According to the
publication of Agricultural and Applied Economic Association, Value added
Agriculture is a portfolio of agricultural practices that enable farmers to
align with consumer preferences for agricultural or food products with form,
space, time, identity and quality characteristics that are not present in the
conventionally-produced raw Agricultural commodities.
It appears that it is
common sense that one should be know that value added Agricultural products
will generate more revenue and at such should be of interest to anyone in this
sector. However, many have decided to look away from this and just simply focus
of the product and sales of the raw commodities. This disposition to value
addition has been attributed to various reasons like capital, competence,
machinery etc but in my opinion, I think chief among the reasons for this is
the issue of mindset.
The Federal
Government of Nigeria has for many years programmed Nigerians to think only in
terms of commodities when it comes to export trade business. This has been
consistently demonstrated by the export of crude oil by the government. This
has continued for more than 3 decades and hence all the government programmes,
infrastructure development, incentives, capacity building have been geared
towards the development of the oil and gas sector. All these have created a
mindset that made people to think less of Agriculture talk less of value added
Agric business when they are thinking of investing in any business. To correct
this anomalies, I will recommend that the government set a short term and
medium term goals. The focus of this article will be on the short term goals,
while the medium term will be considered in another article sometimes in the
future.
The short term goal
should include the establishment of Agro processing centres across the country
in order to enable the Small and Medium Scale Enterprises (SMEs) to have a
point to take off their business in order to build their capital and ultimately
set up their own processing factories. It is interesting to note that the
federal government has started this in some parts of the country. It will be
great to not just extend this all the states in the federation, but also ensure
that this kind of facility is present in all the senatorial districts of each
state of the federation. This model validate the fact that, an Agro processor
do not really need to have all the funds to set up a factory before he can own
his own brand.
Another way of
replicating this model is Contract Production. This involves a process whereby,
an intending Agro processor (client) partners with a processing factory
(factory) that currently produces or has the capacity to produce his dreamed
product via a joint venture agreement. The client produces his packaging
materials and deliver them with his raw materials to the factory. The factory
then processes the product, put it in the package received and deliver it to
the client for onward distribution to the market.
To the extent that
most of the Agro processor are processing various food items for mankind, it
becomes highly imperative for those products to be of very high quality that is
fit for human consumption. Therefore there is need for regulation. However, A
situation where the Agro processors and other entrepreneur sees the regulator
as an impediment to the progress of their business is not good for the country.
I will strongly recommend that the National Agency for Food and Drug Control
(NAFDAC) carry out a thorough assessment of its processes, do some internal
cleansing and carry the following reforms. The Agency should make public a
timeline for the registration of any product with the agency. The phone number
to call when there is unnecessary delay should be made available to the public.
The procedure for escalating any issue to the Director General should also be
made known to the public. In addition to these, besides the checklists on its
website, the exact fees payable to the agency for various degrees of products
and registration should also be made known to the public.
All these information
should be made available to the public via its website, conspicuous display in all the NAFDAC offices across the
country. It will be good for NAFDAC to identify a very
patriotic staff who will be able to inspire others and champion this initiative
and reforms in all its offices across the country. Considering the fact that
Nigerian Agro products is going no where in the export market if the populace
cannot trust NAFDAC to do their job patriotically. I will also strongly
recommend that the presidency directly supervise the activities of this agency
in order to ensure strict adherence to all its directives.
Having taking care of
the production and regulation, the next thing I think the federal government
should do in order to attract more investors into this sector is to give some
tax relief. This is mainly due to the fact that the level of infrastructural
deficit in the country is going to make the business to be highly unprofitable.
A typical Agro processor in Nigeria will need to tackle the issue of power generation,
water supply, cope with high cost of transportation and protracted transit time
and all these contribute significantly to the high cost of production and thus,
making the products pricing to be non-competitive both in the local and export
market. All these are the basis for recommending that the Federal government
should consider giving some tax exemptions to the Agro processors until the
business finally stabilise.
The last
recommendation is the issue of Promotion. This, in my opinion is more critical
than the ones stated above, and without it all other recommendations will be an
effort in futility. The neglect of this has been the bane of all the programmes
and initiatives of the government. Typically in Nigeria, when the government
starts a new programme, it is either not promoted at all after the launch or
they will simply do few insertions on newspaper, radio or television for a few
days and that will be all. The federal government needs to take a cue from the
serious minded businesses who will promote their products or services for
several months or even years because they realise the AIDA theory in human
psychology. This model says that an individual will usually go through four
phases (Awareness, Interest, Desire and Action) in response to any promotional
efforts. This theory says that the initial promotion only created Awareness and
generate Interest with continuous promotional efforts. As the promotion
continues, this makes them to begin to Desire the product or service and
further promotion eventually makes them to take Action. What the government usually
do is to stop after creating awareness and this only allow few people to
benefit from its programmes and hence the minimal impact and eventual failure
of the various government initiatives.
In conclusion, if we
want to create jobs, if we want to reduce post-harvest losses, if we want
increase demand for Agro produce, if we want to grow the agricultural sector,
if we want an inclusive growth in the Nigerian economy, then we must
aggressively pursue value addition to most (if not all) of our Agricultural
products.
Bamidele Ayemibo
bayemibo@3timpex.com
