Draft Final Report On

DRAFT FINAL REPORT ON

IDENTIFICATION OF AGRO PROCESSING CLUSTERS FOR RICE, WHEAT AND TOMATO FOR APPEALS PROJECT IN KANO STATE, NIGERIA

SUBMITTED TO:

KANO STATE AGRO-PROCESSING, PRODUCTIVITY ENHANCEMENT AND LIVELIHOOD IMPROVEMENT SUPPORT (APPEALS) PROJECT

PREPARED BY Tafida, I., Idris A.A., and Abdullahi, Z. A. Contacts: +2348035868653, [email protected]

2nd August, 2019

LIST OF ABBREVIATIONS AND ACRONYMS APPEALS Agro-Processing, Productivity Enhancement and Livelihood Improvement Support APP Agricultural Promotion Policy FAO Food and Agriculture Orginization FGD Focus Group Discussion FGN Federal Government of Nigeria FMAWR Federal Ministry of Agriculture and Water Resources GDP Growth Domestic Product PDO Project Development Objective M&Es Monitoring and Evaluation

TABLE OF CONTENTS CONTENT PAGE Title page…………………………………………………………………………………... 1 Abbreviations and Acronyms……………………………………………………………… 2 Table of Contents…………………………………………………………………………...3 Summary……………………………………………………………………………………5 1.0 Introduction…………………………………………………………………………6 2.0 Methodology………………………………………………………………………..7

LIST OF TABLES Table Page

LIST OF FIGURES Figure Page

EXECUTIVE SUMMARY

The Kano State Agro-processing, Productivity Enhancement and Livelihood Improvement Support Project (APPEALS) survey on the Identification of Rice, Wheat and Tomato processing clusters was conducted between 15 th July and 2 nd August, 2019. The main objective of this study is to identify and assess the small scale cottage processing industries and to map out areas, activities and benefits accrued to the processing units and clusters in Kano State and develop and present a detailed and clear picture on what small agro-processing systems require to effectively manufacture and market processed products based on the strength of each unit and cluster; and to review agro-processing service provision in relation with other value added services. The study was conducted in Kano State and cover five Local Government Areas namely, Bagwai, Bunkure, Garko, Kura and Tudun Wada Local Government Areas. . Despite the intervention by Sasakawa, IITA, IFAD, PROFCOM and others on production agro- processing and the employment opportunities thereby created, the current market forces and the prevailing economic environment tend to favour more growth of large scale processing systems and neglecting of small scale processing enterprises. The loss of business by small-scale processors has led to unemployment and even closure of factories whilst women processors got disempowered by loss of individual and co-operative agro-processing enterprises.

The Kano State agro-processing industry plays a vital role in the national economic development and has potential to meet the local needs and export requirements. The supporting infrastructure for this industry in terms of capital, electricity supply, roads and telecommunication network etc. is below far. Also, there are no established skills training programmes in manufacturing (tool making, welding), for rural artisans and users. However, the sector currently faces many challenges emanating from the poor performance of the national economy, uncertainties that exist over access to both local finances, limited research, limited technical advice, limited marketing information and lack of reliable markets.

Key lessons that emerged from the study are that equipment ownership (individuals, farmer groups or entrepreneurs) has been left for people to decide without adequate technical advice. Tomato is widely processed in Tudun wada even though sun dry method was the method for

6 processing. Equipment costs are beyond the reach of individuals and farmers group and the prevailing economic environment favours technology access rather than ownership. One survival strategy being adopted by many small-scale processors is sub-contracting some operations like de-stoning and packaging to medium scale processors that meet the higher standards, to processed products for the small-scale processors to pack and market in the case of rice processing.

1.0 BACKGROUND INFORMATION 1.1 Brief on APPEALS Project Agro-Processing, Productivity Enhancement and Livelihood Improvement Support (APPEALS) Project is a World Bank Assisted Project of the Federal Government of Nigeria (FGN) through the Federal Ministry of Agriculture and Water Resources (FMAWR). The objective of the project is to enhance agricultural productivity of small and medium scale farmers and improve value addition along priority value chains in the participating states (Cross Rivers, Enugu, Kaduna, Kogi, Kano, and Lagos). The Project Development Objective (PDO) will be achieved through: (i) supporting farmers’ productivity and their linkage to markets, (ii) facilitating consolidation of agricultural products and cottage processing, (iii) facilitating farmers and small and medium businesses’ clustering and connection to infrastructure network and business services, (iv) providing technical assistance and institutional support both to beneficiaries, federal and state governments in value chain development. Increased agricultural productivity, production, and improving processing and marketing of the targeted value chains are expected to help in job creation in the participating States. The project is expected to achieve: increase in productivity of agricultural produce of priority value chains by project- supported farmers; increase in processed output of priority value chains by project beneficiaries; increase in number of beneficiaries supported by the project (separate percentages of beneficiary, women and youth). The Federal Government through its Agricultural Promotion Policy-The Green Alternative (APP-2016-2020), has listed the value chains that are a priority for the country. These priority value chains are chosen due to their potential in contributing to the governments stated primary objectives of: (i) food security and local production; (potential for exports; and (iii) contribution to improvement of livelihoods, and speedy income generation including job creation along the value chains. Although the APP clearly defines the Federal Government priority value chains, yet, this project’s preference for value chains is narrowed down to cereals (rice, maize and wheat), cassava, cocoa, cashew, poultry, aquaculture and horticulture (e.g. ginger, tomatoes and banana). The selected value chains have to contribute directly to at least two of the three goals of the government, i.e. food security and local production, exports, and livelihood improvement.

Thus, the project will focus on a limited number of value chains out of the list identified by the Federal Government as part of APP. Kano State has identified three priority value chains as its target in the project implementation, namely: Rice, Wheat and Tomato. The number of project’s direct beneficiaries is estimated at 60,000 individuals (i.e. 10,000 beneficiaries per state), and 300,000 farm household members as indirect beneficiaries. It is anticipated that 35 percent of direct beneficiaries (or 21,000 individuals) will be women. By design, the project has a dedicated sub-component to benefit women and youth that will allow them to develop agri-businesses that are expected to create jobs and improve their livelihoods. The project monitoring and evaluation (M&E) and information system will include a gender tracker to ensure adequate documentation on different categories of project beneficiaries. Although Nigeria has a distinct comparative advantage in the agriculture sector yet the production system has not developed in terms of significant value addition or processing, and has remained a producer of mainly staple crops. The project aims at supporting transition of small subsistence farmers’ production system (farming 1-5 ha) to a market-oriented agricultural undertaking, and supporting middle size farmers (5-10 ha) to address constraints in enhancing their productivity as well as effective participation in value chains. The agriculture sector of Nigeria is characterized by low productivity; little and untimely access to inputs; lack of seed funds for establishing agro-processing plants by producer cooperatives; lack of access to supportive infrastructure; challenging business environment; limited access to markets; low level of technology adoption; weak quality control mechanism; and low capacity at all levels. Following the government policy thrust of promoting value chain approach to achieve the APP goal, project intervention will consist of tackling key constraints, which hinder the development of the value chains, and prevent greater inclusion of small and medium scale farmers in agribusiness supply chains. 1.2 Objectives of the Study The main objective of this study is to identify and assess the small scale cottage processing industries and to map out areas, activities and benefits accrued to the processing units and clusters in Kano State and develop and present a detailed and clear picture on what small agro- processing systems require to effectively manufacture and market processed products based on the strength of each unit and cluster; and to review agro-processing service provision in relation with other value added services.

