Post by Trade facilitator on Dec 9, 2013 9:21:56 GMT 1
In July 2012 when Ireti Farms in Kwara State sent off its first shipment of 6,000 tonnes of cassava chips to China, the understanding was that “cassava [would] surely become the foundation for the economic development of [the] state” and that “with this initiative, Kwara [was] poised to take over from Thailand as the major exporter of cassava”.
The rhetoric of agricultural transformation through value-added cassava has been around for a while. For many years, many academics, analysts and consultants wrote about the enormous potential the cassava value chain possesses for growth. And then in 2011, the government launched the cassava bread scheme. Months later, the talks about exporting cassava chips to China began.
But what is it about cassava chips that makes manufacturing them worthwhile? For one, cassava chips are a delicious local snack. In a market that has begun to embrace cassava in diverse forms through cassava bread, cassava chips are another way we can have our cake (enjoy good nutrition) and eat it too (support local farmers/industry). And with a profit margin of N20,000 per metric tonne, this is not just nationalistic support but economic advancement through business. Secondly, cassava chips are an important energy source for animal nutrition, with research showing that they can comprise up to 15 percent of animal feed. By replacing maize or other high-energy but high-cost foods in livestock feed, farmers will be able to decrease their production cost while still meeting the nutritional demands of their livestock. And well-fed livestock translates into better prices for sellers and higher quality nutrients (especially protein) for livestock consumers. Lastly, by further expanding the cassava value chain, storage losses can be minimised through the processing of farm produce, and more jobs can be created for people who choose to specialise in the production and sale of cassava chips.
It is no wonder then that in addition to a local need for cassava and cassava chips, there also exists an international demand for it from countries like China. In fact, China reportedly placed orders for 3 million tonnes of cassava chips. This export transaction is projected to fetch Nigeria $272 million. But as it stands, this demand is reported to be much higher than the current national supply. For this reason, the Nigerian Cassava Growers’ Association (NCGA) received a N4.1 billion credit facility from the Bank of Agriculture in order to enable 20,000 farmers to cultivate 60,000 hectares of land. In addition, the Nigerian government is soliciting the Egypt-based African Export and Import Bank for a $40 million loan facility for cassava production. Furthermore, plans are underway to procure 18 cassava milling machines and set up cassava chip processing centres in all six geopolitical zones, including states and cities such as Enugu, Nasarawa, Taraba, and Ibadan.
In the last month, a key debate question has been: where exactly should young people – aspiring agricultural entrepreneurs – come in along the value chain? Should they try to secure plots of land and begin to till the soil or should they look into processing, storage, distribution and marketing? Two weeks ago, a young Nigerian expressed to me his desire to go into agricultural marketing after picking up important marketing skills during a training programme. And of concern to one cassava farmer was how exactly his cassava chips would get to the much-touted Chinese market. With all the developments here and there, who wouldn’t want to be in on the action?
To those looking to take the plunge, there is no straightforward one-size-fits-all answer. Assess your strengths and try to leverage them. Also forge partnerships where necessary to enable you meet your pressing needs. Determine if cooperatives will help you go the whole nine yards of the value chain – or however far you want to go – and network with likeminded or more experienced people in your area of interest. Do not forget to seek out relevant information from your local boards, information platforms and private sector experts.
The other day I came across a video on one of the online Nigerian discussion forums about an agricultural export firm in Southwest Nigeria. Some days later, I found the same service (connecting cassava and other crop farmers to international buyers) being advertised on another website. Although there was no way to verify the claims or service quality of the firm at the time, I was happy to see people already stepping in and exploiting all available avenues for cassava and cassava chips sales. With more people advertising online (through blogs and forums) and offline (through social groups in the community), and old clients submitting reviews, cassava farmers and cassava chip suppliers will be able to compare services and seek out the most reliable and efficient channels of reaching their targeted market and maximising their profits.
At this point, the importance of the debates in January about our agricultural priorities becomes apparent. While infrastructure and financing remain a big challenge to full-scale development, this year, agriculture must be inclusive enough to reach farmers in the remotest areas, enabling them to enjoy as much access to credit, input and information as other farmers. Irrespective of what side one is on with regard to the controversial mobile phone policy, one cannot miss the importance of information to entrepreneurs in a market that is fast changing. To maximise the potential for this transformation, adequate and effective extension is needed. As the government continues to develop the national farmers’ database through the Growth Enhancement Scheme (GES) and other schemes, the ministry and practice sector information/SMS platforms must continue to furnish farmers and buyers with information and help entrepreneurs to reach local and international markets. The proposed development of the marketing and trade corporations is a welcome initiative and the immediate establishment of these corporations and nexus-building between this and the youth employment projects is certainly the way forward.
