With the current drive by the Federal Government to diversify the economy and shift its major source of revenue away from oil, there has been a rapidly increasing interest by the government in Agriculture, this has led to the creation of several incentives to boost investment in agriculture at all levels. This is eminent if one visits farms across the country especially in the Northern parts, records so far can show that there will be a boom in agricultural production this year as a lot of people got involved in agriculture for the first time this year and those already in it boosted their production this year by more than 60%. In as much as this is a very good and welcomed development for our country as a whole, a lot of individuals and firms will have so many regrets going into direct crop farming.
This article focuses on the buying and selling of agricultural produce in Nigeria, it will also explain the reasons why trading in agricultural produce in Nigeria is more profitable than direct crop farming. some of these crops are; Melon/Egusi, Maize/Corn, Sesame/Beniseed, Groundnut, Beans, Locust beans, Soya Beans.
Business of buying and selling of agricultural produce is an age long business which can be traced back to the very existence of Nigeria, most people who did this business were very successful, over time, the business which has made a very good record for itself especially if done with wisdom. In this article, buying and selling of agricultural produce refers to buying agricultural crops during harvest season when prices are lowest, storing them and then selling when prices have gone up during the planting season.
The following market facts and figures can testify that there is both a local and international demand for these crops on large scales, this means that trading in them will be very profitable.
Business Summary
This business in summary is all about buying, storing and selling of farm produce. A trader buys the produce during the harvesting period when supply is high and prices are low, make’s arrangements in the market to store them or transport them a choice area of storage, then sell’s during the dry season or shortly before the planting period when supply is low, demand is high and prices have shot up. Basic steps to carryout the business are:
- Making inquiries on what to trade in. This is dependent on the amount of money the trader is willing to invest in the business and the crop that is currently most lucrative in the market. This is carried out by visiting the market and making necessary inquiries.
- Making inquiries to ensure appropriate timing on when to buy and sell.
- Making available sufficient capital because the sellers don’t sell on credit. It is cash and carry.
- Traveling to the town where the market is located.
- Visiting the Market Chief for, familiarity, security arrangements and further inquiries.
- Making arrangements for storing the goods either in the market or transporting it to a storage area of choice.
- Scouting for quality and cheap produce to buy.
- Making payments.
- Transportation to storage area.
- Waiting while monitoring market prices and trends.
- Time to time visit to check and ensure safety conditions of the produce.
- Selling the produce when prices have gone up or when market trends don’t look favorable.
Who can do this business?
Government workers, Students, Youths, School Leavers, Bankers, Investors, Supply-Chain Managers, Agro-Investors, people in paid employment, Retirees, Entrepreneurs, anyone interested in achieving financial break through by establishing a lucrative business.
When to do this business
Anytime of the year but preferably buying during the harvest time (towards the end of the raining season, July – February) and selling during the dry season or shortly before plating time (beginning of the raining season, March – May).
Where to do this business
Any major market in these states Nasarawa, Benue, FCT, Kogi, Niger, Kaduna and Plateau States.
Who to know
“Sarkin Kasuwa” or Market Chief, the seller of the produce and the owner of the warehouse where produce bought will be stored, that is in the case where the produce will be stored in the market.
A trader can go further to sign agreements if he/she wishes to. In this case, a lawyer and witnesses will be added to the earlier listed people to know.
Just locate the market and ask for the Market Chief, other things will be sorted out from there. The trader should make sure he/she is being introduced to the genuine people by asking more than five (5) different people and from the office environment.
Business skills required
No major one is required except the ability to go on business trips and take calculated risk. Read more on business by clicking here
Business registration/company name
Not required for this business but you can learn more about registering a company by clicking here
Start-Up Capital
N 50,000 – N10, 000, 000.
You can start up at any financial level you are currently.
If you don’t have the capital, you can get information on how to obtain Agriculture related loans on our website at www.bangeez.com/agric-loans
Crops to trade in
All the listed crops; Melon/Egusi, Maize/Corn, Sesame/Beniseed, Groundnut, Beans, Locust beans, Soya Beans/Soybeans are lucrative to trade in but the best is Sesame/Beniseed because of the following reasons:
- Unlike beans it does not need any special preservation and storage other than bagging.
