Strong policies are needed to boost commodity trading

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Thursday 08 November 2018 / 08:34 AM / by Ifeanyi Onuba of Punch newspaper

Nigeria Commodity Exchange Managing Director, Ms. Zaheera Baba-Ari, said there is a need for strong government policies to boost the level of trading in the commodity exchange market.

Baba-Ari, who spoke to our correspondent in Abuja, also noted that the Commodity Exchange Bill, once enacted, would increase farmers’ incomes.

She said the commodity exchange held the key to diversifying the economy, adding that it would be difficult for farmers to get the right price for their produce without the exchange.

She noted that other commodity exchanges around the world were thriving thanks to strong government policies.

Baba-Ari said the bill, which was first drafted by the agency in 2007, would also allow farmers to access loans from banks to boost their productivity.

She blamed the high prices of agricultural products in the country on the activities of middlemen, noting that many farmers would not get adequate value for their products if something was not done for development.

Baba-Ari said, “The exchange provides a platform for people to buy and sell by giving them the real price of their products.

”What happens is that the intermediaries will buy the products at a very low price and resell at a very high price to the exporters. So the people who get all the profits are the middlemen, while the farmers stay poor. That is why we have a large percentage of peasants in Nigeria.

She added that commodity exchanges play a pivotal role in facilitating economic development, including helping farmers build their marketing and risk management capacities.

According to her, when the bill is enacted, it will also help farmers reduce their exposure to price and other production risks.

Baba-Ari said: ”The bill will improve the productivity of farmers because after production they will not be forced to sell the produce due to lack of funds or storage facilities.

”It encourages warehousing, which will also allow farmers to deposit their produce in an approved warehouse. At the warehouse, a receipt will be given to the farmers and it will contain all the details of the goods deposited in the warehouse in case of loan from a bank.

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