SHONGA FARM: Great Idea, Fraught With Doubts

By Biodun Fagbemi, Ilorin   |   20 September 2015   |   12:30 am  

Shonga-farm• We Are In Business, Not Charity, Says GM
• It’s A Mystery, Fraudulent —Oyedepo

Mindful of the unsustainable nature of depending on oil revenue, there is need for Nigeria to end its dependency. The urgency of the unemployment situation has made stakeholders to call for an efficient diversification of the economy from oil. They have called for the enunciation of an agricultural legislation, policy and strategy that create synergy between industrial agriculture and small-holder farmers with a focus on internal food security and food export. Swathes of arable land are available for young and able-bodied Nigerians to work, and earn a decent living. Within the context of the nation’s developmental aspirations, agriculture has been pin-pointed as the lowest hanging fruit. If aggressively pursued and positioned, there are projections that Nigeria would surpass the achievements in those glorious early years of independence when agriculture was the mainstay of the nation’s economy. This week, we continue with part 2 of our special report on agriculture. — Editor

THE hallmark of agricultural policy of Kwara State government remains the introduction of a commercial farming system by the administration of Senator (Dr.) Bukola Saraki in the state some eight years ago. The agricultural revolution, which generated initial scepticism among some in the political class and the host community, Shonga, Edu Local Council, has, at the moment, metamorphosed into a limited liability company, with the state having 10 per cent of the total shares.

The investment as it were, seemed to have dwarfed any other policy of the state government on agriculture, as a lot of people believe the state had made enough investments on it.

The General Manager, Shonga Farm Holdings Limited, Adebayo Sangobiyi, who spoke with The Guardian in Ilorin, described the commercial farm experience, as novel and a veritable means of boosting the Internally Generated Revenue (IGR) of the state.

Sangobiyi dismissed the rumour about the non-availability of the produce of the farm in any market in the state. “We have heard that over and over again, so, we are used to that statement. We are dealing with banks. Shonga was initially known as Kwasinbo; then it was under the Kwara State Ministry of Agriculture. The Kwara State government then solely owned it.
“But later, as time went on, the then governor, Saraki, found out that if the entire Kwara State money was sent to Shonga, it would not take the farms to his desired dream. That brought about bringing in the banks.”

He hinted that, when the banks came into the investment, Shonga was moved out of the ministry to avoid government bureaucracies. “Banks are in business, so, when they invest money, they want returns. Shonga is registered as a limited liability, in fact, that was why the entity Shonga Farms Holdings Limited came up. It started with five banks, namely; the legacy PHB, legacy Finn Bank, GTbank, Unity Bank and Intercontinental now Access Bank.”

According to the GM, each of the banks contributed N300 million-debt and N200 million equity, which was the takeoff of the proper Shonga Farm Holdings Limited.

Since Shonga Farm Holdings Limited started, it has changed not only nomenclature, and it has changed in administrative practice. We are strictly in business. People expect all the continuation of the jamboree, when we were giving fresh milk to pupils, the government was doing that but the banks cannot afford to do that. At inception, the banks rolled out 15 per cent each totaling 75 per cent and the state government added 25per cent.

However, the situation later changed, as the banks became handicapped and couldn’t afford to give money as at when due. “As at that time, Union Bank plc had one of the best agriculture desks, so, we moved to that bank and negotiated with them and that was why the then group managing director, Funke Osinbodu, came to the farm, saw everything herself and granted us some loans,” he said.

According to the General Manager, there’s no way the farm will be on loan and be doing jamboree. “We are open to all, but the unfortunate thing is that the kind of concept we are running is new in Nigeria; we came up with off-taker approach. When we started, we set out to attain certain level of production and we were able to achieve it. When we got to where we were going, there was nobody to buy our products. We never thought of looking for somebody to buy the products before producing and we found out that people could not consume what we produced. That was when we were doing road shows all over the big cities in Kwara letting people know the products we had,” he recalled.

Meanwhile, the offtaker approach system, which the farm is operating today, is, as a result of lessons learnt in the line of doing business.
“How does the off-taker approach work? It simply means that you will tell me what you want before I start producing. We started with cassava supplying the Nigerian Starch Mills Limited, which is the biggest in West Africa. It is located in Ihiala, Anambra State. We were supplying fresh milk to WAMCO to produce Peak and Three Crowns milks. We were equally supplying fresh milk to Nutricima, to produce Coast milk in 10 per cent local content,” he said.

As for poultry products, “we had meetings with people that were supplying the big eateries and hotels to give us their consumption schedule per month. We signed a memorandum of understanding (MoU). And that is what the banks want; they want to be seeing how their money flows. That is what changed our approach to business and that is why people started saying that Shonga products are not available. That is not true. Go to Shoprite or any eatery in Ilorin. If you eat chicken in any eatery, you have eaten Shonga chicken,” he said.

He continued: “At a point we were throwing away as much as 2,000 litres of milk per day; if you throw away 2,000 litres of water people will see the impact. We couldn’t continue that way if we really meant to succeed. We give our products to people with cold rooms and cold vans. I don’t find the attitude of our people towards business, I don’t find it challenging enough. So, our products are available.”

On why the farm lost interest in the production of Yogurt, the GM explained that, “maximum, you can’t sell more than 1,000 litres of yogurt in a day, whereas WAMCO wants me to give it 20,000 litres of fresh milk per day. It is a function of comparative analysis and if I want the banks to show interest in my business their money must be going back as at when due.”

