How the youths can become agricultural entrepreneurs and how Nigeria can make big gains from agriculture

Leonard-Ebute-183x156
co-founder and former Chief Operating Officer, Crest Agro Products Limited, Leonard Ebute

Why do you strongly believe the future of Nigeria is agriculture?

Nigeria has no reason to be poor. Let me throw some numbers to give you some level of perspective: Today, in terms of production, Nigeria is the fourth largest producer of vegetable in the world; the Netherlands is 26th. But when it comes to export, the Netherlands generates the same revenue from fresh vegetables that Nigeria would generate from oil if we were to be producing 1.2 million barrels per day at $50. How much are we, the number four vegetable producer, generating from export? Zero! Let me give you another scenario. Oil sells at around $50 per barrel. The equivalent of a barrel is 137 kilogrammes. Now, 137kg of Irish potatoes is worth around $178, meaning that the amount generated from the sale of a barrel of oil is far lesser than what you will get selling the same quantity of Irish potatoes. Why then should Plateau State be poor? That’s the only state in Nigeria where you can produce Irish potatoes between three and four cycles per year. Why is Akwa Ibom State proudly an oil-producing state and Plateau State is not much more proud as an Irish potato-producing state? The reason is simple — there is zero export, there is zero government focus in converting that value chain into real dollars. The way we have petrol dollars, we should also be talking of Irish potato dollars. Mambila Plateau [Taraba State] is also the only place that has the weather required for temperate vegetable crops to grow. It is the most fertile land for growing crops. However, 80 per cent of Mambila is uncultivated. Rather, the place is owned by a lot of ex-military people. They have farms here and there, but no farming is going on. Those lands hold the key to Nigeria’s economic growth. Let me talk about Benue State. It is the largest producer of soya bean in Nigeria and the largest producer of cassava in the world. Both Benue and Kogi states account for a chunk of all the cassavas produced globally. Talking about soya bean, there is no single farm of soya bean in the whole of Benue State that is up to 10 hectares, which means you cannot mechanise production when the scale is that tiny. Soya bean can be produced there strictly for export to make soya dollars, but the government, as it is set up now, does not think that way. Now talking about cassava, the local demand for its starch alone is nearly 400,000 metric tonnes per annum whereas the local supply is less than 10,000 metric tonnes. Note that we’re not talking about export yet. The Middlebelt, which is currently the poorest part of Nigeria, is supposed to be by far the richest. States like Benue should be lending money to Akwa Ibom and Bayelsa states; states like Kaduna, Niger, Kogi, Kwara and others around the Guinea Savannah region where almost every crop can grow, should not be talking of poverty. And they have so much land. The untapped land in Kogi State alone can create five Lagos cities. Niger State is even worse. My point is that these states all have areas where they can be competitive, but because the Federal Government shares money from oil proceeds, the states are becoming lazy, which is why personally, I agree with the Niger Delta boys that the resources of a place should be controlled by that place. The Federal Government should only collect royalties and regulate the use of that revenue. Think of it this way: Assuming all the oil revenue produced by Akwa Ibom State resides there, the state would have had the capacity to become another Lagos, meaning that Lagos will not be as congested as it is. My only problem, however, with the Niger Delta boys is their approach of agitation. What they are asking for is like a man whose father owns the whole world but is only fighting for bread. What they are asking for is juvenile compared to the scope of what they should be asking for, and the manner in which they are making their demands is like a child defecating in his father’s bedroom because the uncle collected the house. By the time the house is finally given to the child, he will have to clean up his mess. The Niger Delta boys are bombing pipelines and desecrating the environment, not realising it’s their environment they are messing up. They are saying the oil is their own, but they are destroying the facilities. If something is yours, why would you destroy it? They wouldn’t be fighting with this approach if they realised the oil is theirs. Right now, they are worse than politicians and that is why the rest of the world cannot take them seriously because what they are doing is not agitation, it’s a criminal activity. Be that as it may, their agitation is genuine because for instance, does the revenue Kano State is generating from groundnut being shared with Bayelsa State? Is the revenue Benue making from soya shared among the other states? Why then should we be sharing oil revenue produced by some among others? Why can’t we allow the coastal areas enjoy certain benefits like access to the sea, concentrate the resources there, build mega cities around there so that they too can build their own ‘Lagos?’ Every family is represented in and benefits from Lagos. Imagine if we have five ‘Lagos,’ Nigeria would have developed and then the governors from the Middlebelt will stop being lazy and then they will see that they are by far the richest states in Nigeria. The richest state in the United States is California. They’ve got no oil, but they built their economy around Silicon Valley based on technology and knowledge. But in Nigeria, which state will you say is a knowledge-based economy? What we have are oil-producing states and others are nothing-producing states. It’s ridiculous.

