16th IFOAM Organic World Congress, Modena, Italy, June 16-20, 2008
Archived at http://orgprints.org/11713

Accessing the World Market for Organic Food and Beverages from Nigeria

Olabiyi, T. I.[1], Okusanya, A. O. [2] & Harris, P. J. C.[3]

Key words: Export, Nigeria, market opportunities, organic food, organic beverages

Abstract

A study in 2005-2006 assessed the opportunities for and constraints to Nigeria accessing the international organic market. The study comprised semi-structured interviews with agricultural produce exporters and government officials in Nigeria, and with representatives of certification agencies in the UK, and focus group discussions with farmers’ groups in Ogun State, Nigeria. Fresh and canned pineapple and mango, ginger, and herbs and spices were ranked as having very high potential for Nigeria in the international market. Fruit juice concentrates, palm oil, cashew nuts, honey and cotton were among those products classified as high potential. Constraints identified included lack of awareness of organic farming techniques, high certification costs, lack of institutional support, enabling policies, infrastructure, and marketing facilities, limited access to capital and inability to capture economies of scale.

Introduction

The demand for organic food and beverages in industrialised countries continues to increase and a significant proportion of this is met from developing countries. This is especially true for tropical beverages, fruits, spices and some off-season temperate vegetables (FAO 2001, Barrett et al. 2002, UNCTAD 2003). There is good evidence of the ability of smallholder farmers to be competitive in products such as coffee, cotton and cocoa (Barrett et al. 2001) and also in herbs, spices and some horticultural products (Coulter et al. 1999). In spite of the opportunities, there are challenging obstacles to developing countries accessing the global organic market (Harris 1998; Barrett et al., 2001, 2002). Therefore, the focus of the present study was to identify opportunities and constraints to the development of organic agriculture in Nigeria oriented towards export and to evaluate the potential for specific products that can be produced organically in Nigeria.

Materials and methods

Opportunities and challenges for organic exports from Nigeria were explored using secondary data sources, semi-structured interviews and focus group discussions. Ten agricultural produce exporters and twelve government officials in Nigeria, and two UK officials of certification agencies were interviewed using open-ended questions. International buyers of organic products, certification agents in the EU and reputable non-governmental organisations involved in organic agriculture farming in developing countries were also contacted informally to obtain their opinions on the opportunities and limitations of organic exports from Nigeria.

A focus group discussion was also held with five government Agricultural extension officers and repesentatives from two farmers’ groups in each of the four ecological/geopolitical zones of Ogun State, Nigeria: Abeokuta, Ijebu-Ode, Ilaro and Ikenne. The discussions were held in a farmers’ meeting room at the Ogun State Agricultural Development Programme head office in Abeokuta, Ogun State and were moderated by the lead researcher.

Results and discussion

Organic agriculture is at present poorly developed in Nigeria, though there are recent moves for the production of certified organic crops. The Nigerian farming system was perceived as “organic by default”. Respondents noted a lack of policy or regulation covering organic agriculture in Nigeria and were apprehensive about the high cost of certification by foreign regulating bodies. Concerns were also expressed that farmers lacked knowledge of organic techniques and certification. From the exporters’ point of view, opportunities existed for the export of tropical produce, diversification of the traditional export basket, increased export revenue and subsequent foreign investment in organic sector. However, it was thought that considerable efforts would be required to assure confidence of potential buyers in organic products emanating from Nigeria. Availability and timeliness of market information, lack of infrastructure and marketing facilities, limited access to capital and inability to capture economies of scale were all considered major obstacles.

Regarding the relative potential of products for export, USAID (2002a), emphasised the opportunity the organic fruit and vegetable sector presents to producers and exporters in Nigeria. Table 1 shows an assessment of the export potential of some products from Nigeria. Products with export potential characterised as very high and high are primarily those for which there are significant shortages in organic supply and production is mostly restricted to the tropical developing countries. For example, there are a limited number of countries involved in exporting fresh and canned organic pineapple and mango. On the other hand, the production potential of Nigeria for these products is high. For instance, Nigeria is already one of the world leading producers of pineapple, mango, cashew, papaya and oil palm and these crops grow well with little or no use of agrochemicals. Also, the country is already involved in international trade in conventional forms of these products, with the advantage of established relationships with importers in the major markets.

For some of the products listed in Table 1, such as cashew, the general conditions in terms of quality, logistics, price and reliability are not very different for the organic and conventional segments. For cashew in Nigeria, USAID (2002b) concludes that “the majority of Nigeria’s production is considered ‘organic by neglect’ i.e. no chemical pesticides and/or fertilizers.” It is therefore quite feasible to target both markets at the same time.

