The agriculture value chain connects farmers, processors, transporters, marketers, exporters, and consumers in a coordinated manner to ensure that farm products meet both local and international standards.

A well-developed agriculture value chain offers opportunities for social and economic development. It enhances productivity, reduces post-harvest losses, creates employment, promotes rural development, increases farmers’ incomes, and strengthens a country’s position in global trade. 

For Nigeria, harnessing the agricultural value chain is essential to reducing dependence on imports, achieving food security, and ensuring sustainable national development.

What is the Agriculture Value Chain?

The value chain concept represents a systematic approach to examining all activities that businesses perform and how they relate to one another.  In the agricultural context, the value chain encompasses the entire range of activities necessary to bring agricultural products from conception to final consumption.

An agriculture value chain is the complete set of activities, resources, and stakeholders required to bring an agricultural product from the initial input stage all the way to the final consumer. The process begins long before seeds hit the soil. It starts with input sourcing, where farmers acquire seeds, fertilisers, pesticides, and farming equipment. 

It includes the entire journey, from sourcing inputs (such as seeds, fertilisers, and equipment) through production (farming), processing (turning raw products into goods like flour or jams), marketing, distribution, and ultimately, consumption. At each stage, value is added, enhancing the product’s worth and ensuring it meets market demands.

What Does Having an Agricultural Value Chain Mean to a Country?

Having an agriculture value chain means a country can systematically organise and coordinate these interconnected activities to create economic value from agricultural production. It helps:

• Improve productivity by ensuring farmers have access to quality inputs and technologies.
• Enhance product quality and diversity through processing and value addition.
• Reduce losses via better post-harvest handling, storage, and logistics.
• Open better market access and increase export potential by meeting consumer and regulatory standards.
• Enhance rural employment and incomes through more integrated farming, processing, and marketing activities.
• Strengthen the entire agricultural sector’s contribution to the national economy and food security.

Understanding Nigeria’s Agriculture Value Chain

Agriculture was the backbone of Nigeria’s economy before the discovery of crude oil. Between 1960 and 1969, crude oil contributed an average of 57% to GDP and 64.5% of export earnings, shifting focus away from agriculture. Despite being Nigeria’s largest economic sector, agriculture remains highly underdeveloped. 

The value chain is dominated by smallholder farmers, who account for over 70% of the farming population. These farmers often operate with low mechanisation and limited access to modern inputs such as high-yield seeds and quality fertilisers. In addition, inadequate storage facilities and poor processing infrastructure lead to substantial post-harvest losses, estimated at over 40% for specific crops.

Export Opportunities in Nigeria’s Agriculture

Nigeria possesses a wide range of crops with international demand, including: 

1. Cocoa: Nigeria is one of the world’s largest cocoa producers. While raw cocoa beans are a primary export, the real profit lies in value-added products, such as cocoa powder, cocoa butter, and chocolate. Moving up the value chain would attract a larger share of the global confectionery market.
2. Cashew: Nigeria loses substantial revenue by not processing a greater portion of the cashew harvest. Investing in processing plants will allow for the export of roasted, flavoured, and packaged cashew nuts. These finished products possess greater value in international markets, particularly.
3. Sesame Seeds & Ginger: Nigeria is among the top 5  global producers of ginger. Sesame and ginger can be processed into products, such as sesame oil or ginger powder, rather than exporting them as raw seeds or roots, which would expand export earnings.
4. Cassava & Yam: Yam and cassava can be processed into high-value derivatives, such as high-quality cassava flour (HQCF), industrial starch, and ethanol.

Challenges Facing the Value Chain and Export Growth

Several challenges prevent the efficiency of the value chain and global market integration:

1. The low adoption of improved inputs and technology leads to declining yields for key crops, such as cassava and cocoa.
2. Limited mechanisation, poor infrastructure (transport, storage, irrigation), and inadequate research and extension services reduce productivity and product quality.
3. Processing capacity is underutilised due to insufficient raw material supply and competition in marketing channels.
4. Difficulty in land acquisition for farming and processing delays agricultural expansion.
5. Export challenges include non-compliance with international regulatory requirements, inadequate market information, and discounted prices due to quality issues.
6. Financing remains a significant hurdle, with limited access to affordable credit constraining expansion along the entire value chain.

Strategies for Global Market Integration

To properly harness the global trade opportunities available to Nigeria, the following approaches must be implemented:

• Enhance input quality and accessibility by promoting the development of improved seedlings, fertilisers, and pesticides through government-private partnerships.
• Implement export tariffs on raw agricultural products, such as cocoa beans, to incentivise local processing, as successfully done in Indonesia, thereby boosting processed cocoa exports.
• Expand mechanisation and irrigation projects to raise yields and ensure year-round production.
• Enhance storage capabilities with initiatives such as electronic warehouse receipt systems to reduce post-harvest losses and improve product quality.
• Strengthen regulatory bodies to enforce quality standards aligned with international markets.
• Utilise digital agriculture strategies to enhance market access, improve traceability, and optimise supply chain efficiency.
• Enhance financing channels through programs like the Central Bank’s Anchor Borrowers Scheme, which offers low-interest loans to farmers and processors.

Vice President Kashim Shettima, speaking at the signing of a financing pact for a major agricultural program, highlighted the need to move beyond raw exports: “This synergy will shift us from exporting raw produce to exporting value-added goods, creating jobs, wealth, and industrial stability.” He added that the focus on agriculture is not just about food security, but also about creating a foundation for exports that can rival Nigeria’s oil.

Nigeria’s agriculture sector stands at a decisive point because the path to a diversified, resilient, and prosperous economy is paved with the potential of its farms. Moving beyond the export of raw commodities and embracing a value-added approach to agriculture can increase global trade opportunities, improve food security and overall economic stability in Nigeria.

With a clear vision and collective action, this can be Nigeria’s ticket to sustained economic growth and global relevance.