It is no surprise that farmers, meat producers, and other players in the agricultural space can neither find buyers nor procure inputs for production amid the pandemic. This phenomenon can be easily traced to the lockdown and uncoordinated nature of the industry’s supply chain.
I was on a call with my dad the other day, he is a trained veterinary doctor and runs a fishery and piggery in Imo state. He lamented on how it has become difficult to get the feed the animals required and how if this lingers, he may be forced to euthanize a good number of them to reduce the burden of feeding and sell some others as prices have dropped.
This phenomenon is currently playing out in the different segments of the industry, affecting the entire value chain. The restriction of movement has impeded farmers from farming, and food processors from processing without fear, as well as a potential shortage of farm inputs, which could affect food production.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Nigeria’s agricultural sector is made up of predominantly smallholder farmers (circa 80%) – they usually own small plots of land of less than a hectare, on which they grow one or two crops at micro and small levels. The sector contributes 25% to Nigeria’s Gross Domestic Product (GDP) and accounts for 48% of the labour force. The sector’s growth rate over the last 5 years averaged 4%. Crop production dominates the sector, accounting for 22.6% of GDP alongside livestock (1.7%), fisheries (0.5%) and forestry (0.3%).
In the last five years, government has devoted a lot of energy at deepening the industry, with an initiative like the Anchor Borrowers Programme (ABP), ban on the importation of some agro commodities and the shutting down of its land borders, all without addressing fundamental issues of mechanisation, irrigation, seeds, extension service, insurance, research and development, among others.
As the reality of the impact of COVID19 hit the economy, coupled with the crash in the price of crude oil, the Central Bank of Nigeria’s (CBN) Governor, Godwin Emiefele, in a recent report titled, “Turning The COVID-19 Tragedy Into An Opportunity For A New Nigeria”, said in line with the vision of President Muhammadu Buhari, the apex bank has created several lending programmes and provided hundreds of billions to smallholder farmers and industrial processors in several key agricultural produce.
The looming crisis:
Fall in Production: The lack of inputs for existing producers in various segments of the industry such as seedlings and fertilizers for the crop growers; cattle and poultry feeds or fingerlings for meat producers, among other inputs will greatly affect overall production. With a domestic production gap pre-COVID19, a further decline will lead to shortages and thereby causing a rise in price of the available produce. For a population that has experienced declining earning and purchasing power due to the pandemic, a rise in price will lead to more hardship and poor nutrition.
Increased Wastage: It may appear counterintuitive to say there will be a fall in production and then wastage. This isn’t far-fetched as the produce available cannot easily get to markets and store shelves due to the restrictions placed by the Federal and various state governments to curb the spread of the virus. The Nigeria agricultural value chain has an inter-dependent nature, where production can be done in one geopolitical zone, with the target markets being in another. This can be seen in the case of cattle and vegetables, which come predominantly from the Northern region to the rest of the nation.
With lack of access to the market, farmers will be forced to either sell-off their ready produce at give-away prices, donate the excesses to charity organizations or watch them spoil if they are perishable.
Increased Unemployment: With the lack of inputs, fall in production and ultimate decline in revenue or its total obliteration, farmers and numerous players along the value chain will close down shop as business will struggle, leading to their employees being laid-off, with no alternate source of livelihood. Knowing this segment barely has enough to live by and having savings to fall back on is a luxury they don’t have; the threat of increased risk of depression and other health-related risks cannot be overemphasized. The ripple effect of job loss alone is enormous.
What needs to be done
The ravaging pandemic has offered Nigeria a unique opportunity to organize the agricultural supply chain. The food supply chain, which is the system that takes food from farm to fork through production, processing, distribution, and consumption, can be designed more efficiently and made robust. The development of such a highly effective supply chain is dependent on the level of cooperation and coordination between existing private players.
Other key solutions include:
- The Expansion of the Essential Service List and Adequate Sensitization of Lockdown Enforcement Agencies: The current list of essential services as designated by His Excellency, President Buhari, includes food processing, distribution, and retail companies. It is equally important to include food production to the list. The sensitization of the various enforcement agency on the need to grant free passage to logistics companies carrying produce across states is key. I understand the risk of inter-state transmission of the and propose that the relevant health agencies work with the ministries of agriculture and transport, to produce a common health-code that will guide the transportation and distribution of produce across the nation, to curb the spread of the virus and possible contamination of produce.
- Ecommerce Operations Expansion and Improved Partnerships with Experts: Creating access to finance and a ready market are great advantages firms such as Thrive Agric, Farmcrowdy, PorkMoney and Kerekusk Rice, among others have brought. However, for us to effectively fill the gap, productivity needs to be emphasized, as Nigeria continues to suffer low levels of agricultural productivity due to infrastructural deficit and practice of obsolete farming methodologies across the country. “Data from the Food and Agricultural Organisation (FAO) shows that Nigeria has the least average yield per hectare of five selected crops, among its African peers like Ghana, Kenya, South Africa, and Ethiopia”. This boost in the face of the pandemic can be achieved through partnership with indigenous experts, such as IITA and PRODA Enugu, among others, for quality seedling and other inputs, supply of locally fabricated equipment as importation isn’t an option at this time, as well as adequate training of farmers.
- State-Led Initiatives: It is time state governments stop playing second fiddle in the development of the nation. They have more power and influence than they choose to admit or care to utilize. I saw a report of an initiative by the Cross-River state government in producing and distributing rice seedlings initiative. This is being done, even as the threat of the pandemic spreads towards their state. State governments can also develop and implement targeted policies to encourage the small farm owners and other players to keep production level steady, through but not limited to special grants and input supply.
- Establishment of Make-Shit Markets: Knowing that not all Nigerians are tech savvy or have a smartphone to order their needs online, it is important to consider the “off-grid” population. I suggest a review of the lockdown order, to create better access to essentials in a safe environment by creating make-shift markets, under the supervision of the state for absolute compliance from all. This can be modelled to be neighbourhood-centric, to reduce over population and further spread of the virus.
Yes, the pandemic is deadly, so is hunger. We all- Government, Private sector and citizens- need to work together to weather this storm. Nigeria
Interesting piece
Insightful!