A dream of feeding a country
In 2015, Michael Ameh co-founded Hemam Synergy Limited in Kaduna state of Nigeria to provide small-scale farmers with the knowledge and high-quality inputs they need to grow more crops. With an expanding middle class and increasingly sophisticated dietary needs, the unmet local demand for staple crops like maize, rice and soybeans, and other processed goods in Nigeria is soaring.
Photo Credits: AFEX Commodities Exchange
A new generation of small and medium enterprises (SMEs), like Hemam Synergy, has joined the charge to feed Africa's most populous country. These SMEs act as intermediaries between small-scale farmers and large-scale processors.
“We aggregate and work with maize, rice and soybean farmers, provide training and inputs, and in return buy back their produce at harvest. We provide a ready market for their grains, and impact the farmers through inputs and trade,” says Michael.
While these enterprises, also known as agro-support providers (ASPs), play a critical role in organizing and scaling agricultural production, they often struggle to access the capital they need for their businesses to thrive. Enter AFEX Commodities Exchange and its ASP programme, which aims to empower rural enterprises to reach more small farmers.
Unlocking transformative investments
The untapped opportunity around ASPs came to the fore through market studies on the maize, soybean and cassava value chains in Nigeria under the Smallholder and Agri-SME Finance and Investment Network (SAFIN). With support from Small Foundation and leadership on the ground from AFEX, the SAFIN Investment Prospectus Pilot in Nigeria illuminated three investment opportunities with the potential to transform national food systems through agri-SME investment. Among these opportunities was a solution to enhance access to finance for ASPs, which informed the design of the AFEX ASP programme.
In 2021, Michael and 14 other agripreneurs enrolled for the programme. They received financing and processing support from AFEX, and extended input financing packages to small farmers in their supply chains. After one year, the ASP programme reached 5,000 farmers and disbursed inputs worth NGN 600 million (about US$1.4 million). Michael has been a direct impact in his operations as well.
Photo Credits: AFEX Commodities Exchange
“The biggest impact for us has been the number of farmers we have reached so far. The high cost of inputs has been a recurring issue for these farmers. This year, there was a 60-70% increase in input prices, with us spending between NGN130,000 -150,000 per hectare of farmland. The ASP program has been vital in helping to surmount this issue.”
Working towards an Africa that feeds itself
Michael and his team hope to reach up to 10,000 smallholder farmers with support from the ASP programme. AFEX, in turn, hopes to support up to 300 agri-preneurs like Michael to reach 600,000 farmers by 2025. As global food systems move from one shock to another, such efforts are essential to meeting local demand for nutritious food, reducing dependency on imported grains and enabling continents like Africa to feed themselves.
This article was originally published by Small Foundation.
