In this two-part report, GBENRO ADEOYE finds out the plight of local palm oil producers and why they have remained poor amid the demand for the product
It was 5am, the time the Olabodes leave home for Eku– Yoruba name for local palm oil mill. The family’s tradition is to set off early in order to reach Eku at dawn’s first light and this reporter asked to join them on this trip.
The idea is to get to beat many others to Eku as there is always competition for the use of local facilities there.
Save for the crowing of roosters and chirping of crickets, the morning was eerily quiet outside the family’s residence as there was nothing around the house but shrubs and bushes.
The road to ‘Eku’
The Olabodes live in a ramshackle house at Iloda in Ogotun-Ekiti, a palm oil producing town in Ekiti State.
The early morning mist shrouded our paths as we trudged on through its thickness and bushy pathways, heading to Alaba-meta, where one of about 30 local palm oil mills in Ogotun-Ekiti is located. It was cold but the amusing chatter of the Olabodes offered some comfort in the harsh weather condition.
Mrs. Felicia Olabode and two of her children had bucket loads of palm fruits, which they wanted to process on their heads. Palm oil was in its off-season; if it were not so, the Olabodes would have required the help of a commercial motorcyclist (okada rider) to move the fruits to Eku, albeit on several trips.
The palm fruits had been harvested three days earlier.
After trekking for about 30 minutes through what were majorly pathways, we arrived at our destination in Alaba-meta, a local palm oil mill popularly known as Eku Superjet.
Some others had also arrived early, but Olabode appeared pleased with herself, which suggested that the situation was not so bad.
“It is very important to get to Eku early because all of us have to compete to use only two drums in which we boil the fruits, one machine (digester) and two Ada (concrete pit where palm oil is manually extracted). If we don’t get there early, it means we will have to queue for our turn at different stages of the processing,” Olabode said.
She described the local extraction of palm oil as a laborious process, which often makes her fall ill.
“The process is very stressful; it often gives me chest pains and headaches. I know a lot of people who have abandoned the job because of the stress but I cannot do that because it is all that I know how to do,” she said, wiping off small beads of sweat that had formed on her brow.
“My husband is a palm oil farmer and my duty is to process the palm fruits. That is where we get money to pay our children’s school fees and that is why they also assist us on the farm. Though, palm oil is now very expensive, we are still very poor because we are competing with many factors.”
Olabode is only 36 years old but she looked nothing short of 50.
But the Olabodes are not the only ones working like elephants and eating like ants in the palm oil industry despite the enormous potential it offers for development and poverty alleviation in Nigeria, there are many others like them, eating little amid plenty.
For instance, the demand for palm oil in Nigeria, a country with an estimated 180 million people, is high as it is a basic food and has several other uses. So the potential is there but it has not translated into a meaningful life for the majority of people involved in the business.
A researcher and expert in the palm oil industry, Charles Aladewolu, painted a gloomy picture for Nigeria’s local palm oil producers, saying the situation will remain the same if they maintain the same practice.
Aladewolu, who is the Chairman/CEO of TECO group of companies, described part of the problem as the farmers’ reliance on outdated species of oil palm and processing methods.
He said, “We have about three or four different species of palm oil – Dura, Deli dura and Tenera. The Dura is the widely cultivated in Nigeria, and then we have the Deli dura, which was developed many years ago.
“The Dura has only nine per cent oil content. The Deli dura has 13 per cent oil content, but the newly developed one called Tenera, has 22 per cent oil content. So over the years, the world has shifted to Tenera, but in the local environment here, they still depend on the old wild palms.”
The expert, while identifying other factors working against Olabode and many others, said it was shameful that the palm oil farmers and producers have to depend on their local methods despite the losses they incur because of prevailing circumstances.
“It was what kept the women in our rural areas going in those days and it is what they are still doing now. They still require their husbands to harvest for them and they still cook the palm fruits and do manual processing,” he said.
“When it is manually done like that, you only get 35 per cent of the oil, the rest of it is lost in the fibre. But when it is mechanised, you get between 93 per cent and 95 per cent oil content, so it is a lot advantageous to mechanise the process. If Nigeria wants to be one of the countries to be reckoned with in palm oil production, it has to mechanise the process.”
Working like elephants
Confirming the situation, Olabode said even though she has spent a decade in the palm oil business, she was sure she had not made up to N1m in profit in that period.
At Alaba-meta, Olabode explained that earlier, bunches of oil fresh fruits had been cut down from oil palm trees. Such bunches consist of fruits embedded in spikelets growing on a main stem.
Using an axe, they had carefully threshed the fruits (removal of fruits from bunches).
Olabode and Ayodeji, one of her children that stayed back after the younger one left for school, put the palm fruits in a big drum that had been blackened from constant open fire. Then, they started a fire beneath the drum, using dry woods.
