The Nation Newspaper

Tag: agro

  • ‘Naira depreciation affecting agro exporters’

    Continued  depreciation of Naira against the United States dollar is creating a challenging environment for agro exporters,  the  President, Association of Business Owners of Nigeria (ASBON), Dr Femi Egbesola, has  said.

    This is as a result  of  the increased costs of operation involving international shipping companies, which services are dominated in foreign currency.

    He said many exporters are facing challenges of logistics.

    In case of international shipments of agro commodities, he said they   need to pay the shipping charges in US dollars and hence, additional amount has to be paid for the same shipments, making export  business   less profitable for the companies.

    On the export front, he said Nigerians were competing with exporters from other countries  where their currencies  make the   price they  receive  for  their  produce competitive.

    Egbesola added, however, that  local exporters were faced with high freight costs denominated in foreign currencies, subsequently hitting their profit margins.

    Calling  on  the  Central Bank of  Nigeria(CBN)  to do  something  on   the value  of the  Naira, the  ASBON  chief  said  local  agro  exporters  stand  the  risk of losing international customers to competing exporters from other international markets.

    He  said agro exporters are  forced absorb the increase in freight charges and work with lower margins, adding  that  in   event of failure or capability to absorb such additional freight costs, the exporters and importers may avoid/abstain from international trade.

    With  the  government  encouraging  more Nigerians to get  into exports,  he noted,  that  the government  needs  to do  something  to boost  the  naira  as its continued  depreciation   could lead to an overall decline in trade volumes from Nigeria  that would prove to be challenging for the shipping and freight forwarding companies.

    For the shipping companies that focused on  industries, a decline in international trade volumes would result in idle capacity or shipments with not-fully loaded ships, resulting in lower revenues as well as higher operational costs per customer consignment.

    He called on the government to provide more incentives to boost agriculture production and promote   livelihood security for a large number of farm families.

    According  to him,  farm productivity and profitability will be greatly helped if there is  improved  support  to  reinvigorate  farming tradition as  it is  a means to sustainable livelihood.

  • ‘Naira depreciation affecting agro exporters’

    Continued  depreciation of Naira against the United States dollar is creating a challenging environment for agro exporters,  the  President, Association of Business Owners of Nigeria (ASBON), Dr Femi Egbesola, has  said.

    This is as a result  of  the increased costs of operation involving international shipping companies, which services are dominated in foreign currency.

    He said many exporters are facing challenges of logistics.

    In case of international shipments of agro commodities, he said they   need to pay the shipping charges in US dollars and hence, additional amount has to be paid for the same shipments, making export  business   less profitable for the companies.

    On the export front, he said Nigerians were competing with exporters from other countries  where their currencies  make the   price they  receive  for  their  produce competitive.

    Egbesola added, however, that  local exporters were faced with high freight costs denominated in foreign currencies, subsequently hitting their profit margins.

    Calling  on  the  Central Bank of  Nigeria(CBN)  to do  something  on   the value  of the  Naira, the  ASBON  chief  said  local  agro  exporters  stand  the  risk of losing international customers to competing exporters from other international markets.

    He  said agro exporters are  forced absorb the increase in freight charges and work with lower margins, adding  that  in   event of failure or capability to absorb such additional freight costs, the exporters and importers may avoid/abstain from international trade.

    With  the  government  encouraging  more Nigerians to get  into exports,  he noted,  that  the government  needs  to do  something  to boost  the  naira  as its continued  depreciation   could lead to an overall decline in trade volumes from Nigeria  that would prove to be challenging for the shipping and freight forwarding companies.

    For the shipping companies that focused on  industries, a decline in international trade volumes would result in idle capacity or shipments with not-fully loaded ships, resulting in lower revenues as well as higher operational costs per customer consignment.

    He called on the government to provide more incentives to boost agriculture production and promote   livelihood security for a large number of farm families.

    According  to him,  farm productivity and profitability will be greatly helped if there is  improved  support  to  reinvigorate  farming tradition as  it is  a means to sustainable livelihood.

  • How to boost agro exports

    Exporters of agricultural products need a helping hand from the government to overcome challenges they face in trying to reach  new markets abroad and diversify their offerings.

    The  Chief  Executive, The Thy  Consulting,  Ismail AbdulAzeez  told The Nation there was  urgent  need for  the  government to  support  efforts to accelerate  economic  development through trade, by strengthening the capacity of the  Nigeria Export  Promotion Council(NEPC)  to provide business development services that meet the needs of agribusiness exporters.

