Growing Nigeria’s Soybean Industry
By Shem Oirere, Freelance journalist
Nigeria has continued to battle a ballooning import bill for soybean and soybean products despite the West African country being one of the top three producers of the crop in Africa, alongside South Africa and Zambia.
The Nigerian government, in partnership with the private sector, is on the campaign trail to expand the acreage under soybean production and also promoting the growth of both the poultry and fisheries industries, the two main drivers of the country"s soybean market.
Through the State-sponsored Agricultural Transformation Agenda Support Programme (ATASP), which targets sustainable increasing of incomes for smallholder farmers and rural entrepreneurs in the production, processing, storage and marketing of the selected commodity value chains including soybean, Nigeria has sought to create a domestic market for soybean in both raw and processed form and hence trigger increased production.
Nigeria"s domestic soybean production is estimated at 500,000 metric tons despite an existing huge potential to produce more. Increased production has been constrained by several stiffing factors that the Nigerian government, in partnership with the private sector, is attempting to address through ATASP that was launched in February 2015 and runs to February 2019.
The country"s Federal Ministry of Agriculture identifies lack of credit for farmers, inadequate investment in soybean processing, limited use of farm inputs, haphazard extension services, archaic land tenure systems that locks out many from accessing land as a factor of production, as some of the challenges constraining the growth of Nigeria"s soybean industry.
With an average soybean farm sizes of 1.5ha, Nigeria"s annual average production is around 680,000 tons, nearly 25 percent of the country"s national demand of of 2.7 million tons. The deficit is met through imports from major global producers such as Argentina and USA. An estimated 120,000 metric tons of soybean including raw soybeans flour was imported during the 2015/2016 season according to government records. The Nigerian buyers paid an average 18 percent and 19 percent more for the imports, compared to prices in USA and Argentina respectively.
In an effort to reduce the high soybean importation bill, Nigeria has outlined measures that will promote expansion of the animal production sector with more emphasis on poultry and fisheries so as to catalyse growth of domestic production of the crop that is largely grown in the middle belt, particularly Benue State and also Adamawa, Kwara, Katsina, Taraba, Kano and Kaduna.
For example, ATASP targets increasing production of poultry and fisheries by 51 percent and 20 percent respectively. As Africa"s largest egg producer and with the fame of having the second largest chicken population after South Africa, Nigeria has been working on providing more than 260,000 Grant Parent Stock and 40 million parent stock for commercial layer flock over the last four years according to the ATASP.
And for the larger Nigerian animal production segment, growth remains constrained, hence the low appetite for products such as animal feeds with a high soybean ingredient in their formulation. Various reports have shown how dominance of low yielding animal breeds, inadequate access to feeds and grazing, conflicts between crop farmers and pastoralists, low animal products processing capacity and deficiency in value addition have failed to inspire growth in demand for soybean products.
And in what appears to be a confirmation of the growing production deficit in the soybean industry, the ATASP says the government "will address shortage of soybean meal/cake to commercial feed mills by introducing unconventional protein source ingredients that have been developed by Raw Materials Research and Development Council such as vegetable carried blood meal, rumen content blood and also ensuring greater, availability of brewers" dried gran from the breweries." The country"s poultry market is valued at $600 million according to the Ministry of Agriculture.
ATASP also promises to combine both public and private partnerships to ensure "increased local production of soybean and alternative protein sources for poultry feed."
As part of the ATASP, the Nigerian government hopes to have in place a fish farm certification process to ensure quality standards across the industry"s value chain in addition to increasing aquaculture production to more than one million metric tons in the short term and reducing the importation of such products and also inputs.
Growth of Nigeria"s fishing industry is expected to be a key driver in the increasing demand for soybean production in the country. Under the ATASP, Nigeria hopes to scale up annual fish seed production to 1.25 billion in addition to producing 400,000 metric tons of fish feed every year.
The Fisheries Society of Nigeria says for the country to grow its fisheries industry effectively, and hence create demand for associated markets such as soybean, the government needs to set up a Fisheries Commission at the national level with affiliates at the State and local government levels in addition to providing an updated and effective national regulatory and legislative framework for fisheries and aquaculture.
The society says large, medium and small fish industry entrepreneurs should also be supported with financing through the setting up of a special fund for their benefit.
Currently, Nigeria"s annual fish demand stands at 2.66 million metric tons according to government statistics, but the country"s production stands at less than 0.7 million metric tons. The Food and Agriculture Organisation (FAO) estimates Nigeria"s fish imports at 60 percent of the country"s total consumption.
The constrains in soybean production cuts across all Nigerian agricultural sector, which FAO says includes "reliance on rain-fed agriculture, smallholder land holding, poor planting material, low application of fertilizer and weak agricultural extension systems."
Nigeria"s private sector is expected to play a key role in growing the soybean market across the industry"s value chain with companies such as Olam, the country"s largest buyer of domestic soybean, and Nestle expected to lead in creating capacity both to produce and consume the commodity.
For example, Olam says on its website part of its Nigerian investment and capacity building is on "soybean processing, including on-going work with local companies to improve efficiencies and capacity utilisation."
"We also want to enhance smallholder livelihoods and are partnering with the International Institute of Tropical Agriculture, Ibadan to promote high-quality seeds for farmers across Nigeria that are tailored to the country"s climactic conditions," the company says.
The company has recently established a 220ha trial seed farm in Kaduna, with a strategy to increase the country"s soybean production from 500,000 metric tons to 2 million metric tons in five to seven years so as "not only to make Nigeria self-sufficient on plant proteins, but a net soybean exporter."
To endear the Nigerian soybean export crop to international buyers, Olam says both the public and private sector have to address the "negative quality perceptions that Nigerian beans suffer."
Olam lists some of the quality challenges Nigeria"s soybean crop faces in the global market as "aflatoxin content, high presence of foreign matter, low oil content and excessively dried."
"While Olam was able to convince global buyers to overlook some of these parameters, these remain major issue that need to be resolved to make Nigeria a credible exporter of soybeans," the company says in one of its fact sheets on the Nigerian operations.
Meanwhile, Nestle Nigeria, an affiliate of Swiss transnational food and drink company Nestle, has for the last few years partnered with University of Agriculture Abeokuta to sensitise Nigerian soybean producers on good production practices and the economic benefits of the crop as part of the company"s strategy to meet its supply needs in the West African country.
The partnership, which targets suitable soybean growing areas of Lagos, Ogun, Ondo and Oyo to the south west, has come up with two major varieties of TGX1019-2EB and TGX 1448-IE which Nestle says have proven "promising" and passed parameters such as "high yield, disease resistance and seed quality."