The specific objectives are to; i. to identify and map out areas where agro-processing activities are taken place and where they are dominantly located across the value chains (Rice, Wheat, Tomato).within Kano State, ii. identify key actors within and across the agro-processing value chains and find out the capacity and level of processors across the value chains, iii. describe type of infrastructures across all agro-processing clusters, iv. assess the cost implications of the infrastructural needs across the processing clusters, v. outline the key strength, innovations and areas of expertise and skills across the existing agro-processing units, vi. identify market outlets and existing infrastructure and capacity of the agro-processing facilities, vii. describe the constraints of agro-processing units in terms of infrastructural needs, viii. make proper recommendations on way to improve the machineries, system and mode of operations of small cottage processing facilities, and ix. suggest ways for further improvement on small scale agro-processing clusters.

1.3 Justification of the Study As increased agricultural production is envisaged, there is need to have proportionate improvement in the agro-processing industry. Agro-processing industries refer to those activities that transform agricultural commodities into different forms that add value to the product. Small- scale farming in Nigeria rarely provides sufficient means of survival in many rural areas. It is therefore imperative to explore alternative income generating opportunities to support poor families who can no longer fend for themselves from the land-based activities alone. Recent research demonstrates that rural households depend on a diverse portfolio of activities and income sources. Some households are looking towards activities such as food processing as a means to enhance the livelihood they can achieve from a limited area of land. Small-scale food processing activities represent a potential source of livelihood for many poor people in the rural area. The overall potential of agro-processing is huge as it can: Increase the value of crops of poor farmers and thus yield higher returns; Expand marketing opportunities;

Improve livelihoods of people; Extend shelf-life of commodities; Improve palatability of commodities; Enhance food security; Overcome seasonality and perishability constraints; and Empower women who are often involved in agro-processing.

Therefore, it is justifiable to identified value chains (Rice, Wheat and Tomato) and needs of small scale cottage processing facilities across the value chains in Kano State. However, literature on small and medium scale agro-processing (grain milling and vegetable processing) are often commodity-based and scanty. It is against this backdrop that Kano State coordination office of APPEALS Project undertake to identify Agro-processing clusters in Kano State across the value chains with a view of helping to identify their strength, weaknesses and opportunities which will help in designing proper development of agro processing value chain. The study helped to collate and synthesise the scattered literature. 1.4 Scope of the Assignment The study was conducted in Kano State and cover four Local Government Areas namely, Bagwai, Bunkure, Garko, Kura and Tudun Wada Local Government Areas. The study identifies areas of needs on infrastructure including roads, markets, schools, hospitals electrical installations and other along the processing clusters and map out the areas in the state. Key actors within and across the value chains and their capacities by locations, volume of each value chain, market strengths and technology level were identified. Also, standard of machineries in use, processing capacities, strength and competitive advantage as well as constraints in livelihood and production/marketing problems with respect to infrastructure in the selected local government areas were identified. Furthermore, areas where there is high, medium or low level of practice in term of capacity, volume of output across processing strength of each value chain as well as main activities that are in practice were identified. Training of enumerators that were engaged in data collection in the field, supervision and monitoring were conducted in the presence Project M&E Officer. 1.5 Limitations of the Study

The study area is Kano State only, covering the two agro-ecological zones in the state. The limitation of the study is that the survey instrument covered only the listed value chains (Rice, Wheat, and Tomato) and that digital data collection kits were not deployed in some areas during the enumeration exercise due to internet connectivity problem. The inability of some of the processors interviewed to keep records over the years come into consideration. Also, there was not much literature documented to reflect on the earlier work in this area. 2.1 Overview on Agro Processing Development and its Importance A common and traditional definition of agro processing refers to the subset of manufacturing industry that processes raw materials and intermediate products derived from the agricultural sector. According to FAO (1997), Agro-processing industry is a subset of manufacturing that processes raw materials and intermediate products derived from the agricultural sector. Agro processing thus means transforming products originating from agriculture, forestry and fisheries to finished product. Agro processing can be classified into three major commodity groups: crop processing, livestock processing and fish processing. Agro-processing activities comprise two major categories; primary and secondary operations. Primary processing operations involve activities such as crop drying, shelling/threshing, cleaning, grading, and packaging. These activities are mainly carried out at the farm and only transform the commodity into a slightly different form prior to storage, marketing or further processing. Secondary processing operations entail increasing nutritional or market value of the commodity and the physical form or appearance of the commodity is often totally changed from the original. Some examples of secondary processing are milling grain into flour and pressing oil out of groundnut seeds. Depending on type of commodity, equipment needed for primary processing is completely different from that used in secondary processing or major adjustments/modifications need to be done to suit either.

The potential for agro-industrial development in the developing countries is largely dependent on the relative abundance of agricultural raw materials and low cost of labour in them. Therefore, agro processing is important for a number of resons: (i) in term employment creation and generation of income. The agro industry has the capacity to absorb a vast amount of manpower in the primary and secondary level production. (ii) Due to the seasonality of agriculture, a production season may experience high and low demand for labour on the farm.

Conversely, after harvesting the processing industry can absorb a whole lot of man power thus creating jobs for the unemployed and generating income for their livelihood. (iii) Improving food self-sufficiency through processing can also extend the period of availability of food products, reducing the food gap between harvests and mitigating the seasonal rise in food costs at these times which puts so many people at nutritional risk. Several new technologies and refinements of traditional procedure are now available for rural people to use at village level. (iv) It also promotes socio-economic development by establishing strong synergies between agro- industry, agriculture and poverty alleviation. (v) Agro-industry provides capital and services to farmers (e.g. seeds and equipment, training, production and market information), promotes entrepreneurship, raises demand for agricultural products and connects farmers with markets through handling, processing, marketing and distribution of agricultural products. As a result, productivity and quality of agricultural production, farm returns, and economic stability for rural household’s food security and innovation throughout the value chain can be enhanced. Furthermore, (vi) it contribute to a nation’s GDP and manufacturing industry and (vii) promotes regional stabilization and sustainability as well as (viii) integration into global markets. Therefore, in Nigeria two groups of agro processing exists: Domestic processing dominated by small and medium scale firms who operate in the informal sector of Nigeria. Commonly processes crops: Rice, Maize, Cassava, millet, sorghum, groundnuts, oils and fish. (i) its involved male and female non literate and having no formal training (ii) skills acquired mostly through apprenticeship and large amount of family labour is employed (iii) processed outputs are often of different quality (iv) nonetheless, these small scale units are able to create employment opportunities and make use of local resources. Factory processing which is mostly privately own or foreign owned which processed large quantities of raw materials and contributes significantly to the nation’s economy through export activities.

3.0 METHODOLOGY 3.1 Study Area Description Kano State is situated in the Sudan savannah agro ecological zone of Nigeria located between latitude 9 o 30’ and 10 o 33’ to 12 o 37’ North and longitudes 7 o 34’ to 9 o 25’ East. The state is bordered to the West and Northwest by Katsina State, to the East and Northeast by Jigawa State, to the South by Bauchi State and the Southwest by Kaduna State (KNSG, 2004). The state has 44 local government areas with a total land area of about 42,582.8km square out of which agricultural land occupies 30,684.8Km square, while forest and grazing land has 11,898 Km square (KNSG, 2004). The population of the state stand at 9, 401,288 people amounting to 6.70% of the nation and a projected population of 13,261, 445 people by 2016 based on annual growth rate of 3.5% (NPC, 2006). The state has two distinct climatic condition/seasons: the dry and wet seasons. The dry season spans the period between October/November to March/April, while the wet season spans the period between April/May to September/October, with an annual rainfall ranging between 787 and 960 mm and a temperature ranging between a maximum of 33 o C and a minimum of 15.85 oC although it falls sometimes during Harmattan to as low as 10 oC. The temperature is highest between March and May as it is averagely warm to hot throughout the year. The state has an altitude of 472.45m above sea level (Olofin & Tanko, 2002). Farming is the major occupation of the people with over 50 percent of the inhabitants of the state are farmers cultivating legumes, cereals and vegetables (KNSG, 2012). Livestock rearing and trading is also common in the state. The people of the state are predominantly of Hausa/Fulani ethnic origin-though religious and ethnic diversity remains one of Kano’s chief characteristics. Other ethnic groups include almost all major and minor tribes in Nigeria. 3.2 Sampling Techniques The study was implemented through selection of 5 Local Government Areas from the 2 agro- ecological zones in the state; Sudan and Northern Guinea Savannah. The sampled local government areas were Bagwai, Bunkure, Garko, Kura and Tudun Wada. In every Local Government Area, all major agro-processing clusters (communities) were selected for evaluation. From each local government agro-processing communities, 30 processors were selected for the FGD in addition to Informal discussions with key players in agro-processing were also held at every site.