The fruits were allowed to boil for a couple of hours before being taken out and put in the digester, a local machine fitted with a central rotating shaft having a number of beater (stirring) arms. Through the action of rotation, the machine mashes the fruits’ outer covering.
Olabode explained that the machine was a recent development in the community as they used to engage in a tedious process of marching on the fruits with their feet. However, she was still required to do a lot of the work after the threshed fruits were put inside the Ada (a pit filled with water), in which she spent four hours hand sieving to separate fibre and nuts from the oil/water mixture, which was at knee-length level.
When at intervals she was able to stand upright, her knees buckled and her body was drenched with sweat, which freely mixed with the oil and water.
The process is often associated with chest pains and headache, she explained, adding that she could never afford the luxury of visiting a hospital all the times that she fell ill from the job.
“I only take pain relievers and besides, what will my children eat if I’m kept in the hospital?” she asked.
Eventually, the extracted oil started forming on the water and Olabode gladly scooped the oil intermittently with a small plastic bowl before pouring it in a waiting basin.
“The palm kernels stay down while the chaff will be in the middle and the oil on the surface. So we are going to cook the oil again and then leave for some time to cool off before it is gathered and ready for consumption or sale. It takes about seven days from the time the bunches of fruits are harvested till when it is ready for consumption,” she explained cheerfully.
She explained that chaffs from the processing are used as fuel for cooking while another type of oil called palm kernel oil (adin agbon) is extracted from the kernels.
By the time she started cooking the palm oil, the sun had retreated and evening was beckoning upon us. It was not until 11am before it was her turn to use the digester and 5pm before she started draining the water in the Ada she had used as another person was in line to also put in fresh water and start another round of hand sieving.
Olabode and her eldest son, Ayodeji, a senior secondary school student at Ademosan Royal College in Ogotun-Ekiti, sat down to take their first meal of the day- plantains that had been roasted in the open fire used to cook the oil.
Ayodeji had missed school a third time that week.
“I need to assist my mother because I need to pay my school fees of N10,000 and I’m also looking for N35,000 for my external examinations- West African Senior School Certificate Examination and National Examination Council, ” he said.
Eating like ants
Fifty-year-old Esther Elegbeleye, who had taken her turn in the Ada that Olabode had used, also looked much older than her age.
She had come from Okemi village, which had taken her about 40 minutes to get to Alaba-meta on foot.
By now, termites had gathered all around the Ada while Elegbeleye smartly maneuvered her way around.
“Termites are always attracted to palm oil and we are used to them; in fact, we are used to all the sufferings on this job because we have no other. Ours is the story of millions of local oil palm farmers in Nigeria,” she said mournfully while lamenting the poverty situation of local palm oil farmers.
Although, there has been an unprecedented increase in the price of palm oil in the market, Elegbeleye said the condition of local farmers has not changed much because of lack of capacity.
Findings showed that a 25-litre keg of palm oil that used to cost N4,500 before Nigeria’s current economic crisis now costs about N19,000 while a gallon of palm oil that used to cost about N1,000 is now about N3,200.
“It is true that the price of palm oil has increased but we lack the capacity to invest a lot in the business so that we can benefit from the hike in price. If we harvest seven drums of palm fruits, we can only get seven kegs of palm oil. But the work we would do to get the oil out of the seven drums of palm fruits would land some people in the hospital, but at the end of it all, we don’t make much from it,” she said.
The Malaysia story
A 2013 Academic Journal of Development and Agricultural Economics, which compared oil palm marketing in Nigeria and Malaysia, confirmed that majority of people involved in palm oil production in Nigeria use local methods.
The report however said because of Nigeria’s continued reliance on local production of palm oil, its production has virtually been stagnated compared to other countries that used to be behind Nigeria in production.
It identified Malaysia’s success in palm oil production as being “built on structural (size and scale of production and processing sectors) and other environmental and coordinating plantation management together with processing in large modern mills” as against Nigeria’s system, where “80 per cent of production comes from dispersed small holders who harvest semi wild plants and use manual processing techniques.”
It further noted that “between 1961 and 1965, world oil palm production was 1.5 million tons, with Nigeria accounting for 43 per cent. However, since then, oil palm production in Nigeria has virtually been stagnated. But today, world oil palm production amounts to 14.4 million tons, with Nigeria which is one of the largest producers in West Africa, accounting for only 7 per cent.”
Indeed, a Nigerian government policy and strategy document titled ‘The Agriculture Promotion Policy (2016 – 2020)’, identified oil palm demand as way above the supply, putting the demand figure at “8 million tons” and supply at “4.5 million tons”, adding that oil is extracted from the oil palms at 10 to 15 per cent efficiency rate.
A Vetiva (a research organisation) report of June 2016 said at “1.54 million metric tons, (Nigeria’s) total consumption creates a shortfall of about 600,000 metric tons, which is currently met through imports from far Asian countries including Malaysia and Indonesia.”
