The rate of urban population growth in Nigeria is described as alarming, but it presents opportunities for young entrepreneurs in food supply chains.
Lagos State statistics indicate that around 85 new people settle in Lagos daily, implying that around 31,025 people settle permanently in the city each year. As in Lagos, it is the same in Port Harcourt, Abuja, Kano, Ibadan and in all the state capitals of the country.
In addition, it is estimated that food takes a very large part of the monthly disposable family income. On average, for example, a person spends around N500 on food daily in Lagos, and around 20 million people reside in the city. This translates to around 10 billion naira flowing through the city’s economy every day. The circular flow of income revolving around food presents a tremendous opportunity for young people and categories of Nigerians to source rapidly changing crops for the city dwellers.
There are many agricultural products that are changing rapidly in cities. Some of the products are corn, yams, eggs, vegetables, plantains, potatoes, beans and coconuts.
Where to get the products
Maize is a product widely cultivated in all geopolitical areas of the country. Thus, they are available in all states. However, rural areas produce greater amounts than urban areas due to the hundreds of hectares of arable land in the suburbs. Fresh corn makes hot cakes in the city, and traders have little or no difficulty in selling the produce if it is fresh.
Yam is also produced in abundance in Nigeria. Yam tubers are expensive in town, however. States with abundant yam production include Benue, Kogi, Kwara, Oyo, Anambra, Enugu, Ebonyi, Ondo and many more.
Eggs and other poultry products could come from almost any part of the country, but the southwestern states of Oyo, Ogun, Osun and Kwara in the north-central are known for their higher production. . Oyo State is reputed to be the largest poultry production center in the country, with the largest number of hatcheries and a concentration of giants in the feed sub-sector. The suburbs of Ibadan and Oyo Township are egg production centers. Osogbo in Osun State, Abeokuta in Ogun State and their suburbs are prolific in poultry production and these place vendors, along with many other states, could source eggs and chickens for delivery and marketing in cities where demand is high.
Sweet potatoes are also in great demand in cities. Nigeria is also one of the largest producers in the world and domestic consumption is high even in cities. Varieties improved with bio-fortified micronutrients have been developed, such as the orange-fleshed sweet potato promoted by International Potato Center and Harvest-Plus Nigeria. The strain is fortified with vitamin C, zinc and other essential micronutrients to combat vitamin deficiency and malnutrition. The production centers include the states of Kwara, Osun, Kaduna, Ogun and Nasarawa.
Plantains and bananas are bread rolls and sources of income in cities. They are cheaper in rural areas but expensive in cities. They present good opportunities for those who can obtain and sell them in the cities. Producer states include all states in the South, South-South, Southwestern Forest Ecology Zones, and a large number of north-central states. Specifically, Edo, Ondo, Ekiti, Osun, Ogun, Cross River and Delta are big producers.
For example, The Guardian’s investigations revealed that in Ondo State, a bunch of plantains, while buying in large quantities, costs around N500. But the same bunch is sold for around 1,000 to 1,500. N in Lagos, thus presenting a very attractive margin for aggregators.
Other products in high demand in the cities are smoked fish, watermelons, onions, herbs and spices like turmeric, ginger and garlic. These are available in the north and some southern states in commercial quantities.
Marketing and survey
Rotimi Olawale, founder / managing director of JR Farms, said agricultural commodity traders shouldn’t assume there is a market for their produce. The only market available, he advised, is the one created by the trader.
He advised traders of agricultural products to devote more time and resources to creating the market before the products are delivered. He also insisted on materializing supply agreements through major resellers in commodity markets to avoid frustration.
For example, food supply chains in Lagos are built around hubs such as the Ketu and Mile 12 markets. These hubs provide sustainable platforms for marketing and selling agricultural products in Nigerian cities.
Establishing a market in cities is also possible by renting or leasing a point of sale, office or open space from individuals, businesses and government as temporary buying and selling centers. .
As attractive and profitable as selling agricultural products in an urban setting may be, the challenges are many.
The most difficult factor in grouping food crops for sale in the city is insecurity in rural and agrarian communities, highways and food production centers in the north and other food production areas. Food production centers in Kaduna, Zamfara, Kebbi, Ondo and Benue states are becoming increasingly precarious with a high rate of kidnappings, banditry and attacks on pastoralists.
Poor road networks, logistical hurdles and high transport costs are also significant challenges facing city food aggregators. The rural roads are deplorable and, as a result, motorists exploit passengers by charging them exorbitant fares. This sometimes increases the cost of landing and the profit margin for traders.
As in other startups, the initial investment in the marketing of food crops is also. Traders would need financial resources for market research, rental of space or store, and capital buys the crop in commercial quantity to make economic, logistical and perhaps sense of employing a vendor.
Other costs that can arise include local government levies, interstate product movement levies, and a host of other costs transferred from carriers to food merchants.
Other challenges include storage facilities and post-harvest losses associated with most food crops.
Despite the challenges, cheaper sources of food crops in agrarian areas make the marketing and sale of farm-fresh food sustainable in urban areas. And that can take many young people out of the workforce.