Given that the country’s exports are dominated by hydrocarbons, Nigeria’s agricultural sector provides an estimated 60% of jobs across the nation – a dynamic that is mirrored in many of the states, and Oyo is no exception. Agriculture is currently the main contributor to Oyo State’s economy, comprising 38% of gross state product (GSP) and directly or indirectly employing as much as 70% of the workforce. Oyo State is the 12th-largest crop producer and the 15th-largest livestock producer in the country, although there are some niche areas, such as poultry, where it outstrips the others in terms of production. The agricultural sector is therefore one of the key priorities of Oyo’s Restoration, Transformation and Reposition agenda and economic development programmes. The sector offers opportunities in a variety of segments, ranging from husbandry and fisheries to cash crops and downstream processing, but realising its potential will require significant investment to restructure and modernise the industry.

AGRICULTURAL ASSETS: Oyo State has an estimated agricultural landmass of 27,000 sq km and a favourable climate for equatorial crop production and livestock rearing. A wide range of tree and arable crops are already produced, including cocoa (41,320 tonnes in 2010/11), oil palm (66,970 tonnes), cassava (2.92m tonnes), yam (2.5m tonnes), maize (431,140 tonnes) and rice (290 tonnes), among others. There is an equally strong horticultural output of fruit crops such as oranges (321,490 tonnes), banana (61,770 tonnes) and tomatoes (6210 tonnes), among others. For administrative purposes, the state is divided into four agricultural zones of Ibadan-Ibarapa, Oyo, Saki and Ogbomoso. Saki, in the far west of the state, is Oyo’s breadbasket and an exporter of cotton, rice, teak and tobacco.

PRODUCTIVITY: Agricultural output is far below its full potential due to a number of key challenges, which are evident restraints on the state’s most widely cultivated arable crop, cassava. Large-scale subsistence farming translates to a highly fragmented production base that is difficult to control and administer. Farm size, averaging 1.6 ha, is a further limitation that has a significant and positive corollary to productivity. Technical efficiency is also lacking, which means farmers are unable to maximise output from a given number of inputs, such as fertiliser, agro-chemicals and farm machinery. In fact, a study by L T Ogunniyi et al at the Department of Agriculture Economics and Extension at Ladoke Akintola University of Technology in Ogbomoso revealed that provision of modern resources can have a negative impact on cassava production, owing to wrongful application of technologies. The authors recommend support and training services to accompany the modernisation programmes the state has endorsed through its extension agent programme.

BACK TO SCHOOL: One such initiative run by the Oyo State government is the Farmer Field School (FFS) scheme, which delivers practical adult education through onsite workshops, facilitated by extension agents. A total of 65 school sites were open and operating in Oyo State by the second quarter of 2013, teaching a combination of indigenous and technological farming techniques. In addition to 3500 agricultural cadets, the state government and local government employ 84 village extension agents, 165 extension agents for the Youth Empowerment Scheme of Oyo State, 20 block extension agents and 28 block extension supervisors, who have made more than 38,000 visits and trained more than 163,000 farmers.

Education is being used to address a fundamental threat to agricultural productivity in the state, namely the aging population of farmers. According to Ogunniyi’s study, the average age of farmers in some areas was around 50 years old, implying declining productivity due to inadequate labour capacity for large-scale, intensive production. The study warned that without the injection of new labour into the agricultural workforce in the next decade, many of these farmers will reach a declining productivity level and cassava-based farming will suffer a setback. The aging-out of farmers is a threat to overall agricultural output, which props up GSP and is essential to food security in the region. In response, the Oyo State government has launched an agricultural education drive in schools.

Another significant challenge to productivity is that of post-harvest losses – wastage equates to approximately 30% of total production. To help remedy this, the federal government has embarked on a raft of construction projects to expand storage options. In addition to federal government storage facilities, the state government has proposed development of three 10,000-tonne silos. Given plans to increase agricultural output, however, there is certainly a need for more storage capacity. This presents significant opportunities for private investors, as the government seeks to address this problem through crop processing.