It also estimated that about $320m was spent by Nigeria in 2015 to import 600,000 metric tons of crude palm oil.
Similarly, Aladewolu put Nigeria’s palm oil import figure at “60 per cent to meet up with the demand.”
Meanwhile, according to The Agriculture Promotion Policy document, formulated between November 2015 and April 2016, which recognised some of the challenges in the sector, the Federal Ministry of Agriculture and Rural Development will work with investors, farmers, processors and other stakeholders to prioritise for export markets the production of some food crops including oil palm.
‘We’re on our own’
Both Olabode and Elegbeleye scoffed at the latest promise by the government.
“This is not the first time that we would hear of such a promise; past governments made so many but nothing ever came out of it. Sometimes, government officials will come and take down names of oil palm farmers and processors but that is always the end of it. So we are on our own,” Olabode said.
Industry experts have identified the weak crude oil prices and the attendant pressure on forex as laying a good foundation on which to build an enduring oil palm industry, but noted that government’s lack of clear policy may jeopardise the chance.
The Central Bank of Nigeria had on June 23, 2016, released a circular titled: “Inclusion of Some Imported Goods and Services on the List of Items Not Valid for Foreign Exchange in the Nigerian Foreign Exchange Markets,” and listed 41 items that can no longer be imported with foreign exchange sourced from the apex bank, deposit money banks, Bureau de Change and other authorised sources.
The list includes palm kernel/palm oil products, which means that importers of the products have to source foreign currency from the parallel market where rates are far higher than that of the official market.
Although, the situation will discourage importation and help local producers of palm oil compete better with imported products, experts have yet to be pleased with government’s commitment to the sector.
For instance, Aladewolu described oil palm production as scientific and that it requires a clear scientific approach.
He said, “Malaysia and Indonesia were at the same level with Nigeria but they adopted a clear strategy. Their governments acquired large pieces of land, brought in educated farmers and gave them lots of hectares of land for plantations.
“They were given as large as 300 to 500 hectares of land, the right kind of seedlings and easy access to loans, so they developed the land. And by the time the trees started fruiting in three or four years, large mills had been centrally located where the fruits could be taken to for processing.
“There is no way we will make good money in Nigeria if what we are getting out is 35 per cent oil content and the rest of the oil is lost in the fibre. But when we make it fully scientific and mechanised and are able to get more than 90 per cent oil content, then we can make a lot of money. And also, it will be special grade oil which you can sell at premium.”
President of the National Palm Produce Association of Nigeria, Henry Olatujoye, while recently lamenting Nigeria’s relegation to fifth position from the title of the number one producer of palm oil that it used to occupy in the 1960s, had described the country’s old glory as resulting from divine intervention.
According to him, even with the fifth position, Nigeria was currently a net importer of the product.
He said, “Nigeria’s acclaimed title as the world largest producer of palm produce resulted from divine intervention, as the trees were not deliberately planted for industrial use, but grew from domestic farm practices. We are naturally endowed with semi wild grove palm trees that grow mostly in southern Nigeria. We are presently occupying number five position in the world in terms of palm produce production.
“The incidence of import has no correlation with low yield. It is more of capacity to produce at a level that meets demand. Low yield is a function of variety or species planted. In the industry, it is the Tenera generic breed that is ideal for high yield.”
In the meantime, Olabode is hoping that by some miracle, low interest funding will be made accessible to her and others to build capacity and leave poverty behind.
A N200,000 investment should be enough for local palm oil processors each to build more capacity and become self sufficient, according to her.
Perhaps surprisingly, some local palm oil producers still go through demanding efforts to get their products sold.
Risks for palm oil sellers
For example, when Afeez Oladejo, 11, is not in school, his day is spent on the farm, at Eku or chasing after vehicles on the Ado-Ekiti/Ilesha Road; this has been his lot for as long as he could remember following his mother, Bosede, to work.
Bosede sells the palm oil she produces herself and Oladejo’s task is to ensure he gets to prospective customers first, ahead of other sellers, some of whom are also kids. Most times, he is expected to outdo adult women to stand a chance of making sales.
Oladejo is a first child and his two siblings are still too young to join him; however, he was sure that their time would also come as he could not hide relishing the thought of sharing his responsibilities with others because of the risks involved.
Their father does most of the farm work while the rest of the family handles the processing of palm fruits and selling of the palm oil got from them.
To stand a good chance of getting customers, Oladejo has a strategy. He observes approaching vehicles from a distance and when any of them appears to slow down; he dashes to it with feet sending up little puffs of dust with each step.
Some travellers stop to buy food items on the road and more often than not, it is the seller that gets to pitch their commodities to the weary travellers first that wins them.
But these days, Oladejo has had to run faster and harder to sell their stock.
“It seems to take longer for us to sell the little palm oil we make now because of the cost as some people can no longer afford it. But the most painful part is the risk we go through to selling palm oil on the expressway,” Bosede said.