UNIVERSITY OF BIRMINGHAM

1
UNIVERSITY OF BIRMINGHAM
DEPARTMENT OF MANAGEMENT
BIRMINGHAM BUSINESS SCHOOL
MSc International Business
DISSERTATION COVER SHEET
2014-2015
I confirm that I have read and understood the regulations on plagiarism* and acknowledged the
work of other that I have included in this dissertation.
Student’s full name: Emmanuel Anchaver
Student’s ID number: 1487053
Student’s signature:
Title of dissertation: “The Role of Private Extension Services in Developing Nigerian Agriculture.”
Date: 17th
September, 2015
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The Role of Private Extension Services in Developing Nigerian Agriculture
Emmanuel A. Anchaver
Dr Pamela Robinson
MSC International Business 2015
1487053
Word Count; 11,233

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ACKNOWLEDGMENTS
I want to first of all thank God for seeing me through what has been a challenging year
away from home. I want to thank my parents, David and Jane Anchaver for all their
sacrifices and belief in me without which I would not have been able to complete my
MSc degree. I am grateful to Damilola Dokumu for being so supportive and always
lending me a listening ear throughout my time in Birmingham. I am very thankful to my
supervisor, Dr Pamela Anderson whose meticulousness and expertise have been a
great source of inspiration that I will take beyond this dissertation. I would also like to
thank my friend Samuel Onwuzurumba for his concern and help. Finally, I would like to
say thank you to my housemates Satish Gurung, Paul Mbuga and Sindiso Moyo for
being my family here in Birmingham.

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ABSTRACT
Nigerian agriculture has large unharnessed potential with over 84million hectares of
arable land, a population of 167 million and 230 billion cubic meters of water. These
endowments have sadly not translated into economic success for stakeholders. The
calls for agricultural sector reform that spurs investment and to serve as a link for
transforming the country’s abundant resources into a profitable sector that focuses on
food production and poverty reduction particularly among smallholder farmers. This
research study aims to explore the phenomena of private extension in Nigeria and its
impact on agricultural development particularly in replacing public agencies. This study
uses a case study methodology as a primary source of data and secondary data from
documents and publications of reputable agencies reporting on Nigerian agriculture. It
explores the functions of extension services, the factors determining entry into the
sector and ends with recommendation on the constraints and challenges faced by
providers.

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List of abbreviations
ADP – Agricultural Development Project
AGRA – Alliance for a Green Revolution in Africa
ATA – Agricultural Transformation Agenda
ECOWAS – Economic Community of West African States
FAO – Food and Agriculture Organization
FGN – Federal Government of Nigeria
FMARD – Federal Ministry of Agriculture and Rural Development
GAP – Good Agricultural Practices
GES – Growth Enhancement Scheme
NEPAD – New Partnership for Africa’s Development
NIRSAL – Nigerian Incentive- Based Risk Sharing System for Agricultural Lending

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TABLE OF CONTENTS
1.0 INTRODUCTION....................................................................................................... 8
1.1 AGRICULTURE IN NIGERIA.......................................................................... 9
2.0 LITERATURE REVIEW........................................................................................... 12
2.1 PRIVATE EXTENSION..................................................................................... 15
2.2 PRIVATE EXTENSION IN NIGERIA ................................................................ 16
2.3 CRITICISM OF PUBLIC EXTENSION.............................................................. 18
2.4 THE ROLE OF AGRIBUSINESS ENTERPRISES............................................ 19
2.5 LINKING AGRIBUSINESS AND PRIVATE EXTENSION ................................. 20
2.6 MANDEMAKER’S FRAMEWORK .................................................................... 21
2.7 NKONYA’S FRAMEWORK............................................................................... 25
2.8 THE RESEARCH ISSUE AND QUESTIONS ................................................... 25
3.0 METHODOLOGY.................................................................................................... 27
3.1 RESEARCH PARADIGM.................................................................................. 27
3.2 RESEARCH METHODS................................................................................... 28
3.3 SAMPLING STRATEGY................................................................................... 30
3.4 ETHICAL IMPLICATIONS ................................................................................ 31
4.0 DATA ANALYSIS .................................................................................................... 33
CASE STUDY ANALYSIS: MULTI-TREX INTEGRATED FOODS PLC ................. 35
CASE STUDY ANALYSIS: FARMFORTE NIGERIA LIMITED ............................... 37
CASE STUDY ANALYSIS: TOMATO JOS ............................................................. 39
5.0 RESEARCH FINDINGS .......................................................................................... 44
BUSINESS CLIMATE............................................................................................. 49
EXTENSION APPROACH FLEXIBILITY................................................................ 50
CRITICAL SUCCESS FACTORS........................................................................... 51
6.0 CONCLUSION AND RECOMMENDATIONS.......................................................... 52
6.1 LIMITATIONS OF THE STUDY AND SUGGESTIONS FOR FURTHER
RESEARCH............................................................................................................ 54
REFERENCES.............................................................................................................. 55
APPENDIX.................................................................................................................... 63
APPENDIX A: SEMI STRUCTURED INTERVIEW PROMPTS .............................. 63

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LIST OF TABLES
TABLE 1: CHRONOLOGICAL ORDER OF EXTENSION STRATEGIES IN NIGERIA...................18
TABLE 2: OVERVIEW OF SELECTED COMPANY CASES ...............................................................31
TABLE 3: PROBLEM AREAS OF FOCUS FOR MULTI-TREX SMALL FARMER COCOA
EXTENSION IN NIGERIA.......................................................................................................................36
TABLE 4: PROBLEM AREAS OF FOCUS FOR FARMFORTE SMALL FARMER EXTENSION IN
NIGERIA....................................................................................................................................................38
TABLE 5: PROBLEM AREAS OF FOCUS FOR TOMATO JOS SMALL FARMER EXTENSION IN
NIGERIA....................................................................................................................................................40
TABLE 6: PARTICIPATING/COLLABORATING/PARTNERING SECTORS OR AGENCIES, AND
THEIR MAIN ROLES IN THE MULTI TREX SMALL FARMER COCOA EXTENSION
PROGRAM................................................................................................................................................41
THEIR MAIN ROLES IN THE TOMATO JOS SMALL FARMER EXTENSION PROGRAM.......42
THEIR MAIN ROLES IN THE FARMFORTE SMALL FARMER EXTENSION PROGRAM.........43
TABLE 9: EXTENSION APPROACH OF THE FIRMS..........................................................................43
TABLE 10: MAJOR FOCUS AREAS OF PRIVATE EXTENSION PROVIDERS ..............................48
TABLE 11: IMPACT OF GOVERNANCE INDICATORS ......................................................................49
TABLE 12: THEMES FROM SEMI STRUCTURED INTERVIEWS. ...................................................52

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1.0 INTRODUCTION
Agriculture in most parts of Sub Saharan Africa has long been an inexplicably
neglected sector which is in dire need of intervention. There is an opportunity for
public and private individuals to participate in order to realize production potential
and to power rural development (NEPAD, 2013). The Nigerian Government in
recognition of this has begun to implement measures aimed at boosting the
country’s agricultural industry by revamping the FMARDi and initiating agricultural
initiatives to encourage private participation in the sector (The Guardian, 2014).
Nigerian crude oil directly accounts for around 70% of government revenue, with the
value of petroleum exports set to drop to about 52 billion dollars in 2015 down from
88 billion dollars in the previous year; the sharp decline emphasizes the need for an
economy that supports an estimated 160million people to diversify (The Economist,
2015). Hailu (2012, p, 2) succinctly describes the task facing agriculture
“As smallholder farmers provide the bulk of food produced in developing countries- up to 80
percent in Sub Saharan Africa- and agriculture employs the majority of the labour force. Real
transformation in the sector will not happen without the integration of smallholders into markets.
Farming must be transformed from a largely subsistence activity to one that is run as a business and
generates enough incomes that smallholders can improve their livelihoods and make a greater
contribution to the national economy”
The existence of a trade deficit in agricultural products, in which demand continues
to rise, creates an interesting opportunity for those willing to invest in revitalizing a
once profitable and successful sector (Manyong et al., 2005). Smallholder farmers
play an important role in the future development of agriculture across the entire
country.

