Ways Nigerian Government, states can treat agriculture as business

The Green Alternative, a policy and strategy document of the Federal Ministry of Agriculture says, “The new policy regime, tagged the Agriculture Promotion Policy (APP), is founded on the following guiding principles, a number of which are carryovers from the ATA, reflecting the strong desire for policy stability. New elements added reflect the lessons from the ATA, as well as priorities emerging from the aspirations of the Buhari Administration,”

The guiding principles are 11, according to the document, and prominent among them, in order of listing, are treating agriculture as a business, managing agriculture as a long-term economic growth and security, seeing food as a human right and encouraging value chain approach. Treating agriculture as a business is a nexus and catalyst required for the private sector participation, innovations and sustainability with potentialities to make Nigeria food-secure while creating jobs for the youth.

The treating-agriculture-as-a-business principle is “focusing the policy instruments on a government-enabled, private sector-led engagement as the main growth driver of the sector.”

Primary production as a business
Primary production of agriculture is the basic production of food and raw material crops without value addition. Data from the Food and Agriculture Organistion (FAO) and the Federal Ministry of Agriculture indicates that the subsector is about 70 per cent dominated by smallholding farmers. Production of food, raw material crops, animal husbandry, wildlife, fishery and agroforestry ought to be treated as businesses that enjoy basic support, tax holidays, linkage services and re-orientation from subsistence to commercial production.

This implies adopting improved varieties, standard inputs, book keeping, employment of services of professionals (such as agronomists, animal scientists and veterinary doctors) and cooperative production. Farmers’ associations for all crops should be properly identified, empowered with inputs and basic services that would boost productivity and profitability by linking private sector-led input suppliers, service providers, farmers and off-takers together with government supervision and buy-back assurance. Cash loans should be avoided as much as possible, for political farmers are always beneficiaries of such facilities. Inputs and services should be provided instead, but guaranteed by the government.

Prof. Kolawole Adebayo, a former Regional Coordinator of Cassava: Adding Value for Africa (C:AVA), a Bill and Melinda Gates-sponsored cassava value chain development project, said the most important thing is commitment at the highest level of national authority to define and streamlined actions that will ensure food security, employment and sustainable productivity.

“Once we have that, we can then begin to explore specific activities such as improving our transport network without discrimination – urban, rural, industrial, all road, rail, water and air transport.

“We should provide pragmatic incentives (not politically biased ones) for private investments in agricultural value chains from input supply through production, processing, to marketing and recycling,” he added.

If Nigeria builds on these foundations, Prof. Adebayo said, specific projects for crops, livestock, fisheries, forestry and wildlife along with all ancillary services for commercialisation, research and extension services will drive food security, employment generation and sustainable agricultural productivity.

Prof. Lateef Sanni, Deputy Vice Chancellor, the Federal University of Agriculture, Abeokuta (FUNAAB), said to encourage revving up of primary production to become business, the government should create enabling environment for agricultural business by giving interest-free loans to smallholder farmers and processors in the next 10 years.

Prof. Sanni added: “We need to reduce cumbersomeness in the registration of products. The regulatory agencies should fast-track support to small and medium-scale enterprises (SMEs).

“All states and local government areas should create soft loans for youth agricultural entrepreneurs and provide affordable mechanised services for farm operations.”

The Federal Government, he added, should create competitiveness with state anchor borrowers’ schemes and reward best performing states with more access to credits.

The current Central Bank of Nigeria (CBN), he argued, and other loan facilitors are limited in number; quality seeds, varieties and breeds should be used by borrowers. This is the job of agricultural professionals.

The Federal Government should create a national technical hub involving relevant ministries, departments and agencies, as well as universities to introduce high-yielding, disease-resistant and drought-tolerant varieties and breeds to stakeholders.

As alternative sources of funding for crop production and value chain development, Prof. Sanni advised that the existing crowdfunding like Farmcrowdy, Cellulant and AgroParks, among others, should be strengthened and replicated.

Another industry player, Ayoola Oluga, Managing Director of Agrecourse, one of the crowdfunding platforms in Nigeria, said, “The government needs to make policies that will favour agribusiness practitioners. Tax waivers should also be given to these companies. These will encourage the private sector to provide efficient access to finance and markets for smallholder farmers. If farmers get continuous and uninterrupted access to these, they will be able to engage in sustainable production.”

Secondary production as a business
Treating the secondary stage of agriculture as a business requires enabled factors of production facilitated either by the government or private sector-led investments in power, road networks, machinery and import-export policies. Enabling factors of production implies facilitation of access to cheap capital, land and other critical elements to make primary agricultural products into finished products with longer shelf life.

The basic factors of production of land, labour, capital and entrepreneurship are essential as basic economics explains, but power supply, tax, social infrastructure are taken for granted. While entrepreneurship and labour are not so problematic in the country, access to land and capital are difficult. Without adequate factors of production and supporting infrastructure as well as social networks, moving from primary to secondary level of agriculture would be difficult, and by extension, running agriculture as a business in Nigeria.

Founder of JR Farms, Rotimi Olawale OpeyemiTop of Form, advising the current Minister of Agriculture, said to make agriculture a business, the government needs to first make things easier for farmers by putting in place infrastructure like rural roads and energy for agro-processing facilities, among others.

“In addition, after providing enabling environment, the government needs to work with the private sector to drive the sector as a business. The private sector can provide funding and new frontiers to facilitate growth in the sector,” he said.

A Senior Scientist, Cassava Commodity Specialist and Head of Station, International Institute of Tropical Agriculture (IITA) based in Onne, Rivers State, Dr Richardson Okechukwu, said the Federal Government should invest in vocational studies of agriculture to be taught in primary and secondary schools with new agricultural tools to win them young.

Also, he suggested that the National Youth Service Corps (NYSC) programme should be modified to a one-year internship on agriculture (crop, livestock, fishery, tree crops, agroforestry, mechanisation, agribusiness, processing, storage, packaging, plant and crop protection).

“NYSC camps should be equipped with machines that would lead to a change of mindset to adopt agribusiness. The government should buy excess crops and encourage the private sector in regional trades.

“Companies that site in rural areas should be supported with good infrastructure like electricity, road and security. There should be a clearing house where the government, research institutes and private sector players deliberate on appropriate policies that support agribusiness. And such policies should be long-term strategic across different government tenures,” the IITA specialist said.

For the actualisation of a government-enabled, private sector-led agriculture as one of the main growth drivers of the economy, there is the need for synchronization of demand and supply information at both primary and secondary levels of agricultural production.

And the government, through the federal and state ministries of agriculture, as well as private sector-led information technologies players, can assist in setting up a good market information dashboard that would enhance online commodity trading. This will help in reducing gluts, serve as an interface between producers and off-takers, and create new businesses that will drive exports.