Why commercial farming in Nigeria is so hard

Apr 13th 2013 | GITATA |From the print edition

SEVEN years after 18 white Zimbabwean farmers settled on a chunk of land in Nasawara state at the invitation of the then governor, only one family is still there. All the others have given up in despair. Bruce Spain, aged 35, and his father Colin, 66, together with their doughty wives and a pair of toddlers, are hanging on—but only just.

On flat, dry scrubland two hours’ drive east of Abuja, the capital, the Spains and their Zimbabwean compatriots have experimented with a variety of farming enterprises. But crop yields were dismal, mainly due to poor-quality seed and fertiliser. Spares were hard to get when machinery broke down. The Spains’ last hope is a factory that churns out chicken feed. “Until good seed is available and the theft factor is dealt with there will be very little commercial farming in Nigeria,” says the older Mr Spain.

The litany of problems seems endless. “There’s just no organised marketing here,” says the younger Mr Spain. “No marketing boards, nothing—in Nigeria you’re on your own. In Zimbabwe you knew what your pre-planting price was—and the government guaranteed to buy what you grew. There are no support structures…In Zimbabwe you’d send a soil sample to the fertiliser company and they’d tell you what sort would be best. There’s nothing like that here.”

The Spains have no mains electricity, no piped water, no land-line, no trained labour force, no one handy with basic accountancy, no available research facilities, no easy access to agricultural data. Roads are lousy. Theft is endemic.

The biggest initial headache was persuading a bank to make a long-term loan at less than 20% interest. And when a bank did agree, the money might not come through. “It was always next week, then next week,” says the younger Mr Spain. “That’s the general story in Nigeria.” For two of their first five years they did no farming, due to the lack of bank finance. “You always need contacts,” he sighs. “Corruption can be helpful,” he chuckles. “At least it means if you want something done you can get it done—instantly.”

The older Spains, resilient as ever, have built a neat single-storey house surrounded by a tall electric fence on a rocky outcrop. It is reminiscent of Zimbabwe, where their farm was confiscated; during the guerrilla war, before independence in 1980, their homestead had been burned down. Here in Nigeria, in the searing heat, they sleep peacefully on the veranda under a mosquito net. “We get malaria between three and six times a year.” It seems the least of their worries.

The Spains have no mains electricity, no piped water, no land-line, no trained labour force, no one handy with basic accountancy, no available research facilities, no easy access to agricultural data. Roads are lousy. Theft is endemic.

Dibiachukwu: Nigerians have been farming here with very little complaints. This is why the Nigerian farmer is the most suitable farmer to farm in Nigeria. Support Nigerian farmers. If all these facilities were available, don't you think the Nigerian farmer would do better too.

wesley80: ^ So why didnt those in Kwara state fail as well? Perhaps Kwara state is no longer in Nigeria is it?

wesley80: ^ So why didnt those in Kwara state fail as well? Perhaps Kwara state is no longer in Nigeria is it?

What the experience of the less successful of Zimbabwean white farmers in Nigeria tells us about developing commercial agriculture
Oct 16, 2010

The 19 white Zimbabwean farmers who arrived in Nasarawa State in 2006, on the invitation of the state government, were given a mandate to develop commercial farming to a scale unheard of in the country. This effort followed on the progress recorded by an earlier initiative in Shonga, Kwara State.
The promise of a new land tenure, a guarantee for a loan facility, security and infrastructure became a rallying point for the farmers, who hoped to begin a new life in Nigeria growing cassava, maize, soya beans and rearing pigs and cattle in commercial quantities. The state government provided the essential capital, which they were denied in Zimbabwe: over 10,000 hectares of land. But just less than a year after, the realities and the uncertainties that ranged from poor infrastructure such as access roads, flooded rivers, to late season cultivation, affected the yields, forcing eight of the farmers to leave in 2007.

