16th IFOAM Organic World Congress, Modena, Italy, June 16-20, 2008
Archived at http://orgprints.org/11713
Accessing the World Market for Organic Food and Beverages
from Nigeria
Olabiyi, T. I.1, Okusanya, A. O. 2 & Harris, P. J. C.3
Key words: Export, Nigeria, market opportunities, organic food, organic beverages
Abstract
A study in 2005-2006 assessed the opportunities for and constraints to Nigeria
accessing the international organic market. The study comprised semi-structured
interviews with agricultural produce exporters and government officials in Nigeria, and
with representatives of certification agencies in the UK, and focus group discussions
with farmers’ groups in Ogun State, Nigeria. Fresh and canned pineapple and mango,
ginger, and herbs and spices were ranked as having very high potential for Nigeria in
the international market. Fruit juice concentrates, palm oil, cashew nuts, honey and
cotton were among those products classified as high potential. Constraints identified
included lack of awareness of organic farming techniques, high certification costs, lack
of institutional support, enabling policies, infrastructure, and marketing facilities, limited
access to capital and inability to capture economies of scale.
Introduction
The demand for organic food and beverages in industrialised countries continues to
increase and a significant proportion of this is met from developing countries. This is
especially true for tropical beverages, fruits, spices and some off-season temperate
vegetables (FAO 2001, Barrett et al. 2002, UNCTAD 2003). There is good evidence of
the ability of smallholder farmers to be competitive in products such as coffee, cotton
and cocoa (Barrett et al. 2001) and also in herbs, spices and some horticultural
products (Coulter et al. 1999). In spite of the opportunities, there are challenging
obstacles to developing countries accessing the global organic market (Harris 1998;
Barrett et al., 2001, 2002). Therefore, the focus of the present study was to identify
opportunities and constraints to the development of organic agriculture in Nigeria
oriented towards export and to evaluate the potential for specific products that can be
produced organically in Nigeria.
Materials and methods
Opportunities and challenges for organic exports from Nigeria were explored using
secondary data sources, semi-structured interviews and focus group discussions. Ten
agricultural produce exporters and twelve government officials in Nigeria, and two UK
officials of certification agencies were interviewed using open-ended questions.
1
Faculty of Business, Environment and Society, Coventry University, CV1 5FB, U.K
E-Mail: Timothy.Olabiyi@coventry.ac.uk
2
As Above
3
As Above
16th IFOAM Organic World Congress, Modena, Italy, June 16-20, 2008
Archived at http://orgprints.org/11713
International buyers of organic products, certification agents in the EU and reputable
non-governmental organisations involved in organic agriculture farming in developing
countries were also contacted informally to obtain their opinions on the opportunities
and limitations of organic exports from Nigeria.
A focus group discussion was also held with five government Agricultural extension
officers and repesentatives from two farmers’ groups in each of the four
ecological/geopolitical zones of Ogun State, Nigeria: Abeokuta, Ijebu-Ode, Ilaro and
Ikenne. The discussions were held in a farmers’ meeting room at the Ogun State
Agricultural Development Programme head office in Abeokuta, Ogun State and were
moderated by the lead researcher.
Results and discussion
Organic agriculture is at present poorly developed in Nigeria, though there are recent
moves for the production of certified organic crops. The Nigerian farming system was
perceived as “organic by default”. Respondents noted a lack of policy or regulation
covering organic agriculture in Nigeria and were apprehensive about the high cost of
certification by foreign regulating bodies. Concerns were also expressed that farmers
lacked knowledge of organic techniques and certification. From the exporters’ point of
view, opportunities existed for the export of tropical produce, diversification of the
traditional export basket, increased export revenue and subsequent foreign
investment in organic sector. However, it was thought that considerable efforts would
be required to assure confidence of potential buyers in organic products emanating
from Nigeria. Availability and timeliness of market information, lack of infrastructure
and marketing facilities, limited access to capital and inability to capture economies of
scale were all considered major obstacles.
