How To Start Agricultural Business in Nigeria or Africa: Complete Guide

How To Start A Lucrative Agricultural Production Business in Nigeria or Africa: Complete Guide | Image: Metrics

Agricultural production is one of the most crucial tools for ending extreme poverty, boosting shared prosperity and feeding a projected population of 9.7 billion by 2050. Agricultural growth is two to four times more effective when it comes to raising income among the poorest, compared to other sectors. Analysis conducted in 2016 found that 65% of poor working adults make a living from agriculture. Agriculture is also vital to economic growth. It constituted one-third of global gross domestic product (GDP) in 2014.

Agriculture is an essential sector of the Nigerian economy in terms of employment, with about 70% of the workforce involved. The agricultural industry contributes just over 20% of the country’s total GDP, although it could be more. Agricultural holdings are typically small and dispersed. Globally, agriculture is mostly subsistent and characterized by simple tools and shifting cultivation. Such small-scale farms produce about 80% of the total global food.

Approximately 30.7 million hectares (76 million acres), or 33% of the land area of Nigeria is used for cultivation. The varied climates in Nigeria, from the tropical coastal regions to the arid Northern zone, make it possible to produce nearly all the agricultural products that can be provided in the world’s tropical and semitropical regions. Nevertheless, large-scale agriculture is uncommon. Despite abundant water sources, favourable climate, and large areas of arable land, production is limited in many areas due to low soil fertility and inefficient cultivation methods. In 2001, agriculture made a contribution of about 32% to the GDP of Nigeria.

Nigeria’s agricultural products can be split into two main groups: food crops produced for domestic consumption, and export products. The country was self-sufficient in food before the 1967 civil war, but food imports increased significantly after 1973.

Despite available oil resources, agriculture remains the base of the Nigerian economy, providing the primary source of livelihood for most people in Nigeria.

There are several reasons one should consider agricultural production as an endeavour. The most basic reason why you should consider choosing farming as a business is that people need food and clothes, and will always do. Farming is precisely the industry that provides food and materials. Apart from meeting needs, a farming business will always be in demand.

More so, given that that the population of Nigeria is continuously on the rise, there’ll be more need for food to meet the needs of the nation’s population. There’s a wave of interest in the agricultural sector in Nigeria. A lot of entrepreneurs are beginning to develop an interest in various areas of agriculture, thereby and transforming it into viably successful endeavours using multiple forms of information technology. As a result, the agriculture sector is fast regaining its agelong respectable reputation.

The agricultural sector is one of the most blossoming industries of the Nigerian economy. With proper strategic planning, any individual having a basic knowledge of farming and manufacturing production and operations can start a profitable agriculture business. If you’re looking to start a lucrative agricultural production business, you will find a helpful guide to help you here.

What Is Agriculture?

Agriculture is the science of producing food, feed, fibre and many other desired products by growing individual plants and raising domesticated (livestock) animals. Large-scale agricultural goods may be classified into foods, fibres, fuels and raw materials (such as rubber). Classes of food include cereals (grains), vegetables, fruits, oils, meat, milk, mushrooms and eggs.

What Is Agricultural Production?

Agricultural production refers to the process of growing, cultivating and harvesting plants and rearing livestock to derive food and other finished products for both human and animal consumption. Agricultural products originate from plants or animals grown to support or improve human life. Food is the most commonly produced agrarian commodity, and the global food supply per person as measured in calories has increased over the past 50 years by more than 20%. Yet for many reasons, we use a vast array of agricultural goods every day, from the garments we wear to the paper we write on. We decorate with flowers mainly provided by agriculture and power our cars partly on farm-made ethanol. We also produce plastics using agricultural materials. New uses for farm products will continue to expand as technology advances at breakneck speed.

Business Opportunities in Agriculture In Nigeria & Around The World

There are countless opportunities in agricultural production. Some of them are:

1). Cassava Farming:

With Nigeria’s increasingly diverse use of cassava products, cassava farming is becoming more lucrative every passing day. For millions of Nigerians, this farm product has always been a source of livelihood and food. Every day, 90% of Nigerian households eat cassava products. Some of the popular cassava meals are garri, wheat-flour, animal feed, commercial caramel and much more.

2). Poultry Farming:

Poultry farming is the method of raising domesticated birds such as chickens, ducks, turkeys and geese for food-grazing purposes. Diverse dairy products are consumed every day, including eggs, chickens, and cheese, among many others.

3). Rice Farming:

Nigeria remains the largest producer of rice in all of West Africa and the third largest producers in Africa after Egypt and Madagascar. Nigeria produces approximately 3.6 million metric tons of rice annually. Interestingly, despite this large production Nigeria still falls short of meeting its local demand placed at about 5.5 million tons.

