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| Cocoa Store |
Agribusiness
is one of the most important industries with tremendous potential for growth
and development. It involves the production, distribution, and consumption. It
has many functions to be performed by key players to bring about its efficiency
in addressing food security, employment generation and economic development.
However, agribusiness has monumental and consequential issues it must address
and one of it is middlemen participation. Middlemen are regarded as
intermediary between the producers (or farmers) and consumers. They are
believed to be performing some marketing functions that enable smallholder
farmers’ produces get to consumers and of which they get rewarded by performing
the functions. Some smart agropreneurs are beginning to query the act of these
middlemen to be exploitative rather than facilitating marketing functions. Why
will smallholder farmers pay 10% of their sale revenue to market agents in Mile
12 public market? Shouldn’t farmers be selling their produces directly to
consumers and cut off the middlemen? Will farmer be able to perform these
marketing functions efficiently and bear the cost? What is Government doing about increasing
smallholder farmers’ shares and profits and curbing the excesses of middlemen?
These are some of the issues that were discussed and addressed during
Agropreneurs’ media chat session.
A
female agropreneur, Mrs. Wulasha Amina, a greenhouse tomato farmer in Abuja
gave her own submission about the role of middle in agriculture and how to curb
their excesses;
“Nigeria
has enough food. The problem is the middle men. Middlemen raise prices for
consumers while underpaying farmers, leaving farmers poor, farmers unproductive
and produce overpriced. Farmers encounter high production cost in their effort
to boost production but hardly get fair pricing of their products from
middlemen, the bulk farm gate buyers. The real profit goes to the middlemen who
buy up the farm produces at almost give away prices and sell them at outrageous
prices to consumers. This attitude of middle men has discouraged genuine investors
from getting into agribusiness because of the marginal profit associated with
it as the middle men cart away the bulk of the profit. This activity of the
middlemen is therefore a threat to food security. Do we therefore eliminate the
roles of middlemen completely? In my opinion, the answer is NO! This is because
they free us to concentrate on our business which is getting better yield and
so add to our efficiency.
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| Female Agropreneur |
Production is not complete until the goods produced
reach the final consumers. I feel like middlemen if well utilised will add to
the growth of the agricultural sector, thereby adding to the growth of the
economy and improved standard of living. Here are a few suggestions to tackle
this issue. We will not be able to completely eliminate the roles of middlemen.
I consider them 'Necessary Evil'. However, we will need to have structures in
place to; determine fair prices for produces, control the market and penalise
offenders and to act as checks and balances to the excesses of the middlemen. We
can actually have something like a task force so to speak. We will need to
belong to some associations where we will register for a token. Our produce
should be inspected and then the middlemen will buy at a price agreed by the
association which should have a fair representation of both sides of the divide.
Let's not wait till tomorrow. Change can start here and right now. We have the
number to start the change we hope to see. We have people of diverse
professions here. Let's use that to our advantage. We can no longer do business
as usual and expect things to be different. Let's not expect middlemen to just
fold their arms and not fight back when we effect changes but we must be firm
in our resolves to see any meaningful change. I know agriculture is the next
big thing in Nigeria and we are the people to make that happen. The end of the
matter is that we must ensure good practice so that everyone goes home happy”.
Amaechi
John, a poultry egg farmer in Porthacourt gave an insight into how he has been
getting good price for his products;
“As
a farmer, don't sound desperate when you are selling your farm produce. For
example, when I’m going to make supply for eggs, I dress as if I’m going to my
office. Add value to what you do, then people will respect and accept your
price” he advised.
I'm
not really concerned about what the middleman does. I'm just trying to focus on
getting more bucks for my efforts and enterprise. In Kenya I think, catfish
sells for up to an equivalent of N1,000 per kilo. We
need the middlemen as much as the middle men need us however, what's happening
here is that the middlemen are the ones putting a price on our produces because
the farmer don't have unity, the farmers don't have one voice, the farmers are
at the mercy of the buyers (middlemen), said Kunle Dulan, Commercial Catfish
Farmer in Ogun state.
In
another reaction by Gbenga Fagbohun, a financial expert and catfish farmer, “Controlling
prices at the farm gate is not so easy as it seems. Farmers don't really have access to grants or
long term loans; they basically have to incur all the cost associated with
production personally. When it's time to
sell, and a farmer is low on cash flow, it won't be that easy for farmers to
start dictating price. So basically what we have is a cash flow problem.
