Improving smallholder farmers’ productivity through innovations’ uptake in Nigeria: can cooperatives make a difference?

 

Nigeria, with an estimated population of 175 million people, is the most populous country in Africa, and about 50% of the population live in the rural areas. The total land area is 911,000sq.km, and about 80% of this is available for various agricultural purposes, including arable land, permanent crops, pastures, and irrigated land.

Food poverty and rural poverty

Although Nigeria is the world’s largest producer of cassava, yam and cowpea, it is still a food deficit nation and a net importer, and more than 80% of rural dwellers in particular live below the poverty line. Agricultural land is severely underutilized, with less than 50% of land cultivated as of 2009, and a very small fraction of irrigable land has been irrigated (IFAD, 2009a).

The contribution of agriculture to GDP has been put at 23%, and about 90% of food and agricultural output is from small-scale farmers who cultivate between 0.5Ha in the densely populated region to about 4 Ha in sparsely populated areas (FAO, 2013).  Among other things, neglect of rural infrastructure, land degradation and drought, and non-availability and /or non-access to equipment and innovations have resulted in low yield and non-profitability of agricultural production.

Recent surveys indicate that about 44% of male farmers and 72% of female farmers cultivate less than 1 hectare per household, despite the fact that about 34million ha out of 83million ha – 40.96%- of agricultural land is currently being cultivated. Reports indicate that about 90% of Nigeria’s food is produced by small-scale farmers cultivating small pieces of land (IFAD, 2009a; IFAD, 2009b). Moreover, for the less than 50% of agricultural land currently being cultivated, yield per hectare is low compared to other developing countries like Brazil and Thailand

Innovations and institutions

Many researchers and development agencies have suggested that, considering the fact that majority of poor people in developing countries are small-scale rural farmers, intervention efforts should be primarily targeted at them, in order to effectively mitigate poverty and promote inclusive development. Recently, there have been debates about whether focus on small-holder farmers, to the exclusion of private investments in big firms, is the way forward for economic transformation of sub-Saharan Africa. Questions have been raised about economies of scales and the need to improve labour productivity in the agricultural sector. Related to the question of productivity is the challenge of access to, and optimal use of technological innovations.

It is widely recognised in the diffusion literature that poor, small-scale farmers are at distinct disadvantage regarding access to, and use intensity of, technological innovations, compared with large scale farmers and big corporations. Among other things, smallholders struggle with limited access to information, lack of access to credit, and limited technical knowledge. My investigation also affirms that, in fact, access to innovations is not enough for overall improvement of farmers’ productivity and profit. Institutional factors, including markets and government policies, play significant role, and there has not been sufficient attention on the impact of these on small-holder agriculture.  Like several others in our sample, one farmer laments:

The challenges I face is that there is no help, government should be assisting us in giving out money to us to use in farming and then we can return the money that was given to us. There are no amenities, we do not have electricity, and as you can see there is no good road nor is there borehole (for potable water). Transportation is another main challenge, after harvesting our farm produce, we do not have readily available transport for us to transport our farm produce to the market…

Clearly then, for many farmers, the challenge they face go beyond the question of accessing innovations, but also the question of the institutional environment, including markets and infrastructure, that can hinder or foster the success of adopted innovations. For example, another farmer affirmed that, even in the event that farmers achieve high productivity, they may ultimately lose out due to poor access to market and volatility, and lack of storage, processing and other value added facilities:

Marketing tops the list of our challenges.  Personal consumption of our produce is, in fact, the only profit we have. Farmers can boast of profit only once every 4 years.  At the beginning of this year a truckload of maize sold for N100, 000 while a tractor-full went for N70, 000 but currently, that same quantity goes for just N20, 000!…

Cooperatives to the rescue?

In my research, I examined the question of whether and how cooperatives can help small-holder farmers to overcome barriers to successful uptake of technological innovations in Nigeria. I also consider how cooperatives can help mitigate the challenges and difficulties of the institutional environments.

Cooperatives are not, of course, new to Nigeria. They have been in existence since colonial times, and continue to operate in various forms in the present time. The main problem is that farmers’ cooperatives have not, on the whole, evolved and moved with the time. Today, many farmer groups and cooperatives exist mainly as conduits for receipt of intermittent government loans and subsidies. By and large, government intervention efforts, in addition to been erratic and limited, have been poorly conceived as welfare programmes. This was much recognised recently by the current (2014) federal minister for agriculture, who stated, among other things, that there is a need for a paradigm shift from treating agriculture as a ‘development programme’, to a virile business model. Part of this shift in thinking is to reduce farmers’ mindset of heavy dependence on government, and develop entrepreneurial capabilities of farmers.

This is easier said than done, especially with regard to the current state of smallholder agriculture in Nigeria. I find that farmers’ cooperatives represent an auspicious platform for effective integration of small holder farmers into successful agri-business. Farmers’ cooperatives, compared with individual small holders, are better positioned to overcome various barriers to successful innovation and increased productivity and profit. With regard to access to credit, for example, it was observed, from the views of commercial and public-funded banks, that formal cooperatives have better chances of obtaining loans as they can provide collective collateral on behalf of members, authenticate members’ farming activities, and have better structure in place to enforce loan repayments.

Similarly, formal cooperatives are better positioned to overcome, or at least mitigate, the economies of scale and high transaction costs associated with procurement of innovative inputs and viability of processing machinery and enterprise. With respect to market competitiveness, cooperatives are able to gain better access to new markets by bridging social capital with apex organisations, and linking social capital with domestic and foreign food companies and supermarket chains. On the issue of land tenure, farmer groups are more able to access land on collective leases from government or community owners, and they are also able to exercise more effective influence on government policies relating to resolution of resource conflict and farm land security. Moreover, the effectiveness of government contribution and support, say with regard to provision of essential infrastructure, depends to some extent on the strength and viability of organised farmer groups.

In order to achieve this, however, cooperatives cannot be effective in their current form. They have to reform and adapt to the dynamic challenges and opportunities of the twenty-first century.

References

FAO, 2013. Nigeria- land use and crop production data, Rome, Italy: United Nations Food and Agricultural Organisation.

IFAD, 2009a. Agriculture in the federal republic of Nigeria, Rome, Italy: International Fund for Agricultural Development.

IFAD, 2009b. Federal republic of Nigeria: country programme evaluation, Rome, Italy: International Fund for Agricultural Development.

 

 

 

 

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