"These were people who had to live in very basic conditions, away from their wives and families," said Colin Spain, a farmer in Farm 10. "The challenges were almost too much in the first year, although we fortunately found four new farmers to replace the ones who left." But three and a half years down the path, the challenges that pushed some of the farmers away have not abated, in a scheme reported to employ over 2,500 locals. Of the initial number of farmers who came in 2006, only eight are left today for a project the Nasarawa authorities hoped will assist food production and help develop agriculture in the country.

The farmers said the conditions under which they have worked over the past years are different from those agreed with the government and the financial institutions which agreed to provide a long term funding for the plan. And as a result, yearly projections have scaled down significantly and even
becoming worse in cases where farms lay fallow many months through the season, as a result of lack funds.

"Commercial farming obviously will be made difficult without long term loan," said Patrick Ashton, a specialist mango farmer at Panda, the site of the project. "But the banks here do not want to lend long term. If you cannot pay for your house in five years, I simply cannot repay agricultural credit in five years." An agricultural economist in Abuja said the coming of the Zimbabwean farmers have exposed the flaws within the nation's agricultural sector. He said Nigerian banks are not used to issues of agricultural loans, hence the difficulties the farmers face assessing them. Mr. Ashton said the bank involved has maintained a largely unstable rate system, which has not assisted the project.

The UBA Plc, which offered the first loan to the farmers in 2007, accepted that it will be on the basis of eight per cent interest. The interest rate has since oscillated between 19 per cent and the present 24 per cent, even with the intervention of the Central Bank of Nigeria.

"Over half of the money graciously granted us, is gone to interest rates," Mr. Ashton said.
Several calls to get the reaction of UBA for this story did not succeed. One of the spokespersons for the bank, Nasir Ramon, repeatedly promised to get back with information over a period of two weeks.NEXT, however, learnt that the bank refused to grant additional funding to the farmers because of the interest rate issue.

Interest rate trouble

For instance, Mr. Spain lists the planned cropping for 2009 to include the cultivation of 2,590 hectares of cassava, 410 hectares of maize, 210 hectares of rice, 1,000 head of cattle and others -including piggery, poultry, bananas, potatoes and vegetables - with a total labour cost estimated at over N104 million.

The plan, Mr. Ashton said, has been "destroyed by bank failures to provide funds as contracted. They seem not to know what they committed themselves to." For the 2008 season, the farmers said enough finance was released to enable timely cropping. However, half-way through the season, they said the
bank refused to release the other sums of finance. This meant crop maintenance was not completed and this caused significant loss in yields and, therefore, significant lower returns than budgeted and expected.

The revenues from the 2008 season were used to finance land clearing and, later, some cultivation for 2009, Mr. Ashton said.

However, in most cases, cultivation went down to as much as 90 per cent on 2008 levels. At the moment, 30 months after negotiations commenced on funding, the project got a little respite in August, 2009, when some money was released to the farmers.

The Permanent Secretary in the Nasarawa State Ministry of Agriculture, Peter Okaba, told NEXT that the poor funding of the project was due to a restructuring of the scheme, particularly with respect to the interest rate which the government "insists must be reversed to its initial charges." "To my knowledge, the government said the current rate is too high and called for a reversal. The matter is with the executive council for now, and I cannot say of its outcome," he said, advising that the commissioner, Oyigye Iyimoga, who was unavailable to NEXT, would be the most competent to release details of the government's decision on the funding and other challenges of the farmers.

Again, although the farmers said the state government and the community of Panda have been reasonably supportive, some indigenes said they suspected the project may not be receiving as much attention from the governor, Akwe Doma, as it got from the immediate past governor, Abdullahi Adamu, who initiated it.

"I think the government continues with it without a choice," said a man who gave his name as Musa Mohammed. "The fanfare has really reduced about it and the government may be using it for their politics." But Iliya Bello, a doctor of agronomy who serves as an adviser to Mr. Doma, said whatever
challenges the scheme faces falls within the normalcy of any enterprise.

