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Monday, July 17, 2017

Top 5 Most Profitable Crop Farming Businesses to Start and Run in Nigeria

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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