On Sunday December 3, 2017 an APMT Reefer arrived in Lagos from Dutsen Wai in Kaduna state, with 933 crates of tomatoes, each weighing 20kg, a cumulative of 18,660 kg or 18.6 metric tonnes. The shipment was a first of its kind, moving tomatoes in large volume through cold chain storage as a way of reducing and possibly eliminating losses. Sadly, it has not been consistent despite its numerous prospects.
In 2017 the Nigeria Agribusiness Group (NABG) says about 45 percent of fresh tomatoes produced were lost. The postharvest losses can be attributed to poor supply chain management such as inefficient storage facilities and poor transportation systems. As a result, in 2016 and 2017, Nigeria imported tomato paste estimated at USD360m annually. In 2016, the country experienced a major pest attack, the tuta absoluta outbreak, resulting in 80 percent tomato loss.
This resulted in shortage of tomatoes for the processing industry, a significant hike in the market prices and increased imports. The problems in the tomato production can be mostly linked to a faulty, inefficient value chain.
When agriculture is considered extremely risky, particularly by financial institutions, tomato is often one that stands out in making the sector appear overtly risk prone.
“What stops us from having tomato farmers and tomato processors so that tomato as a raw material is moved into processing as paste,” said George Uwakwe, chief risk officer, Guaranty Trust Bank. According to him, bankers have always advocated that value chains across agriculture need to be fixed. He explained that, it is one thing to provide funds to the farmers, but when they produce, most of the time substantial portion of the produce get spoilt before getting to the market. “If the producers cannot sell, the truth is that you will not be paid back (as a bank). That is the issue,” he said.
However, fixing the value chain needs to run end-end, that is, from inputs carefully developed to deliver desired yields, through well-managed production processes, and final delivery to consumers. Currently, fresh tomatoes are often packed in raffia baskets instead of Crates, increasing the tendency for spoilage. There is also a dearth of temperature Controlled Storage, and in the end, all of these still require funding to be achieved.
As Bolarin Omonona, an agricultural economist at the University of Ibadan explained, “finding the value in the value chain involves heavy investments in the agricultural value chains”. Agricultural finance is crucial to support the growth of the agricultural sector because of its importance for food security, job creation and overall economic development.
The tomato value chain needs to be fixed, and potentially retain up to N72 billion in crops that may have been lost. At the same time, funding is required in order for this to be achieved. The banks, as it appears, would need to have more trust and commit funds so that the risks they fear can be gradually eliminated when the value chain is fixed.
Caleb Ojewale