4). Maize Farming:

The Maize farming business is a food staple in Nigeria. Maize, also known as corn, is said to be one of the most consumed sources of starchy food in Africa. Maize can either be boiled or roasted or further processed into the production of pap, cornflour, popcorn, corn flasks and many more products. For its multiple uses, maize never runs out of demand all year.

5). Pig Farming:

Pig farming in Nigeria is one of the lucrative and profitable livestock businesses. Commercial pig farming is beneficial because pigs are prolific breeders and can deliver 10 to 14 piglets in a single birth. Pig meat (pork) has a high demand since red meat is a good source of protein, and is very tasty as well. The pork market in West Africa alone accounts for about $3 billion consumption value, 80% of which is sourced by importation. That is a lot of untapped revenue for agropreneurs both in Nigeria and Africa as a whole.

And so much more…

Facts and Benefits of Agriculture

The following are benefits of Agricultural production:

It serves as a major source of livelihood
Reduces poverty
Creation of business opportunities among people of all age ranges.
Employment opportunities for youths and graduates
Sources of raw materials for producing other items
Development of the national economy
The UK, India, Russia, China, France and Argentina remain the biggest Agriculture-producing countries of the world.
Benue, Imo, Anambra, Cross River, Taraba and Ondo states lead agricultural production in Nigeria.
Creation of wealth for farmers.
Generation of funds via international trading and exportation of products.
Income generation for the world
40% of the global population are farmers
30% of farm operators worldwide are women.

Types of Agricultural Products

Agricultural products fall into four broad groups which are: foods, fuels, fibres, and raw materials:

1). Food:

According to the U.S., grains and cereal crops are grown on over half the farmed acreage of the world. However, food crops include more than just cereals such as wheat and corn. Food and dairy products such as milk and honey and farmed fish are also organic food products.

2). Fuels:

Ethanol, made from corn, sugar cane or sorghum, is the most commonly used agricultural fuel product. In addition, agricultural by-products such as straw sugarcane are also burned to produce power.

3). Fibres:

Fibre crops include cotton, wool, and silk. Farmers use hemp to make linen, rope and flax. You can also use bamboo fibre to make cloth.

4). Production of Raw Materials:

These are agricultural products used for processing other agricultural products. Almost all farm products can be used to generate other products which may or may not be edible.

How To Start An Agricultural Business in Nigeria: Step By Step Guide

1). Identify The Sector Of Agriculture To Venture Into:

There are different sectors of agricultural production in Nigeria, so its best to choose the sector that best suits you, your level of financing and the level of your return. This is because some sectors are capital-intensive while some are less capital-intensive. In the same vein, some agricultural businesses have short-term returns while others yield returns over a long term.

2). Get The Technical Know-How Involved In That Sector:

After identifying the sector of agricultural production you want to venture into, it is best to acquire all the technical skills needed to venture into the sector. This is a crucial step, as your success in any field of endeavours would be significantly influenced by your knowledge of that field.

3). Draw Up A Business Plan:

After acquiring the skills needed for this endeavour, it is now time to draw up a budget and count the cost required to venture into the sector of your chose. It is also essential to draw up a workable and very detailed business plan to help you prepare adequately to start up your business.

4). Source For Funds:

The next step is to source for the capital needed to run the business. You could generate funds by taking loans from banks, seeking investors or borrowing from friends and family, or applying for grants from the government.

5). Acquire A Production Site Of Farm Land:

The next step after acquiring your funds is to secure a production site or farmland, which can be gotten through outright purchase or by renting the property for a specified period. Ensure that your farmland or production site suits your agricultural business.

6). Acquire Necessary Tools and Labour For Production:

This is the last stage of starting agricultural production. After acquiring a property, it is time to set it up for production. This stage involves getting all necessary tools, machines and goods as well as the labour needed to commence production.

Challenges Of Agriculture In Nigeria

Bad government policies
Unavailability of funds
High cost of production
Bad road network
Lack of adequate skilled labour
Lack of machinery for mechanised production
Poor power supply in the country
Little or no attention is given to research into advancing production
Some farm produce are seasonal
Lack of storage facilities
Unfavourable international market policies
Mistrust between farmers and marketers of farm produce
Lack of chemicals to control pests and diseases
Lack of government aid and support
Absence of loans and grants for farmers and agropreneurs
Exposure to thieves
Inexperience among local farmers
Lack of standard varieties of seeds for planting

To Sum It Up

Agricultural production business can never go obsolete because there would be demand for food which would mean more demand for agricultural produce. The agricultural production business in Nigeria can be a lucrative and profitable venture to start-up, due to its vast market demand and on your ability to build a wide supply chain network. If you’re looking for a supply chain business to venture into, the agricultural business in Nigeria is a great option to explore.

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