• Friday, April 12, 2024
businessday logo


Brazil’s agric success points way for Nigeria

Brazil’s agric success points way for Nigeria

Brazil, a net importer of food in the 1960s is now a top agricultural exporter in the world.

In recent years, Brazil with a population of 214 million people has emerged as a global leader in agriculture, and its success points the way for Nigeria in changing the country’s narrative of a mono-economy, driving growth and creating jobs through the sector.

“Brazil shares flora with Nigeria and, as a result, many of the physical things you see in Brazil are also possible or available here,” said Christopher Okeke, a former Nigerian ambassador to Brazil, in an October 2020 interview with the Financial Times.

According to him, at the time Nigeria gained independence from the UK in 1960, the country was a top exporter of peanuts and palm oil — until the country switched its focus to crude oil.

He noted that as the country started earning money from oil exports, its importation of food began to surge. “The ability to import wheat, rice and other foods created an environment where the basic data around agricultural inputs and productivity were obscured and received inadequate investment and attention.”

Brazil, according to the International Fund for Agricultural Development, is the fourth largest agricultural-producing country in the world, the main producer of coffee, sugarcane, and citrus, and the second-largest soybean, beef, and poultry producer.

The country grew its agriculture through value addition and investment in research.

Nigeria’s agriculture is making some progress, nonetheless. The country must begin to add value to its raw agro commodities and invest in research to boost productivity, according to experts.

Despite the country’s large size of agriculture compared to other African nations, Nigeria lags behind its peers in the sector in terms of research funding.

For every $100 of agricultural output, Nigeria invests only $0.42 into agricultural research, as compared to $0.94 and $1.40 in Ghana and Uganda respectively, according to a 2015 report by ActionAid.

Nigeria has the highest agricultural research system in Africa though, in terms of investments and number of researchers, with over 80 government and high education institutes and over 2,000 researchers engaged in research. However, official fraud limits funds from reaching their points of critical need.

Also, one of the challenges facing Nigeria’s agric is finding private financing. The industry’s financing relies heavily on government subsidies and low-cost loans, particularly from the central bank.

Stakeholders have said that a massive potential for agricultural investment is if a framework is put in place to attract local equity.

Read also: Brazilian firm to support Nigeria in rice revolution through tractorisation

“A simple win would be for the government to provide risk guarantees for investor equity, which would allow investors to seek additional private bank, pension or other leverage, and would expand investor appetite,” Omoniyi Omojola, a Lagos-based investment banker, who has been involved in structuring and fundraising for several agricultural projects, said.

Brazilian agricultural businessmen believe that Nigeria needs to focus on its domestic market before exporting.

“We have a growing population, and before exports are considered, feeding them stably and securely has to be a priority,” says Igor Corrêa Pinto, a Brazilian agricultural businessman with interests in Nigeria.

Unlike in today’s Brazil, the traditional, manual approach of smallholder farmers has kept yields below full capacity. Nigeria has somewhere between 15m and 30m smallholders producing an estimated 95 percent of the country’s farm output.