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1.1 AGRICULTURE IN NIGERIA
In terms of employment, agriculture is by far the most important sector of Nigeria's
economy, employing about 30.5% of the labour force (World Bank, 2010). Agricultural
holdings are generally small and scattered; farming is often of the subsistence variety,
characterized by simple tools and shifting cultivation. Nigeria's diverse climate, from the
tropical areas of the coast to the arid zone of the north, make it possible to produce
virtually all agricultural products that can be grown in the tropical and semi tropical
areas of the world (Yakubu and Akanegbu, 2015; World Bank, 2014).
In the NAIP1 technical report which outlines agriculture in Nigeria, the constraints of the
sector are discussed in terms of the characteristics of the sector. Firstly, more than 70
percent of the farming population in Nigeria consists of smallholder farmers, each of
whom owns or cultivates less than 5 ha of farmland (NARP,1994), but together
accounts for 90 percent of the total farm output. A more recent report states that the
country has around 14 million small farmers with average size of farms ranging from 1
to 3 hectares, this places around 33% of the country’s land as arable with 80% of the
land potentially cultivable.(Corporate Nigeria, 2010). Many such farms are fragmented
and scattered in different locations because of inadequate access to farm land under
the current land tenure system. This has serious negative implications not only with
respect to higher transaction costs but also in view of mechanization which is
difficult.(Takeshima and Salau, 2010) Secondly, though the arable land in Nigeria is
suitable for cultivating most crop types, crop yields are far below their potentials
1
National Agricultural Investment Plan tasked with implementing the Comprehensive Africa Agriculture
Development Programme (CAADP) under the auspices of New Partnership for Africa’s Development.

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(Roudier et al., 2010). Nigeria recorded in the past, on average, 4 tonnes of agricultural
product per hectare compared to 13-14 tonnes per hectare in other countries of similar
climatic pattern (NAIP, 2010). Thirdly, as a result of the first two factors, the growth of
the sector over the last ten years may be attributed mainly to acreage expansion and
favourable weather, but dealing with the uncertainty of rain-fed agriculture is
increasingly becoming a challenge (Dinar et al., 2008). This is becoming a serious
concern in view of climate change that is causing seasonal changes and making it
increasingly difficult for non-irrigated farmers to plan on the basis of past trends,
coupled with the weather related risk is the uncertainty of pest and disease outbreaks
that are capable of wiping out entire farms In addition, price instability in the harvesting
seasons is also outside the control of farmers, while crop insurance exists in Nigeria it
places an extra cost on resource-poor farmers and is only patronized when imposed by
financial institutions as a condition for formal credit ((Enete and Amusa, 2010:Aina and
Omonona, 2012).
Agricultural extension and advisory services play a major role in agricultural
development with the ability to contribute to the improved welfare of farmers and rural
areas (Waddington et al., 2010). While agricultural extension plays a leading role
among the public services through which governments have sought to promote
agricultural development, the performance of extension services provided by the public
sector in developing countries has largely been disappointing (Rivera et al.,2001).
Consequently, there has been agitation for more private sector involvement due to the
realization among stakeholders of the key role incentive structures play in the
performance of public extension agents (Anderson and Feder, 2007).

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In view of the numerous problems facing agriculture in Nigeria, the FMARD 2 through
the auspices of NIRSAL 3 has moved to develop private sector participation in Nigerian
agriculture. Privatization of extension services is one among the many mooted entry
points for private sector involvement, with the potential to act as a tool for the
development of smallholder agriculture. This research study aims to explore the factors
affecting the privatization of extension services in Nigeria and their role in the overall
development of the sector.
2
The Federal Ministry of Agriculture and Rural Development (FMARD) primarily funded by the Federal
Government superintends almost 50 parastatals operating either as key departments or agencies across the
country covering Agriculture, Fisheries, Livestock, Land Resources, Fertilizer, Food Reserve & Storage and Rural
Development. Service Departments include Finance, Human Resources, Procurement, PPAS (Planning, Policy,
Analysis and Statistics) and Co-operatives.
3
The Nigeria Incentive – Based Risk Sharing System for Agricultural Lending. Formed in conjunction with the
Alliance for Green Revolution in Africa (AGRA) to tackle agricultural value chains and the agricultural financing
value chain.

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2.0 LITERATURE REVIEW
Anderson (2007, p.6) defines the term agricultural extension as ‘the entire set of
organisations that support and facilitate people engaged in agricultural production to
solve problems and to obtain information, skills and technologies to improve their
livelihoods’. The role of agricultural extension and advisory services as a means of
increasing productivity through the provision of technology, information and skills
necessary for the increase the scale of production in a sustainable manner is well
recognized (Kidd et al., 2000) but dissatisfaction with progress of the public sector in
this role is aggravated by a misconception of what agricultural extension actually
means.
Historically, agricultural extension services are associated with the notion of transfer of
technology of top down projects of a centralised state, as opposed to the more open
definition of ‘helping people through a systematic use of communication to solve their
problems as partners both contributing their own knowledge and capabilities
(Albrecht,1995, p.66). The needs of farmers have expanded in recent times as a result
of the growing challenges: increased competitiveness, greater value chain integration
generating higher quality standards and more adverse conditions brought about by
climate change and natural resource deterioration (Feder et al., 2011) meaning that
traditional public agricultural extension cannot be realistically expected to meet all the
challenges.
This has prompted scholars nowadays to view extension in a broader sense, as
‘comprising public, private and semi-public systems that make up a multi-institutional,
multisectoral, pluristic system’ (Rivera and Sulaiman, 2009, p. 267). The expansion of

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this definition has widened the agenda traditionally covered by extension services from
just technology transfer (Feder et al., ibid) to include:
(1) Linking farmers to domestic and international markets, reducing their vulnerability
and enhancing the voice of the rural poor. (Farrington et al., 2002);
(2) Advising on and promoting environmental conservation (Alex et al., 2002);
(3) Advising on farm and small rural business enterprise development and non- farm
employment (Rivera et al., 2002);
(4) Augmenting technology transfer with services relating to both input and output
markets(Neuchatel Group, 2002); and
(5) Contributing to capacity development through training, strengthening the
innovation process, building linkages between farmers and other agencies, and
helping to strengthen farmers’ bargaining position through appropriate
institutional and organizational development (Sulaiman and Hall, 2002).
By focusing on the role of private extension services in linking farmers to domestic and
international markets, this study aims to explore the role of private extension providers
in developing agriculture in Nigeria. Private sector stakeholders, public donors and
government agencies all have different objectives for engaging in extension services, it
is understandable that each group will therefore have different challenges in reconciling
gaps in investments required by the areas they cover. Private sector investments in
developing countries are often restricted to competitive smallholders capable of
supplying a better quality product at commercial volumes (Ferris et al., 2014). Public
donors are usually focused on improved welfare for less endowed farmers, with
emphasis placed on stabilizing assets and perfecting traditional methods (Nkonya,

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2009). The support of government agencies is usually streamlined to export products
and is often political in nature (Bawa et al, 2010). Ferris et al. (2014) note that over the
past 50 years, there has been a decline in government spending on farm extension
services, with governments of developing countries generally in favour of more private-
public sector partnerships.As a result of this structural and functional changes across
the globe, traditionally public extension systems have been modified over the years to
meet the current challenges facing farmers (Saravanan, 2001). With the revision of the
concept of private extension by Saravanan and Shivalinge (1999) to involve the
rendering of services in the area of agriculture and allied aspects by extension
personnel in private agencies which requires farmers to pay a fee (or free) to act as a
supplementary or alternative to public extension services. This pluralism in extension
services developed out of the need to approach smallholder agricultural challenges with
varied systems that encompass outsourcing and privatization mentioned above
(Heemskerk and Davis, 2012) through the participation of public – private partnerships,
farmer-based and nongovernmental organizations, as well as private input suppliers.
Babu et al. (2015) in discussing the role of private extension suggest that the
practice of private fee for service extension involving no public sector involvement is
both impractical and undesirable. Their views are supported by Rivera and Alex (2004)
who assert that despite calls for privatization of extension, it is important that
government plays a continuing role due to the public goods nature of extension and
advisory services.

