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Sugar cane, an untapped gold mine

Sugarcane plantation

Sugar cane production fell from 44,893 tonnes to 10,843 tonnes in 21 years. As the dip in oil prices continues to take its toll on the nation’s economy, experts say the sugar cane industry can be another goldmine if given the desired attention. NIKE POPOOLA writes

Sugar cane production commenced in Nigeria, almost the same time oil was discovered in Oloibiri, Bayelsa State. The oil discovery took place in 1956. But while the oil sector has enjoyed immense attention of the government, the reverse has been the case for sugar cane production.

There has been a drastic fall in sugar cane production in the country over the years. Local production of sugar thus fell from a quantity of 44,893 tonnes in 1991 to only 10,843 tons in 2012. While Nigeria imported728,570 tonnes and spent only $211,285m on importation in 1991, it imported 1.09 million tonnes and spent $517.22m on importation in 2012. Presently, Nigeria produces two per cent of its sugar needs, which makes it unable to export and earn income from it.

Experts note that the discovery of oil, which was a blessing to the economy through income earned from its exportation, was regrettably a curse to the agricultural sector. Nigeria’s economy had been dependent on income from agriculture until the government saw oil as an easier way to earn foreign exchange, thus allowing agriculture to die slowly.

In the past years, there had been times when prices of oil fell in the international market. This led the government to devalue its local currency and introduce austerity measures to cushion its effects on the economy. Sadly, it had seldom implemented long-term plans to solve such problems. Presently, Nigeria’s economy is groaning under the adverse effect of another oil slump as oil and gas sector accounts for 95 per cent of its total income. This led to a further devaluation of the country’s currency. Recently, the Central Bank of Nigeria disclosed that gross oil revenue fell from N602.5bn to N470bn between June and October. It attributed this loss to the fall in the prices of crude oil in the international market. According to the CBN, the Federal Government’s estimated retained revenue in October was N278.79bn, while the total estimated expenditure was N320.73bn, resulting in an estimated deficit of N41.94bn. The 2014 budget was based on $78 per barrel; however, oil price fell from about $110 in the beginning of the year to $58 towards the end of the year.

Experts say sugar cane is an area of agriculture that has huge potential to increase Nigeria’s exportation, foreign exchange, provide sugar needs of its own citizens and create employment for diverse skills in the country. This makes it imperative for the government to diversify the economy and revive this important sector.

Source: National Sugar Development Council

Sugar cane boom days

Sugar cane is the crop that is grown on the plantation, while sugar is the sweet crystalline product after it has been processed in the factory. Sugar is consumed by individuals, families and organisations. It is not sugar cane but sugar, its end product, that is exported. Beverage-making, baking and pharmaceutical companies among others use sugar for production. Feasibility studies on sugar cane production started in Nigeria in 1956, after which the government established its plantations in different parts of the country. Its first production was done in 1964. Then, the Nigerian Sugar Company was the premier sugar company in the country. Nigeria experienced boom in the sector in the 70s and late 80s, reaching 44,893 tonnes in 1991. There was however a lull from 1991 when production fell to 10,843 tonnes in 2012.

There were four sugar companies in the country then. There was the Nigerian Sugar Company in Kwara State which was the premier company to be established in the country; The Savannah Sugar Company in Adamawa State; The Sunti Sugar Company in Niger State; and the Lafiagi Sugar Company in Kwara State.

Mr. Kunle Adegboye worked in Nigerian Sugar Company in the 80s. He said sugar cane provided employment to a lot of people from different sectors. According to him, it provided employment to agricultural scientists, artisans, labourers, business administrators, engineers among others.

“During harvest, we used to employ over 20,000 people. We employed several labourers who earned money during the harvest period,” he said. He however notes that the reverse is the case now because most of the sugar cane plantations are underperforming and Nigeria is simply importing its sugar needs. He is worried that Nigeria is just creating employment and providing income for other countries while this potential is left largely untapped.

Fall of sugar cane

Despite the existence of the Nigerian Sugar Master Plan, the product currently supplies about two per cent of the nation’s requirement. This also contradicts the country’s comparative and competitive advantages in sugar production, according to the Nigerian Sugar Development Council.

Nigeria has a large expanse of land good for sugar cane cultivation, conducive climate for its growth and reliable manpower. In fact, the environment is so favourable to enhance its natural growth, unlike some countries that require artificial chemicals to ripen and aid its cultivation. These were factors that prompted government’s sugar investment in the past. Over the years, sugar cane production has suffered neglect. Further devaluation of local currency and inadequate funding worsened its state. It became difficult for farmers to get most of the critical inputs like herbicides and fertilisers to grow their farms. Again, as the companies were largely owned by the government and not well managed, there was a lack of political will to hand over most of them to investors that would inject funds and resuscitate them. Businessmen who took interest in sugar business saw more convenience in importation than cultivation. Over time, almost all the major sugar companies in the country went down. However, in fulfillment of government’s plans to hand over control of most of the firms, the privatisation of the sugar companies started. Lafiaji Sugar Company was bought by BUA Group in 2008; Sunti Sugar Company was acquired by Flour Mills Nigeria in 2009; Savannah Sugar Company was acquired by Dangote in 2002; and Nigeria Sugar Company was bought by Josepdam & Sons in 2006.