You held various positions at multinationals like Kimberly Clark, Sanofi-Aventis and Nestlé Nigeria Plc. What made you quit these lucrative jobs to venture into agriculture?

I’ve always seen problems in value chain in the agricultural space and sought to fix them. I believe the flip side of every problem is opportunity and solving problems commands value. It was easy to spot problems in the agricultural sector because I believe the big businesses of tomorrow will be solving social issues such as unemployment, and not just aiming for profit. Many years ago, I saw agriculture as the vehicle to achieving that. The transition into agriculture was not very difficult for me. I was prepared, I had plenty years to prepare. I had always wanted to be an entrepreneur and I knew that at a point in my life, I was going to be on my own. Also, at the outset, my business partners knew that I had a great career and family, so they made my pulling out as easy and less stressful as possible. Talking about my career, Nestlé was very exciting; a lot of what I am doing now came as a result of the opportunities seen there. The training I underwent and the projects I did there prepared me for what I am doing now, so it was easy to combine that experience with my knowledge of agriculture and the economy to create what I’m doing now in agriculture.

So at what exact point did you think your time was up in those companies?

The moment I made my presentation to the investment bankers funding the project and it was obvious that they were going to fund it. They asked me if I would be willing to leave my ‘lucrative’ jobs when they needed me,  I assured them that I wasn’t just going to be willing, but I would be happy.

That means you had been working on the project even while in those companies?

Yes, the business plan was written while I was there and the business was already running over the years at Kimberly Clark, Sanofi-Aventis and Nestlé. I was just waiting to join. I left Nestlé in 2013 and then went to Sanofi-Aventis as Head of Procurement, East and West Africa; I eventually left there for Kimberly Clark as Head of Supply Chain, East, West and Central Africa. That was also very exciting for me because Kimberly Clark was setting up a business for East, West and Central Africa and they needed pioneers to head functional units, so it was an opportunity to learn how to do it. I was there for two years and left March 2016 to resume at Crest Agro.

When you finally decided to quit those jobs, was there any opposition from family and friends, especially your wife?

No, I think I had cured my family of that kind of worry a long time ago. I have always been adventurous. They knew me. I am a biker, I used to climb mountains while in Jos and I hope to go into ski diving someday. I think my family trusted me with the decision. I had always taken up challenges even when all the odds were against me. My parents died before I finished secondary school and I barely had enough money when I resumed at the University of Jos, not even enough to pay for registration. I couldn’t afford to buy a single handout while in the university. When I could finally afford it through some scholarships that I received, I was already used to not buying, but I thank God I still graduated top of my class. God has helped me to achieve things when the odds were stacked against me. For example, in the value chain that we’re trying to do business in, there is no success story in Nigeria, and the question we ask ourselves is, what makes us smarter than the guys who had failed there? However, we don’t bother ourselves about the guys who failed. It is about what we need to do to succeed.

There are perhaps millions of unemployed youths out there who would tell you they would have started their own businesses too, but for no capital. Did you experience the finance problem while starting out?

I didn’t have any capital, too. The reality is that capital is not about money alone. It’s mainly about intellectual property. The truth is that the world is full of loose funds and the owners of those funds are looking for who to give, but because the owners of those funds are not politicians who have stolen government money, they would not dump them on a project that they cannot see its viability. For example, when I started conceiving of Crest Agro, I was trying to do my job at Nestlé as a supply chain person. I saw a supply chain problem and I was trying to fix that problem. But then, I discovered that Nestlé couldn’t fix that supply chain problem, it had to be an independent business and so my thinking was how should that ideal business look like? So I started painting a picture of what that ideal business would look like. I knew all the operational aspects of what that ideal business would look like, but I didn’t know the business side, the financial side and the investment side. I didn’t know how to source for funds, how to structure a deal. So I went to the Lagos Business School and enrolled for a Master of Business Administration and in the first year of my MBA, I perfected all of these sides. In every class, I asked lots of stupid questions because I had an agenda. It was at the end of my first year that I presented my business plan to the investors. My point is, what you lack you should actively seek for. If you don’t know the specific people that can fund your business, that’s a knowledge gap and you have to seek for it. The youths should stop saying there is no money; they should just say they don’t know the people who can fund their businesses and then begin to investigate.

Do you think restructuring would solve the problem of laziness among state governors?

