Going by international standards, an arable piece of land not up to 10 hectares is categorized as a small scale farm.
A publication revealed that over 80% of Nigerian farmers are smallholders and agriculture stands as a significant contributor to Nigeria’s Gross Domestic Product (GDP) with the farmers playing major roles in this contribution.
These farmers are the major producers of food consumed by Nigerians. Efforts have been put in place by the government and private bodies to improve agricultural production via upscaling the country’s small scale farmers, however, that hasn’t yielded much effort.
The possible solution is to shift focus from big-scale transformation to small-scale holdings, an approach that isn’t new to the traditional Nigerian practice.
Looking to this solution agtech startup, Farmer1st a platform on a mission to provide simple tailored-made solutions to the market access, banking and micro-lending challenges faced by smallholder farmers in Nigeria.
Background
In 2017, the platform commenced as TradexPress an agro trading and aggregation service that provides farmers direct access to off-takers (bulk buyers and agro-processors).
In March 2018, the company restructured and registered as Farmer First Technologies Agro Limited. The platform expanded to eight states namely, Lagos, Taraba, Bauchi, Anambra, Kaduna, Enugu, Rivers and Abuja (F.C.T).
The agtech startup developed its online aggregation platform of its business and began major supplies to agro-processing companies such as Kaptain Foods.
In 2019, the company realized that its off-takers had major transport and logistic problems after aggregating their orders.
Hence, the platform decided to extend its service offering to include the haulage of agro commodities and signed bilateral agreements with Fadama Co-operative Society and the All- Farmers Association of Nigeria.
In 2020, Farmer1st expanded its operation to more than 27,000 registered farmers having discovered that access to capital and basic banking and financial services were a major challenge for rural farmers.
Hence, the company developed two products:
Agro Money
A short-term single-digit loan for farmers and women agro traders.
Farmer Pay
Mobile banking(USSD) and agent banking platform in partnership with etranzact and Zenith Bank Plc, enabling farmers to make payments, receive money and pay basic bills.
Overview of small scale farming in Nigeria
According to Farmer1st more than 70% of farmers in Nigeria are small-scale farmers, that is to say, they farm on 1 to 9,5 hectares of land.
The small-scale farmer plays an important role in building the economy in Nigeria, makes a significant and important contribution to the national product.
78% of food consumed in Nigeria is produced by small-scale farmers.
The small-scale farmer in Nigeria face challenges of buying inputs such as pesticides, insecticides, fertilizer and farm tools.
The government do not subsidize the price of this item in order for these farmers to purchase them.
Small scale farmers do not have access to credit facilities, these small scale farmers tend to produce low grades of crops because they lack funds to boost farming activities.
Lack of land Tenure system, small scale farmers in some cases lack land space to farm. Small-scale farmers have limited access to modern agricultural technology.
Lack and high cost of labor in rural areas. Small scale farmers lack information on recent development in the Agricultural sector in
Nigeria.
Farmer1st Solution
Market Acess
Farmer1st provides farmers with off-takers, helping them in reducing poor storage, exposure to the exploitative tendencies of most middlemen as well as farm produces getting spoilt due to lack of off-takers.
Farmer1st presently is listed on Lagos commodities exchange(LCFE) and Afex Commodities exchange to trade agricultural commodities.
Micro Credit
Farmer1st discovered that a lot of farmers in Nigeria do not have access to micro-loan. loans to the agricultural sector account for a meagre 3.6% of the total issued loan portfolio by banks and other financial institutions.
Most of the small scale always are in need of these loans to get farm inputs, therefore the Agro Money platform, a micro-credit scheme enables farmers especially women in the agricultural space access short-term loans at single-digit interest rates.
Financial Inclusion
Over 30 million small-scale farmers in Nigeria do not have access to basic banking and financial services.
For instance, a lot of farmers in the rural areas in Plateau state do not have access to banks, while a number of these farmers do not have bank accounts.
Farmer Pay was developed to allow farmers to make online transactions such as deposits, withdrawals, airtime purchases, bill payments through a wallet system.
This platform is Nigeria’s first Mobile Banking (USSD) and Agent Banking platform.
Challenges and milestones
Some of the farmers, the company has loaned to sometimes fail to repay the loan, however, as mentioned earlier the platform has been listed on the Afex commodities exchange and Lagos commodities exchange (LCFE) to trade on the trading floor.
Its new solutions, Farmer Pay and Agro Money will kick start by the end of May.
It has also added a POS platform in partnership with companies such as Paga, Flutterwave and Global Accelerex.
Farmer1st has 23,800 on its platform, having disbursed 377 loans with 1,100 Farm to off-taker deals completed.
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