agro-business

Rotimi Williams Empowers an Agro-Entrepreneur with NGN0.2 Million

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By Lanre Solarin

“The Agricultural industry is a bittersweet one”, stated Rotimi Williams, the 36 year old happily married entrepreneur, as we sat in a Café on a cold Tuesday morning at a time when everyone was still enjoying the freshness of the new year in their homes and villages.

Agriculture in Nigeria didn’t come into full swing until it became a necessity for income diversification. With the country still heavily focused on oil as a primary source of revenue, only a few people were willing to go the whole nine yards into this untapped sector.

As a graduate of Economics from the University of Aberdeen, with two Master degrees, the second in Finance and Development studies, Rotimi landed a job with Euromoney Magazine to cover the African Space.

It was during his many trips that he discovered that Agriculture was a common interest and so decided to get involved in the market on his arrival back to Nigeria.

To Rotimi Williams, the owner of Kereksuk Farm which is the second largest commercial rice farm in Nigeria by land size, it’s no big deal being a rice farmer. “Agriculture is the most basic thing, but we’ve managed to complicate it beyond rocket science. The only reason people talk about me is because I do the most basic things that they haven’t done.”

Regardless of the fact that he has a farm, Rotimi is more location independent than most people can imagine. As an entrepreneur, he has been able to diversify, creating three businesses, all providing solutions to the Agricultural sector.

Although he has an office, Rotimi prefers to work from the Café or anywhere else, asides his house where his two children run the show. With his laptop, a drink and a couple of distractions to spark up his creativity, Rotimi can monitor his businesses, have meetings and make sound business decisions. For him, some distractions are good.

With a rice farm which sits on 45,000 hectares of land, and a Big Data company that acquires real time prices of everyday goods you can find in the market, like tomato, onion, pepper, rice, etc. Rotimi has his work cut out for him.During planting season, Rotimi spends up to two weeks in Nasarawa for the land preparation and actual planting. At other times, he simply goes over to inspect.

In order to make informed business decisions, and help provide needed data to help other players (both small and big) in the industry, Rotimi’s second company, Compare The Markets (CTM), has been studying the Agricultural market closely for up to three years now, constantly obtaining commodity price data from four main markets in Lagos – Ido, Oyingbo, Ketu and Mile12 on a daily basis.

The quantitative and qualitative data collected helps them understand the reason behind seasonal trends and market price fluctuations. In Rotimi’s opinion, this information alone helps smart farmers know when to plant in order to supply the market when the prices are high. It’ll also help policy makers and the government properly allocate resources efficiently.

For example, he revealed that 75% of Pineapples are brought in from Cotonou into Lagos. If a city close to Lagos, like Ogun state, were producing these pineapples, it’ll automatically create jobs for people and generate extra income for the government, while cutting the outward flow of resources.

Getting to this point of intentional research and making data-backed decisions didn’t come by chance. By steadily growing his rice farm for the past 5 years, Rotimi has come to realize that there’s nothing better than learning on the job. But getting started wasn’t easy.

 

Growing an Agro-Business From Scratch

Rotimi laughed, in response to the perception people have about him starting out on a large scale. “I didn’t start big. That’s the mistake people make. I did a lot of personal raising of funds and got rid of a few assets. I started first with a pilot scheme of 50 hectares, then went to 100, 200, and then 1000 hectares,” He stated. As a forward-thinking entrepreneur, Rotimi started out with an expansion plan on ground but with organic growth in mind. To him, starting big is an epic fail.

The Government also created a program where they allowed people in rice production import rice at 30% while those not in rice production could import at 70%. After qualifying for the program, the 40% savings he made was reinvested back into the farm.This shortened the time he’d have otherwise used to grow his farm to what it is today. But it didn’t come easy as he had to compete with 24 other companies in the program.

45,000 hectares of farmland is the expansion plan. He got the land ahead in order to start growing into it. But the actual planting is done on 1,000 hectares, which is still a huge piece of land. In his breakdown, he stated that to plant on 1,000 hectares, you need a minimum of about 120 million Naira working capital every season (up to twice a year). It’ll also cost about 100 million Naira to clear that land and that excludes purchasing your own equipment.