3.3 Data Collection Method Three multi-disciplinary team of specialist scientists and trained enumerators carried out the study exercise across the 5 selected local government areas of the state using Participatory Rural Appraisal (PRA) Techniques. The team used structured checklists guide for focus group discussions (FGD) with key stakeholders (processors, extension agents, spare parts dealers, up takers, service providers etc), key informants interview and other relevant reports to generate the requisite information. Also, within the four local government areas sampled for the study a desk- review of literature focusing on commodity-specific cases of agro-processing enterprises. Final wrap-up sessions to validate data generated were held at the end of each local government area visited with officials of the state ADPs and APPEALS and agro-processors cooperatives were possible 3.4 Analytical Technique The data collected were analysed by the use of descriptive statistics to achieve the objectives of the study. Descriptive statistics (such as frequency, percentages, mean, minimum, maximum, ranking, pie chart and bar chart) were used to achieve all the objectives.

4.0 RESUTS AND DISCUSSION

PART A: RICE PROCESSING CLUSTERS

4.1 RICE PROCESSING Processing is the conversion of a commodity from its raw state to a form more acceptable to the buyer (Olukosi & Isikor, 1990), which starts from harvest of the raw product to a food ready for consumption. Processing is defined as changes brought about in any food material at home or at industrial level to improve its palatability, nutritive value, acceptability, shelf life, or sanitary condition. The general objectives of food processing are to protect and preserve food. Rice processing in the context of this report is the mechanical change/conversion of rice product from its raw form (Paddy) to finished stage (white or parboiled rice) for consumption by maintaining “quality and quantity of the product. In consideration of the need to develop the agricultural sector, to serve as source of food, provide employment, source of income and foreign exchange, Rice opens a new opportunities. Hence the importance of rice as a source of food cannot be over emphasized. According to Olukosi and Isitor (1990) processing is the conversion of a commodity from its raw state to a form more acceptable to the buyers or to the next stage in the distribution chain. It thus implies that processing is a transformation process a farm product under goes before it gets to and/or becomes acceptable or useful to the final consumer or in the next stage of marketing. Jones, (1992) stated that processing is beneficial in that it helps to convert agricultural products into forms more suitable or desirable for human consumption and to extract commodities that are not readily available in food as harvested. It also makes food safer by removing, inhibiting or killing pathogenic microorganisms and also to inactivate toxic factors. Processing is a component of the physical functions that makes up the marketing functions (Olukusi and Isitor, 1990) it is a form changing activity (Adekanye, 1988). It may be necessary to increase the value of some products, like turning cassava into gari, palm fruits to palm oil, or to increase their shelf-lives like in the case of yam flour (Adegeye & Dittor, 1985). The activities of food processors are concerned with the addition of value, which result from changing the form of the primary product. Processing methods are mainly traditional,

16 intermediate methods and improved or advanced technology (Olukusi & Isitor, 1990). The methods vary in their capital intensiveness and time efficiency and effectiveness. Women in in Northern Nigeria mostly carry out rice parboiling, while men carry out rice milling in the process of rice processing. Food processing starts with the harvest of raw agricultural produce, procurement of foods of marine origin, or slaughter of animals and finishes when the processed foods are consumed. The purpose is to extend the storage time, remove undesirable raw food constituents, and change the colour, flavour and texture to make the food more attractive and palatable. (Ikekoronye, 1999), while to Srilakshmi (2002) referred processing to include all the things that get food ready for cooking and serving. The various processes include to Mix, Blend, Bind, Beat, Whip, Fold, Mash, and Stuff, the advantages of all these include the following. (a) Help in the enhancement of flavour of the product (b) Aid incorporation of air thereby lightening the texture, and (c) In process of binding, dough becomes elastic and thus can be easily rolled. In large areas of Africa, food processing, both for home consumption and for the market, is still a household based (CTA, 1999). The processing of food can bring a wide range of benefits to enterprising people in developing countries (Ihekoronye, 1999) like Nigeria with a high population growth rate in the following manner viz: - The potential for adding value to basic agricultural produce and thereby promotes access to wider markets. - Improving small-scale products and entrepreneurs income –earning ability - Allowing improved use and control of local resources and skills - Helping to create employment for poor people, particularly in rural areas

Different methods of processing are applied to different agricultural produce depending on nature and consumers demand. 4.1.1 Mechanical Processing of Rice: The mechanical processing of cereal grains follows the same basic principle of separating the bran from the grain. The processes used by the food industry can divide into common operations, called unit operations. Examples of unit operations common to many food products include cleaning, coating, concentrating, controlling, disintegrating, drying, evaporating,

17 fermentation, forming, heating/cooling, materials handling, mixing, packaging, pumping, separating (Potter & Hotchkiss, 1996). Rice milling technologies that produce high quality rice with minimal losses are available, but they imply the use of sophisticated, large scale plants operated by skilled workers and a regular supply of good-quality paddy. The final product of the milling process is called milled or white rice or less commonly polished or pearled rice (Ihekoronye, 1999) ready for home use. Rice is generally produced and processed in Local Government Areas that have irrigation scheme in Kano State. Therefore, for this study the following Local Government Areas were sampled and major processing communities in each of the LGAs identified below. Rice is generally produced and processed in Local Government Areas that have irrigation scheme in Kano State. Therefore, for this study the following Local Government Areas were sampled and major processing communities in each of the LGAs identified below. Table 1: Major Local Government Areas and Communities where Rice Processing are Highly Intensified in Kano State. S/No . Local Government Area Names of Major Rice Processing Communities and GPS Location 1. Bagwai Bagwai, Yanruwa, Kiyawa, Daddauda, Guido, Kauyin, 12 o 09’20.86’’N Adan, Gogore 8o 08’ 06.25’’E 2. Bunkure Gilimo, Lautaye I, Arewa da Gari, Dan Dagona, Gabas 11 o 41’57.11’’N da Gari, Lautaye II, Lautaye III, Doguwar Kanya, 8o32’32.61’’E Gafan I, II, III, Kode, Agalawa, Luran Tudu, Luran Kwari, 3. Garko Maida, Gurjiya, Garin Ali, Raba, Kafin Chiri, 11 o39’02.94’’N Zakarawa, Kawo, Dal, Tsakuwa, Kere 8o47’49.76’’E 4. Kura Kura, Karfi, Dan Hassan, Butalawa, Daka Soye, Rugar 11 o46’05.08’’N Dukka, Bugau, Shinkafi, Agalawa, Mudawa, Kadani, 8o25’19.73’’E Rakauna 5. Tudun Wada Sabon Garin Tudun Wada, Tsohon Garin Tudun Wada, 11 o14’50.62’’N Dalauda, Yarmariya, Buri, Hayin Yawa, Faska, 8o23’57.23’’E Kauyen Maiturare, Yalwa, Jammaje, Yar Kauro, Yayende, Sumana, Damaga, Sunusi, Gimbawa, Karefa

4.1.2 Rice Processing Cluster The rice processing clusters were shown in Table 1. Kura, Bunkure, Tudun Wada, Garko, and Bagwai were the major local governments areas were rice processing is intensified with the 18 presence of small and medium scale processors. The summary of the findings of the survey are presented as follows.

