Stronger together: The marketing benefits of cooperation between farmers

Hello, listeners, welcome to our program. My name is _____.
Today, we are going to talk about marketing. This is a very important topic for farmers, both large and small. Farmers work extremely hard to produce crops like rice, maize, and cassava. But it is not enough to just produce them, the crops must get to the market and to consumers at a good price for farmers.

For farmers, selling their yields at a good price is essential for their survival—to meet their families’ basic needs and to provide the funds to farm again next year. It is also important nationally as Nigeria seeks greater food security.

Today, we are going to talk to a few farmers from Benue State about their experience marketing their produce, particularly rice and cassava. But first we will introduce our expert, Kaneng Rwang-Pam, a marketing consultant who works with Marketing Systems Development or Marketing for the Poor. Ms. Rwang-Pam, welcome to the program.

Thank you.

Please tell us a bit about your background.

I work in a number of markets. I am a market development consultant and an M4P consultant as well. M4P stands for Markets for the Poor. I am also a trainer and rights advocate for farmers, especially when it comes to agribusiness and marketing. I’m a farmer myself, so I’m aware of the difficulties the farmers I’m helping face as I have experienced some of them myself.

Could you give us some background on agricultural marketing in Nigeria?

Well, for the crops we are discussing today—rice and cassava—there isn’t much of a difference. The structure of the value chains is very similar, as well as the methods to be successful.

In Nigeria, the main challenge is to change the mindset of small-scale farmers so that they see farming as a business rather than merely a means of subsistence. Regardless of the crop, they basically farm to survive.

Is there any reason for this?

There are a number of reasons, such as lack of knowledge on the farmer’s part, leading to poor practices that prevent them from increasing production beyond subsistence levels.

Another reason is the lack of an enabling environment. Farmers are trapped in a perpetual cycle of struggling to survive and not breaking even. So they can’t grow their business, and this can lead to poor yields because they sometimes can’t afford inputs like fertilizer.

When you say “enabling environment,” what do you mean?

Well, the markets are not very friendly to them, so it’s hard for them to flourish. There are middlemen, and often a lack of access to manufacturers and processors. There are also poor storage facilities and poor transport networks.

Farmers are the first link in the value chain, and there are other stakeholders that add value to their products to make the value chain thrive and grow, and give the producers a good return. But, in practice, some of these links in the chain are missing. For example, for many farmers, there are no large buyers or processors or manufacturing off-takers. This means that they have to rely on small, local markets, which reduces the amount of money they make, and thus reduces the scale of their farming. Thus, they may not be able to afford better seeds, tools, machinery and so on. And this means that farmers, despite their best efforts, may not be able to use best agronomic practices that would enhance the financial returns from their yields, whether it’s rice or cassava.

What about marketing? How does that work for farmers?

They have all struggled. For some farmers, finding markets is difficult. Some do not understand the value chain and how far it extends, or where to find other value chain actors. Farmers may think the only place they can sell is the local community market. But if they better understood the value chain or had access to manufacturers or processors, they would have a wider range of people to sell to, and possibly a better price. This is where my colleagues and I come in. We help farmers market their products and identify new markets and stakeholders.

Thank you so much. We’ll get back to Ms. Rwang-Pam later, but let’s talk to a few farmers about their experiences marketing what they produce.

First we will talk to a rice farmer from Benue State, Shishi Isaac. Mr. Isaac, welcome to our program.

Thank you.

Can you tell us a little about yourself? How did you get into farming?

I am from a generation of farmers and I started commercial farming after I finished university in 2013. My mum inspired me—she was not educated, so her income came from her farm.

How has it been so far?

I have had ups and downs. I farm rice, yam, maize, and beans. My successes with rice have been quite recent. Last harvest, I managed to get 10 bags of rice. In terms of failures, I had to sell earlier than I planned to, in March, so I could pay off a debt to a friend who needed the money urgently. The timing was all wrong and I didn’t make as much profit as if I had I sold in June. I lost a lot of money.

What would you say you learned from these experiences?

From the successes, I learnt that when you do farming on a small scale, you get a small reward, but if you scale up, you make more money. From the failures, I learnt about timing. In selling your farm produce, timing is very important.

When is the best time to sell rice? Do you have to market it?

I actually don’t market. I think it is important though because between the consumers and the middleman, whether that’s a wholesaler or retailer, there’s a lot of money. So if you want to sell directly and make more money, you have to use marketing.

Why don’t you market then?