Choosing Nasarawa as his farm location wasn’t planned. While working on a project in Nasarawa, raising funds for a business, he discovered that the location was also good for rice. Asides that fact, there was no issue with Boko Haram, the community was relatively stable with a good balance of Christians and Muslims, and being from the South, he was easily accepted. A lot of things just came together for him.

But even though the team felt they had it all figured out, they never anticipated some setbacks. His growth strategy was simple: whenever he grows the expanse of farmland up to 1000 hectares, he’ll simply reinvest to expand again. But he never anticipated the flood.

“When the flood came, it wiped out the entire capital. We didn’t have anything to use to expand. We literally had to start small again. This is really what Agriculture is about. It could be one season of fortune and 3 or 4 bad seasons.”

Facing Challenges

Rotimi’s farm in Nasarawa is located just 50 metres away from the bank of the River Benue, and the only divider is a road. Whenever there’s a lot of rainfall, the Lagdo dam in Cameroon gets opened and one place the excess water moves to is his farm, taking with it his rice seeds and planting efforts. This was what wiped out his capital the first time the farm scaled up to 1000 hectares.

Moving away from the water would cost more because then, they’d have to pump a lot more water. To address this issue, measures are being taken to develop another part of the farm to avoid future occurrences. But the flood was just one of several challenges.

In 2016, just like every other farmer would do, they bought seeds, and did everything required during the planting season. However at harvest, not a grain of rice grew from most of the seeds. It became obvious that the seeds purchased were bad seeds. So a ton of money was lost, all as a result of poor quality control of seeds.

“Driving from Abuja to my farm is about 5 hours. So every time I go to the farm, I have to leave by 3pm otherwise my life would be in danger,” Rotimi stated as he recalled the security challenges he faces with his farm. Due to the long distance, there are certain hot spots along the way and this has led to a couple of unwanted occurrences that could have claimed his life.

As with many entrepreneurs, getting funding from banks posed as another issue. Small projects are less likely to get funds. For big projects, the reverse is the case but then, the interest rate kills you.

“A lot of people are going into Agriculture without understanding this part,” Rotimi continued. “If you want to plant rice for example, the biggest part of your working capital is the purchase of fertilizer, seeds, herbicides and pesticides.”

Unfortunately, these fertilizers, seeds and chemicals are imported, therefore their prices are at the mercy of Foreign Exchange rates which farmers aren’t in control of. If, after receiving your loan, the Naira gets devalued further, the cost price will eventually go up. While the obvious solution to this would be to raise the price of local rice, Rotimi pointed out that due to the price of the imported rice, the price of local rice would forcefully remain stable, thereby causing less revenue and profit for the farmers. This market fluctuation is one reason he has withheld making loan applications to banks. For him it’s a huge risk prefers to be patient.

Getting talents was also another major challenge that kept Rotimi frustrated. Inasmuch as people say there’s unemployment, the truth is in the rural areas, not everybody is willing to work. And he went into the business with the mindset that they were going to use more of labour and less of machines in order to create employment. However, the cost became too much. The labourers became slow and inefficient. Generally, the work ethic was poor and there were issues of theft. However, accepting the help of a security guard to bring his female relatives to the farm changed the modus operandi.

 

The Farm-Out-Of-Poverty Initiative

“For me, it’s one of the things I’ve done that gives me the greatest joy,” Rotimi stated with a smile and sense of gratitude.“What we did was we took a group of people no one believed could do anything in Agriculture and proved that they were better than most people at it.”

The Fulani women were perceived as being only good enough for selling milk on the road. But when they arrived on the farm, they grew to understand the crop they were planting and were ready to take on their own farms. However, none of it was planned.

The community was quite structured. They had a development board that could mobilize people. So getting hands wasn’t an issue and the Fulani men didn’t need training because most of them were already small scale farmers.

