Agri11 Workshop V - Osun State

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Agri11 Workshop V - Osun State

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

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