If you are looking to start a crop
farming business in Nigeria and wondering just where to start looking for
ideas, there are a few I would share with you in this article. In fact they are
the most profitable crop farming businesses to do in Nigeria as at 2017 based
on their return on investment.
Interesting thing about these farming
businesses is that they can be started on a small scale with as little as N100,000 and you can be sure of getting
your money back within a very short period of say a few months. But let me
warn, while they are profitable they are also very risky businesses to do and I
will explain the risks involved in these businesses.
Challenges of running a Farming Business in Nigeria
Firstly you must consider certain
things first before looking to go into farming.
- Farming is a very tedious and labour intensive business to do in Nigeria. Mechanized farming which would have removed the labour intensive part is very expensive to setup and is out of the question for many small scale investors seeking opportunities in Agriculture.
- There are regulatory and policy challenges to deal with. There are not enough policies to support farming as a business and the few policies in place are not well implemented.
- There are marketing issues like how will you evacuate your farm produce to the market? How will you secure the best price for your produce? If you want to export your farm produce how will you locate international buyers or if you want to sell locally how will you get reliable processors and traders who will pay meaningful amounts for your produce? Even joining a farmer’s cooperative may not solve all these problems.
- There is problem of optimal production which involves having the right farming mix, techniques and input that will maximize yields from your farm. How will you get affordable and fertilizer, extension services, quality seed varieties, pesticides? etc
- There is the problem of storage of your produce. At least 20% of harvested farm produce gets wasted due to poor storage facilities. This must negatively affect your profit potentials.
- Pest and diseases can ravage your crops whether those on the field or the ones you have harvested and stored in your barns and farm storage. In 2015, more than 80% of tomato crops in Nigeria were destroyed by a farm pest called ‘Tula Absoluta’ which many nicknamed “Tomato Ebola”.
But even after all these, farming
can be profitable once you learn the right approach and build a reliable
business to identify and overcome your business challenges.
The 5 most profitable farming businesses to do in Nigeria
These are the most profitable
farming businesses to do in Nigeria in 2017 because there is a huge local market
for them and they also offer farmers attractive profit margins. Let’s set the
ball rolling with;
#1 Soya Beans or Soybean Farming
Soy bean farming is the most
lucrative farming business to do in Nigeria. Farmers in this business make at
least 106% - 200% return on investment for each planting season. That means if you
invest N100,000 into small scale
soybean farming, you should make at least N
106,000 profit after selling your produce, what’s more there are always ready
buyers willing to take your produce once you have your harvests ready for
evacuation.
#2 Rice Farming
Rice farming makes between 60-150% return on investment for each planting season. Rice can be produced twice
yearly and the market demand for rice has always been on the increase since
independence. There has never been a year in which annual demand for rice
declined compared to the previous year and Nigeria is the second largest
importer of rice in the world.
#3 Maize Farming
Growing maize is becoming
increasingly more lucrative than previous years. This is because many large
scale buyers of maize now approach farmers directly through their cooperatives
to source for their products at much higher prices than the farmers would get
if they sold directly to middlemen traders. These large scale farmers include;
poultry farms, Animal feed mills and food processing companies. Also government
has recently supplied many maize farmers with improved seed varieties which
yield more and are more resistant to diseases. 40-120% return on investment on every planting season.
#4 Tomato Farming
Tomato farming is volatile but
still profitable. It isn’t suitable to do in the southern part of Nigeria because
the best varieties grow in the North were the right soil, temperature and
rainfall are present. With the advent of local production of tomato paste and
with huge investment by Dangote and Erisco foods who have both invested over N8
billion in 3 years in processing local tomatoes into paste you can be sure of
making quick sales. But there are two catches. First you must be located within
the right planting zone where these companies can reach you and you must join
the right farmers’ cooperative. The return on investment is 30-100% for each
planting season.
#5 Cotton Farming
Cotton can be processed into animal
feeds, crushed to produce oils, is useful in the pharmaceutical industries,
textile industries for making khaki, underwear, fishing nets, book covers and
more. Even if there is no local market for it, the international market demand
for cotton is huge and Nigeria even if it can produce 3 times is current level
would not be able to meet its own quota of existing global. The return on
investment is between 20 to 80% for every planting season.
I wish I could go on but this
article must have an end and unfortunately it is at this point but you can
learn more about farming techniques and marketing plans you can pursue for each
of these farming businesses if you intend to do any of them.
Give me a call or send me an email if you need a business plan
on any of these businesses. My phone number: 0803 206 4106 and email: paulonwueme@gmail.com
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