During planting time, the men they employed accepted about 500 Naira per day. But at harvest time, being that they saw the urgency for Kereksuk Farm to harvest quickly, these men tripled their prices, including the time taken to clear the land. So if they were to clear in one day, they did it in three days, collecting thrice the amount per day. It became too expensive and at a point, Rotimi and his team had to leave Nasarawa to Niger state in search of labourers.

On seeing the issue at hand, the Farm’s security guard offered to bring his sister, wife and others to do the work. The next day, 50 women showed up and they worked amazingly well. Rotimi requested for more and the numbers kept increasing.

As a result, they created a program where the women were taught the planting cycles – from planting to harvest for both dry and wet seasons. A part of the land and resources were allocated to them to develop and afterwards, they could sell back to Kereksuk Farm.

The initiative didn’t run fully in 2017 because of the need to put a few things into perspective. “I had to procrastinate on some things. So for me procrastination is fantastic. It’s a gift, so I procrastinate a lot,” Rotimi gleefully stated. “The time you spend thinking about a particular thing helps you see a lot more details that others are blind to.”

For Rotimi, farming is a lifestyle. So it only makes sense to get it right. There’s no harm in stopping, tweaking the strategy and moving on.

 

Opportunities in Agriculture

With Agriculture moving at a very fast pace, more farms will spring up and there will be less available land for cattle to graze on. For this reason, dairy and beef production will become a necessity in the nearest future.

Rotimi explained that the crisis between the Fulani herdsmen and the farmers exists partly because the country developed without developing the Fulani. These people have been grazing on these lands for hundreds of years, and we’ve been buying the meat. However, due to the sudden push for Agriculture, grazing land has become competitive.

By rearing cattle for commercial purposes, with quality, exportable meat in mind, while creating a sustainable way to provide more grazing land for the Fulani, it could create opportunities in areas like cattle feed production, cattle rearing or dairy production, meat processing and sales. This would help us compete with other African countries that don’t even have as much cattle as we do but seem to have gotten it right.

“There are opportunities everywhere. For everything I complain about today, it’s an opportunity for someone else to create a solution. And that’s a great thing about this country; there are so many problems that just need one smart guy to create a solution.”

Rotimi started planting rice to address the problem of rice importation which to him, wasn’t helpful. It was his solution to the importation problem he spotted and as nature would have it, the environment was conducive enough to start. Now, many Nigerians have developed the courage to move in this direction. With the move to stop rice importation, as stated in President Buhari’s speech on the 1st of January, 2018, hopefully our local rice will now become readily available and affordable, giving rice farmers an opportunity to thrive.

 

Start Big or Die Trying

“Starting big is a big mistake because agriculture is the fastest way to lose money,” Rotimi stated. The only thing you can control is putting the seeds in the ground and applying the fertilizers. You’re neither in control of the seed production nor nature which enables growth.

It’s a gamble to start on a large scale for something you’re not fully in control of. Initially, Rotimi was raising 130 million dollars to develop 17,296 hectares. Unfortunately, the money didn’t arrive and he is more than happy that it didn’t. “I’m glad it didn’t come through because if I invested that money into the project at once, we would never have understood the market and nature fully.”

There are a lot of things to understand before pushing for growth. But the resources required for that growth must be available, which is land. Developing thousands of hectares at once is not advisable. Smart people will look for data first. And Rotimi reduces his risk by leveraging historical data in the industry.

The common misconception about Rotimi’s success is he had a lot of money in order to acquire the land he presently uses. On the contrary, Rotimi offered the land owner a percentage of profits and acquired the land on lease for a number of years without having to buy it. His idea was to start small in the best way possible.

Luck or not, Rotimi believes in being prepared to take it when it comes. To him, preparing ahead is important because the chance to break out will always come.

 

Policies and Legalities

It’s important to be smart about the kind of agro-business you start, because choosing an area that’s of national interest makes fund acquisition easy. For example, in crop farming, crops like cocoa, cassava, cashew, rice, soya beans and maize are more likely to attract funding than crops like tomato or pepper. “There has to be a reason for picking a crop,” Rotimi advised. “You must either have a ready market, or be able to forecast profits in future. But policies are different, so first find out what the policy is for whatever crop you choose.”

