Olam Nigeria has said that the partnership between it and the International Fund for Agricultural Development (IFAD), and the Federal Government of Nigeria on the Value Chain Development Programme (VCDP) has boosted the country’s economy with over N3 billion. The programme was launched in 2014 with the aim of generating wealth for smallholder farmers, thereby improving their livelihoods, while also enhancing food security in the country.
The VCDP provides inputs and training to smallholder rice farmers with guaranteed buy back of between 80 to 90 per cent of the rice paddy produced by the farmers at competitive market prices while the rest of the rice paddy is reserved by the smallholder farmers for personal consumption.
The Olam IFAD VCDP initiative kicked off in 2015 in Benue State with 475 farmers. As at 2020, the programme has been extended to Taraba State with a total of 18,646 registered smallholder farmers. Since inception, Olam has purchased rice paddy worth N3 billion from smallholder farmers in Benue. Olam Nigeria also has rice out-grower initiative programmes apart from its IFAD VCDP partnership where it has engaged a total of 14,868 smallholder farmers. A breakdown of this figure shows that the company has registered 5,000 smallholder farmers in Nasarawa State, 1,200 smallholder farmers in Kebbi State and 8,668 smallholder farmers in Plateau State.
Olam Nigeria has 33,514 smallholder farmers registered under its rice farming initiatives and the total value of rice paddy it has purchased from the farmers in all the states is valued at over N4.4 billion.
To kick off the planting season and onboard new farmers to the initiative, grants worth over N107 million was presented to 2,917 farmers in Benue State in the form of inputs as palliatives to cushion the impact of the COVID-19 pandemic on them.
Speaking on the impact of the project, especially with regards to the reduction of poverty in the rural areas, Nadine Gbossa, the Country Representative, IFAD, said the registered smallholder farmers under the VCDP programme have experienced a 79 per cent increase in their income, adding that the increased income of the farmers has resulted in improving the educational capabilities of their children.
She said, “before the IFAD-Olam-VCDP partnership, many of the smallholder farmers were involved in subsistence farming. However, they are now able to market their produce because a firm like Olam purchases over 90 per cent of their rice paddy. They are now generating a significant income and profit. Data shows that the smallholder farmers have increased their income by 79 per cent. The number of children attending secondary schools from VCDP households has increased by 17 per cent, so it means that more of the farmers are able to send their children to secondary schools, when the norm was just sending them to primary schools. We have seen that the quality of the household in terms of the quality of life is much higher than the national average. So, the impact of VCDP in terms of incomes and quality of life through this partnership is quite measurable and with visible evidence.” The IFAD Nigeria Country Representative further stated that the project has a budget of $329 million, adding that IFAD is financing about $250 million while the Federal Government and enterprises like Olam finance the difference.
Shedding more light on the VCDP project, Reji George, Vice President, Farming Initiatives, Olam Nigeria, said the target of the programme are the rural farmers who reside in remote areas. According to him, a distinguishing factor of the Olam-IFAD-VCDP initiative is the decentralised model in terms of the mobilisation, registration and engagement with the smallholder farmers. The decentralised model makes it easier to train farmers in the area of contemporary agronomy practices, provides them with farming inputs while also offering other forms of support. To further ensure transparency, there is a pricing board comprising representatives of the smallholder farmers as well as IFAD and Olam officials which conducts regular market surveys thereby ensuring that the rice paddy produced by the farmers are purchased at competitive market prices