Business Opportunities in the Storage of Agricultural Products EMBA28

I am today compelled to write about the above subject because many people out there do not have a slightest of idea about what opportunities exist in the agricultural space in Nigeria. I am going to outline below the possible monetary returns from agricultural product storage, the category of agricultural produce to store and the right moment to store the agricultural product.

I would start by analyzing the possible monetary return from agricultural product storage. The returns from storage of agricultural products is determine by number of factors viz: The category of product stored, the success of the harvest period (bumper harvest or not), The economic outlook of the country and Government policy. So many other factors could also have effect on the returns but for the purpose of this writeup, we would consider only the ones mentioned above. Returns from storage of agricultural product can be determine greatly by the category of product stored. My experience over the years have thought me that the best product that guaranteed consistent higher returns over the years is beans. This is due partly to the vastness of the number of people that consume the product across the country. The returns from beans could rise to as high as 100% per annum for every Naira spent. Other favorable economic factors could lead to return rising to as high as 300% especially in the year 2020 probably due to effect of Covid19, the return from my bean’s storage was a little over 300%. Aside beans, the next product that returned the highest profit its rice, this is partly due to Government policy barring the importation of the product into the country. Returns from storing of rice could be as high as 70-90% depending on how favorable other economic factors are and the success of the harvesting season. From my experience, the product that return the least profit is maize. The economic outlook of the country plays a little role on the possible returns from storing agricultural product since these categories of food is considered as a necessity. The last factor to consider under this category is the Government policy. Since the advent of this administration, a policy prohibiting the importation of certain agricultural product was made. This policy in turn led to more investment in the agricultural sector that seek to close the gap between demand and supply. This in turn lead to volatility of price in the agricultural sector of the country.

Second factors to consider in our writeup is the category of agricultural product to store. Looking at the analysis of the possible monetary returns from storage of agricultural product above, we understand that the products that return the highest profit is the beans and rice storage. We therefore advise that since this category of products returns the highest profitability, more and more of these products should be store instead of the ones that return the least profit. Further buttressing the above, the acceptability of the two products across the country would help ensure that there is always a ready market demand for them.

Thirdly, to ensure that the business returns the highest profit possible, the buying period should coincide with the harvesting period. In this period, the price of the products is usually the lowest. This is due to the farmers selling the product to raise money that would help them complete harvesting of the remaining product. So, to raise money to complete the bulk of the product harvest, the farmers usually sell parts of the product. The right moment to buy the products is therefore between the period between November and January of the following.

It is my believe that this writeup would help us pay a little bit of attention to the agricultural sector for possible business opportunities.