Tag: agribusinesses

The agricultural sector is facing a deepening labour crisis as some growers struggle to find field workers amidst rising cultivation costs. Farmers are battling drastically increased prices for fertilizer, fuel, and pesticides that have surged.

Some reports indicate fertilizer prices have risen by over 200 per cent in a two-year period. The cost hike has been compounded by higher prices for farm labour and machinery, with total investment costs rising significantly across the country.

While the agriculture season is here, The Nation learned that growers are struggling to find workers. This, The Nation gathered, is impacting the agriculture industry. In the past, labourers from Benin and Togo were hired to work on farms in Lagos, Ogun, Oyo, Osun, and Kwara. Their growing popularity as efficient hands increased local farms’ appetite for them.

The number of such temporary migrants, who provided three to nine months of paid work, has grown ever larger. Some lived within the farms until returning home at the end of the harvest period. The Nation learned they were provided free accommodation and a motorcycle at the end of the season. However, the high cost of providing these incentives is now making it difficult for farmers to engage foreign workers.

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Chief Executive, Agricultural and Rural Management Training Institute (ARMTI), Dr. Olufemi Oladunni, highlighted the overwhelming financial burden and logistical challenges now facing small-scale farmers across the country. “The crisis is having a direct and measurable impact on the nation’s food production targets. It’s affecting total productivity,” he said. He painted a grim picture of older, small-scale farmers who are unable to bring their harvests to completion. “If you see some small, older farmers who start a farm, they will not be able to complete it… Because of shortage of labour to weed the farm.” Referring to the difficulty in securing farmhands, he said farmers are facing the challenge everywhere. “It’s the same experience all over. The same experience,” Oladunni stated, stressing that what farmers are now forced to pay for manual labour is “staggering.”

The ARMTI Chief Executive noted that traditional, non-cash forms of compensation—such as housing and feeding workers throughout the season and then rewarding them with a valuable item such as a motorcycle—are no longer sustainable or attractive. “So, those things [non-cash payment methods] may not be a good form of payment.The net result of these economic pressures is a pervasive manpower deficit. That is why shortage of farm labourers are there now,” he maintained . Oladunni said the soaring cost and severe shortage of farm labour are posing an existential threat to agricultural output. The ARMTI Chief Executive pointed out that the reliance on manual weeding is exacerbated by the high cost of alternatives, adding, “Because agrochemicals are expensive.” He underscored the urgent need for interventions—including greater access to affordable mechanisation—to safeguard the livelihoods of smallholder farmers and secure national food security. To keep pace with population growth and urbanisation, he said tackling the issue of farm hands is important if food production must increase.

Co-Founder , Cato Foods, Pelumi Aribisala, attributed the situation to the massive disruption in the foreign exchange rate and the steep rise in the cost of assets. According to him, these factors are crippling the farm labour market, forcing farm owners and workers into a payment stalemate that is severely impacting agricultural productivity.

He explained that the current state of farm labour is “a very difficult one right now,” a struggle that began in the past year. The crisis, he continued, stems from the breakdown of a long-standing system where farmhands, often migrant workers from neighbouring countries such as the Republic of Togo, were paid at the end of the season with assets, primarily motorcycles.

 “You know before we used to pay with motorcycles.This system worked when the Naira’s value was low relative to their home currencies, making the motorcycle a coveted, high-value asset. However, the significant devaluation of the Naira has made this payment method untenable for farm owners. A motorcycle that once cost between N450,000 and N600,000 now goes for “only N1.5 million.So that is making agribusinesses or farm owners reluctant in paying with the motorcycle. Simultaneously, the farm workers are now reluctant in collecting cash,” he noted. “Because by the time they get the cash back to their country, in the Republic of Togo, they don’t get up to what they should get,” he stated. This, he indicated, has led to a major shift in worker demands. Instead of cash or an end-of-season asset, he said the workers now demand payment based on specific tasks completed. “So most of them now just want to work activity. They want to be paid for activity… which is very expensive,” Aribisala stressed.