I don’t really need to. I usually take my produce down to Lagos and it’s easy to sell there. Sometimes, though, if my harvest is very bountiful, I also sell in Benue, and there I sell to wholesalers. Sometimes this is a challenge because the wholesalers play the middleman role and make more money that way. Recently too, a company has been buying directly from us in Benue State.

Thank you, Mr. Isaac. Do you have any advice for farmers looking to get into rice farming?

If you can, mill the rice. You can’t sell rice with husks to the final consumers, who are just looking for rice they can cook and eat. If you grow rice and you really want to make money, you should consider processing it so you can sell to the final consumer. Selling to the final consumer is where the real money is.

Thank you, Mr. Isaac. Our second farmer today is Adams Nicolas, who comes from a village of farmers in Benue State. Mr. Nicolas, welcome.

Thank you.

How long have you been farming?

I have been farming for about seven years now. My parents farmed, and I’m following in their footsteps.

What do you farm?

I started farming rice, though on a small scale. I moved from that when I realized that it involves a lot of spending, even for that small scale. I moved to soybeans and now I also farm cassava, depending on the time of the year.

What would you say is your biggest success and failure?

For me, it’s not really about sales. Rather, it’s the fact that I have been able to provide for my family. As you know, Benue State has had a few crises in recent years.

Between farmers and nomadic herders?

Yes. It has really affected our productivity. So for me to be able to still feed my family who depend on me in spite of this, I consider it a success.

Well done. And what would you consider a failure since you started?

Around 2014, there was a drought, as well as an influx of imported rice on the market. I lost so much money. I had to borrow money from friends and family to restart farming the next season. It’s actually why I decided to move on from rice.

I’m sorry to hear that. What did you learn from these experiences?

It’s important to save for rainy days like what happened to me in 2014. Don’t spend all your money at once and always have a back-up.

How do you view marketing?

Normally, we have people who just want to buy our produce. But recently it has been a bit difficult. We can still sell it, but it is becoming harder to make a profit over the last three years because of all the troubles.

So you do marketing activities for your cassava?

Yes, I do some. For example, sometimes I will store my harvest first and then do a market survey. I might do this in person at the local markets, or I will call other farmers and people on the phone.

What do you ask about?

Price. What type people are looking for. Do they want it processed into gari or apu or flour (Editor’s note: gari is cassava grits and apu is fermented cassava grits)? That type of thing.

What of middlemen? Do you use them?

Sometimes. Sometimes I don’t need to. I get people who want to buy from my farm even before harvest. I just count the ridges and sell to them. I usually save customers’ numbers, so if I have a customer I sold a large amount to in the past, I call them first. If I can sell a large amount, I sell directly. But if I can’t, or I feel the price is not so good, I contact a middleman and see what price they can offer me.

How do you pick a good middleman?

Have an open dialogue with the middleman. Find out their own successes and challenges. Like, what’s the most they have sold before, where have they sold? What problems do they have selling? I guess also listen to your heart—can you trust them? Make sure you can trust them before engaging them.

Do you partner with other farmers?

Yes, I do. I have a physical disability which makes walking a bit difficult, so I am grateful that my brother farmers help me. I usually work with people that I trust.

What is your biggest challenge in selling your cassava?

Transport. Moving the produce from the farm to the market is a big challenge. I don’t have a car, so I have to always pay for one.

Thank you very much, Mr. Nicolas. Before you go, do you have any tips for farmers who want to grow and market cassava?

I would advise that newcomers meet and build relationships with cassava sellers so that they understand the different ways each one of them markets and then choose what works best. Also, if you want to sell cassava, processing it is a good idea. For example, I peel and dry some of my cassava and then sell it. People can also dry it and sell it as apu, gari, or cassava flour, which is actually the most profitable of the three.

Thank you so much for your insights, Mr. Nicolas. Let’s go back to our expert, Kaneng Rwang-Pam, having heard from our farmers. Ms. Rwang-Pam, it seemed like a lot of the farmers were experiencing the kinds of things you talked about.

The farmers you spoke to seem to be doing ok with finding markets, whether it’s going directly to markets or building relationships with customers so that some even come and reserve ridges. It’s very positive.

What could they be doing better?

Well, it does seem like they are making a bit of profit, enough to take care of their families and afford inputs for the next year. But perhaps the whole process could be easier and even more lucrative. None of them mentioned contract farming, for instance.

What is that?