    He  urged  the government to demonstrate readiness to assist  exporters to boost agribusiness and increase non-traditional exports.

    The  sector,  he  explained, has  a potential for commercial agriculture,  urging   the government to partner with others to  bring real economic benefits  through  international  trade.

    One way  to achieve this,  he  said,  was through promoting   collaboration with   the   network of local export  development  centres as  well  as chambers of commerce, universities and educational institutions and other private service providers.

    The  result, he  maintained, ,would  be  an   efficient trade support network providing export development services to agribusiness exporters.

    AbdulAzeez said  exporters need to improve their capacities to   better understand and implement food safety systems based on Hazard Analysis and Critical Control Points (HACCP),required  for  agro exports.

    He emphasised that exporters need to be taught how to improve food safety since importers in Asia, Europe and North America all demand food safety standards compliance.

  • Making agro financing easy

    Making agro financing easy

    Financing is a  major challenge  for  farmers. They  cannot get loans  to improve yields, protect soil resources and expand their businesses.  To  stakeholders, the way out is for farmers’ organisations, financial institutions, government bodies and other institutions to explore new possibilities to promote a paradigm shift in agricultural finance.  DANIEL ESSIET writes.

    DO farmers have the capacity to produce food in abundance?Yes,they do,say experts,who argue that the agricultural sector has vast untapped potential which can satisfy the country’food requirement.

    There will also be sufficient to export.

    Though farming is considered a stable source of income that can be managed by small and large scale farmers, many  do not consider the practice as a business entity.

    Many of those involved  in small and large scale farming are not utilising the potential to achieve maximum profits that can transform their lives. The farmers face diverse challenges which hamper their ability to produce more from their land.

    Lack  of access to credit has been identified as the major constraint.  Worst hit by this challenge are  small owners and poor farmers who find it hard to buy fertiliser and input to improve their yields.

    To them, farming is a risky business.  In most states, small farmers do not have access to modern agricultural machinery that can help increase their productivity and improve food security and incomes. Many farmers cannot afford new tractors and there are few rental opportunities. This is linked to lack of access to credit. Because of this, they have no choice but to continue farming without the benefit of modern equipment.

    In cases where the loans are available, its cost is too expensive for rural small owners to take advantage of. They rarely can meet the rigid collateral requirements or pay back the loan within the typical short-term lending periods.

    A consultant to the World Bank, Prof Peter Bola Okuneye, said the agric sector has not received enough financial support from the banking sector.

    He, however, attributed this to the failure of the Federal Government to increase investments in agriculture to 10 per cent of its national budget.

    He explained that Nigeria and other African countries, in 2003, committed themselves to the African Union Maputo Declaration on Agriculture and Food Security to set aside 10 per cent of their national budgets for agricultural development. But, nine years on, just eight countries have fulfilled their promise. Nigeria is not among them.

    On the average, Okuneye noted that public agriculture expenditures have not risen to over 2.5 per cent per year, signalling less recognition of the sector as an engine of growth and poverty reduction.

    Added to this is high interest rate which is the biggest risk for farmers where they have little access to loans. This is because a simple change in interest rates can wipe out their profit margins.

    Where the small farmers have access to loans, they do not have the collateral required to take advantage of it without using land or other assets.

    Nationwide, Okuneye said farmers lack access to financial services, many of them live in rural areas. In other climes, such access help them   get better input, better farming, higher yields and better returns. But this has not been possible here. This leaves them in a poverty trap which they struggled to escape from.

    An expert said one way out is by participating in out growers schemes. It is  one of the most common ways farmers get access to credit. Under out grower programmes, firms provided seeds and input on loans, together with extension services to improve productivity. Generally, credit for input is tied to commodity sales at harvest. Prices paid for the harvest supposedly reflected international prices. However, it is only viable for a few selected cash crops. As a result, many farmers are left out.

    As a developing economy, Okuneye said government must spend increasingly more on agriculture if it is to take the sector out of the woods. Such investment, he said,  has the potential to create jobs and raise rural incomes, particularly by promoting uptake of improved production techniques and greater use of inputs.

    Chief Operating Officer, Centre for Cocoa Development Initiative, and spokesperson for the Cocoa Association of Nigeria, Mr Robo Adhuze,  said  not much  has been  done to better  the lot of  rural farmers. He sees how farmers suffer during harvest. In some rural areas, harvest times, are both days of plenitude and peril for poor farmers. The products are weighed and paid for in cash or cheque. In most of the rural areas, there are no banks. Farmers have to travel far on dusty, unpaved roads to cash checks or deposit cash in town. That makes them targets for robbers.

