How to start a Farming Business in Nigeria – 4 Practical Tips


How to start a Farming Business in Nigeria – 4 Practical Tips

Following the recent economic downturn in Nigeria, the focus of business has shifted from the oil sector to other sectors with the aim of diversifying the economy. Evidence of this change in emphasis is the increasing efforts of governments to increase the productivity and competitiveness of the agricultural sector through a variety of loans, subsidies and programs. Starting a business in the agricultural sector in Nigeria has always been something that interested me.

So, I sat down to interview my friend Uka Eje who has tried his hand at several entrepreneurial ventures in the agricultural sector. He gave me some tips on how to start a farming business and I will share these tips with you in this article.


Here are Four Practical Tips to Help you Start a Farming Business in Nigeria


Tip 1: Identify Agricultural Problems

The first step in starting a farming business is identifying the problems people have and focusing on solving those problems. A few months ago, Uka launched Thrive Agric, a technology-based agriculture company that raises crowdfunding from individuals and companies interested in agriculture. The money is invested in farms with the promise of profits after the agricultural cycle.

But before starting this business, he worked with many farmers across the country and while interacting with them, he identified two major problems they faced. These major issues were related to the demand and supply of agricultural products.

• Supply Problems: On the supply side, he found that farmers across the country face three major challenges.

First, they did not fully understand standard farming practices, which resulted in low yields from their farms. Second, due to lack of financial knowledge, there was not enough money to expand. For example, they did not understand the concept of distinguishing between income and profit, or that work should be consumed and personal wages divided by income. As a result, they were spending all their income and could not expand their business.

Third, they could not access profitable markets, which forced them to sell their products at subsidized and unfavorable prices.

• Demand Problems: The aforementioned supply issues have affected market participants who request produce from these farmers. e.g: Residents of nearby villages needed more produce than the farmers could supply. Processing companies in Lagos and elsewhere also wanted more raw materials that farmers could provide.

Identifying these issues led to the establishment of Thrive Agric. Simply put, UKa wanted to produce enough to meet its domestic food needs.

If you can identify the agricultural problems around you and create a plan to solve them, you have taken the first step necessary to start an agricultural business.


Tip 2: Close the Knowledge Gap

Once you've identified the agricultural problem you want to solve, the next step is to bridge what you know about that problem with what you need to know to be a successful agricultural entrepreneur.

There are two ways to break this:

•  Pursue agricultural knowledge: You can learn about the problem you want to solve through available resources (online courses or books to read).

•  You can benefit from the knowledge of others by consulting with experts in your desired field. There are many intelligent people in Nigeria that we can learn from but the problem is that we rarely see them.

A combination of these two methods is recommended, as a proper understanding of the agricultural business is an important key to success. This lack of understanding can cost you dearly, and Uka used a personal story to explain how.

In 2014, he opened a poultry farm and raised about 450 chickens. An important part of any agricultural enterprise is the individual agricultural technological practices, and in the case of raising poultry, this includes the administration of scheduled vaccines, maintaining the temperature of the birds and understanding their general behavior.

He built this business primarily based on knowledge gained through hours of online research.

However, online information is often unstructured, leaving many opportunities for knowledge gaps. Lack of knowledge of agricultural techniques prevented him from properly administering the necessary vaccines.

As a result, he lost about 100 of the 450 pigeons he was breeding at the time. Fortunately, Benue has an agricultural college, so I met a friend who is a livestock farmer. Her friend planned a study trip for her to learn more about animal behavior.

Therefore, to start an agribusiness, it is important to first have the right experience/education, and second to be curious and willing to learn. No matter how many experts you want to hire, there's no substitute for a solid understanding of the industry you're entering. No matter what type of farm you want to run.

Here are the Basic Things you will Need to Know Before Starting a Farming Business Regardless of What Type of Farming you are Looking to go into:

• Right input

Appropriate inputs include healthy animals, high-quality seeds, fertilizers, pesticides and insecticides from reputable companies. It is recommended that you get seeds for planting from a seed research institute or a reputable organization and look for seeds at the Institute of Agriculture (IAR). It's important to know where your crops come from, as the wrong seed variety or fertilizer mix can lead to low yields.

Before deciding on fertilizers and other input options, Thrive Agric conducts soil tests to determine soil nutrient requirements. It is this information that informs the composition of the fertilizer to be used or the input requirements of the soil. This type of due diligence is important when starting a farm.

• Proper Management

There's an old saying: "If you can't protect the castle, it will fall." Management is an essential part of any farming business and includes proper supervision, knowing when/what crops/animals should be grown, knowing soil requirements, moisture retention, rainfall requirements, signs of disease and pest control methods. attack.

In the early stages of business development, it is best to act as an expansion/farm manager. And even if you're old enough to get extended service, you should consider all of these checks. Without proper management, your farming business will be destroyed before dawn.

• Select a Location

The appearance of your farm is an important part of your farming business. Many people don't know this, but there is a difference between earth and land. Land is general, but soil refers to the environment conducive to the production of a particular crop under the right conditions.

Some land in Nigeria has been divided into private ownership, losing topsoil (essential for arable farming). It's important to always make sure you do a soil test before choosing what/where to plant. It is also important to locate operations close to product markets and consider logistics and access costs.

• Security

Protection against pests and product theft is an important aspect of any farming business, especially if you operate a large farm. In addition, all farmers are protected from fires, droughts, floods, etc.


Tip 3: Raise Capital

Finally, the main limiting factor for many potential farms is funding to get started. But with any business, it's important to start as small as possible and learn to be patient and grow. That being said, there are three ways to raise capital to finance your farming business.

• Use of personal funds: If you want to start a farming business with personal funds, you will usually need to use your savings to finance the farm. This is the most effective way to start a farming business as it helps you test your farming ideas, learn valuable lessons and gather useful information before attracting external parties in the form of loans or equity capital for your business. This was Uka's experience when he started Thrive Agric.

Initially, he and his co-founder used their savings (₦60,000 to be exact) to start the company. Their desire to expand their business and lessons learned from previous farming operations helped them gradually grow their business until they felt confident that they could bring outside parties into the business.

Now, Thrive Agric collects money from subscribers to buy a share of the farm, and after the contract expires, customers get their capital back along with the promised return. More information on how this process works can be found here. Remember, getting where you want to go is all about where you start.

• Through Partnership/Equity Financing: This is when you sell your interest in an agricultural business in exchange for capital to start the business.

• Through Loans: You can finance your idea by taking loans from financial institutions or from close friends or family members. However, at this crossroads, I would strongly recommend taking a loan and starting a business.

Before considering a loan agreement for your business, it is wise to test the situation at an early stage and save money to invest in your farming business. When starting a business, there are too many uncertainties to be certain about the repayment of the loan.


Tip 4: Run

The final step is to officially launch your business. The version of the farm you start with may not be the one you want, but you should take a bold first step and start somewhere, learn from any mistakes you make, and scale as your business grows.

No one knows everything when they start out, so don't let the fact that you don't have all the information you need hold you back. This information will help you expand your business operations, so you should continue to learn and keep up with the latest trends in the agricultural industry.


Final Thought

Well, that's it for now. The four steps above will give you the basic information you need to start a farming business in Nigeria. Now that you have this basic information, go ahead and start your farming business. Together we can create economic prosperity for Africa through agriculture.

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