That is what federalism is supposed to be. Federating units are supposed to be autonomous but not independent. We borrowed a US model and then adulterated it. Part of that adulteration is from history. There was a war and after the war, [General Yakubu] Gowon needed to have more powers at the centre to be able to rebuild, which was logical. But we forgot when the war was over that we had to be federal again. When we talk about restructuring, it is not what we want to do, it’s something that was and we moved away from it. It is a constitutional provision that we are a Federal Republic of Nigeria and that the federating units would have self-governing autonomy. This is why we vote to elect our leaders. Nigeria is probably one of the few places in Africa where democracy ought to work because democracy works where you have a diverse population. When you have a homogenous population, you don’t need democracy, you need a king. For instance, if Saudi Arabia ventures into democracy now, their system will crumble. But for democracy to work in Nigeria, the people need to have self-governing bodies. The reason why everybody wants to be at the centre is because the peripheries have been stripped of powers. The governors are subservient to the president, this ought not to be so. In the US, governors sometimes refuse to obey certain federal laws and enact their own laws to override federal laws. This is what true democracy in a federal system is supposed to look like. The president is not supposed to be king. For instance, the governor of Illinois in the US does not command as much resources as the mayor of Chicago, even though he is a governor. It is just like saying a local government chairman controlling more resources than the governor of a state in Nigeria. This is what federalism ought to bring. When this happens, people will look inwards and think of how to build their communities and not depend on the Federal Government. With our current faulty system, someone can just bring their brother from the United Kingdom, sponsor and make him the governor of the state. Why? Because the people don’t need to know you before you can get there. But where there is federalism and people own their immediate environment, no candidate can ever be imposed on them. Look at councillors in Nigeria today, they don’t look like lawmakers, they just look like political stooges. When was the last time a bye-law in any of the 774 local government areas in Nigeria was worth reporting by any newspaper? Absolutely none! All the laws affecting us are being made at the centre, that is, the National Assembly. This is not supposed to be so. Community issues like herdsmen crisis are supposed to be managed internally by the people of those communities because the man in Abuja might not really understand what’s happening in the communities. So we need to strengthen the peripheries and devolve power from the centre and then this laziness will go away. When this happens, the Federal Government can then focus on the bigger issues. Right now, Nigeria should be focussing on Africa, not Nigeria. The reason Boko Haram became a big issue is because Nigeria forgot to handle Niger, Sudan, Cameroon and Mali. Those countries are supposed to relate with Nigeria the way Canada, Mexico and Cuba relate with the US. But we have become so small in our thinking. Our democracy should be worked on for us to become better.

You run a 13,000-hectare farm. How do you handle security challenges, particularly the herdsmen issue?

We’ve had two cases of kidnap on our farm. Our farm manager was kidnapped in 2015, we paid a ransom to get him out. Also last year, a supervisor was kidnapped few weeks to his wedding. We paid a ransom to get him out. These are some of the issues we’re dealing with. But we have invested so much in security. We have armed mobile policemen and we have other policemen guarding the place 24/7. We have armed members of the O’odua Peoples Congress in the farm and we have local vigilantes helping us. But, this has escalated the cost of doing business. To be fair, the Kogi State government did a good job in terms of security and the spate of kidnapping around us has greatly reduced. A lot of the hoodlums have been arrested. The military has also been doing a good job. There was a time about 310 soldiers were in the bush for two days combing for those criminals and they made some arrests. So Kogi State has really responded to the spate of insecurity around the environment. But again, it is not enough yet. Insecurity anywhere is a threat to security everywhere. If Kogi State is responding well, the same hoodlums would move to any other state like Benue or Ondo or Kwara. So we need a coordinated effort which has to be locally-driven and federally-supported. If there is no coordination and it’s just Ekiti State passing an anti-grazing law, we will have disjointed solutions to the problem.

Do you have a monthly budget for security on your farm?

Yes, but I cannot disclose the actual figure as it is confidential information. What I can say is that the costs were unexpected as I never thought we’d be spending a really really significant money on security.

How do you practically address the herdsmen issue?