4.2 AVERAGE INCOME OF PROCESSORS IN KANO STATE One of the important variables considered in the study was average income of the processors per month which constitute farm and non-farm earnings. Many agro processing studies considered respondent income which is also depicted in Figure 1 below. Processors were found to have average income of N15,000, N10,000 and N30,000 for Bunkure, Garko and Kura while the average income for Tudun Wada and Bagwai was N35,000 and N20,000 respectively. The average income across all state implied that processors have moderate income that can help them to be productive. This will improve processors performance for sustainable processing in Kano.

average income/month

35000 30000 25000 20000 15000 10000 5000 0 BUNKURE GARKO KURA TUDUN BAGWAI WADA

Fig. 1: Income generating Activities in the selected LGAs

Table 2: Categories and Proportion of Processors in the Processing Clusters Category of Kura T/Wada Bunkure Bagwai Pulled Processors

Small Scale 75% 95% 85% 100% 89%

Medium Scale 20% 5% 15% - 10%

Large Scale 5% - - - 1%

Total 100 100 100 100 100

4.3 PROPORTION AND CATEGORIES OF RICE PROCESSORS Different categories of processors exist in the production cluster which comprised of small, medium and large scale rice processors. The findings of the report revealed that majority (89%) of rice processors across the processing clusters in Kano state are small scale processors. They were described as those processors who own on one milling machine usually diesel power with some time an alternative of electricity powered milling machine. While 10% were found to fall within medium scale operators, few (1%) large scale rice processors were found along Kura processing clusters. The promotion of small /medium scale business is being increasingly adopted as a strategy for growth and development in this world. Small-scale businesses are now perceived as being crucial to the economy as engines for economic development. In fact, the World Bank estimates that the informal sector (Micro enterprises) currently provides more than half of Africa's urban employment and up to one fifth of the Gross Domestic Product (GDP) in many countries. The international labour organization confirms this, stating that the sector employs about 60 % of the urban working population in sub-Saharan Africa, and accounts for an average of 20 % of the GDP. The result revealed that, in all the processing clusters small scale processors dominate the enterprise. The importance of small scale business cannot be over emphasized in terms of Nigeria’s present derive to achieve a self-reliant economy. In Nigeria today, small scale business contributes over (70%) of all registered companies (Ayuba, 1986) and if encouraged they can provide more opportunities in terms of employment. Consequently the possibility of a more equitable distribution of wealth is possible. The nature of the business is to facilitate the

20 mobilization of capital and human resources, and when properly planned it provides basic for resources, social reconstruction and rehabilitation within the national framework. Another area in which the small-scale business plays an important role is in the development of entrepreneurship. The development of small-scale business has brought along with it a new entrepreneur class drawn from the middle and lower levels of the society with limited capital resources. It has thus been possible to mobilize the resources of capital as well as skills to a great extent. Much importance is attached by various governments to the development of small-scale businesses because of the significant role they play in the industrialization of a country; it is more economical to produce on a small scale than on a large scale. In such cases, smallness is not a handicap and may even afford competitive advantages. Efficient small scale industries cannot only co-exist with large ones or compete successfully with them but also, in some cases, can be linked with them by complementary relationship in which, as subcontractors, they produce for their various parts or components or carry out certain processing or financing. Table 3: Capacity Utilization Category of Processors Capacity (hp) Output Per Day (12hrs)

Small Scale 6hp 6 - 10 Bags/day

Small Scale 8hp 10 - 15 Bags/day

Small & Medium Scale 10hp 16 – 19 Bags/day

Medium Scale 12hp 20 - 30 Bags/day

4.4 CAPACITY UTILIZATION OF MACHINE USED FOR PROCESSING Small scale processors were found to use 6hp and 8hp milling machines with a capacity of 6-10 Bags per day and 10 – 15 bags per day machines respectively. Medium scale processors were found to operate three (3) more 10hp milling machines and sometime even 12hp milling machine were found used by medium scale operators. Millers in all the study locations were generally men. Women are not directly involved in milling, but around each milling unit you may found a number of old women and young girls who usually provide winnowing services to processors. The milled rice is winnowed in order to properly separate the rice husk from the grain. The cost of this additional processing is charged separately from that of milling. Milling units usually

21 consists of two types of machines; diesel powered and electricity powered as a strategy to secure alternatives. Millers prefer to use the electric types because they are more efficient in terms of output quality and cost of operation. But generally millers use more of the diesel generators than electric type due to poor and inadequate supply of electricity which characterize the general business operating environment. This particularly is in the case of the entire processing cluster where for years the electricity supply infrastructures were faulty without repair. The type and capacity of milling machines used are similar across the processing clusters. Operation and ownership of milling enterprise are in most cases different. The owner usually employed an operator who is a skill person to operate the milling machine and unit. The operator is responsible for recruiting casual workers who will assist him in maintaining and operating the milling unit. Millers provide milling services to their customers for fee which is usually charged per bag of paddy milled. But millers also milled their own paddy for sale, thus most owners of milling units are also traders. Such integration is more common among relatively large millers who possess the capital outlay to buy their own paddy for processing but even among such categories milling owned rice is combined with provision of milling services to others for a few. Milling enterprise is usually not integrated with parboiling. Customers or processors bring in their rice ready for milling. Parboiling is usually a separate activity which is done usually by women who operate parboiling unit located in their own household as a cottage enterprise. No integrated units were found. Such units that will provide both parboiling and milling services together and are fitted with improved milling and parboiling equipment. With this type of integrated units a processor can therefore pay for both parboiling and milling services unit of per bag.

Table 4: Key Actors, Prominence and their Proportion in the Processing Clusters Key Actors Prominence Proportion (%)

Parboilers 1st 42.5

Dryers 2nd 20

Millers 3rd 15

Winnowers & Bagging 4th 7.5

Transporters 5th 7.5

Engine Repairs/Maintenance/Spare 6th 7.5 parts

4.5 KEY ACTORS RANKING AND THEIR PROPORTION ALONG THE PROCESSING CLUSTERS The actors in rice processing were ranked based on their importance in the process of obtaining a high quality output (milled rice). Parboilers happens to be ranker the most important of all actors involved in rice processing. There are numerous rice varieties adapted to the different production systems and processing centers. However, it is apparent that many of the cultivars are genetically the same but are coded with different local names in the different locations. The names are a description of the quality of the grain i.e. in terms of its fineness, luster and grain to width ratio. Millers usually rank rice varieties based on their physical attributes after processing. The varieties that ranked top are different across the locations; however, they could be the same but bear different local names. For example, in Tudun Wada all short-statured, long duration, lowland rice varieties are collectively called ‘Dukusa’. In the Kura-Kano cluster the output from top most varieties, namely, SIPI and WITA is comparable to imported rice according to the millers. The general opinion of the millers is that although they are happy with the quality of their product, but they admit it can be made much better by improvement in the processing technology

23 and techniques. This implies they are amenable to any change in their production system for as long as it results in better performance and efficiency while it takes into account their capabilities. In every location there is often a particular variety that when properly milled gives the best quality. Generally, quality is more important to customers than price. This is to say that customers are willing to pay for affordable price for good quality output from the processing units. To some other millers dryness, brightness and grain length are important quality attribute. There is variation in the types of customers who enjoyed milling serves in the clusters. It is evident that farmers, parboilers and traders are very important recipients of the milling services. In processing cluster under study millers process their own commodity in addition to processing for others (contract). A number of factors have been identified as being responsible for limiting the optimum quality of rice. This include the quality of parboiling, experience and technique employed by the parboiler, type and age of milling machine, extent and nature of drying, rice variety and quality at harvest. However, the most emphasized actor in rice processing is the parboiler, followed by the dryer. There is the need therefore, for parboilers to improve on their practices. Milling is nearly the final stage of processing and ends with winnowing and bagging. Sometimes if rice is poorly handled at the farmer’s level and not much has changed at the point of parboiling, the end product will be something else. When farmers dry on bare ground the rice picks a lot of sand and soil particles which eventually dissolve when soaked in the hot water and changes the color of water which eventually changes the color of the rice even before milling. Many of the existing milling machines are without de-stoners and one stage milling is the norm and none of the millers goes through the second stage milling. The price charged per bag for milling services is uniform irrespective of the type and quality of the parboiling. Mostly the millers push a blame to parboilers or attribute it to lack of proper drying after the parboiling since often it is the responsibility of the rice owner to handle the drying before taken to the miller. After milling the prices vary depending on the grade of the product. There are standard products in all the locations studied and these are usually the cultivars that ranked top according to quality. The qualities of a standard product are common to all locations i.e. the grain should be shiny, long, unbroken after milling, devoid of weed seeds, impurities and stones. There exists some level of standard outputs from processing in the processing clusters.