For products rated as moderate potential in Table 1 such as cocoa, coffee and sesame, the organic markets, particularly in Europe and the US have the potential to be oversupplied. Although Nigeria is a leading producer and supplier of the conventional cocoa and sesame, it would need to compete significantly on price and quality bases against other countries that already have well established relationships with organic buyers. The market for organic sesame is relatively large and has shown medium annual growth rate of around 5% recently. Unfortunately, it is oversupplied, which has caused prices to fluctuate by as much as 50% (EPOPA, 2005). In 2001, Nigeria became the largest supplier of sesame to the world’s largest importer of sesame, namely Japan. Being a major player in the conventional sesame market, Nigeria can take an advantage of its position in the market to carve a niche in the organic sector as well. Other opportunities for Nigeria in the organic market are the production, processing and supply of speciality products such as honey, herbs, leather products, hides and skins.

Tab. 1: Potential of selected Nigerian organic products in the international market

Potential / Products
Very high / Fesh and canned pineapple and mango, peanuts, herbs and spices, ginger and ginger oil
High / Fruit juices, concentrates and pulps including papaya and mango, cane sugar, cashew nuts, palm oil, honey, cotton
Moderate / Cocoa, coffee, sesame, rice
Low / Bananas and plantain, vegetables, tomato pulp and puree, beef and chicken products
Very low / Citrus

For some products classified as low and very low potential, the market may be oversupplied, or have a slow growth rate, if any at all. And where demand exists, established exporting countries are more likely to take that advantage. For products such as citrus for instance, several countries are already significant producers and exporters, including EU and other industrialised countries with which Nigeria could not compete effectively.

In the case of bananas, until 1999, organic production came almost exclusively from small-scale banana farmers. However, large-scale plantations in the Dominican Republic and Ecuador have recently started exporting organic bananas (Barcus, 2001). Despite a growth in demand, the rate of production and level of investment and export from these well-established South American exporting countries makes the chances for Nigeria in the organic banana market very slim. For beef and chicken, imports from Nigeria are prohibited in Europe, either as organic or conventional, as a result of health and safety measures. However, opportunity may exist in the Gulf States for these products.

Conclusion

This study revealed that the formal organic industry in Nigeria is relatively underdeveloped, although much agricultural production in Nigeria may be described as “organic by default” with potential for increased yield from optimised organic farming. Additional potential benefits were thought to be environmental conservation, economic self-reliance, employment generation and reduced rural-urban migration. Fresh and canned pineapple and mango, ginger, and herbs and spices were ranked as having very high potential for Nigeria in the international market. Fruit juice concentrates, palm oil, cashew nuts and honey were among those products classified as high potential. Among the main constraints identified were farmers’ lack of awareness of organic farming techniques, high certification costs, risk aversion, lack of institutional support, enabling policies, infrastructure, and marketing facilities, limited access to capital and inability to capture economies of scale.

Acknowledgments

This study formed part of the MSc studies of Abraham Okusanya, funded by the Ogun State Human Capital Development Programme, Nigeria.

References

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Coulter J., Millns J., Tallontire A. (2000): Increasing smallholders’ involvement in high-value horticulture - lessons from Zimbabwe. Small Enterprise Development 11:36-46.

EPOPA (2005): Opportunities for the export of organic sesame seed from Uganda: Summary of a market study. EPOPA, Bennekom.

FAO (2001): The market for organic and fair-trade. In Proceedings of the 2nd Session of Bananas Committee on Commodity Problems: Intergovernmental Group on Bananas and on Tropical Fruits. 4–8 December 2001, San José, Costa Rica. FAO, Rome, 3-8.

Harris P. J. C., Lloyd H. D., Hofny-Collins A. H., Barrett A. R., Browne A. W. (1998): Organic agriculture in Sub-Saharan Africa: Farmer demand and potential for development. The Henry Doubleday Research Association (HDRA), Coventry.

UNCTAD (2003): Organic fruits and vegetables from the tropics: Market, certification and production information for producers and international trading companies. UNCTAD, Geneva.

USAID (2002a): Industry action plan for the Nigerian cashew industry. USAID Nigeria, Abuja.

USAID (2002b): Sub-sector assessment of the Nigerian cashew industry. USAID Nigeria, Abuja.

[1]Faculty of Business, Environment and Society, Coventry University, CV1 5FB, U.K

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[2] As Above

[3] As Above