Posted by Alex Thier, Assistant to the Administrator, Bureau for Policy Planning and Learning on Wednesday, March 19th 2014
Standing at the gates to the Nigerian cassava processing plant, Thai Farms, we held our breath while watching a local farmer anxiously weigh a sack of his latest cassava crop. Cassava, a starchy local staple crop, takes 12 to 24 months to grow, but begins to rot after only 48 hours out of the ground. So for this local farmer, transporting and being able to quickly sell his crop is essential to getting a good price.
To determine purchase prices, cassava is weighed and then tested for starch content through a simple, yet ingenious method of submersing the cassava tubers in water to test buoyancy. The higher the starch content, the more cassava flour is produced and the more money the farmer earns per kilo. The farmer breathed a sigh of relief when the starch content turned out to be high enough for the factory to buy his produce, but not high enough to fetch the best price. The farmer left relieved, but somewhat disappointed and hopefully inspired to plant improved varieties next season.
In Nigeria, more than 70 percent of the population earns their livelihood from agriculture and 70 percent of the MARKETS II farmers live on less than $1.25 each day. By giving these farmers the tools to improve their harvest and connecting them with buyers, USAID is helping the farmers earn a higher selling price that is essential to increasing their household income and lifting their families out of extreme poverty.
Thai Farms exemplifies the MARKETS II model of connecting local farmers to new markets and technologies. However, there are several other local agri-business enterprises boosting the economy in Nigeria. Timmod Farms, for example, is a Nigerian success story. The farm was established in November 2004 with just four ponds of fish and is now one of the leading fish processors in Nigeria. Timmod Farms produces a smoked catfish that is well-known in the local Nigerian market and has been recognized by the Federal Department of Fisheries in Nigeria. The extremely entrepreneurial owner, Rotimi Omodehin, keeps adding new parts to the business, but is also concerned about the potential for further growth. Every step on the value chain suffers from some fundamental constraints, especially reliable access to energy and credit. These producers pay three to five times the price of energy from the grid to power their enterprises with expensive diesel generators. This is necessary as the power supply from the utility is unreliable and surges can damage expensive equipment. Credit, meanwhile, is hard to get at all and often costs 20 to 25 percent annual interest making loans hard to get, very expensive and very risky. To really enable small famers and small enterprises to drive inclusive economic growth, these problems will have to be addressed.
USAID has the opportunity to pull farmers out of poverty by sharing best practices in agriculture activities and focusing on value chains as a whole. Let us know what programs have been most successful for you or share your local stories of success.