"It cannot be true that the governor has less interest in it," he told NEXT in Lafia. "Any business comes with challenges, which the businessperson solves over time. Nasarawa State is largely agrarian, and any leader who wants to have a direction cannot do without agriculture. The project has started, and it will be there." Mr. Bello, incidentally, is a native of Panda, a distance of about 150km east of Abuja where the farmers were given 20 farms in 2006. He said the governor has also started a N1 billion small scale farming scheme that does not include the Zimbabwean farmers. "He cannot do that if he does not believe in agriculture, " he said.

Inherited tenure troubles

But whatever might be afflicting the farms could certainly be traced beyond Mr. Doma's tenure. For instance, the former administration of Mr. Adamu assigned the farms on a location with unresolved communal issues. Some of the residents still lay claims to the land allocated to the Zimbabwean
farmers.

One of the farmers spoken to by NEXT said in 2008, he lost about seven and a half percent of his gross turn-over to intrusions from unrestrained nomadic farmers who graze the area with their cattle. This affects about eight of the farms "That is about 40 per cent of my profit," the farmer said. "We are very fortunate to have very supportive people around, but this is business, and you get helpless sometimes."

So there we have it, a detailed exposé of all the interlinked factors that the farmers in Kwara state have enjoyed but those in Nasawara have largely lacked. And guess what folks: very different support conditions, ergo very different results!

The white farmers of Zimbabwe developed their group farming expertise over decades. Along with their willingness to work hard was the cheap labour of the Africans and support from successive governments going back decades before independence in 1980, which government support continued for a good many years into the independence era before the farmers fell out with their erstwhile pal Robert Mugabe.

The white Zimbabwean farmers earned their reputation for farming prowess over a long period of time under a special set of conditions. Remove enough critical parts of those conditions for success (political commitment over the long term, security of land tenure, access to affordable and long-term finance, infrastructure in place, access to inputs and markets, etc, etc) and it doesn't matter how knowledgeable or committed those farmers are; you end up with failure.

Both the Zimbabwean and Nigerian governments in their different ways seem to stubbornly refuse to learn these basic lessons in order to create viable indigenous commercial farming sectors. So you find that the Zimbabwean government had the naive, silly idea that if they just drove the white farmers out of their bungalows and put in favoured blacks who had no particular interest in farming seriously and had no interest in going through the decades long learning curve that had resulted in the white farmers being such mighty big-scale tillers of the land , everything would somehow magically turn out alright.

Nigeria has seemingly decided to learn from the experience of Zimbabwe's once powerful white farming sector in a similarly shallow way. Nigeria's 'brilliant' idea was not to apply and modify the lessons of the white farmers to the task of designing a home-grown, indigenous commercial farming sector but to hope that the model and the success could simply be transplanted whole from Zimbabwe by importing a few white farmers!

In Kwara state where the authorities seem to have thought things through holistically and made the commitment to bend over backwards to put in place as many of the support factors the Zimbabwean farmers needed to try to replicate the success they had built up in Zimbabwe over decades, there are already promising early signs of eventual success.

But in nearby Nasawara where many of these factors are missing, the experiment is floundering, just as in Zimbabwe agriculture has stumbled after a naive government destroyed one model of farming without giving any thought to devising and then supporting a replacement model!

I have connected enough of the dots, anyone can fill in the rest to draw a picture of the hard, long-term thinking work that Nigeria and Zimbabwe need to do to develop serious commercial farming sectors dominated by "indigenes", but which neither country seems the slightest bit interested in doing.

wesley80: ^ Nigeria produces about 1.8mt of rice per annum but require about 5.5mt of rice, you expect a handful of Zimbabwean farmers to bridge that gap cos they are termed "successful"? And how does their failure to bridge the gap in rice production translate to failure? I'm really curious.
Meanwhile here's a piece from Bloomberg news celebrating the success of supposedly failed and frustrated Zimbabwean farmers in Nigeria.


mobile.bloomberg.com/news/2012-10-10/nigeria-gains-from-zimbabwe-as-farmer-helps-cassava-drive.html


So you were saying?

