Jonathan Eze examines interventions in agricultural value chains that has created a robust market for Soyabean production and marketing
Nigeria is one of the largest Soybean producers in sub-Saharan Africa.
However, the size of the crop is relatively small -less than 400-500 thousand metric tonnes (TMT) compared to 8,000 to 10,000 TMT for Corn and 4,000 to 5,000 TMT for Sorghum.
This is primarily due to lack of adequate market liquidity providing a limited incentive to grow this crop. This demand is constrained by inadequate Soya crushing capacity, which in turn is limited by low demand from the animal feed industry, the primary use of Soya in Nigeria.
Like most other crops in Nigeria, Soya is a small-holder crop with the average farm holding below one hectare. The limited investment in farm inputs and low farmer know-how results in poor productivity, currently less than 1.0 MT/hectare in Nigeria versus 4.5-6.0 MT/hectare in the USA.
According to Head, Corn & Soya Business, Olam Grains, Mr. Ayaz Khatri, this is attributed to the unavailability of certified seeds. There is a significant opportunity to close this yield gap thereby, boosting farmers’ income and creating a virtuous cycle for continuously growing this sector.
To Dr. Alpha Kamara of the International Institute of Tropical Agriculture (IITA), strategic partnership has begun between IITA and industry players geared towards promoting Soya production through the provision of high yielding improved varieties, thus, creating awareness, promoting sustainable seed production systems and strengthening capacities with seed companies to sell improved seeds.
In the same vein, a plant breeder at the University of Agriculture, Makurdi, Dr. Lucky Omogui, buttressed this when he noted that the partnership between research institutes and industry players will drive sustainable demand and supply for the commodity.
Private sector intervention
No doubt, the federal government is making headway in addressing the imperative of economic diversification and development, but unfortunately, no government in any part of the world can single-handedly ensure food security for its citizens.
In 2015, more than 195-member countries adopted the 17 global sustainable development goals (SDGS) at the landmark 70th meeting of the United Nations General Assembly in New York, where the private sector was enjoined to rally round their home governments to help realise the 17 goals and 165 targets.
In this regard, Olam, a global agri-business operating across agriculture value chains in 70 countries, took a strategic decision to expand into animal feed and protein in Nigeria as a natural adjacency to its grain business. This was led by a strong growth for the global animal feed industry, an existing gap within the country and a consumer demand for domestically produced protein.
In 2016, Olam established Nigeria’s largest integrated animal feed mill, poultry hatchery farms in Kaduna and integrated Poultry and Aqua Feed Mill in Ilorin, Kwara State. This was expected to go a long way in satisfying a huge gap in the market as well as invigorate the whole industry, thus, supporting Nigeria on her way to self- sufficiency. This underscored the strategic importance that the company attaches to the Nigerian state.
Creating a Ready market
Prior to 2016, there was no export market for Soya bean production. In 2016, and Olam was said to have emerged as the largest buyer of Nigerian Soya bean from local farmers and traders.
As the supply of Soybean had surplus to domestic needs, Olam successfully created an export market for Nigerian beans and accounted for the bulk of Soybean export.
The Nigerian beans suffer from a lot of negative quality perceptions- aflatoxin content, high presence of foreign matter, low oil content, excessively dried, amongst others. While the company was able to convince global buyers to overlook some of these parameters, these remained issues that needed to be resolved to make Nigeria a credible exporter of the produce.
Nigeria has an advantage of being a country that only allows the farming of non-genetically modified organisms (non-GMO) which have a niche demand in global markets.
Role of Research
Research plays a crucial role in fostering agricultural development.
But sadly, no local seed company engages in research to boost Soya production.
Dr. Emmanuel Sangodele, a Breeder Seed Scientist with Olam, argued that the unavailability of certified seeds prompted Olam to bring on board a team of dedicated and passionate seed breeders to deliver quality seeds.
The Olam is the only seed company in Nigeria dedicated to research and they are partnering with the Nigerian government. Through systematic research, it has identified the availability of good quality, high yielding seeds as a major catalyst for boosting farmers earning, thereby, generating more interest among more farmers to grow Soybeans.
It has also begun analysis of several aspects of agri-processing, including energy usage, greenhouse gas emissions and fresh water usage.
This initiative has enabled the company to review their operational practices geared towards improving the use of scarce resources as well as minimise the negative impacts of production and processing across the value chains.
In Nigeria and elsewhere in Africa, small scale farmers do not have the potential for increasing their productivity due to poor financial support.
Often, they are usually found wanting because they cannot access loans for their operations and growth.
Galadimawa, a local farmer noted that one of the greatest challenges confronting farmers is inadequate finance.
He said, “if we are supported with irrigation systems, tractors, soft loans and timely release of fertilizers, I believe farmers will have a reason to smile home to the bank.”
Furthermore, Olam identified potential government, NGO and private sector partners to jointly develop farmer support and agronomy programs, including agricultural practices to achieve this objective.
Supporting Women Agenda
There is no gainsaying that the empowerment of women is a key driver in an economy but unfortunately this has been historically overlooked.
To this end, Olam has kick-started an out-grower program targeted at women farmers.
This scheme was designed to improve the livelihood of women through the distribution of farm inputs, training in crop management practices and assisting to access international markets.
The company is also giving high yielding seeds and training materials to women.
With this, the company provided interest-free credit on fertilizers and pesticides in addition to buying back the produce at prevalent market prices during harvest.
In terms of capacity building, the company is supporting further investment and capacity utilisation in the Soybean processing sector. It is currently working with several local medium sized solvent extraction units to improve their efficiencies and capacity utilisation. Olam’s substantial investments in poultry and feed mills have significantly increased the demand for Soya meal, the principal product from processing Soybeans.
With an increased demand for Soybean, Olam has successfully created over 500 permanent jobs, over 5,000 casual jobs.
Prospects for Soybean Farming
Given the huge financial commitment involved, it would be unrealistic to assume that the transformation agenda will magically be implemented hitch-free. Nevertheless, such a vital initiative should not be allowed to crash, rather it should be consolidated through strategic partnerships with Donor agencies, Research Institutes, NGOS, and the private sector.
A partnership of this nature would not only bring a lasting solution, but it would also attract higher foreign direct investment. The government should as a matter of necessity implement policies that would pave way for a competitive, diversified and self-reliant economy.
According to Sangodele, Nigeria is currently producing 400-500 thousand metric tonnes of Soybean crop. Soybean crop farming is spread equally between North and Middle belt region, Benue, Katsina and Kaduna being the largest crop production states. Other producing states are Zamfara, Gombe, Bauchi, Adamawa, Taraba, Nasarawa, Kwara and Niger.
Impact of Soya Production on Soil fertility
Soybean is a crop well suited for Nigeria as it is more weather, disease and pest tolerant. It also requires far lower use of fertilizers and in fact, it provides a huge benefit due to its nitrogen fixing properties. Soybean is now one of the crops you can cultivate and be handsomely rewarded. Any farmer who engages in Soya farming will smile home to the bank. The average price of Soya bean in current crop season was around 150,000 naira per metric tonnes. Small-scale farmer can produce one metric tonnes on a hectare, with cost of production less than N70,000, and earn more than N150,000 on a hectare.