If
farmers can structure their farm and practices such that there is steady cash
flow, he can always stand his ground. The reality is that middlemen will always
make more money than the farmers, same way a wholesaler makes the least profit
in the production chain. They get compensated by volume of production. So these
everyday items we buy, if you knew how small the margin is on these items from
the production company, you will be surprised. The middlemen and retailer
always make more profit in terms of percentage, but the production company
makes more in terms of volume. The only solutions available is for; 1. Farmers
to find a way to increase production volume/capacity and also reduce product
cost, 2. Participate in the value chain, i.e. farmers should also be middleman
and retailer. Forming a body in order to fix prices may not work in the long
run in my humble opinion” he submitted.
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| Fruits and Veggies Value addition |
According
to Simi Ogunlade, Songhai trained agripreneur, the Government is trying to make
almost everybody happy at the moment, the middlemen many farmers dislike is
seen by the Government as part of the value chain they love to talk about so if
we are saying Government should come up with policies that will boycott them,
I'm not sure they will be easily disposed to that. Equally, Okezie Sylvanus,
who is an exporter shares his experience how foreign middlemen blocked his deal
with farmers;
“We
have a contract to supply Shea Nut to a company here in Nigeria. After
we have discussed price with the seller on 30,000/MT with transportation fare,
on
the day we are ready to carry our goods with the agreed price, the farmer said
that he is no longer selling to us, that an Indian man have paid 50,000/MT; how
can a foreigner come down here to meet farmers directly? We have several orders
to export agric produce but the middlemen price is a problem” he revealed. A
submission by Emeka Willy, a Crop Scientist to ending middlemen excesses reads;
“In response to the session on middle men and
women making the profit from the farmers’ sweat and causing price pain to the
consumers/customer; In America for example, due to
this trend in middlemen business, most farmers decided to be selling their
product directly to the consumers, cutting off the middlemen and that was how Farmers’ Market came to be, and since 1994 farmers markets in America has
tripled from 12,019 to 36,000 plus and still rising, with more licenses to
create more been given which was caused by the surge of farmers to sell their
product directly and make maximum profit. New York Times reports that, “60% of
Americans now go to farmers market nearest to them to get their fresh fruits
and veggies and all other produces and that was caused by the Bush
administration campaign for F to T (farm to table). The trend can be
seen in South Africa where farmers markets are springing up here and there and
in solidarity and pursuit of profit, farmers in the country are flocking to
sell their produce in any farmers market nearest to them. If we are to make
head way in maximizing profit as farmers we ought to follow this tried and
tested method or system which seeming to be growing and bringing joy to the
farmers using it”.
Olumide
Ajibare, a Shea butter allied products maker, however, concurred to the
creation of farmers’ market. He said that, the idea of farmers market is a good
one. But it will need to be developed into a business model, segmented into
infrastructure (buildings, refrigerators, dryers etc). The
logistics aspect of it also include, Refrigerated trucks, crates and packaging
generally. Then the farmers will have to go into associations that will operate
in clusters to cover specific physical zones or areas. All
these can't be achieved without serious Government commitment and legal backing.
Adeniyi Sola, an agribusiness consultant says that, ‘I believe agribusiness is
potentially the next frontier for Nigeria.
I also believe that proper farm management, access to key markets and
training can potentially help change the fortunes of smallholder farmers and
make them commercially viable. The solution is obvious but the resources are
finite’.
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| Organic Shop |
Equally,
Deji, a commercial Pig farmer proposed how he wants to boycott middlemen; “Government
has no business in business. Any farmer that intends to boycott middlemen
should invest in having centers or shops to sell directly to the public. To cut
out the middlemen; I am looking into processing my pigs to pork, I want to sell
my eggs directly to the end user and sell at N700
as oppose N630. If not for them, a lot
of farmers won't even be able to function. If you feel you want to get closer
to the market, then we have to grow our own market. We should rather look at
setting up, farmers market. Some middlemen came from Warri, Portharcourt to buy
pigs in Kwara state. I can't set up a shop in Portharcourt even if I can afford
it. We all need to specialise and face what is convenient and profitable for us
and care less about others profit; Middlemen make more profit in piggery, but I
prefer to be a pig farmer; I have made up my mind not to complain about it
again. I
will process and cut them out”.
Olamilekan,
CEO Stamal Farms however appeal to Government, Policy makers, Ministers and
Commissioners to look into the current situation of Nigerian smallholder farmers
and middlemen exploitation, give farmers enabling environment to enable them
contribute efficiently to food security and economic development.
Leave your comment and inquiry below!!!