Like the proverbial Nazzaret, Nigerians are asking, “can anything good come out of the North East?” Insecurity, terrorism, homelessness, refugee crisis, poverty, and farmer herder crisis have been recurring themes in news headlines from the North East for the past decade or more.
The war against insurgency, banditry, and criminality has been ongoing in the Northeast for eleven years, led by the Nigerian armed forces. Significant progress has been made, but much more remains to be done.
Because of the length of this war, many people are wondering if military action alone will solve the problem. A recent study discovered that poverty is the primary source of insurgency, indicating that combating insurgency requires a multifaceted approach.
Agriculture, the primary occupation of the locals, has been identified as a viable medium for empowering and improving the lives and livelihoods of those affected by terrorism in the north East. The Central Bank has been at the forefront of efforts to broaden people’s opportunities.
It has collaborated with individual farmers, farmer cooperatives, small, medium, and large corporations in its efforts to alleviate the suffering of the peoples of Northeast Nigeria. Across the country, agro-industrial transportation, processing, and storage facilities are being built, with the goal of increasing local production, improving the agricultural value chain, and reducing waste.
Sebore International Farms is one of the pioneering farms working with the Central Bank to democratize opportunity in Adamawa State. Sebore farms employs innovation, technology, and relationships with dairy farmers to provide consumers with high-quality dairy products made from high-quality raw milk sourced from Adamawa’s magnificent natural environment, while also creating a massive market for local dairy farmers, ultimately creating wealth, alleviating poverty, and establishing an incentivized system that provides a viable alternative to banditry and all other forms of criminality.
In this interview, Aminu Nyako, MD/CEO of Sebore International Farms, discusses the positive impact his farm has had on the local people. And how Sebore Farm is changing the narrative about the Northeast, becoming the lighthouse that both locals and Nigerians have been looking for. He discusses how the agricultural value chain system affects dairy farmers’ lives, combats insurgency, and generates economic growth in the country.
Tell us more about Sebore International farms?
Sabore International Farms was formally established in 1982, and we are primarily involved in dairy, horticulture, and agricultural extension services. Our mangoes and dairy products are well-known. We received the license to become an expert processing zone in 2001. It is one of Nigeria’s only privately owned agro processing free trade zones.
The land is 15,000 hectares in size. I became CEO of Sebore International Farms four years ago, with the goal of repositioning the farm for future prospects and innovation. The development of our dairy business became of key interest to me because the dairy space within Northeast Nigeria, Adamawa State in particular, is such a rich resource base.
The lifestyle of the local people has always been around cattle and one of our main goals as a company is how to transform that innate wealth of the people to bring about prosperity and improvement in means of livelihood. And I think that’s what we’ve been focused on and that’s what we’re doing.
It is surprising that a young man like you would choose to go into agriculture. Most Nigerian youths don’t find agriculture attractive. What inspired you?
I chose to go into agriculture because it’s the sector with the greatest opportunity for growth; and if harnessed properly, presents an opportunity for wealth generation. For any country to become a developed society or a prospering society it must find a way of making her agriculture make sense. It means that you have to make it attractive economically, you have to be able to put science within it.
What I mean by science within it is that inputs should equal output, and technology should be able to bridge that gap in terms of financing gaps, in terms of productivity gaps, and the likes. I think for far too long, we’ve left our subsistence farmers within the Agric space to do what they’ve always known without innovating in the right direction.
Nigeria is said to be growing at a whopping 4% birth rate for the past couple of decades. And I believe right now we are about 210 to 220 million people. Nigeria is a growing country and if you leave the factors of production (land, water and its people) constant, then your Agric doesn’t grow that much. I’m explaining it this way because of my background in economics and for a country that has also had its poverty rate increasing because of our low GDP growth in the past couple of years, you need people that have this sort of thinking to enter the Agric space, and to be able to innovate their way through or solve their way through.
What roles can private equity in conjunction with the Central Bank play in funding Agricultural business in the country?
They help provide long term financing which ultimately curbs most of the risks of defaulting that are otherwise prevalent in existing short term financing. Agriculture, when not fully mechanized, is a very risky game because you need a very precise growing environment (ie temperature, humidity, etc) in order for you to have maximum productivity and because not a lot of research has been put into weather and climate in Nigeria, the risk for farmers becomes very high.
And at that point in time, you will need patient funding. You will need funding partners that are in it for the long haul and I believe only private equity in some part and the central bank right now as you’ve seen it, have that kind of long view as to what macroeconomic benefits can come if we’re able to crack this Agric business within Nigeria. The Central Bank has played a very tremendous role in extending long term finance to the private sector. They have also supported Agric businesses with monetary policies and favorable fiscal policies. I think that is very key in giving farmers the levity of time to bring innovation and science into Agriculture. I think more funding is required because serious players that currently exist within the Agric space need to be given a lot of support to be able to bring the sector to its full potential.
