Nigeria's fixation on its oil industry has left the agriculture sector largely undeveloped. In recent years, however, there has been a shift in thinking and the country has identified agriculture has the main driver of future economic growth. Kwara State has been the clear leader of this agrarian revolution. With enabling government policies, the state has seen a number of significant investments in the sector. The goals of the state government are to ensure that Kwara State produces enough food for the local population as well as to export to the rest of Nigeria and international markets. Agriculture must be seen as a business, with more commercial farmers. The state has nearly two million hectares of uncultivated arable land which it wants to put to work. A favourable climate and good soil support rain-fed agriculture and livestock production. 

The natural vegetation consists broadly of rainforest and wooded savannah. The landscape of undulating hills, valleys and plains is traversed by the tributaries of the Niger River. Annual rainfall is between 1000mm and 1500mm, while the average maximum temperature ranges between 30' C and 35' C. Opportunities for investment include direct cultivation of crops, agri-processing, transport, the provision of agricultural inputs and the marketing of produce. Investors can easily acquire land with the assistance of the state government. Numerous incentives are also offered to attract investment to the sector.

 

 

New Nigerian Farmers
Kwara State's flagship agricultural project is the Commercial Agriculture Initiative in Shonga where a group of displaced farmers from Zimbabwe were invited to start with commercial farming. Thirteen farmers relocated to the state and are currently involved with the production of dairy products, poultry and the cultivation and processing of a range of crops such as cassava, soya beans, maize and bananas, among others. Despite some initial challenges, the project has become a huge success. The dairy syndicate is already producing its own brand of milk and yoghurt drinks. A cassava processing facility has been established and some crops are being supplied to Africa's largest retailer, Shoprite. With modern irrigation systems coming on-stream and world-class poultry facilities finally completed, the New Nigerian Farmers are set to go from strength to strength. The state government has already identified land for a similar project in the Asa Local Government Area. See case study on page 40 for more information. 

Empowering local farmers
The state government is looking for the techniques used by the Zimbabwean farmers to pass on to the local population. Agriculture inputs such as tractors and fertilizer are currently sold or hired to farmers at much subsidized prices. At the Integrated Youth Training Farm in Malete, students are taught about various advanced farming practices. After completing the course, graduates are provided with five hectares of cleared land and a loan to facilitate their early resettlement as a young generation of commercial farmers.

Agricultural institutes located in the state are the Agricultural and Rural Management Training Institute, the National Centre for Agricultural Mechanization and the Niger River Basin Development Authority, all in the capital llorin. The International Institute of Tropical Agriculture research station is also doing trials on new seed varieties in Kwara State.

Crops
The focus in Kwara State is on the cultivation of six crops: cassava, rice, .maize, cow pea, soya beans and groundnuts. Other crops that can be grown include cashew nuts, yams, beans, sugar cane, and cotton, cocoa, coffee, tobacco and palm produce. Various fruits and vegetables such as tomatoes, mangos, oranges, pineapples and bananas are also cultivated in the state. Another area that holds good potential is cut-flower production. A delegation from Kwara State recently travelled to the Netherlands where cut-flower export opportunities were discussed. The new cargo terminal at lIorin International Airport means that cut flowers can be in Europe within six hours of harvesting.

 

 

 
Agri-processing
Kwara State cannot achieve the economic growth it envisages by merely exporting raw materials. If the state fails to add value, it would be labouring in vain. Statistics from the International Coffee Organisation show, for example, that '" for every dollar earned by local coffee farmer, traders and firms further up the value-adding chain received $13. The state has seen a large number of investments in the area of agri-processing. Through its local subsidiary, Olam Nigeria, Singapore-based Olam International invested in a cashew-nut factory at Ogbondoroko. The facility processes cashew nuts, bought from more than 5 000 local merchants, exclusively for the export market.
The opening of Dangote Flour Mills in lIorin is further confirmation of the state's attractive investment environment. In the area of ethanol or biofuel production, Kwara Casplex Limited has announced that it will produce ethanol by using cassava as an input.

