One of the best reads in recent times. We should learn and practice it. Abeg don't run with the headline.
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Agriculture is NOT the MAGIC solution

Simon Kolawole

Anytime I hear Nigerian presidents, ministers, governors, economists, analysts and commentators declare that agriculture is the alternative to oil, and that the solution to Nigeria’s economic woes is to return to the farm, I am tempted to jump up and ask at full volume: “Who agriculture alone don epp?”

Some states have hilariously declared work-free days for civil servants to go to the farm. It would be nice to see those farms and how well the emergency farmers are doing. We’ve been told again and again that agriculture, as Nigeria’s biggest employer of labour, is the magic solution to unemployment, that we will export agricultural produce and earn plenty forex. Well done.

I’ve been hearing this fairy-tale all my life. When I was a primary school kid, Lt. Gen. Olusegun Obasanjo, then head of state, asked Nigerians to tighten their belts because the oil boom would not last forever. He added drama by tightening his military belt on TV. He launched Operation Feed the Nation. My grandfather responded by setting up a garden in our backyard. President Shehu Shagari did Green Revolution. The structural adjustment programme (SAP) of Gen. Ibrahim Babangida was basically about diversifying into agriculture. In different shapes, forms, sizes and packaging, we have been talking about agriculture, agriculture and agriculture forever.

Since we love glamorising our exploits in the export of cocoa, coffee, palm oil and groundnuts before the oil boom doom, I will pick on just cocoa to dispel this ill-conceived notion and never-ending campaign that agriculture is the magic wand.

We used to be the biggest producers of cocoa in the world. Chief Obafemi Awolowo utilised cocoa revenue to develop the south-west when he was premier of the region in the 1950s. But we dropped the ball along the line and Cote d’Ivoire overtook us. And now we are lamenting that we are nowhere to be found. The solution, therefore, is for the south-west to revive the cocoa farms. Oh, the good old days!

Okay, let us talk about Cote d’Ivoire’s fabled cocoa wealth. Cote d’Ivoire produces 33% of world cocoa and exports to manufacturers such as Hershey’s, Mars Inc. (both in the US) and Nestlé (Switzerland). You know what Cote d’Ivoire earns yearly from exporting raw cocoa? A whopping $2.5bn. I repeat: a whopping $2.5bn!

So Mars buys Ivorien cocoa and makes several products from it: Bounty, M&M, Mars and Milky Way, to name a few. You know Mars’ net income from chocolate products alone in 2015?

According to the International Cocoa Organisation (ICCO), Mars made a pathetic $18bn, compared to Cote d’Ivoire’s whopping $2.5bn. Agriculture, indeed.

If you are wondering how just one company, which manufactures chocolate, can earn seven times more than a whole country, which farms and exports the cocoa input, then you are asking the same question with me: Who agriculture alone don epp?

On ICCO’s list of the world’s top 10 companies in net revenue from chocolate, you have three from America, two from Japan, two from Switzerland, and one each from Luxemburg/Italy, Argentina and Turkey. None from Cote d’Ivoire, Ghana and Indonesia — the world’s three biggest producers of raw cocoa. There must be something that Hershey’s, Mars and Nestlé know that we don’t know as we keep planting cocoa.

To be fair, Cote d’Ivoire is waking up. In 2015, French chocolatier Cémoi opened a plant in Abidjan, the economic capital, to produce chocolate. President Alassane Ouattara, on touring the plant, said: “We want to be able to make chocolate for Ivoriens, for Africans and especially West Africans.” Ouattara (pronounced Wa-ta-ra) understands what we still don’t understand here: that agriculture without industry is dead, being alone.

How could I buy cocoa worth $1m from you and make chocolate worth $10 million from it — and you think you are smart? If you are smart, you will start making the chocolate yourself and stop romanticising about the “good old days”.

There was a video that went viral sometime ago. CNN’s Richard Quest visited a cocoa farm in Cote d’Ivoire. Come and see poverty written all over the faces of the farmers, who have been told for decades that agriculture is the magic solution to their problems. Quest gave the farmers bars of chocolate. They were eating the sweet stuff for the first time in their lives!

Compare their lives to those of the executives of Mars Inc., who buy the cocoa beans from Cote d’Ivoire. They are flying private jets and holidaying in the moon, while the Ivorien farmers are fighting off flies and bees in the bushes of Koffikro. For your information, Mars Inc. has no cocoa farms!

