A presentation delivered at 2019 First Bank Agric Expo

1. Agric Expo 3.0 | Augist 30, 2019
Agricultural Innovations
across the Value Chain

2. Recognitions
Every week, OpenFarm reachesan a growing audience of more than
2,000 Agribusiness Owners, Professionals, & Key Decision Makers
across Agribusinesses, Government Parastatals, Agric Agencies, and International Organizations.
The OpenFarm Network

3. $78 Billion
Nigeria’s Agriculture Sector Size by 2017
(PwC)
31%
Agriculture’s GDP Contribution
to Nigeria in 2017
African Food Import Bill
But Let’s Compare
No doubt we are recovering and the Agricultural sector is being
revitalized
$313 Billion
Nigeria’s Food Import Bill
$35 Billion
The Agric Sector in Numbers
(AfDB)
(PwC, 2017)
$4.5 Billion
45-50% | $9 Billion
in Nigeria
Post-Harvest Loss
(GAIN)

4. • Sector performing extremely below it potentials and global counterparts
• Not a competion of Land Size or Farmers’s Populace.
Can’t continue to do what we are doing expecting the same result or miracles
• A brave new world where ideas; innovation; solutions; compete, win & drive value
Global Comparative Performance
Thailand
(66 Million People)
>
Sub-Saharan Africa
(800 Million People)
AGRICULTURAL EXPORT
Netherlands
(42,508 km²)
>
AGRICULTURAL PRODUCTIVITY
Nigeria
(923,763 km²)
Niger State
(76,363 km² )

5. • AfcTA Agreement signing;
a threat and an opportunity.
• Ideas rule the world today as the
a scaleable property not limited
by geographic boundaries.
• The present & future belongs to
the innovators and solution
providers.
$200 Billion2015
expected
growth
2030
FAO Market Report on Sub-Sharan Agriculture
Total Market (AfDB)
Market
$1 Trillion
The Continental Opportunity
Innovations + Businesses around these Opportunities
= New Billion Dollars Businesses
1.2 Billion
People
1.7 Billion
People
This is the case for innovation
current
state

6. To Provide Insights on:
•Areas & Opportunities for Innovation with Case Studies
and Trends
•Path to Successful Innovation and Success Recipe
•Pitfalls to avoid
Class’ Agenda

7. Areas & Opportunities for Innovation
with Case Studies and Trends

8. The Agricultural Value Chain
Similar to the activity chain in Power and the Oil & Gas Sector
Each of these components provides challenges & opportunities for innovation
• This is also known as Farm2Fork
…the farther right you go; the less risky & the more profitable, but also the more the competition
Hence, the preference of Financial Institutions for Traders, Processors & other Agribusinesses
Farmers &
Cooperatives

9. Challenges/Opportunities
• Information services for Farmers for the provision of GAPs,
weather, and market information.
• Access to inputs
• 1 Farmer: 5,000 - 10,000 Extension Agents in the Country
Innovations and Players
• Mobile based extension services; IVR, SMS, USSD
• E-Wallets
Considerations
• Competition is with Government and input suppliers who
have an access advantage (partnership can help)
• Need for context and personalization (high technical
expertise)
• An economy where we don’t really pay for information
• Monetization is a challenge especially when it involves telcos.
Extension Services & Input Distribution

10. Challenges/Opportunities
• Underfunded sector
• High risk for Financial institutions
• Low penetration of Agric Insurance
Innovations and players
• Crowdfunding as investments in Farming Cycles;
Farmcrowdy, EZ Farming
• Kenyan Fintech company making it easier to lend to
farmers
• Derisking by NIRSAL with Credit Risk Guaranteee
• Rise in Impact investment
Considerations
• Agency banking for reaching Farmers at the last mile has
a lot of potentials
• Cluseters such a cooperative societies to derisk
• Input financing over direct cash transfer
Financing

11. Challenges/Opportunities
• Cutlasses and Hoes still in use making farming
unattractive attractive
• Undermechanization; some states in the SouthWest have
less than 15 working tractors
• Low buying power of Farmers; many cannot even afford
power tillers
Innovations and Players
• Infrastructure as a service; tractors, storage etc. to
aggregate demand and lessen cost
• NAMEL (service providers) and HelloTractor (on
demand) partnership to access tractors on demand and
estimate cost per usage
Considerations
• High outlay of investment
• Needs to be demand-driven for sustainability
• Need for technical skills and Human Resources
Agro Support Services

12. Challenges to Opportunities
• Low buying power
• Unavailability of inputs
• Low yield
• Climate change
Innovations and players
• Sachet sized input
• Index insurance for input
• NIRSAL Comprehensive Index Insurance (NCII).
Considerations
• Competition against GAPs
• Result-driven, requiring thorough control
experiment
• Last mile distribution is a challenge
• Inputs may be subjected to use of other inputs
Farm Inputs & Insurance

13. Challenges/Opportunities
• Too many smallholding and subsistence operations
• Unpredictability of harvest
• Massive post-harvest losses and Uncertainty on when to
harvest
Innovations and players
• Nucleus/Out-grower programme to aggregate supply
• Satellite imaging for harvest prediction
• Direct to Farm startups connecting Farmers to Buyers
like Ninjacart
Considerations
• Huge upfront investment in provding inputs and
infrastructure
• Loyalty of Famers to contracts in the face of market
realities
Production