Contract farming is when farmers are given some money to produce a certain tonnage of crops for a particular client. It’s not very popular yet in Nigeria, but it’s growing. Some groups are giving farmers money to produce crops for specific off-takers. In Jos, in Plateau state, there are farmers who are given funds to grow crops like potatoes, to be sold to some of the big hotels in Abuja, Nigeria’s capital.

What about other crops such as rice and cassava?

It’s not very common yet, but there are big off-takers—industrial producers, factories, manufacturers, and so on—who are emerging in the cassava and rice chains.

While contract farming has its advantages, the somewhat monopolistic nature of these contract farming situations means that farmers do not always have a wide range of markets to sell their goods. Sometimes they are not even aware of other markets, especially if the off-taker is a major player in the region. However, as more people enter these value chains, farmers should have more of a say in pricing.

What are the advantages of contract farming for farmers?

A huge advantage is the reduced risk of off-taking. Let’s say I invest 300,000 naira (US $723) on a one-hectare plot of cassava. My expected yield should be up to one million naira (US $2,410). On average, I’d be hoping for around 500,000-700,000 naira in profit (US $1,205-$1,687). But, even if I get this yield, my big worry is selling it in time. I may have problems with storage, electricity, transportation, maybe insects might infest it … all of these might damage my crop before I get it all to the market. Having a contract farming arrangement would wipe away a lot of the worries about selling the goods. Imagine a situation where the off-taker gave you 700,000 naira in return for your entire yield. In that case, you don’t have to worry about storing it for long, and you might not have to worry about transportation if that was included in the contract.

I recently heard about a young girl who invested about 200,000 naira (US $482) in some piglets. In a mere seven months, she was counting two million naira (US $4,820) in sales income, after selling them to one off-taker. We are seeing similar things in the cassava and rice value chains, with big supermarket chains from major cities like Lagos coming to farming communities and entering into contracts with farmers to produce a certain amount of crops for an agreed amount of money.

What are the disadvantages of contract farming?

If you do not have a solid contract, farmers can find it difficult to get off-takers to meet their obligations. I was once part of a group that invested our own money in farming, only for our off-takers not to show up after the harvest. We lost some of our yield, and had to sell the rest at a low price just to cut our losses. Even if you can enforce the contract legally, the clock is ticking on your produce. So make sure you have a solid contract.

It seems like partnerships or cooperation amongst farmers is a good way to approach these bigger off-takers.

It is, but that hasn’t really occurred to many farmers, even though many rice and cassava farmers belong to associations. But there is a difference between these associations and co-operatives. Associations are more like networking platforms. They look after their members and have meetings.

A co-operative is more formal, more legal, and often times, more respected. Co-operatives are not a new concept. These have existed in Nigeria for decades.

Farmers who have formed co-operatives in many different value chains have seen those co-operatives thrive and make them very well off. They have not just stayed as producers, but have moved into other parts of the chain, like simple processing and packaging. Adding a little value to their products increases their earnings. Any way that farmers can advertise the availability of their products will also help, including advertising on radio and through social media, though some forms of advertising are expensive and are best done in groups.

It seems like farmers are reticent to form these groups, right?

The way groups are explained might be a reason why some farmers have not totally bought it into it. They might feel that must surrender control over their own farming plans, or that the arrangement might benefit only one person, or a few leaders. Or they might feel they will get more yield than others and thus be at a disadvantage when it comes to profit-sharing.

So we need to simplify how we explain the advantages of starting or joining a co-operative.

That makes a lot of sense.

Another thing is that when you’re in subsistence mode, you’re in survival mode, and it’s hard to think about taking risks and changing what you’ve been doing. You’re not going to buy fancy hybrid seeds when you expect a profit of only 50,000 naira (US $120) and you have to pay rent, pay school fees, and feed the family.

Thank you so much. We’ve come to the end of our program today. Before we go, any closing remarks Ms. Rwang-Pam?

We in the M4P field are trying hard to change mindsets, as well as introduce better agronomic and agribusiness- friendly practices. It’s not easy and there is still a long way to go, but there is hope. Despite all the dysfunction in the market and value chain, Nigeria is the world’s largest producer of cassava. There is a lot of potential with Nigeria’s three million hectares of arable land.

Thank you very much. It looks like the journey ahead is long, but if farmers are willing to step out of their comfort zone, or the same way of doing things, there may be high rewards.

I hope the information from our farmers and our expert today is of some help to you, and you are able to find further information that will help you increase your yields and profits. Till the next time. Good luck!