Ever since the end of the slave trade, the palm tree farming business in Nigeria has been a very critical sector of the Nigerian agricultural economy. For the student of Nigerian history, one must have heard about the oil river protectorate, which was named so because the economy of the area was dependent on the oil palm products; this was way before the amalgamation of Northern and Southern Nigeria and even predated the discovery of crude oil in commercial quantities in Nigeria.
To this day, the palm tree farming business in Nigeria is still a big hit, the demand for palm products is still as high as ever before, and the soil and climatic conditions of several parts of Nigeria, especially those of the Eastern parts of the country is very suitable for palm tree farming business. Before deciding whether to go into the palm tree farming business in Nigeria, one has to weigh in on several factors; we have put out a few of these factors to consider before embarking on a palm tree farming business in Nigeria.
These factors Include
Not all parts of Nigeria are suitable for palm tree farming:
Given the environmental requirement of palm trees, the crop may not perform well in several parts of the country because it requires around 90% humidity and a considerable amount of sunshine for its growth and also requires a monthly rainfall of about 150 mm; not all of Nigeria’s geography can satisfy this crucial aspect of the palm tree farming business. The parts of the country with the most suitable climatic and soil conditions for the palm tree farming business in Nigeria are those of the East and West of the country.
Access to land:
Although Nigeria may seem to have a vast land, accessing land in some parts of the country, especially in the East, is becoming tougher as the days pass. This is because the Eastern part of the country, especially the South East, is one of Africa’s most densely populated areas. Acquiring land while also being cheaper in the West, since the objective of the land acquisition is for palm tree farming business in Nigeria, the West may not be the best when considering this venture. This is because western Nigeria is more popular with cocoa farming; as such, getting palm seedlings and other support, including crop medical support, may be scarce in the West since low production could impact availability. On the other hand, while the East is the most suitable for palm tree farming business in Nigeria, the area also, as mentioned earlier, has a small landmass while also having high population density. The other parts of the East, also known as South-South Nigeria, are also very suitable for the palm tree farming business as they have both the availability of different varieties of palm trees, availability of support and considerate amount of land available for palm tree farming.
Capital:
After considering suitable geography and access to land, the next very important thing to consider while intending to set up a palm tree farming business in Nigeria is the capital. Palm tree farming business can be capital intensive. Perhaps you have secured the land, but it may still cost about 4.5 million naira worth of investment in about 10 hectares of land; this is considering an average of 145 palm trees per hectare and intercropping. Note that the cost is estimated to cover the five-year period that it may take before an oil palm farm’s return on investment; this cost also covers readying the land by clearing and actual cultivation and fertilizer application.
The 4.5 million naira consideration then implies that everything is equal. This amount can take you through until your oil palm farm becomes productive. This capital would be split through the five years. The money would be utilized to employ workers and even see to intercropping and other important aspects of the palm tree farming business in Nigeria; however, with palm tree cultivation, the financial need would be reducing year after year, given that as the palm trees grow, their leaves would produce a kind of canopy capable of reducing the growth of weed as both sunshine and rain would be limited on the weed thereby significantly reducing the weeding need although not entirely eradicating the need for weeding and other care, also planting a palm tree should everything be equal is once in a while activity however sometimes some trees may be replanted in case of the reality of some of the trees not surviving given accident, pest or other forms of situation that may warrant replanting, even in this situation, most cases won’t require entire replanting.
Intercropping Consideration:
Palm tree, just like other farming ventures, needs continuous care; in the case of palm tree farming, intercropping is very important. Cultivating other crops within your palm tree farm does not just improve biodiversity and ensures constant human presence, leading to more attention on the intercropped crops and the palm tree; it is also a means of generating extra income. It is important then that anyone considering starting a palm tree farming business in Nigeria ought to also make provision for intercropping. Intercropping is the practice of planting other crops within your palm tree plantation.
Return on Investment:
Most business ventures are motivated by profit maximization and return on investment. With palm oil cultivation, however, one needs to be patient; as we have noted earlier, it can take about 4 to 5 years for your palm tree farming investment to turn fruitful. The palm yield could be smaller in size for the first few years, but this would improve year after year. Since palm tree farming is a long productivity process, it is a little tough to tell the return on investment after a year of harvest. If we make our return on investment calculation based on about 1:1.3 ratio estimation, it means that once the oil palm becomes fruitful in about four to five years, one could expect a profit in that ratio year after year for the productive years of the plantation. Also noteworthy is that some other derivative products of palm tree farming were not considered in this ratio, just palm oil and palm kernel products. This ratio means that our 4.5 million investment could turn a 5.85 million return on investment from five years into your palm plantation.
Conclusion
Palm Tree Farming Business in Nigeria is a very lucrative venture worth trying; rest assured that Niger Investor would be willing to answer any further questions you may wish to ask when you contact us or leave such questions in comment.
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