There has been an interest in the future of agro food processing and its role in generating employment. Experts say Nigeria’s agro-processing industry, if properly harnessed, could create jobs and grow the agro-allied sector’s contributions to the Gross Domestic Product (GDP). But the challenges facing small agro processors are numerous, but not insurmountable. DANIEL ESSIET reports.
Why does Nigeria exports raw cashew nuts and imports its processed form? Why do Nigerians import chocolate and other products made from cocoa when its beans are produced in the forests of Ondo, Osun, Ekiti, Cross River and other states?
The reasons for these are not far-fetched. For one, there is no competitive agro-processing sector that has a comparative advantage in agriculture. The sector again had suffered a long period neglect by successive governments.
The cashew nuts industry is one area where the country is losing millions of dollars every year by exporting unprocessed cashew nuts. According to experts, one processed tonne of cashew nuts could fetch five-fold income after processing.
Nigeria exports more than 70 per cent of its cashew production in raw form. After the commodity has been shelled in India, the nuts are re-exported to the United States (US) and Europe where they are sold at good prices.
The National Cashew Association of Nigeria(NCAN) President, Mr Tola Faseru said exporting unprocessed cashew is the reason for farmers’ poverty.
Faseru, who spoke with The Nation, said the food processing sub-sector is still dominated by small-scale food processors. “They cannot afford machines capable of carrying out large processing of the commodity. This explains the reason for the underdevelopment of the sector,” he said.
With this gloomy picture, he said, the overall potential of processing is huge as it could increase the value of the crops of poor farmers thus yielding higher returns.
Several trends, he added, indicated that the significance of agro-processors in the food value chains is going to increase.
He, however, lamented that the conditions for good integration are not favourable.
He said in the last two years, there have been reports of few investments in processing taking place in fresh fruit and vegetable products which are showing little success.
The President, Association of Micro-Entrepreneurs Nigeria (AMEN), Prince Saviour Iche is concerned about this development. According to him, the agric sector faces many problems emanating from various negative aspects of the economy. Some of them are the uncertainties that exist in access to finance, advice, information and reliable markets.
He urged the government to take urgent measures to upgrade small-scale processing, adding that the current level of agro processing was not helping agriculture sector’s growth.
To achieve this, encouraging investment in the agriculture and food processing sector, he said, will go a long way in establishing an efficient supply chain that links farmers and small manufacturers directly with retailers, and maximise value for all stakeholders.
He called for the establishment of infrastructure, arguing that it will minimise wastage especially, in fresh perishable foods and vegetables, increase farmers’expectations, encourage best practices in crop management and improve food safety and hygiene.
He reiterated that the agro-processing industry has the potential to meet the local requirements and that medium-scale enterprises have potential to create employment opportunities.
The cassava industry is an example. Farmers are increasing cultivation of neglected cassava after chipping machines introduced by the Federal Institute of Industrial Research, Oshodi(FIIRO) has opened up market opportunities. The machines allow for quicker processing of raw cassava, which is chipped, dried and ready for sale within days.
Cassava, according to experts, perishes within 72 hours after harvest, making it unfit for for human and livestock consumption. Farmers, who cultivate the crop are being left with losses as poor market has limited its sale. The surplus, which is supposed to translate to joy to farmers, becomes their loss. This has forced them to limit production, leaving the crop to its nondescript backyard subsistence crop, even as farmers from other developing countries such as India continue to make millions from value added to the crop.
However, FIIRO’s new processing machine is changing the face of cassava production.
Its Director-General, Dr Gloria Elemo told a forum in Lagos that the institute is working on cassava processing machine. Through selective breeding, scientists from major research institutes have managed to increase cassava yields six-fold and as a result expanded the average area farmers can plant with cassava almost 10-fold. While this has increased food security, there is a real threat of cassava getting spoilt before harvest. This eventually undermines the local market prices and farmers’ income.
To prevent this, Mrs Elemo said FIIRO is helping local processors to get processing machines that could produce chipped cassava and flour.
Aside, she said, the Institute has done extensive research on cassava apart from its high quality flour. These include de-odorised fufu; glucose syrup production; using cassava wastes in animal feeds; production of adhesives; ethanol; custard; biogas and enzymes among others.
Another area where FIIRO is producing machines for is fruit juice processing. High demand for processed fruit juices is seeing new entrants in a market model that is also benefiting small hold farmers, who are earning from the demand for raw materials from these companies.
She said fruits and vegetable processing and preservation offer a new viable opportunity, adding that though more effort needs to be put into promotion and marketing.
The institute, Mrs Elemo said, is empowering small and medium agro-processing entrepreneurs to manufacture processed produce, adding that increasing the level of agro-processing would have a significant impact on the economy. This is due to the scale of output generation, employment creation and impact on rural economy.
While FIIRO has made efforts to develop machines for medium-scale grain milling, bread-making enterprises, livestock feeds manufacturing and vegetable oil processing to facilitate entry of more entrepreneurs increase, Dr Elemo said the institute aims to increase the competitiveness and growth of agro-processing enterprises by helping them translating research results into improved products.
She said it is the vision of the institute to commercialise its developed technologies. This, according to her, is being done through Public-Private Partnership (PPP) as evidenced by the number of Memoranda-of-Understanding (MoUs) the Institute has signed in the last few months.
Notable among the private sector organisations that have signed the MoU are Honeywell Group Limited, Bio-organics Nutrients Systems Limited and Ladmok Nigeria Limited.
According to her, some small-medium scale enterprises have also signed MoUs with the institute in cassava processing and fortification of food products developed from the institute’s research activities.
The institute, Mrs Elemo said, held a forum with equipment prototype fabricators to enable them produce equipment of higher quality and durability.
She stressed the need for government at both federal and state levels to re-orientate the youths to embrace technical and vocational skills development by reviving the technical colleges and trade centres.
According to her, the institute’s engineers will facilitate the assessment of the equipment available in technical colleges and polytechnics especially, in Lagos State and there after train personnel to operate the machines to ensure optimal use.
To assist small scale entrepreneurs, FIIRO’s management met with the Bank of Industry (BoI) on ways to provide innovative interventions geared towards boosting the economy’s transformation from farming to developing small-scale enterprises, food processing and industrialised agro-industries.
BoI’s Managing Director/CEO, Mr. Rasheed Olaoluwa, said the collaboration became necessary in order to boost the 6.8 per cent contribution of the real sector to the nation’s GDP, through encouraging the development of localised solutions to the industrialisation gaps identified.
He said the mandates of both organisations are the same, adding that stakeholders especially, SMEs in the area of agro-processing, would benefit if both organisations aligned their strategies to work together.
He, therefore, promised FIIRO of BoI’s support, especially in the area of promoting the low-cost technologies developed by the Institute, which could help SMEs compete favourably through exhibitions and other avenues.
