Strengthening of organization capacity of Implementers/Aggregators for effective business and agricultural management in contract farming

www.iita.org A member of CGIAR consortium

Strengthening of organization capacity of Implementers/Aggregators for

effective business and agricultural management in contract farming

Debo Akande

AgMP March 2013


Outline

• THE PROBLEM TO BE SOLVED

• THE SOLUTION/ OUTCOMES

• RISK MANAGEMENT AND SUSTAINABILITY PLAN


THE PROBLEM TO BE SOLVED


THE SOLUTION/ OUTCOMES


RISK MANAGEMENT AND SUSTAINABILITY

PLAN


Markets for Aflasafe

DOREO PARTNERS

Poultry industry

Export-oriented aggregators

Food processors

Large commercial farmers

Smallholder farmers

Market based

• Poultry feed

• Premium food market

AgResults (Incentive-cum-market based)

mar

ket

de

man

d f

or

Afl

asaf

e • 60% maize consumed by farmers • 40% sold in the market

Maize & Poultry Growth

• Nigerian maize production has grown from 4 million metric tons in 2000 to a 7.3 million metric tons in 2010

• Nigerian poultry production has grown from 113 Million birds in 2000 to 192 million birds in 2010

• Each sector has grown on average 5% per year.

• Poultry feed is approximately 60% maize.

• Annual demand for maize: 1 million tons

Nigerian Govt Bans Poultry Imports

Index of growth in production for maize and poultry relative to Nigeria’s production in 1961* Measure: Relative growth in production

Poultry Industry… Key Driver of Domestic Maize Production

Aflatoxin and Broilers

AF-free

diet

500 ppb AF diet

Aflatoxin impacts • Significant increased mortality

• Reduced immunity

• Reduced vaccine efficiency

• Dramatic reduction in live weight / Feed

efficiency

• Drop in egg production rate

Aflatoxin levels in feeds in Nigeria

Aflatoxin level (ppb) Samples (%)

<20 (safe) 38

>20 to 100 (up to 5x) 14

>100 to 500 (up to 25x) 41

>500 to 1,000 (up to 100x) 7

Poultry industry’s current cost (per ton feed*) for toxin binders:

Tier 1: $3 Tier 2: $6

Tier 3: $13 * 600 kg maize per ton feed

Poultry Feeding Study

$3,200 net

profit from

10,000 birds

in 8 weeks

www.iita.org Mycored Europe, 28 May, 2013 DOREO PARTNERS A member of CGIAR consortium

Aflasafe maize feed Toxic maize feed

Innovation Platform

• Platform meeting with leadership and members of Poultry Association of Nigeria, feed manufacturers, maize aggregators, aflasafe farmers, vet professionals and regulators

• Results of poultry feeding study presented

• Poultry farmers to buy all aflasafe maize at a premium



Key Economic Drivers

• Ex-factory price: $12.2 including 28% EBITDA

• Farm Gate price: $15.6

• Maize yield required for farmers to recover aflasafe cost + 33% profit: 3.5 t/ha

• Yield enhancement to go hand in with aflasafe use

DOREO PARTNERS

Actions to Create Demand

• Develop manufacturing capacity

• Create awareness about aflatoxin

• Engage stakeholders frequently

• Demonstrate efficacy of Aflasafe

• Train farmers in aflatoxin management

• Enable aflatoxin testing of products

• Incentivize use of Aflasafe by the poor

• Link Aflasafe users to food and feed market

• Being piloted by Doreo Partners

www.iita.org DOREO PARTNERS A member of CGIAR consortium

Babban Gona Pilot

www.iita.org DOREO PARTNERS A member of CGIAR consortium

• Farmers’ cooperative with professional management

• Credit, inputs and technical services

• Yield enhancing practices

• Aflasafe use

• Aflatoxin testing – 100% met standard

• Incentive for meeting aflatoxin standard

• Warehousing

• Output marketing – linking to market

• Return profit after sale ($140/ha)

• Farmers keep part of the harvest for family use


Thank You

Thank u

Science

Strengthening of organization capacity of Implementers/Aggregators for effective business and agricultural management in contract farming