More than before, Nigerians appear to have found more reasons to bet their money on agriculture, with a good number increasingly entrusting their idle funds in the hands of anchors of a farming scheme or the other.
Opportunity windows are widening and statistics such as the value of Nigeria’s agricultural export rising in the first quarter of 2019 by 17.5 percent higher than the same period in 2018 reinforces investors’ optimism. The exports were largely driven by Sesamum seeds worth N39.6 billion, well-fermented cocoa beans N20.1 billion, superior quality raw Cocoa Beans N9.8 billion and frozen shrimps and prawn N4.3 billion.
As promising as the agricultural sector appears, leading experts in the field think intending investors should be able to answer certain key questions before launching out fully into farming. Experts who spoke to BusinessDay have these to say.
Babafemi Oke, All Farmers Association of Nigeria (AFAN), Lagos Chapter Chairman
I think you should think of the farm location against post-harvest losses. Where you are going to have your farm should be taken care of such that it would be more accessible to the road network. If not, you will definitely start recording post-harvest losses.
Availability of labour should be taken into consideration. Labour is a critical area of farming that has to be guaranteed in order to protect productivity. Then the marketing has to be strategic, which is knowing where you are going to sell your products.
In terms of the method, it depends on what you are planting. Definitely, you have to be conscious enough to get a hybrid seed that will assure better yields. If it’s animals, consider the drugs for them. You should not just plant anything, that at the end of the day, it won’t yield well. These are very important when going into agriculture.
Dangote Sanni, President, Nigeria Agri-Business Group (NABG)
It depends on the crops to be cultivated and the size of the activities. The fundamental issues are suitable land, accessible water (irrigation or rain), seeds quality, fertiliser and herbicides. Other inputs are finance, market value, mechanization and sustainability. I believe these issues are the most important things to take care of in the evaluation of the farming business.
Ade Adefeko, vice president Olam Nigeria
They (investors) need to understand the terrain, the soil type, the enabling policy framework that guides agriculture in the states they want to venture into and the legislation on ground. There also has to be an understanding of the crop dynamics and the need to determine which part of the value chain to play. Whether it is in production, processing or finished products, there are specifics to consider.
Tunji Falade, chairman, Lagos Chamber of Commerce and Industry (LCCI) Integrated Agriculture Project (LIAP)
What market am I producing for? What crop or what produce? What are the specifications of the market? Then it depends on whether it’s an out grower’s scheme or you want to do it yourself.
You have to consider the land to be cultivated. Has it been tested? Is it suitable for the crops to be planted? What about whether, irrigation and mechanization? What about the inputs? Are you getting seedlings, fertilizers and chemicals from the right and authentic sources? These are the concerns that an investor must address before investing.
Olabode Adetoyi, chief executive officer (CEO), Hi-Nutrients International Limited and Harvard University trained entrepreneur
The investor should study the area he or she wants to play, be it livestock or crops. What is the margin and market for the product and opportunity for growth are what investors should look out for.
OpenFarm Network
The business perspective to agriculture
One of the challenges African farmers are suffering from is their inability to take farming from a lifestyle inherited from their ancestors to running a business venture. This explains why a banker who leaves the banking hall for agriculture could prosper within a few years unlike those that have been farming for decades.
It starts with a difference of perspective. He comes with a single aim of making a business out of farming. No more. No less. Having this perspective shapes the decisions the farmer makes. It becomes more economical rather than sentimental in nature. This makes them ask questions like: “Is this purchase an asset or liability? How can I reduce the cost? How can I increase profit? Who can buy at this price? These perspectives also shape how the business is managed. Records are kept to track cost in order to know the minimum market price acceptable. This lack of farm record is the reason so many farms run at a loss without the farm owners even realising it. It also determines how human resources are organised to manage and get things done on the farm.
Value Added Agriculture
Value-added agriculture is any activity done to improve the value of agriculture produce beyond its raw state. These activities range from the way crops are processed and packaged. Lack of value-added services such as this is why other players in the food production chain earn far more than growers. Billion dollars agribusinesses have been built on providing value-added services to farmers.
A poultry farmer who goes beyond just producing his eggs with well-branded promotional materials and offers home delivery as a service can sell at 20 percent higher than market competitors. Adding value to farm produce increases their appeal to buyers, which then increases their willingness to pay higher prices. Successful farmers see themselves beyond growers. They see themselves as players in the food production sector, knowing that the more responsibilities they can take to add value to their produce, the bigger the financial reward that accrues.
