Olam Reaffirms Commitment to Backward Integration

Gilbert Ekugbe

Olam Nigeria, a leading agribusiness conglomerate, has reaffirmed its commitment to the federal government’s backward integration programme (BIP) to revitalise the agricultural value chain.

The Olam said that it has made strong inputs across the local agricultural landscape with valuable impacts on Nigeria’s gross domestic product (GDP) and the national job creation drive.

The report showed Olam has consistently scaled its investment in various out-grower programmes, research partnerships, seed trials, and the integration of smallholder farmers into various empowerment initiatives across different levels.

To boost the supply of rice, Olam partnered the International Fund for Agricultural Development (IFAD) and the federal government of Nigeria in the value chain development programme (VCDP), a backward integration framework to train smallholder rice farmers, supplies input to the farmers and provides guaranteed buyback.

According to the statement, since 2014 when IFAD and VCDP rolled out the rice value chain development project, about N22 billion has been injected into the rice smallholder initiatives of Olam in Nigeria’s Middle Belt as data by IFAD revealed that a larger number of the smallholder rice farmers who were engaged by Olam and its partners recorded a 79 per cent jump in their incomes.

To mitigate the negative impact of the COVID-19 supply chain shocks in 2020 on the supply of rice to Nigerians and the incomes of farmers, Olam presented an estimated N110 million grants to select farmers in Benue State. Till date, the agribusiness out-grower programme has engaged over 35,000 smallholder rice farmers and is still on boarding new farmers to accelerate the supply of rice.

Similarly, in the wheat value chain, the collaborative efforts between Olam, Flour Millers Association of Nigeria (FMAN) and Federal Ministry of Agriculture and Rural Development (FMARD) are yielding appreciable results.

Currently, the scaled investment in seed trial and research, distribution of farming inputs to local wheat farmers and the adoption of mechanised farming techniques have spurred increased harvest yield. This year, an estimated 847 tonnes of wheat have been collected for off-take by members of the milling association.

The Olam, through Caraway Africa Nigeria (CAN), its subsidiary company, signed a memorandum of understanding (MoU) with the world vegetable centre, a renowned research institute and prominent seed producer and developer, in 2019, for the supply of 18 varieties of seeds for local farmers engaged by CAN.

Over 1,000 tomato farmers are participating in its out-grower programme while tomato harvest yields per hectare in Kano and Jigawa States have risen from 7.5 metric tons to over 30 metric tonnes of tomato per hectare.

Other intervention programmes embarked upon by Olam include a $150 million investment in the animal/ aquafeed, hatchery and poultry segments in 2017; a partnership between Outspan Nigeria Limited, a subsidiary of the agribusiness giant, and the over 70,000-membered Kano Dairy Union, to modernise milk collection processes in Nigeria.

These backward integration projects are currently impacting the livelihoods of poultry farmers in Kaduna, Kwara states and suburbs and in Kano where over 12,000 dairy farmers, for the first time, have access to a modern milk collection facility.

The Vice President of Olam Agricultural Intervention Programmes, Mr. Reji George said: “Our robust backward integration programmes underscore the confidence we have in Nigeria’s pursuit of food sufficiency. We are committed to supporting the Federal Government’s Agriculture Promotion Policy and development efforts by consistently scaling our research and seed trial efforts along the value chain.”