The urban population growth rate in Nigeria is described as alarming, but it presents opportunities for young entrepreneurs in food supply chains.
Statistics from Lagos State indicates that about 85 new persons relocate to Lagos daily, implying that about 31,025 people settle permanently in the city yearly. As it is in Lagos, so it is in Port Harcourt, Abuja, Kano, Ibadan and all state capitals in the country.
Also, it is estimated that food takes a very large portion of disposal family incomes monthly. On average, for instance, a person spends about N500 on food daily in Lagos, and there are about 20 million people resident in the city. This translates into about N10 billion circulating in the economy of the city every day. The circular flow of income revolving around food presents a very huge opportunity for youths and categories of Nigerians to source fast-moving crops for city dwellers.
There are many farm produce that is fast-moving in cities. Some of the products are maize, yam, eggs, vegetables, plantains, potatoes, beans and coconuts.
Where to source the products
Maize is a product widely cultivated in all the geopolitical zones of the country. So, they are available in every state. However, rural areas do produce larger quantities than urban areas because of hundreds of hectares of arable land in the suburbs. Fresh corns are hotcakes in the city, and marketers have little or no difficulty selling the products if they are fresh.
Yam is also produced abundantly in Nigeria. Tubers of yam are, however, expensive in the city. States with abundant yam production include Benue, Kogi, Kwara, Oyo, Anambra, Enugu, Ebonyi, Ondo and many more.
Eggs and other poultry products could be sourced from almost all parts of the country, but the Southwestern states of Oyo, Ogun, Osun, and north-central’s Kwara are known for bigger production. Oyo State is reputed to be the largest poultry production hub in the country, with the largest number of hatcheries and a concentration of giants in the feed mill sub-sector. Suburbs of Ibadan and Oyo township are egg-producing hubs. Osogbo in Osun State, Abeokuta in Ogun State and their suburbs are prolific in poultry production and these and many more states place vendors could source eggs and poultry chickens for onward delivery and marketing in cities where demand is high.
Sweet potatoes are also very much demanded in cities. Nigeria is one of the largest producers in the world too, and domestic consumption is high even in the cities. Improved varieties with bio-fortified micro-nutrients have been developed, such as orange-flesh sweet potato being promoted by International Potato Centre and Harvest-Plus Nigeria. The variety is fortified with vitamin C, zinc and other essential micronutrients as a means of combatting vitamin deficiency and malnutrition. Production hubs include Kwara, Osun, Kaduna, Ogun, and Nasarawa states.
Plantain and bananas are hotcakes and sources of income in cities. They are cheaper in rural areas but expensive in cities. They present good opportunities for those who can source them and sell in cities. Producing states include all the states in the forest ecology zones in the south, south-south, southwest and a large number of states in the north-central. Specifically, Edo, Ondo, Ekiti, Osun, Ogun, Cross River, and Delta are large producers.
For instance, investigations by The Guardian revealed that in Ondo State, a bunch of plantains, while buying in large quantities, is about N500. But the same bunch is sold for about N1000 to N1,500 in Lagos, thus presenting a very attractive margin for aggregators.
Other products with high demand in cities are smoked fish, watermelons, onions and herbs and spices such as turmeric, gingers, 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 marketers of agricultural products should not assume that there is a market for their produce. The only available market, he advised, is the one created by the marketer.
He advised agricultural produce marketers to spend more time and resources in creating the market before the products are supplied. He also harped on concretising agreements on supplies through major dealers in commodity market places to avoid frustration.
For instance, the food supply chains in Lagos are built around hubs like Ketu and Mile 12 marketplaces. These hubs provide sustainable platforms for the marketing and sale of farm products in Nigerian cities.
Emplacing a marketplace in cities is also possible by leasing or renting an outlet, an office or an open place from individuals, firms and the government as temporary hubs for buying and selling.
As attractive and profitable as selling farm products in urban places could be, there are many challenges.
The most challenging factor in aggregating food crops for city sale is insecurity in rural and agrarian communities, highways and food production hubs in the north and other food-producing zones. Food production hubs in Kaduna, Zamfara, Kebbi, Ondo and Benue states are increasingly becoming insecure with a high rate of kidnapping, banditry and herders attacks.
Poor road networks, logistic hurdles and high cost of transportation are also substantial difficulties facing food aggregators in the city. The rural roads are deplorable, and as a result, motorists do exploit passengers by charging exorbitant fares. This sometimes increases the landing cost and profit margin of the marketers.
As it is in other startups, so is the initial capital outlay in food crop marketing. The marketers would need financial resources for market survey, space or shop rent, and capital buys the crop in commercial quantity to make economic sense, logistics and perhaps to employ a sales attendant.
Other costs that may arise includes local government levies, interstate produce movement levies and a host of other transferred costs from transporters to the food merchants.
More challenges include storage facilities and post-harvest losses associated with most of the food crops.
The difficulties notwithstanding, cheaper sources of food crops in the agrarian areas make marketing and sale of farm-fresh foods sustainable in the urban areas. And this can take a good number of youths off the labour market.