When Nigeria’s (last) agriculture policy was published in 2016, demand for tomato was 2.2 million metric tonnes (MT), with supply of 800,000 MT that left a supply gap of 1.4 million MT.
The supply itself was derived from an original production of 1.5 million MT, out of which 700,000 is lost post harvest. In essence, Nigeria was losing 46.6 percent of tomato harvests that were not even enough to meet the country’s needs, due to a range of factors between the farm and market.
With Nigeria’s population growth from 185 million people in 2016 to 206 million according to the World Bank as at 2020, demand for not just tomato but every other food item would have increased, but little evidence to suggest production would have grown commensurately.
Yet demand abounds, not only for consumption of fresh tomatoes, but also processed in the form of pastes used by households and businesses in the food industry.
There’s a huge market to be filled, and even though challenges exist, so does an opportunity to make money, and a lot of it too
Tomato paste importation is restricted in Nigeria (especially in availability of foreign exchange to get it), as part of a broader plan to drive backward integration. Yet, farm yields have historically been low, averaging 10 MT per hectare, and post harvest losses have not improved, with tomato growers always complaining of huge losses every year.
On the other hand, processors operate haphazardly due to inconsistency in supply of the same raw material. The market and supply chain inefficiencies have been a stumbling block to ensuring backward integration in that industry truly works.
However, in Jigawa state, Caraway (an Olam group company) has recorded its first commercial tomato harvest, which is seeing yields of 40 metric tonnes (MT) per hectare, exceeding earlier projections of 30MT, as noted during a visit by BusinessDay.
The 500-hectare Kuda Gangara Integrated Tomato Farm, out of which 100 hectares have been cultivated, is part of the company’s backward integration plan. It has one goal: strengthening local sourcing of raw materials for the company’s tomato paste factory in Lagos, where popular brands of tomato pastes such as De Rica and Tasty Tom are produced.
When the complete 500 hectare expanse is cultivated, overall production is projected to be over 15,000 MT from the commercial farm alone.
The project also runs a farmer outgrower program that covers over 2000 farmers and the current year’s crushing is expected to give about 2000MT of concentrates for further value addition and packing at the Caraway plant in Lagos.
To deepen the local value chain of its backward integration, Caraway partnered with a local crushing facility, Aldusar Foods & Beverages in Katsina State, where the tomatoes are taken from Jigawa after harvests.
Current investments by the company have been put at $20 million in developing the commercial farming & outgrowers program, crushing, and the plants for processing and packaging.
Reji George, head of Farming Initiatives at Olam, said the investment is driven by a need to complement the thrust and direction of moving agriculture into a self-reliant and sustainable model by the Federal Government of Nigeria, ensuring enough and quality food to the population, as well as environmental sustainability.
“Using significant volumes of Tomatoes for our products, the backward integration helps us to achieve self-sufficiency, develop local farmers and provide increased employment opportunities to local population,” George says.
The tomato project commenced with field trials in September 2019 and a second one in October 2020. When BusinessDay first visited in February 2020, harvest from the first trial was being done and with output at the time, yield was projected at 30MT per hectare.
This has now been surpassed on the commercial farm’s first harvest. Land clearing started in September 28, 2021, even though it would have been preferred to start in July, with planting starting on 17th and ending on 22nd of December, 2021.
Part of the delay came pre-land clearing, as the team wanted to be sure water was available. “If you do not get enough water after all the clearing then there is no point,” George says. At the present harvest rate, “We should be well placed to go beyond 40 metric tons,” he says during the recent farm visit. Some plots would deliver significantly better and some lower, which would even out to give the desired results he explains.
Eight boreholes have now been dug, all connected to a pump station where water is pumped 20 hours a day throughout the farm. At the beginning it was 8 hours a day and has slowly gone up to the 20 hours daily consistently for 50 days as at the time of the visit.
