Exploring post-retirement low-risk agric businesses

If not well planned, life after retirement from active civil, public or private services could become drab, unproductive and financially stressful. FEMI IBIROGBA writes on post-retirement agro-allied businesses that serve dual purposes of fitness and financial freedom.

Agriculture, especially in resource-poor countries where low inputs, poor agronomical practices and rain-fed farming dominate the scene, is associated with high level of risk, creating uncertainty about yields, success rate, capital security and returns on investments.Retired civil or public servants or people approaching retirement usually have aversion for risky businesses, making agriculture a usually no-go area despite its financial and health benefit potential.

One of the business risk theories postulates that as the investor approaches retirement, he enters the spending phase. He has his daily living expenses covered through pension and other streams, provided he is invested to receive a steady, stable income. He has no need to speculate aggressively.  It follows, then, that he is likely to become more risk-averse, as he decides to place investments only in relatively low-risk assets that could beat inflation.

However, there are low-risk, income-generating and less energetic agricultural businesses that people who have retired or on the verge of retirement in Nigeria can do to avoid financial dependence, miserable and sedentary lifestyles.

Low-risk agribusinesses
FROM the experiences of farmers, agricultural researchers and agro-allied entrepreneurs, commodity aggregation, animal feeds dealership, input supply, greenhouse farming, grocery operations and grain storage for off seasons, among several others, are low-risk but moderately rewarding businesses.

Animal feeds dealership
ANIMAL feeds, especially poultry feeds, are fast-moving goods if the business outlet is located closer to poultry farms. Becoming a major distributor for prominent feeds makers, though with low return ratio, is almost risk-free, and it guarantees a very reliable and predictable stream of income.This is different from feed milling. Feed milling requires buying feed ingredients, capital for hammer mills and mixer, as well as electricity or power generators for production. It is a capital-intensive business, and it needs nutritional and other expertise to be successful. The major feed millers have the capacity for production, while distributing for them is a low-risk business the potential and actual retirees could conveniently do.

Co-founder of J&S Agro Ltd, Ilorin, Ozigi Salami, who is a major distributor for Hybrid Feeds, told The Guardian that though the profit margin is very low (in the region of one or two per cent), the good thing about the business is the stability of returns because the birds will always consume feeds. Apart from the profit margin, rebate is given to a dealer who sells a specified quantity in a quarter.

On the capital requirement, Salami said the minimum a retiree could invest is between N1.5 and N2 million to get the maximum benefits. However, he added, one could start as low as N300,000 or N400,000. He advised that the business premises should be located closer to clusters of poultry farms. Another animal feeds distributor in Ibadan, Oyo State, Mr Pelumi Adekunle, operator of Moore Agric Services, told The Guardian that apart from rebate in three months, he also gets a subsidy of N10 on every bag sold in one month. This, he added, is apart from profit margin per bag, which could range from N50 to N100. Adekunle said it would require a minimum of N3 million to do the business conveniently, and admitted that not only retirees but also younger people could do the business.

Farm input supplies
FARM inputs include agrochemicals, seeds, farm tools, fertiliser, wears and packaging materials. Agrochemicals such as insecticides, herbicides and fertiliser, among others, are always in high demand in the dry season. Farm tools, including cutlass, hoes, boots, gloves and knapsack sprayers are fast-moving products too. Poultry equipment such as transport cages, feeders, drinkers, crates and veterinary medicines are less risky items and selling fast. Improved seeds of maize, soy bean, cowpea, okra, pepper, tomato, as well as seedlings of cocoanuts, orange, pawpaw and mango could mean serious business. Combining the above in a one-stop store would really have the hands of a business-oriented retiree full, steadily making a living while doing bodily exercise and keeping mental alertness.

Raw and processed foods marketing
MARKETING and sale of raw and processed foods could be a serious business to a retiree. Call it a grocery, selling fresh fruits, vegetables, frozen foods, plantain and banana, packaged palm oil, garri, fufu, lafun, apu, bean flour and other processed foods could make a retiree generate money steadily.In the cities, and especially in rich neighbourhoods, selling apples, cucumber, sweet melons, watermelons, groundnuts and cashew nuts, decently packaged eggs, bell peppers, exotic tomatoes and others could mean millions of naira per annum to a retiree.

Also, root and tuber crops, such as sweet potato, yam and cocoyam are food crops that Nigerians love eating, and selling them in large or small-scale quantity would definitely attract patronage. Industrially processed foods, such as semo, corn food, wheat and yam powder, and plantain flour are part of daily staples selling in all neighbourhoods in the country.

