28/04/2009 (The Guardian) - AT a time when the world is facing a chronic financial recession and world leaders are thinking of ways to improve the well-being of their suffering citizens through job creation and increased business opportunities is the same time, Nigerian leaders on the other hand find it pertinent to lift the ban on importation of palm oil, a commodity which has proven to be a prolific revenue earner and job creator. Obviously those clamouring for the lift of this ban do not know the value of the oil palm crop. The single crop can literally lift a developing country out of poverty all by itself. The most famous example of this is of course Malaysia, the world's largest palm oil producer. In the early years after independence from Britain, the country was still very much an underdeveloped, poor nation, with per capita incomes of less than US$ 400 per year (in 2005 dollar terms).

But today, Malaysia has become one of the strongest Asian economies, with continuous growth and a current per capita GDP of over US$ 11,000. GDP incomes grew 31% in the sixties, and an amazing 358% in the seventies led primarily by export-oriented industries. Palm oil contributed in the sense that the crop became the centre-piece of agricultural reforms included in the so-called Second Malaysia Plan (1971-1975), which turned the country into an export-driven economy. Palm oil production was increased massively as the result of the vast program. Today in Malaysia, palm oil brings export earnings worth US$ 6.2 billion, only trailing crude oil exports. But compared to crude oil, palm plantations create considerably more jobs, currently employing around 14% of the countries entire workforce. Around half of all palm oil is still produced by smallholders, that is, by individual farming families. In short, the Malaysian economy and society as a whole benefits immensely from the African palm.

Given these numbers, it is not difficult to understand why many developing countries are looking into replicating Malaysia's success story. With Peak Oil around the corner, and continuously rising energy prices, the temptation to massively use one's land to cultivate the energy crop is strong.

Common sense points to a general agreement among Nigerians that it is important that the country should diversify its exports and sources of foreign exchange earnings, preferably through increased agricultural production and export. This is in view of the fact that Nigeria is basically a rich agricultural country, with tremendous comparative advantages in agricultural production.

Also considering the volatility in the world market demand and price of crude oil, there is a strong and convincing argument against Nigeria's current over dependence on crude oil export, as almost the country's major and only source of foreign exchange earnings. Through relevant and appropriate public policies and programs, there is no reason why local palm oil producers in Nigeria should not be encouraged to produce enough, not only for local consumption, but also a surplus for export. A lot of investment has gone into oil production in various parts of Nigeria. Government should therefore be very mindful of policies that have the likelihood of ruining not only the affected palm oil businesses but also the interest of genuine investors in the country in general. It is necessary not to lose sight of the interest of the generality of the Nigerian economy, including its people and different industrial establishments.

I don't know why Nigerians have refused to learn from the experience of Dunlop and Michelin who closed their factories as a result of their inability to compete cheaper imported rubber. It should be clear to these policy makers that this is the exact same route they are leading the oil palm industry. Secondly how do they expect the cost of production of anything in Nigeria to be cheaper than exported goods when we virtually run our businesses on generators as a result of power failure which is the fault of these policy makers in the first place. The big oil palm estates have started to cut back on their workforce. This is untoward for rural employment. Suffice it to say that plantation agriculture remains the largest creator and provider of rural jobs. For instance, it is bad omen for Presco Plc that has just upgraded their processing capacity, just as Okomu Oil Palm Company Plc has had to put on hold further construction work on their new 60 tons fresh fruit bunches per hour palm oil mill, which is intended to be the largest in Africa. All these investments have been made in the quest by plantation owners to improve the supply and availability of palm oil in the country. It should be of concern to Nigerians the kind of people making these policies. Their intellect should really be questioned. One can only conclude that there are ulterior motives to this apparently senseless policy. Because the only thing they would achieve is an increment in poverty and unemployment.