Don’t get me wrong please. If I have created the impression that agriculture is useless, I do apologise. That is not my intention. After all, agriculture is our culture. Millions of Nigerians are farming rice, beans, cassava and corn. That is huge employment. Also, we certainly can produce many food items that we are importing and burning precious forex on. But is that why governors are declaring work-free days for civil servants to go and plant melon and maize to solve Nigeria’s economic problem and stop the dependency on oil? If only these governors knew that Switzerland does not grow one tree of cocoa, yet makes the world’s most elegant chocolates!

Let us break this whole agric logic into pieces. If we really want to diversify from oil and create proper value, agriculture must give birth to industry. If agriculture currently employs, say, 5 million Nigerians, agro-allied industry can employ 15 million in the value chain. So why do we spend so much time discussing farming and not industry? For example, how many graduates can a tomato farm employ compared to a factory making tomato purée? The factory will employ or engage the services of engineers, technicians, chemists, marketers, accountants, communicators, lawyers, administrators, drivers, and so on. It may even have a sick bay and employ doctors and nurses.

I’m not done. A basket of tomatoes sells for N800 in Kaduna. A 400g tin of purée sells for N300. Look at how many bottles of purée you can get from a basket, and how much value you will be getting. Who, then, is making the real money? The factory will pay company tax, its employees will pay PAYE and the consumers will pay VAT. That is how government will boost its revenue.

The purée bottle makers offer a different business altogether that employs workers and pays all kinds of taxes too. And if we are good enough, we can begin to export purée to other countries, and earn forex. This is just purée. Think of a thousand agro-allied factories. Think of our huge population.

Sure, agriculture is very important in a primitive economy like ours. But we always miss the bigger picture. One, we need full optimisation of the sector to enhance productivity. A country like the US knows this much better: the percentage of the population engaged in farming is insignificant, but it is so optimised that the output is out of this world. For instance, the US produces enough rice for local consumption, for export, for aid and to dump in the sea to “stabilise” market prices. Two, processing is where you find the massive job opportunities. The agro-industry will yield far more output, more jobs and more economic value than Benue Friday Farming.

These things look so simple and doable, but commonsense is not common. Our agricultural output can be far better in quantity and quality than currently obtains. We can do with better technology, storage, conditioning, packaging and transportation. Most importantly, our brains should focus on how industry can bring out the real value of agriculture and spark off a chain of economic activities that will create millions of good jobs and generate billions of dollars in revenue to investors, employees and government. But we seem excited only about preaching and promoting the export of raw produce, and we feel so smart we think this is the way out of our oil dependency!

But how can we add value when, despite the billions of dollars we have made from oil since 1999, we don’t have the basic infrastructure to inspire an agro-based industrial explosion? Where are the roads? Where are the rails? Where is the electricity? Where is the security? Where is the finance? Yet I can point to uncountable private jets, mansions and customised cars that politicians and their friends have acquired since 1999 with proceeds from the oil boom , while they keep preaching stone-age agriculture to Nigerians.

So if your governor joins this craze of declaring work-free days for primitive farming, just ask him politely:Your Excellency, who agriculture alone don epp?

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Copyright 2016 TheCable. Permission to use quotations from this article is granted subject to appropriate credit being given to www.thecable.ng as the source.

Only our oyel is the answer oyel sharpens oyel

Only if they will reason like this aswell

but unfortunately... They wont..

brilliant submission.

Masterpiece..

Lalasticlala, who Agriculture don epp

Am really impress with this article

We have flourmills in this country, yet we still import the wheat(raw material) the mills need for productions.We need to engage in massive commercial agriculture before the industries will come in.most of us here don't know that majority of our so-called manufacturing industries are nothing but packaging sites for imported processed products. Examples are Dano milk and Dangote sugar. We just have to take one step at a time in revamping our economy for sustained growth.

Fantastic article. The future is in food processing.

Ignorance.
The writer should look at the items in the import list to see how much forex is spent on importing stufffs that can be grown or made in the country.
You should learn to crawl before attempting to walk.
Are you better than more advanced economies such as Thailand,India and Indonesia where farmers still toil the swamp to produce the rice that the politicians give you in exchange for your future?
This is one of the reason why at times, I wished those militants stopped the oil completely.
Maybe then you will grow some sense.

politicians be telling the youths to go back to the farms when their children are not there

The assumption of the writer is that the $2.5 billion cocoa can become $18 billion once it arrives inn Mars warehouse, that's ignorance of the highest order.

