Quick question, which of the foods below do you eat more than twice a week?
1. Garri (Eba)
2. Akpu (Fufu)
I eat Garri and Fufu at least twice a week. I especially like to drink garri with groundnut and milk and honey!
Because Nigerians eat these foods a lot, cassava farming is a very profitable business in Nigeria. However, most cassava farmers are making peanuts because they are not processing their cassava. Let me explain.
Let’s say you have 1 hectare of land. You hire a tractor to clear the land. You plant cassava using very good cassava stem and the best planting and cultivating methods. You spend a total of N350,000 and your farm yields 30 tonnes of cassava.
The average selling price of 1 tonne of raw cassava is N25,000. So, if you sell your raw cassava to the women who make garri and akpu, you’ll make N750,000 (30X25,000), which is a profit ofN400,000. This is actually not bad but you can make more!
The Aliko Dangote Way
As you know, Dangote is one of the richest men in the world and his major business is food processing. Let’s apply his method to your 30 tonnes cassava harvest.
You take your 30 tonnes of raw cassava and you process it to 10 tonnes of High Quality Cassava Flour (used to make spaghetti and noodles) and 15 tonnes of cassava chips (used in making poultry feed). The market price for 1kg of cassava flour is N200 and cassava chips is sold for N100 per kg. Recall, as you were taught in primary school that 1 tonne = 1000kg.
This is how much you’ll make from selling your processed cassava products:
1. Cassava Flour
10 X 1000 X N200: N2,000,000
2. Cassava Chips
15 X 1000 X N100: N1,500,000
Total Sales: N3,500,000 (2,000,000 + 1,500,000)
Let’s assume it cost you N500,000 to process this 30 tonnes of cassava. Your total cost of growing and processing the cassava is N850,000 (500,000 + 350,000). So your net profit from selling your processed cassava products is N2,650,000 (3,500,000 – 850,000).
Now if you do this every month for several years, it won’t be long before you too become a billionaire like Dangote!
When you compare a N400,000 profit to a profit of N2,650,000 you’ll understand why I said most cassava farmers are making peanuts. The real money in cassava farming is made by the processors.