Let’s first do a reality check. A Fulani man’s cultural way of life was threatened. He didn’t wake up one day and decide to become a hooligan and start killing people. He’s only responding to an existential threat to his way of life that has spanned hundreds of years. The Fulani men or nomads don’t see any boundary on the land. They have absolutely no regard for national boundary. They just have routes from Mali all the way to the South and then as the season changes, they start going upwards again all the way to the North. Those routes were handed over to them by their ancestors several generations back. Having said that, at Independence, Nigeria’s population was around 40 million, but today, we’re about 200 million, so the same land the Fulanis used to graze their cattle had shrunk as people cultivated more and more land. So the area the Fulani man grazed last year, he’s passing through the same place which has now become a farm. Similarly, the demand for the Fulani man’s cow has also increased. His ancestors were passing with 50 cows, now he’s passing with 300 cows, on smaller grazing field. This is to tell us the origin of the conflict we’re having today so that we will not totally blame the Fulani man for who or what he is today culturally. What we can say is that the government has failed to respond adequately in a focused, deliberate and systematic manner to this issue over the years. These are issues anyone should have seen coming. A lot of papers had been written about this years ago, including by the current Minister of Agriculture [Chief Audu Ogbeh]. Everywhere in the world where they breed cows, they used to have nomads too, sometimes called cowboys, and they used to allow open grazing, but when they saw the future, they responded adequately and now they have what are called ranches. Now, in Nigeria, you can’t just wake up and say you want to relocate people and call their homes grazing fields. The time for putting in place any systematic mechanism to address the crisis is past. Unfortunately, some of the interventions needed now have to be military. Also, the farmers need to know the fact that a cow eats their yam doesn’t mean they should kill it. That cow needs to eat quite a lot of yam for its exchange value to be okay. When the farmer responds with anger and kills it, you can be sure the Fulani man will retaliate. In my experience, when you approach a Fulani man that his cow has eaten your cassava or yam and it is valued at so-so amount, he will negotiate with you and pay. I have done this several times and it works. They are always ready to pay you for your damage if you don’t kill their cows. I have had this encounter before. We have had cases whereby we arrested the cows and the herdsmen came to bail them. They don’t like their cows to be arrested or killed, so they are always willing and happy to have a conversation with you. Imagine a cow worth around N150,000 being killed by a farmer because it ate yam or cassava leaves, the Fulani man will come with weapons and retaliate. However, somebody has to moderate conversations like this at the community level. Local court systems must be established where complaints by farmers or herdsmen can go to and are evaluated. There should also be presence of many policemen in communities. Nigeria is currently under-policed and the ones we have are so many in cities that the villages and communities have been neglected. This strategy has to change. If these measures are put in place, there will be no room for conflict. Then we can look at systematic solutions like grazing lands and establishment of markets. Note that the Fulani man is grazing not just to feed his cow but to access markets. His cow commands more value in the South than in the North. Yes, there are cities in the North like Kano, but it is not the Fulani man that is gaining, it is the merchant there who buys many cows and brings them to Lagos. If we are able to get them access to markets without them moving their cows down to the South, they will stay over there without destroying people’s farms. I have a friend who goes to communities in the North to get milk from cows. Because he has created an access to market for the women, they want to stay over there and their herdsman husbands have also been forced to stay. Imagine how good it would be having a coordinated effort by the government to maximise milk production in the country by providing markets for the cow milk. However, we can’t do much in terms of milk production because the cows move around so much that their capacity to produce enough milk is diminished. Second, the Fulanis are largely dispersed all over the country, so to aggregate milk in large quantity is difficult if not impossible.

What technologies do you think will shape the future of agriculture in Nigeria?

We are doing catch-up and I don’t think innovation will disrupt agriculture here anytime soon. Ninety-five per cent of our agriculture is still subsistence. Actually, Nigeria is one of the few places in the world where hoes and cutlasses are still being used. This is not happening even in Kenya or Uganda or Malawi. It is only in Nigeria we still sweep our homes with brooms. There needs to be a break-away from what used to be. We should quickly make use of the available technology and not think about innovation for now. The use of tractors is still at the basic level and how fish farming is done here is still rudimentary. So let’s make more use of the existing technology.

What policies should the government be putting in place to make agriculture attractive, especially to the youths?

Agriculture is attractive enough as it is for young people; agricultural loans are the cheapest you can find. On my farm, there are young people there, agronomists and other young professionals. The young supervisor I told you was kidnapped few weeks to his wedding, he spent a week with the kidnappers. We got him out on a Friday and took him to the hospital. He didn’t sleep in the hospital but came to work the following day because the field is awesome. When you see lush green vegetation, when you see tractors working, when you see them discussing research findings, they are excited. You need to hear them debate. Some of the things they are discovering are contrary to what they learnt in school. To be able to farm like that, it requires a lot of capital, however, the only way to farm like that is when you understand the business of agriculture, which they don’t teach at school. For example, the poor farmer in a Benue village looks for buyers only after harvest while forty per cent of harvest is already lost on the farm. What I think ought to happen will not be driven by young people going into agriculture. It will be about young people partnering with big businesses to create agricultural projects.

You may have the passion, have the love, but you may not have access to large land and machinery. You need to team up with businesses so that you will not become a farmer, but an agricultural businessman or entrepreneur. This is where the government can come in if it wants to help the youths. The government can create business education for them which is facilitated by businesses that can fund those projects like what is done abroad. Government should work with companies and campuses to create this kind of business education. For example, that’s what the Ministry of Labour and Productivity or that of Youth and Sports, should be doing. The government should do activations on campuses to not only make young people have interest in agriculture, but to also become agricultural businessmen. Once a young person can see money, he doesn’t mind the sweat.

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