An Economic Diversification Alternative

With Nigeria producing between 400, 000 and 500, 000 metric tons of soybean yearly, experts say the crop may be the hope of the country’s diversification drive from oil to agriculture. Martins Ifijeh reports

In the middle of every difficulty lies a great opportunity, says renowned physicist, Albert Einstein. This, perhaps, best describes the current state of the Nigerian economy, which is troubled by inadequate foreign exchange to sustain domestic food security. This has forced the federal government to embark on an agricultural transformation agenda, with a focus on developing the agricultural value chain.

Within the options in trying to reverse the Nigerian story through agriculture is a miracle seed – soybean. It is referred to as the most versatile of the world’s major crops, and one of the value chains under the agricultural transformation agenda of the Nigerian government

The miracle seed, experts believe, is a tool that will help in addressing Nigeria’s growing demand for oil and protein.

According to Seed Breeder Scientist at Olam Grains, Dr. Emmanuel Sangodele, Nigeria is currently producing 400, 000 to 500, 000 metric tons of soybean crops every year, with its farming spread equally between the North and Middle Belt region; Benue, Katsina and Kaduna being the largest crop production states, while others are Zamfara, Gombe, Bauchi, Adamawa, Taraba, Nasarawa, Kwara and Niger.

Economic Importance

Sangodele said the nutritive and economic importance of soybean has earned it the sobriquet “the miracle crop”, noting that the oil extracted from soya is refined in the factories and is ultimately consumed by humans as an alternative to palm oil or other forms of imported oil obtained in the country.

He stated, “Nigeria’s population is estimated to be 170 million with only $5, 000 per capital GDP. With an increasing growth and an increasing population, there will be an increased rate in the consumption of oil.

“Soya is also one of the few plants that provide complete protein as it contains all eight amino acids essential for human health. It is the cheapest source of protein and healthy domestically produced edible oil source in Nigeria. With an increasing per capital GDP, a greater number of persons will consume a protein-based diet with chicken being the primary source for human consumption. With an increased rate of chicken consumption, there will be a ripple effect on other aspects of the economy.”

According to him, soybean is the cheapest protein source available in the world, as it is the major source for animal feed business globally. He said it was the most preferred source of protein because of its high digestibility, high energy content and cost-competitiveness among other crops. “Another rapidly growing market for soybean is in the manufacture of a variety of pharmaceuticals, such as vitamin E and other anti-oxidants. It is equally used for the treatment of chronic diseases such as cancer.”

He explained that soybean was also used for industrial applications, such as basic carrier, inks, varnishes and paints, while soaps, lubricants and sealants also contain soybean oil. “Soybean oil shows great potential as an environmentally friendly substitute for petroleum- based diesel fuel known as biodiesel.”

Impact

The crop scientist noted, “Soybean is a crop well suited for Nigeria as it is more weather, disease and pest tolerant. It also requires far lower use of fertilizers and in fact, it provides a huge benefit due to its nitrogen fixing properties.”

He said it was now one of the crops that could be cultivated and was handsomely rewarding. “The average price of soybean in current crop season was around N150, 000 per metric ton. Small-scale farmers can produce one metric ton on a hectare, with cost of production less than N70, 000, and earn more than N150, 000 on a hectare,” he said.

Challenges

Today, Nigeria is one of the largest soybean producers in Sub-Saharan Africa. However, the scope of production is relatively small – less than 500, 000 metric tons, compared to 8, 000,000 to 10,000,000 metric tons for corn and 4,000,000 to 5,000,000 metric tons for sorghum. This, agricultural scientists say, is primarily due to lack of adequate market liquidity, which provides a limited incentive to grow this crop. They say the demand is constrained by inadequate soya crushing capacity, which in turn is limited by low demand from the animal feed industry.

Like most other crops in Nigeria, soya is a smallholder crop with the average farm holding below 1.0 hectares. The limited investment in farm inputs and low farmer know-how results in poor productivity- currently less than 1.0 MT/hectare in Nigeria versus 4.5-6.0 MT/hectare in the USA.

Head, Corn and Soya Business, Olam Grains, Mr. Ayaz Khatri, says this is attributed to the unavailability of certified seeds, adding that there is a significant opportunity to close this yield gap, boost farmers’ income, and create a virtuous cycle for continuously growing this sector.

Principal Research Scientist, International Institute of Tropical Agriculture (IITA), Dr Alpha Kamara, said, “Strategic partnership has begun between IITA and industry players geared towards promoting soya production through the provision of high yielding improved varieties, thus, creating awareness, promoting sustainable seed production systems and strengthening capacities with seed companies to sell improved seeds.”

Private Sector Intervention

While the Nigerian government is making effort to address economic diversification and development, unfortunately, no government in any part of the world can single-handedly ensure food security for its citizens. In 2015, more than 195 member countries adopted the 17 global sustainable development goals (SDGS) at the landmark 70th meeting of the United Nations General Assembly in New York, where the private sector was enjoined to rally round their home governments to help realise the 17 goals and 165 targets.

