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Home Opinion & Analysis Columnists

Government’s Agricultural Initiatives and Economic Development: The Missing Options

The New Normal: Post Pandemic Implications on the Nigerian Economy

Wednesday, 13 May 2020, 1:34 pm
in Columnists, Opinion & Analysis
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Current Structure and Challenges of the Nigerian Agricultural Industry
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In our first of the series, we concluded by asking questions of wit. In our bid to address these questions, we would try to identify those missing links towards achieving the developmental goals of government in the sector.

We will also touch those areas that seemingly push the agricultural sector to the front burner as one of the major industries with great potentials to redirect the economy towards steady, consistent recovery.

The prying mind would wonder why there are less progresses made in the agricultural sector after the lovely initiatives by successive governments. Why has only a little changed? What are the missing links that hinder progress?

We talked about agribusiness being made up of four components in our last discourse. These components cover the different operating ambiences of the agribusiness value chain. Let us have a deeper look into their constituents according to Dr. Kelikume of the Lagos Business School (Webinar 2020).

  • The pre-upstream requires huge human and technical resources. It involves the players into research, standards and control, soil testing and treatment, seed management and control and so on. Here you find such players like the National Seeds Council (NASC), National Horticultural Research Institute (NIHORT), international Institute of Tropical Agriculture (IITA), FMN Agro, Dizengoff Nigeria, etc.
  • The upstream consists of direct farmers in agriculture who deal on crops’ production, animal husbandry, forestry, and fishery. It actually begins the value chain.
  • The midstream incorporates the players in such areas as agribusiness journalism, packaging, manufacturing, processing, distribution, etc.
  • The downstream includes operators in export of processed and semi-processed products, shipping, importation of tools, chemicals, input supplies and the likes.

Having clarified the above, let us try to identify the missing link(s) to agricultural success. One of the gaps in the sector is the dearth of the midstream and downstream. Most players are into direct farming (upstream), and as such there is no link between the farm and the fork.

  • Read also: Current Structure and Challenges of the Nigerian Agricultural Industry

This missing link is part of why Nigeria loses a lot to post harvest losses. If we have big players in agro logistics, it may not be witnessed recently the massive waste of mango fruits in Benue farms while same mango fruits are very exorbitant in Lagos (not scarce though). We have not satisfied domestic consumption in some areas.

The land border closure policy of the FGN exposed the inadequacy of rice farming capacity in Nigeria. If we have enough production output within the rice sub sector, the price of local rice would not have skyrocketed, selling almost same price as imported ones. Take note that the claim has foundations in the fact that only 3.3 million hectares of arable land is under rice cultivation and the average yield is 2.2 metric tons per hectare.

We have lamented the lack of storage facilities in the sector. If we have processors within the value chain, the waste would be minimal. Do we need to import tomato puree when more than 50% of tomato yields perish annually? Do we not have mango juice companies in this country? While would raw, juicy mangoes waste in Benue? Why are processing companies divesting in Benue?

  • Read more: Building a Business based on Local content-Lessons for a would-be Entrepreneur

Organic farming is one area Nigeria needs to key into massively. For one, it ensures healthy living. For the other, it ensures standardization. In as much as fertilizer is a necessary component to good yield, organic fertilizers are no bad ideas. There are companies in Nigeria manufacturing these but how many of them? Are they strategically positioned for farmers to access them? Are their prices affordable for smallholder farmers?

Soil suitability is another area most farmers neglect. Different crops need different soil components especially the pH balance. Some plants do not need much water (or water-logged soil) like plantain and pineapple while others do well with much water like sugarcane and rice.

Some players in the pre-upstream are doing soil testing and sensitization already for farmers (like IITA). They collect a farm’s sample and test the suitability for the intended crop. Again, use of green houses are checkmating some of these challenges as the soil used are treated prior to first planting and intermittently in-between subsequent crop yields.

But how many can afford to test their farms’ soil suitability vis a vis the intended crop to be planted? How many can afford green or screen houses? How would IITA determine that the portions of random soil collection are representative of the entire farm topography? In most cases where the farmers collect the samples themselves, how reliable are the sampling? Who monitors the treatment in-between crop yields as the farms progress? Who monitors other soil testers within the sub-sector?

