Nigeria’s most important crops
Cashew nuts, sesame seeds and cocoa beans represent more than 50% of Nigeria’s agricultural exports. However, there are many challenges to these industries that hamper future expansion. Janine Ryan explores the agriculture sector in this West Africa country.
According to Taiwo Oyaniran, an associate director at PwC Nigeria, agriculture is a key sector in Nigeria, contributing around 22% to the country’s annual GDP and employing about 36% of the workforce.
Despite the size and importance of the sector, more than 80% of farmers in Nigeria are smallholders, and they grow around 90% of the country’s agricultural produce.
Investment in the sector remains fairly low, with only about R7,37 billion of the budget in 2020 apportioned to the sector. This is short of the 10% specified in the AU’s 2003 Maputo Declaration on Agriculture and Food Security.
Crop production is the largest segment of agricultural production in Nigeria, accounting for 87,6% of total output. This is followed by livestock (8,1%), fishing (3,2%) and forestry (1,1%). Sesame seeds, cashew nuts and cocoa beans account for more than 50% of all agricultural exports.
Sesame seed, which is produced in northern and central Nigeria, is an important earner of foreign currency. Production has dropped over the past few years, however, totalling 490 000t in 2020/21, compared with the 510 000t produced the season before (see table). Sesame grows fairly quickly, with the crop being ready to harvest three to four months after cultivation.
On average, Nigeria’s exports of sesame seed range from 140 000t to 180 000t per annum. Japan and Turkey are the country’s biggest market for these exports, followed by India and South Korea.
According to the US Department of Agriculture (USDA), most of Nigeria’s sesame seed is produced by smallholder farmers, and there is little data on production and trade. Despite this, the crop remains a crucial part of Nigeria’s agriculture sector. Moreover, increasing global demand for sesame seed means that there is plenty of opportunity for Nigerian farmers.
Sesame is a hardy crop that can survive poor climate and soil conditions. This makes it a particularly important crop for Nigeria’s cash-strapped smallholders.
Nonetheless, there are many barriers to the expansion of production, as listed by Premium Times.
Some of these include:
Lack of processing facilities
The processing of sesame seed into its by-products, such as oil, requires specialised machinery and is fairly expensive. According to the USDA, the price of processed sesame seed on the global market is up to 30% higher than that of raw sesame seed due to the extra costs involved.
Currently, Nigeria has no processing facilities and therefore exports only raw sesame seed. Importers process the seeds themselves. Investing in a processing value chain would enable Nigeria to export processed seed and oil, thus generating greater foreign income. It would also create more jobs in the industry.
Another challenge for smallholder sesame seed producers is the lack of fences. Ranging livestock is often responsible for complete or part destruction of farmers’ crops. This ultimately means that the farmer earns less, and is thus even less likely to raise capital to invest in production.
This is a major problem for farmers, who are vulnerable to attack by bandits and other criminals.
Lack of training and knowledge
Smallholders may rely on generational knowledge for the production of the crop, but this is often not enough for a commercial producer. With better training, smallholders may be able to produce better-quality sesame seed.
Access to funding
As in many other African countries, smallholder farmers face serious challenges in terms of accessing land or funding. In order to invest in production, farmers need to invest capital. But without collateral, there is little chance that commercial financial service institutions will provide these farmers with loans.
According to the Food and Agriculture Organization of the United Nations, Nigeria’s annual cashew nut production averaged 255 416t between 2010 and 2019. While there was a decline in cashew production in 2010, current trading and exports of the crop are worth about R973 million and more than one million people depend on the industry, according to a recent study. Around 80% of Nigeria’s cashew crop is exported.
The vast majority of Nigeria’s cashews are exported in-shell; only around 5% are processed. About 600 000 people are employed in the industry, say Agbaje Lateef, professor of microbiology at Ladoke Akintola University of Technology (LAUTECH) in Ogbomoso and Dr Adekunle Adeoye, lecturer in food science at LAUTECH.
In 2019, the export of this crop contributed 7% to the country’s total agricultural exports. According to market data portal Statista, Nigeria exported 184 000t of in-shell cashew nuts in 2020.
As only a small percentage of the crop is processed in Nigeria, the country does not reap the full benefits of this high-value crop, according to Business Incorporated.
Vietnam is Nigeria’s biggest importer of cashew nuts; at the same time, it is the world’s biggest exporter of processed cashew nuts. As with sesame seed, there’s a major difference between the value of the in-shell product and the processed product.
For Nigeria to take full advantage of this lucrative crop, further investment in processing facilities is required. This will also require investment in the specialised skills needed for processing, as the nuts can lose value if processing is not up to standard.
Most of the country’s cashew nut crop is grown by smallholders, who face numerous challenges to expanding production:
Lack of access to quality seedlings
In order to ensure that farmers remain competitive, there needs to be greater investment in the research and development of higher-yielding and more tolerant cashew nut cultivars. Nigeria’s farmers face being left behind if they cannot improve the quality of nuts they produce.
According to Business Incorporated, the land acquisition process in Nigeria is extremely tedious, and producers struggle to gain access to land with sufficient resources for production.
Lack of mechanisation
Mechanisation is important to improve yield and quality, while cutting down on labour costs. However, it requires capital, and many farmers in Nigeria are unable to invest in the necessary machinery for more efficient production.
As cashew nuts are seasonal, a greater investment is needed in storage facilities so that the crop can be produced year round. This would allow Nigeria greater access to export markets, while maintaining market presence throughout the year and improving the quality of the crop.
Adverse weather conditions
Cashew trees are fairly easy to grow, but adverse weather conditions can affect the yield and quality of a crop. Improved cultivars and seedlings may offer greater tolerance of these adverse conditions.
Nigeria is the world’s fifth-largest exporter of cocoa beans, and exported 216 700t of the crop (about 95% of the total) in 2020, according to Statista. The main markets for Nigeria’s cocoa beans are the Netherlands and Germany.
The Cocoa Farmers’ Association of Nigeria hopes to reach a production target of 500 000t by 2024. However, production is expected to reach only 280 000t in 2021/22, which is down from the more than 300 000t produced the season before. There are various reasons for the drop in production, as reported by The Guardian.
Low production per hectare
In order to produce cocoa beans more efficiently, investment must be made in the research and development of new cultivars. New and improved cultivars would help to increase yield with fewer inputs, ensure better-quality cocoa beans, and help farmers rejuvenate old plantations.
Neglect of extension services
Producers need training and assistance. A lack of extension services means that farmers may not be given the knowledge, help or skills they need to improve production.
Lack of access to finance
Without the money needed to buy inputs, farmers use little fertiliser, insecticides, fungicides and pesticides. This negatively affects productivity and production.
Finally, there is a general lack of coordination between stakeholders in the value chain. This makes it very difficult to develop and implement a coherent and effective strategy to address the above issues.