Olam Company took some journalists on a facility tour of its farm in Nasarawa State to showcase its contributions to the rice revolution in the country. It was, indeed, an experience to behold Foreign Direct Investment (FDI) in action. CHRISTIAN OCHIAMA was there for LEADERSHIP Newspapers Group.
Two hundred and sixty five kilometres south east of Abuja, or approximately 150 kilometres off Lafia, the Nasarawa State capital and on the banks of the river Benue, lies an expansive, fully irrigated paddy farm on a Greenfield site measuring 10,000 hectares. On it is an ongoing rice project being developed by Olam Nigeria, a fully owned subsidiary of Olam International Limited, committed to enhancing domestic food security through scaling up of rice cultivation. Compared with its operating environment, Olam farm is a completely new world integrating agricultural processing to add value at origin.
At the heart of the rice farm is a mechanised rice milling facility, state of the art in its modernity that incorporates Satake milling technology and Italian par boiling technology. At current operating capacity, it will provide 67,500 metric tonnes of milled rice per annum to the domestic market.
Taking journalists round the facility, the General Manager, Mr Pieter Nel and the Farm Manager, Mr Mark Mclean said that the farm is expected to yield 10 metric tonnes per hectare (over two annual crop cycles), based on four varieties of high-yield rice tested with the West African Rice Development Association. Presently, 4,450 hectares are already under cultivation, with a further 3,000 hectares on target for 2017/18 with an average yield of 4.2 to 4.5 metric tonnes per hectare far above the national average of 1.5 metric tonnes per hectare. Up to 1000 workers are employed on the farm depending on seasonality. Over 950 workers are employed at the mill during peak season.
Though Olam is a fully capitalised company, it is linking large scale agriculture with smallholders to boost rice production. To this extent, the nucleus model combines the quality control of a large scale commercial farm with the cost and scalability benefits of smallholder ‘outgrower’ networks. Mr Mclean said that scalability of the nucleus model is significant and expressed the hope that other players will replicate the success of Olam’s rice farm to further enhance Nigeria’s food security.
It is this determination to ensure self-sufficiency in rice production that is the driving force behind what is going on in Nasarawa State. The rice-growing communities in Nasarawa, Benue and Kaduna States are supported by Olam with group formation, training and all agri-inputs on credit in order to improve their own paddy yields and revenues with assured buy back system. As major stakeholders in this ambitious initiatives are the Federal Government of Nigeria, the Central Bank of Nigeria (CBN), through its Anchor Borrowers Programme, the IFAD and USAID Markets.
The Olam farm is engaging well above 4003 farmers including women in an area of 5563 hectares, with a target of 16,000 by 2018, ultimately supplying 30-40 per cent of the mill’s capacity.
To augment its own production, Olam buys paddy from all producing states, controls quality and hires transport to factory. The difference Ola farms is making in the rice revolution in the country is that it is putting its money where its mouth is by practically supporting Nigeria’s agricultural and Change Agenda in a very meaningful way.
Olam makes quality its unique selling point and therefore, it insists through its control mechanisms as explained by the company’s Director of Quality Assurances, Mr Madan Singh, that the company is out to produce quality rice that can compete with any other in the domestic market – creating high-end rice from Nigeria, for Nigeria. This has earned for it the honour of being the only ISO 22000 FSMS and FSSC certified rice processing company in Nigeria. Just as it has received global best quality rice product of the year award FY-2015 for the brand- Mama’s Pride.
As a project, Olam commenced on July 1, 2010, the land development started in January, 2012 and so far well over N20 billion has been invested in the project. The total area of the farm is 12,920 hectares just as current area under cultivation is 4351 hectares. The project has on its regular pay roll 594 people and 450 seasonal workers making a total of 1044. At the mill, there are 959 employees made up of 81 regular and 878 seasonal. The impressive policy of the company that has endeared it to the host community is that 90 per cent of the workers are from the local communities.
Employing job seekers from within the vicinity is not the only aspect of corporate social responsibility that has engaged the attention of Olam. Though the company cannot be said to have broken even in its five years of operation, it has nonetheless proved itself a neighbour worth having as far as the communities are concerned. It has a well-defined policy of helping the farming communities around it to thrive. This takes the form of commitment to the next generation through the provision of school buildings, materials and scholarships for students; connecting communities through the development of 54km of roads between surrounding villages and ensuring access to clean water and electricity through provision of bore wells and solar panels and lamps. It even goes as far as inviting herdsmen to feed their animals from the stalk left behind after harvesting while others are allowed to help themselves to the grass that grows in parts of the field pre-planting and post harvesting.
Olam rice field operates all season and this entails maximum use of irrigation facilities. For this purpose, it has a water facility that pumps 150,000 litres of water every second from the River Benue. And there are five of such pumps that provide water for the 375.9 kilometres of irrigation canals and 372.5 kilometres of drainages. The farm is made assessable through 269.6km of roads built and maintained by the company.
Giving details of the operations of the company, the General Manager, Mr Nel said that “setting up the company posed a challenge in the beginning and we had to go through all the learning curves. This also included acquiring the land, getting young people to teach them”. This was corroborated by the farm manager Mr Mclean who went into the technicalities of the business from the mechanisation to the use of aircrafts to spray water and other chemicals that aid the growth of crops to ensure quality consistency in the final product as well as the adoption of scientific imaging through the use of GPS. The use of technology is all pervasive in that the farm can compare effectively with anyone of its kind in the developed world.
Curiously, the government, may be as result of the burden of an economy in recession, is not fully involved in the project as it should. The access road to the farm is so bad that Mr Mclean described driving to the farm on that road as “nice bumpy ride.” It is one thing to invite foreign businesses to come and invest, a lot more is needed, in terms of incentives, to encourage them to stay. Olam has proved that it intends to stay. It has invested heavily in the farm that incentives such as reconstructing that road will go a long way to help especially in bringing in logistics and evacuating finished products. Considering their socio-economic impact on the adjoining communities, giving them generous tax holiday will also be a good idea.