Johnson Terhemen (not real name) farms cassava in Mbakyu, a quiet agrarian community in Benue State. In March 2018, he engaged eight young men to harvest the cassava crop, paying them N40,000 after two days of labour. He combined with 20 other farmers to get a 911 truck to ferry the tubers to a starch-processing plant in Lagos.
The cost of moving the cassava tubers to Lagos was N450,000 and Terhemen paid N80,000 out of it. He had borrowed N200,000 from a microfinance bank in his community and promised to repay in 12 months at 28 percent interest.
By the time the truck arrived at the Lagos factory, the cost of a tuber had increased by 12 percent because the truck broke down three times due to bad roads and the driver demanded an extra N120,000.
The processing plant could not accept the crop for two reasons. One, the tubers were now very expensive and they no longer met the quality the factory wanted. The company had to stop production temporarily to search for high quality cassava.
Terhemen and his associates then had to sell 25 percent cheaper than anticipated in an open market as buyers were even willing to do without cassava due to their shrinking wallets.
On getting back to his community after incurring a huge loss in Lagos, Terhemen discovered that his small farm had been invaded and overrun by herdsmen, with cows eating up everything of value.
At the same time, his eldest son Samuel, who just finished university and moved to Lagos in search of jobs, could not secure employment because no factory was ready to engage workers.
This had been the case for 24 months.
He settled for a job at a restaurant where he was paid N20,000 a month ($1.85 a day).
Samuel was extremely poor and so could not send money to his father to pick up the pieces left by the herdsmen. So, his farmer-father could not buy new land elsewhere or expand and the eight people he once engaged on his farm became jobless.
This is the cycle of poverty that connects rural communities to cities. The rural population (% of total population) in Nigeria was reported at 51.4 percent in 2016, according to the World Bank, quoting the United Nations. An estimated 80 percent of the rural dwellers in Nigeria are living below the poverty line.
Hundreds of Nigerians move from rural communities to cities every day in search of jobs and opportunities. Official data say that 86 people enter Lagos (Nigeria’s mega city of 21 million residents) from across the country every hour.
These hopefuls eventually struggle to get jobs but processing plants and factories are not ready to take in new workers because they incur high energy and input costs and pay at least 54 different taxes to all levels of governments, touts and contractors.
More than 2,000 members of the Manufacturers Association of Nigeria (MAN) could only create 18,203 jobs in 2018, according to the association’s economic review for the second half of 2018.
Unemployment rate rose from 18.8 percent to 23.1 percent in the third quarter of 2018.
Hard-hit manufacturing and agro-processing plants, characterised by high job ratios, are not engaging many Nigerians as much as they did five years ago because farmers can’t get high quality seeds, roads are bad, railways are near absent, raw materials are expensive and energy cost is prohibitive.
Chief executives of manufacturing firms in the country rank poor electricity and gas supplies/non-reliability of gas supply/scarcity of diesel as their biggest challenge.
“To create enough jobs, there is a need to repair and expand the roads leading to Lagos ports, and make other ports outside Lagos functional,” CEOs of manufacturing firms said in a recent survey carried out by MAN.
“Make FX more available for purchase of inputs, and create a flexible condition to improve manufacturers’ access to funds,” they added.
Nigeria’s smallholder farmers are yet to significantly increase their yield per hectare, as Africa’s most populous nation still records the lowest among its peers.
For tomatoes, the average yield per hectare in Nigeria is 7 metric tons (MT); Kenya’s average yield for the crop is 20MT, tomato yield in Ghana is 8MT, and South Africa’s average yield for the crop is 76MT, according to the Food and Agricultural Organisation (FOA)’s 2017 data.
Similarly, for maize – which is the most consumed grain on the continent— Nigeria’s yield per hectare is 1.6 MT on the average despite being the second largest producer of the crop while Kenya and Ghana have same average yield of 2MT per hectare. South Africa’s average yield is 6MT per hectare.
For potato, which is the best rounded and nutrient root in all of Africa, Nigeria’s yield per hectare for the crop is 3.7 metric tons (MT) per hectare. Kenya’s average is 15.5MT and South Africa’s average yield for the crop is 38.8MT.
Nigeria’s average yield per hectare for rice paddy, which is the most consumed staple in the country, is 2MT, while Kenya, South Africa and Ghana have same average yield per hectare of 3MT.
“Nigeria has the lowest yields per hectare globally. In tomatoes, for instance, only one percent of Nigerian farmers plant their tomatoes using hybrid seeds and seedlings. In Ghana, 40 percent of their farmers farm with hybrid seeds and in Kenya 68 percent of their farmers use improved seeds and seedlings,” Emmanuel Ijewere, vice president, Nigeria Agribusiness Group (NABG) said at CEO’s breakfast meeting in Lagos last year.
Seeds remain a big issue for farmers. Nigeria’s seed industry potential stands at N777.38 billion, according to the Federal Ministry of Agriculture. Local farms annual production is estimated at N252.35 billion, leaving a gap of N525.04 billion.
As confirmed by farmers, most imported seedlings are cheap but substandard, which eventually hurts seed productivity.
The total national seed requirements for eight major crops, including maize and rice, in Africa’s most populous country stood at 388,690.64 metric tons (MT) in 2015, while the quantity available was 126,173 MT, leaving a yawning gap of 262,518 MT.
