Overview of agri-business
Agriculture is one of the oldest occupations in the world, which involves the cultivation of land for the planting of crops and the rearing of animals for man’s consumption. The agricultural sector is important in every nation, due to the importance of food in the human body.
In times past, agriculture was one of the major sources of income for the Nigerian government, through the cultivation of food and cash crops, such as palm fruit, cocoa, cassava, etc. At that time, these crops served as a major source of export products to other nations, to serve as a source of income for the nation.
Now, the words “agri-businesss” are from the combination of the words: Agriculture and business. It has to do with any business endeavour related to agriculture and farm-related activities. Agri-business also relates to animal rearing businesses, such as cattle rearing, pig farming, poultry, etc.
How to start agricultural businesses
Starting an agricultural business involves taking certain steps to help you set up. Now, it is important to know that there are various kinds of agricultural business, which one can engage in, and there are also different scales; varying from small-scale businesses to large-scale businesses.
Now, to start an agricultural business in Nigeria, take the following steps:
- Determine the kind of agricultural business to venture into: In starting an agricultural business, the first step to take is to determine and choose the kind of agricultural business to venture into. There are a variety of agricultural businesses, which include cocoa farming, cassava farming, pig rearing, poultry, etc. After deciding this, you can then proceed to the next step.
- Make your research: Here, you are to research the kind of agricultural business you want to start. Check out the processes involved in the business, how much would be required to start up, the machinery required, the cost of labour, rate of return, etc.
- Create a business plan: After doing a thorough research and being sure that you would be able to undertake the business, the next step is to create a business plan, which would guide your work. Your business plan includes details, such as your business goals and objectives, financial analysis, competitor analysis, market analysis, etc. This business plan would serve as a guide for every activity to be carried out, and how they are to be carried out.
- Get an adequate plot of land and other required equipment: Next, you are to purchase or rent an adequate plot of land, to start up your business, depending on the kind of agricultural business you decided on. You should also get the necessary machinery and equipment that would help your work. At the beginning of the business, you may not be able to purchase all the required equipment. However, as time goes on, you should purchase more to make your work faster.
- Register your business: After getting everything ready for your business, you can then move forward by registering it with the authorized business registration body in the nation:CAC in Nigeria. This helps your business to be legally recognized and approved by the government.
- Hire an extra hand for labour: You can proceed to hire labor and extra hands to help you in your business, to make production faster and more efficient.
How to raise money for Agricultural business
Start-up capital is an important component for any kind of business, and agricultural businesses are no exception. Money can be raised for agricultural business, through the following ways:
- Personal funds: One of the ways to raise money for your agricultural business is to use your funds or savings. You could take a dip into your savings, to begin the business and grow with that, as time goes on.
- Grants and loans: Another way to raise money for your agricultural business is through applying for grants and loans in banks. There are some banks designated to give out loans and grants to farmers to carry out agricultural projects. Also, some government funds are specially meant for agricultural businesses, as a means to encourage more involvement in agriculture.
- Partnership: You can also raise money for your agriculture business by forming a partnership with another person, in which you both contribute the capital to use in starting up the business.
Opportunities in agriculture in Nigeria
There are a variety of opportunities in the agricultural sector in Nigeria, and they are as follows:
- Production: The production of crops, through farming, is one of the opportunities in agriculture in Nigeria. It involves the cultivation of land, planting, and harvesting of crops for man’s use. This is the first stage in every agricultural business, and it requires knowledge of farming.
- Processing: Another opportunity in agriculture is the processing of raw crops harvested from farmlands. After production, some crops need to be processed, for them to be useful to man for use. So, one can decide to delve into this aspect of agriculture, as a means of livelihood. Cashew nut processing, cassava processing to get cassava flakes (Garri), palm nut processing to get palm oil, fruit juice concentrates to get liquid for fruit juice, cocoa processing for making beverages, are all business opportunities in the processing aspect of agriculture.
- Storage: Storage is also an important business opportunity in agriculture, which involves the storing and preservation of crops, for man use. Storage facilities such as barns, drums, etc to help preserve farm produce cannot be overlooked, as they play a key role in preserving these produce when in excess, to prevent spoilage. This is another business opportunity in agriculture that can be taken up.
- Transportation/Logistics: Transportation of farm produce from farmlands to the market is an opportunity that is being taken advantage of by many individuals in the agricultural sector. Most farmlands are not close to the market. Hence, transportation facilities need to be put in place to transport farm produce from the farmland to the market, where they would be sold to retailers and consumers.
- Marketing: This is another important aspect of the agricultural sector, which involves the marketing of farm produce to make people aware of where to get certain food or cash crops. Marketing could also involve the advertisement of farm equipment, fertilizers, etc. which are used to enhance farmers’ labour.
- Exporting: Exportation is another lucrative business opportunity in the agricultural sector, which involves the transportation of cash and food crops to other nations of the world. This is usually a large-scale business opportunity that brings in a lot of income for any agricultural business that is focused on exportation. Examples of farm produce that are exported include palm oil, cocoa, cashew nuts, etc.
- Commodity trading: Commodity trading involves selling crop produce internally in the nation. This requires transporting farm produce to local markets and selling them to individuals.
- Agriculture Consultancy: As an expert in the agricultural sector, another way to make money in this sector is to offer your knowledge to people as a consultant, for a fee. Many people require the knowledge that you have. Hence, offering them your knowledge as a consultant would also yield a lot of income for you.
Export potentials for the Agricultural sector
There are many export potentials for the Agricultural sector in Nigeria. In time past, Agriculture was one of the major sectors which brought in a large source of income for the government, through exporting farm produce.
