Olam Nigeria Limited received one of 10 World Business and Development awards at a 2008 United Nations meeting in New York.The awards recognize private sector contributions to achievement of the United Nations’ Millennium Development Goals. Olam was singled out for its initiative to increase rice production in Nigeria — raising farmer incomes as a result. Working in partnership with the USAID-funded Maximizing Agricultural Revenue and Key Enterprises in Targeted Sites project
, Olam’s rice initiative has more than doubled yields and tripled profits per hectare for smallholder farmers in the country.
The project — which helps to expand economic opportunities for rural Nigerians by increasing productivity — identified Olam as a potential partner in 2006. The company had recently purchased a defunct rice milling facility in Benue State, planning to source raw materials locally through smallholder farmers and produce finished rice that could compete with imported brands.
The USAID project took the role of honest broker to initiate a partnership with Olam, bringing an appropriate business development perspective to transforming farmers from subsistence farming to commercial farming. The project formed rice farmer associations, established model farms to demonstrate better management practices, and introduced improved production practices to farmers.
In addition to Olam, the project brought in other key players critical to the initiative’s success. These include the Nigerian Agricultural Insurance Company, which insures against natural disaster to reduce the element of risk; the First Bank of Nigeria, which provided $4.2 million in credit to farmers associations that facilitated expansion of the project; and the Benue State government, which ensures the availability of fertilizer through its extension services.
In less than three years, the program raised productivity from 1.25 tons to 3.5 tons per hectare and increased farmer profitability from an average of $235 per hectare to $1,000 per hectare.
The success of the partnership encouraged Olam to expand the program to additional areas in Nigeria and to other countries. The company Managing Director Venkataramani Srivathshan said, “Olam is committed to continuing effective partnerships with donors and international (nongovernmental organizations) as a private sector development partner across Africa, Asia, and Latin America.”