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Agri11 Workshop V - Osun State

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  • 1. Inclusive Model for Agribusiness Development October 2011
  • 2. Prevailing Agribusiness Environment
    • Weak economic governance
      • Absence of a coherent agricultural development strategy
    • Lack of investment in agriculture and related infrastructure.
    • Weak innovation systems – technology, agribusiness education, extension services
    • Unintended consequences of liberalization – high food import bill
      • Absence of deliberate policies/strategies to upgrade domestic production
    • Limited access to affordable inputs – land, tractors, fertilizers, agro-chemicals, improved seeds
  • 3. Undeveloped Agribusiness Potential
    • Population of 3.7 million
      • Over 50% living below $2 per day
      • 30% engaged in agribusiness and related activities
    • Land area of about 14, 875 sq km – 80% suitable for agriculture (figure includes built up areas)
    • Presence of rivers and water bodies for irrigation
    • Proximity to a large food market opportunity
      • $23m per day Lagos food market
      • Good road and rail connections to Lagos
    • Strategy is to capture 10% of the Lagos food market
  • 4. Strategic Objectives Focus on Mass Food Production Osun Rural Enterprise & Agriculture Programme (O-REAP) Economic transformation of Osun State with agriculture as a key driver Wealth creation, leading to increased household income and IGR Job creation and youth empowerment Food security in Osun State
  • 5. Programme Components O-REAP
    • Farm Estate Development
    • Farmer Cooperatives
    • Agricultural Land Bank Initiative
      • 1,000 ha per local government
      • Agric Land Planning & Development Authority
      • As for farm estates
    • Agric Investments and Partnerships
      • Infrastructure upgrade
      • Inputs supply
      • Provision of storage facilities
      • Market linkages
      • Training
      • Association strengthening
      • Agribusiness support services
      • Access to credit
      • As for farm estates
      • Public private partnerships
      • Large scale agric investors
      • One stop government agency
  • 6. Preparing for Agribusiness Development (1)
    • Organise the factors for agribusiness development
      • A land bank dedicated to food production
      • Equipment leasing companies to promote affordable access to tractors and other farm machineries
      • High yielding seed varieties – private sector driven market for seeds
      • Private sector driven markets for fertilizer and agro chemicals
      • Innovative training and extension services
      • Rural infrastructure – roads, water, energy
      • Portfolio of affordable financial services for farmers
  • 7. Preparing for Agribusiness Development (2)
    • Producer Business Support – building capacity for innovation and upgrading
      • Producer association strengthening
      • Entrepreneurial training for farmers
      • Trade and information systems, market linkages
    • Aggregate Production and Processing
      • Development of production clusters
      • Facilitate formation of commodity association and networks
      • Agro-industrial estates for cassava, maize and rice.
  • 8. Preparing for Agribusiness Development (3)
    • Link producer groups to the Lagos food market
      • Produce buying companies to distribute from the farm gate to market
      • A logistics hub to move produce to Lagos by rail - free of freight charges
      • Osun Food Mart in Lagos – markets dedicated to agricultural produce from the State of Osun
    • Broker linkages between value chain participants
      • Producers, industry, governments, investors, trade associations, NGOs.
    • Private sector linked out growers’ schemes
  • 9. Market Development Stages
    • Stage 1 – Value Chain Integration for Low Income Farmers
    • Fully developed production and agro-processing clusters
    • 10% of the Lagos food market
    • Strong trade relationships with industrial buyers
      • Raw materials input supply- out growers’ schemes
    • Improved economic governance
      • MDA capacity enhancement
      • Inter-ministerial collaboration to create value
  • 10. Market Development Stages
    • Stage 2 – Agribusiness Development and FDI Flows
    • Strong domestic agribusinesses
      • Investments in out growers’ schemes
    • FDI from large global players and buyers of agricultural commodities
      • Establishment of food processing subsidiaries
      • Equity investments in domestic agribusinesses
    • Significant private sector investment in the agribusiness sector
  • 11. Partnering for Agribusiness Development
    • Office of Economic Development & Partnerships (OEDP) to drive development cooperation, investments and partnerships for agriculture.
    • Investment and partnership opportunities for:
      • Maize, rice, cassava, tomato, chili, vegetables, fisheries and livestock commodity sectors.
      • Equipment leasing company – limited govt. equity
      • Produce buying companies to distribute from farm gate to market – Lagos, industrial and export markets.
      • Agro-input dealers – seeds, fertilizer, agro chemicals, machinery.
      • Food processing and marketing companies.