariff policies.  The reason is that it is most inconsistent, incoherent and unpredictable, and sometimes , lacks transparency,” Muda Yusuf told BusinessDay.  “It thus aggravates investment risks and weakens investors’ confidence.  The plight of the tyre manufacturing industries – Dunlop and Michelin – exemplifies the consequences of bad tariff and trade policies. Our tariff and trade policies are often times characterized by manipulations by bureaucrats and the politicians to favour narrow interests in the economy to the detriment of the larger economy and welfare of citizens.,  he said”

At a point in time, according to Ndoma Agbor, a farmer and agribusiness consultant,  it was criminal to import such products as cassava flour, starch, chips and other products of cassava into Nigeria. This, he said, created legitimate market   for local cassava processors in addition to the 10 per cent cassava inclusion policy, but overnight government made a 360 degrees turn to open the door for importation of cassava products.

POFON is worried that the move by the manipulators in question  is coming  barely two days after the Stakeholders Meeting On The Amendment of CET (2008-2012), where the deliberations on vegetable oil tariff was deadlocked and the Budget Office of the Federation promised to reconvene a stand-alone discussion session for  this segment.

The statement recounted: “Amazingly, the promoters of CPO tariff reduction have taken the matter through the back door to the EMT clearly with the intention of circumventing the decision and position of the stakeholders present at the CET meeting of Monday, 3 September 2012. It is pertinent to state that at the just concluded CET meeting,  PZ-Wilmar  asked for tariff reduction, while the Plantation Owners Forum of Nigeria (POFON), the National Palm Produce Association of Nigeria (NPPAN) and the Vegetable and Edible Oil Producers Association of Nigeria (VEOPAN) rejected the request.  PZ-Wilmar, we are told, had set out to build a CPO refinery in Lagos and just at the point of completion of same, suddenly realized that CPO is not available locally to run its plant. To assuage this obviously deliberate oversight, the company is insisting on importing CPO at 5-10 percent tariff.

“It has complained to the Manufacturers’ Association of Nigeria (MAN) and the Association, armed with misleading data and irrelevant fiscal models, has set out to override Nigeria’s economic safeguards in order to ensure that PZ-Wilmar achieves its objectives.  What is most pathetic is that these schemers have secured the sympathy of some government agencies and officials who seem to have spared very little thought about the fact that plantation owners have committed huge capital and shareholders’ funds in long gestation investment, neither are they bothered about the adverse effect tariff reduction would have on smallholder farm families.

POFON says it  continues  to wonder why  each time Nigeria’s  “local industry is recording growth, foreign influence, well aided and protected by highly placed Nigerians, will be used to stall the growth and return the industry to the path of retrogression”.

It  argued  it is only in Nigeria that supposed ‘foreign investors’ brazenly put spanners in the works of extant policies, pressuring government to change them to further their parochial business interest as well as the interest of their home countries to the detriment of the local economy. Is it plausible for a foreign investor to demand for tariff reduction to import CPO to process and make profit for seven years when other investors are investing unconditionally in the same economy? There are many indigenous and foreign companies successfully running palm oil refineries and tailoring their operations to suit the capacity of the Nigerian economy without exposing the country’s economic flanks to external assaults.

“We demand that PZ-Wilmar and their sponsors be called to order. Genuine investors should be seen to support the value chain approach of the Federal Ministry of Agriculture for sustainable development of our vegetable oil industry. We frown at and will never support any investment proposal that will ultimately truncate the oil palm value chain and destroy the primary industry - oil palm plantation.”

POFON, is a body of corporate private investors in plantation crops. Its  members include the Okomu Oil Palm Company Plc, Presco Plc, Calabar Oil Palm Estates Limited, Dansa Agro Plantation Limited, A & Hatman, JB Farms, Nasak and Aden River Estate.

POFON notes the contribution of organized oil palm estates to the total CPO production in Nigeria does not account for more than 20 percent but added that its  main concern goes beyond the threat that the proposed tariff reduction poses to “our members”. “It is more about the smallholders (who hold the key to palm oil production) and the oil palm communities in over 24 states of Nigeria; who, given their exposure, may not survive this ‘Malaysian onslaught'.”