14. Challenges to Opportunities
• Massive post-harvest loss (almost 50% in the
case of tomato)
• Unavailabilty of fresh produce round the year
• Underpricing of poorly stored produce
Innovations and players
• Plastic Trays over Woven Baskets
• Solar Driers & Cold Chain
• Processing into Chips and flour
Considerations
• Opportunity for innovation in agro-focused
logisitcs, maximimum utlization of trucks on the
road and data-driven logistics
• Who is the customer? Who pays? Farmer?
Trader? Supplier?
Logistics, Storage & Processing

15. Challenges to Opportunities
• Low buying power of Customers yet High Competition
• Growing global population leading to high food demand
locally and internationally
Innovations and players
• Pricing strategy for availability and affordability e.g
noodles pricing-strategy for Nigeria’s sachet economy.
• Changing the form of the produce for better export value
e.g. Poundo yam flour vs raw yam which is 80% water;
heavier; takes more space, susceptible to damage
Considerations
• Dilemma: export require premium value vs a local market
sensitive to price
Value-Addition

16. Path to Successful Innovation

17. The 5Ps
Pain Point
Recognition
and Solution Ideas
Passion
to Execute and
Follow through
Proof-of-Concept/Pilot
of Solutions and Iterations
Partnerships
for Capability and
Commercialization
Profit
from Scale and
Market Traction
Going from idea,
concept to market success

18. Pain Points
Availability Accessibility Affordability
• Pain Points revolve around unavailability, inacessibility or unaffordability
• You must answer WHAT it is, WHO has it, WHO it affects, HOW you intend to solve it
• Ideas for an solution must must meet one or more of the criteria below
Recurring Trends:
• Availability of mechanized services based on Aggregation of Demand for invesment in
infrastructure & provision of services e.g NAMEL’s distribution of farm service centres
• Access to fund based on Aggregation Supply of funds and interests as investments into
farming cycles e.g. Farmcrowdy and Thrive Agric’s
• Affordability based on as Service-on-Demand over full cost of ownership e.g HelloTractor
that makes mechanized services available, accessible and at an affordable rate.
• Technology eases these processes

19. • Takes you beyond the idea
• Keeps you going before profit
• Fuels you throgh the journey when
there is no instant result
• Propels you to acquire the required
capabilities as agriculture is not savvy
Passion

20. The Need:
• Think Big. Start Small.
• Proof of Concept (PoC) used in Technology | Pilots used in Sciences
• Your small experiment to test your assumptions and make adjustments
• Risk management before scaling
A good Proof-of-Concept/Pilot focuses on:
• a single pain point
• clearly defined outcome e.g. productivity, cost reduction
• a specific or few commodity value chains.
Need for comparison with control group for pilots or industry benchmark for PoCs
Expectations from a Pilot/PoC:
• Collect data
• Evaluate Impact
• Craft Success Stories
Proof-of-Concept/Pilots

21. Acquire or Enhance Capacity
this may be human resources (domain expertise),
physical space & sites, or risk reduction
Public and International Agencies
such as IITA (with HarvestPlus & Airtel) or NIHORT
Insurance Companies
such as crowdfunding companies and Leadway
Ministries, Departments and Agencies
such as NIRSAL for financial interventions or ADPs for
extension services on your solutions or train-the-
trainers
Institute of Agricultural Research & Training has been
an incubation hub for startups providing physical
space, farms, and expertise
Partnerships
Building on your Success Story, you may need partnership to:
Acquire Customers
this can provide direct route to market or value-
adding services to their customers
Cooperatives & Microfinance Banks
access to smallholder Farmers
Banks & Insurance Companies
access to Agribusinesses; Owners and Professionals
Institutions
access to Agroprenuers (IITA and other Agric
institutions)
Required
Be definite about roles and expectations

22. Agri-
businesses
Agroprenuers
Smallholding Farmers
• You are either an Agribusiness or
innovating for any of these
Stakeholders
• They are different customer
segments requiring different
approaches though they interact
• Pricing is dependent on the
customer segment;
volume vs price
• Your user is not necessarily your
cusomer.
Large Farm Owners
& Agribusiness Professionals
(Money hubs)
Youths and
Urban-based Farmers
(Digitally savvy)
Rural-based Peasant
& Subsistence Farmers
(Populous & at the
bottom of the pyramid)
Profit from Commercialization

23. Pitfalls to Avoid

24. Lack of Domain Expertise.
Passion or Huge investment cannot substitute for
it. Build a multidisciplinary team/advisors.
Costly Assumptions which stems from lack of
expertise. Test all assumptions. Go to the field.
Lack of a Clear Path to Commercialization. You
don’t need to figure it out from the start but work
on it.
One Size does not Always Fit All. Tailor the
solutions as may be required.
Pitfalls to Avoid

25. Talk is Cheap,
The Future belongs to the Doers!

26. Agric Expo 3.0 | Augist 30, 2019
Best Wishes. Thank You!