What Principle is your business model hinged on ?
For us, our business is built on economic inclusion hinged on pro-poor growth policies. That is, being able to ensure that our local farmers share in the gains of Agriculture. It is very important to us that whatever we do within our farm actually extends to the communities where we operate, so much so that they share in the gains made by the farm.
That is one of the reasons our dairy operations integrated local dairy farmers and gave them access to a ready market to sell their milk at favorable prices thereby improving their means of livelihood. Currently, we are collecting milk from over six thousand dairy farmers on a daily basis. This opportunity for guaranteed milk offtake from the local community has given them economic security in terms of source of livelihood and access to finance which enables them solve other challenges they may face. We have also provided access to water and nutrition for their children. It is our hope that as we grow, these local farmers also grow with us and we all share in the gains from agriculture.
Insecurity, terrorism and banditory have has huge impact on businesses in the Northeast. How have you managed to navigate these issues and continue to do business?
We view the issue of insecurity in the North East as an economic issue; and what we have tried to do with our program is to find ways of inclusive economic growth. Luckily for us , the security environment has stabilized over the last couple of years. A major contributor to the crisis was increasing poverty of the locals due to inadequate opportunity and climate change. Lack of opportunity and climate change really exacerbated the insecurity in the North East. For instance, we all know our climate is changing rapidly, with sources of food, livelihood, and traditional waterways all having dramatically changed in the last couple of decades. Unfortunately, the local communities living in the affected region have not gotten the right kind of information that will enable them to adjust their lifestyle as quickly as the climate is changing.
To remedy this, Sebore Farms has focused on appropriate information sharing as well as provision of services that help mitigate the effects of climate change in the communities where we operate. Additionally, we have made a concerted effort to create opportunity for local farmers and link them to the larger dairy value chain.
This means that we use our access to technology, finance, and favorable policy as an EPZ to create a system that benefits all participating members of the community. We have built milk collection infrastructure, created support systems and self help groups to teach local farmers how to take care of their cattle using our agric training and extension expertise. We have also built solar power boreholes to give them access to water during the dry season to mitigate the effects of climate change. Ultimately, our business approach has helped us create a security blanket around the farm, because every member of the community has a skin in the game. This shared prosperity has created a kind of safe zone where everyone wants to be part of the program due to the net benefits it has created for the individuals and community at large. This model has helped reduce the insecurity in the area and we hope to extend this to neighboring communities and states which hopefully would contribute in solving the security issues plaguing the region.
How many farmers are you currently working with, what is the average quantity of milk you receive each day?
We currently process about 2500 liters of milk daily collected from about six thousand farmers. Right now, we are in the process of increasing our milk processing capacity to 150k liters daily and hope to commission the factory by the end of the first quarter of 2022. We have invested heavily in improving our capacity for milk collection and hope to grow our farmer base to over twenty thousand by the end 2022.
In what ways would you say the activities of Sebore farms are impacting the lives of the locals and helping in the fight against poverty and insurgency?
The way the dairy collection program was designed was geared towards achieving a seamless fit between our collection procedures and the general routine of farmers. The program has also fostered a sense of dignity of work for the local community as they now feel connected with the brand. Even though we have been here since 1982, thanks to this program and advancement in technology , this is the first time we have been able to connect with the local farmers in a very visceral way. Technological advancement in power generation through renewable energy has helped in improving efficiency in processing as well as storage and transport of fresh milk products.
Additionally, innovations in financial service delivery have further increased the success and adoption rate of the program. Utilizing favorable CBN policies and infrastructure such as that of the SANEF agent networks has helped to bring the people into the financial system. On our part, we basically have integrated and consolidated a lot of the good things happening in Nigeria to create value for the local communities where we operate. The local farmers see it and most of the restive youths now understand that there is a better and more sustainable way of making a living. We hope in the next coming years to expand this collection infrastructure to Gombe, Taraba, Borno and Gombe, integrating as many of these farmers into this program to enjoy the benefits of these programs.
To what extent has the covid-19 pandemic affected Agricultural operations in Nigeria and your business in particular?
What was most apparent was that the logistics of getting food around the country changed overnight as well as the issues caused by increasing prices due to inflation. We experienced rapid increases in prices of inputs, which had damaging effects on our bottom line .The only silver lining I would say that emanated from the COVID-19 pandemic is that it forced us as a Country to look within to solve our issues of food insecurity. On our own side as a company, we did our best to shield local farmers from a lot of the supply chain issues during the Pandemic by continuing to provide a steady market for their milk and other farm produce regardless of the effects of covid 19.