TABLE 5: Challenges Identified Hindering Processing Activities along the Clusters

Challenges Kura T/Wada Bunkure Bagwai Garko

Inadequate capital Only One Financial No financial A collapsed micro- No financial institution institution exist (Unity institution exist and finance bank exist, exist and credit to finance Shortage of Bank) with an extremely credit to finance with difficulty in processing activities is poor services rendered to processing activities accessing credit highly not accessible Capital customers and no credit is highly not from informal even from friends and facility at all. accessible even from financial institutions relatives friends and relatives Inadequate Polisher, Total lack of equipments Lack of de-stoner, Inadequate millers, Inadequate Polisher, Blower, Separator like Polisher, Separator polisher, sewing parboiler, Blower, Separator Inadequate (grading machine) (grading machine), De- machine maintenance and (grading machine) processing stoner and the need for repairs. equipments improved parboiler, milling machine, sewing machine Technical Know Inadequate technical Inadequate of expertise Inadequate technical Lack technical on Inadequate of expertise know how on improved processing on expertise on expertise on on improved processing how techniques improved processing improved processing techniques techniques techniques Storage Inadequate storage Inadequate storage Inadequate storage Lack of storage Inadequate storage facilities facilities facilities facilities facilities Energy Poor supply of Total reliance on diesel Total reliance on Poor supply of Total reliance on diesel electricity and high machine due to lack of diesel machine due to electricity machine due to lack of fluctuating cost of electricity lack of electricity electricity diesel Other Challenges Noise pollution Inefficient Inefficient Telecommunication Telecommunication network network Inadequate motorable Inadequate motorable Lack of good feeder Inadequate motorable feeder roads feeder roads road feeder roads

4.6 CHALLENGES ALONG THE PROCESSING CLUSTERS The millers are seriously challenged by the incessant shortage of power supply, persistent hike in fuel prices, poor parboiling, adulteration of product, machine break down and theft. The investment and operational costs have been on the increase and in some processing clusters. In the same place millers provide services on credit and sometimes if the traders loose in their transaction it may affect the payment. Millers in some clusters complained of lack of good access roads to production areas which invariably affects product transportation to milling centers. The increasing costs of transaction imply a reduction in the profitability of the business and this has further implication on its sustainability. The activities of millers are generally on the rise in all the production and processing clusters. Milling was manually done in the past using pestle and mortar and in some places grinding stones but are now replaced by machines. Because of the positive trend in rice production and marketing of local rice, there is an increase in the number of millers caused by the increase in demand for their services. There is also an emerging market for the rice husks by the livestock industry. The main constraints to entry into the commodity market are the ability to raise enough capital and then be able to acquire the skills to survive the market competition. In all the rice processing clusters, there is a strong organizational participation. Millers organize themselves into association and demands that all potential millers register with them. Registration is open and affordable to all potential entrants. It is therefore not a structural barrier but a regulatory mechanism. There are no restrictions to other markets. The millers operate all year round although there are peak periods of high activity which are soon after harvest and at the beginning of the following season (farmers and traders bring out their stored rice to sale to meet obligations for farming activities). However, in most places activities are almost even for most part of the year. They operate morning and evening to target market days.

Table 6: Strength, Weaknesses, Opportunities and Threats of Rice Processing

Strength Weakness

Minimal grain breakage gave the processors Inadequate running capital, poor record, lack an edge among others leading to increased of improved machines like de-stoner, market competitiveness. polisher, separator (grading machine) and

Although stable electricity has been a packaging has made local processing in the problem in the production clusters, clusters difficult to compete with the imported availability of diesel (alternative) and crop brands. Total absence of value addition to the straw for millers and Parboilers respectively commodity in the clusters has maintained and influenced Lack of telecommunication network positively the size of the local market. especially in Bagwai LGA has made

information sharing among actors so difficult.

Opportunities Threat

Increase awareness, govt. policies, Competition from large scale processors, population, the need to improve on the small financial outlay to stock paddy during standard of the quality of processed rice using on-season, lack of electricity, inadequate improved machines are opportunities to financial institutions and credit facilities are sustain this enterprise continuously posing great threats to this

emerging enterprise,

Changing consumer preferences,

Lack of year-round supply of paddy,

Multiple taxation

Lack of credit facilities in the areas

Table 7: Estimates of a Starts-up Rice Medium Scale Processing Enterprise Asset Model (Name and Number) Value (N) Milling machine Amuda, Colba, Colin, Eamex, N400,000 – N700,000 Liberty, LisenEmes, Madras, (average = N550,000) OPC, PMX, Selia De-stoner N500,000 Polisher N2,500,000 Blower/Dryer N500,000 Sorter/Separator/Grader N7,500,000 Sawing machine N70,000 Weighing scale N120,000 Power Coil N250,000 Parboiler (Small) N500,000 Others (Specify) False bottom Rubber roll mill Store (Storage) N7,510,000 Stall (Shop)/Plant Other Installations Paddy (Raw Material) Total N20,000 ,000

4.7 ESTIMATES OF INFRASTRUCTURAL MACHINERIES FOR START-UP OF MEDIUM SCALE PROCESSING ENTERPRISE Start-up relates to beginning of a new business. Davilla (2003) defined start-up as growth path of recently formed companies. Financing connotes provision of money to an individual organization for a project or business activity. Financing should thus be an important instrument in business start-up. Various studies were conducted on the effect of financing on the growth of start-up. Hellmann and Puri, (2000) in their study of venture capital financing effect on business growth identified financing as an important internal factor in the early stage of start- up. Their study revealed a differential start up among various companies, owning to differences in their capital financing. However, effect of financing on managerial differences among companies was also observed. Share and Venkatarma, (2000) found additional resource endowments as relevant parameters for enhancing entrepreneurial capability of business thereby accelerating a firm’s growth. Invariably, external financing has been noticeably perceived to substantially influence growth in businesses. Advocates of this assertion include: Aldrich,

(1990); Singh and Lumsden, (1990). Similarly, effects of internal generating capacity of companies were also empirically reported as a vital instrument towards start-up growth (Teece et el ., 1997; Zahra et al. , 2000 & Canals, 2000).