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2.1 PRIVATE EXTENSION
Roling (1982) maps out the three distinct developments in agricultural extension, private
extension, commercialization and privatization of extension services in the 1980s.
Rivera (1992) takes this further in his analysis on privatization, where he identifies the
privatization trends in France, the United Kingdom, the Netherlands, and New Zealand
which represent the earliest literature on private extension. This led him to classify
private extension into three models: public funding for material relevant to the public,
followed by direct payment from farmers as in France; Direct charging of users without
privatization, as seen in the United Kingdom; and an equal distribution of labor between
the public and private sectors with responsibility for coordination belonging to the public
sector, as seen in the Netherlands.
Rivera (1993) in further tracing the emergence of private extension notes that the
privatization of advisory services is widespread, he identifies that self-financing in the
sector emerged as a result of budgetary problems, with the relative share of national
resources earmarked for agriculture steadily decreasing leading to the increasing
phenomena of private services. He concludes his analysis by opining that private
extension has negative effects on smallholding farmers due to the reluctance of private
providers to service low level farmers mainly because they are unable to make
substantial profits due to the geographical disparity and small sizes of their farms. While
this view is supported by other authors, the notion of private extension is not completely
discarded (Faure et al., 2012).
Private extension is not an entirely new phenomenon, but the emergence of
agricultural input companies and the increasing participation of nongovernmental

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organizations in the area of extension has resulted in more visibility of the activities of
the private sector. (Saravanan & Babu, 2015). Saravanan and Gowda (1999) have
defined private extension in the context of developing countries, they see it as a set of
services rendered in the areas of agriculture by private workers which farmers may or
may not be expected to pay a fee for.
Contract farming is a recurring theme in private extension, though not always
identified as part of private extension, Minot (2007) makes a case for its identification as
part of private extension citing its mutual benefits for the farmer and provider. Contract
farming guarantees a market for the farmer and helps the producer ensure the quality of
produce (Ferris et al., 2014).
In recognition of the difficulties that entail extension services to small hold
farmers, pluralism in privatization has developed as a means of encouraging public –
private partnerships. Notable examples of such partnerships over the years have seen
governments provide means for farmers to pay for private extension from private
providers (Sulaiman, 2012). This is telling, as an approach it recognizes the broad
nature of extension which public bodies cannot be expected to fully cater for. A crucial
part of the public sector in this partnership is its role as certifier to ensure that the quality
of private extension providers is adequate and that farmers are not exploited for private
profit (Umali – Deininger, 1997).
2.2 PRIVATE EXTENSION IN NIGERIA
In Nigeria, agricultural extension services have been primarily provided by the public
sector , most notably the Agricultural Development Programs (ADPs) funded through
the world bank since the 1970s (Adebayo and Idowu, 2000). Prior to this period, the
extension services were thought to be lopsided and capable of only providing limited

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services to the majority of farmers in the most basic farming enterprises. This
ineffectiveness was the basis for the advent of the ADP’s and removal of extension
services from the civil service system in an attempt to revolutionize the sector (Ekpere,
1991).
Following the establishment of Agricultural Development Projects on trial basis in
certain parts of the country, the success of the trials encouraged the implementation of
ADPs in all states, leading to a revamp in the organization and management of
extension programs (Saliu and Age, 2009). Oyebanji (1994). and Idachaba (2005)
attested to the impact of these programs in improving the pattern of delivering extension
services to smallholder farmers.
Agbamu and Okagbare (2005) cite the withdrawal of external funding by the World Bank
and the subsequent difficulty of government to solely finance the sector as having a
noticeable effect on the inability of public extension bodies to perform efficiently due to
insufficient funding at state level, inadequate availability of inputs, poor logistics support
and inadequate staffing.

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S/No. Extension Strategy
1 Farm Settlement Scheme
2 National Accelerated Food Production Programme (NAFPP)
3 Operation feed the nation (OFN)
4 River Basin Development Authority (RBDA)
5 Green Revolution (GR)
6 The Pilot Agricultural Development Project (PADP)
7 Agricultural Development Projects (ADPS)
8 Unified Agricultural Extension System (UAES)
9 Women in Agriculture
10 National Agricultural Land Development Authority (NALDA)
11 National Coordinated Research Program
12 Farming System Research and Extension (FSRE)
13 Training and Visit System
14 Research – Extension – Farmer – Input linkage system (REFILS)
15 Extension Services by Non- Governmental Organisations
16 Extension through information communication technologies
17 Farmer Field Schools
Table 1: Chronological Order of Extension Strategies In Nigeria
Source: Adapted from Africa in Search of extension system: Experience from Nigeria (2004)
Oladele et al., (2012) commenting on the timeline of extension strategies in Nigeria
reveal that no system has exacted operational dominance, they go on to suggest that
efforts should be geared towards an extension system that would be ‘sustainable and
responsive to the socio-cultural conditions of African farmers and economic productive
capacities.’ p 280 .
On the back of this recommendation, this study aims to explore the role of
agribusiness enterprises as private extension providers and their contribution to the
development of agriculture in Nigeria.
2.3 CRITICISM OF PUBLIC EXTENSION
Public sector extension delivery has come under a lot of criticism, which has been partly
responsible for the reappraisal of the appropriate channels for delivery of agricultural
extension services. Rivera and Alex (1991) remarked that public sector extension was

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criticized for not doing enough, not doing it well and for not being relevant. They
associated the relative ineffectiveness of public extension approach to the bureaucratic
inefficiencies and poor policy formulation of the public sector. Richardson (2005)
commenting on the contribution of ADP’s in sub-Saharan Africa highlighted the failure to
address the needs of farmers, inadequate human resource capacity, weak government
commitment and the absence of a participatory role for farmers in the planning as major
impediments of public extension.
2.4 THE ROLE OF AGRIBUSINESS ENTERPRISES
Hanson and Just (2001) have argued against a universal movement towards
privatization, citing that private extension services prioritize profits over social welfare.
Rivera (1997) shares this sentiment and underlines the difficulties facing private
extension in developing countries, his assertion is primarily made on the premise of the
difficulties arising from the subsistence nature of most African (Nigerian) farming, which
necessitates the continued involvement of the public sector. Acknowledging this, Umali
–Deininger (1997) argues that experience in several developing countries show that
extension services can be delivered efficiently and profitably by the private sector. As a
result of the constraints of this study, the focus is solely on agribusiness enterprises in
the private sector excluding private consulting firms, farmer associations and non-
governmental organizations (NGO’s).
Davis and Goldberg (1957) in their pioneering work on agribusiness, group it into three
primary tri-aggregates: (i) farm supply (ii) farm production (iii) processing distribution
with the intrinsic value of synergizing agro-industrial linkage. Stone (2005) in a more
recent commentary simplifies this definition to explain agribusiness as a person or

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organization that generates income from the sale of a product and/or service which
facilitates the decision making of a farmer. Locally based agribusiness enterprises in
developing countries are typically small to medium scale operations in rural areas that
either process raw agricultural materials or provide marketing, transport and other
extension services (Kinsey, 1987). From this definition, the discourse that concerns this
study, is to explore what factors influence the dissemination of private extension
services to smallholders.
2.5 LINKING AGRIBUSINESS AND PRIVATE EXTENSION
Rhodes (1993) on the industrialization of agriculture opined that the need for better
levels of managed coordination has resulted in changes to the agricultural supply chains
by a focus on vertical integration. Kirsten and Sartorius (2002) on the same note,
highlighted that the major structural changes in the world agricultural industry in
developed countries have far reaching implications for agricultural development efforts
in developing countries.
Dannson et al., (2004) in studying farm-agribusiness links across five African countries
observed that most agribusiness companies provide a wide range of extension services
to farmers which include the provision of agricultural inputs such as seeds, fertilizers,
agro-chemicals, veterinary drugs, artificial insemination, animal feed etc. as well as field
preparation services, supply of irrigation water, produce transport etc. free of charge or
on credit, they concluded that the private sector is able to take over public extension
services to primary producers, provided the agro-business is a profitable enterprise.
Alongside its role in stimulating economic growth, agribusiness and agro industrial
development has the potential to contribute substantially to poverty reduction and