A Senior Agriculture Economist with the World Bank, Dr. Adetunji Oredipe, has called on governments at all levels to re-strategise to check the incidence of rising prices of foods in the country.

He also advocated the development and immediate implementation of a National Food Prices Management Plan (NFPMP), rather than adopting food price control measures, to tackle the impact of the ongoing food crisis.

Oredipe said to achieve these, decisive actions must be taken by the Nigerian authorities to create the enabling environment for privately driven large scale commercial agriculture enterprises similar to what obtains in Latin America, where farming has become a big-time business.

The World Bank Agriculture Economist stated these while delivering an annual lecture with the theme, “Mitigating Rising Food Prices: The Underlying Issues: A Close View of the Nigerian Food System,” at the Faculty of Agriculture, Obafemi Awolowo University, Ile-Ife, Osun State, recently.

He noted that inspite of the drawbacks of large scale farming, the model will assist Nigeria in the current situation to achieve stability and food security.

Oredipe, however, warned that small-scale agriculture is not the best option for Nigeria in the current circumstances, adding that this would not “help to unleash the economic potential at scale even when given the best of scientific technologies.”

He stated that large-scale modern mechanised farms would ensure the required economies of scale, while small-scale farmers, rather than being displaced, would be accommodated to constitute nuclear farms to large commercial farms in their environment.

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Oredipe said: “We must upscale the nation’s ability to increase the supply of food to stem the tide of high food prices. I would like to advocate for decisive action to create the enabling environment for privately driven large-scale commercial agriculture enterprises in the similitude to what happens in Latin America where farming is a big-time business.

A large-scale commercial farm is a technologically sophisticated, mass-scale commercial agriculture enterprise. In addition to the usual agricultural needs, large-scale farming depends on the rule of law, secure land tenure, adequate infrastructure, affordable energy access, and well-functioning banks and financial markets.

In addition, large-scale farms can employ both educated people and unskilled labour and offer a pathway to development and economic growth in rural areas that lag behind fast-growing urban areas.

To their critics, large-scale farms raise concerns over animal welfare, ecological impacts, and overuse of chemical fertilizers and pesticides. But for the situation in Nigeria today, the model will help to achieve stability and food security.

“Talking seriously, small-scale farming will not help to unleash the economic potential at scale even when given the best of scientific technologies. For instance, there is the maximum yield obtainable to a small farm size after which the law of diminishing returns sets in. Large-scale modern mechanized farms would help bring in economies of scale. While we do not displace those small-scale farmers, they could form nuclear farms to large farms within their vicinity.”

The World Bank senior agriculture expert explained that the National Food Prices Monitoring Plan would define what constitutes a major food crisis and prompt timely action across government, private sector and development partners to prevent and mitigate the impact of the crisis, noting, however, “This is not an attempt to advocate for food price control.”

He further stated that government needs to directly connect the output of its food production programmes to the strategic commercial food reserve operations, where it would enable government to “intervene in the raw material prices for food and beverage companies, and the major staple food items that constitute the food inflation basket – Maize, Rice, Sorghum, Soybeans and Cowpea.”

Oredipe also stated that the objective of the commercial food reserve operations would be to establish a sustainable way to finance the aggregation and disposal of essential commodities for processing companies in the country with the ultimate objective of moderating food price inflation and reducing food importation.

Noting that “Investment in and deepening appropriate structured commodity trade platform could support these connections to manage the food prices system,” he added.

He also urged government to take a number of actions including promotion of urban agriculture “to improve its self-sufficiency; protection of existing farm settlements, estates, and clusters from encroachment for non-agricultural uses, promotion of backward integration of firms and industry, investing in value addition on and off-farm to improve the proportion of produce that reached the table all year round, encouraging youth involvement in food production by improving the operating environment, and putting in place a sustainable and commercially viable food bank.”

Oredipe further advised government to take a balanced approach that encourages the importation of what cannot be produced locally while promoting and supporting domestic agriculture to ensure long-term food security.