Planting process

When sugar cane is planted, it is either for the purpose of being chewed or processed into sugar. There is also the beet sugar which is got from a plant called sugar beet and more common in the temperate areas. But in the tropics like Nigeria, what we plant is sugar cane.

The National Cereal Research Institute, as a government agency, was established to conduct research into the genetic improvement and production of the major stable grains like rice, maize, cowpea and sugar cane. Former Head, Sugarcane Research Programme, Mr. Afolabi Amosun, explained that sugarcane is planted by cutting the stem of the cane, burying it in the soil and making sure it has sufficient water to grow. He said when planting for industrial production, mechanised farming is the appropriate method because it requires a large expanse of land, unlike producing for chewing purpose which can be done by small scale farmers. According to him, chewing cane is different from industrial cane because chewing cane is softer and made for the human teeth to chew and extract liquid. The industrial cane, on the contrary, is very hard and made for industrial plant to squeeze and get sugar.

He noted that sugar is of different kinds such as the white crystalline sugar and the brown crystalline sugar. The difference between white and brown crystalline sugar, he noted, is in how pure the crystals are. “The white crystals are very pure, purified well and all the molasses have been removed. The brown crystals have been purified to a stage and left. The brown colour is added to the crystal from molasses got from the factory during production,” he said.

While explaining the process of getting sugar from sugar cane, he said, the liquid is squeezed out of the sugar cane plant, sieved, put in a container, and heated to concentrate the liquid. “After concentration, and it is very thick, you put one crystal of sugar in the thing and other crystals of sugar will form in that liquid, then you sieve it, and use centrifuge to remove most of the liquid from the crystal and then, you purify the crystals depending on whether you want white or brown sugar,” he said.

Amosun said that despite the fact that the sugar factories in the country were supposed to produce sugar from cane, they were not well maintained. He also lamented that the country lacked adequate human capital that understood the mechanism of sugar making, thus resulting in low production level. He noted that the vacuum pan was the high level production of sugar form which was common in the country, while there were also the medium and low-level production techniques which were not so common. “But I think if we lower our level of sugar extraction technology, we might be able to increase our level of sugar production because we are using high- level technology and low -level manpower to run our factories, and therefore our factories are under performing,” he said.

What aided growth in the past

In the early years, there was total commitment of the government to sugar cane and sugar production in Nigeria. There were enough funds and agriculture was treated as a priority.

Former Assistant General Manager, Agric Operations, Bacita Sugar Company, Funsho Makanjuola, said infrastructure was available like roads that linked the Bacita estate with other places like Ilorin and Kaduna roads. “Basic raw materials like fertilisers were available; energy needs were also available; the Federal Government gave direct line from Jebba, Kainji to Bacita Sugar Company because growing sugar cane was considered important and everything must be done at the right time,” he said. Makanjuola added that fuel for running the factory was available and maintenance of the factory was good. He explained that once the cane was cut, it must get to the factory within 48 hours otherwise it would start deteriorating on the field and become too hard to get sufficient sugar from it.

He is however worried that today, attitude to work has changed and basic infrastructure available in the past is no more. “There are poor roads; even within the factory areas and plantation, roads are no more there while irrigation equipment is not available,” he said. According to him, sugar cane is grown for 12 months, and usually in an area that has about six months of rainy season and six months of dry season. The essence of the six months of rainy season, he mentioned, is to nurture the cane to a certain stage with enough water to grow, and the dry season stage is to help its harvest. He explained that in the dry period, some of the canes not harvested must be watered with irrigation. “All these basic infrastructures are no more there,” he said.

Makanjuola said that there had been climatic change because some places now experience drought unlike before. He said some of the systems designed in the past were based on climatic data available in the 1960s and 70s. While observing that many things have changed, he said the infrastructure needs to be reexamined. He also observed that the government was also not taking care of varieties of crops. “There are some varieties that do well in each climate and the research institute in Nigeria should produce varieties that are suitable to our environment. The old ones imported from Indian and other countries are no more suitable and yield has also dropped,” he said. Again, he noted that sugar cane is a mono crop and the soil had been thoroughly used and deprived of all necessary nutrients. “We need to rebuild the soil profile to improve the productivity,” he said.