Justifying the privatisation of the project, Sangobiyi noted that the process has expanded its capital base and removed wastages from restricted market situations.
“For four years, I have a depot for Yogurt in Ilorin, the state capital and I was throwing away yogurt every day; we don’t have the milk drinking culture, they are only making politics out of it. Then I felt the best thing to do is to give the milk to WAMCO and we are all benefiting directly or indirectly. We still have depots all over; people are not patronising us and the next song they will sing is that they are not seeing our products. Chicken Chillies eatery was selling our rice for years; Alhaji Dan Musa Gold rice was processing our rice. How many of these were they buying? Dan Musa was taking his rice to Abuja and Lagos,” he said.

If we face agriculture squarely there will be industrialisation, with that the economy will be transformed. Even at the national level, the GDP will improve and we will do less of importation. In Shonga, we were the first to do major cassava chips export during Dr Akinwumi Adesina. We did about four or five shipments during that time; we were mopping up cassava from the entire state to do our chips. More money was coming to the farmers. If we have a similar Shonga Farms Holdings Limited in all the zones, I tell you Nigeria will be a major challenge to America and Britain and our Naira will appreciate.

To Sangobiyi, the reality is that most people want free things or cheap things, which will not be possible in a business venture like Shonga farms.
“We cannot afford to do that; we are in business. If Kwara State government wants, it can buy parts of the products and do politics with it. Unfortunately, it does not have the controlling shares.”

Describing Shonga Farms Holding Limited as a successful business investment, the GM said, “my poultry farmers started from one pen each; when the banks came in they did one more each for them and already today, they are erecting pens on a daily basis. At the close of this year, each of the four of them will be having 10 pens. If there is no market, they will not be talking of expansion. We have depots in Abuja, Lagos and we deal directly with all the eateries.

Now what we are concentrating on is how to benefit the immediate communities. We have brought a concept called out-growers to showcase these communities to others. Our intention is to extend state wide in terms of what we do as give back to the communities. We are in business in Shonga Farms Holdings Ltd. We are competing with other companies, so our concentration is now on constant growth,” he said.

On how the management of the farm had been able to douse the initial hostility from the host communities, Sangobiyi said the peace was facilitated through constant dialogues and introduction of Corporate Social Responsibility, (CSR).

To the glory of God we see one another as family members. There is hardly anybody in the communities that does not know the names of my farmers. But it didn’t just come out of its own volition. It came courtesy of the committee on community relations. We give them technology free of charge. We have allowed some of them who are excellent in their farms to work in the farms of the white farmers.
“We are transferring skills and subsidise whatever they want to make their farm grow. We even create out-growers for them. If you plant and you cannot sell we buy from you and put it along with our own larger quantity and sell to the larger market.”

On the future plans for Shonga Farms Holdings Ltd, he said, “the concept was for us to understudy the white farmers and by the time they are big enough they should buy us out. That is why we have the Shonga phase 2 called Alapa project. Our intention is to start the Alapa project with the indigenes. I think Governor Abdulfatah Ahmed has started it by selecting 10 farmers from each of the 16 local government areas of the state. The concept is to transform them to commercial farmers and they are doing wonderfully well. Our plan is to bring Kwara state to the world map as the food basket.

If we face agriculture squarely there will be industrialisation, with that the economy will be transformed. Even at the national level, the GDP will improve and we will do less of importation. In Shonga, we were the first to do major cassava chips export during Dr Akinwumi Adesina. We did about four or five shipments during that time; we were mopping up cassava from the entire state to do our chips. More money was coming to the farmers. If we have a similar Shonga Farms Holdings Limited in all the zones, I tell you Nigeria will be a major challenge to America and Britain and our Naira will appreciate.

One area of Shonga farm that is attracting scathing criticisms, especially, from the members of the opposition, Peoples Democratic Party (PDP), is the alleged secrecy of how the affairs of the project are being run.

According to the state’s Chairman of the PDP, Chief Iyiola Oyedepo, there should be an urgent public debate to discuss the benefits ‘if any’ that had accrued to the people of Kwara since the inception of the project.

In a chat with The Guardian in Ilorin, Oyedepo, who had five years ago written a book on the project, entitled, Time Bomb: The Story of a Commercial Farming in Kwara, said the commercial farming remained a white elephant project to the state’s GDP.

According to him, “the so called commercial farming in Kwara is shrouded in mystery. The government had for long been using the identity of the state and its finances to run this project without telling us the turn over in it.
“At present, the state government is believed to be in control of 10 per cent shares in the whole charade. It is ridiculous, because at the inception it was the state, which supplied all the needed funds, so, why should somebody else be sharing the shares with the state now?”

He added, “I think we should enter into a public debate on this thing once and for all. You see, in my book, I referred to the so-called project a fraud and I have been proved right today.
“The state government had then started with a mysterious collaborative agreement with the 14 Zimbabwean farmers who did not bring anything to Kwara, apart from their bags. The truth is that the state government gave them money to sign a phoney collaborative agreement.
“Look, the project, at present, looks to be in a comatose condition, and yet the so called banks said to be having the controlling shares are looking indifferent? Does that appeal to the logic? We shall get to the root of the matter one day.”



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