21
improved social outcomes and a ‘consensus is emerging that agro-industries are a
decisive component of socially-inclusive, competitive development strategies’
(Wilkinson and Rocha, 2008 p.1).
In the report by Dannson et al.,(2004) they reveal the linking arrangements between
farmers and agro processors to range from full vertical cooperation, asset sharing
arrangements and contract farming. The linking arrangement influences service
provision, contractual agreements as well as price determination. Agribusiness firms
can enter contractual agreements with farmers and choose to operate multipartite,
nucleus state and informal models (Eaton and Shepherd, 2001). This flexibility provides
a suitable platform for agribusiness firms to provide the aforementioned services to
farmers depending on the objectives which can be for welfare, political, social and
economic reasons. Contract farming has been implemented widely in developing
countries as a means to reduce risk and ensure throughput volumes of known quality
and price (Kirsten and Sartorius, 2002) which require the provision of extension services
to maintain the volume and regularity.
2.6 MANDEMAKER’S FRAMEWORK
To establish a platform to analyze the role of private extension service providers in
developing Nigerian agriculture, this study has attempted to use two theoretical
frameworks. Firstly, using Mandemaker et al., (2011) assessment of the relationship
between agricultural production dynamics and World Bank indicators for governance.
Mandemaker attempts to show the correlation between quality of governance and
agricultural yield. This research study borrows from this theory to examine the impact

22
governance indicators on agricultural development. By examining the case study firms
on each of the following governance indicators, the researcher aims to reveal what the
constraints are to such companies. The six indicators;
Voice and accountability
According to Kaufamann et al., (2005) this the extent to which citizens have political
rights and civil liberties, and are able to participate in selecting their government. Yields
were found to be significantly higher in countries with more political rights and civil
liberties (Fulginiti et al., 2004), indicating that agricultural development is related to
voice and accountability. Agricultural development requires interactions between the
rural population, e.g., labour unions and agricultural associations, and government
agencies, e.g., extension service and ministry of agriculture. Binswanger and Deininger
(1997) opine that such interactions are believed to benefit from political rights and civil
liberties. Furthermore, governance influences agricultural policies, tax levels, and the
conditions under which subsidies are granted. They are also of the opinion that extent to
which the rural population can influence governance by political votes is therefore
supposed to express itself in improved conditions for the rural population.
Government effectiveness
Thirtle et al., (2003) define government effectiveness as relating to the provision, by
government agencies of public goods and services, and quality thereof, such as
infrastructure and governmental agricultural research programs. Infrastructure plays a
key role for the agricultural potential of remote rural areas to be used; agricultural
research and development play a key role for yield increases. Therefore, whether or not

23
these public goods and services can be delivered effectively by the government is
crucial to agricultural development. Moreover, government effectiveness is known to
provide an adequate measure with respect to the quality of these public goods and
services, and in particular for agricultural research and development (Thirtle and Piesse
2007).
Regulatory quality
The World Bank (2015) states that regulatory quality expresses how well private sector
development is promoted by the government. A poor promotion of private sector
development may negatively affect the performance of free market mechanisms and
investment climate, e.g., making it difficult for investors to get loans (Patt et al., 2010). In
many countries, poor regulatory quality is caused by industrial protectionism: domestic
trade policies disturbing the balance between domestic and world prices and preventing
access to international markets, thereby obstructing private sector development (Lio
and Liu, 2008). Furthermore, countries with poor regulatory quality tend to implement
policies that result in high taxation of agriculture, which also has negative effects on
private sector development and investment (Krueger et al. 1991).
Rule of law
The rule of law has different interpretations depending on the context it is used. In
agricultural circles, the World Justice Project (2015) defines rule of law in relation to the
quality of contract and law enforcement in general. Poor contract and law enforcement
hinders the protection of property and the rights of landowners and tenants. In that

24
case, advances in agricultural development, i.e., yield increase, are unlikely because
these advances strongly depend on private investments in agricultural research and
development (Thirtle et al., 2003). Such investments are not likely to be made, when
investors cannot be assured of future revenues.
Political stability and absence of violence
According to Hussain and Herens (1997) political stability measures the public
perception of the likelihood of destabilization or overthrowing of a government by
unconstitutional or violent means, leading to domestic violence and terrorism. They
state it is well known that when violent political conflicts arise in a country, food security
is compromised by failure of economic and social networks. In countries facing higher
levels of political conflict and war, yields were reported to be significantly lower during
these periods (Fulginiti et al., 2004). Therefore, violent political destabilization or
overthrowing of government would have negative effects on agriculture.
Control of corruption
The control of corruption refers to the extent to which public power is abused for private
goals and gain. In countries where corruption is controlled, impartial authorities are
often provided to check for corruption of conventional authorities and to hold them
accountable if necessary. This increases the likelihood that power and funds are used
for what they were intended (Beekman et al., 2013). In countries that fail to control
corruption, powerful individuals have the opportunity to abuse their influence to their
advantage, at the expense of other less powerful individuals, e.g., farmers. For

25
example, it has been suggested that large fertilizer producers persuaded African
governments to impose particular fertilization programs upon farmers through bribery
and other forms of corruption (World Bank 2010), despite the fact that farmers often
knew more about the particular deficits of their soils.
2.7 NKONYA’S FRAMEWORK
According to Nkonya (2009) there are different models of extension services defined by
the approach of service delivery (supply driven, demand driven, participatory vs top-
down), providers of extension services and funders of services. He further suggests that
most countries follow a combination of models, each constantly evolving in response to
new realities, he emphasizes that there is no one size fits all model- so far. It is on this
basis that the case study firms will be examined.
2.8 THE RESEARCH ISSUE AND QUESTIONS
The purpose of the literature review was to attempt to show the position of agribusiness
enterprises in the privatization of extension services. Following the overview on private
extension, private extension in Nigeria and the role of agribusiness enterprises, the
researcher has attempted to outline the reluctance of academics to embrace full
privatization of agribusiness services, despite this reluctance, the idea of privatization
has not been dismissed completely. Consequently, the researcher has identified
agribusiness enterprises as a tool for extension/advisory services, the issue that will
consequently be addressed is what factors affect private extension services in its
development of agriculture in Nigeria, and this will be done by attempting to answer the
following research questions:
1. What roles do private extension systems play in providing advisory services and
how they fill gaps left by public extension?

26
2. What factors determine the entry, establishment and sustainability of private
extension systems?
3. What issues, constraints and challenges do private extension providers face in
Nigeria?

27
3.0 METHODOLOGY
3.1 RESEARCH PARADIGM
The purpose of this research study is to explore the factors affecting private extension
as a tool for the development of agriculture in Nigeria. The researcher settled on
interpretivism as the research paradigm because of the nature of the topic.
Interpretivism was chosen due to its underpinning belief that social reality is not
objective but highly subjective because it is shaped by our perceptions (Collis &
Hussey, 2009). When compared with positivism, this approach is better suited to the
research topic because it allows the adoption of methods that can ‘seek to describe,
translate and otherwise come to terms with the meaning, not the frequency of certain
more or less naturally occurring phenomena in the social world’(Van Maanen,1983,
p.9). Collins and Hussey (2009) in discussing interpretivism, highlight the ontological
differences with other research paradigms mainly because of its assumption that social
reality is subjective because it is socially constructed, meaning each participant has
their own sense of reality and there are multiple realities.
Given the different approaches to private extension, interpretivism is more likely to
reflect the distinct nature of the extension phenomena in the Nigerian context. The
epistemological assumption of interpretivism is another reason for the choice of this
paradigm; epistemology is concerned with the relationship between the researcher and
that which is researched, while ‘research facts constrain beliefs in positivist paradigms,
interpretive research beliefs determine what should count as facts’ (Smith, 1983, pp.10-
11) allowing for greater flexibility.

