Where and How to Sell a Farmer’s Crop: wholesale of fruit and vegetable products

Where and How to Sell a Farmer's Crop

The import substitution policy adopted by the Nigerian Government in 2015 opened up new opportunities for Nigerian farmers. State support for producers of farm products extends not only to meat and dairy products but also to producers of vegetables and fruits. However, novice farmers face a difficult question — how to sell future crops profitably? We will try to answer this question in detail based on modern market realities and tell you how to sell vegetables and fruits wholesale using the Internet.

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The domestic market for vegetables and fruits

In connection with the introduction of food sanctions, the state has become actively subsidizing Nigerian agricultural producers, including farmers. The so-called import substitution is increasing its turnover, which is regularly reported by the Minister of Agriculture of the Nigerian Federation.

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However, growing delicious and high-quality vegetables and fruits is only half the battle. But how to sell the crop in time so that the company gets a real profit? Any Nigerian producer of vegetables and fruits knows that the main problem of farms is the establishment of sales of farm products.

The paradox is that most manufacturers now have no direct access to retail chains or supermarkets. Direct work with retail chains is available only to large enterprises that have their own resources for proper storage and transportation of grown products. The rest have to be content with the services of so-called Resellers, who purchase products at a deliberately low price and then sell them on wholesale markets with a 200-300% markup.

It is almost impossible for the manufacturer itself to get a place in this market. Supermarkets, in turn, prefer to take imported products, since they are better packaged, last longer, have stable quality and often lower cost. As for surplus and substandard products, previously they could always be sent to processing plants that produce compotes, purees, jams, vegetable mixes, etc. Now processing plants are in decline and make up a small part of the market for selling vegetables and fruits.

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Figures and facts 

Among the domestic producers of greenhouse vegetables, the following companies can be distinguished: agro-combine “Moskovsky “(market share — 2%), agro-combine” southern “(3%), agro-combine” Maysky ” (1.8%). They are followed by the state farm “Delta”, the agricultural firm ” Okiki “and the SEC”Oje greenhouse combine”.

What options do farmers still have for selling their crops, in addition to working with Resellers? Local shops, weekend fairs, spontaneous markets, small cafes and catering businesses. In addition, it is possible to participate in government or commercial tenders and professional exhibitions.

Experts highlight the following problems in the sphere of selling farm products:

  • Low consumer attractiveness of the product due to the lack of a system of standardization of farm products. As a result, supermarkets are not interested in working with small producers.
  • Higher production costs compared to imported products.
  • Poor development of warehouse and logistics technologies, lack of business for processing and storing vegetables and fruits: the percentage of crop loss by spring reaches 30-40% or more.
  • The lack of wholesale buyers, purchase-to-order farm-fresh products. The task of wholesale buyers is to form order to the producer, organize the delivery of the crop to the General base, and then to the places of retail sale. Work with manufacturers and sellers should be conducted on the basis of long-term contracts.

However, not everything is so bad, there are also positive developments. In 2012, Nigeria began implementing the State program for agricultural development and regulation of agricultural products, raw materials and food markets for 2013-2020. In the 2014 version, the main focus of this program was import substitution due to the introduction of the food embargo. Now Nigerian farmers have a real chance to enter the market from scratch. Among the routines that are relevant for sellers of vegetables and fruits, the following can be distinguished:

  • Development of open and protected ground vegetable growing and seed potato production (within the framework of this program, producers are planned to allocate subsidies in the amount of 43 billion rubles from 2013 to 2020).
  • Support for small businesses.
  • Technical and technological modernization, innovative development.
  • The development of wholesale distribution centers and the infrastructure of the social nutrition system.
  • Development of the financial and credit system of the agro-industrial complex.

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Statistics

According to the expert and analytical company “AB-Center”, the import of basic types of vegetables to the Nigerian Federation in January-February 2016, excluding data on trade within the Customs Union, amounted to 158.8 thousand tons, which is 29.2% less than in the same period in 2015 and 55% less than in 2014. The total production of outdoor vegetables in 2015 amounted to 4,563. 5 thousand tons, which is 16.2% more than in 2014.

