Nigeria now has a population of about 200 million people, with that number predicted to climb to over 400 million by 2050.
As a result, food production and sustainability will always be a top priority, and agriculture will continue to be a crucial area of national growth.
Recently, a slew of investors, innovators, and entrepreneurs have flocked to the agricultural sector to use technology to solve a slew of problems.
Unfortunately, the industry has experienced an influx of people with nefarious objectives. Such people prey on the unwary through a variety of schemes, one of which is Ponzi Agriculture Investment Schemes (PAIS).
The essential points to look out for while investing in an agricultural plan are outlined below; following these points carefully will prevent you from falling prey to scammers.
Ensure there’s a physical location
It is vital to see the farm’s physical location, as mentioned on their website, before continuing to invest in any agricultural business. If you are unable to visit, find someone who can verify the farm’s location.
Farm addresses that are either non-existent or belong to other persons are listed on several bogus agricultural platforms. By going to their indicated locations, you will be able to ascertain their genuiness to a reasonable extent.
Look out for contradictions in the scheme
Every company is controlled and operated by a group or an individual. To assess the trustworthiness of the individual or directors of the company, a background check should be conducted.
If the team does not expressly tag themselves to the investing platform or does not have reliable or traceable digital details.
Unrealistic Return On Investment (ROI)
The first question to consider when it comes to returns is how they are computed. Is it paid on a per-product-cycle or per-year basis?
Keep in mind that the majority of agricultural investment scams offer exorbitant rates to entice people to engage in their platforms.
As a result, examine current market rates and compare them to what you’re being given. The best bet here is to hire an investing specialist and request a cost–volume–profit analysis (CVP) to see whether the stated return on investment is realistic.
Is it covered by insurance?
Most agricultural product is perishable and farming cycles can be disrupted by weather or other factors, it’s critical that the program is insured.
Also, contact the insurance provider to determine the type and scope of coverage for the farm. Is the insurance covering the crops, the equipment, the cattle, or all three?
Most premiums do not cover the ROI, so if something unfortunate happens, you will not receive your estimated returns until the farm resumes operations.
Double-check Accreditations and Partnerships
The company should be properly licensed and registered with the Corporate Affairs Commission and its paperwork should be current.
Accreditation from the Securities and Exchange Commission and NAFDAC is also beneficial. If any or all of these are absent, you should not proceed.
Evaluate partnerships such as extension telecom operators (agencies that provide guidance and information to boost output), raw material suppliers, and off-takers (those that buy off harvests or farm commodities).
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