What is the value of other inputs, sugar, milk, labour, know-how, additives, marketing, advert, distribution channels that makes it possible to earn the difference. You'd be scared at the huge resources deployed by Mars to earn $ 18 Billion compared to what Cote' Ivoire invested to earn $2.5 Billion. We are too quick to look at the results without pontificating on the work we need to do to reach the goal.

It is a no brainer that adding value to a primary commodity will earning additional revenue but the chain and societal linkage to achieve that is non-existent or grossly inadequate in Africa. Are we better off not having the primary commodity and still not having the expertise to convert raw material to products?
If we go the way of Agro-processing we still need to import all the machines as we lack local capability and still import expatriate to service and maintain the machines with huge capital flight. Eventually the machines breakdown as we make little sales while trying to compete with established markets.

Societies are not grown on emotions but on deliberate and meticulous planning which is still lacking in our current plans for agriculture neither is the crux of the problem addressed in the article.

Jorussia:
We have flourmills in this country, yet we still import the wheat(raw material) the mills need for productions.We need to engage in massive commercial agriculture before the industries will come in.most of us here don't know that majority of our so-called manufacturing industries are nothing but packaging sites for imported processed products. Examples are Dano milk and Dangote sugar. We just have to take one step at a time in revamping our economy for sustained growth.

that guy is right......
without Agro allied industrialization we will just end up like other African countries......
the way out is not creating an alternative commodity export but adding value chain to our primary commodity....be it crude oil, farm produce, raw minerals etc.
pls the era of telling people to go back to farm with primitive tools like hoe and cutlass is long gone......

SIRTee15:


that guy is right......
without Agro allied industrialization we will just end up like other African countries......
the way out is not creating an alternative commodity export but adding value chain to our primary commodity....be it crude oil, farm produce, raw minerals etc.
pls the era of telling people to go back to farm with primitive tools like hoe and cutlass is long gone......

I am not saying he isn't right. All i am saying is we need food sufficiency first before agro allied industries can come on stream.we have many agro allied industries in this country, what they lack is raw materials.

Ovamboland:
The assumption of the writer is that the $2.5 billion cocoa can become $18 billion once it arrives inn Mars warehouse, that's ignorance of the highest order.

What is the value of other inputs, sugar, milk, labour, know-how, additives, marketing, advert, distribution channels that makes it possible to earn the difference. You'd be scared at the huge resources deployed by Mars to earn $ 18 Billion compared to what Cote' Ivoire invested to earn $2.5 Billion. We are too quick to look at the results without pontificating on the work we need to do to reach the goal.

It is a no brainer that adding value to a primary commodity will earning additional revenue but the chain and societal linkage to achieve that is non-existent or grossly inadequate in Africa. Are we better off not having the primary commodity and still not having the expertise to convert raw material to products?
If we go the way of Agro-processing we still need to import all the machines as we lack local capability and still import expatriate to service and maintain the machines with huge capital flight. Eventually the machines breakdown as we make little sales while trying to compete with established markets.

Societies are not grown on emotions but on deliberate and meticulous planning which is still lacking in our current plans for agriculture neither is the crux of the problem addressed in the article.

bros you just spoke my mind.Most of these writers just write articles without taking holistic view of what is on ground. We need food sufficiency before we start thinking about agro allied industries.

Ovamboland:
The assumption of the writer is that the $2.5 billion cocoa can become $18 billion once it arrives inn Mars warehouse, that's ignorance of the highest order.

What is the value of other inputs, sugar, milk, labour, know-how, additives, marketing, advert, distribution channels that makes it possible to earn the difference. You'd be scared at the huge resources deployed by Mars to earn $ 18 Billion compared to what Cote' Ivoire invested to earn $2.5 Billion. We are too quick to look at the results without pontificating on the work we need to do to reach the goal.

It is a no brainer that adding value to a primary commodity will earning additional revenue but the chain and societal linkage to achieve that is non-existent or grossly inadequate in Africa. Are we better off not having the primary commodity and still not having the expertise to convert raw material to products?
If we go the way of Agro-processing we still need to import all the machines as we lack local capability and still import expatriate to service and maintain the machines with huge capital flight. Eventually the machines breakdown as we make little sales while trying to compete with established markets.

Societies are not grown on emotions but on deliberate and meticulous planning which is still lacking in our current plans for agriculture neither is the crux of the problem addressed in the article.