Some of the export potentials for the Agricultural sector are in farm produce such as:
- Palm kernel oil
- Cassava flour
- Cashew nut
- Sesame Seeds
Importation potentials of the Agricultural sector
Importation potentials for the Agricultural sector have to do with farm produce which are imported into a nation from other nations. The following are crops which have importation potentials in Nigeria:
Read also: Profitable business ideas in Nigeria
Challenges facing agricultural business
There are various challenges faced by individuals in the agricultural sector which hinder production, preservation of produce, and other aspects of the sector. Some of these challenges shall be discussed below:
- Lack of mechanized equipment: The lack of mechanized equipment such as tractors, pulleys, etc. to be used for farm work is a major challenge that hinders the production of crops. These mechanized equipment are meant to make farming work easier and faster. Hence, when farmers do not have access to them, these farmers need to resort to the use of crude farm equipment, and this slows down work and reduces efficiency.
- Finance: Access to financing for agricultural endeavours is another challenge faced by the agricultural sector. Farmers need funds to purchase land, seeds, rent or buy mechanized equipment, rent or buy storage and transportation facilities, etc. However, when funds are limited or inaccessible, they are hindered in fully expressing their potential.
- Pest problems: Pests that disturb crops are another challenge, which affects farm output. Some of these pests destroy planted crops, resulting in low yield.
- Lack of storage facilities: Storage facilities are also very important in the agricultural sector, as they help in the preservation of farm produce, after being harvested. Now, the lack of these storage facilities is another issue, that sometimes leads to the damage of these farm produce, when they are not properly stored for future use. The lack of these storage facilities hinders the large-scale production of crops.
- Market access: Accessing markets from farmlands is another major challenge, encountered by farmers. Most farmlands are in rural areas, and most of the roads leading to these farmlands are not motorable. Hence, this poses a challenge when transporting farm produce to the market for sale.
- Natural disasters: Natural disasters, such as drought, flood, erosion, etc is another challenge of the agricultural sector, which could lead to a lot of damage if care is not taken.
What is the most profitable agricultural business?
There are many profitable agricultural businesses that can be engaged in. However, the most profitable agricultural business is the palm tree business. Here, palm seedlings are planted, from which palm trees are produced. And from palm trees, produce such as palm nuts, palm oil, palm wine, shrubs for making brooms, etc can be derived for man’s use.
Agro-processing business in Nigeria
Agro-processing refers to the physical or chemical process, through which agricultural products are processed and converted from their raw state to finished products for man’s use.
Agro-processing involves converting raw food materials to their finished state, for sale and consumption. The following are the agro-processing businesses in Nigeria:
- Tomato Processing Business
- Soy Beans and Zobo Business
- Plantain and Potato Chips Business
- Shea Butter Extraction and Refinery
- Fish Hatching Business
- Cassava Processing Business
- Yam Flour Production
- Bean Flour Production
- Corn Flour Business
- Ginger Garlic Paste Processing
- Ginger Oil production
- Spice Powder Processing
- Textile Mill
Top agricultural business in Nigeria
- Flour mills of Nigeria
- OLAM Nigeria
- Stallion Group
- Dangote Group
- BUA Group
- SeedCo Nigeria Limited
- Babban Gona
List of agricultural businesses in Nigeria
- Cassava Farming: Cassava Farming is one of the major agricultural business sectors in Nigeria, which involves the planting, harvesting, and processing of cassava for men’s use. And from this crop, other food items, such as garri are obtained.
- Poultry Farming: Poultry farming involves the rearing of birds, such as chicken, hen, turkey, and other poultry birds. It also involves the production and sale of eggs for man’s use.
- Palm fruit Farming: Palm fruit farming involves the planting of palm seedlings, which would produce palm trees, from which palm nuts would be harvested.
- Snail Farming: Snail farming is another very lucrative business opportunity that involves keeping snails that can be sold.
- Rice Farming: Rice is one of the most consumed food in Nigeria, thus, making rice farming a lucrative agricultural business in the nation.
- Pig farming: Pig farming involves the rearing of pigs, for man’s consumption.
- Cattle rearing: Cattle rearing is another agricultural business, which is more popular in the northern part of the country. It involves keeping cows, rams, goats, etc to sell, consume, etc.
- Catfish Farming: This is another agricultural business sector in Nigeria, which involves keeping catfish and selling them.
- Maize farming: Maize farming involves the planting and harvesting of maize.
- Cucumber farming: Cucumber farming involves the planting of cucumber for man use.
- Yam farming: Yam farming involves the production of yam tubers, which can be used to make yam flour, pounded yam, etc.
- Potatoes farming: Potatoes farming involves planting and harvesting potatoes, which can be used for potato chips and other food items.
- Agro-Produce Exportation: Agro-produce exportation is another lucrative business in the agricultural sector, which involves the exportation of agro-produce to other nations, as a source of income.
- Mushroom Business: The mushroom business is another lucrative agricultural business.
- Bean Flour Production: Bean flour is obtained from processing beans, to get the flour that can be used for producing food such as beans cake, etc.
- Corn Flour Business: Corn flour is gotten from processed corn and can be used to make various food items.
- Quail Farming Business: Quail farming involves rearing quails for their flesh and eggs, for human consumption and to sell.
- Pig Farming Business: Pig farming has to do with rearing pigs for sale and its products, such as pork meat.
- Ginger and Garlic Paste Processing: Ginger and Garlic Processing is another agricultural business in which ginger and garlic paste can be gotten, be used in making meals.
- Ginger Oil Production: Oil can also be gotten from ginger, and this is very nutritious and used for cooking various meals.
The agricultural sector is a big sector in the nation, from which various export products can be gotten, which would yield a sustainable source of income for a nation. And even internally, agriculture is important for human survival, through the production of food crops, to be consumed by individuals.