    Adhuze does not appreciate it. He therefore canvassed the need for  mobile finance providers  to  break into rural areas to expand market share and achieve nationwide presence.

    For him, the agricultural sector is entry point into these communities, given the keenness of commodity buyers to move away from inefficient and more expensive cash payments to producers. With cash transactions comes the increased risk of theft and violence, high transportation costs and greater possibility for corruption. Adhuze urged the government to embed mobile finance services into the agricultural supply chain.  The key to this is leveraging the corporate procurement policies of large buyers.

    To enable  rural  farmers benefit from  such  arrangements , he  urged the  government to  look at diverse ways of integrating mobile finance solutions into the agricultural supply chains.

    With more and more entrants into the mobile finance market, the choice for rural customers looks set to grow.

    According to him, emerging innovations in mobile finance are revolutionising the agricultural value chain, will give farmers greater access to a range of financial services.

    It encompasses not only mobile money and mobile banking but other alternative delivery channels such as e-vouchers, debit cards, smart cards, branchless banking, ATMs and point-of-sale devices.

    With mobile banking service, he said buyers are allowed to transfer payments to growers’ bank accounts via text messages on their mobile phones, while funds can be withdrawn using a bank card at electronic funds transfer machines, at automated teller machines (ATMs), bank branches, or at local shops that operate as agents for the bank.

    To make it work, there should be a network of agents offering the service in rural areas close to where the cocoa growers live and work.

    This saves farmers time and money, enabling them to focus on   tending their land, raising productivity, rather than worry about transporting money.

    Without the presence of a financial institution, Adhuze believes such  innovations may be the way forward for rural finance, at least for small farmers.

    The number  of  Nigerians  suggesting that  mobile financial tools be used to facilitate more agricultural credit, savings, insurance, transfers or payments increases daily.

    Minister of Agriculture and Rural Development, Dr Akinwunmi Adesina, agrees. According to him,  by deploying  mobile finance represents a paradigm shift for agricultural value chain finance. He said the government is  doing a lot to improve the lot of local farmers.

    Addressing the global forum on “Revolutionising finance for agricultural value chains in Africa’’  at the Kenya School of Monetary Studies in Nairobi, Kenya,  Adesina cited the use of the electronic wallets through which farmers pay subsidised amount of money to banks to get coupons to buy fertiliser and other inputs from accredited agro-dealers.

    Since the agro-dealers get their full pay from the subsidy from the government and what farmers pay, they have been committed to helping farmers grow their businesses, even offering extension services.

    Nigeria is the first in Africa, and in the world, to develop the electronic wallet system for reaching farmers with subsidised farm inputs on mobile phones, he said.

    He said: “The impact is reaching well beyond Nigeria. Several African countries, as well as others in emerging markets like India, Brazil and China have expressed interest in adopting the electronic wallet system in their own countries. Nigeria, which used to have a terribly corrupt fertiliser system, is now exporting transparency.”

    Adesina, however, explained that lending is skewed to larger agribusinesses, while smallholder farmers, commercial farmers and other small and medium size enterprises are unable to access affordable financing.

    He added that Nigeria’s bank lending to the sector was expected to hit 7.5 per cent by next year and 10 per cent by 2015. With banks’ yeraly total lending portfolio standing at over N8 trillion, he  said   the agric sector is expected to get N600 billion this year and N800 billion next year.

    He said financial institutions would not lend to businesses they do not find viable.

    “Therefore there is a greater need to ensure that, through strategic reforms, agribusinesses become wealth creator.

    “This is a good way to tackle some of the major impediments that create both real and perceived risks which deter greater financing to agriculture,” he said.

     

     

  • Towards building agro entrepreneurs

    Towards building agro entrepreneurs

    With an ever-increasing population in Nigeria, the challenge is how to produce enough food to meet demand. Some higher institutions are addressing the challenge through agricultural projects. DANIEL ESSIET reports that this initiative will enhance food security.

    Students of agricultural science in tertiary institutions  need practical skills to be employable or or self-employed. To this end, many higher institutions are undertaking agriculture projects to  build innovative entrepreneurs across the country. One of such schools is the Federal College of Animal Health and Production Technology (FCAH&PT), Moor Plantation, Ibadan, Oyo State.

