Investment opportunities beckon in mechanisation, irrigation to grow Nigeria’s agribusiness

… to stimulate yield, reduce crop losses
… Kebbi state calls for providers of reliable solar powered pumps.

Opportunities are sprouting in the areas of mechanisation and support services for Nigeria’s agricultural sector, as more entrepreneurs enter the business and show a yearning to expand land under cultivation and crop yield per hectare.
The growing interest in agriculture has indicated the need to fully mechanise Nigeria’s agricultural value chain, so that outputs, value and standards, can be commensurate with what obtains internationally.
Michel Deelen, head, Netherlands Representation in Lagos, and deputy ambassador to Nigeria, had said during BusinessDay’s Agribusiness and Food security summit last week, that “agricultural practices have changed all over the world, and this also needs to happen in Nigeria; changing from subsistent farming to professional (commercial) farming, in order to feed Nigeria’s growing population.”
Starting from land preparation, the first stage in crop production, Nigeria has over 75 percent deficit in number of tractors needed in the country.
“The last statistic we have is that tractors in the country are about 22,000 but only about 12,000 to 14,000 are operating,” Emmanuel Ijewere, Vice president, Nigeria AgriBusiness Group (NABG) said by phone, also noting that four times the available number of tractors, is what the country needs.
Ijewere explained that NABG for instance, is encouraging expansion of the tractor hiring companies in the country, as not every farmer can afford to own a tractor, or even needs to, adding that, “it should not be a status symbol but how effective it is going to be.”
While the present economic situation in Nigeria has diminished the purchasing power of many companies (and individuals), offering agricultural equipment not necessarily as expensive as tractors is also expected to be a huge commercial success, while also contributing to the coountry’s quest for sufficiency in food production.
In rice production for instance, Rotimi Fashola, senior partner, OITFash Consult, and a renowned consultant on rice production, said “We need more concerted efforts in certain areas, such as getting to cultivate more land by bringing in mechanisation, and it isn’t just harrow and plough. It includes providing planters, harvesters, threshers, reapers and other small equipment.”
Fashola further explained that, “These are complimentary but very important things for rice mechanisation. By the time one goes to 50 hectares of rice farming, manual harvesting becomes very tedious and most of the time, we lose so much from harvesting it.
“We need to have a mechanised system in which we can plant and harvest more effectively and efficiently,” he said.
Another area of challenge, which stakeholders say is of investment value, is preservation.
Ijewere explained that “One of the areas of investment should be having collection and collation centres near the harvesting zones, so that immediately our crops are harvested, we cool down the temperature, which extends the shelf life for a very long time.
“There is also a need for refrigerated/temperature controlled warehouses in the cities because we are producing quite a lot and a sizable portion is wasted, owing to lack of preservation,” Ijewere said.
Apart from mechanisation for land preparation, planting and harvesting, opportunities also abound in the irrigation aspect of not just rice, but farming in general. Though considered a challenge, it could become an opportunity for investors who will also be solving the problem of irrigation costs.
“The most expensive input used on the farm is petrol,” Muhammed Augie, chairman, rice farmers association in Kebbi told BusinessDay.
Augie explained that petrol is bought every day and used to power water pumps for 10-12 hours to keep rice fields’ watered, depending on the size of the farm.
“If this is substituted by cheaper technologies such as solar, it will go a long way in lowering the cost of production,” he says.
Two options have been identified in solving the irrigation problem and they are potential investment sources for the private sector. Provision of reliable solar powered pumps, and massive development, deployment of irrigation through well managed dams.
“We are still looking for a cheaper solar scheme that will be affordable for the farmers, even with small intervention from the government,” Garuba Dandiga, Kebbi state commissioner for agriculture told BusinessDay.
Dandiga further explained the emphasis on reliability saying “when you run some solar schemes for a short period, they pack up, but we are looking for the one that will be sustainable and affordable.”
Fashola also complemented the view on reliability of solar powered pumps, saying “considering the initial cost of setting up a solar system, one is expected to use it for a very long period of time. If one puts so much money in it without being guaranteed it will work for the next five years, then it is not worth the trouble.”
From every indication, like Kebbi, many states across Nigeria will be open to anyone who can offer reliable, sustainable solar-powered pumps for irrigating farms.
Dandiga described fuelling water pumps as “part of our major problems in the irrigation activities of the state. It is too worrisome for the farmers to be making that ritual every day.
“We are still looking for a cheaper form of irrigating the land. The cheapest is the one done by gravity but for now, although we have the rivers, we don’t have the capacity to analyse the places and we haven’t received the blessing of the Federal Government in doing so. But we are still prayerful that one day, we will get that support and encourage our farmers to do more,” Dandiga said.
Experts who spoke with BusinessDay expressed the view that while irrigation is expensive and usually borne by governments across the world, there is room for Nigeria to develop a model for private sector involvement. Existing but unused dams can be turned over to willing investors who will get them functional and supply water to farmers under a “user-fee” arrangement.
Ijewere also explained that “companies with experience on dam and irrigation would have a cluster of farmers around them, to whom they provide water at a fee. This will be tied into the cropping of those people, a practice common in Bangladesh and India.”