In this regard, Sangodele said Olam, operating across agriculture value chains in 70 countries, took a strategic decision to expand into animal feed and protein in Nigeria as a natural adjacency to its grain business. He said this was led by a strong growth for the global animal feed industry, an existing gap within the country and a consumer demand for domestically produced protein.

Sangodele stated, “In 2016, Olam established Nigeria’s largest integrated animal feed mill, poultry hatchery farms in Kaduna and integrated Poultry and Aqua Feed Mill in Ilorin, Kwara State. This sustainable drive is a clear demonstration that a new wave of patriotic support has emerged to boost the on-going efforts of the federal government’s change and food security agenda.

“This will go a long way in satisfying a huge gap in the market as well as invigorate the whole industry, thereby supporting Nigeria on her way to self- sufficiency. This is not only commendable, but it also underscores the strategic importance that Olam attaches to the Nigerian state. Indeed, it is a positive indication that a lasting solution to the food insecurity may no longer be a distant past.”

Sangodele said prior to 2016, there was no export market for soybean production, but that in 2016 Olam became the largest buyer of Nigerian soybean from local farmers and traders. He added that as the supply of soybean recorded a surplus in relation to domestic need, Olam successfully created an export market for Nigerian beans and accounted for the bulk of soybean export.

“The Nigerian beans suffer from a lot of negative quality perceptions – aflatoxin content, high presence of foreign matter, low oil content, excessively dried, amongst others. While Olam was able to convince global buyers to overlook some of these parameters, these remain issues that need to be resolved to make Nigeria a credible exporter of Soybean,” he said.

The scientist said Nigeria had an advantage of being a country that only allowed the farming of non-genetically modified organisms (non-GMO) which have a niche demand in global markets.

Driving Research

Research plays a crucial role in fostering agricultural development but, sadly, no local seed company engages in research to boost soya production in Nigeria. Sangodele argued that the unavailability of certified seeds prompted Olam to bring on board a team of dedicated and passionate seed breeders to deliver quality seeds. He said Olam was the only seed company in Nigeria dedicated to research. He explained that they were partnering with the Nigerian government, and had identified the availability of good quality, high yielding seeds as a major catalyst for boosting farmers’ earning.

Olam, he said, has also begun analysis of several aspects of agri-processing, including energy usage, greenhouse gas emissions and fresh water usage. This initiative has enabled Olam to review their operational practices geared towards improving the use of scarce resources as well as minimize the negative impacts of production and processing across the value chains.

Supporting Farmers

In Nigeria and elsewhere in Africa, small scale farmers do not have the potential for increasing their productivity due to poor financial support. Often, they are usually found wanting because they cannot access loans for their operations and growth.

Isha Yusuf Galadimawa, a local farmer in Kaduna State, told THISDAY that one of the greatest challenges confronting farmers was inadequate finance. “If we are supported with irrigation systems, tractors, soft loans and timely release of fertilisers, I believe farmers will have a reason to smile,” Galadimawa said.

Sangodele noted that as part of Olam’s sustainable commitment, financial support was granted to small scale farmers in Nigeria. He said, “Olam is also making direct investment to enable capacity enhancements in line with the growth of local Soybean production. Currently we are partnering with IITA, Ibadan to promote high quality seeds for farmers across Nigeria tailored to the country’s climatic conditions.

“We have set an ambitious target to increase Nigeria’s soybean production from current 500,000 MTs to 2,000,000 MTs over the next five to seven years. This will not only make Nigeria self-sufficient in plant protein but also a net soybean exporter.”

Supporting Women Agenda

There is no gainsaying that the empowerment of women is a key driver in any economy. But women empowerment has tended to be overlooked in Nigeria. A female local farmer in Kaduna State, Yankaja Joy, said her main source of livelihood was soya, which paid for most of her needs. She said the training she received from Olam had improved her method of farming and yields from it.

Sangodele said they kick-started the out-grower programme targeted at women farmers because they hoped to improve the livelihood of women through the distribution of farm inputs, training in crop management practices and assisting to access international markets. “We are also giving high yielding seeds, training materials, interest-free credit on fertilisers and buying back of produce at prevalent market prices during harvest.”

He explained that Olam was also making substantial investments in poultry and feed mills, which has significantly increased the demand for soya meal, adding that with increased demand for soybean, Olam has successfully created over 500 permanent jobs, and over 5,000 casual jobs.

Huge Prospects

Experts believe there are good prospects for soybean production in Nigeria. But considering the huge financial commitments involved, government at various levels need to adopt deliberate measures to incentivise soybean farming and encourage strategic partnerships with donor agencies, research institutes, non-governmental organisations, and the private sector.