AFEX Releases 2021 Crop Production Survey and Forecast Report

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Monday, November 08, 2021 / 3:50 PM / Kainosedge Consulting for AFEX Commodities Exchange


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Introduction

The outbreak of the COVID-19 pandemic, among other effects, exposed the precarious state of food systems, especially in Africa. It became imperative for national governments to fix challenges across the agricultural value chain within their nation-states. An increasing number of countries are facing growing levels of acute food insecurity, reversing years of developmental gains. Vulnerable households in almost every country are being affected, with this impact expected to continue through 2021, into 2022, and possibly beyond. National governments are now tasked with building a sustainable food system, one which is inclusive and contributes to higher income levels, especially for farmers. To this end, AFEX strongly believes in the efficacy of the food balance sheet in driving policy actions and decisions. This led to the commencement, and continuing publication of our yearly crop production survey


In, Nigeria, achieving food security has become more important than ever, in the face of consistently rising population and consumption levels. More importantly, alleviating the challenges of smallholder farmers, who account for over 80% of total agricultural produce, is very critical to closing the supply gap that currently exists across all grain commodities, particularly major staples.


As a guide to policy intervention in the Nigerian agriculture space, our crop production survey report seeks to answer questions regarding factors that farmers consider most weighty, which affect their productivity. Also, through responses gotten from farmers, we have attempted to forecast production levels and give directions to prices based on identified factors we believe are critical to influencing key agricultural indicators.


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From our survey sample, younger farmers accounted for most responses gotten this year. Also, about 60% of farmers surveyed have more than 10yrs experience in farming across two or more commodities. In addition, we see that most farmers cultivated between 1 to 5ha of farmlands, contributing to production at a small scale over the years. One policy direction in this line will be how farmers can transition to a medium-scale and ultimately a large-scale farmer. For every farmer scaled, it translates to more production volume for the country.


This will mean solving a plethora of challenges that have limited farmers to the smallscale status. It is also worthy to note that the adoption of more improved seeds remains low across regions. Historically, only 5-10% of cultivated land is planted with improved seeds, and about 10% of rural farmers use improved varieties. This could be explained by the farmers' lack of finance, limited access to information on the importance of improved seeds to yield and quality, etc. among other possible explanations.


However, following our 2020 projections across 4 major grains commodities, farmers are more optimistic of production levels this year. The major motivating factor this year was the need to take advantage of higher price levels from 2020 which drove increased planting activities and which also resulted in farmers being more willing to sell larger quantities upon the full harvest of commodities. Also, most farmers confirmed to AFEX that the rains were favorable across commodities. In essence, although rains came late, the situation was different from 2019 when farmers experienced both late rains during planting and prolonged rains after planting. Drawing from insights this year, we are optimistic about production levels across most commodities covered in this report, except for Cocoa.


In line with possible policy direction and corporate actions, long-aged challenges across low access to finance, inputs, and improved seeds among others remain a major challenge to farmers. Addressing these challenges will go a long way in solving and fixing Nigeria's food systems from the production front. Our industry insight reveals that prices of most grain commodities will start at a higher minimum base price upon harvest this year as against price levels in the corresponding period of 2020.


Already, prices are at their all-time highs and ongoing aggressive purchase by processors and big aggregators both from the open market and directly from farm gates, irrespective of the moisture contents of these commodities, will further increase price levels in the new 2021/2022 trading season. This is a signal to possible inflationary pressure in the year.


Survey Methodology

The AFEX 2021 crop production survey covered all geopolitical zones in Nigeria with a focus on Maize, Sorghum, Soybean, Paddy Rice, Cocoa, and Ginger. These commodities are currently trading actively on AFEX Commodities Exchange, and results from the survey will help food processors, investors, and other participants on the Exchange, the public inclusive, to take positions ahead of the 2021/2022 trading season which typically kick off in November. The goals of this survey included: To achieve the goals of the survey.


which are;

  • Understanding the planting behavior of AFEX & non-AFEX farmers in the 2021 wet season
  • Forecasting expected volume of production for the year
  • Providing an outlook for commodity prices, and;
  • Making recommendations to boost Nigeria's crop production capacity


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To achieve the goals stated above, a well-structured questionnaire was built and deployed. The study focused majorly on the impact of land usage, inputs, weather, and subsequently, the output expectations of farmers on production levels. These factors were instrumental in informing our forecast for production levels across all commodities captured in the survey this year.

 

Sample Characteristics

The study surveyed 9,117 farmers to respond to research questions provided out of which 7,719 consisting of 54.94% AFEX farmers and 45.06% non-AFEX farmers, respectively, met our analysis inclusion criteria.


Age Responses were gotten from farmers across 4 age brackets. Most farmers were in the categories of young adults accounting for 75% of total farmers. More female farmers were surveyed this year compared to 2020.


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Demography

The survey captured farmers from Northeast, Northwest, North Central, Southeast, SouthSouth, and Southwest. More responses were gotten from grain-producing regions. Given the nonrepresentative sample of farmers from the South-eastern region, farmers were merged into the South-South region for analysis.


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Farming Experience and Farm Size

From our survey this year, about 80% of farmers surveyed have more than 10 years' experience across all commodities captured. However, more than 70% cultivate between 1ha to 5ha of farmland. This could suggest among other possibilities that income levels of farmers have not necessarily improved over the last decade, hence, farmers have not been able to expand or acquire more farmlands for grain production. Also, we could conclude that the lack of adequate storage facilities across the country remains a demotivating factor for farmers to expand their farmlands to produce more commodities. These areas provide possible intervention areas for both government and private organizations.

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Download Full PDF Report Here


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