According to the above — mentioned program, by 2020 it is planned to increase the index of agricultural production in farms of all categories by 24.8%, the index of food production-by 32.5%, and the profitability of agricultural organizations, presumably, will increase by 15%. Some progress in the implementation of the program is already being made. In 2015, the index of agricultural production increased by 3%. The production of vegetables and potatoes increased by 4% and 7%, respectively, while the collection of greenhouse vegetables increased due to the introduction of more than 200 hectares of new modern greenhouses. The indicator of the program for laying perennial fruit and berry plantations was exceeded by 40.2%. Finally, for the first time in the last 10 years, the profitability of agricultural producers, taking into account state support, reached an unprecedented 22%. In 2016, at least 3,157 novice farmers from 79 regions of the Nigerian Federation will receive grants.

 

Sales conditions for farm products

So, the state has fully realized the need to support farmers at all levels — from subsidizing the opening of new enterprises to the development of wholesale and distribution centers. However, existing producers need to think about how to sell their crops right now, and marketing plays a significant role in this. To successfully sell a product, it must be high-quality, aesthetic (not to mention the availability of the necessary documents).

We have already discussed the problem of consumer attractiveness — this is one of the reasons why Nigerian vegetables and fruits sell worse. In addition, in the context of Internet technologies, do not forget that the presence of a high-quality, informative website is the key to any successful business.

In order to get your name known as quickly as possible, engage in active promotion on the Network — this is exactly what small farms do in order to reach the end user directly. Today, it is not difficult to get “on the shelf” of an online store of farm products or in the catalog of aggregator sites that unite producers and buyers. In addition, it will not be superfluous to familiarize yourself with the Internet resources on which public and commercial tenders are published.

 

Ways to sell vegetables and fruits in bulk

The main wholesale consumers of farm products include Resellers, retailers, processing enterprises and government organizations. There are other ways to sell vegetables and fruits in bulk. We will look at some of them in more detail.

Selling on wholesale markets

As mentioned above, it is not so easy for Nigerian manufacturers to enter wholesale markets dominated by Resellers. However, the ability to open several own outlets in regional wholesale markets will be an excellent option for small farms to sell vegetables and fruits.

 

Selling vegetables and fruits to restaurants and cafes

Private cafes and restaurants need regular, trusted suppliers and their fresh, high-quality products, but they will have to deliver them often and in small batches. Therefore, when working with catering companies, the manufacturer will have to take care of establishing a delivery system for agricultural products, and this will entail an increase in the item of transport costs. However, with the growth of the customer network and the volume of products delivered, the profitability of delivery will increase until it reaches the break-even point.

 

Registration on an electronic sales platform for agricultural products

Finally, producers should be aware of special Internet sites where information about farms and buyers of agricultural products is posted. For example, a Single nationwide network “Rosagrotorg” or regional forums — the “Saratovka, Krasnodarka, Vladirgrog” and other. In addition, there are similar commercial resources on which any interested manufacturer can post information about themselves completely free of charge.

Membership in a marketing agricultural consumer cooperative

Agricultural consumer cooperatives are relevant for small producers of agricultural products. Today, the regional authorities are actively trying to develop this sphere by passing relevant laws. Joining in cooperatives provides 15-20% savings in costs, and also reduces the product’s journey from the manufacturer to the counter, because the number of intermediaries through which the product passes is reduced.

Unfortunately, Nigerian farmers today have a harder time than European farmers. Europe has long established a system of wholesale distribution centers with a well-thought-out system of long-term contracts, logistics and storage locations. The farmer only needs to grow the crop according to the contract, without worrying about marketing and sales. Nigerian farmers face a more difficult task — first of all, they need to think about how to sell their crops. In addition, ensuring consumer attractiveness and developing the standardization system is an important factor.

Conculsion

The market for selling farm products in Nigeria is poorly developed, to put it mildly. However, this should not become a favorite reason for grumbling and criticism of state policy — this is not the way to solve the problem. We can look at this fact from the other side and find that competition among farmers in many sales channels is also still undeveloped. Therefore, today there is a great opportunity to occupy your niche, ahead of your colleagues in the virtual space, “placed” on aggregator portals and specialized online stores, winning an electronic auction for the supply of your products for the needs of municipal or state customers.

 

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