If you plan to invest your money into agriculture, some factors should be taken into account when you are going to invest in farming.
Interest and knowledge
For engaging in farming successfully, you need to stock up on some knowledge about the sphere you are going to invest in. It’s better to choose the sector of your interest. In this case, your goal is not only earning money as much as possible. You can also get pure satisfaction from your activity. The sports passion will push you to achieve more and more new peaks in agriculture.
Moreover, you need specific knowledge of the rural economy. If you want to get a big return, you have to be well versed in the field of your engagement. Even if you hire top-notch professionals, no one is more involved in success than you. For this, you always need to keep your finger on the pulse. Therefore read books and other educational materials related to your activities, visit seminars, conferences, and share experiences with your colleagues and even competitors.
Natural factors
Natural factors significantly influence farming. Modern man today has learned to anticipate the onset of certain factors and even affect them. But the others cannot be predicted and avoided. In this case, an investor may lose his or her money.
For example, a hurricane or a flood can destroy an entire crop, and disease can cause the death of livestock. Therefore, before growing this or that agricultural crop, find out whether there are floods in this area or how long a dry period lasts. If you are going to breed animals, find out if there are epidemics of diseases in the region that are dangerous for domestic animals, etc.
Seasonality
Taking into account seasonality is also important if you are going to farming. The quality and quantity of the crop usually depend on whether you are going to plant and sow in the dry or rainy season. If you want to breed poultry, for example, you need to take into account months with sharp temperature fluctuations. Don’t plan on hatching chicks for this period, since it will take you a lot of resources to warm them, and they are also the most prone to disease during this period.
Environmental legislation
Before you start investing in agriculture, find out the environmental laws in your area. You may not be allowed to place your farm where you want it.
Free space
Depending on your business, you need a large or small amount of land or open space. For the cultivation of the crops, you require a large land. But for snails breeding, only a small room is enough.
Staff
Whatever type of farming you do, you need qualified and honest staff. If you have a big family and small business, you can do it yourself. But the larger the enterprise, the more hands you may need. Besides, you require a person or some persons whom your authority can be delegated when you are absent. Qualified staff also demands proper investment.
Market
Before attaching your investment, find out all about the potential market for your products and the presence of major competitors in your region. After all, it is important not only to grow but also sell successfully for the profit obtaining.
Finance
All that has been listed above certainly plays an important role, but the main thing is your money infusion. If you do not have enough funding for large investments, it’s better to start small and gradually develop.
Advantages of investments in agriculture
Now, when you know what types of agriculture you can invest as a businessperson and what factors to take into account, let’s consider the advantages of the investment in agriculture in the country. Entrepreneurs who decide to invest money in agriculture in Nigeria have several advantages:
  1. The farming products rarely fall in price. Of course, you can see seasonal fluctuations, but finally, the cost of products increases year by year with inflation. The products grown in environmentally friendly places are in high demand. The manufacturers who can competently resolve the issue with the sale of products should not be afraid of possible losses.
  2. The constant demand for products will only increase in Nigeria. It is well known that the larger is the population, the higher and faster is demand growth for agricultural products. So engagement in farming will always be high.
  3. Besides, it should be noted that investing in agriculture can bring benefits not only to an investor. Investment in this area solves several problems at once:
    • providing the population with jobs;
    • strengthening of economic stability in the country;
    • proper use of natural resources directly contributes to solving environmental safety problems.
Justified risk
  • Farming production depends on many factors that neither the producer nor the investor can influence. Concerning crop production, it may be duration and intensity of drought or rainy season, pest invasion and other unfavourable conditions for the future harvest. The livestock sector is also a subject to risks. Sudden animal diseases can lead to the destruction of whole livestock. Being involved in farming, try not to risk much. Diversify your business. If you lose one profit, you can save others. Choose disease-resistant crops or breeds, have a supply of pesticides for pest control and medicines for domestic animal or poultry diseases. Sanitize storage facilities and farms. Long waiting for profit is a distinctive feature of farming.
  • For profit-making, you should not just grow a crop. It is necessary to pick it up, save, then process and most importantly sell it. Only after that, you can count profits. The problem of product sales can scare most of the businessmen.
  • From time to time you need modernization. Investing in agriculture in Nigeria is a great idea. But many investors think that for this you need to buy forage or seedlings, plow the land or buy a young herd. Although the Nigerian government provides support to entrepreneurs and investors who decide to farm, you must provide for a complete renovation of the technical equipment and machinery as well as real estate complexes. That is why such investment entails additional costs with purchasing of new facilities. Another important aspect is the need to irrigate a lot of agricultural land in the Northern part of Nigeria. And the installation of irrigation systems is a time-consuming and quite expensive process.
Learning how to investing in the agriculture creates confidence in your strength and self-reliance. Moreover, the agricultural sphere’s development contributes to state revenue and prevents the country’s excessive dependence on oil and gas. Economic independence due to agriculture can lead Nigeria to political and economic freedom.