    While the school offers academic opportunities to prospective students in Animal Health and Production, it also provides a hands-on approach to course content and encourage  students to gain the practical experience required.

    To train agriculture professionals, research and community service, the school established farms of the major domestic livestock species such as beef, dairy, sheep and goats and poultry.

    The primary objective of establishing these farms, according to the institution is to support the practical teaching and service activities in the field of animal sciences. The college also  raises goats, pigs  and snails.

    Across the school, there are  a variety of campus farms that  function as demonstration centres and laboratories where students can witness and participate in animal husbandry.  From one edge, farms can be seen stretching all the way to the horizon.

    Speaking on the development, the  school’s Acting Provost, Dr Friday Nworgu  said campus farms are vital because real practical farming would help  graduates start something on their own on completion of their studies, adding that it is hard to get  youths  involved in functional agriculture if they don’t have the know-how and  skills to carry out profitable farming.

    Since the school’s strenght is   animal  husbandry, Nworgu said  the  campus farms are used for hands-on instruction in a variety of courses offered through the Department of Animal Sciences, ranging from livestock management to horse nutrition and small ruminant.

    However, the school has started to build and restock its livestock farms to stimulate entrepreneurial agriculture.

    One area the college is taking seriously is horse breeding. This is because  few people  have knowledge  of horse  breeding. Polo racing is perhaps the most glamorous and money-spinning animal sport. However, behind every champion on the race tracks lies the masterly skill of its breeding. The  college is taking  advantage of it to  raise  horse breeding entrepreneurs.

    The market is there as lots of polo clubs are emerging that need exotic horses. He said the school will train Nigerians on how to raise  horses.

    To achieve  this, the  school is  banking on the strength and capacities  of its faculty, while Ibadan has climate and geographical advantages to become a major player in this form of agriculture.

    According to him, the infrastructure is there and there is a large farm house for horses. He added that the horse facility was designed to breed high quality purebred horses. There  is  a breeding shed, an indoor arena/classroom complex, and a storage shed. There are barns on the facility that are used to quarantine new horses. This gives students the opportunity to experience all aspects of horse preparation. The mission of the breeding programme is to produce exotic breeds, combining type, conformity, and athleticism with the trainability required for use in a programme   with extensive student involvement.

    At  the end, the Acting Provost   sees a new breed of young entrepreneurs combining their love of farming and agriculture with an acquired professional business approach.

    FCAH&PT stands out today as  one higher institution with horse breeding programme in the country.

    Nworgu said the primary mission of the college horse breeding  programme is to educate the next generation of horse persons and solve industry problems through applied scientific research.

    The  philosophy is to  maintain the highest quality of livestock possible on its   farms for those purposes.

    While the students benefit, the quality of life of the residents who use the place  as a hub for  acquiring  skills towards entrepreneurship is enhanced.

    According  to him,  the  unprecedented commitment of the present government to seriously address the need for employment generation is a propitious opportunity  for  higher institutions  to implement strategies for generating full employment in the country.

    For  him,  promoting  agro entrepreneurship   will lead to higher productivity  that will unleash multiplier effect on the value chain by increasing demand for farm and non-farm products and services.

    One of the instructors, Dr Oladipo Tunbosun said the endeavour involves meticulous planning and immaculate techniques.  To this end, the school has to pay attention to proper feeding and grooming of the horses.  On the whole, he sees  countless revenue possibilities in the horse industry. Graduates of the horse programme go on to have successful careers within the equine industry focusing on areas such as training, horse farm management, and equine-related businesses.

    Generally, experts believe if higher institutions are to salvage the economy, he said a lot of efforts have to be put into agricultural entrepreneurship activities.

    One of them  is  the Project Manager, Cassava: Adding Value for Africa (C:AVA), Natural Resources Institute, University of Greenwich, United Kingdom, Dr  Kola  Adebayo.

    Stressing the importance of providing agro entrepreneurship training, Adebayo said a combination of good farming practices, and the integration of technology will make the difference in a successful farm that is able to help feed the nation. This ,he  said is  achievable  with  the  rising  trend  of  entrepreneurship  agriculture.

    A entrepreneurial  tour  of  the  Federal University of Agriculture, Abeokuta  will show farms and food-related businesses.

    Highlighted are   high quality sustainable  crop   production using  conventional farming systems, and more.

    FUNAAB  offers   facilities that are capable of   training   future agro entrepreneurs. This is obvious with a number of farming projects scattered across its campus. There are a variety of chicken breeds, developed for egg production, meat production, and/or good looks. While many breeds are adaptable to a backyard setting, certain breeds are better than others for backyard conditions.