STIMULATING GROWTH: Government-led projects are vital to carrying the agricultural sector forward, and the Oyo State Agricultural Development Programme (OYSADEP) has successfully addressed some of the challenges which have stunted growth of the sector. The ultimate objective is to make agriculture a major driver of growth for the state’s economy, elevating it among the top five agricultural producing states in the country. Special attention has been paid to transforming production and value chain development of crops such as cassava, rice, cotton, maize and soybean.

In 2012 a total of 76,082 farmers had registered for the Growth Enhancement Support Scheme (GES) in Oyo State, and the Ministry of Agriculture in Oyo State had predicted that 250,000 farmers would register by the end of 2013. GES is a federal initiative intended to subsidise major agricultural inputs such as fertiliser and seedlings. After kicking off in May 2012, the programme had registered 14m farmers nationwide as of mid-2012. Farmers receive a 50% subsidy on inputs through an e-wallet system that alerts registered farmers via SMS about the nearest agro-dealer where they can redeem their subsidy, rather than waiting in long queues.

CASSAVA TRANSFORMATION: Under the government’s agricultural programme, cassava has been transformed from a subsistence crop to an industrial cash crop, becoming one of the most actively marketed food crops with promising growth and market opportunities.

Processing of cassava tubers to make high-quality cassava flour is a priority objective under the Cassava Transformation Agenda, which seeks to curtail and displace imported starch, flour and sweeteners. Cassava is already grown in sizable volumes in Oyo Sate, but there are moves to improve commercial production to allow for a shift towards higher value-added production. Psaltry International, a private Nigerian-owned enterprise based in Iseyin, has a cultivated area of 500 ha which is to be expanded to 700 ha in 2013. Production is supported by an outgrower scheme of 300 farmers with a cultivated area of 1000 ha. This is expected to increase to some 500 outgrowers cultivating 2000 ha in 2014. Outgrowers yielded an average of 20-25 tonnes per hectare cultivating virgin soil without fertiliser, and productivity dropped to 15-20 tonnes per hectare on non-virgin soil. The factory farms produced slightly higher yields, but were comparable nonetheless.

COLLABORATION: Plantation agriculture has hit perennial stumbling blocks in Nigeria for a variety of reasons, and this has prompted many multinational corporations and domestic firms operating in Oyo State to pursue outgrower schemes, which have proved very successful. British American Tobacco Nigeria (BATN) currently manages an extensive network of contract farmers who supply tobacco to its large factory in Ibadan. BATN oversees 850 contract farmers with a combined acreage of 1900 ha. The multinational provides vital support to its farmers, who receive interest-free loans, input materials such as fertiliser and seed, and a guaranteed market with prices agreed on every year. Total production in 2012 reached 2400 tonnes and BATN now plans to expand operations in Kwara State. Psaltry International is also working with some of the same growers as BATN as they have entered into dual production, growing tobacco for three months of the year through the limited growing season and cassava the other nine months. This method is helping bring the farming population into commercial agriculture.

ACCESSING LAND: In order to facilitate investment in the sector, the Ministry of Agriculture has been helping investors secure farmland. According to the Oyo State Ministry of Agriculture, 10,537 ha of farmland have already been secured for soybean production in the Atisbo local government area by UK-based Karma Foods, for which the state granted the firm a 75% discount. The ministry also negotiated the release of 1668 ha by the Ayete Community to domestic firm Vegefresh Farm Nigeria, which intends to produce and process cassava and tomatoes. Courtney Ambrose Farms has also secured 1780 ha in Ori Ire via the state government for maize and cassava production and processing of starch products. While these incentives will facilitate investment in the state, it should be clear that it remains an uphill struggle to get projects off the ground. Investors must contend with limited road infrastructure and power supply, all of which make large-scale commercial agriculture difficult and outgrower schemes ideal.