Import duties resurface, Goshenn Greenland calls for help.

motor cultivated tractor

The effort of the past administration to diversify and reposition the country’s economy through the removal of import duties on agricultural equipment, might have been faulted with by the Nigerian  Customs Service, which might lead to high cost in the production of food and in furtherance make farming more expensive for small holders farmers to participate in across the country.

Import substitution been a prevailing strategy for spurring economic growth in developing countries since it was first theorized in the 18th century by Alexander Hamilton to protect developing country from cheap imports has once been ignored as it was in the past. David Okpon spoke on the effect and challenges of the resurface of import duties to farmers, read his excerpt below:

Please introduce yourself?

I am David Okpon, the Md. Goshenn Greenland, a representative of Lovol Arbos group a Sino-Italian company. We are into agric consulting and we are into machinery, we deal with tractors mainly, our tractors are from 5.5hours power to 260 horse power and fully built tractor from 20.4 hp to 260hp. we have Goldoni tractor and Rbus tractors, and they are all Italian products.

While preparing for this exhibition we imported one of the low earned which is the motor cultivated tractor, which is the pedestrian tractor, for the small holder farmers, as the small holder make about 70% of Nigerian farmers, women and children are the greatest number in them and then we thought that we should empower this segment of agriculture farmers in Nigeria, fortunately when we brought this tractors, we found out that the main tractor, the four will tractors attract zero percent in charges while the motor cultivators attracts 35% in charges, which was something we couldn’t imagine, we were so shocked, for instance we brought in the motor cultivator for N2.1million and the custom charges is 35%, which is 745,000, and we have not been able to pay that money up till now and we have come into the exhibition without not been able to show our equipment, but the pictures instead of having the main tractor as we proposed.

No this tractor has sat down there and has incurred demurrage because we are not been able to pull up money because we were told it was going to attract zero charges from custom.

So why are you interested in bringing in the motor cultivator?

The major interest is that the major people producing food in Nigeria 70% of them are small holder farmers, in their farms big tractors are useless, and they have been laboring with hoe and cutlass for a long time and even for the young people, like the NYSC people who finish who are done with school, we want to encourage the young people to go into farming. Presently agriculture is the way to go, because agriculture is the one that can increase the base of our economy, from agriculture  you can start cottage industries  and companies that  produce, process and distribute, thereby creating a vibrate value chain. Bringing in technologies is the  basic way and fastest way to go into agriculture to help people go into farming and the lowest earned we thought was to bring this motor cultivator in, for instance the Oyo state government is bring in mini tractors and that’s because they recognize the importance of mini tractor in agriculture, many other states are doing the same so we think this is where to go and in our research we knew that most farmers, small farmers needs the motor cultivator, because they don’t need big tractors, because it’s almost useless in the farms.

Do they do the same job?

They don’t, this tractor has the capacity to use 50 implements and this 50 implements can do 100 different jobs, from clearing the farm to tilling, harvesting , processing, and other things in down time, the time you are not farming, sweeping the street or any kind of place or cleaning, it’s a multifunctional kind of machine.

What is your request to the government?  

My request to government is to reverse these particular charges, because this motor cultivator falls under agric machinery.

So there are no charges for four wheel tractors?

 Four wheel tractors attract zero zero zero custom charges, but the two wheel tractor attracts 35% and it is unbelievable.

So where do they classify it?

 They classify it under what they call the HS CODE, the HS Code for full scale tractor, fully built (FBU): HS CODE : 8701.9019.00 is different from what they call the pedestrian controlled tractor, which is has a different HS Code 8701.1000.00. What we want is for government to harmonize this, so that when you bring in a two wheel tractor it also falls under the zero custom charges.

What is the implication of this denial?

The implication is that we have lost cost, because you can imagine if we have the tractor on ground, for the people who want to see and touch it, it would have given them a clearer picture of what they want to buy, so we have lost lot of customers due to the absence of the machine. The adage of a 35% duty on this machine will increase the price of the tractor, you can imagine if you bring in a tractor for N2million and you add N1million on it, how much are we going to eventually sell it to the farmers, who are not rich farmers, who can afford big tractors, because after spending 35% which is N740, 000, you need to do another Vat of 10% that brings almost N200, 000 on it, so it goes to N950, 000. So this is not desirable because this tractor cannot sell get into the hands of people who needs it, which is going to affect the productivity.

The small tractors can be owned by farmer’s cooperative which is going to make farming easier for them. The idea is cooperative should own one, and various farmers can keep interchanging it and productivity will increase. Because what we are driving is productivity increase.