Agriculture is important for Nigeria's economy but remains underdeveloped. Agribusiness considers agriculture as a business from production to marketing. It has several components: planning through financial and production planning; production focusing on quantity, quality and efficiency; processing through value-addition; and marketing using strategies like direct sales, contract farming and processing. Developing strong agribusiness can help improve agriculture and food security in Nigeria.

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Agribusiness- Doing agriculture as a
Business.
Debo Akande
On behalf of AgResults Aflasafe Team
Ibadan May 2015

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Outline
 Introduction
 Background to Agribusiness
 Components of Agribusiness
 Conclusion

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Introduction
Agriculture is the most important sector in the Nigerian
economy.
It employs 60% of Nigerians, including many rural women,
and contributes up to 35% of the country’s GDP.
As in many other African countries, agriculture in Nigeria is
largely focused on food crops for the domestic market, given
the Nigerian population estimated at 150 million people.
39.6 m hectares of arable land in Nigeria, of which 60% is
under cultivation.
In spite of this reality, Nigeria remains a net importer of food
with an annual import bill of USD 3b. (FAO MAFAP Country profile 2012)

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Intro
About 5% of Nigerian smallholders use
improved seeds because there are significant
problems with seed availability, quality and
pricing.
The fertilizer application rate is approximately 7
kg per hectare of arable land in Nigeria, a small
fraction of the global average of 100 kg/ha.
Only 18% of farmers receive extension services.
Traditional thinking and Subsistence Farming .

5. Maize & Poultry Growth
• Nigerian maize production
has grown from 4 million
metric tons in 2000 to a 7.3
million metric tons in 2010
• Nigerian poultry production
has grown from 113 Million
birds in 2000 to 192 million
birds in 2010
• Each sector has grown on
average 5% per year.
• Poultry feed is
approximately 60% maize.
• Annual demand for maize:
1 million tons
Nigerian Govt Bans
Poultry Imports
Index of growth in production for maize and poultry
relative to Nigeria’s production in 1961* Measure:
Relative growth in production
Poultry Industry… Key Driver of Domestic Maize Production

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What is Agribusiness
“The chain of services, value adding and transformation of
commodities that stretches from the production of raw food and
fibre, through to the delivery of food, fibre and associated
products to consumers’” The Australian Agribusiness Association (AAA).
Agribusiness : Interdependency of agriculture process from
planting to market.

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Components of Agribusiness
Planning
Production
Processing
Marketing

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Planning
Non- Financial
Legal and Ownership (Sole ownership, Partnerships;
Cooperative; Limited Liability Company)
Organisation Management: Who will manage the
organization? Who is who? (Organogram) What will the
structure look like?
Organisation Capacity : Resources needed (human etc)
Organisation Culture: Same mind/ Same ethics
Succession plan

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Planning
Financial Plan
 Financial goal: What is your goal for the finance?
Start-up capital: What is the start- up capital vrs business goal?
Source of fund: Where is it coming from? Bank, Other lenders, Family source
etc
Planning Horizon: What timeframe is the finance for?
Forecasts and Projections :What are the net income projections ? How does
this projection change when certain prices change? What is the break-even
point for farmers producing the crop? What is the cost of the added value vrs
profit at short and long term.
 Bookkeeping: Record of financial transactions as part of the accounting
system.
Revaluation and revise of the financial plan:

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Component of Business plan
Business Description: Mission statements, business
overview and product service.
Market Analysis: Market characterizes, Customer targets
Competitors Assessments: Who are or will you be
competing with ? market share, relationship with customer,
price, distribution, financial strength etc
Marketing Plan: Promotional and Advertisement plan.
Operation Plan : Human resources need.
Financial Plan: Expenditure Vrs profit projection, break
even.

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Production
Product : Quantity that is going to be produced? What
standard of quality? What market are we targeting?
Buyers knowledge of the value addition?
Technically efficient ( maximum output/units of output
Economically efficient (maximum profit)
Operation: the production of the crop, the processing
facility (including labour requirements), storage and
transport resources required. What are the risks, plans to
mitigate the risk.
Profitability: How will this lead to profit.

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Processing
Value Addition
 Branding/Labeling- Nutritional contents.
Grading/categorization.
Cleaning/separation.
Bagging.
Certification where and when required.
Standards from buyers. (Local and International Market
specific) Shoprite etc.
Processing to secondary products. Maize flour
Tuwo,Kenke etc.

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Marketing
The management process through which goods and
services move from concept to the customer. It includes
the coordination of four elements called the 4 P’s of
marketing:
(1) identification, selection and development of a product,
(2) determination of its price,
(3) selection of a distribution channel to reach the
customer’s place and
(4) development and implementation of a promotional
strategy

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Market strategies
Which way to go?
Direct Sales? Open market.
Contract Farming? what would a contract
conceivably look like - quantity, quality,
duration?
Agro Processing? Cooperation among
smallholder farmers to turn primary agricultural
products into other commodities for market .

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Summary
Opportunities for Agribusiness
Business plan before business start up
Financial and non-financial planning.
 Quantity and Quality production vrs profit .
Value addition in processing.
Marketing strategies.
Return on investment.

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Conclusion
Where is my business plan?