The Perfect Model

The success of the Shonga project, initiated by the current President of the Senate, Bukola Saraki, during his time as governor of Kwara State, offers the country a novel approach for gaining ground in food security, Solomon Elusoji writes

In the year 2000, Robert Mugabe stunned the world when he initiated a series of legislation to make dramatic changes to land ownership laws in Zimbabwe. These changes had one major goal: to kick out thousands of white Zimbabwean farmers from the country. His argument was simple: the farmers, who owned 70 per cent of the most arable land in the country, had inherited their property from a colonial past built on racial hierarchy. By September 2005, armed youth militias were chasing some of Zimbabwe’s last remaining white farmers from their land. Coffee Farmer David Wilding-Davis and his South-African farm manager, Allan Warner, were attacked by youths wielding iron bars and automatic weapons.

“If white settlers just took the land from us without paying for it,” Mugabe had said, “we can, in a similar way, just take it from them without paying for it.”

But Mugabe’s plan was only good politics. It was terrible economics. According to the Washington Post, “driving around Zimbabwe today, it’s hard to miss the acres of farmland lying fallow.” The reason for this is not far-fetched, the blacks who got the lands grabbed from the whites did not have a fraction of farming knowledge the latter possessed. This year, Zimbabwe’s growth rate is predicted to be 1.5 per cent, according to the government, lower than that of any of its neighbours. Between 2000 and 2009, agricultural revenue declined by $12 billion, according to the commercial farmers’ union. The nation, once called “the breadbasket of Africa,” now relies on international aid to feed 25 per cent of its population, according to the World Food Programme.

However, while Mugabe was dragging his people into the ditch, the then Executive Governor of Kwara State, who is today the Nigerian Senate President, Bukola Saraki, decided to take advantage of the Zimbabweans’ fatal mistake. The government cleared large hectares of land at Edu Local Government, opened up roads leading to the community, and built an independent power station, which also supplied about 37 villages around the fallow farmland. Then Saraki invited 13 of the rejected farmers to come to Kwara and start farming. They were each given 1,000 hectares of land under a 25-year renewable lease for commercial farming purpose.

At first, there were some kickbacks from the natives of the community who thought that the government had come to take away their land and hand it out to foreigners. But, knowing the power of knowledge and how it can transform civilisations, the Kwara State Government stood its ground, patiently assuring its people that this was all for good. Over a decade after Shonga was established, its successes have put paid to the protests of those who doubted its potentials.

Today, the farm supplies cassava to the Nigerian Starch Mills Limited, which is the biggest of its kind in West Africa. It supplies fresh milk to WAMCO to produce Peak and Three Crowns milk. It equally supplies fresh milk to Nutricima. Its dairy farm has the capacity to process up to 50,000 litres of milk per day.
The farm has a cheese exporting plant in the diary section and is set to saturate the entire West African region with the product. They also export cassava chips and are probably the only company to have done five shipments of chips to countries like Israel, Australia and Hong Kong.

The farm has also led directly to the employment of thousands, and has indirectly attracted investors like WAMCO and Olam into Kwara S tate, creating multiple opportunities for its residents. The farm presently employs between 4,500 and 6,000 workers for both off and peak periods but with the on-going expansion, the poultry section alone has 2,000 workers at off and peak periods, which is expected to increase to about 10,000 workers when the expansion is completed.

This year, the Central Bank of Nigeria (CBN) paid a visit to Edu Local Government and were so impressed with the success of the Shonga project that they decided to inject a loan facility worth N2 billion into the poultry section. The facility will be provided at interest rates as low as nine per cent.

In a chat with newsmen after the tour, the CBN Governor, Godwin Emefiele, noted that the N2 billion loan facility was to support the investor’s expansion plans. He also described his visit as an eye opener, noting that there are several opportunities to tap from Shonga Farms and the poultry value chain as a whole in order to improve the country’s economy. He added that Shonga Farms was a practical example of how governments can collaborate with the private sector to deliver real dividends of democracy such as jobs and agro-allied prosperity.

A smart structure
The magic wand that has elevated Shonga Farms into the stratosphere appears to be the structure of its management, which is based on a private-public model. Although the Kwara State Government initiated the project, a limited liability company, Shonga Farms Holding Limited (SFH) was incorporated to drive its economic and financial success.

Under this arrangement, financial institutions were invited to invest in the company and Guarantee Trust Bank, Trust Bank, Intercontinental Bank, Unity Bank, Fin Bank and Bank PHB were the initial investors. The banks took 75 per cent equity, with the state government having 25 per cent. The SFH however, owns 60% equity in each of the 13 Shonga farms, leaving the farmers with 40 per cent.
Since the banks were involved, there was no room for sloppy management and the Farms were managed in such a way that they were guaranteed to make profit. “Banks always want to see how their money flows,” the General Manager of the Farm, Mr. Bayo Sangobiyi, said. “That is what changed our approach to business.”

The leader of the expatriate farmers, Allen Jack, has also attributed the success of the Farms to how they have been structured, which has left little room for needless bureaucracy or politics. “We have completely avoided the issue of politics,” he said. “The SFH surpasses politics; we are dealt with purely on professional grounds.”

A win for poultry
It is little wonder that the CBN decided to provide loan facilities to the Farm’s poultry section. Although every Shonga farm is involved in cropping, its use of backward integration has accelerated the growth of its poultry section and opened up new frontiers. The farmers plant maize, soya beans, millet, etc, and they process them into feeds for the chickens.

As at 2013, one of the national dailies reported that the poultry section of the farm was devoid of any offensive odour, the drainage system was such that no bird faeces were retained, and well planned spaces between birds afforded the avian animals comfort and free ventilation. The poultry also had a total capacity to raise 160,000 birds on weekly basis and was fitted automated modern abattoir to dress 5,000 birds daily.

There is also a research and development section which focuses on the area of breeding and genetics, seeking to uncover best practices and provide innovative solutions to the problem of increasing yield, combating diseases and ensuring seamless efficiency.
Currently, the farm’s chicken processing plant, at full capacity, produces 10,000 chickens per day. Soon, it is expected to multiply that number to 25,000 per day, making it the largest in the country. It is the major supplier of chicken to most restaurants in the country, including Kentucky Fried Chicken (KFC).

“We had meetings with people that were supplying the big eateries and hotels to give us their consumption schedule per month,” Sangobiyi said. “We signed a memorandum of understanding (MoU). Go to Shoprite or any eatery in Ilorin. If you eat chicken in any eatery, you have eaten Shonga chicken.”

Learning from the Zims
The initial distrust of the farmers from Zimbabwe may have been put to rest by Shonga’s success. But the Kwara State Government, from the beginning, had ensured that the exercise was tilted to the advantage of the locals. When the land was allocated, the design was, for every 1,000 hectares of land to the white farmers, a gap of 200 hectares was left in-between for local farmers to understudy what their more experienced counterparts were doing, learn from them and then replicate the methods on their own farms. This was a way of transferring knowledge and should have been the route taken by the Zimbabweans.

“The aim was that when our local farmers are proficient with the use of all the equipment, they can go to other communities and replicate what they have learnt,” Sangobiyi said.

A Shonga Phase 2, called the Alapa Project is now in the works. This will be focused on helping local farmers benefit from the trove of knowledge that has been applied to make Shonga a success. “I think Governor Abdulfatah Ahmed (the current Executive Governor of Kwara State) has started it by selecting 10 farmers from each of the 16 local government areas of the state,” Sangobiyi said. “The concept is to transform them to commercial farmers and they are doing wonderfully well. Our plan is to bring Kwara State to the world map as the food basket.”