The sugar cane expert said no sugar company could handle the challenges confronting its production alone except with funding and full support from the Federal Government. If revived, he said sugar cane would produce jobs for lots of unemployed Nigerians. “We have mass of land wasting and there is unemployment. A factory that produces 35,000 tons of sugar per year can do so on about 4,000 hectares of land, and it will employ 4,500 workers,” he said.

Investing in sugar production, he said, was capital-intensive, hence the need to allow sincere investors to come into it. He suggested that the government should provide soft loans and make available good irrigation system. He said when appropriate structures are in place, within a few years the investors would start to make profit. “We are a large importer of sugar. People keep importing sugar from other countries and generating employment outside our own people are jobless,” he said.

Government’s intervention

The Federal Government established the Nigerian Sugar Development Council through Decree 88 of 1993 to promote the development of sugar sub sector through the provision of guidance on the development of sugar estates and the organisation of sugar cane out growers towards enhancing local production of sugar. This is to ensure that Nigeria achieves at least 70 per cent self sufficiency in sugar requirements.

While speaking on government intervention, the Executive Secretary, Nigerian Sugar Development Council, Dr. Latif Busari, said the Nigerian Sugar Master Plan was implemented particularly with respect to getting the sugar refineries to implement backward integration to raise local production both in terms of milling capacity and sugar cane activation. The backward integration seeks to encourage more local production of cane for sugar producing companies.

“The Nigerian Sugar Master Plan approved by the Federal Government in 2012 provides the policies, programmes and strategies for the attainment of self sufficiency in local sugar production in Nigeria,” he said.

He noted that some of the challenges confronting the sugar cane producers were lack of locally based and adjacent sugar mills, lack of access to funds, and attitude of finance houses.

According to him, fluctuation in prices of critical inputs in sugar cane production, owing to vagaries created artificially most times by the middle men and profiteers in the distribution of such inputs as fertilisers, agro chemicals, water pumps and water delivery hoses, most times goes beyond the capacity of the farmers. He also said that inadequate or total lack of necessary information on weather forecasts and disasters most times leaves the farmer completely devastated and forcibly pushed out of his sugar cane production business.

Most rural farmers, he said, are interested in diversifying into the production of the industrial sugar cane but there must be a buyer such as the industrial end user before they can embark on its production. He said that the lack of these industrial end users would render such attempt infeasible because even when there is one sugar mill within the supply reach of the farmers, the monopolistic tendencies of the miller in buying off the canes from the farmers may not encourage them to expand production. According to him, if there are more than one sugar millers within the reach of the farmers, there will be price competition and that alone will encourage more production and create more sugar cane producers. “However, the NSMP is programmed to address all these through NSDC” he said.

Major sugar companies

Presently, the major sugar companies operating in Nigeria are Dangote Sugar Refinery, Savannah Sugar Company Limited, Josepdam Sugar Company and BUA Sugar Refinery. According to the NSDC, reforms aided the operations of Dangote and BUA’s refineries in Lagos. It noted that Jigawa Sugar Plant in Jigawa State was 85 per cent complete. Dangote also completed feasibility studies in Bauchi, Taraba and Jigawa states. There is currently full privatisation of existing government-owned sugar companies at Numan, Bacita, Sunti and Lafiagi, while Savannah Sugar Company is being resuscitated. The NSDC said currently, 10 mini plants are being established in Agbede, Edo State; Girinya, Kogi State; Kalgo, Kebbi State; Danja, Katsina State; Makarfi, Kaduna State; Kauran Mata, Kano State; Shonga, Kwara State; Konan Mada, FCT; Sara, Jigawa State; and Zigua, Bauchi State.

The way forward

When sugar cane is planted, it matures between 10 and 12 months in Nigeria, as opposed to other countries like Mauritius that employs artificial ripening. After the harvest, the root comes shooting back again, and on very good soil, it can be there for the next 10 years. Experts have said that if fertilizers, herbicides and irrigation are very much available, virtually, every state in Nigeria can grow sugar cane because there is very good weather and sufficient land for its production. The only thing that is lacking is the political will to do the right thing. Again, there is the need to stop the epileptic power supply because the factories need electricity to operate and service the irrigation stations. Experts say there is a need to replace old parts in the factories.

It is also relevant for the research institute in Nigeria to produce varieties that are suitable to its environment. To revive the sector fully, government should encourage more investors. If investors who are vast in sugar cane production are allowed, there is a lot of hope for the sector to grow. The government can conduct more feasibility studies in many states to facilitate its production. It is also important for the government to update available data on climatic change in the country, as well as provide soft loans as a means of funding producers.

As importation increased, sugar production fell by 76 per cent between 1991 and 2012. The Federal Government has initiated the backward integration policy, which aims to discourage businessmen from importing sugar but encourages investors to develop the local sugar cane plantations and plant as much sugar cane as possible to have enough for production. If this is well implemented, it will increase sugar production for local consumption and also make Nigeria one of the exporting countries.