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Jigawa plantation and land compensation

I am very keen about real-sector development as engine of growth. When the idea of huge foreign private investment in Jigawa’s agricultural landscape was first muted in 2012, I followed the policy-syntax and dynamics and read other documentations there from. I welcome every good policy of the government in so far as it conforms to achieving ‘Pareto solution’ that would make Jigawans the ultimate beneficiaries.

I have taken a dispassionate evaluation of this very issue following Hon. Sani Zoro’s outburst of incremental lamentation in a squalid exercise of his legislative oversight. According to Mr. Zorro, the development will dispossess more than 10,000 peasant farmers of their farm lands in over 35 farming communities in Gagarawa Local Government of his constituency.“The company plans to grow sugar cane against the will of majority of the people who own farmlands. There is tension and threats of breakdown of law and order in the area, consequent upon the company’s audacity to proceed with an illegal compensation since Tuesday, November10. This is in spite of a law suit and stiff resistance by owners of the farmlands.  We cannot build our nation if we continue to elevate the citizens of other nations above our own citizens,” Zorro said.

In a swift reaction recently, the Jigawa State deputy governor, Barrister Ibrahim Hassan Hadejia said: “Out of the 12,000 hectares granted to Mr. Lee in 2013, we now gave him only 6,000 hectares and told him you are going to pay for 12,000 hectares. 6,000 hectares will be exclusively for your use while the balance 6,000 hectares will be curved into plots of lands. Anybody whose land was affected on the acquisition will be allotted a piece of land where he can grow sugarcane for you on an out-grower basis and not only that in-between the rows of sugarcane in the out grower plots you will create a gap for their inter-cropping.”

One can see good economics and bad politics being interspersed by the people’s ignorance. I think the government has not done enough in communicating her policy to the locals whose land is being threatened by this good-intentioned investment policy. This is a case of communication gap between the poor farmers and the government. And this is where my intervention in this article becomes imperative. Total Economic Value (TEV) of a hectare of land is given by its use and non-use values. Its use values are represented by its Direct Use Value (DUV), Indirect Use Value (IUV) and its Option Values (OV). Its non-use values are represented by its Existence Value (EV). This can be expressed by the formula: TEV = DUV + IUV + OV + VE. This formula allows estimating an approximate value of land; thus, it allows governments to determine the monetary value of gains and losses caused by a land forfeiture- impact, which in this case relates to an increase or decrease of customary land ownership by the local farmers. The issue of land compensation is taking another dimension as the Jigawa State Government is clueless. The social and Economic Impact Assessment conducted on the project indicated that a farmer with two hectares would make a minimum of 350 percent of his annual income from the sugarcane cultivation

Information regarding the local growers’ predisposition to substitute their current subsistent crops, forest reserves and fallow lands with large scale Sugar cane plantation of a foreign investor should be  used first to calculate the areas of substitution. According to the sample information collected from the affected 12,000 hectares spread across 36 communities of Jigawa State; 50% of the land affected by this policy of sugar cane production would be forests, 20% would correspond to crop substitution, 30% to fallow lands. This implies that the Lee Group in partnership with the Jigawa State government would make adequate compensation of those locals whose land falls within the 20% crop substitution zone as prescribed by the extant laws.  The partial substitution of crops assumes that, although the Sugar cane cultivation is more profitable than traditional crops, farmers are risk averse and while engaged in the cane business, would also maintain an area of traditional crops.

Since Sugar cane would probably be more profitable than other crops, the area of production required for each family’s own consumption will be maintained.  The assumption that growers will not only occupy forest and fallow land areas to produce Sugar cane but will carry out crop substitution as well is supported by the fact that currently each family grows, on the average, about  3.2 hectares of traditional crops. But if the communities are taking part in sugar cane production through a semi-mechanized production system, each family would on the average grow from 6 to 10 hectares of sugar cane as a result of the benefit of external economies of scale which Lee Group would provide. The sugar industry structure analysis reveals that there is no fierce competition in the Nigerian sugar industry that prohibits potential investors from investing in the sector. The industry requires a huge capital investment and the payback period is longer. Employment will be generated and poverty will be on the decline. I think the policy is best if primordial politics is allotted the back seat.

In Nigeria, land is public property. Both urban and rural land is available for investment on leasehold basis. Lease right over land can be transferred, mortgaged or sub-leased together with on-build facilities. The period of lease may also be renewed. The rental value and the lease period of rural land are determined and fixed by land use regulations of each state. Experiences of existing sugar factories in Northern Nigeria show that because of the suitable soil, adequate water and conducive climate, an average sugar cane production per hectare per month of the land under irrigation is very high as compared to other regions and this would make Jigawa State a very attractive location for investors to invest in the production of sugar cane for which it has a comparative advantage. For instance, in 2007, FDI to sub-Saharan Africa amounted to over US$ 30 billion, a new record level – up from the records of about US$ 22 billion in 2006 and US$ 17 billion in 2005. The distribution of FDI flows and stocks is highly uneven, shaped by cross-country differences in resource endowments. Big shares of investment are concentrated in countries with important petroleum and mineral resources, such as Nigeria. In Nigeria, Friends of Earth for Africa and Friends of Earth for Europe (2010) noted that most lands grabbed in Nigeria were profit driven and were under the guises of using the lands acquired for agricultural investments especially for cassava, sugarcane and sweet sorghum which ultimately would become raw materials for bio-fuel production.

However, the Jigawa State Government should as a matter of responsibility, balance investment protection with local interests in order to douse tensions between investment confidentiality and local oversight in investment arbitration. We must reconcile the investor’s need for regulatory stability with host community’s endemic fear of domestic re-colonization in any land deal. This is to ensure that the goal of attracting direct foreign investment in sugar cane farming under the current globalization and liberalization policies of Nigeria is not jeopardized.

Hadejia is the Acting Registrar NOUN, Gusau Study Centre, Zamfara State.

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