How the government can promote and encourage agricultural SMEs – The boss of Adubiaro Farms

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Through Ayo Alonge, [email protected]

Hafiz Adubiaro is the founder of Adubiaro Farms, an agricultural startup specializing in agriculture, crop processing, consultancy, sale of agricultural land, establishment and management of farms.

In this interview, he discusses the essentials of agriculture, while admitting that it is profitable but for the challenges that arise from it. He also spoke about government intervention for small and medium enterprises (SMEs) in the agricultural sector.

Background

I always wanted to be a businessman because I wanted more out of life and thought that a paid job might not give me the lifestyle of my dreams. Of all the ideas that came to my mind, I decided to go for agriculture because it meets the most basic human need which is food. I believe that whether the economy is good or bad, people need to eat and our population is growing at a rapid rate. Fortunately, there was a business plan competition for a business grant called YouWin. I applied and won the scholarship in 2014, the same year I finished my NYSC. I started operations at Adubiaro Farms in January 2015 with this grant. I also got a $ 5,000 grant from the Tony Elumelu Foundation, even 2015.

Competitive advantage

What sets us apart from others is also our motto “the clear choice of quality”. At Adubiaro Farms, we don’t skimp. I have learned, over the years, that farming pays off but not for quick money. You have to take your time and step by step, you will surely get there. Our food products are the clear choice of quality and also of our services. Our branch of development and management of farms which can be assimilated to other agricultural investment companies is different because it is a real agricultural investment. We sell the land to them, set up the farm and manage it for them, give regular updates in pictures and videos and we take them periodically to the farms. We do not practice abstract farming and promise unrealistic returns on investment. We make it clear to every potential customer who has contacted us so far that projected revenues are “projected” and not fixed. In the meantime, they can all attest to the quality of management that we give to the operations to ensure that they get even more than the projected numbers.

Challenges

The challenges for agricultural businesses are enormous. They include security, climate change, lack of good roads and electricity in rural areas where farms are located, irregular prices of agricultural products, shortage of trusted and experienced farm workers, etc., but we have found ways to adapt to the challenges and keep moving forward despite the challenges. For example, in response to climate change, almost all of the farms we are setting up now are irrigated.

Mitigate the challenges

We take on the challenges one at a time. When faced with a challenge, we sit down, redefine our strategy and find a way around it. For example, when we started garri production in 2017, we had the challenge of being able to be competitive in the market because our production price was higher than the market price for garri. All our production stages, from peeling cassava to frying garri, have been mechanized. This, in fact, made our product stand out. Garri very clean without any dirt and very dry too, but at the time when we calculated our cost of production, it was difficult for us to sell it in the market. Nigerians are more interested in price than quality, especially for food products and it is not that local farmers who sold at ridiculous prices to middlemen were making a profit because they did not take into account. counts all production costs, including labor, even if they and their family members do; the cost of the firewood they collect from the bush, etc. We have started to package our products which allow us to be able to sell at a profit, albeit very slowly.

Agriculture and profitability

Farming is profitable, as I said, but not for quick money. In fact, you can lose all your money if you’re not careful. This is why I advise those who want to get into crop production to consider cash crops that are long term. They are less risky and the income is predictable to a very large extent. Most short-term crops are not resistant to disease and drought. Plus, you can’t really predict your income. Income is usually lower than projected, in most cases, and when you hit it in one cycle, you risk losing everything in the next cycle. For example, the same bag of cucumber that sold for around N7,000 in January is currently sold for N 1,500. The Nigerian food market is great fun. Imagine if you had projected your income using around 5,000 per bag? In addition, we all focused on short-term crops, leaving aside crop transformation and also perennial crops. It is a shame for us as a country that, despite being the largest cassava producer in the world, we import up to 95% of cassava starch for industrial purposes. We import up to 80 percent of coconuts for direct consumption and almost 100 percent of derivatives for industrial use in Nigeria. We import palm oil and many other food products that we cannot even imagine.

Growth and expansion

Like I said, growth is one step at a time. The majority of business founders do not understand that money is not, in fact, the biggest obstacle to starting and running a profitable business. We started with a lot of money and we failed several times. When you have truly understood the business and are in the growth stage, it is time to look for huge loans for major expansion. For us, we want to follow our growth. When we are ready to take the plunge, we can consider a loan if the terms are right. Otherwise, I prefer to raise funds through equity. This is how to raise a fund for patients.

Youth empowerment and mentoring

I have consulted with young people who contact me directly for advice so that they don’t make the mistakes we have made, just as we consult with those who are waiting for us to speed up our journey as we take the small steps. One of the key success factors in any industry is mentoring and anyone who has contacted me can attest that I am not keeping important information that can be useful.

Ministry of Agriculture and support for farmers

If he is caught in a room with the Honorable Minister of Agriculture, I will tell him to please look at ways of measuring agricultural products as a way to control the price and ensure that farmers get value for their efforts. There is no country that can be described as a contemporary of Nigeria which uses the congo, a bucket of paint / cream, a bag of food, etc., as a means of measurement to determine the amount to be paid to the ‘farmer. Farmers should be paid by the weight of the produce. The current irregular measures allow middlemen to pay farmers little and make a profit in the market. If this problem is resolved, local farmers will earn more money and be able to change their standard of living through farming. The current trend is one of the reasons why young people are not encouraged to get into farming.

The government can promote and encourage small and medium-sized businesses and budding entrepreneurs like us through funding – grants or loans – to develop and employ more young people. The YouWin program should be relaunched and allow more young people to benefit from it so that they can start. One of the reasons that many foreigners do business and excel in Nigeria, while native counterparts complain, is because they have access to loans at a very low rate from their country. In addition, the government should consider possibly forming a presidential committee to oversee the disbursement of its business intervention funds, as many of them are not reaching the people who really need them.

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