With Nigeria and the rest of Africa facing steep increases in food prices and the devastating impacts of climate change contributing to a rise in hunger and poverty, there are calls for support for small-scale businesses in agriculture to avert future food crises, DANIEL ESSIET reports.
There will be a rise in acute hunger in over 20 countries in Africa and the Middle East in the coming months if there is no urgent and scale assistance, the Food and Agriculture Organisation (FAO) and World Food Programme (WFP) have said.
Nigeria is on the list, especially the North. It faces catastrophic levels of acute hunger, with families at risk of starvation and death, the Hunger Hotspots also said in a report.
In the conflict region, projections for the June-August lean season, the report maintained, shows that the number of people at the emergency level of acute food insecurity is likely to almost double – to over 1.2 million.
In the next six months, the report warned that food and nutrition insecurity would rise in the North with some 13 million people likely to be affected.
The report recommended critical short-term actions to address the issue. This includes the distribution of drought-tolerant seeds, and rehabilitatation of water-harvesting structures.
Nigeria has seen a slight improvement in food security since June 2020, due to good seasons, according to a report by the National Bureau of Statistics (NBS).
However, the situation remains worrisome no thanks to violence.
Nationwide, there have been concerns ovre the availability of food commodities. In most parts of the Northeast, supply chains of livestock and commodities are unsafe, given the insecurity hampering domestic production.
In light of these challenges, there have been campaigns for support for small-and medium-scale businesses in the agri-food industry.
One of those advocating this is Nassawa- based farmer, Innocent Mokidi. He believes in the role of SMEs in driving agricultural growth.
Fertiliser is another problem in the sector. Since last year, its price has been going up. Mokidi said fertiliser was about 200 per cent more expensive than it was last year.
As a large producer of corn, soybeans, Mokidi said he spent so much as the crops were huge consumers of fertiliser.
Mokidi, who owns Brote Urban Farm, noted that the price of fertiliser had risen from N13,000 to N17, 000.
Since last year, farmers across the country have struggled to keep up with hikes in fertiliser price. Many of them, he continued, have refrained from going to or continuing in agri-business due to the high cost of production input.
Surging fertiliser costs are projected to continue, following the soaring prices of natural gas required for making the input. In the economy, it seems like nothing is escaping inflation.
Mokidi is also concerned about insecurity in Zamfara and Kaduna states. He reaffirmed the need to broaden the assistance programmes for farmers and SMEs.
In Lagos, the state’s new agriculture road map is aimed at boosting growth through support for farmers. The state is wooing domestic and international agricultural entrepreneurs into producing more crops and livestock.
According to the Commissioner for Agriculture, Ms. Ruth Abisola Olusanya, agriculture will continue to be an important sector for food security, poverty reduction and hunger eradication.
To boost small businesses, she affirmed the need for the sector to be competitive, adaptive to climate change, and integrated into the regional and global supply chains.
Startups, including those in corn, animal feed, agriculture equipment and grain storage facilities, are promised government’s support for such investment ventures.
Also, she highlighted the important role of agriculture in growth and development, and the government’s resolve to provide livelihoods for the citizens, particularly the low-income groups.
She said the state government had retooled its environmental policy to enable investments that would allow the sector to continue to adapt to the opportunities created by rising demand and the challenges of climate change and limited resources.
She explained that the state government would empower youths in agriculture.
With the modernisation campaigns in most areas, productivity is expected to rise.
For the Consular-General, Consulate of the Federal Republic of Germany, Bernd von Münchow-Pohl, however, the food industry holds the ace for growth in the country.
He noted: “A growing number of Nigeria entrepreneurs have realised this, and have invested substantially in agriculture and food production in more efficient processing, packaging machinery as well as storage and transportation capacities.
“Regarding the domestic market, you know that the emerging economies tend to spend a much-higher percentage of the household incomes on food and food products.”
As FAO warned of the soaring cost of cereals and vegetable oils, analysts believe that plans to support SMEs in agriculture.
The Lagos Chairman, the All Farmers Association of Nigeria (AFAN), Mr. Femi Oke, lamented that farmers were in for a tough year with soaring diesel prices.
Oke explained the situation. “To cultivate two to five hectares of land, labour is needed and it is not easy to get it. Such a farmer cannot be advised to go into mechanised farming because by the time you rent a bulldozer to uproot the plants, the money has gone.
“An average day rental of bulldozer requires N80,000 and a minimum of 100 litres of fuel. With the high cost of diesel, a lot will be spent on it. With the vast land, the bulldozer cannot cultivate the land in a day. So, for two days, N160,000 will be spent on cultivation. Also, about N90,000 will be spent on fuel. How much money are you now bringing out?”
In view of the foregoing, the Africa Agribusiness Outlook, by the Kenya-based Alliance for a Green Revolution in Africa (AGRA) and KPMG East Africa, called for improvement in the business environment for private sector players in the agribusiness; supporting women agribusiness entrepreneurs, small and medium sized businesses on the design and delivery of innovative financial solutions.
One issue the Outlook identified was that three factors influenced access to finance for agri-SMEs. A key observation was that companies did not seem to have many sources of financing. This is partly because they do not know where to get finance and the difficulty of accessing it even when they know.
Also, the agrifinance sector still finds it difficult to predict the risk of lending.
Many companies, the Outlook noted, indicated that they were using family and friends’ funding and retained earnings to grow their businesses. It observed: “The amounts that family and friends provide is typically below US$10,000. The majority of respondents indicated not being able to access other sources of funding, despite trying to get these. However, bank lending to the sector is far from optimum, and only reaching a fraction of the market as the banks analysed only had eight per cent of agri-SME lending in their portfolio. Some non-bank financial institutions lend between $10,000 and $100,000 as short-term capital for small businesses. However, the lending rate by such institutions is minimal. “Global social lenders also play an active role in the agri-SME lending space although they advance fewer loans than commercial banks. They provide between $150,000 and $1 million as working capital needs by the SMEs. Some banks focus on small, short-term loans of between $10,000 and $100,000, while others have moved to corporate lending advancing between $50,000 and $500,000.”
The Outlook strengthened the need to equip future leaders with skills across the entire value chain. It observed that most firms could not afford to pay for the talent that they needed to assume senior management positions.
Source: The Nation Newspaper