Financing has equally been seen as a pivotal parameter in understanding and adopting new business technologies. It was reported that firms with strong financial backing significantly devote management resources to understand new technologies and markets, find promising start- ups, provides financial resources and coach them through the early part of their existence. It is noteworthy however; that financiers confer their direct or indirect effect towards facilitating growth rate of newly established businesses. Advocates of this opinion include Davilla, et al., (2003) whose apriori assumption postulated venture capital backed firms to have higher average growth rates than start-ups not receiving this type of financing. Indifference to this assertion was reported by Zacharakis (1998) and Meyer (2000) that firms whose venture capitalists were self- selected had higher growth rates than other wise. Not only facilitation of start-ups, but venture capitalists play a significant role in the management as well as in monitoring the evolution of a firm (Fried and Hisrich,1995 ) in addition to a tremendous role they play in establishing a network of contact with experienced infrastructure providers (Kaplan and Stromberg, 1999). Progress in business organization could emerge from external financing. This is because financiers require detailed analysis of firm’s management team, their technology, products and viability of their business plan before they demonstrate their enthusiasm and commitment towards business financing (Gorman & Sahlman, 1989; Fried & Hisrich, 1995).

Capital is one of the most requisite primary resource without which businesses cannot flourish. This is also the case in rice processing as capital is required right from business plan or investment analysis. The capital is used for expenditure on fixed and variable resource in rice processing which has to be in place at the beginning or start of the business. Any investment/business study tends to identify starting capital of that enterprise on average basis as shown in Table (7) for rice processing investment in the rice processing clusters in Kano State. The starting capital for a medium scale rice processing enterprise was obtained among Kano state rice processing clusters to be (N20,000,000). These findings implied that rice processing investment requires large amount of capital depending on the scale of enterprise.

Table 8: Type of Parboilers Used and Estimated Cost Parboiling Equipments Estimated Cost Aluminum Pots N3,000 Half Drum N3,500 Full Drum N4,500 Hanigha N150,000 Shafa N2,000

4.8 RICE PARBOILING ACROSS THE PROCESSING CLUSTERS The aspects of the rice processing strongly disliked by parboilers are poor quality paddy with stones and other impurities and Inadequate drying spaces are also among the dislikes of parboilers in the processing clusters identified. Generally the constraints to entry into the parboiling business are the skills of the potential entrepreneur and the availability of capital. Since most of the parboilers operate at the level of household to small business, the capital requirement is generally not high. Skill and interest are the main factors that determine entry into the parboiling enterprise. There are no restrictions to access to markets for parboilers across the clusters; more so, some of the Parboilers (women) especially at Kura clusters do not go to market places. They usually conduct tractions that require going to market places through proxies, usually by sending their husbands and children. At other clusters of Garko, Bagwai and Tudun Wada the women freely go to the market and have no restrictions what so ever in carrying out their business transactions. Generally parboilers across the clusters view their parboiling as an important source of income and means of livelihood. Generally the motivating factor that influences parboilers across the processing clusters is profit. The level of rice production and trade in the study areas means that there will be demand for parboiling, making it a feasible enterprise. At Kura and Tudun Wada processing clusters parboiling is an inter-generational enterprise and many of the actors are born into the business. The cost of inputs and demand for services are the main determinants of price of parboiling. In the view of parboilers, main challenges facing rice value chain in Kura-Kano, Garko and Tudun Wada areas are poor access roads (feeder roads) linking operating areas and increased level of competition among parboilers. The use of motorcycles and bicycles in transportation is the main action taken to improve the situation.

Lack of access to improved parboiling facilities and poor quality paddy from farmers is a major constraints. Although nearly all the parboilers in the processing clusters are willing to invest in improved technology and most of the parboilers the area had no new parboiling technologies available in their localities. The areas of highest costs in parboiling are purchase of fuel wood (Straw) and transportation and handling costs in Kano State. Across the clusters, parboilers do not face any major conflicts with their spouses as a result of their businesses. The major challenges faced by parboilers are; • price fluctuations which affect profit margins • cheating and unsatisfactory conduct by proxies in cases where wives do not go market themselves but use male relatives to carry out transactions on their behalf • Theft of paddy while in parboiler’s custody (occasionally) Generally these risks persist and nothing is done to mitigate the situation. Crop Stalk (Straw) is the main source of energy for parboiling. However, sometimes firewood is used as source of energy as such there is a lot of pressure on it and shrubs around the clusters, posing risk to the environment. Parboilers across all the clusters do not perceive any major risk to their health as a result of their parboiling activities, except in very rear cases where they associated exposure to heat with high blood pressure. Table 9: Down-Stream Activities along the Rice Processing Clusters Down-stream activities Remark Mechanic workshop Available Local fabricators Very Few Sources of spare parts Available Packaging Readily available Transportation Available Production of local rice, tomato or wheat Readily available

4.9 DOWN-STREAM ACTIVITIES OF THE RICE PROCESSING CLUSTERS Down-stream activities such as mechanic workshops for milling equipment, local fabricators for some parts of milling machine and parboiling pots and drums, Shops for spare parts dealers for milling machines, packaging materials and transport services (Okada and small lorries popularly known as “kur’ kura” especially) are the emerging down-stream activities rice parboiling is generating in all the processing clusters.

Table 10: Market Outlets along Rice Processing Clusters Market Outlets and Buyers Remark Exporters South-West, South-East & North East Nigeria. Chad, Cameroun, Other more Established Processors Umza, Golden, Tiamin Middlemen Available Retailers Readily available Community-based Wholesalers Available Consumers Readily available

4.10 MARKETING OUTLETS OF RICE PROCESSING CLUSTERS The processing of rice in Kano state rice processing clusters will not be complete without saying few more things about rice trading. From the above table, it can be realized that exporters from the South-west, South-East & North East Nigeria and as far as Chad and Cameroun came to some of these rice processing clusters to buy rice. Establishment like large scale processing were also found in the Kura clusters. However the FGD’s highlighted some important information about the trading activities taking place in the clusters. Rice trading in the processing clusters have observed structural changes in the marketing over time. Generally, both supply and demand for locally produced rice has increased over time in all the clusters leading to increase in the volume of the commodity traded. There is also increase in number of market participants (traders, marketing agents, etc.) in the Kura cluster which led to the emergence of new marketing arrangement in terms of weighing and measures between sellers and buyers at the market level. In the past, transaction between buyers and sellers is based on the sellers’ packaging and measure. But recently, buyers tend to use their own unit of measure to re- measure the commodity at the point of transaction. Although buyers consider this new arrangement as a means for verification of quantity and quality of the commodity, traders generally consider this new arrangement as detrimental to them. In the past, rice husk (by product of milling) had no value but is now valuable especially that of the non-parboiled rice because of its demand by livestock feed companies, individual livestock owners and cement companies (Sokoto cement company) who uses the husk as raw materials. Traders at Tudun-

Wada observed improvement in quality of milled rice which they associated with the improvement in skills among parboilers and millers. The major constraint to entry into the commodity market common among all clusters is capital required for investment and operation in the marketing system. Rice trade is capital intensive especially at the wholesale level. Therefore lack of adequate operating capital can hinder potential entrants into the market. During off season period when local supply of the commodity is not adequate, traders in Kura axis travel to other locations to purchase rice and they are in some markets (Bidda in Niger State & Cameroon,) via commission agent and directly from the sellers in Talatan Mafara market in Zamfara State, Suru market in Kebbi state, Adamawa, Gombe and recently Bauchi states traders can purchase directly from sellers. Traders in the market area (Rimi, Sabon-Gari and Dawanau market) and Garko have not experienced access restriction to markets outside their domains. However, heavy taxes levied on traders in other markets are considered to be an indirect restriction. Rice trading is not devoid of risks and uncertainties. Some of the risks associated with trading of the commodity include insecurities of lives and properties while on transit. Rice trading involves traveling to various markets especially for purchase of paddy during offseason. Traders sometimes become victims of armed robbery, theft and accident leading to loss of capital and lives. This is a situation common in all the studied clusters. Wholesalers from Dawanau travel with large amount of money in cash to markets in remote areas with no banking facilities thereby being exposed to a lot of risks. These security issues are usually beyond the control of traders. However, traders avoid night journeys and traveling with large amount of cash to places where banking facilities are available. In addition wholesalers conduct transaction through known commission agent who will not reveal to others the amount of cash trader is traveling with. These have not completely solved the problem because insecurity is generally on the increase. The traders operating in Kura axis complained of loss of capital from the bad practices of some farmers who mixed different types of varieties of rice in same bag before selling to the traders. Some farmers’ adulterate paddy rice by mixing it with weeds (empty rice panicles). All these affect the quality and quantity of the commodity thereby reducing trader’s revenue. Traders individually and collectively provide feedback to farmers on the quality status of the product purchased from the farmers and advise them to abide to market standards in packaging the products. This has improved the situation over time. The irregular fluctuation of price is also a

