Support to Food Value Chain Industrialisation – Challenges and Solutions International Fund for Agricultural Development - October 2015

Nigeria Today Largest economy in Africa after rebasing its GDP in Agricultural sector generating about 22 percent of the rebased GDP and employing about 70 percent of the labor force. Agriculture - an overwhelming share of the Nigerian labor force. Positive public awareness that farming andagro-processing can be profitable businesses. Positive public awareness that farming and agro-processing can be profitable businesses.

Challenges Complex and challenging land tenure system Lack of access to Finance Policy inconsistency Inadequate infrastructure Agricultural spending as a share of total spending averaged 3.8 percent

Low Economies of Scale Low Yields (finance, management practices), High Input Costs, Low prices Low Capacity Utilization, High Production Costs (infrastructure, electricity), Inconsistent supply Farmers Processors

High Economies of Scale Access to finance, extension, Quality Inputs, Commodity Organisations Access to finance, Infrastructure, Link to producers Farmers Processors

Where do we want to get to? Food Security Wealth creation Employment

Key Policy Messages enabling environment Create an enabling environment for private sector investment Adopt a private sector led approach todrive inclusive growth of small, medium andlarge agribusiness stakeholders Adopt a private sector led approach to drive inclusive growth of small, medium and large agribusiness stakeholders Avoid policies that interfere with ormanipulate the market Avoid policies that interfere with or manipulate the market coordination Ensure coordination across all ministries and levels of government budget Allocate budget for provisioning of public goods in the agriculture sector

What we can do? Increase flows of market information along the value chain, linking farmers to buyers Market Information Create business engagement platforms for agri-business value chain players Trust Strengthen commodity organisations and business associations to serve their members Strengthening

Specific Propositions Develop a ‘rural network of agents” to help farmers tap quality inputs and extension Support the “missing middle” – including processors, transporters, distributers and retailers – with access to finance Put in place the “right business model” to stimulate private sector development

Thank You