Valore 101

Ibrahim Mustapha grows maize in Katsina. He and his family grow their crop on a 1.1-hectare farm. The 50-year-old has been farming this small-scale way all his life. In a given year, Mustapha would be lucky to harvest 1.4 metric tons of maize — one-fifth the yield farmers in Brazil and China can expect. To match their production, he’d need to invest about $500 per hectare. But Mustapha earned only around $600 a year — and that was if the weather cooperated.” — Harvard Business School Stories, 2014

The struggles of Ibrahim cited from this article are not peculiar to him. In fact, most smallholder farmers in Nigeria, a majority of the agricultural labour force, have similar stories to tell: low yields and low earnings.

But these symptoms don’t stem from the fact that majority of our farmers are smallholders. Considering the fact that about 80% of all ‘Made in Nigeria’ food you consume comes from small farms, I would say they are collectively doing enough to feed Nigeria.

I think that the problem with agriculture in Nigeria lies much deeper.

Let’s look at another scenario of a typical Nigerian smallholder farmer:

Old McDonald has a farm behind his home. On his farm (measuring about 1 hectare), he grows food crops mainly for his family to consume; whatever is left from his harvest after his family eats gets sold at the village market or to middlemen.

Meet Old McDonald and his family

Now, past experiences have taught our Farmer Old McDonald to expect a fairly consistent output (let’s say X tons) every harvest season.

If, for one reason or another (fell ill, drank too much pammy, harsh weather conditions etc.), Farmer McDonald slacks during a planting season, he knows that he will achieve less than X tons. He also knows that means he’ll have some explaining to do to his wife when she queries him about where she’s supposed to find food to feed the family, or money for school fees and jewellery.

On the other hand, let’s say our farmer decides to be ‘sharp’ and wants to grow more in order to harvest more than his usual X tons. All things being equal, there would be more cha-ching at the end of the season for him to blow.

Money for Mercedes Benz

But reality has taught him that isn’t always the case. First, he would need to invest in farm inputs: labour, seed etc. Then he’ll need to invest in storage; then distribution to get the goods to the market. But the worst lesson reality has taught him is that he is at the mercy of the middlemen. If he doesn’t want to end up making distress sales, he has to sell his goods to middlemen at a price which is, most times, not in his favour.

To illustrate these scenarios in a graph, I would say it looks something like this:

Think of X as the Optimal Farmer’s Harvest Output. Harvesting more than X at the end of a planting season is not necessarily in his favour because his Return on Investments don’t match the efforts he puts into production.

When you look closely at the story of Old McDonald and Ibrahim Mustapha, you notice 3 similarities: they both experience high cost of production (investments), low Return on Investment (earnings) and low productivity.

Therein lies the true problems of agriculture in Nigeria.

The factors of production are too cost intensive for smallholder farmers in Nigeria to make favourable profits. This is also hindered small farmers from adopting modern agricultural practices, thus leading to low productivity. In fact, these costs are so high, it is more cost effective for suppliers to import food than to buy from local farmers (one of the reasons why our import bill is high; and imported frozen chicken from Togo is cheap, but that’s another topic for another day).

All this talk by our Government that we should start patronising Nigeria’s agricultural produce or go back to farming is misguided until these problems have been solved. Their focus should be on making agriculture more competitive instead of banning the importation of food. While I applaud their noble intentions, this only helps to create black markets which hurt the local farmers they are trying to help in the first place.

At Valore, we believe in the potential of small farmers to unlock Nigeria’s true wealth. What we intend to do is add value to the agricultural processes of smallholder farmers by ‘industrialising’ their farming activities.

Let’s bring back our graph again. What we intend to do would change the graph to this:

What has happened now is we have helped shift the optimal harvest output of the average smallholder farmer to the right meaning he can increase his yields (and earnings) within a planting season; we’ve also raised the curve higher meaning the average farmer can achieve a higher return on investments from his activities and investments.

These are our intentions. How do we want to achieve them?

First, we will be creating new market opportunities for these smallholder farmers. This means introducing them to more valuable supply chains such as exports and private sector partners who require their produce. By selling their produce though our value chain, they can earn more from their produce.

You might read that and say, ‘Oh, so you guys are just another middleman *side-eye*’.

No.

Think of us more as ‘agents’ and smallholder farmers are our ‘clients’; which brings up the next thing we’ll be doing. We’ll be growing alongside smallholder farmers also to introduce them to more innovative farming practices. Essentially, we are teaching our clients how to grow more in order to earn more.

This aligns with our vision of eradicating hunger and poverty in Nigeria, by feeding Nigerians with our produce. If we can achieve this, then we can massively increase Nigeria’s overall agricultural production and per capita production. This is key to the Valore vision.

Now I just mentioned ‘our produce’. In the process of ‘industrialising’ the activities of smallholder farmers, we’ll be introducing them to marketing. We shall be branding our smallholder farmers’ produce to increase their demand in the market. That way, we can also exhibit our Valore brand and make it recognisable. So watch out for our Valore food coming soon to take over your Local Government Area.

So there you go. Now you know about us, Valore, and our grand schemes. Allow me to introduce myself. My name is Farmer T and I shall be regularly sharing stories about our farm experiences, our views on various topics concerning farmers and also updating you about the communities we operate in.

(I’ll also be selling our brand online but that’s just by the way).

Welcome and together, let’s make agriculture in Nigeria valuable again.