Commodity Exchange Best Option for Sales of Farm Produce to Foreigners

Experts in the Nigerian agriculture sector have said commodity exchanges were the best option for farmers to sell their products to foreigners rather than licensed local agents.

This comes after the Nigerian government placed a ban on the direct purchase of agricultural produce from local farmers by foreigners. The development was disclosed by the Minister of Industry, Trade and Investment, Niyi Adebanjo, who said appropriate mechanisms have been approved to ensure competitive prices for commodities of an indigenous farmer in a bid to protect them from exploitation.

According to him, only licensed local buying agents who are registered with the relevant national commodity associations will be permitted to buy directly from farmers and sell to foreigners.

But the Chief Executive Officer of Multimix Group, Obiora Madu, said the international best practice for commodity sales was through licensed warehouses or the commodity exchange.

He noted that the ban has brought the country a step closer to the global best practice but noted that a functional commodity exchange was a long-term solution.
“The licensed agents will only become middlemen and would frustrate the process.

We are concerned about the implementation because we want the middlemen to be regulated in the value chain, so they don’t distort the market.

“It is easy for a foreigner to get a Nigerian to buy for him directly from the farm gate. We need a mechanism in place to ensure that they buy from commodity exchanges or warehouses as it is done globally,” he said.

On his part, Executive Chairman of Colossus Investment Limited, Tola Faseru, said the farmers buying directly from the farmers were distorting the market and not giving stability to the value chain, noting that with the ban on their access, the issues would be addressed.

“We are concerned about the implementation because we want the middlemen to be regulated in the value chain, so they don’t distort the market.

“It is easy for a foreigner to get a Nigerian to buy for him directly from the farm gate. We need a mechanism in place to ensure that they buy from commodity exchanges or warehouses as it is done globally.”

He said the implementation of the new regulation would create jobs for Nigerians and reduce illegal exports of the country’s agricultural commodities.

source Agro Nigeria:
Commodity Exchange Best Option for Sales of Farm Produce to Foreigners