OrderPaperToday – The senate has ramped up its agricultural agenda by focusing on creating a national food reserve that will serve even during times of emergencies.
Accordingly, a bill seeking establishment of the National Food Reserve Agency and for Matters Connected Therewith was passed by the Senate, on Wednesday 14th April, 2021.
How the bill has fared so far…
According to the sponsor, Senator Abdullahi Adamu, Chairman, Senate Committee on Agriculture and Rural Development (APC, Nasarawa), the bill seeks to establish the National Food Reserve Agency for the purpose of storing food grains and other food commodities for strategic purposes.
The bill was read the first time in the hallowed chamber on Wednesday 20th November, 2019 and the second reading followed on Tuesday 19th May, 2020. It was subsequently referred to the Committee on Agriculture and Rural Development. The passage of the bill was not without some drama as constitutional issues of conflict was raised by Sen. Ajibola Basiru (APC, Osun).
The bill, which is made up of 34 Clauses, is divided into five parts aimed at providing a legal backing and regulatory framework for the establishment of National Food Reserve Agency.
The proposed agency will be saddled with the mandate of implementing the country’s national food reserve policy to “ensure a reliable supply of designated commodities and meet local short falls in supply of the designated agricultural commodities in the country.”
Other functions of the agency includes to: “reduce post-harvest losses by contribution and management of silos, warehouses and other suitable storage facilities to be installed at such places and ensure the maintenance, availability and functionality of all plants, equipment and ancillary facilities within the country that are strategic and suitable for storage.”
“Facilitate and provide guidelines for the establishment and maintenance of buffer stock by all states of the federation including the Federal Capital Territory in order to ensure price stabilization and food security and correct problems relating to the supply of designated commodities.
“Meet such other food emergencies caused by drought or flood, or by such other natural disaster, as may be declared by the President.
“Promote and ensure compliance to standard and grades of agricultural produce so as to encourage uniformity in quality of produce, in association with the relevant agencies and as provided for in Weight and Measures Act and Standards Act.
“Facilitate the establishment of a National Agricultural Market Information system for each designated commodity operated by the agency for the benefit of the consumer and any person engaged in the production.”
The proposed food reserve agency will have a governance structure with powers to oversight its affairs; fix the terms and conditions for service including remuneration of the employees; establish such number of committees as it deems necessary for the efficient performance; and do such other things which is in opinion of the agency “are necessary to ensure the efficiency performance of the functions of the Agency.”
The proposed agency is intended to be funded from federal allocation as well as “whole or part of the Natural Resource Development Fund as may be approved from time to time by the President.” Other sources include grants or loans from any tier of government; grants from “the organized private sector, international or donor organization and nongovernmental organizations.”
The bill provides for a Guarantee Reserve Fund “into which shall be paid, from time to time such sum as will maintain the credit balance of such Fund at an amount not less than one quarter of the total of the money which the Agency is liable for the time being to be called upon to pay under guarantee given by the Minister.”
It also provides for a General Reserve Fund into which any net profit earned by the agency shall be paid and which shall be “applied to indemnify any loss or deficiency which may occur in any in any transaction of the agency, other than those for which the Guarantees Reserve Fund is available.” It further provides that “the Minister with the concurrence of the Auditor-General of the Federation, may give direction to the Agency as to the balance to be maintained in the General Reserve Fund and where such directions are given, the Agency shall not be required to pay any of its net profits into the fund whereby the balance thereof would exceed the amount directed by the Minister with the concurrence of the Author-General.”
The bill provides that the proposed agency shall purchase food items “either through open biding, commodity exchange or contract growers,” and that “where the government so desires, the Agency shall purchase food items through guaranteed minimum price scheme.”
Release of food stock shall be under commercial purpose or government intervention; and in the former case such shall be “conducted through an open competitive bidding process and or Abuja Securities and Commodity Exchange” and when under the latter, it shall be “at the price determined by the Government; however, the government shall reimburse the Agency at a price not less than the cost of stocking.”
Penalties for default…
The bill provides for a set of penalties for certain defaults, including the following: Misrepresentation of the grade of designated commodity contrary to established standards attracts a fine of not less than N100,000 as well as the forfeiture of the commodity upon conviction. Furthermore, failure to pay such fine within two weeks makes defaulter liable to prohibition from “participating in the marketing or processing of any designated commodity for a period not exceeding three years” in addition to still paying the fine.
Declaration of national food emergency
The bill provides for how a national food emergency can be declared by the President, viz: “The President may declare a National Food Emergency if in his opinion, there is a major short fall in the domestic production or availability of designated food items;” and that “whenever the President declares a National Food Emergency, the powers of the Board under this Act shall vest in the Minister” up to “not more than thirty days after the end of emergency as declared by the President.”