Calm down... You and the writer mean the same thing although he seems to be thinking farther than you are doing.

Nigeria and Nepotism... An economy surviving under a monopolised approach is dead and buried on its inception..

Dangote is like the private Business governor of Nigeria, he control 55% of our home made consunmable goods and u don't find any fault in it...

Northern rule since 1969 has masked our thoughts, that's why we see right but prefer left because we want to carry their slavish and religious mentality along.

989900:
On the money!

the OP make sense scatter....

Cheii

The truth is our leaders just yap about agriculture while they fix their kids in CBN and NNPC...thunder fire all of them...OP your head correct...

CuteTj:

Calm down... You and the writer mean the same thing although he seems to be thinking farther than you are doing.

He isn't.
He is giving the typical "in America" ,"in Japan " example which has consistently failed every dysfunctional country like Nigeria.
He is right to put him straight.you seem to underestimate the brain work that goes into getting the mars bar into the market.
Have some of you been to the headquarters of some of these foreign brands. Their IT departments employ thousands of programmers ( in many cases, located in different countries),content developers etc. Not to talk about the logistics required, accounting for their global staffs, marketing,taxation,legal and dealing with governments and regulations.
Simply put, you need thousands of experienced professionals which is something Nigeria lacks.
learn to walk first

In a nutshell Industrialisation should be grestly encouraged.

A well thought out Agricultural road map is the MAGIC solution not forcefully pushing people into farms as many State governors are doing without empowering their people with innovative knowledge and inputs.

Internally, the journey from cultivating to our plates is so disjointed that is generates so much waste and we pay for such wastes by paying more for those that makes the market.

Jorussia:
I am not saying he isn't right. All i am saying is we need food sufficiency first before agro allied industries can come on stream.we have many agro allied industries in this country, what they lack is raw materials.

Food sufficiency will not be achieved by telling people to go and farm a plot of land. Or if everyone in the cities troop back to their villages to farm, who will teach? Who will learn and innovate? We need mechanized large scale farming to make ourselves food sufficient and even think of importing. The same point with Cocoa is the same thing happening with Ghana, Nigeria and Burkina Faso: we produce most of the Shea butter used around the world but those foreign companies reap large profits selling overpriced creams and lotions made from shea butter (the beauty industry is easily a billion-dollar industry, a small tin of refined shea butter from French luxury company L'Occitane goes for over N10,000). Same thing with Palm Oil: I don't believe Malaysia became a hugely rich country from being the largest exporter of Palm Oil. Now, look at Kenya and some other countries in that axis in large scale horticulture: their product is sold almost finished and they're making good profits off selling fresh flowers.

We cannot all go and farm and there is no economy that is sustainable on just basic Agriculture in this modern era. It is in our best interest to farm, commercialise it and export and Industrialise.

Singapore encourages foreign investors to come to their country on the premise of "Build, Transfer, Operate". Any plant you build in their country must be 50% staffed in technical levels by their citizens and they must be trained because in 25 years' time, their government will buy you out and hand the company over to a Singaporean businessman. This creates wealthy citizens who hire more citizens and improved tax base and keeps profits made in the country from being remitted out. Nothing stops us from doing the same (and some of us suggested such to past state governments), we were ignored.

Simple common sense in Nigeria has been killed by Greed and Lackadaisical attitude from every single Nigerian.

This is the best article, I have read so far on this site and not the shameless dolts who have polluted this space with their APC and PDP nonsense.
What an eye opener!

Pavore9:
A well thought out Agricultural road map is the MAGIC solution not forcefully pushing people into farms as many State governors are doing without empowering their people with innovative knowledge and inputs.

Internally, the journey from cultivating to our plates is so disjointed that is generates so much waste and we pay for such wastes by paying more for those that makes the market.

I have said it a million times...agriculture is only remembered once we are in recession or there is a fall in oil price...Once things get stable we abandon what ever that relates to large scale agriculture and also its finished and refined products...

The government presents agriculture quickly to pacify us and then fix their kids in CBN and NNPC...

[quote author=Izonpikin post=48750229]I have said it a million times...agriculture is only remembered once we are in recession or there is a fall in oil price...Once things get stable we abandon what ever that relates to large scale agriculture and also its finished and refined products...