Casplex also has similar projects which are at an advanced stage of implementation in Oyo and Ekiti states. The team of Nigerians has taken on Chinese partners to assist with the technical aspects of the project. Using the oil from Jatropha seeds to produce biofuel also has potential in Kwara State.
Prospective investors can either cultivate their own crops or buy from local farmers and focus solely on processing activities.
 
Livestock
  The climate and vegetation of Kwara State is well-suited to the rearing of livestock. The Zimbabwe farmers imported 800 Jersey cattle from South Africa and are looking at cross-breeding this milk-producing cow with the hardy Zebu cattle found in Kwara State. At present, Nigeria imports 48000 tonnes of dry whole milk, 30 000 tonnes of evaporated milk and 16000 tonnes of dry skimmed milk every year. The projected growth in dairy output in Kwara State will generate a potential US$21-million saving in foreign exchange outflow.

   
A sizeable cross-border trade in cattle is already taking place in Kwara State. Cattle are being brought in from Benin and are then sold for their meat within Nigeria. Opportunities exist to set up a modern abattoir near the border which will allow residents to buy packaged meat instead of live animals. Poultry accounts for nearly 10% of Nigeria's agricultural output, although many chickens are bred on a small scale basis. Significant potential exists for large-scale poultry production, of both eggs and broilers. A company called African Chicken Farm has already acquired land in the state and will have a capacity of 12 million broiler chickens per annum. Goats are also found in the region and the meat is very popular with Nigerians. 

Fish farms
Kwara State has many rivers and water bodies which would serve as good locations to set up fish farms. Opportunities exist in various areas of the aquaculture sector, including the production of table fish, the construction of fish farms, the provision of storage facilities, fish seed multiplication and financing. The foundations of a new fish-farming estate in Omu-Aran were recently laid. The facility comprises four hatcheries, 100 ground tanks, a feed mill and a fish-processing unit.

Investment Opportunities in Agriculture

Processing of cassava

Cassava can be processed into a number of products such as starch, flour, chips, ethanol and glucose syrup, to name a few. These products are in high demand locally and also have significant export possibilities.

Sugar-cane refining
Nigeria has a total demand for sugar of 120000 tonnes per annum and of this, only 55000 tonnes are produced by local sugar firms, while the balance is imported.

Fruit-juice production facility
Kwara State’s climate is conducive to the growing of fruits and vegetables such as mangoes, pineapples, bananas, tomatoes, etc. The project includes the planning, construction, installation of equipment and operation of the facility.

Agric malls and equipment leasing
Agric malls are facilities where farming equipment and inputs are stored and made available for farmers to rent. There is a significant market for equipment hiring and good returns on investment are possible. Farming inputs required include: tractors and accompanying implements, fertilizer, seeds herbicides, insecticides and poultry medicines and vaccines.

Fish farming
Nigerians are large consumers of fish and it remains one of the main sources of animal protein. Only around 50% of demand for fish is currently being met by local supply.

Rice Production
Local production cannot meet Nigeria’s demand for rice and the country spends large amounts to import the commodity. Olam international is investing in a rice mill in Kwara State for which land has been allocated. The company will also sponsor an out-growers scheme through which it will buy rice from local growers.

Second commercial agriculture project
The administration is looking for investors to participate in a second commercial farming project. A total of 20000 hectares of land has been identified in the Asa Local Government Area. The land is similar to Shonga with plenty of surface and underground water.

Cultivation and processing of soya beans
Nigerians have recently turned to soya beans as an alternative source of protein to meat and other protein-related food supplements. Kwara State has an excellent climate to grow soya beans and the current administration will do anything in its power to assist investors in both the cultivation and processing of the crop.

Cashew-nut processing
  Nigeria is the world’s fourth-largest producer of raw cashew nuts, but there is still plenty of room for increased cultivation and processing activities. Investors can buy raw cashews from various small-scale farmers across the state.