disincentive and the uncertainty associated with trading of rice in Kura axis and Tudun –Wada respectively. In Garko and Rimi sales of rice on credits is a risk that has led to loss of capital to traders and there are extreme cases where traders were put out of the commodity business. Many traders have reduced and put control over the amount of sales on credit and the types of customers that could enjoy from the sales. Available market space for operation of traders in Rimi market is temporary and hence not secured. In the outlying clusters, uncertainties in the commodity value chain include fluctuations in the volume of sales, theft and purchase of stolen goods. 4.11 SUGGESTION Provision of improved/standard processing equipments at subsidized rate Making sure that any support from government reaches the actual target Provision of Capital through interest free loans to assist processor stock paddy during on- season Small lorries should replace the traditional use of wheel barrows to transport paddy and processed rice Locating a processing site in each cluster far from residents to avoid complaints of noise pollution Development of feeder roads in all the production and processing clusters to improve the movement of goods and services Improvement of telecommunication network especially in Bagwai L.G.A, were actors complain bitterly on the near total absence network. Provision of stable electricity to improve efficiency in processing. Provision of more efficient source of energy to Parboilers to substitute the use of crop straws in parboiling. Additional training on improved method of processing to equal/surpass an average quality Training on good record keeping is also highly needed as majority of the processors were found wanting in that area. Establishment of small processing plants. Gender deliberate intervention in relation to rice processing. Market linkage should be improved along the processing clusters.

Figure 2: A Modern Rice Processing Machine for Medium Enterprise

PART B: TOMATO PROCESSING CLUSTERS

4.12 Tomato Processing Clusters The Tomato processing clusters were shown in Table 11. Kura, Bunkure, Tudun Wada, Garko, and Bagwai were the local governments areas considered for Tomato processing with the presence of small and medium scale processors. The summary of the findings of the survey are presented as follows. 4. 12.1 Tomato Processing in Kano State Tomato is one of the major vegetable crops produced in Nigeria, being highly perishable in nature; it has a limited shelf life. It creates glut during it short production season and becomes very scarce and expensive during it off season. The short life of the crop, inadequate processing and preservation methods leads to huge loss of revenue to the farmers. Kano state is one of the leading states for tomato production, hence the call for investments to reduce the annual wastage in the region to the barest minimum and enhance farmer’s income. The need to preserve the product for home use out of season or to add value for extra income. Also, the demand for this product is increasing every day in all parts of the country (it is one of the most consumed crops in every home, hotels and restaurants being used almost on daily basis) apart from the local markets; it can also serve as a source of foreign earnings through export. Table 11: Major Local Government Areas and Communities where Tomato Processing are Highly Intensified in Kano State. S/No . Local Government Area Names of Major Tomato Processing Communities and GPS Location 1. Bagwai Bagwai, Yanruwa, Kiyawa, Daddauda, Guido, Kauyin, 12 o 09’20.86’’N Adan, Gogore 8o 08’ 06.25’’E 2. Bunkure Lautaye I, Arewa da Gari, Dan Dagona, Lautaye II, 11 o 41’57.11’’N Lautaye III, Doguwar Kanya, Gafan I, II, III, Kode, 8o32’32.61’’E Agalawa, Luran Kwari, 3. Garko Maida, Gurjiya, Garin Ali, Raba, Kafin Chiri, 11 o39’02.94’’N Zakarawa, Kawo, Dal, Tsakuwa, Kere 8o47’49.76’’E 4. Kura Fegin Malam, Gamadan,Kadirawa, Dukawa, Gundutse, 11 o46’05.08’’N Sawaika, Garin Kaya, Baure, Butalawa, Daka Soye 8o25’19.73’’E 5. Tudun Wada Mala, Jan Dutse, Audiga Sabon Gari, Tudun Wada 11 o14’50.62’’N (Gawo), Kayu Nata,ala, Faruruwa, Tudun Wada 8o23’57.23’’E (Kurfafiya) Yaryasa, Jeri, Sumana, Tinkiri, Karefa, Rugurugu

4.13 TOMATO PROCESSING POINTS IN KANO STATE Tomato is processed and locally processed in all the production clusters of Kano State. One of the important aspects considered in this study was processing points in the state. The highest place where tomato is processed was Tudun wada (36%), followed by Kura (26%), Bagwai (17%) and Bunkure (15%) and Garko had the least (6%) processing points. This implies that tomato is processed locally in almost all the production clusters.

6% 15% 26%

17%

36%

Kura Bagwai Tudun wada Bunkure Garko

Figure 3. Tomato Processing Points in Kano state

4.14 TYPES OF PROCESSING METHODS Type of processing methods used by farmers to processed and preserved the tomato is important factor to consider especially in the peak season in order to minimised wastage. Local sun drying method (90%) was the dominant method used while 10% were not using any method to process or preserved the tomato. This implies that they are artisanal processors and lack technical knowledge for tomato processing to paste and also they don’t have any processing plant with all the machines necessary for its processing.

10%

Local sun drying No method

90%

Figure 4. Type of Processing Method Used

4.15 CHALLENGES AFFECTING PROCESSING ENTERPRISE Tomato processing faced with different challenge in the enterprises, among the challenges are lack of processing equipment (43%), shortage of capital is the next accounting 40% followed by shortage of storage facilities (10%) and low market for dried tomato (7%).

50% 45% 40% 43% 35% 40% 30% 25% 20% 15% 10% 5% 10% 7% 0% Shortage of capital Lack of Processing Lack of Storage Low market for dryed equiptment facilities tomato

Figure 5. Challenges Affecting the Processing Enterprise

4.16 SWOT ANALYSIS FOR TOMATO PROCESSING The strength, weakness, opportunity and threats of the enterprises was also considered in this study. The identified strength is the production of tomato in large quantity in the areas, but they don’t have a standard means of processing it to paste or other means apart from sun drying, to avoid wastage.

4.17 COST IMPLICATION OF THE INFRASTRUCTURE NEEDS ACROSS THE PROCESSING CLUSTER The cost implication to set up a tomato processing plant was also considered in this study, there are three categories of machine namely, small tomato grinding machine set, Automatic tomato paste processing set and packaging machine (see Table12 ) which gives a total of N29,560,000 naira to set up a plant. Apart from the machines required, there need for place to set up this plant, the labourers and training on the technical knowledge on the processing tomato to paste and ketchup. With these development the farmers can have better opportunity of improving their standard of living, exporting the paste to other part of Nigeria and neighbouring countries and also it will solve the issue of wastage. Table 12. Cost Implication to set up a Medium Tomato Processing Plant Equipment Model (Name and number) Value (N) Small tomato grinding Lance - LQ2500 N1,620,000 machine set Automatic tomato paste Elite - DGJ2406 N25,600,000 processing machine set Packaging machine Shigan – SG-300Y N1,440,000 20/40 feet freezer container Yaj PH5930A-13 Cold Room N900,000 movable type Total N29,560,000

Figures 6, 7, 8, 9 and 10: Medium Tomato Grinding Machine Set

Figures 11 and 12: Automatic Tomato Paste Processing Machine Set

Figure 13: Packaging Machine Set

Figure 14: 20/40 Feet Freezer Container Movable Type 4.18 RECOMMENDATIONS FOR TOMATOES ENTERPRISES Provision of Tomatoes processing plant Provision of tomatoes drying machine, in order to move from the local method and avoid the contamination with dirt and other things. Provision of motorised cold room for easier transportation.

