SMEs Frown at non-implementation of Minimum Guarantee Price

Small and Medium Enterprise (SME) owners in the cassava value chain in Nigeria have voiced out their displeasure over non implementation of the minimum guarantee price for high quality cassava flour (HQCF), approved by the federal government. The SMEs lamented that despite the fact that the federal government pegged the price of high quality cassava flour at 103,000 naira per tonne, no flour mill in the country is complying the set price.

The Managing Director of Mastol Limited, Mr Femi Adegbite, expressed his displeasure while receiving some members of C: AVA, who paid a courtesy visit to his cassava processing plant at Ogun State. Mr Adegbite revealed that although the six cyclone flash dryers procured  for the SMEs by the federal  government are functioning effectively, there has been a lull on production of high quality cassava flour, due to the fact that the price is presently at N80,000 per tonne.

He said, ‘’SMEs are finding it hard to work out the cost of their production due to the fact that huge amount is spent on processing high quality cassava flour. It will be difficult for SMEs to stay in business if the price of HQCF does not get better. If the price does not change, we might put our production on hold.’’

The six cyclone flash dryer produced by Nobex is a product of C: AVA’s innovation in the first phase of its project. Prior to the fabrication of the six-cyclone flash dryer, most cassava processing plants were relying on the use of single cyclone flash dryers which were not cost effective.

The Project Director of Cassava: Adding Value to Africa, Dr Kolawole Adebayo had earlier said that the six-cyclone flash dryer is C:AVA’s  input into the drying technology in the continent of Africa. He explained that the new flash dryer addresses two key points: the level of fuel consumption and secondly the output.

He revealed, ‘’The traditional flash dryers were consuming  200 litres of diesel to dry one tonne of flour, when CAVA came in and intervened with all our engineering vehicles, we reduce that to 26 litres of diesel. That is a huge stride in the technology development of drying technology on the continent of Africa.’’ He explained.

Meanwhile, the Technical Adviser to the Minister of Agriculture and Rural Development, Dr Martins Fregene, reacting to the pricing  tussle  between the cassava processors and the wheat millers, has advised that the only feasible way to sustain the HQCF  market is to bring down the cost of producing the product.

According to him, “We want high quality cassava flour to be economic. It cannot be economic if the price is expensive, so the federal government is trying to stabilise the price of HQCF by cutting down the production cost.”

Dr Fregene, however added that the federal government is developing mechanised farming for medium and small scale enterprises as part of efforts to increase the efficiency of all the value chains in the cassava sector.