Nigeria has a number of agricultural products that are needed outside the country, but for the most part, the smallholder farmers who produce them hardly have the means or capacity to get them outside of Nigeria’s shores. Then comes Agroeknor, an agricultural business focused on backward integration and optimising the agricultural value chain while taking indigenous superfoods to a global market where they are needed.
Co-founder and Executive Director of Agroeknor, Timi Oke, spoke on the Nairametrics Business Half Hour show about how Agroeknor is creating high-income opportunities for the farmers with its agricultural market access.
“My background is in economics and international business, and my first work experience was in retail banking and business analysis. But while I was doing business analysis, I discovered that there was a market for certain Nigerian superfoods, hibiscus and ginger especially, and it was a market that I felt we could meet the demand while creating income opportunities for the smallholder farmers that grew it domestically. I took a career break for a year to start Agroeknor,” he said.
Working with his co-founders and partners, they sourced the agricultural produces needed, did some processing to add value to it, and then exported it into the international market in 2013. They channelled their savings into getting started, and later on, took funds from family to improve on the business. The team ran with this for years before it had access to an export stimulation facility from the Nigeria Export-Import Bank (NEXIM) in 2018, and another facility from the Development Bank of Nigeria. With these, they grew the business, and grew trades and revenue too, before recently taking on private equity and impact investments.
“We now have farming operations in Jigawa, Nasarawa and Katsina states. We also have collection sites in those three states, looking at expanding into Kebbi State this season. We have two processing facilities in Kano state as well. We have had a farming initiative in Akure and Ekiti as well. We have farming operations in 5 states, then all our processing is done in Kano state,” Oke said.
To improve the quality and quantity of the produce, the Agroeknor team initiated an inclusive partnership with the farmers through the Hibiscus Outgrowers Scheme. Through this scheme, they provided support facilities and services to help the farmers increase the quantity and quality of their yield through improved agricultural practices, and by providing storage facilities.
Coupled with the tech-enhanced processing, Agroeknor had improved products to take into the international market, resulting in more revenue for the startup and for the farmers. Even though the pricing in the international market is generally influenced by big off-takers in the pharmaceutical industries, beverage production industries, cosmetics industry; Agroeknor tries to define its price margin by the added processing done to the products before exporting.
Combatting challenges
To address issues of security which is a general issue for Nigerian farmers, the farms are insured against losses. The farmers also organise themselves into local vigilantes to protect their farms. It is also through these organised groups under the farm coordinators that Agroeknor gets to provide them access to capital, fertilisers and other enablers.
Agroeknor has also had to do a lot in educating and enlightening the farmers on better farming practices to improve their yield, using weather forecasts and data to plan their farming and proper farm management. Agroeknor has also connected the farmers to other players that can significantly improve their operations, like providers of temperature regulated storage facilities.
“If you want farmers to keep going to the farm, you have to improve their income because no one wants to go to the farm just to earn peanuts, so that was what we did by reducing their operational and transaction costs, we filled in little gaps that made life easier for them, helped the environment and make business easier for us,” he said.
By being present in every stage of the process, Agroeknor has made itself an integral part of the farming process with the farmers, instead of simply sourcing and forwarding the products. The team has also had to deal with challenges in transportation and hauling of the produce without damage.
“Most of the farmers were not even sure of the type of fertilisers or fumigants they used, and we did not have enough readily available agricultural laboratories that could test products at the spot to tell you what was contained in the product. Most times you would have to bring the product to Lagos or Abuja, but now in kano, there are such labs for the sort of superfoods we deal with,” Oke recalled.
Expansion plans
While operating from a physical office in Kano, and a liaison office in Abuja, Agroeknor has plans to extend the scheme to cover 20,000 smallholder farmers within the next two years.
“It is about people and impact. If we can extend this impact to improve the livelihood of 20,000 smallholder farmers, the ripple effect would be massive. We also want to expand our global footprint in select European and American markets where we already have a presence. Beyond that, we also want to keep investing in an integrated backend process and ensure that whatever digital infrastructure we are introducing into this space is scalable, which means they can be used in several products. We want to keep maximising the value chain and closing the gaps”, Timi Oke state.