“We have discovered water is very critical, so is land preparation and soil fertility regime, the fourth is weather. If you have all this in place it is even possible to go as high as 80 tonnes per hectare,” says Emmanuel Sangodele, the project’s chief agronomist, who studied genetics and plant breeding from University of Agricultural Science, Dharwad, Karnataka state, India.
Every year, Caraway, where the tomatoes are processed into pastes, requires 18,000MT of concentrate and with the current backward integration efforts, the company expects it will be able to reduce the shortfall in sourcing inputs.
The company also says it is on course to attain its expansion plans, and seeks to continue reducing the gap significantly in the coming years. At present, Caraway has a capacity to produce 44,000 MT of different products under the brands of Derica, Tasty Tom, Jollof Mix, Onion Pepe etc.
“Caraway hopes to achieve the supply of home-grown and processed innovative tomato product brands of Derica, Tasty tom, jollof mix, onion Pepe etc for the domestic consumption,” emphasises George.
Premender Sethi, business head, Packaged Food Business, Caraway (Olam Group), says this stride in Jigawa towards achieving a local supply chain for raw materials, represents “A complete end to end Supply chain solution for domestic markets – right from growing to crushing to processing to packaging for the domestic markets (from naturally grown high quality fresh tomatoes).”
According to him, the impact of this investment will be seen in the company’s Forex outflow which will decrease and so will the pressure to manage it. “Flexibility will increase as we can get the products produced locally and at high quality. The key critical areas to ensure are the consistency in the Fed Govt policies and an enhanced level of security,” he says.
Low farm productivity, coupled with high postharvest losses has contributed to low output of the tomato crop in Nigeria. The Olam-Caraway project is however, showing possibilities that exist in achieving more than four times the current average yield in Nigeria.
Also, the buyback of fresh tomato fruits on time through a network of outgrower farmers and supplying to the crushing plant within 24 hours has also reduced postharvest losses by more than half.
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“If more farmers come into tomato cultivation then the yield should be better,” says George. Considering current deficits (in national demand), he says farmers would find this to be a very profitable business if done properly.
Using the example of rice and the gains made within the last seven years, he says Nigeria’s tomato deficit may not be wiped off overnight, but can be achieved over years of consistent efforts like those being done by the company (Olam-Caraway). There’s a huge market to be filled, and even though challenges exist, so does an opportunity to make money, and a lot of it too.
As Sangodele explains, the company supports its network of outgrower farmers through pre-season training, providing them with an agronomy package of practise which will build their capacity, and in addition, designates coordinators who visit their farms to offer extension services.
After this, the farmers’ harvests are bought at the farm gates, according to the company at prevailing market prices, and taken promptly for processing. With this, post harvest losses and farmers’ incomes are addressed in one strike.
35-year-old Murtala Musa, who heads a farmers’ cooperative in the area, says since the company came to the area, they have been learning a lot. According to him, after harvesting one hectare, they usually get about 150 baskets which give about 10 tons but since they have adapted some of the knowledge from the Olam-Caraway farm, they now get up to 300 baskets and above.
“Tomato has changed my life,” he said. It is through tomato farming he has been able to get his house (seven years ago), he got married, and also bought his motorcycle.
For Furera Isma Jumare, director general, Jigawa State Investment Promotion Agency, the significance of the caraway tomato project is that it would showcase Jigawa state as one of the largest tomato-producing states in the country.
“The caraway project, especially with harvest already beginning within a short period of time, clearly shows the tomato potential of the state, and it will put us right on the map of those that are the largest producers,” Jumare says.
For her, expectations in terms of the caraway project’s contribution to the state are both in terms of direct and indirect employment for citizens as well as skills transfer. Also, it would contribute to the IGR of the state and hopefully in the long term, reduction in cost of certain commodities such as tomato.
As George explains, the strides are not ending, just yet. “The major plans are to increase the area of tomato growing through our commercial farm and the number of outgrowers in the coming years. The enhancement of capacity on crushing fresh tomatoes, processing and packaging are other key components,” he says.