- It does not need the application of pesticides during preservation as it is not easily attacked by pest.
- It does not compress when stored in bags so its volume doesn’t change during buying and selling unlike Melon which reduces in volume over time and can be compressed by hand during re-bagging for sale.
- It has a very high economic value which appreciates rapidly over time unlike maize which has a very low economic value and sometimes depreciates with time. This is very important in making a choice on directing resources.
bagged sesame seeds
Returns on Investment
10%-400% (Depending on the produce, mode and time of selling)
Personal Experience
My earliest experience: I bought 5 bags of sesame in January 2018 at N 20, 000 each and sold it in March 2018 (3 Months) for N 38, 000. My profit is 18,000 X 5 = 90,000 in three months with a 100,000 investment. So if you put 500,000 you will have 25 bags. after same three months your profit will be 18,000 X 25 = 450,000 Phew!! Easy peasy. This shows how much it appreciates within a very short period of time.
Demand and Selling the Produce
The demand for the produce is always very high all year round especially during the planting season making selling the produce very easy. Many big companies send their representatives come and source for them from the market, individuals and small companies also come to buy for their local use or exportation.
Storage
There are already built stores in the market where the produce can be safely and securely stored with all guarantees assured after all necessary legal steps have been taken.
Alternatively the trader can transport the produce to any designated location of choice.
Price Negotiation
Price negotiations can be reached depending on current market price and the buyer’s bargaining power. There are no imposed fixed prices.
Transaction completion period
Buying: this can take about 2-4 days, depending on the trader’s buying price limit and proximity to the market. If he/she traveled from a far distance, he/she may not want to stay for too long where he/she is putting up, so it all depends to a large extent on buyer. It is advisable to find out the market days of such markets so as to plan well.
Selling: takes about 1-2 days depending on the Trader’s market price target.
Market Price
Pricing of sesame seed and most other crops are usually dictated by market forces of demand and supply which in turn is a function of time, level of production, distance from the point of delivery, quality and the quantity demanded.
Market Size
Any market size is appropriate.
Where best to buy/Location of Market
Best markets for Sesame seed are in Nasarawa, Keffi, Gombe, Jigawa and some parts of Abuja. Click here for a comprehensive list
Business risks
Business is a risk they say, all businesses have risk but the ability to identify them am avoid the ones that need to be avoided or take calculated risks makes one successful. Here are some identified risks:
- Be careful not to be scammed in any way.
- Make sure the produce are bagged in your presence. There have been cases where traders have bought produce only to realize when it was time to sell that sand was bagged in the middle of the bag or that the produce was mixed with older ones that have either gone bad or lost value.
- Please don’t make any transactions over the internet or phone, simply visit the market to make your purchase.
- Make a little investigation about the owner of the warehouse where you will be buying a space for storing your produce, alternatively you can hire a store for your produce and lock it up. Certified people to help you in all these arrangements are on ground in these markets.
Opportunities and Threats to the Business
The opportunities to these business is very high as the demands for these produce never end. Also at a time like this when the government is turning its focus to agriculture, a lot of opportunities and government incentives are available for the agricultural sector.
So far, threats to the business is centered on monopoly, where a very rich and influential individual or company may like to be the only one in the business therefore using every means possible to buy every available produce. They could also be willing to pay the farmers a higher amount of money thereby making prices go out of the reach of small scale traders.
Language/Communication
English is majorly understood but an understanding of Hausa language is also an advantage. You can always see volunteer interpreters around if the need arises.
Security and safety tips.
- Avoid traveling at night as much as possible.
- Don’t travel with cash other than that for your feeding, transportation and accommodation.
- These days, hotels are available almost everywhere in the country. Most hotels now are online and you can book with a call. you can check our list of Hotels bookable online or you give us a call and we can help arrange it for you
- Make sure deals with the seller and every other person in the market are sealed before going to withdraw money from the bank for payment.
- Where possible, try to make payments inside the banking hall.
- There are banks almost everywhere checkout a directory of banks in
Wish you all the best and enjoy trading.
