Sustaining Agribusiness in the Midst of Economic Crisis in Nigeria

by ONIFADE, Precious Abimbola  Federal University of Agriculture, Abeokuta (FUNAAB), Nigeria INTRODUCTION Nigeria is endowed with abundance of arable land with varieties of agricultural produce such as palm oil, cocoa, groundnut, beans, melon, corns, rice, among others. As at 1960, the agricultural sector contributed over 60% to the GDP despite the reliance of Nigerian peasant farmers on traditional tools and indigenous farming methods, and these farmers also produced over 70% of Nigeria’s exports and 95% of its food needs. However, the root cause of crisis in Nigeria agriculture lies in the total neglect by successive government through payment of lip services to the sector. Since the discovery of oil, there was focus shift from being an agriculture - dependent country to a crude oil - dependent nation. Nigeria has been faced with a lot of economic problems in the recent years, coupled with the effects of the COVID – 19 pandemic, and this problem has in one way or the other affected the sustainability and development of Agribusiness. The Nigeria Bureau of statistics [NBS] states that Nigeria is at its worst economic recession experience in the past 29 years. The agribusiness sector of the Nigerian economy is not spared from the scorch of this economic crisis as evident in the high cost of inputs in the farming business. The agribusiness sector in Nigeria includes all farms and firms involved in producing, harvesting, packing, processing, preserving, distributing, marketing, and disposing of food and nonfood agricultural products. Those activities could be classified into the following categories:

1. Agriculture: The agriculture segment of agribusiness includes all of the classical agriculture sector GDP: the primary production of all crops, livestock, forestry, and fishing.
2. Processing: The processing segment includes the part of the manufacturing sector GDP that involves processing, value addition, and preservation of food and nonfood agricultural products. Examples include food processing, beverages, tobacco, cotton yarn, and timber.
3. Trade and transport: The trade and transport segment includes the part of the services sector GDP that entails transportation, storage, logistics, and trading for agricultural commodities and products between farms, firms, and final consumers.
4. Food services: The food services segment is the part of the classical services sector GDP that involves the preparation and sale of food outside the home (for example, restaurants and street vendors).
5. Hotels: The hotels segment includes the part of the hotels and accommodation GDP associated with food.
6. Inputs: The inputs segment includes all GDP generated during domestic production of the inputs used by farmers and processors, excluding the inputs produced by the above five segments.

HOW TO SUSTAIN AGRIBUSINESS IN THE FACE OF THE ECONOMIC CRISIS IN NIGERIA

1. Agricultural development via empowering the rural farmers:

The goal of self – sufficiency starts with empowering the rural farmers. Rural farmers are often ignored, yet the country depends on them for food. The persistent use of traditional/manual farming system drives low agricultural productivity in the country. For sustainability to take place through the rural involvement and development, then there must be provision of farm tools and machines at affordable prices, periodic maintenance of farm tools and machineries, provision of good transportation system, adoption of mechanized farming, provision of processing and storage facilities, provision of reliable electricity, improvement of post- harvesting activities and setting up of functional and reliable agro- allied industries. All of these, coupled with the right information and innovation scheme, will help in sustaining agribusiness in this harsh economic situation. Also, sustainability will not be effective without implementation. The government are to implement policies that would create a thriving environment. Information and funds need to get to the actors (farmers). To sustain the programme, proper supervision of the farmland and progress report is necessary from those that got assistance from the government. Otherwise, it will fall back like the old saying that “government money is no person’s money.”

2. Private- public partnership and enhancement of market linkages:

Apart from improving farm output through increased incentives to small holder subsistence farmers, achieving sustainable economic development in Nigeria will also require a private- public partnership in creating off- farm jobs or wage labor opportunities, in commercial agriculture or agro- based industries. The federal government through its various agencies and ministries should build linkages and promote greater mobility between rural and urban areas. Market linkages are important for agribusiness to acquire inputs at minimum prices. When competition in an industry is high, more money is spent on advertising, market research, publicity, labor and customer satisfaction. An effective linkage with markets can ease complications and trade implication at both regional and international levels.

3. Support for SMEs:

Small and Medium Enterprises [SMEs] are a worthy key factor to sustain Agribusiness in Nigeria because generally SMEs are viewed as the backbone of an economy because of their role in lessening poverty, employment creation, foreign trade promotion and technique innovation and facilitation equitable distribution of income. The recession isn’t helping matters and the attitude of the government towards SMEs is the greatest challenge. Until the government realizes that sustainability of Agribusiness starts with the rapid growth of the SMEs, especially in the rural areas, then there is no way forward for sustainability.

4. Efficiency of the Agricultural value chain:

Nigeria should realize that by allowing the import of goods that can be produced in Nigeria, we export wealth and jobs to those countries and import recession, unemployment and poverty to Nigeria.  In Nigeria, it is estimated that only 10% of diary, 10% of cassava, 20% of rice, 30% of cocoa, 60% of maize and 10% of tomatoes is being processed. If the agricultural value chain is well utilized, we would not have any course to import goods that can be produced and processed in Nigeria.

5. Collaboration among agribusiness owners

All actors in the food ecosystem need to collaborate by sharing information across value chains and between sectors. This is especially critical during times of crises, given the irrational behavior of actors around hoarding and price gouging that is often fostered by misinformation. Also, the value chain is very long and can accommodate virtually everyone (as many as possible). When actors (agribusiness owners) pick a niche, collaborate with others, and spread more to attending trainings, joining associations and cooperatives, the effect of Agribusiness will be recognized even in this period of recession. Also, actors in the agribusiness sectors should only take calculated risks. The recession is not encouraging neither is it helping matters. It is only those that know their "why factor”, that are ready to face challenges and key into opportunities, that will actually remain in the sector and make recognizable impact in the economy. CONCLUSION In conclusion, the agribusiness sector provides perhaps the best opportunities to accelerate inclusive recovery from the 2020 recession while generating more and better jobs. As such, there is a serious need to fashion out various ways to help keep agribusinesses afloat during the current economic hardship in Nigeria. Dear reader, what are the ways or methods you would suggest for agribusiness owners to adopt so as to survive this economic crisis, be able to stay in business and make reasonable profit from their enterprises? Let us hear your thoughts and opinions in the comments section.  

References

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