Another important factor is land. Spending money on acquiring land is pointless if you can always lease, which was Rotimi’s primary strategy as it reduces risk of loss to indigenes.“A Perfected Lease document is as good as a C of O because it gives you ownership for a certain period of time. My lease is for 50 years,” Rotimi stated, with a sign of satisfaction on his face. “When it comes to payments, offer them a percentage of your profits and put a representative on your board. That reduces risk for you because they get a sense of ownership of the project and it’s more likely to succeed because they’ll make sure you’re safe by protecting the business. Just ensure the money they get is used properly so everybody in the community is happy. That way, you’re already using the property but paying for it in bits.”

 

Agro-Business Education

Education comes in different forms; people can always self-educate or go to an institution. For Rotimi, he believes that every Professor has an article on Google. So he self-educated himself through online research and with the help of an Agronomist, implemented what he read.

However that may not work for all things as some need experts. Learning only from experience can be risky and more expensive.

For Rotimi, mentorship is a little overrated and can be a dream killer if the mentee isn’t intentional about his personal journey. So he always preaches self-belief and his reason is simple; “I can tell people my experience, but since my experience and yours will be different, it’s left to you to pick what makes sense from it and dump the junk. But that should never determine your own journey.” Rotimi firmly believes that if you want to do anything, you shouldn’t have to depend on anyone who has done it before. You should be able to try it for yourself.

As a hobby, Rotimi paints. As we sat in the Café, he proudly pointed to some of his works which hung beautifully on the walls and gladly showed me more paintings on his Instagram page. He paints for fun, but when he started it never really made sense. He started small, but people only appreciated it when the results showed forth.

He only started painting in December 2016 when he purchased a painting in an art exhibition in Abuja. “On taking it back to my room, I started wondering why I spent so much money on the painting. It took sleep from me,” He chuckled as he recalled the experience. He then decided to duplicate the painting and to learn the art, he had to watch an artist paint while he practiced himself, using online videos as a support learning tool. By May 2017, Rotimi was able to sell some of his paintings in Lagos for some good money. For him, he didn’t need to go to art school to sell paintings. Self-education did the trick.

 

On Growth

“As it grows, the smart thing to do will be to involve my wife more so that we don’t spend too much time apart. Otherwise there’ll be problem.” He stated as he relaxed back on his seat, smiling. His goal is to become more of a corporate farmer than an active one, so he has more time to think of how to grow the business, while an expert who knows the business oversees it. He understands that he can’t get rich by always standing on the farm.

“I’ve been in this business for about 5 years. And if you start seeing any decent profits before 5 years, then something is wrong,” He stated.“It probably means you’re no longer scaling or there’s something you’re not doing.”

It’s possible to make good money in the first year of harvest. However, it isn’t to be splurged but should be reinvested back into the farm or kept aside to withstand shocks in coming seasons. And that should be done consistently for at least 5 years, according to Rotimi. By then, there’ll be more stability and expectations are better tailored.

Agriculture is wide and there are different funds for different parts. Before starting, Rotimi says it’s better to use the different funds available to guide your decision, especially if acquiring funds is part of the plan. There has to be interest or a market. “The bank for me is a no-go area for now. Start small, grow organic. If you put a brick at a time, you’ll be able to withstand shocks,” he strongly remarks.

 

0.2 Million Naira For One Youth

Youth empowerment is hinged on policies. And in order for the government to successfully create jobs, their policies have to be well thought out. “The truth is if prices of fertilizers, herbicides, and pesticides drop, most crop farmers won’t need banks. But at this level where those prices are high, some farmers will always have to look for external funding,” Rotimi stated with much displeasure.

“Funding is not the only problem with small businesses. Many of them also think small,” He stated, as he mixed local honey with his tea. To him, business owners need to spend 80% of their time thinking about how specific things will work and 20% implementing.

To help one young entrepreneur bring that agro-business dream to reality, Rotimi will be giving off 0.2 million Naira in funding, including all access to his knowledge and experience to one youth.

Would you be the one? Apply now

Editor’s note: This article was originally published in the Spark Magazine. Find the magazine here to read more articles.

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