Value-addition key to unlocking potentials in agribusiness

One of the keys to unlock the potentials in the agricultural sector is through value addition. Majority of agricultural products are marketed in their raw forms in Nigeria.

Agro processing has a tremendous potential for increasing income through value addition and increasing shelf life and access to food security through the establishment of small-scale agro processing enterprises and rural based industries.

Nigeria is a major producer of agricultural produce, however, these produce have not been fully exploited because of poor processing that has stalled the overall development of agriculture and food production.

Food and Agricultural Organisation (FAO) estimates that 50 percent of all agricultural production is at the rural and below commercial level in Nigeria, and most of these are involved in domestic consumption produce.

There is need for the agricultural industry to pay attention to value addition and product diversification, not only at the consumer level, but most importantly at the domestic level.

This has multiple benefit of improving the state of food by processing, improvement of food nutritional value, stimulation of local economy and in helping to avoid waste of surplus or unsold fresh farm produce.

The Federal Ministry of Agriculture and Rural Development (FMARD) under its Agricultural Transformation Agenda (ATA) launched the first phase of its Staple Crop Processing Zones initiative (SCPZ) to drive modernisation of Nigeria’s agricultural sector.

This initiative includes the construction, development and operation of agro-processing clusters located in areas of high-food production across the country.

SCPZ is to facilitate agro-processing environments that will be used to attract private sector investments into the local production and processing of Nigerian agricultural produce, with the primary goal of substituting imports and adding value to local agriculture produce to serve the vast and growing local market.

Agriculture and agribusiness together are projected to be a $1 trillion industry in sub-Saharan Africa (SSA) by 2030 (compared with $313bn in 2010), and they should be at the top of the agenda for economic transformation and development, according to the World Bank.

Nigeria is the world’s largest cassava producer, supplying over 20 percent of global production, according to a FAO report. Following the rise in cassava production on the heels of the Presidential Initiative on Cassava (PIC) in 2002, overall output remains below potential with production largely subsistence-based.

Cashew farmers and marketers in Nigeria selling the raw nuts are losing about 900 percent of what they would have realised if they process fully and package the nuts to international standards.

Stakeholders attest to the fact that establishment of standard cashew processing factories would create massive employment. By selling cashew nuts raw, the country realises only N9.8 billion annually, forfeiting N88.2 billion annually to other countries where the cashew nuts it produces are fully processed.

When local industries process fresh farm produce it will help to guaranty the sale of surplus farm produce, and prevent the colossal waste that is experienced.

This can be transformed into a stable export industry where finished packaged Nigerian brands are sold in other parts of Africa and around the world.

Stakeholders have pointed out that the need for processing and adding value to raw agricultural products in the country has become very necessary to safeguard prices from crashing and help becoming unattractive to investors.

Growing middle-class is seeking greater diversity and higher quality in its diets. The most dynamic sectors overall are likely to be rice, feed grains, poultry, dairy, vegetable oils, horticulture, and processed foods.

Josephine Okojie