28
3.2 RESEARCH METHODS
Case study method will be used to explore the private extension phenomena in its
natural setting to obtain in-depth knowledge. Eisenhardt (1989, p.534) on case study as
a research method cites its focus in ‘understanding the dynamics present within single
setting’ as its strength. This view is supported by Stake (1995) who observes that case
study research is concerned with the complexity and particular nature of the case in
question.
Yin (2003) identifies that a case study allows the use of a variety of methods to try to
explore certain phenomena but also to understand them within a particular context. He
also points out that the research uses multiple methods of collecting data which may be
both qualitative and quantitative. This research was initially planned to be based on
solely primary data collected through the use of semi structured interviews. A list of
SME agribusiness firms was compiled from the Corporate Affairs Commission yellow
page online service, the selected firms were then sent emails, explaining the purpose of
the study and requesting for participation. Due to a lack of time, absence of internet
facilities and a busy schedule, a good number of firms were unable to take part.
Factoring in these difficulties, it was extremely challenging to contact agribusiness
enterprises in Nigeria who were willing and able to participate in this study.
Consequently, only two sample companies participated and this number is insufficient to
make any convincing assertions on the phenomena of private extension and its
attendant difficulties. This has prompted the researcher to look to secondary data to
supplement the findings from the semi structured interviews in answering the research
questions.

29
Documentary secondary data such as books, journals, newspaper articles and reports
from the FAO, AGRA, World Bank and other organizations on private extension in Sub
Saharan Africa will be covered in an attempt to gather as much information as possible
within the constraints of time and resources. According to Saunders et al., (2007) this
approach of using secondary data has its disadvantages, chief among which is that the
initial data collection was for another purpose which will affect its interpretation in this
research. In view of this, John Scott (1990) has suggested a criteria for assessing the
quality of secondary data; authenticity, credibility, representativeness and meaning, all
of which will be adhered to when selecting documentary data to be used in this study.
Secondary data has been invaluable in this study and provided the case of Multi Trex
whose private extension model serves as the framework for this study. Its extension
program is focused on the cocoa industry in Nigeria, by analyzing the model a
comparison will be drawn with the two other case study companies(Farmforte and
Tomatoe Jos) to explore whether the issues that hinder private extension are
synonymous to the extension model in practice or general occurrences.
After collating and transcribing the semi structured interviews (see appendix), the
interviews with available employees of the participant firms were categorized in order to
identify patterns of concepts associated with the study area. Coding (Tables 11 and 12)
enabled data categorization (identified as important to the interviewees).
The analysis involved identifying category notes regarding issues considered important
by the interviewees. The resultant categories demonstrate the density of comments
related to each code. The most common negative comments related to issues of
infrastructure deficits and bureaucracy of government institutions, while the positive

30
issues reflect the critical success factors and the flexibility the extension approach of the
case study firms that have allowed them to adapt to the business environment.
The emergent codes were grouped into families based on constructs that indicate the
behavioural attitude of the agribusiness actors towards governance and how the
external environment affects the development of agriculture across their fields. The
categorization is represented in the data analysis and findings section.
3.3 SAMPLING STRATEGY
Collis and Hussey (2009) define a sample as an unbiased subset that represents the
population and a population is a body of people or collection of items under
consideration for statistical purposes. Kothari (2003) in explaining the importance of a
sampling strategy describes it as a plan for obtaining a sample for a given population.
The choice of sampling strategy is usually tied with the research paradigm, with non-
probability sampling commonly associated with the interpretivist approach. As Bryman
and Bell (2011) point out, probability sampling involves a lot of preparation, so it is
frequently avoided because of the difficulty involved.
However, the choice of convenience sampling method is not solely due to the
constraints of the study but also the prominence of convenience samples in the field of
business and management. The difficulty with this method is the limit to generalization,
since the samples collected are not completely representative of the population from
which the samples are taken.
The sample companies are two Nigerian agribusiness firms dealing in a range of a
range of commodities across the country; they are registered as limited liability

31
companies dealing in production, storage, processing and marketing of agricultural
products. The focus is on their position on the highlighted governance indicators and its
effects on the activities of their organizations. One of the firms is focused on filling the
gap in the domestic market while the other is aimed at reaching export markets.
By relying on primary data from semi structured interviews and analysing the
documentary sources, the researcher aims to answer all research questions not
exhaustively but sufficient enough to be informative about private extension systems in
Nigeria.
The perspectives of producers and company management are used in the analysis of
Multi – Trex to understand the factors that determine entry into the private extension
domain. The semi structured interviews conducted with employees of Farm Forte have
been transcribed and analysed to discuss emerging themes on the constraints and
challenges faced in the private extension domain. Secondary data from journals,
NGO’s, FAO and AGRA where collated, with the dominant themes presented in the
findings section of this study.
Agribusiness Firm Commodity Production Storage Processing Marketing
Farmforte Sesame, Beef    
Tomato Jos Tomato    
Multi Trex Cocoa Beans    
Table 2: Overview of Selected Company Cases
3.4 ETHICAL IMPLICATIONS
The researcher has attempted to comply with the institutional guidelines on research
ethics by obtaining permission to conduct research from the relevant authorities
concerned. The nature and purpose of the research study was explained to participants
before presenting them with an overview of issues to be covered during the semi

32
structured interview session. Consent of each participant was sought and voluntary
participation was important for the in depth accounts on the issues discussed. The
interviewees had the option of disclosing the names of their SMEs and all participants
were assured of the confidentiality and privacy of what they considered sensitive
disclosures. The interviews were made at the convenience of the participants on pre-
arranged video calls, with the conversations transcribed and subsequently analysed.
The researcher ensured that all sources of information are properly quoted in order to
avoid plagiarism.

33
4.0 DATA ANALYSIS
Robson (1993) adaptation on the procedure for analysing qualitative data in a case
study will be used to analyse the data from the case study firms and secondary data
collected. His approach draws on the quasi-judicial method propagated by Bromley
(1986) whose purpose is attempt to construct a multi-perspective account of the
particular event the researcher is investigating drawn from the explanations given by the
primary participants.The underlying issue for this study is to understand what factors
affect private extension services in its development of agriculture in Nigeria, and this will
be done by attempting to answer the following research questions:
1. What roles do private extension systems play in providing advisory services and
how they fill gaps left by public extension?
2. What factors determine the entry, establishment and sustainability of private
extension systems?
3. What issues, constraints and challenges do private extension providers face in
Nigeria?
Adebayo et al., (2014) comment that as Nigeria cut its budgets for extension
services, public sector operators started providing extension services and
purchasing raw materials from the farmers to whom they provide extension services.
Multi- Trex, Farmforte and Tomotao Jos are a few of the private sector companies
providing extension to farmers, the aim of this case study is to highlight the role of
private extension systems, factors determining entry and constraints to private

34
extension providers in Nigeria. The three cases will be discussed under three
sections patterned in line with the research questions highlighted above. The
purpose is to make comparisons to the approaches used by the different companies
and then draw conclusions which will be presented in the findings section of this
study.

35
CASE STUDY ANALYSIS: MULTI-TREX INTEGRATED FOODS PLC
Multi-Trex Integrated Foods Plc, located on the Lagos–Ibadan Expressway in Warewa,
Ogun state, was registered in 1990 as a cocoa bean merchant. Leveraging the 12-year
cocoa commerce experience of its chief executive officer, the company at the outset
bought cocoa beans from a select group of local suppliers, including a cooperative
union of farmers, and processed and exported them to its customers, mainly in Europe.
In 2003, the company expanded its operations to include processing of cocoa beans
into semi-finished industrial products, namely cocoa butter and cocoa cake. Then it
exclusively hired the facility of Nigeria’s premier cocoa processing plant, Cocoa
Industries Limited (CIL), Ikeja, Lagos. The partnership arrangement with CIL afforded
the company the opportunity to retain its staff and prepare itself for the manufacturing
business.
Multi-Trex commenced cocoa processing at its current location in October 2005. The
switch from trading company to manufacturing concern demanded the restructuring of
the company’s operation.
The focus of Multi – Trex extension and advisory services for farmers is presented in
Table 3.0. It is designed to target cocoa farmers and assist them to increase their
productivity, increase the quality of cocoa supplied, increase input availability to farmers
and ensure regular supply of cocoa to the company.

