The global fall in oil prices has affected the economy of oil-dependent countries like Nigeria. Coupled with the COVID-19 pandemic, many economies are getting worse and seem like they cannot recover.
In Nigeria’s case, the fall in oil price already caused enough damage. The 10.6 trillion naira ($29 billion) budget was based on crude price projection of $57 per barrel and targeted oil earnings of about 2.64 trillion naira. However, the price of oil is now hovering around $40 per barrel and the oil benchmark price was reviewed downward to $28 per barrel. Where is the federal government hoping to get money to fund this deficit?
Government proposes diversification of the economy on paper, but does very little to show its full commitment. Youths are being called upon to venture into agriculture- this is a good call. Let’s ask ourselves, what comes to the mind of youths whenever agriculture is mentioned? They immediately paint a picture of a poorly dressed man slightly hunched at the back carrying a hoe and sweating profusely.
Many people are oblivious of the opportunities that can be tapped into in Agribusiness. Although, the government still needs to do a lot to help agriculture thrive in the country, especially to those in the production stage of the agricultural chain.
In this piece, I have highlighted the four distinct stages in the agricultural chain. Once you gain insight into what purposes each serve, you’d be able to carefully select the one that interests you the most.
What is Agribusiness?
Agribusiness covers all business transactions that depend on agriculture either directly or indirectly. Food products are meant to move from the farm to consumers’ table. There are separate but dependent chains that facilitate the production and distribution of food to its final destination.
These chains are:
- Agricultural inputs
- Production (Crops planting & Livestock rearing)
- Agricultural products processing
- Finished or semi-finished goods distribution
Farming activities, whether crops or livestock, require some inputs to run effectively. Supplying these inputs to farmers is a business on its own that you can venture into. Some common inputs are listed below for both crop and animal production.
Before that, just a simple reminder that we at Farmsquare supply most of these inputs to farms regardless of your location.
- The service of real estate agents for agricultural land purchase
- The service of soil scientists to analyze the soil before planting.
- Service of an engineer to construct structures like pens for some animals, barn or silo for storage, even a greenhouse, etc.
- Farm machines rentals for farming activities.
- Service of workers to work on the farm or manage the farm.
- Agents that supply chemicals like pesticides, fertilizers, herbicides, etc.
- Service of a veterinary doctor or a pyhtopathologists.
- And many more………..
This is the chain that is generally referred to as agribusiness. It comes to mind whenever agriculture is mentioned. In this section, workers here are experts who actually grow crops and rear animals to market size before releasing them to the next group in the chain.
The activities here are pretty straightforward because farmers practically grow crops and rear animals using the inputs supplied. Unlike others in the chain, this aspect is delicate, requires a level of expert knowledge, and quite risky.
As a farmer, you call for inputs based on your discretion and experience. A mistake can ruin everything one has done from the beginning. Fortunately, the good news is that, once you take time to learn the ropes before delving into this, your chances of making mistakes are extremely low, unlike if you don’t go for training at all.
AGRICULTURAL PRODUCTS PROCESSING
The products from the previous stage are passed to this stage which deals in processing the products into finished or semi-finished products. Usually, this stage is dominated by companies that are reasonably big because of the cost of setting up a processing structure on a large scale.
Despite the huge capital often associated with this stage, there is still room for you to start on a small scale while growing steadily. The burden of storage is mostly laid on operators in this stage. In fact, the storage of farm produce is a business on its own. Some of the products gotten from the farm and processed are:
- Oil palm fruits processed into palm oil.
- Cassava tubers processed into garri
- Cocoa processed into milo
- Wheat, barley processed into beverages
- Fruits processed into fruit drinks
- Animal milk processed into a final form
- Animals killed and processed into ready-to-wear meat
- And many more…….
There are instances when products move directly from the production stage to distribution stage, skipping the processing stage in the chain. Farm products such as eggs, Live chicken, Tomatoes & pepper, fruits like cucumber, etc are taken directly from the farm to the distribution stage without necessarily getting processed at all.
FINISHED PRODUCTS DISTRIBUTION
This is the final stage in the agribusiness chain where food products are delivered to the consumers. Although, it is possible that the distribution stage might still be broken down into stages like distributor, wholesaler, and retailer.
Products already processed are picked from the farms or processing industries, packaged and sold to the consumers. This stage requires the services of:
- Drivers to transport goods from one place to another.
- Sales representative to devise strategies that will drive sales.
- Warehouses to store finished products before moving it to the market.
- And many more…….
Of all the stages in this chain, the people presently in the production stage are not enough to take Nigeria to the level of self-sufficiency. However, it is believed that once investments start rolling in from private pockets or the government’s purse, things will start falling in place.
Agriculture is fun and profitable if done the right way. Regardless of which stage you are in the agribusiness chain, you are contributing one way or the other to the growth of agriculture in the country.
Like I mentioned earlier, we supply most of the agriculture inputs that are needed to successfully run your crops or livestock farm. Check out our store.