SAULAWA, Nigeria (Reuters) - Down a winding dirt
track in this sleepy village in northern Nigeria lies a
corn farm which looks much like the dozens that
surround it. The difference is, this one is turning a
profit.
"I can barely lift my 8-year-old. He's the fattest in the
village," said Ibrahim Mustapha, 50, drawing laughter
from his fellow farmers as he pretends to lift up his
chubby son.
The Babban Gona or "Great Farm" project, in northern
Kaduna state, is one of a handful where private
investment is helping former subsistence farmers like
Mustapha make profits for themselves and the
companies backing them.
When President Goodluck Jonathan was elected two
years ago, he pledged reforms that would transform
the lives of tens of millions of farmers who live on less
than $2 a day despite occupying some of Africa's
most fertile land.
Oil remains the main source of foreign currency and
state revenues, but agriculture is by far the biggest
contributor to GDP, making up 40 percent of Africa's
second largest economy.
With 170 million mouths to feed and a growing food
import bill thanks to the disarray in the farming
sector, agriculture ministry officials say there's no
time to lose.
If productivity does not improve Nigeria could face a
food crisis within a decade, its current account surplus
would be wiped out and the credit worthiness of
Africa's second biggest debt issuer would be under
threat.
"If we did nothing, it would be a disaster," Agriculture
Minister Akinwumi Adesina told Reuters in the capital.
"We don't eat oil, we don't drink it ... We cannot
sustain the amount of money we use to import food,"
Adesina said, a Nigerian flag hanging behind his office
chair.
In some cases, the imports substitute for things
Nigerians are growing but can't get to market or lack
the means to process.
The country is the second largest grower of citrus fruit
in the world after China and yet it spends $200 million
(131 million pounds) a year on imported fruit juice
while its own produce rots, Adesina said.
It also produces 1.5 million tonnes of tomatoes
annually of which 45 percent perish, while consumers
spend $360 million on tomato paste imported from
countries such as Italy and China.
CURING DUTCH DISEASE
To succeed, Adesina's reforms will need to reverse the
inadvertent damage done to the sector by Africa's
earliest and biggest oil and gas boom, which crowded
out other commodities.
In the 1960s, Nigeria was the biggest exporter of
peanuts in the world and had 27 percent of the palm
oil trade. It remains one of the world's top cocoa
growers, but production and bean quality have
declined since their heyday in the 1970s.
While an elite allied to a series of military
dictatorships grew rich on the spoils of the energy
sector, millions of mostly subsistence farmers were
given little or no help at all.
The result: Nigeria is now the world's second largest
importer of rice and the biggest buyer of U.S. wheat,
while much of its own fertile land lies fallow. A
booming population has sent its food import bill
rocketing to around $11 billion a year - equivalent to
more than a third of the federal budget.
Agriculture also offers the best chance to cut
unemployment, which feeds an Islamist insurgency in
the north and oil theft in the south. Unemployment is
23 percent and youth unemployment double that,
national statistics suggest.
"Poverty is the source of a lot of the insecurity
problems we have. A hungry man is an angry man,"
Adesina said.
The minister plans to create 3.5 million new jobs in
agriculture and boost food production by 20 million
tonnes by 2015, the year of the next national election.
To achieve this, he wants to boost access to
microfinance for farmers and draw in $10 billion of
foreign investment into farming and food processing.
He has received tentative praise for early successes
from foreign diplomats, bankers and aid agencies, but
big agro-business projects have yet to take off.
Adesina took a corrupt fertiliser subsidy out of
politicians' hands and now farmers are texted subsidy
vouchers directly to their mobile phones so they can
recoup from fertiliser sellers, a policy used in Kenya's
farming reforms.
Seventy percent of farmers now receive subsidised
fertiliser and seeds, compared with 11 percent under
the corrupt programme previously run by state
governments, Adesina said.
LONG ROAD AHEAD
Production of rice, cassava, wheat, sorghum, and corn
are rising and cocoa, Nigeria's most important export
crop, looks set to go up by more than a third this
season.
In 2012, agriculture exports rose by 128 billion naira
(516 million pounds) and food imports fell by 850
billion, Adesina says.
Foreign investors such as food giant Cargill, seed
company Syngenta, brewer SABMiller and Africa's
richest man Aliko Dangote are planning to build
everything from fertiliser plants to food processing
factories.
Yet rice imports still soak up $7 million a day, while
poor infrastructure and policy flip-flopping have in the
past seen farming potential wasted. Farmers needs
infrastructure to get goods to market -- and rural
Nigeria's is as woeful as it gets.
Nigerian billionaire Dangote has pledged to spend $35
million on a tomato paste plant in the northern city of
Kano and $45 million in Cross River state to process
pineapple juice.
Adesina says he has received $8 billion in
commitments but such promises are often not kept in
Nigeria. Cargill and SABMiller told Reuters they are
only "considering" investing.
"I would estimate that no more than one dollar of
investment actually occurs for every $100 of
announced commitments," said Fola Fagbule, an
Africa-focused investment banker in Lagos.
A central bank initiative has issued guarantees on
around 25 billion naira of agriculture loans since it
began in July last year, lifting lending to the sector to
around 4 percent of total loans, from 1.5 percent at
end-2009, the bank says.
The World Bank is putting in $100 million into
agriculture, while British and U.S. aid projects pump
in tens of millions.
This barely scratches the $10 billion Adesina says the
sector needs by 2015. Smallholders say banks still
don't lend to them, while the scheme doles out cheap
money to big firms.
"We've heard it all before and I have never seen it get
better," says Alhaji, a farmer wrestling with two
scrawny long-horned cows dragging a rusty plough
through a field.
"I have 15 children and ... we barely get enough food
to feed ourselves," he said.
BEARING FRUIT?
A few success stories nonetheless give cause for
optimism.
Farmer Mustapha says he made $1,350 per hectare
from his harvest after paying back private firm Doreo
Partners, which runs the Babban Gona project,
compared to previous years where he might earn $
200 per hectare.
"Now I want to grow my farm, I have so much space I
never used. Now I will send my children to school," he
said, while behind him mostly unused farmland
stretched to the horizon.
Doreo is working with 600 farmers. It has ambitious
plans to boost this to 500,000 by 2020, and 5 million
by 2030.
"I know it sounds ambitious but it's been done
elsewhere and Nigeria has so much easy-to-reach
potential," said Kola Masha, the company's head.
Masha is attempting to emulate giant food
cooperatives like CHS in the U.S. or India's dairy
franchise Amul, who make huge profits while helping
millions of smallholder farmers.
He gives farmers high-quality fertiliser, seeds,
equipment and expertise on credit to massively
increase their yields, while negotiating with firms like
Nestle to buy the produce at higher prices than the
farmers could get themselves.
Farmers working with Masha, he said, are using 40
times more fertiliser than neighbours who could never
afford that amount.
"It's early days but I'm more optimistic than I've ever
been," he said.

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