By Ayo Alonge, [email protected]
Hafiz Adubiaro is the founder of Adubiaro Farms, an agric startup into crop farming, crop processing, consultancy, farmland sales, farm setup and management services.
In this interview, he discusses the crux of farming, while admitting that it is profitable but for its attendant challenges. He also talked about government intervention for agric-based Small and Medium-scale Enterprises (SMEs).
Background
I have always wanted to be a businessman because I wanted more out of life and I believed that a salary job may not give me the lifestyle of my dreams. Of all the ideas that came to mind, I decided to go with agriculture because it addresses the most fundamental human need which is food. I believe that, regardless of how good or bad the economy is, people must eat and our population is increasing at a fast rate. Fortunately, there was a business plan competition for business grant called YouWin. I applied and won the grant in 2014, same year that I finished my NYSC. I started operations at Adubiaro Farms in January 2015 with this grant. I also got a $5,000 grant from Tony Elumelu Foundation, same 2015.
Competitive edge
What makes us different from others is also our motto ‘’the clear choice for quality’’. At Adubiaro Farms, we do not cut corners. I have learnt, over the years, that agriculture is profitable but not for fast money. You have to take your time and a step after the other, you will surely get there. Our food products are the clear choice for quality and also our services. Our farm setup and management arm which can be likened to other agricultural investment companies is different because this is real agricultural investment. We sell the land to them, set up the farm and manage it for them, give regular updates in pictures and videos and we take them to the farms periodically. We don’t do abstract farming and promise unrealistic returns on investment. We make it clear to every prospective client that has contacted us so far that the projected revenues are ‘’projected’’ and not fixed. Meanwhile, they can all attest to the quality of management which we give the farms to ensure that they get even more than the projected figures.
Challenges
The challenges with farming business are enormous. They include security, climate change, lack of good roads and electricity in rural areas where farms are located, irregular prices for farm products, scarcity of trusted and experienced farm workers, and so on, but we have found means of adjusting to the challenges and keep moving despite the challenges. For instance, in response to the climate change, almost all the farms we are setting up now are with irrigation.
Mitigating challenges
We tackle the challenges one at a time. When faced with a challenge, we sit, re-strategise and find a way around it. For instance, when we started garri production in 2017, we had the challenge of being able to compete in the market as our production price was higher than the market price for garri. All our production stages from cassava peeling to garri frying were mechanised. This, in deed, made our product stand out. Very clean garri with absolute no dirt and very dry too but by the time we calculated our production cost, it was hard for us to sell it in the market. Nigerians are more interested in the price than quality, especially for food products and it is not that the local farmers that were selling at ridiculous prices to the middlemen were making profit because they didn’t factor in all the costs of production including labour even as they and their family members do it; the cost of firewood which they just enter the bush to get, etc. We started packaging our products which allow us to be able to sell at profit, although very slowly.
Agriculture and profitability
Agriculture is profitable, as I have said, but not for fast money. In fact, you can lose all your money if you are not careful. That is why I advise those who want to go into crop production to consider cash crops which are long term. They are less risky and the revenue is predictable, to a very large extent. Most short term crops are not disease and drought resistant. Also, you cannot really predict your revenue. The revenue is usually short of the projections, in most cases, and when you hit it in a cycle, you may lose all in the next cycle. For instance, same bag of cucumber which was sold for about N7,000 in January is currently being sold for N1,500. The Nigerian food market is very funny. Imagine if you had projected your revenue using about #5,000 per bag? Also, we have all focused on short term crops, leaving out processing the crops and also perennial crops. It is a shame on us as a country that, despite being the largest cassava producer in the world, we import up to 95 per cent of the cassava starch for industrial use. We import up to 80 per cent of the coconut for direct consumption and almost 100 per cent of the derivatives for industrial use in Nigeria. We import palm oil and many other food products that we cannot even imagine.
Growth and expansion
Like I have said, growth is one step at a time. The majority of new business founders do not understand that money is actually not the major barrier in starting and running a profitable business. We started with a lot of money and we have failed a couple of times. When you have really understood the business and you are at the growth stage is the time to source for huge loans for major expansion. For us, we want to keep up with our growth. When we are ready to take the leap, we may consider a loan if the terms are favourable. Otherwise, I prefer raising funds through equity. That’s how to raise a patient fund.
Youth empowerment and mentorship
I have been consulting for youths who reach me directly for advice so that they don’t make the mistakes we have made just as we are consulting those ahead to make our journey faster while we take the baby steps. One of the key factors of success in any line of business is mentorship and all of them that have contacted me can attest to the fact that I do not hold on to important information which may be of help.
Ministry of Agriculture and support for farmers
If caught in a room with the Honorable Minister of Agriculture, I will tell him to kindly look into the means of measurement of agricultural products as a means of controlling the price and ensuring that farmers get value for their efforts. There is no country that can be described as a contemporary to Nigeria that uses congo, paint/ custard bucket, feed bag, and so on, as a means of measurement to determine the amount to pay the farmer. Farmers should be paid by weight of the products. The current irregular measurements allow the middlemen pay little to the farmers and make profit in the market. If this issue is addressed, local farmers will make more money and will be able to change their standard of living through agriculture. The current trend is one of the reasons why youths are not encouraged to start farming.
Government can promote and encourage SMEs and budding entrepreneurs like us through funding — grants or loans — to expand and employ more youths. The YouWin programme should be re-launched and allow more youths benefit so they can start up. One of the reasons we have many foreigners doing business and excelling in Nigeria, while the indigenous counterparts complain, is because they have access to loans at a very low rate from their country. Also, government should look at constituting probably a presidential committee to monitor the disbursement of its business intervention funds as many of them do not get to the actual people that need it.