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Thursday, July 5, 2012

Capacity trends in Nigeria’s agro value chain

Ordinarily, a value chain depicts a chain of activities for a firm operating in a particular industry, like agriculture.
Typically, the agriculture activities very often start with the search for seedlings, followed by the fertilizer acquisition after the clearing of farm lands, only then can the seedlings be planted.
Nowadays, there are various sets of people who specialize in various farming including clearing of lands and in the eastern Nigeria, those are known as the ‘Abakalikis.’ They are also useful during the harvest seasons, according to Madam Okwy, rice farmer at Awba-Ofemili in Anambra State.
She says, another value chain of note are those who put the seedlings on the grounds or cleared farm land for such purposes and those usually coming from neighbour towns, where either wages for farm workers are very low or lack the relevant arable lands. These set of workers go to their home towns as soon as the planting season is over, but once its harvest time, they return.
The food industry has been severally described as a complex, and a collection of diverse businesses that congregate to supply much of the food energy consumed by the world population.
Therefore, it is pertinent to state that though subsistence farmers; those known to grow for self or mere family survival could be considered outside of the scope of the modern food industry, because their original plan was not to engage in large scale farming for commercial purposes.
So, food industry  could be rightly said to involve several stages including regulation at different levels; be it local, regional, national and international rules and regulations for food production and sales, consist of food quality and food safety, and industry lobbying activities.
And to unlock the potential of agriculture to create jobs, the Minister of Agriculture and Natural Resources, Dr. Akinwunmi Adesina, disclosed that there is need to engage the energy, dynamism and entrepreneurship of the youth.
Adesina said that the President Goodluck Ebele Jonathan’s administration no longer treats agriculture as a development programme, declaring that the goal of the government is to treat agriculture as a business and to make the nation an agriculturally industrialized economy.
To this end, he said that under the Agricultural Transformation Agenda, this administration intends to add some 20 million tonnes of food to the domestic food supply with the creation of 3.5 million jobs in all the agriculture value chains before the end of year 2015.
Subsistence farming, he noted, is not viable to feed a nation, hence the importance of expanding the level of use of tractors in the country to boost the agriculture investment by small, medium and large scale farmers.
According to him, agriculture sector is the fastest in terms of employment generation, thus has the capacity to change the trend of economic growth in the country.
Adesina in his remarks at the Ekiti State’s Youth in Commercial Agribusiness Development Programme recently, noting that Governor Kayode Fayemi’s decision to involve the state’s youth in agriculture deserves commendation.
To raise the level of use of improved seeds, Adesina said his Ministry financed the entire seed supply for the country which amounts to N2.7 billion for the 2012 season, adding that the finance, is not from the government but the use of guarantees for banks to lend to seed companies.
Also, he affirmed that the Federal Government was able to secure financing for the supply of fertilizers for 2012, at the level of N27 billion from commercial banks using guarantees from the Ministry of Finance.
In a related development an agreement to establish and implement an agricultural development project was signed by Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and Voluntary Services Overseas (VSO).
Alhaji Muhammad Nadada Umar, SMEDAN Director-General said the agreement, tagged SMEDAN-VSO Agro-Enterprise Project, is to engage women and youths between the ages of 18 and 35 years in agrobiz.
NaijaAgroNet learnt at the signing session that the agreement combines expertise of both bodies would add tremendous value to the development of Micro, Small and Medium Enterprises and the nation’s economy.
The pilot programme, Umar revealed would be established in four states; Nasarawa, Ondo, Kaduna and Cross Rivers States. Pointing out, “Our organizations both share the same values in respect of assisting disadvantaged people. SMEDAN, as a gender-sensitive organization, with our high level of professionalism, has a lot to offer to this nation.”
It was not surprising therefore that a multi-million Naira assembly plant was being targeted, a North American company, AGCO which specializes in manufacturing of agricultural equipments, in anticipation of Nigeria’s dream to grow the sector with 300,000 within the next three years.
AGCO, DigitalSENSE News gathered, offers a full product line including tractors, combines, hay tools, sprayers, forage equipment, groundscare and implements through more than 8,500 independent dealers and distributors around the world.
DigitalSENSE News investigations also revealed that AGCO is likely to provide this number of tractors through its worldwide retail financing scheme known as Agricredit joint venture.
Experts at Investopedia says joint venture is the cooperation of two or more individuals or businesses in which each agrees to share profit, loss and control in a specific enterprise. Describing it as a good way for companies to partner without having to merge and are typically taxed as a partnership.
Affirming this development, Dr. Adesina, emphasised that AGCO is the largest manufacturer of Marcy Ferguson tractors globally and that Federal Government has advanced strategies for the establishment of assembly plants in the country following a discussion with the manufacturer in April.
“Nigeria needs at least 300,000 tractors, to enable our youth to get into agriculture as a business,” he declared, pointing out that already the Nigerian government has concluded farmers’ census, while introducing an agric-wallet and employment of 36 agriculture directors, who have been deployed nationwide at the state capitals.
As we look forward to a better youth empowerment with all these laudable government programmes, it is high-time to walk the talk, while the Universities of Agriculture across the country should take up adequate research initiatives on agricultural related products for better production at the end of every farming season.

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