Aluta continua. With 10 months remaining in the transformation year, the journey ahead of us remains long but laden with infinite possibilities.
Source: BusinessDay
The rhetoric of agricultural transformation through value-added cassava has been around for a while. For many years, many academics, analysts and consultants wrote about the enormous potential the cassava value chain possesses for growth. And then in 2011, the government launched the cassava bread scheme. Months later, the talks about exporting cassava chips to China began.
But what is it about cassava chips that makes manufacturing them worthwhile? For one, cassava chips are a delicious local snack. In a market that has begun to embrace cassava in diverse forms through cassava bread, cassava chips are another way we can have our cake (enjoy good nutrition) and eat it too (support local farmers/industry). And with a profit margin of N20,000 per metric tonne, this is not just nationalistic support but economic advancement through business. Secondly, cassava chips are an important energy source for animal nutrition, with research showing that they can comprise up to 15 percent of animal feed. By replacing maize or other high-energy but high-cost foods in livestock feed, farmers will be able to decrease their production cost while still meeting the nutritional demands of their livestock. And well-fed livestock translates into better prices for sellers and higher quality nutrients (especially protein) for livestock consumers. Lastly, by further expanding the cassava value chain, storage losses can be minimised through the processing of farm produce, and more jobs can be created for people who choose to specialise in the production and sale of cassava chips.
It is no wonder then that in addition to a local need for cassava and cassava chips, there also exists an international demand for it from countries like China. In fact, China reportedly placed orders for 3 million tonnes of cassava chips. This export transaction is projected to fetch Nigeria $272 million. But as it stands, this demand is reported to be much higher than the current national supply. For this reason, the Nigerian Cassava Growers’ Association (NCGA) received a N4.1 billion credit facility from the Bank of Agriculture in order to enable 20,000 farmers to cultivate 60,000 hectares of land. In addition, the Nigerian government is soliciting the Egypt-based African Export and Import Bank for a $40 million loan facility for cassava production. Furthermore, plans are underway to procure 18 cassava milling machines and set up cassava chip processing centres in all six geopolitical zones, including states and cities such as Enugu, Nasarawa, Taraba, and Ibadan.
In the last month, a key debate question has been: where exactly should young people – aspiring agricultural entrepreneurs – come in along the value chain? Should they try to secure plots of land and begin to till the soil or should they look into processing, storage, distribution and marketing? Two weeks ago, a young Nigerian expressed to me his desire to go into agricultural marketing after picking up important marketing skills during a training programme. And of concern to one cassava farmer was how exactly his cassava chips would get to the much-touted Chinese market. With all the developments here and there, who wouldn’t want to be in on the action?
To those looking to take the plunge, there is no straightforward one-size-fits-all answer. Assess your strengths and try to leverage them. Also forge partnerships where necessary to enable you meet your pressing needs. Determine if cooperatives will help you go the whole nine yards of the value chain – or however far you want to go – and network with likeminded or more experienced people in your area of interest. Do not forget to seek out relevant information from your local boards, information platforms and private sector experts.
The other day I came across a video on one of the online Nigerian discussion forums about an agricultural export firm in Southwest Nigeria. Some days later, I found the same service (connecting cassava and other crop farmers to international buyers) being advertised on another website. Although there was no way to verify the claims or service quality of the firm at the time, I was happy to see people already stepping in and exploiting all available avenues for cassava and cassava chips sales. With more people advertising online (through blogs and forums) and offline (through social groups in the community), and old clients submitting reviews, cassava farmers and cassava chip suppliers will be able to compare services and seek out the most reliable and efficient channels of reaching their targeted market and maximising their profits.
At this point, the importance of the debates in January about our agricultural priorities becomes apparent. While infrastructure and financing remain a big challenge to full-scale development, this year, agriculture must be inclusive enough to reach farmers in the remotest areas, enabling them to enjoy as much access to credit, input and information as other farmers. Irrespective of what side one is on with regard to the controversial mobile phone policy, one cannot miss the importance of information to entrepreneurs in a market that is fast changing. To maximise the potential for this transformation, adequate and effective extension is needed. As the government continues to develop the national farmers’ database through the Growth Enhancement Scheme (GES) and other schemes, the ministry and practice sector information/SMS platforms must continue to furnish farmers and buyers with information and help entrepreneurs to reach local and international markets. The proposed development of the marketing and trade corporations is a welcome initiative and the immediate establishment of these corporations and nexus-building between this and the youth employment projects is certainly the way forward.
Aluta continua. With 10 months remaining in the transformation year, the journey ahead of us remains long but laden with infinite possibilities.
Source: BusinessDay