36
EMPHASIS NOT AT ALL MINOR FOCUS MAJOR FOCUS
Closing
Technology Gaps
X
Pest Control X
Natural Resource
Management
X
Closing
management gaps
X
Providing market
and input
information
X
Output marketing X
Input Supply
Seeds X
Fertilizers X
Crop protection
products
X
Equipment/
Machinery
X
Credit (Leasing,
payment
structures)
X
Distribute
subsidized inputs
to eligible
beneficiaries
X
Collecting crop
and administrative
data and providing
associated reports
X
Certification;
quality assurance
X
Table 3: Problem Areas of focus for Multi-Trex Small Farmer Cocoa Extension in Nigeria
Source: Knowledge Driven Development: Private Extension and Global Lessons

37
CASE STUDY ANALYSIS: FARMFORTE NIGERIA LIMITED
Farmforte is an impact oriented company focused on creating innovative solutions to
existing problems in the African agricultural landscape and transforming them to
economic opportunities. Established in 2014 and located in Lagos, Nigeria, its model
constitutes training as well as equipping smallholder farmers with the required input to
enhance their production. The company aims to connect smallholder farmers with
requisite micro finance as well as provide them with access to basic technological inputs
that would standardize their activities. It also enters into out grower contracts with them
and buy out their produce for onward delivery to market segments. The model aims to
achieve this through
1. The use of smart and innovative mapping systems to connect farmers to real-
time on-demand logistics services that would assist in moving their produce from
farms to storage or processing facilities
2. Provision of technological implements that would enhance on-site processing
and value addition to farm produce where feasible.
3. The use of reliable alternative modes of transportation as well as harnessing of
existing unused distribution capacities to deliver produce from rural areas to
markets across the globe.
The focus of Farmforte extension and advisory services for farmers is presented in
Table 3.0. It is designed to target smallholder farmers in its value chain of oil palm, fruits
and vegetables, cassava, corn, nuts, soya-beans, sesame seed, sorghum and beef.
The table represents its services only in sesame and beef.

38
Closing
Technology Gaps
X
Pest Control X
Natural Resource
Management
X
Closing
management gaps
X
Providing market
and input
information
X
Output marketing X
Input Supply
Seeds X
Fertilizers X
Crop protection
products
X
Equipment/
Machinery
X
Credit (Leasing,
payment
structures)
X
Distribute
subsidized inputs
to eligible
beneficiaries
X
Collecting crop
and administrative
data and providing
associated reports
X
Certification;
quality assurance
X
Table 4: Problem Areas of focus for Farmforte Small farmer extension in Nigeria
Source: Author’s adaptation

39
CASE STUDY ANALYSIS: TOMATO JOS
Tomato Jos is a for-profit social enterprise that is making a domestic brand of tomato
paste in Nigeria. It operates across the full tomato value chain (farming, logistics, and
processing) and sources raw material from smallholder farmers. Established in 2014, it
is located in Panda Development area of Nassarawa State, Nigeria. It aims to empower
farmers through three business lines:
1. Farm and agricultural centre with farmer education and bundled inputs to help
smallholder farmers grow and harvest crops more efficiently;
2. Logistics and supply chain support to navigate the “last mile” to smallholder
farms and safely bring produce to the processing facility; and
3. Food processing and packaging facility that prepares and brands finished goods
for distribution in the domestic market
The focus of Tomato Jos extension and advisory services for farmers is presented in
Table 3.2. It is designed to target smallholder farmers in its value chain of tomato value
chain to maintain its supply of products and improve the welfare of small farmers.

40
Closing
Technology Gaps
X
Pest Control X
Natural Resource
Management
X
Closing
management gaps
X
Providing market
and input
information
X
Output marketing X
Input Supply
Seeds X
Fertilizers X
Crop protection
products
X
Equipment/
Machinery
X
Credit (Leasing,
payment
structures)
X
Distribute
subsidized inputs
to eligible
beneficiaries
X
Collecting crop
and administrative
data and providing
associated reports
X
Certification;
quality assurance
X
Table 5: Problem Areas of focus for Tomato Jos Small farmer extension in Nigeria
Source: Author’s adaptation

41
Partners Main roles
CENTRAL PUBLIC SECTOR: FEDERAL
MINISTRY OF AGRICULTURE AND
RURAL DEVELOPMENT, ABUJA.
RESEARCH INSTITUTIONS: CRIN,
IBADAN
FARMER ORGANIZATIONS:
COOPERATIVE UNION OF FARMERS
PRIVATE COMPANIES: INPUT
PRODUCERS, AGRO – INDUSTRY AND
INPUT DEALERS
NGO’S: SUSTAINABLE TRADE
INITIATIVE (IDH)
OTHERS: UTZ: FAIR TRADE
INTERNATIONAL; RAINFOREST
INITIATIVE.
Helps in accessing inputs through GES:
mainly makes fertilizer available to
smallholder farmers
Supplies improved seedlings to contract
farmers and provides information on new
varieties of cocoa
Supports the organization of farmers into
cooperatives in collaboration with Multi –
Trex
Inputs are supplied through credit
arrangements with local banks, which
provide credit to the farmers to purchase
inputs, which helps them to use high-quality
inputs:input dealers are also able to
connect with farmers to provide inputs on
credit arrangements
Support in the cocoa certification process
Support in the cocoa certification process
Table 6: Participating/Collaborating/Partnering sectors or agencies, and their main roles in the Multi Trex
Small Farmer Cocoa Extension Program

42
Partners Main roles
RURAL DEVELOPMENT, ABUJA AND
NAFDAC (NATIONAL AGENCY FOR
FOOD AND DRUG ADMINISTRATION
AND CONTROL)
RESEARCH INSTITUTIONS: NOT
AVAILABLE
FARMER ORGANIZATIONS: LOCAL
FARM COOPERATIVE GROUPS
IN HOUSE OPERATIONS: INPUT
INPUT DEALERS
NGO’S: NOT AVAILABLE
OTHERS: MANUFACTURERS
ASSOCIATION OF NIGERIA.
Helps in accessing inputs, mainly fertilizer
available to smallholder farmers
Safe guarding public health by monitoring
the quality of food and drugs.
Not Available
To spread the news of extension services,
participating farmers are screened and
selected individually by the company
Tomato Jos categorizes its extension
service beneficiaries into two groups; High
Touch and Low Touch farmers. High touch
farmers receive a bouquet of extension
services while low touch farmers are
provided with only improved seed
variations.
Not available
Linking industry, government and general
public stakeholders.
Table 7: Participating/Collaborating/Partnering sectors or agencies, and their main roles in the Tomato Jos
Small Farmer Extension Program

43
Partners Main roles
RURAL DEVELOPMENT, ABUJA AND
NAFDAC (NATIONAL AGENCY FOR
FOOD AND DRUG ADMINISTRATION
AND CONTROL)
RESEARCH INSTITUTIONS: NOT
AVAILABLE
FARMER ORGANIZATIONS: LOCAL
FARM COOPERATIVE GROUPS
IN HOUSE OPERATIONS: INPUT
INPUT DEALERS
NGO’S: NOT AVAILABLE
OTHERS: NETHERLANDS AFRICA
BUSINESS COUNCIL
Helps in accessing inputs, mainly fertilizer
available to smallholder farmers
Safe guarding public health by monitoring
the quality of food and drugs.
To channel local farmer needs and suggestions for
infrastructural investment.
With inadequate value adding services, the
approach takes advantage of the high demand
for Nigerian sesame by focusing on export
Linking farmers with market information and
modern farming techniques and machinery.
Table 8: Participating/Collaborating/Partnering sectors or agencies, and their main roles in the
Farmforte Small Farmer Extension Program
Agribusiness Firm Approach Providers Funders
1. Multi Trex Supply Driven CRIN, Multi-Trex Multiple Sources
2. Farmforte Demand Driven In house In house
3. Tomato Jos Top Down In house In house
Table 9:Extension Approach of the firms
Source: Author’s adaptation of Nkonya’s Framework

