ECONOMY - 31 OCT 2017

What Nigerian Farmers Really Need

What Nigerian Farmers Really Need
Nigerian farmers could benefit from bringing marketing boards back to prominence.

Nigerian farmers have it tough. On one side, they are barricaded by herdsmen and on the other, by unfavourable weather conditions. 

Yet, another significant threat to their livelihood is the relentless competition they face from big-time players. Over 80% of Nigeria's domestic food supply is provided by small-scale farmers who work on less than a hectare of land. When compared to larger firms that command vast amounts of land and are able to produce on a large scale, it is not hard to see how and why small farmers stay small. Worse still, smallholder farmers have limited access to domestic and international markets, restricting them to subsistence farming.

If we are serious about making agriculture as important as oil, we need to get certain things right. Compensation for farmers, for one. To disrupt the current status quo in Nigeria's agriculture sector, marketing boards – recently mentioned by the Federal Minister of Agriculture – may help make the sector work better for small farmers. 

 

All Aboard

So what exactly are marketing boards, and how can they help? Usually not-for-profit organisations, marketing boards consist of representatives from many small farmers selling similar products. They often receive government funding, which is then pooled together with the resources of its members to perform a host of activities ranging from marketing, setting prices, and controlling output. 

Most people would have seen billboards promoting Golden Penny Sugar or Dangote Pasta. Small-holder farmers do not enjoy this kind of visibility as they have neither the funds nor the brand to promote. With marketing boards, these farmers can pool resources together under one brand and boost demand for their product – giving them Dangote-like powers as a collective

Marketing boards mitigate farmers' risk in a volatile market; they can acquire strong networks with supermarkets and wholesale buyers and use more formal contracts to ensure strong demand. Even prices can be kept stable. In Ghana, the Cocoa Board pays a guaranteed minimum price to farmers – a luxury Nigerian farmers once had with our British established cocoa board.   

 

A Seat at the Table

A 'green revolution' is coming to Nigeria's agriculture sector, and small-holder farmers must actively take advantage of the coming boom. However, without the help of marketing boards, which have the power to make crucial data readily available to all market participants (small farmers inclusive), only a few might get to reap the rewards.

Presently, the weak bargaining position of small-holder farmers makes it difficult for any policies governing this sector to work for them. For example, when the Agricultural Transformation Agenda launched a 100% tariff on brown rice in 2013, larger businesses benefited from this, with minimal trickle-down effects to grassroots producers. Until more farmers can access these opportunities, it would be difficult to unlock the full potential of the sector.

Marketing boards can also help small farmers with improved quality and research. We often receive reports of Nigerian beans and palm oil being turned away from Europe. Can marketing boards help here? Well in Rwanda, one of its marketing boards helped save poultry farms from the risks of bird flu by suggesting alternative sources for bird imports. Similarly, marketing boards could have been just as useful to our tomato farmers when Tomato Ebola made it notably more expensive to make our beloved jollof. 

 

Tables Turned

While this all sounds good, marketing boards did not last long the first time they were introduced in Nigeria. The truth is, these organisations can be slow to adapt to change – there are fewer incentives to innovate or adjust if you control a substantial amount of the market. In some parts of the world, such as Canada, this rigidity has forced some marketing boards to close down.   

Also, while I advocate for fairer compensation for small-holder farmers, marketing boards could present difficulties for consumers. Putting a single organisation in charge of business for an entire product like cocoa is similar to creating a monopoly, and from economic theory, this is usually followed by higher market prices and exploitative practices.

Therefore, if marketing boards are to make a comeback, they must do so in a different way. 

 

Their Turn to Eat?

One way to go is to make changes to the way marketing boards are organised. New boards could have a semi-autonomous structure similar to Ethiopia's, ensuring they remain innovative and dynamic, but still regulated by the government to ensure prices don't hurt consumers. Effectively, while heavily regulated, boards would function in a more for-profit manner, which is good for service delivery.

However, marketing boards alone won't deliver the agriculture sector. Let's not forget that money matters, and this makes funding particularly crucial to empowering small farmers. Already, the Mobile Portfolio Program has helped 4.3 million Nigerian farmers purchase "Cellulant" fertiliser at a subsidised rate. Similar policies need to be rolled out to ensure the small players can win too.  

Marketing boards seem appealing, especially when you consider their ability to include farmers, whose opinions are usually overlooked. However, for real reform to take place, general agriculture policy needs to more accommodating to poor farmers who have the potential to grow, provide more crops for the population, and escape poverty in the process.

 

Follow this Writer on Twitter @FadekemiAbiru. Subscribe to read more articles here.

Fadekemi Abiru

Fadekemi Abiru

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