Greenhouse cultivation
GREENHOUSE technology in farming is a revolutionary device that enables a farmer to maximise the utilisation of scarce resources to get optimum yields. Land is very well utilised; cultivation is with drip irrigation and with this, all-year planting is the norm.According to the Integrated Project Manager, Sustainable Livelihoods, Dizengoff Nigeria, Mr Oscar Walumbe, “Greenhouse is essentially a controlled environment limiting the devastating effects of insect pests and diseases that ravage vegetables, including tomatoes. “It is not rain-fed but brain-fed, as it comes complete with a customised drip irrigation system. With little amount of land space and water, you are sure to get a yield far higher than your traditional open field production.”

The greenhouse is used for production of bell peppers, tomatoes, cucumbers, sweet melon, flute pumpkin, and a host of other vegetables. An 8m x 24m greenhouse (less than a plot of land) yields up to four tonnes of tomatoes, for instance, in a six-month season. In comparison, traditional open field tomato cultivation with best agricultural practices yields a maximum of seven tonnes per hectare (10,000m2). Clearly, the greenhouse replicated over one hectare yields about 133 tonnes of tomatoes, 19 times higher than the traditional open field cultivation.

Humphrey Otalor, Communication and Marketing Manager, Dizengoff Nigeria, said a farmer with good practices could record two metric tonnes (2000kgs) of bell pepper in a year. According to him, a kilogramme of the pepper is sold at about N800. This would give the farmer nothing less than N1.6 million in seven months.

Cassava cultivation
FOR relatively younger and more energetic retirees, going into mechanised cassava production is not only rewarding but also stress-free.The Cassava Project and Agro-processing Project (CAMAP) Coordinator of African Agricultural Technology Foundation (AATF), Mr David Omowumi Ayodele, had encouraged investors to explore unlimited profit potentialities in cassava production.

“All inputs adequately used, the maximum is to invest N150,000, and one should expect at least the net profit of N300,000 per hectare. This means one can sell cassava of 450,000 per hectare, which is the minimum,” Ayodele had said.The Cassava: Adding Value for Africa (C:AVA) Regional Coordinator, Professor Kolawole Adebayo, had also informed The Guardian that C:AVA links up producers of the root crop to industrial processors, assuring farmers of a ready market for their produce.Apart from industrial processors, small scale processors who make garri, lafun and apu are ready buyers of the crop. There is no more dull moment as far as the sale of cassava roots is concerned.

Produce storage
SEASONAL scarcity of certain produce presents opportunities for Nigerians, including those who have left or about to leave active work. Grains such as maize, millets and others; beans, palm oil, melons and dry pepper could be purchased, stored and transported to cities where they are needed off-seasons.A palm oil dealer in Ibadan, who did not want his name in the print, confided in The Guardian that he borrowed about N1 million from a friend in 2016, bought some gallons of palm oil from Okiti-Pupa in Ondo State, stored for a period of four months, and realised a net profit of N1.5 million.He regretted not buying more, for, as he said, he could have realized higher profit if he had done so. He advised retirees to buy non-perishable farm produce and sell at the time of scarcity, assuring that the worst scenario would be selling at no profit.

Tractor hiring services
TRACTOR and other farm equipment hiring services are currently in short supply in the country as the focus gradually shifts from subsistence to commercial agricultural businesses. Commercial farming requires mechanisation in land preparation, planting, crop protection and harvesting.Some savanna ecological states of the North and the North-central zones of the countries favour grain production and bi-annual cultivation of crops, requiring regular land preparation and planting. Retirees in these zones may have their hands full hiring out tractors and other farm equipment to commercial farmers.According to engineers at the National Centre for Agricultural Mechanisation (NCAM), Ilorin, a very good tractor would last for over 20 years earning money for the owner if maintained very well.One of the NCAM engineers, Mr Tope Faleye, while taking The Guardian round the premises, said a particular tractor had been working for over 15 years without anything repaired or replaced in its engine.

Though capital intensive, the tractor would have about six months of work per annum, and could do more where irrigation facilities are available. About N10 to N12 million would be required as capital to buy a tractor with basic implements such as ploughing unit, harrowing and ridging implements, among others.Agriculture presents opportunities of dual benefits of generating income and remaining physically active after retirement. Therefore, a careful planning by those on the verge of retirement and those who are already there could help cushion the emotional and financial burdens associated with poor living conditions after years of working.

However, whoever intends to embrace agriculture after retirement should seek advice, knowledge and feasibilities studies. Training is very important.As you take a decision preparing for retirement, you are left with this piece of advice from George Clason, author of The Richest Man in Babylon: “Insure an income for thy future. Look thou at the aged and forget not that in the days to come, thou also will be numbered among them. Therefore, invest thy treasure with greatest caution that it be not lost….“Counsel with wise men! Seek the advice of men whose daily work is handling money…. A small return and a safe one is far more desirable than risk.”