Lastly, the Pandemic gave us an opportunity to reevaluate our food systems and pushed us to find new ways of creating value within existing value chains in the country. Look, Nigeria has an estimated population of 220 million people and also imports a lot of her food products. That is totally unsustainable. So we have taken up the gauntlet to find ways of reducing the import burden on milk on behalf of the federal government. It is a daunting task, however, we believe Nigerians and their ingenuity in business are up for that challenge.
We know you have collaborated with the CBN in this endeavor, but what more can be done to support small and medium-sized agricultural enterprises?
I think the CBN can do more but I don’t actually believe it’s their mandate to do so. The commercial banks in the Country are more suited to deliver support and are better positioned to adjust their policy regarding Agricultural loans for SMEs and MSMEs. Notwithstanding, the CBN has been able to provide stop gap access to finance for small and Medium businesses. Hopefully, the successes recorded by Sebore Farms and other farms will signal to commercial banks that agriculture is a viable business and they should be more bullish about supporting the growth of agribusiness within the Country. The CBN is taking the lead in this and I am very grateful to the CBN and its current leadership led by Godwin Emefiele. The leadership at the CBN really believes in Agriculture and its potential to stabilize the entire Nigerian economy.
To what extent has the categorization of your business environment as a free trade zone bolster your operations? How has it helped you with the export side of your business?
The EPZ status gives you some of the best incentives for running a business such as minimal excise duties, large expatriate quotas and favorable tax policies to help give businesses an opportunity to focus on growth.
To further leverage on the EPZ status of the Farm, we have just completed the design and development of the Sebore Agro Allied Industrial City within Sebore Farms. The Sebore Industrial City will look to create value by aggregating and processing all the Agro Allied commodities within the Northeast of Nigeria. It’s important to note that the North East is actually 1/3 of Nigeria’s land mass, so a lot of the food we eat in Nigeria comes from the North East. Our hope is to position Sebore Industrial City so that it becomes a hub for semi processing and final processing for agricultural products for unward export or to serve the domestic economy.
Could you tell us more about Admirala natural yogurt? Are all the ingredients used in making it locally sourced?
All the ingredients used for making Admira’A products are sourced from local farmers. Everything is 100% natural. We currently produce yogurt butter and cheese, with no preservatives or artificial additives. We believe that This is one of the ways to create organic value for local products. Admiral products are always fresh and we hope that someday everyone gets a taste.
In what ways would you say your business model is helping solve the farmer header crisis in the north east?
I think it has helped tremendously. A few weeks ago, I had an encounter with a lady who did not know I was. She mentioned she is a farmer within our program and said that if this program had started 10-15 years ago, maybe Bokoharam would not have set foot in the northeast. The program has given her a lot of dignity and pride, she no longer had to sell her cattle, to raise money for education for the kids or for medical care. She has been able to sit in one spot to earn a living and take care of a family. This made me very happy to know that our program is having a serious impact on the people and improving their lives significantly.
Additionally, one of the main causes of the farmer header crisis is access to water, typically, you never hear about this crisis during the rainy season but it gets exacerbated during the dry season when cattle rearers and farmers are forced to move towards the benue. Without proper supervision, the cattle could trample on the farms or eat the crops, creating the crisis. At Sabore farms, we understand the part climate change plays in this crisis and what we do once we identify a hearder community is to build bore holes, creating access to water for the headers and their cows. This naturally minimizes their movement and forces them to settle within the areas where the water is made available.
Like I mentioned earlier, we’ve done about 12 of these boreholes and we intend to do up to 50. We’re looking for more partners to help us expand this water infrastructure. We know that the moment you provide water,access to feed and finance around the dairy value chain, the farmer herder crisis will be a thing of the past.
What can be done to attract more investment into the Local Agricultural sector?
If you look at it within the Agric space, you’ll realize that it needs funding, expertise and commitment for tremendous gain. So I think anybody looking at where financial should be channeled to, should look towards Nigeria’s agric sector. Nigeria has always been an Agric based economy until the discovery of crude oil and then we let go. But as you can see, right now crude oil is being rapidly replaced by renewable energy. Even though crude oil prices have increased in the past couple of months, you’ve also seen local demand for it increase at almost an equal rate. So, it’s netted off in terms of receipts from crude. The only other place that we know we’re sitting on a goldmine, we’re not harnessing it is in agriculture. Nigeria has tremendous fertile land for agriculture ,we have six zones within the country; from the rainforest to the mangroves to the savannah regions. It is quite unique for a country to have this kind of climate conditions which allows us to grow almost every kind of crop within the country.
