This is a miniature sample business plan that will briefly
summarize the tomato farming business in Nigeria from some of the key elements
of the business. In this article, ideas to be explored include; opportunities
for tomato farming in Nigeria, Future trends, challenges, startup cost summary
and potential income and profit/returns.
Market Overview of Tomatoes in Nigeria
Tomato farming is the third most lucrative crop farming
business in Nigeria. The tomato crop itself is a very popular vegetable used in
the preparation of tomato stew, vegetable soups, sauce, egg, salad and as
garnishing for barbecue among others. The crop just like most other food crops
in Nigeria enjoys huge demand from the local market.
The local market comprises both commercial entities and
private individuals found in the main markets - big cities (kano, Kaduna,
Abuja, Lagos, Benin, Port Harcourt, Onitsha to name a few) where stew is more commonly
eaten with rice, spaghetti and yam. Besides stew, tomatoes can be processed
into paste and sold to the general public as well. Nigeria has the largest
market in Africa for tomato paste consumption (more than 3.5 million metric
tons consumed as at 2018) and is easily one of the most profitable markets to
resell tomato based products (profit margin could be as high as 30%).
The demand for tomatoes by far outstrips its supply by over 1,700,000
tons meaning that Nigeria still needs to import tomato pastes, purees, ketchup,
dry tomato slices to name a few. This high demand is due mainly to three
factors; rainy season, transportation challenges and high rate of spoilage. About
40% of harvested tomatoes goes bad before it reaches the market which
contributes to its seasonal scarcity. The rainy season period often times sees
a sharp drop in production of tomatoes (from April to October) when the price
can go as high as 6 times what it will sell for during the dry season.
What are some of the Opportunities for Tomato Farming in Nigeria?
Tomato is in high demand year round as local supply is unable
to meetup. That means farmers can be sure of selling their produce year round. There
is also the synergy between small holder farmers, off-takers and tomato
processing plants has created opportunities for farmers who can bypass
middlemen involved in the marketing of tomatoes to the end users. Government interventions
and policies local food self-sufficiency so far have supported tomato farming
at all levels which can only mean the future for local farmers is bright as
financing and inputs supply will likely receive massive government boost.
What are
some Challenges of Tomato Farming in Nigeria?
Tomato farming is faced with many challenges. For instance,
the problem of storage which most farmers complain bitterly about since they
typically lose nearly 40% of their harvests leading to loss of income. Secondly
there is infrastructural challenges especially transportation infrastructure
which contributes to the high cost of distribution and even spoilage of
tomatoes. Farmers are also challenged by low yield per hectare. Nigerian tomato
is one of the lowest quality tomatoes in the world and also one of the costliest
to process. There also inadequate access to inputs, precious agro-chemicals and
agronomic support among others.
What are
the investments required for Tomato Farming in Nigeria?
Besides suitable farmland (loamy soil) measuring at least 2
hectares, a prospective tomato farmer will need adequate inputs such as tomato seedlings,
irrigation system and fertilizer to name a few. Besides this, farming
implements, storage facilities, labour expenses and working capital. An initial
outlay for a 2 hectare tomato farm should cost at least 1,300,000 in total to
setup.
First Year
Projections
The average yearly yield of tomato in Nigeria per hectare is
7 tons. A ton of tomato goes for between 70,000 and 140,000 naira depending on
location of the farmer and agreements with the off-taker. A 2 hectare farmland
can yield a tomato farmer between 980,000 to 1,400,000 naira per season, minus
running expenses profit after tax could be between 400,000 and 600,000 per
season.
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Are you interested in writing a comprehensive business plan for a tomato farming or processing venture in Nigeria and need an experienced, professional business plan writer for it? Then give me a call: 0803 206 4106 or email me: paulonwueme@gmail.com
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