Boosting the giant
USDA assistance effort helping Nigerian producers
to help themselves with user-owned cooperatives
By James Haskell, Gerald Ely
and Jeff Jobe
Editor’s note: Haskell is acting deputy
administrator of the Rural Business-
Cooperative Service of USDA Rural
Development; Ely is the USDA Rural
Development co-op development specialist
for Pennsylvania, while Jobe holds the
same post in Iowa. They recently spent
two weeks in Nigeria training key cooperative
technical assistance providers in three
targeted agricultural states.
igeria is the giant of
western Africa, with a
land area about twice the
size of California and a
population of 123.3 million
more than the entire U.S. population
west of the Mississippi River.
Only 10 percent of the labor force in
Nigeria works in industry, and 20 percent
in service trades. The other 70
percent has ties to agriculture, yet
agriculture accounts for only 39 percent
of the gross domestic product;
crude oil exports account for most of
the remainder.
Agriculture in Nigeria primarily
consists of producers tilling and harvesting
small land holdings, producing
food for their family and as a source of
income. Their products may be sold to
others in their community or to buyers
who go from village to village buying
fruit, vegetables and animal products
for resale in more distant markets.
When traveling across the country,
producers set up colorful roadside markets
to sell their produce. Driving
through the countryside, you can stop
to purchase a bundle of bananas or a
sack of peanuts (called groundnuts) to
snack on. The prices received by these
producers are often limited by their
access to market information, their
inability to transport products to a better
market or to process their crops into
value-added food products.
In an effort to improve the lives of
rural residents, the U.S. Department
of Agriculture has teamed with
USAID’s Opportunities Industrialization
Centers International program to conduct
several efforts to strengthen
Nigeria’s agriculture processing and
marketing. One program, the Nigeria
Agricultural Cooperative Marketing
Project, focuses on cooperative organizations
that serve agricultural producers.
Cooperatives have long served U.S.
farmers in their efforts to improve
income for their products, to secure
quality farm production supplies at reasonable
costs and for credit and utility
services. Cooperatives offer similar
opportunities for agricultural producers
in Nigeria.
While associations of farmers, frequently
called cooperatives, exist in
Nigeria, they do not have a history as
viable business entities. Rather, they
have served as vehicles for distribution
of governmental programs.
Membership in the associations has
been the means by which farmers
might receive seeds, fertilizer, credit,
technical services or other assistance
in agricultural production. Farmers
have rarely made use of cooperatives
for marketing purposes.
Making strides
Nigeria is making strides toward
business development, placing
increased emphasis on the development
of successful cooperative businesses.
The development of sustainable
cooperative businesses requires sound
feasibility analysis and business planning.
In fact, the new cooperative
development policy currently being
implemented in Nigeria requires each
cooperative to pass an “economic feasibility”
test before it can even be registered
as a cooperative. It’s essential
that assistance providers have the
capacity to carry out this new mandate.
The initiative to developing stronger
business cooperatives is focused on
training cooperative leaders and a cadre
of extension specialists and other technical
assistance providers. These
individuals, in turn, will train
others in the field about cooperative
principles and operations.
They also work directly with
cooperative leadership to form
new cooperatives or improve the
business operations of existing
organizations.
Training conducted by
USDA began with basic cooperative
governance, principles,
practices and operating procedures.
A second team, including
the authors of this article,
focused on feasibility analysis
and business planning. Seminar
participants learned about the
components of a feasibility
analysis; then they split into
small groups and worked
through analytical exercises for
a real or hypothetical cooperative marketing
effort. All of these marketing
endeavors were relevant to their individual
communities.
The final step was to learn how to
evaluate business feasibility and the
results of financial projections to reach
a decision as to whether a proposed
business activity could be successful.
Participants learned to recognize the
importance of using realistic business
assumptions, careful analysis and welldeveloped
business plans.
“It was exciting to see some of the
projects the groups came up with, and
as they developed the project to
see how the assumptions they made in
each phase of the feasibility study
process affected the outcome and financial
results of the proposed business,”
Jobe says. “We stressed to the participants
that if the results of the analysis
indicated that the project wasn’t feasible,
they were doing their job in preventing
a producer group from investing
in a project that was not feasible.”
Wide application possible
Training was provided to a dozen
handpicked technical assistance
providers in each of three agricultural
states: Abia, Nasarrawa and Kano.
Each session lasted three days.
Workshop materials developed by
USDA were contained in a notebook
that included discussion information,
work exercise aids and slides that could
be reproduced as teaching aids. In
addition, project leaders were provided
a CD that included all workshop materials
that can be reproduced for additional
training programs.
Each training recipient was asked
(he or she knew this in advance) to
use their newly gained knowledge by:
(1) training an additional 10 technical
assistance providers in their state, and
(2) presenting a feasibility analysis and
a business plan for a designated agricultural
marketing cooperative in
their community. Follow-up procedures
are in place to access the results
of their work.
Future training is being planned to
continue the development of successful
cooperatives. Sessions on market
analysis, financial management and
cooperative marketing techniques are
planned for next year. Classes on the
responsibilities of directors and cooperative
bookkeeping will follow.
As in other parts of the world,
Nigerian cooperatives will only be successful
with informed and responsible
leadership.
“International co-op development is
always a very interesting learning experience,”
Haskell says. “Terminology
typically used in the United States
often carries different meanings in
other cultures. For example, on this
trip, Jerry (Ely) was explaining how and
where to account for patronage refunds
on the various forms included in the
feasibility analysis. Following a short
period of confusion, the group finally
explained to us that in Nigeria, patronage
covered such things as a “direct
cash payment” in order to get one’s
truck to the front of the line. They
thought this should be counted as an
operating expense. Always quick on his
feet, Jerry promptly found a substitute
phrase for patronage refunds.”
Nigeria has vast potential to improve
its food production and distribution systems,
and the cooperative form of business
provides a strong self-help vehicle
to enable producers there to continue to
strive toward a better future.