The government presents agriculture quickly to pacify us and then fix their kids in CBN and NNPC...[/quote

That is pure lip service which successive governments at all levels have shamelessly engaged in. I only encourage Nigerians at individual level to go it on their own and not bother to wait on government. Take for example as an individual if one can preserve something like African pear way beyond the season it is in abundance, it is big money for the person when he/she brings it out when it is out of season.

Very very brilliant article.

Nice read for this morning.

Onegai:


Food sufficiency will not be achieved by telling people to go and farm a plot of land. Or if everyone in the cities troop back to their villages to farm, who will teach? Who will learn and innovate? We need mechanized large scale farming to make ourselves food sufficient and even think of importing. The same point with Cocoa is the same thing happening with Ghana, Nigeria and Burkina Faso: we produce most of the Shea butter used around the world but those foreign companies reap large profits selling overpriced creams and lotions made from shea butter (the beauty industry is easily a billion-dollar industry, a small tin of refined shea butter from French luxury company L'Occitane goes for over N10,000). Same thing with Palm Oil: I don't believe Malaysia became a hugely rich country from being the largest exporter of Palm Oil. Now, look at Kenya and some other countries in that axis in large scale horticulture: their product is sold almost finished and they're making good profits off selling fresh flowers.

We cannot all go and farm and there is no economy that is sustainable on just basic Agriculture in this modern era. It is in our best interest to farm, commercialise it and export and Industrialise.

Singapore encourages foreign investors to come to their country on the premise of "Build, Transfer, Operate". Any plant you build in their country must be 50% staffed in technical levels by their citizens and they must be trained because in 25 years' time, their government will buy you out and hand the company over to a Singaporean businessman. This creates wealthy citizens who hire more citizens and improved tax base and keeps profits made in the country from being remitted out. Nothing stops us from doing the same (and some of us suggested such to past state governments), we were ignored.

Simple common sense in Nigeria has been killed by Greed and Lackadaisical attitude from every single Nigerian.

What you have written there is really on point

I always grin when Nigerians are admonished to take up farming. Buhari aim is that agriculture accounts for 49% of GDP. This is economic illiteracy at its height!

The truth is that no matter how fast agriculture grows other sectors of the economy will outpace it. So if agric sector grows by 5% industry might zoom 10%. If agriculture grows faster than other sector it means your economy is declining

Agriculture in Thailand which exports more food than all of Africa put together constitute only 10% of GDP. In Malaysia probably the second largest of producer of palm oil in the world has an agric sector that accounts for only 7% of GDP

General obasanjo did not realise that the Naira was so strong back then that it was cheaper to import food than to grow it locally and that was one of the reasons farmers were abandoning the farm for the cities.

Agriculture started making a recovery in 1986 when Babangida devalued the Naira. Agric production increased and the export of many cash crops in their primary state began in earnest.

Only problem was that and is still a major clog is that productivity did not and has not improved much

This I suspect is due to the non-availability of cheap credit facilities to farmers. Dangote once asked how can agric grow when cost of credit is 20%.

This high cost of credit and its short term nature as well has also had an adverse effect on industry and may be the chief reason why there are no sufficient agro alllied industries to take advantage of the huge opportunities in agro allied manufacturing sector.


.

Ovamboland:
The assumption of the writer is that the $2.5 billion cocoa can become $18 billion once it arrives inn Mars warehouse, that's ignorance of the highest order.

What is the value of other inputs, sugar, milk, labour, know-how, additives, marketing, advert, distribution channels that makes it possible to earn the difference. You'd be scared at the huge resources deployed by Mars to earn $ 18 Billion compared to what Cote' Ivoire invested to earn $2.5 Billion. We are too quick to look at the results without pontificating on the work we need to do to reach the goal.

It is a no brainer that adding value to a primary commodity will earning additional revenue but the chain and societal linkage to achieve that is non-existent or grossly inadequate in Africa. Are we better off not having the primary commodity and still not having the expertise to convert raw material to products?
If we go the way of Agro-processing we still need to import all the machines as we lack local capability and still import expatriate to service and maintain the machines with huge capital flight. Eventually the machines breakdown as we make little sales while trying to compete with established markets.

Societies are not grown on emotions but on deliberate and meticulous planning which is still lacking in our current plans for agriculture neither is the crux of the problem addressed in the article.

You are correct on a number of points

One thing I have noticed about chocolate is that the biggest producers have very high per capita incomes. That means production is centered where the the market is- those with lots of disposal income

Even if Nigeria makes high end chocolates the market here is simply to small and Nigeria is not an established brand in chocolate business