Owing to the low crop yields, Nigeria now records huge demand-supply gaps in most of its staple foods, even as the population growth rate stands at 2.6 percent per annum and projected to surpass the 300 million people mark by 2050, according to the World Population Prospects 2017.
Nigeria’s food inflation is high at 11.4 percent in April, 2019, with tomato prices doubling. Data from Agriculture Ministry show that Nigeria is the largest producer of yam globally, with 40 million metric tons per annum but yam demand in the country is 60 million metric tonnes per annum (MT), leaving a gap of 20 million MT.
Nigeria produces 42 million MT of cassava but has a demand of 53.8 million MT of the crop, leaving a gap of 11.8 million MT.
National supply for Irish potato is put at 900,000 MT per annum but with a demand of 8 million MT and a gap of 7.1 million MT.
Similarly, local production of sweet potato is estimated at 1.2 million MT, while demand is 6 million MT, leaving a gap of 4.8 million MT.
More so, Nigeria produces 400,000 MT of wheat annually but with a demand of 4 million MT, which leaves a gap of 3.6 million MT.
Maize production in the country is put at 10.5 million MT but demand is 15 million MT, leaving a gap of 4.5 million MT.
Nigeria has 200 million people, with 45 percent in extreme poverty. A third of the world population will come will come from Africa in 2050. The continent is also expected to produce food for the world but it is not yet ready.
“The only two ways of doubling food production are through investment and science,” Scott Angle, director, National Institute of Food and Agriculture in the United States and former CEO of International Fertilizer Development Center (IFDC), told BusinessDay in Washington at the Global Entrepreneurship Summit’s international reporting tour.
“You will need to move from small-scale subsistence agriculture to more commercial agriculture,” he said, while addressing Nigeria food production model.
Funding for farmers is insufficient, with many accessing loans at over 20 percent, say experts.
Many cannot embark on commercial farming owing to lack of capital access. Consequently, Nigeria is one of the least mechanised farming countries in the world with the country’s tractor density put at 0.27 horsepower per hectare (hp/hectare) which is far below the Food and Agriculture Organisation (FAO) recommended tractor density of 1.5 hp/ hectare.
The country is 132nd out of the 188 countries worldwide measured by FAO / United Nations in terms of the number of tractors in the country. This is one reason why farming has been mainly subsistence, rather than commercial.
Amidst these challenges, wheat farmers in many parts of northern Nigeria no longer farm due to insurgents and herdsmen, prompting food and beverage firms to import inputs with scarce foreign exchange.
Almost 1,700 violent deaths have been attributed to herdsmen in attacks carried out between January and September 2018, according to the 2018 Global Terrorism Index.
Rural dwellers that mostly farm and produce these commodities are moving to the cities in droves. Ironically, they want to secure jobs from the same industries that are going through low capacity utilisation.
The insecurity is sending not only rural farmers on forced exile, but also investors, who left the city, hoping to invest in agriculture.
One of such is Olumide Abayomi, a chartered account and fellow of the Institute of Chartered Accountants of Nigeria (ICAN), who retired from his lucrative job at African Capital Alliance, a private equity firm, in 2013. Upon retirement, he planned to pursue his own private ventures, which included farming. The long-term plan was to develop his plantation into a resort, since it had access to a railway line, and a river flowed behind it.
“If one had no reserve, by now one would have committed suicide,” said Abayomi in a phone interview, as he recalled losses incurred after crops on his 450-acre farm in Osun state were eaten up by cattle, which according to him, were brought by Fulani herdsmen.
“I have not farmed in 18 months because of this issue of insecurity,” Rotimi Williams, CEO Kereksuk Rice Farm told BusinessDay.
He said operations on his 45,000-hectare farm in Nasarawa State have been suspended owing to recurring conflicts in the neighbouring communities.
As noted in a recent BusinessDay report, while some accounts of attacks on farmers make it to the news, most never do.
Post-harvest losses are a challenge for farmers too. Half of the fruits and vegetables grown in Nigeria often get bad before they get to the markets owing to inadequate storage facilities and huge road deficits, experts say. Storage facilities cost millions and most smallholder farmers cannot afford them.
“Post-harvest losses in Nigeria are huge due to inadequate storage facilities in the country,” said Mawuli Coffie, team leader, West Africa Food Markets Programme.
Coffie stated that the country is not growing enough owing to low yields per hectare, and most of what is grown often rots in the field because it is difficult to move them easily from the farms to the market and the facilities to store them are lacking also.
Investments in the country’s primary agricultural infrastructure will help integrate the poorer sections of the population into a sustainable process of economic growth and development, experts say.
Losses usually occur during harvesting, handling, packaging, and storage.
Also, high logistics cost has limited farmers to easily access markets with their produce while reducing their profits.
“Farmers pay so much transporting their produce from the farm to the market because the roads are very bad. This further increases the cost of production and deter farmers from easily accessing the market and making most resort to selling their produce to middle men who rip them off,” said Lawrence Afere, founder and CEO of Springboard Nigeria.
Afere said that Nigeria can only feed itself and improve farmers livelihood when infrastructure needed to boost productivity across the value chain are provided, stating that infrastructural facilities such as storage, good road and adequate access to quality seed varieties will lift farmers out of poverty.
Odinaka Anudu, Josephine Okojie, Caleb Ojewale & Steve Onyekwelu
