Before the advent of modern cooperatives in Nigeria, farmers traditionally collaborated to support one another’s farming efforts. For instance, among the Yoruba people, this practice is known as “aaro”, while in the Igbo community, farmers form cooperative societies called “Ndioji”.
In Yoruba culture, cooperatives facilitate collective farming and promote economic prosperity. Farmers contribute funds regularly, with each member receiving the pooled money in turns, either weekly or daily. This system, called Esusu or Ajo, provides farmers with access to funds as needed. While the Yoruba refer to it as Esusu, the Hausa people call it Adaghe.
Though these traditional cooperatives lacked modern technology, they provided vital support, sharing crop-growing techniques, offering credit, and supplying manpower. These early forms of cooperatives laid the groundwork for today’s agricultural cooperatives, which are formally organized and owned by their members. Modern cooperatives support farmers not only in crop cultivation but also in marketing, distribution, and sales, helping them access government credit facilities and agricultural interventions more easily.
The establishment of the Nigerian Agricultural Cooperative and Rural Development Bank (NACRDB) in 2000 illustrates the importance of agricultural cooperatives. NACRDB provides financing, loans, guarantees, and savings schemes, filling a crucial gap in support for both large-scale and small-scale farmers.
Agricultural cooperatives also deliver educational resources on pest control, crop disease prevention, and market trends. Some cooperatives are product-specific, such as those for maize farmers, to avoid excluding others who cultivate different crops. This approach enables new farmers to benefit from the expertise of experienced members, who advise on seeds and planting schedules to ensure good yields.
Economically, agricultural cooperatives offer value by enabling bulk purchases of seeds and fertilizers, reducing costs for individual members. For rural farmers, poor road networks in Nigeria increase transport costs, which cooperatives help mitigate by organizing bulk transportation. In urban areas, cooperatives make bulk purchases on behalf of members, further reducing expenses.
Cooperatives also streamline the marketing and sale of produce. Since smallholder farmers account for 80% of Nigerian agriculture, they benefit significantly from cooperatives’ collective bargaining, which secures better prices and mitigates storage issues that individual smallholders might face.
Another advantage is access to government support. Agricultural cooperatives often receive priority in government initiatives, such as fertilizer distributions, seed programs, and low-interest loans. Due to their organized structure, cooperatives bypass bureaucratic hurdles that individual farmers might encounter. The government supports these groups through programs like Agricultural Development Programmes (ADPs) and River Basin and Rural Development Authorities (RBRDAs), which have expanded from two to twelve basins since 1973.
Finally, agricultural cooperatives provide essential credit facilities, allowing members to avoid high-interest rates from banks or the reluctance to lend due to farming risks, often linked to Nigeria’s reliance on seasonal rainfall. Cooperatives bridge this gap by offering interest-free or low-interest loans, with flexible repayment schedules.
Agricultural cooperatives are indispensable in Nigeria’s agricultural landscape, complementing government interventions and enabling farmers to achieve sustainable and profitable growth.