44
5.0 RESEARCH FINDINGS
The major focus areas for the private extension enterprises analysed were closing
technology gaps; pest control; output marketing; seeds and fertilizer distribution; and
crop protection.
Technical assistance is expected to close the gap between actual and potential
agricultural production and increases inter annual stability. The role of private extension
providers in educating smallholder farmers is crucial to their development in the
mutually beneficial relationship which allows providers to be certain of the quality of the
raw materials they receive and farmers benefitting by getting value for high quality farm
products. By investing in closing the technological gap, productivity and stability is
improved.
Output marketing and crop protection services assist smallholder farmers by the
simplification of a process that involves grading, packaging, transport, storage, agro and
food processing, distribution, advertising and sale. The difficulty in accessing these
services is bridged by private extension providers who are invested in the value chain.
Seeds and fertilizer distribution services remain a difficulty for private extension
providers due to the highly regulated nature of the industry by public agencies. By
collaborating with NGOs and agricultural research development programs, extension
providers are able import seed varieties, partner with research institutions to develop
better strains. The bureaucracy of public agencies often hinder the efforts of extension
providers in accessing and redistributing such supply inputs.
As highlighted by a manager at Tomato Jos

45
‘…the major things for us that require government intervention or interaction are importing
seeds, which we have to work with the National Seed Council, a subcommittee of the Ministry of
Agriculture, as well as Customs because we are importing, we applied for permission to import 5kg
sample of tomato seeds from France on June 1st
[2015] and it is August 15th
[2015] and we still haven’t
gotten the permission letter…’
There was less focus on credit leasing and quality certification, both areas were
dependent on the scale of the operations and target markets of the extension providers
respectively. The firms that focused on quality certification are involved in value
addition; by focusing on the quality of produce from their smallholder partners,
processing facilities operate to maximum capabilities due to a constant supply of quality
raw materials. Credit leasing for smallholder farmers is a capital intensive operation that
involves huge expenditure and economic clout to liaise with lending houses and farmer
societies.
Based on the objective to identify problem policies and assess the extent to which they
may be limiting investment in local SME agribusiness and the consequent impact on
smallholders’ access to inputs and market, AGRA’s (2014) report on Nigeria has
provided an overview of the policy gaps in areas of trade and suggestions for
consideration:
AGRA recognizing the policies adopted by the FGN to achieve the objective of food
self-sufficiency, marks the government expenditure policy of Growth Enhancement
Scheme (GES) under the Agricultural Transformation Agenda as the most robust. This
is supported by other policy measures such as the fiscal policy of import substitution
and the use of tariffs and duties to protect domestic production. GES focuses on
increasing use of improved farm inputs of fertilizer and seed to leverage productivity.

46
Boosting productivity is seen as the first step in promoting household food security and
incomes and supplying raw materials for processing zones identified for job creation
along the value chain of the most important staples as defined in the GES. Within the
GES framework, the FMARD seeks to abolish direct government involvement in the
procurement of fertilizer and seed but rather encourages use the electronic voucher
system (E-wallet) to make fertilizer available to farmers. While this approach seems to
have considerably reduced corruption in the procurement and distribution of fertilizer,
many questions have been raised in terms of the credit facilities for the agro-dealers,
the use of mobile devices for notifying and processing allocations to farmers in a
country where connectivity is a problem, and the subsequent late payment to agro-
dealers which invariably affects the timeliness in the availability and application of
fertilizer at farm levels.
The policy of concentrating foundation seed production in the hands of the National
Seed Council and the undue privilege enjoyed by the Agricultural Development Projects
(ADP) continue to undermine active involvement of the private sector, which could
leverage Nigeria’s seed production and distribution. Except for a few crops, most
varieties being planted are from informal farmer-to-farmer transfer or farmer-saved
seeds. Supporting the informal seed sector to establish standards and some form of
certification process may be one way to improve seed quality from this source that
currently supplies more than 90% of the seed.
Another reason for the gross under-performance of the seed industry is the absence of
functional national seed laws and non-harmonization of regional laws and regulations
that could allow seed trade among ECOWAS countries. Now that the ministers of

47
agriculture from the ECOWAS region have ratified and gazetted the harmonized laws,
the Member States need to comply with these rules and allow cross-border trade
among countries. Capacity building and raising awareness will be crucial for the
successful implementation of the seed harmonization scheme.
Use of tariffs to promote domestic production, particularly of maize, is not only
protectionist in approach but distortionary, without adding value along the value chain of
local staples. The focus is on driving import substitution by accelerating the production
of local staples, to reduce dependence on food imports and turn Nigeria into a net
exporter of food. The use of tariffs and duties creates inherent uncertainties in the
business environment and has been criticized as a bane to private sector development.
Frequent tariff changes tend to destabilize the production plan of entrepreneurs and
make output regularization and holding inventories very risky. Business prefers a stable,
predictable environment for long-term projection and investment.
Import substitution and high tariff rates for wheat and wheat flour appear to be the most
controversial policies as they affect traditional international trading partners, like the US,
that export wheat to Nigeria. In addition, industrial users of cassava, like the starch
industry, have raised concerns about higher prices of this raw material due to the
increase in demand without corresponding short-term increase in production.
The government of Nigeria has embarked on an elaborate plan to revive the agricultural
sector and restore the sector to its pre-independence glory. This plan is driven mainly
by the Agricultural Transformation Agenda of the FMARD. The government has laid out
a comprehensive ambitious path to achieve this agenda through fiscal policy and
institutional reforms. Aside from import tariffs, the government is also introducing other

48
policy reforms and changes in laws and regulations that include the deregulation of
seed and fertilizer sectors. Others involve marketing reforms that would promote the
setup of private market corporations to help coordinate the market, set grades and
standards, and develop innovative financing mechanisms for supplying credit.
Additionally, interstate barriers to paddy trade, such as interstate taxes, are expected to
be eliminated to reduce market transaction costs and increase free movement of
staples from areas of relative surplus to deficit zones. However, these policies and
reforms have created additional burdens that might limit the success of the ATA
process. It is suggested that the government undertake empirical analysis to
comprehensively identify—and if possible quantify—some policy gaps identified herein
to minimize hidden costs and risks that could jeopardize ATA’s success.
S/N Activity Multi- Trex Farm Forte Tomato Jos
1 Closing Technology Gaps   
2 Pest Control   
3 Output marketing   
4 Seeds   
5 Fertilizers   
6 Crop protection   
Table 10: Major focus areas of Private Extension Providers
Source: Author’s Compilation
By using governance indicators as a basis for constructing the semi structured
interview, the experiences of private extension providers were gathered and analysed
with the following themes emerging as the by the positive or negative impact of each of
the requirements that determinants for entry, establishment and sustainability of the
extension models by private providers. (See Table 5)

49
Code
identity
High – level
code
Level one code
families
Group of codes
PO
ID
PI
Business
Climate
Policy Obstacles
Infrastructure Deficit
Political Instability
Quality Certification; Government
Inefficiency; Poor Electricity; Poor Road
Conditions; Policy Discontinuation; Civil
Disorder
BM
GS
FA
Governance
Flexibility
Business Model,
Governance
Structure,
Feedback and
Accountability
Social Entrepreneurship; Risk
Diversification; Buyer Driven Value Chain;
Interference of Intermediaries; Customer
Satisfaction; Smallholder Trust; Smallholder
Education
FP
LO
SI
Critical
Success
Factors
Foreign Partnership,
Land Ownership,
Smallholder Inclusion
Opportunity to Expand; Land Ownership
Rights; Attitude to Agric; Staff Shortage,
Table 11: Impact of Governance Indicators
Source: Author’s Compilation
Business Climate
The researcher found that the business climate in which the selected firms operate is
influenced by the actions of public institutions and government policies at a Federal
level. Quality certification is controlled by Federal agencies that are prone to
government inefficiency. Agricultural polices also affect the commodities firms choose to
deal in, with non-staple products at the risk of losing government support for political
reasons despite their economic potential.
[…] Our firm intended to go into cassava production because of the immediate
past government’s cassava flour inclusion policy that would require flour mills to include
10- 20% of cassava or wheat flour for wheat production which was an idea that would
help small farmers due to the ease of growing cassava across the country. We had to
pause when we became unsure whether the subsequent administration would carry on
the policy. So far, there has been no follow up and there is a glut in the market because
other firms moved to capitalize. (Operations Manager Farmforte)