Regarding the relative potential of products for export, USAID (2002a), emphasised
the opportunity the organic fruit and vegetable sector presents to producers and
exporters in Nigeria. Table 1 shows an assessment of the export potential of some
products from Nigeria. Products with export potential characterised as very high and
high are primarily those for which there are significant shortages in organic supply and
production is mostly restricted to the tropical developing countries. For example, there
are a limited number of countries involved in exporting fresh and canned organic
pineapple and mango. On the other hand, the production potential of Nigeria for these
products is high. For instance, Nigeria is already one of the world leading producers of
pineapple, mango, cashew, papaya and oil palm and these crops grow well with little
or no use of agrochemicals. Also, the country is already involved in international trade
in conventional forms of these products, with the advantage of established
relationships with importers in the major markets.
For some of the products listed in Table 1, such as cashew, the general conditions in
terms of quality, logistics, price and reliability are not very different for the organic and
conventional segments. For cashew in Nigeria, USAID (2002b) concludes that “the
majority of Nigeria’s production is considered ‘organic by neglect’ i.e. no chemical
pesticides and/or fertilizers.” It is therefore quite feasible to target both markets at the
same time.
16th IFOAM Organic World Congress, Modena, Italy, June 16-20, 2008
Archived at http://orgprints.org/11713
For products rated as moderate potential in Table 1 such as cocoa, coffee and
sesame, the organic markets, particularly in Europe and the US have the potential to
be oversupplied. Although Nigeria is a leading producer and supplier of the
conventional cocoa and sesame, it would need to compete significantly on price and
quality bases against other countries that already have well established relationships
with organic buyers. The market for organic sesame is relatively large and has shown
medium annual growth rate of around 5% recently. Unfortunately, it is oversupplied,
which has caused prices to fluctuate by as much as 50% (EPOPA, 2005). In 2001,
Nigeria became the largest supplier of sesame to the world’s largest importer of
sesame, namely Japan. Being a major player in the conventional sesame market,
Nigeria can take an advantage of its position in the market to carve a niche in the
organic sector as well. Other opportunities for Nigeria in the organic market are the
production, processing and supply of speciality products such as honey, herbs, leather
products, hides and skins.
Tab. 1: Potential of selected Nigerian organic products in the international
market
Potential
Very high
High
Moderate
Low
Very low
Products
Fesh and canned pineapple and mango, peanuts, herbs and spices, ginger
and ginger oil
Fruit juices, concentrates and pulps including papaya and mango, cane
sugar, cashew nuts, palm oil, honey, cotton
Cocoa, coffee, sesame, rice
Bananas and plantain, vegetables, tomato pulp and puree, beef and chicken
products
Citrus
For some products classified as low and very low potential, the market may be
oversupplied, or have a slow growth rate, if any at all. And where demand exists,
established exporting countries are more likely to take that advantage. For products
such as citrus for instance, several countries are already significant producers and
exporters, including EU and other industrialised countries with which Nigeria could not
compete effectively.
In the case of bananas, until 1999, organic production came almost exclusively from
small-scale banana farmers. However, large-scale plantations in the Dominican
Republic and Ecuador have recently started exporting organic bananas (Barcus,
2001). Despite a growth in demand, the rate of production and level of investment and
export from these well-established South American exporting countries makes the
chances for Nigeria in the organic banana market very slim. For beef and chicken,
imports from Nigeria are prohibited in Europe, either as organic or conventional, as a
result of health and safety measures. However, opportunity may exist in the Gulf
States for these products.
16th IFOAM Organic World Congress, Modena, Italy, June 16-20, 2008
Archived at http://orgprints.org/11713
Conclusion
This study revealed that the formal organic industry in Nigeria is relatively
underdeveloped, although much agricultural production in Nigeria may be described
as “organic by default” with potential for increased yield from optimised organic
farming. Additional potential benefits were thought to be environmental conservation,
economic self-reliance, employment generation and reduced rural-urban migration.
Fresh and canned pineapple and mango, ginger, and herbs and spices were ranked
as having very high potential for Nigeria in the international market. Fruit juice
concentrates, palm oil, cashew nuts and honey were among those products classified
as high potential. Among the main constraints identified were farmers’ lack of
awareness of organic farming techniques, high certification costs, risk aversion, lack of
institutional support, enabling policies, infrastructure, and marketing facilities, limited
access to capital and inability to capture economies of scale.
Acknowledgments
This study formed part of the MSc studies of Abraham Okusanya, funded by the Ogun
State Human Capital Development Programme, Nigeria.
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