Agriculture in Nigeria’s Economic Diversification Process: A Study of a Poultry Outgrower Scheme

Abstract

Nigeria’s current economic plan targets diversification through leveraging the power of the private sector in order to enable and fast‐track business investments and job creation. This paper reports a study of a model of a poultry outgrower scheme ‐ Akwa Prime, used in catalysing private investments in the poultry sector of Akwa Ibom State, Nigeria. The scheme shares the potential of combined strength of the state and that of the private sector in stimulating increased production and integrating of small livestock farmers to the national economy. The study’s specific objectives were to examine the extent of smallholder farmer involvement in contract negotiations including price setting; the role of the key participants, particularly the regulatory function of the state in an out‐grower scheme construct; and the impact of the scheme on socioeconomic improvement of smallholder farmers. This research was conducted with 42 smallholder independent broiler poultry farmers who are registered members of the Akwa Prime outgrower scheme and receiving a range of input support and good production practices aimed at optimization. Findings show a positive impact of the scheme on small independent poultry farmers’ productivity, profitability and survival. Contract negotiations and key participants role were fully documented. Participating farmers were found to have high income and stocking density while the cost of day old chicks and other production inputs provided by the scheme accounted for 99.1% (R2=.991) of the variation in farmers income. This positive change on the bottom line of small independent poultry farmers indicate the prospects for greater deployment of out‐grower model to stimulate agriculture productivity and growth. However, despite some benefits there were major bottlenecks including compromised role of the state, imposed buyback price on farmers and late offtaking of the finished stock. The implication of this finding is that small poultry farmers left alone with their independent business choices may not stimulate much diversification driven by agriculture.