50
Commenting on the business climate, one of the proprietors of the firms stated
[…] On the one hand, it is easy to get incorporated, but on the other hand the day
to day interactions with government agencies are where you find that the business
climate is not very conducive. (Co-Founder, Tomatoe Jos)
As most of the agrarian land is located rurally, the absence of stable electricity and
insufficient road networks increases the cost of production for firms, with sporadic cases
of unrest between farmers and herders also incurring added costs.
Extension Approach Flexibility
The case study firms recognized the complex business climate as an important variable
that is crucial to establishing any extension model in the region. The researcher
discovered that despite the relatively high cost of production, the domestic demand is
sufficient incentive for firms choosing to operate. The erratic nature of doing business
can be a hindrance necessitating the need for adopting a model that is able to
effectively provide adequate services while micromanaging the manual smallholders.
The firms operate as flexible buyer driven chains, concentrating on specific commodities
with public and private safety focused standards. A shared characteristic of the firms is
the diversification of risk by sourcing from different areas, while one of the firms has
adopted a model which excludes middlemen, the other is faced with extra quality
checks and price mark ups from middlemen still in the value chain.
The extension model also influences stakeholder engagement through open channels
of feedback and accountability that are important in encouraging the participation of
smallholders, an approach which makes them more willing to accept better yielding
practices. The participation of smallholder farmers is important as it provides a constant

51
source of raw material that can be tailored to meet the standards of processing facilities
without the cost of running the farming operations.
Critical Success Factors
Private participation in the agribusiness industry is in its infancy and requires
collaboration with public agencies. Participants revealed a history of distrust between
local smallholders and government initiatives; this makes disseminating better practice
inputs difficult, with farmers sceptical about the commitment behind such initiatives.
Cooperating with foreign bodies has granted access to improved seeds, subsidized
extension services and buyer markets for processed/raw products.
The land ownership system can pose a problem in certain areas; this is remedied by
engaging with smallholder farmers without incurring rent charges but increasing seed
inputs appropriately to scale up production when necessary. However, this requires
more supervision which is affected by the shortage of skilled staff owing to attitudes
towards agriculture and added costs.

52
6.0 CONCLUSION AND RECOMMENDATIONS
By consulting secondary data and interactions with the participant enterprises, the
conclusions drawn from this study on the impact of private extension in developing
agriculture in Nigeria; value addition, trust and accountability, social entrepreneurship
and networking appear to be the areas where private extension is most active as well as
well as showing potential for development. (See Table 5.1)
S/No Codes Related Issues Theory
1. Value Addition Quality Assurance, Cost
of Production,
Value addition for commodities
influences quality requirements and cost
of products
2. Trust and
Accountability
Motivation and
Participation,
Technology
Assimilation,
Stakeholder Feedback
The effect of motivation in encouraging
participation across the value chain
3. Social
Entrepreneurship
Business Demography,
Legal Framework,
Smallholder Inclusion
Social entrepreneurship as viable model
for developing agriculture due to its
prioritization of social value and
development as well as economic value.
4. Networking Access to funds, Solving
Logistics Problems
The importance of networking for
agribusiness firms in improving
production processes and sharing
knowledge
Table 12: Themes from Semi Structured Interviews.
Sources: Author’s Compilation
The lack of adequate value addition facilities affects the manufacturing process,
resulting in annual losses of substantial amounts of produce. By providing storage and
transportation services, extension providers are eventually able to lower their costs of
production by investing in their sources of raw material.
Smallholder farmers are sceptical of the public extension projects owing to years of bad
experiences, to allay these fears and gain the trust of participating farmers represents
the biggest achievement and continuing challenge for private extension providers. Due

53
to a history of misinformation and politicization of agricultural initiatives, there has been
an uneven or virtually no improvement in certain areas of the value chain. The approach
of local firms largely takes into account the considerations of smallholder farmers,
making them more willing to accept better yielding practices. This approach has thus far
proved successful in engaging stakeholders and could be used as a model for
government intervention. The establishment of private standard initiatives such as the
GLOBAL G.A.P could go a long way to harmonizing relations with farmers, as well as
an effective, dedicated option for product certification.
The private extension models ran by the participatory firms run to an extent as social
enterprises, making profit as well as prioritizing the development of social value and the
welfare of participating farmers. Given that the agricultural sector has been largely
dormant, this approach is best suited to initially improving the fortunes of those who are
most fundamental to the value chain i.e. smallholder farmers.
This is crucial in developing an industry in its infancy. It is important for knowledge and
innovation to flow not only across the value chain but also with other businesses that
may have common issues and be able to offer solutions. It is also an avenue to
publicize polices that are most harmful and can potentially act as pressure groups to
drive the necessary changes required.

54
6.1 LIMITATIONS OF THE STUDY AND SUGGESTIONS FOR FURTHER RESEARCH
The low response rate from participants proved to be a major hindrance to this study.
The distance from Nigeria has contributed to the researcher’s inability to immerse
completely in the studied phenomena and has affected the ability to include more
agribusiness enterprises in the research study. The use of secondary data meant that
the researcher was dependent on research conducted by other people.
The semi structured interviews would provide more perspective if they involved
smallholder opinions to obtain their opinions on private providers. The depth of work
required to fully analyse the focus areas of private extension holders was not one that
was permitted due to time constraints. Furthermore, to supplement the findings from
secondary data would require the use of more sample firms to give weight to the
themes found in the analysis of the primary data. The researcher would suggest a more
extensive study of the phenomena of private extension by focusing on the perspectives
of the participating smallholder farmers who are arguably the most important and
underutilized stakeholders.

55
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63
APPENDIX
APPENDIX A: SEMI STRUCTURED INTERVIEW PROMPTS
S.No
Interview Questions Issues Explored Underpinning Areas of
Literature
1. Do you consider your
business process successful?
Nature of the
business
enterprise
To establish scale of
operations of selected firms
2. How would you describe your
input-output
structure(Products in to
Products out)
Researcher wants
to establish the
scale of
operations
To understand the
connection between
different goods and services
in the value chain
3. Do you consider your
relationship with your
smallholder suppliers as
buyer-driven (Your
Organization), producer
driven (Smallholder farmers),
or that of a traditional market
(Domestic, subsistence
markets)?
Governance
Structure
For an understanding on
how the chain is controlled
and coordinated
4. What is your approach to
industry policies that you find
hindering?
Role of Federal
Government in
Governance
The impact of the
institutional framework on
private initiatives
5. How important is feedback
and accountability across
your value chain?
How information is
collected to
improve
operations
Benefits of communication
in upgrading the value chain
6. What is your opinion on Challenges to
private
governance
Researcher wants to gain
an insight into factors that
discourage entry of firms

64
infrastructural challenges that
affect your firm?
initiatives into the sector
7. How far apart are quality
regulations (NAFDAC)
between the domestic market
and export market?
If the approach
differs depending
on target market
To understand what factors
influence the production and
of commodities
8. Does the legal framework
encourage your development
?(Contract enforcement,
landowner rights)
Business
demography
9. To what extent does political
instability affect your
operations?
Business
demography
To explore the extent to
which market and political
powers are intertwined in
the sector
10. Does public power abuse
ever affect your relations with
smallholder farmers?
Business
demography
To establish a contextual
view of how businesses
operate when dealing with
people in positions of power
11. Are you affiliated to any
business or social network?
Researcher wants
to explore the
level of business
The advantages of firms
networking to collectively
tackle mutual problems

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