One of the farmers spoken to by NEXT said in 2008, he lost about seven and a half percent of his gross turn-over to intrusions from unrestrained nomadic farmers who graze the area with their cattle. This affects about eight of the farms "That is about 40 per cent of my profit," the farmer said. "We are very fortunate to have very supportive people around, but this is business, and you get helpless sometimes."

eGuerrilla: @Wesley/@Gbawe,

You've both shared some interesting insights here, thanks.

Still trying to get my head around the absence of important safe-guards highlighted in Nasarawa.



Can there be any doubt these farmers were predestined to fail?

redsun:

I mean,it translate in the sense that if nigerian farmers,not just the imported zimbabwean oyinbos are really successful,they will fill that gap of billions of dollars of rice import.That is just rice,not spaghetti,semolina,potato or tomato paste.

There are industries too create,jobs to fill,resources to use and monies to be made.All the country needs are good policies and sacrifices.

redsun:

I mean,it translate in the sense that if nigerian farmers,not just the imported zimbabwean oyinbos are really successful,they will fill that gap of billions of dollars of rice import.That is just rice,not spaghetti,semolina,potato or tomato paste.

There are industries too create,jobs to fill,resources to use and monies to be made.All the country needs are good policies and sacrifices.

aasog1: I ventured into farming 5 years ago because of the occasional hiatus and drought of customers in real estates. It was the biggest mistake I've ever made. I've applied for numerous loans, government grants, been to BOI, and nothing happened. Once, the late Umar Musa Yaradua ordered banks to disbursed 100Billion Naira agric loan to farmers, and on getting to my bank at UBA, Sango-Otta, Ogun State, my bank manager sincerely told me that the funds is meant for just 10 farms in Nigeria, as the federal government requires I have a collateral worth 300million naira before they can give me the loan. Isn't that madness of the highest order? Agriculture in Nigeria is totally discouraged. Even BRF through his Nafada implemented program got swindled by all these political farmers who keep embezzling funds meant for small time farmers like me. Right now, I've converted my 2 acres land to a plantain farm, shut down my poultry and catfish pond and snailery and I'm dying under the weight of debts I'm owing Grand Cereals the suppliers of the feeds I use, and also Lanre Hatchery. I'm a total mess right now, and often I have nightmares when I think of how often my chickens die, and everything cost like hell. Farming in Nigerian is just for politicians. If OBJ wasn't a crook, and stole enough, I'm sure his farm would be dead by now. For the youths, stay of farming. I'd rather sit in an office and keep selling properties.

aasog1: I ventured into farming 5 years ago because of the occasional hiatus and drought of customers in real estates. It was the biggest mistake I've ever made. I've applied for numerous loans, government grants, been to BOI, and nothing happened. Once, the late Umar Musa Yaradua ordered banks to disbursed 100Billion Naira agric loan to farmers, and on getting to my bank at UBA, Sango-Otta, Ogun State, my bank manager sincerely told me that the funds is meant for just 10 farms in Nigeria, as the federal government requires I have a collateral worth 300million naira before they can give me the loan. Isn't that madness of the highest order? Agriculture in Nigeria is totally discouraged. Even BRF through his Nafada implemented program got swindled by all these political farmers who keep embezzling funds meant for small time farmers like me. Right now, I've converted my 2 acres land to a plantain farm, shut down my poultry and catfish pond and snailery and I'm dying under the weight of debts I'm owing Grand Cereals the suppliers of the feeds I use, and also Lanre Hatchery. I'm a total mess right now, and often I have nightmares when I think of how often my chickens die, and everything cost like hell. Farming in Nigerian is just for politicians. If OBJ wasn't a crook, and stole enough, I'm sure his farm would be dead by now. For the youths, stay of farming. I'd rather sit in an office and keep selling properties.