    Other facilities include the cassava production unit, the bakery, palmwine unit, palm oil unit, cashew nut unit, pineapple plantation, college of animal science and livestock production  cattle production venture farm and the institute of food security, environment resources and agricultural research farm.

    The university engages in the training of production-oriented agricultural graduates which equips them to be job creators rather than job seekers.  To achieve this, the university entrenched farm practical curriculum in the B. Agriculture programme between 300  and 400 level.  The peak of the training is the mandatory six months exclusive farm practical year programme (FPY) at the penultimate year of the B.Agric programme which objectives are to: expose  the students to work methods, tools, techniques and practices not taught in the theory class, bringing trainees in direct contact with farm staff and local farmers to obtain first hand information on farming conditions and problems.

    The Farm Practical Year (FPY) programme afford the trainees the opportunity to “learn by doing” by undertaking practical farming activities on both crop and livestock sections of the university.

    The Federal Government recently directed that FPY programme be extended to one year from the six months it previously was.

    Addressing Stakeholders’ Workshop, at the Nigerian Institute of Social and Economic Research, Ibadan, FUNAAB Vice-Chancellor, Prof. Olusola Oyewole said  graduates were expected to be practising farming as a business venture in an exemplary and successful manner that will in turn reduce unemployment level, enhance farm production, increase food production and food security. It will also reduce food importation and improve livelihoods of farm households by invariably leading to the overall national economic growth and development.

    The don observed that these aspirations remained unfulfilled despite the establishment of the specialised Universities of Agriculture for a number of reasons that had prevented the nation from attaining its desired rapid economic development through agriculture.

    These reasons include the difficulty in getting fresh graduates to take up farming as a means of livelihood after leaving school, increasing ageing farming population, over-dependence on food importation, food price instability and political crisis.

    He said: “Agriculture and farm-related occupations remain unpopular among young people because of its inherent association with poverty, drudgery and backwardness. The undergraduate agriculture training programmes in universities have not helped matters much as it only mimics the existing methods of farming by the local populace with its practical component depending on manual labour and minimal application of modern technology.

    “The result has been declining enrollment in undergraduate agriculture programmes and the growing lack of interest in farming among youths.”

    According to him, Universities of Agriculture, by their very foundation would appear to have a covenant with the society, arguing that the covenant is to develop a cadre of young, dynamic modern farmers that would develop innovative practices in agriculture, the economy, reduce poverty and bring about sustainable development of the sector. He lamented that this covenant with the society has largely remained unfulfilled.

    Despite of the challenges, he said the giant strides recorded by FUNAAB, in fostering innovation for inclusive development through its institute of food security, environmental resources and agricultural research; agricultural media resources and extension centre; students’ industrial work experience scheme/farm practical year; agro-industrial park unit; the graduate farming scheme, among others.

    The Vice-Chancellor of the Federal University of Technology, Akure (FUTA), Prof.Biyi Daramola, said poor performance of the agriculture sector led to the inability to reach sustainable economic development in Nigeria.

  • ‘Expand rail to improve agro shipments’

    ‘Expand rail to improve agro shipments’

    The Federal Government has been urged to expand storage and rail capacity to improve the efficiency of rail shipments of agro produce.

    Speaking with The Nation,the Programme Coordinator,Farmers Development Union(FADU),Mr Victor Olowe said farmers unique challenges in the market, and require a dependable and affordable means of transportation for their products. Weather and marketconditions,he explained, have impacted the rail transportation industry causing losses, and that farmers,sometimes operate on exceedingly low profit margins–this paired with dramatic fluctuations in that places them in a financially precarious environment.

    He said reliability and efficiency of the transportation system would be a significant advantage for farmers.

    He said the transportation infrastructure requires total overhaul and maintenance as demand and domestic production continue to increase.

    He said expansion of the railway system makes it possible for agro produce to be moved efficiently to shipping hubs.

    Failing infrastructure, he stressed,was a serious emerging issue for growers as improving the transportation systems underpin modern agriculture, from rural roads and bridges, to railroads, and especially inland waterways.

    He said farmers are leaving crops in uncovered mounds amid a shortage of silage bags and a lack of space at grain storage area and export depots.

    According to him, grain shipments have become almost a “just-in-time-delivery” business and keeping the pipeline is absolutely critical to ensuring that there is consistent delivery.