Is a farmer an entrepreneur? The quick answer is – IT DEPENDS – on whether that farmer is a commercial or a subsistence farmer. While there are few commercial farmers, typically retired military men or politicians, the sad reality is that in West Africa, there are few farmers who are considered entrepreneurs – either by themselves or the general society.
In fact, the average farmer in our region is not a farmer by choice, but by necessity or heritage. He (I will use “he” for the purposes of this article; However it is important to recognize that women are also very active farmers) most likely lives in a rural community and was born into a life of farming. With little education and limited on-the-job training, he depends on age-old methods, which are archaic and inefficient. He cultivates under one hectare of land, which is typically rented in the case of women, as they can rarely inherit land, or which belongs to a family member. Given the size of the land, he cannot afford or justify the cost of renting tractors and other cultivation equipment. He has limited access to extension support from the formal government structures at the state and local government level, and has no interaction with research or academic institutions in the state to help him improve his techniques or farming operations.
In addition, the average farmer is cut off from the inputs market and as a result, does not use fertilizer, purchase improved seeds, or depend on any form of irrigation. His yields are linked to the amount of rainfall each year, the intensity of the heat, and the presence of insects, given the limited use of pesticides. As a result, some years are good, while others are terrible. He has absolutely no insurance to guard against the swings of the harvest. During times of hardship, his stock is offloaded very quickly to cover expenses, at very low prices.
The farmer harvests and sells most of his produce primarily because he has limited storage and processing experience and limited options. He barters a portion of the output, consumers a portion and sells a portion. Some farmers sell as little as 10% of their produce.
With limited access to formal markets, the farmer depends on middlemen who typically come to the community to purchase in bulk or he sells his output in the local market. He may belong to a loose association, which sometimes holds meetings but is typically disorganized and politicized, especially around the general elections, when is suddenly remembered by politicians. He is cut off from the formal financial services market, and so rarely saves and cannot borrow. For this reason, the average farmer is simply fighting for survival. In addition, with an aging population of farmers, and sons who do not deem the profession to be noble or lucrative, the future of our farmers is even more tenuous.
While the average farmer understands the concept of revenues, profitability is not a word that he uses or fully understands. As with many other professions in the informal economy, the farmer does not know how to effectively value his time, and given the time lag between when he plants and harvests, does not pay himself a monthly salary. A rigorous assessment of the average farmer’s operations in Nigeria would indicate that, depending on the cultivated crop – whether it is a cash or food crop, the year, the yields, the losses and pure luck, farmers are barely cover their operating expenses.
Unfortunately, this current reality, where the average farmer survives on a subsistence level is not sustainable for the farmer, or for the society. The truth is that Nigeria, and indeed West Africa need farmers who are entrepreneurs – running sustainable businesses that generate profits and grow.
What should be done about this? First, it is imperative that we begin to change our mindsets about farmers and begin to recognize them as critical stakeholders in the Nigerian economy, who deserve recognition and support. This change in mindset will not only enhance the image of the sector, but will also encourage more youth to become farmers. The earlier the business community starts regarding farmers as entrepreneurs, the sooner we start taking them and the industry more seriously, and begin investing in the sector. In addition, farmers and farmers groups also need to begin to take themselves more seriously, by establishing and strengthening their associations to serve as credible voices to shape policy. They could also provide support services to enhance their operations such as purchasing seeds and fertilizers in bulk or sharing the cost of cultivation and processing equipment. With the recent E.Coli breakout in Europe, farmers demanded compensation for their lost revenue, which was quickly granted. This reaction was only possible because the farmers in Europe were organized entrepreneurs, who were recognized as important stakeholders in the region. The same is possible in Nigeria, with a concerted effort from our farmers.
Second, Nigerian farmers need massive training and retraining. Today, according to the Federal Ministry of Agriculture and Water Resources, only 18% of Nigerian farmers benefit from extension support, relative to 95% of farmers in other countries. Even those that receive the support complain that it is too infrequent and that the support that is provided is insufficient. As a result, the Nigerian government needs to totally overhaul the extension support services managed by the Agriculture Development Programmes (ADPs) across Nigeria, Clearly there is an urgent need to increase the number of qualified extension workers, and also to design and implement tools for tracking their effectiveness. Beyond extension support, farmers need basic entrepreneurship training, which will enable them to understand the principles of profit and loss, and the need for improved systems and structures to enhance their operations. There are successful models that have been used in India for illiterate farmers, which can be tailored to the Nigerian context, to ensure that our farmers begin to move beyond the “subsistence” operating model, to one of growth and profitability.
Third, Nigeria like many other African countries requires serious land tenure reform. This will ensure that more farmers can actually own land, which will not only reduce the risks that they currently bear when they cultivate “rented” land, but will also enable them to grow their operations, by gaining access to larger land areas. In addition, it will enable them to gain access to financial credit, using the land as collateral. It is important to recognize that land reform is not a panacea, but can definitely enhance the lives and profitability of farmers, especially female farmers.
Finally, the public sector should make a concerted effort to create an enabling environment for farmers to thrive. By easing government involvement in fertilizer and seed distribution, and supporting the emergence of private-sector led agro-dealer networks and smart subsidies, the public sector can ensure that our farmers have access to affordable inputs for the planting season. In addition, by investing in rural infrastructure, especially feeder roads, electricity, and education, our local and state governments can ensure that our farmers can improve the efficiency and effectiveness of their operations and add more value through local processing before gaining easy access to markets to sell them. This will not only create more jobs in the rural areas, but it will also encourage more of our youth to stay in the family business. Through this support, our farmers will be able to grow their farms into successful and strong businesses that will eventually rival those in South Africa and Brazil.
Written By: NDIDI OKONKWO NWUNELI
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This article was first published on 9th August 2011 and updated on June 1st, 2012 at 8:34 pm
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