PART C: WHEAT PROCESSING CLUSTERS

4.19 Wheat Processing Clusters The Wheat processing clusters were shown in Table 13. Kura, Bunkure, Tudun Wada, Garko, and Bagwai were the local governments areas considered for Wheat processing with the presence of small scale processors. The summary of the findings of the survey are presented as follows. 4.19.1 Wheat Processing in Kano State Wheat farming has been the most complicated area of Nigerian agriculture for the last decade, due to high temperatures unsuitable for the crop. It is predominantly grown by small-scale farmers who have outdated skills and limited access to finance and technology. In Kano state wheat is produced in low quantities in almost all the clusters due to unfavourable climatic condition and low market. However, there is no wheat processing in Kano state due to lack of processing machines, technical know-how and low demand of the processed wheat in the state. Table 13: Major Local Government Areas and Communities where Wheat Processing are Highly Intensified in Kano State. S/No . Local Government Area Names of Major Wheat Processing Communities and GPS Location 1. Bagwai Yanruwa, Kiyawa, Daddauda, Guido, Kauyin, Adan, 12 o 09’20.86’’N Gogore 8o 08’ 06.25’’E 2. Bunkure Alkamawa, , Gafan I, II, III, Luran , Anguwar Kaya, 11 o 41’57.11’’N Barkun 8o32’32.61’’E 3. Garko Garin Ali, Raba, Kafin Chiri, Zakarawa, Kawo 11 o39’02.94’’N 8o47’49.76’’E 4. Kura Kura, Karfi, Dan Hassan,, Butalawa, Bugau 11 o46’05.08’’N 8o25’19.73’’E 5. Tudun Wada Nata,ala, Yaryasa, Karefa 11 o14’50.62’’N 8o23’57.23’’E

4.20 COST IMPLICATION OF THE INFRASTRUCTURE NEED ACROSS THE PROCESSING CLUSTER The cost implication to set up wheat processing plant was also considered in this study, there are two categories of machine namely, Small scale wheat flour milling machine set and Bag sealing machine (see Table 14). Apart from these machines, there need for place to set up this plant, storage facilities, the labourers and training on the technical knowledge on the processing tomato to paste and ketchup and also a good wheat variety that can adopt to the climatic condition of Kano State, With these development the farmers can be encourage to produce wheat in large quantity in the areas, opportunity of improving their standard of living, exporting the flour to other part of Nigeria and neighbouring countries and also Maintain the state ranking on wheat production.

Table 14. Cost Implication to set up wheat processing plant Equipment Model (Name and number) Value (N) Small scale wheat flour Gemco - M6FTY-20 N10,800,000 milling machine set Bag sealing machine Wadley N200,000 Thresher Joycan N 540,000 Total N 11,540,000

Figure 15: Small scale Wheat Flour Milling Machine Set

Figure 16: Bag Machine Sealing

Figure 17: Wheat Thresher 4.21 RECOMMENDATIONS Farmers should be enlightened on the growing of wheat production, and they should be link with buyers within and outside the country. A good wheat variety that can adopt to the climatic condition of the state should be source for the farmers to encourage them in its production Wheat processing plants should be provided in all the clusters where wheat is produced Technical know-how on the processing of wheat should also be provided. Awareness should be created on the important of wheat processing.

4.22 GENERAL CONSTRAINTS IN THE AGRO-PROCESSING ENTERPRISE Growth of the agro-processing enterprise is hampered by various constraints that range from equipment supply to problems faced by the processors. In the processing sector, progress is limited by: Demand for equipment as most clients fail to mobilize resources to acquire equipment; Limited transfer of technology from research; Limited access to working capital; High duty and tax on imported raw Machineries and spare parts. In some cases the government policies on duty and taxes charged on imported equipment discourage local manufacturing.

4.22.1 Agro-processors face numerous constraints including: Poor equipment back-up service rendered by dealers, shortages and high cost of equipment and spare parts; Limited access to information from extension service; Limited access to appropriate packaging material for processed products, lack of marketing skills; Inadequate support services from training institutions, private sector consultants, small enterprise advisors, research institutions and engineering workshops; Erratic supply and increased cost of fuel coupled with frequent power outages; Unreliable supply of raw materials, reduced demand for processed food products; Poor cash flow emanating from low volumes of raw materials hence low income is realised from processing; Failure to meet food processing regulations pertaining to food safety and hygiene practices which need to be adhered to in the enterprise; High cost of processing equipment; and Limited capacity to mobilise capital for equipment purchase and working capital.

4.23 CONCLUSION Small- and medium-scale agro-processing enterprises play a vital role in the national economic development of Nigeria yet they do not receive due attention from the government. There is a need to critically look at how equipment fabricators can be assisted in the manufacture of good quality machines that are affordable to processors. This may call for preferential treatment of the enterprise by the Government in terms of capital intervention. Research could also contribute by investigating how equipment production costs can be reduced. Business viability is enhanced by good training, service back-up, attractive financial packages and strategic equipment ownership arrangements (cooperative groups). Training institutions and extension services should develop business models that can be adopted by entrepreneurs. Equipment fabricators and processors

need to coordinate with farmer organisations and organise themselves into a lobby group in order to alleviate the constraints faced by the processing value chain. There is need to review the agricultural value chain for a wide range of commodities produced in Kano State. The reviews help to identify chain constraints which need addressing. The dynamic nature of the agro-processing enterprise necessitate frequent and periodic reviews. Based on this study of the agro-processing enterprise in Kano State, it is concluded that the state is not self-reliant with regards to fabrication processing equipments for small and medium processing enterprise for Rice, Wheat and Tomato. Establishment of medium-scale grain milling enterprises. 4.24 GENERAL RECOMMENDATIONS The agro-processing enterprise in Kano State has potential to meet the local needs and export requirements. Small and Medium-scale processing enterprises have potential to create employment opportunities especially if the enterprises are nurtured to produce for both domestic and export markets. However, the processing enterprise currently faces many problems that emanate from various negative aspects of the national economy, uncertainty that exists over access to finance, advice, information and reliable markets. The major areas that need improvement are: The response of the agro-processing industry to the changes in the agrarian sector. With the reduced farm sizes and increased number of farmers, there is need to develop small- and medium-scale processing equipment that cater for the full spectrum of agricultural commodities produced in the state. There is lack of clear government policy on agro-processing yet it has potential to drive the economy. Government policies that enhance performance of small and medium processing enterprise on Rice, Wheat and Tomato processors need to be put in place as a tool for empowering local entrepreneurs. There is need to enforce food safety and hygiene standards as well as protect consumers against adulteration of product. Training offered to agro-processors needs to include business management skills as these are lacking in most business people. This entails that training in agricultural colleges and universities should also encompass the same to ensure competence of extension officers in the subject.

The Department of Technical Services in the Ministry of Agriculture should broaden their knowledge and capacity to offer technical assistance and advice, support and extension services that cover a much bigger range of equipment, ownership modalities and financing models. The limited capacity of processors to purchase equipment can be alleviated in a number of ways that include conducting research on how costs of production can be reduced, advocating for removal of VAT on imported materials used in agro processing enterprise, introducing low cost finances for both processors and fabricators by giving preferential allocation of credit facilities. 4.25 LESSON LEARNT Equipment ownership (individuals, farmer groups or entrepreneurs) has been left for people to decide without proper technical advice. Equipment cost is beyond the reach of individuals; hence technology access through service provision rather than ownership of the equipment is more favourable

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