‘Contract crop production crucial for agro-industries, youth employment’
Mr Dayo Olunowo, Managing Director, Agricapital Ltd, Ibadan, in this interview, says agribusiness can only be sustainable if farmers can plant according to off-takers’ product standards, specifications, and packaging methods. He argues that the market gap between the farmer and the produce end-user, when bridged, can save millions of dollars yearly from import substitution.
FEMI IBIROGBA reports:
Unemployment rate is high. How can young Nigerians be attracted to farming?
We encourage our farmers, especially youths, to partake in crop diversification and sustainability, and here is how it works. Let’s say I have one acre of land I can plant three different crops on it: one portion for tree crops for the long-term, one for short-term produce, which is stapled crops, and the last portion for immediate perishable crops. When you look at these together, a farmer now has monthly income coming in rather than waiting for a crop that the world or market does not need and is one-off.
Secondly, we need a constant reminder of our youths on agricultural value chains. A lot believes agriculture stops with a farmer, but it is not. Agriculture stops at the right end of the consumer. Everything, from land clearing, plowing, seed inputs, fertiliser, pre-harvest, post-harvest, logistics including market, ends on the table of the consumer. So, they have a role to play in the value chains.
Nigeria’s business environment is adjudged difficult. Two years on, what are your challenges in agribusiness?
Introducing good agricultural practice to farmers and getting them to follow the new process of crop cultivation is really challenging. The off-take partners’ requirements and guidelines must be adhered to.
Which crops are you aggregating?
Currently, we plant thyme, Orange-Flesh Sweet Potatoes (OFSP), white onions, ginger, turmeric, maize, and cassava. We run an out-grower scheme where we act as an aggregator from the farmers to off-takers. The off-takers tell us what they want and we get the farmers to plant what the off-takers want, following their specific standards and specifications.
Why do you specialise in more of seasoning leaves instead of food crops, and who are the off-takers?
We specialise in these because they are demanded by our off-takers. They look at the market and they are innovating, with the aim of import substitution. For example, Nigeria imports thyme and no major player is cultivating it.
Importing thyme into Nigeria yearly costs about $50 million. We have off-takers to buy thyme leaves now. Our farmer’s plant and off-takers buy.
We have Sano Foods who buys orange-flesh sweet potato, thyme, and turmeric. They use them for bread, cookies and other products. Integrated Feeds Limited also off-take yellow maize, cassava, and other products, among many other off-takers.
How do you handle insecurity and herdsmen’ clashes with farmers?
These are parts of the risk assessments we do carry out ab initio. We take soil samples, check the environment, check history of clashes, and other risk factors before engaging farmers in certain areas. Our plan is that each farmer should not be more than five kilometres from another. This assists in risk management. We work with farmers’ associations, which help us as well.
Are you participating in the Anchor Borrowers’ scheme?
No. But we will be more involved in the programme during the next planting season.
How many farmers are involved, and their locations?
We have about 7,850 farmers in the scheme. They are located in Ibadan, Oyo, Fiditi, Ilora, Ogbomoso, Ibarapa, all in Oyo State for now.
What differentiates us is that we do not just aggregate, we train our farmers in good agricultural practice, and currently, we have two farm assurers certified by GLOBALGAP in our team. This enables them to meet the requirement of off-take standards, increase yield, and encourage business continuity among parties.
We also have programmes for the welfare of the farmers and their families. The first one is the farmers’ medical programme. When the farmer or any of the family members is sick, we have provisions for medical care loans. At the end of the production cycle, we deduct the loan from their product sales.
We have a farmer housing programme, in partnership with a company, which is aimed at building affordable houses for farmers. But the challenge is that farmers have not been keeping records or financially included. So, we assist to arrange their books, partner with banks to get them included financially by opening accounts for them, and getting them BVNs in preparation for the housing scheme.
Family education scheme for farmers is also there. Any of the farmers may want to buy books, pay school fees, we have provision for loans to take care of that. The loans for farmers are affordable, between two and five per cent interest rate.
We also have a farmers’ extension networking. If farmers do not have land but want to farm, we network them with people that have the land. We also have farmers’ access cards, a form of credit card that farmers can use to buy food and groceries at major stores. We run these services so that farmers can concentrate on their farm operations.
Most farmers do default in loan repayment and financial institutions are averse to giving them loans. What is your experience with farmers?
What we do is that we pay them on delivery of the produce. We also spend a lot of time and other resources monitoring the farm businesses. We do not sit in the office and assume that everything is well. We gave some farmers, for example, seedlings but they failed to plant them. In the process of visiting every farm, we detected that early. So, we monitor when it is time to prepare land, plant, apply fertiliser or pesticide. We supply all the inputs to them and the balance is remitted to them after the sale of their produce.
So, because we monitor them well, we are able to ensure delivery. We tie them to groups. We do not do isolated cases. We do it in a way they can guarantee one another and check defaults.
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