  • Further read: Barr. Amaka discusses Nigeria’s Business Laws and Tax System: What every Business Owner should Know – Part 6

Seeds improvement also constitutes part of the gaps to the achievement of our agricultural goals. Not all seeds are suitable for planting; and that is the simple truth. Seeds for planting purposes are planted, nurtured, harvested, processed and preserved to required standards. That is why “the NASC is charged with overall development and regulation of the national seed industry.”

They do this in partnership with the Food and Agricultural Organization of the United Nations (FAO), the West African Agricultural Productivity Programme (WAAPP) and the International Institute of Tropical Agriculture (IITA). Other players in this sector include FMN Agro, Dizengoff Nigeria, etc.

In one of the biggest agribusiness exhibition and seminars in Africa organized by Agra Innovate in Lagos annually, it usually is a wonder to see the different seed crops on exhibition and the rigorous, detailed processes deployed to have them conform to standards.

But how many smallholder farmers are aware of this? If they know, can they access and afford them? Can they invest in capacity building by attending these free seminars to remain up-to-date?

  • Read also: How Much is the Business Worth: The Balance Sheet – Know the Asset Items

We can go on and on identifying and discussing these missing links but let us also look at what new can be done or improved upon for this sector to grow to capacity.

Since part of the new normal is going techy, the agricultural sector can join the bandwagon in full blast. There could be improvements on online marketplaces to reduce the menaces of market associations and, sometimes, middlemen. This is already ongoing but if more players come in with more funds, ideas and innovations, the competition would rise mutually and the farm to fork gap will be reduced.

More online courses should be introduced by training institutes to bridge the gaps of time and space. They should be able to issue valid certificates to ensure that these trainings are cut-to-fit. One of the conditions for accessing NIRSAL MFB loans is certification after training by designated Entrepreneur Development Institutes (EDI).

These courses can go online while the examination or whatever qualification assessment can be made physically with the two-week internship period. Also, NIRSAL should try to work with LGAs to establish mini EDIs in their areas to take this training to the farmers.

Cooperative societies also are modes of training via cluster farming. Leveraging on taking the EDIs to the local government areas, smallholder farmers can aggregate together and access anchor borrower funding for farming. This can be a hands-on learning experience for the newly graduated farmers. They learn from and with each other, monitored and supervised by both EDI and NIRSAL personnel within the LGA and bundle their yield together for off-takers since, most probably, their farming procedures would conform to standards.

This exposes them to the off-takers for future collaborations. It also exposes them to the details of farm management which includes financial management. To make it simpler, clusters of trainees per session (admission into the EDIs) can form their own cooperative societies. GIZ Nigeria is already doing this but on a highly unnoticed scale.

Partnerships between the big stakeholders and smallholder farmers can go a long way. Off-takers (like Nigeria Breweries and Nestle) can identify such smallholder farmers trained by these EDIs and strike partnerships with them. Remember that there is already a network among them during the co-operating experiential cluster learning. These off-takers would invest in the farms, monitor production and off-take at harvest.

  • Read more: The International Finance Corporation (IFC): Applying for Financing Part 1

This is the period the R & D departments of cognate industries should be at their best to develop these farmers, aggregate their yields and mutually expand both businesses. It has to be a win-win.

How does this rub off on the economy? These initiatives would, to a large extent, satisfy domestic consumption, reduce the unemployment index, increase food security and, ultimately, reduce poverty. It is a chain and as such trickles down to the lowest stratum of society.

The major concern of government, at the moment, is not the big farm owners or big players within the stretched value chain because they are already big businesses that can fund themselves or source for business funding. The government seems to concentrate more on developing smallholder farmers whose aggregate yield could augment what comes from the established sector players, reduce poverty and empower the youths.

If FMN, for the instance, uses cassava as raw material, can they produce, through FMN Agro, what they need to sustain daily production? Part of production planning would be availability of raw materials as at when needed. Even if they practice lean management as regards inventory, it suffices to make supply-chain sense that they aggregate some smallholder farmers whose yields are akin to their specifications, empower them, monitor them and buy off whatever they produce. The emphasizing imperative is on supervision for conformity to standards.

Having established the above options, what growth opportunities are there in the sector? How can government measure performance of these initiatives? What percentage of total yield goes domestic? Who aggregates these smallholder farmers? What more opportunities are there in the midstream and downstream? Is it really worth an investment, agribusiness?

For answers to these and many more, watch out for the next in the series.

Written by,

Edokobi Azuka Stephen

+234 803 553 5948

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