    

The New Nigerian Farmers

Kwara State's New Nigerian Farmers initiative is spearheading an agrarian revolution in the state and nationwide

 
The New Nigerian Farmers project has been the subject of unparalleled interest both within and outside Nigeria. Of all Governor Saraki's initiatives, it was certainly the most ambitious and politically controversial, but to date has proved hugely successful and a ground-breaking template for the rest of Nigeria. The New Nigerian Farmers project has its origins in a 2004 pilot scheme known as 'Back to land' that was part of a federal government initiative to kick-start the agricultural industry.

At state expense, land was cleared and key ingredients such as insecticides and fertilizer were provided to farmers in an attempt to move them from small-scale production to commercial farming. However, the scheme ultimately failed due to both lack of technical expertise and, perhaps more importantly, a lack of real stakeholder incentive.
Governor Saraki realised that without finding a way to dramatically improve technical capacity and ensure the farmers had as much at stake as the financiers, it would be impossible to make an impact. Since 2001, the political turmoil in Zimbabwe left large numbers of white farmers without their farms or livelihood. The Governor saw that these farmers had generations of commercial farming experience in Africa and their skills were lying as fallow as their land. He immediately sent a delegation to the Zimbabwe Commercial Farmers' Union (headed at that time by Mr. Alan Jack) and enquired as to the appetite for a number of the displaced farmers to come to Kwara State with a view to restarting their farming livelihoods in Nigeria and, more importantly, creating a commercial farming hub in Kwara that would provide the base for capacity-building and development of the indigenous farming community.

After a number of investigative visits, 13 farmers from Zimbabwe moved to Nigeria to form Shonga Farm Holding Ltd, named after the area in Kwara State where the farms were established. The company was originally formed as a Special Purpose Vehicle to facilitate the public-private partnership in respect of the commercial farming project of the Kwara State Government. Subsequently, five major banks agreed to fund the project through debt and equity financing options. The farmers were awarded long-term leases over the 1 000 hectares they each owned and the company became an independent entity with limited state ownership. The Shonga farms now operate poultry, arable and dairy enterprises, the dairy herd memorably arriving at Ilorin International Airport by cargo plane from South Africa. All the crop farmers have been increasing their yields year on year and crops at Shonga now include maize, soya beans, rice, cow peas, bananas, ginger and pineapples.

The dairy syndicate includes a processing plant that is now fully operational. The dairy farmers consist of five individual farms of 1 000 hectares each; the milk output from these farms will be fed into the processing unit. The processing plant forms the final stage in the value chain of the milk produced by the dairy farmers. It was designed to take in and process approximately 11 million litres of raw milk per annum. The unit is used to process milk into UHT milk, yoghurt, butter and cream, depending on market demand. The poultry farmers consist of four individual farms of 1 000 hectares each mainly focused on broiler production. The four farms jointly own the feed mill and abattoir project, as well as the climate-controlled poultry houses that are also under construction. The abattoir has installed capacity to slaughter and process 10 000 birds per day and each farm intends to produce approximately 240 000 broilers per month.

Graham Hatty, one of the Shonga arable farmers, is presently selling over 60 tonnes of fresh cassava tuber per day to Nigerian Starch Mills, which is in the process of establishing a processing factory in Kwara.

The most recent development at the Shonga farms was the first-stage completion of the N2.9-billion irrigation project. The state government underwrote the project but the federal government has promised to underwrite N800-million of the cost. Four of the 13 Shonga farms now have irrigation and the rest are expecting irrigation infrastructure to be completed in the next year.

With between 3 000 and 4 000 people employed at each Shonga farm during harvest, the impact of this commercial farming centre in terms of local employment is obvious. As the surrounding transport infrastructure continues to improve and, crucially, the cold-storage facility at the lIorin airport is completed, there is the potential for Shonga produce to become an international export.

The New Nigerian Farmers project has been the catalyst in a quiet but steady agrarian revolution in Kwara State. And with continued support from federal government and wider political support from other states, it has every chance of being the catalyst in a nationwide agrarian revolution.

 

For more information, Contact
Fela Ibidapo, Special Assistant to the Executive Governor on Investment.
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TradeInvestNigeria:
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