‘Agribusinesses must adhere to standards, specifications to become sustainable’
Dayo Olunowo is the managing director, Agricapital Limited. In this interview with Josephine Okojie, he spoke about the Nigerian herbs and seasoning market and his organisation’s scheme for smallholder farmers.
WWhy are you in agribusiness? e run an out- grower scheme where we act as an aggregator from the farmers to off-takers. The off-takers tell us what they want and we get the farmers to plant what the off-takers want following their specific standards and specifications.
Which crops aggregating?
are you
Currently, we plant thyme, Orange-flesh Sweet Potatoes (OFSP), white onions, ginger, turmeric, maize, and cassava.
Why do you specialise in seasoning and herbs instead of food crops?
We specialise in seasoning and herbs because we have a high demand for it from our offtakers. They look at the market and they are innovating, with the aim of import substitution. For example, Nigeria imports thyme and no major player is cultivating it. Importing thyme into Nigeria yearly costs about $50 million. We have off-takers to buy thyme leaves now. Our farmers’ plant and off-takers buy.
Who are your off-takers?
We have Sano Foods who buys orange-flesh sweet potatoes, thyme, and turmeric. They use them for bread, cookies, and other products. The Integrated Feeds Limited also off-take yellow maize, cassava, and other products, among many other off-takers.
What makes your services better for farmers, that is, why must they enroll here when they have associations?
What differentiates us is that we do not just aggregate, we train our farmers in good agricultural practice and currently, we have two farm assurers certified by GLOBALGAP. This enables the farmers to meet the requirement of the offtakers standard, increases yield, and encourages business continuity among parties. We also have programs for the welfare of the farmers and their families. The first one is the farmers’ medical programme. When the farmer or any of their family members is sick, we have provision for medical care loans. At the end of the production cycle, we deduct the loan from their product sales
We also have a farmer housing programme, in partnership with a company, which is aimed at building affordable homes for farmers. But the challenge is that farmers
have not been keeping the record or financially included. So, we assist to arrange their books, partner with banks to get them included financially by opening accounts for them, and getting them BVNS in preparation for the housing scheme.
The family education scheme for farmers is also there. Any of the farmers may want to buy books or pay school fees; we have made provision for loans to take care of that. The loans for farmers are affordable, between two and five percent interest rate.
We also have a farmers’ extension networking. If farmers do not have land but they want to farm, we network them with people that have the land. We also have farmers’ access cards, a form of credit card that farmers can use to buy food and groceries at major stores. We run these services so that farmers can concentrate on their farm operations.
How many farmers are involved and their location
in the out-growers’ scheme? We have about 7,850 farmers in the scheme. They are located in Ibadan, Oyo, Fiditi, Ilora, Ogbomoso, Ibarapa, all in Oyo State for now.
Apa r t from o f f- t a ke agreement, have farmers keyed into other services?
Some have keyed in because we are just rolling out other services. Test-running has started and would become fully operational by the next planting season.
Farmers do default in loan repayment most times. How is your experience with farmers in the scheme?
What we do is that we pay them on delivery of the produce. We also spend a lot of time and other resources monitoring the farm businesses. We do not sit in the office and assume that everything is well. We gave some farmers, for example, seedlings but they failed to plant it. In the process of visiting every farm, we detected that early. So, we monitor when it is time to prepare land, plant, apply.fertiliser, or pesticide. We supply all the inputs to them and the balance is remitted to them after the sale of their produce.
So, because we monitor them well, we can ensure delivery. We tie them to groups. We do not do isolated cases. We do it in a way they can guarantee one another and check defaults.
How do you handle insecurity and herdsmen’ clashes with farmers?
These are parts of the risk assessment we do carry out. We take soil samples, check the environment, and the history of clashes as well as other risk factors before engaging farmers in certain areas. We plan that each farmer should not be more than five kilometers from another. This assists in risk management. We work with farmers’ associations which help us as well.
Are you participating in Anchor Borrowers’ scheme?
No, but we will be more involved in the programme during the next planting season.
Two years on, what are your challenges?
Introducing good agricultural practices to farmers and getting them to follow the new process of crop cultivation is challenging. The offtake partner’s requirement and the guideline must be adhered to.