By GOZIEM OKUBOR
Something curious happened to a group of rice farmers in northern Nigeria. They found a way to produce more cheaply and became more productive. Then the economics of farming turned against them. That is worth understanding in a country where food has become painfully expensive. The IMF estimated that 27 million Nigerians faced food insecurity in late 2025. Yet the people growing that food are hardly getting rich. The apparent contradiction—expensive food and poor farmers—reveals something important about what is wrong with Nigerian agriculture.
The story begins with petrol.
Many small farmers growing rice during northern Nigeria’s dry season use pumps to irrigate their fields. For years, those pumps ran mainly on petrol. When Nigeria removed its petrol subsidy in 2023, the cost of irrigation rose sharply with the price of fuel. Shell Foundation and AFEX, a Nigerian commodities business, had been trying to solve precisely this problem through Project Clean Green. Instead of buying petrol throughout the growing season, farmers could acquire solar irrigation pumps through financing arranged by AFEX and repay them over several harvests.
By 2026, the project had put 1,504 pumps into use, giving more than 10,000 farmers access to solar irrigation. The attraction of solar irrigation is usually framed in environmental terms. But the more immediate proposition to a farmer is economic. He needs water on his field; if sunlight can pump it more cheaply than petrol, reducing emissions comes with saving money rather than sacrificing it. The results were striking. The petrol price used in our evaluation rose from N708 to N1,165 a litre between the baseline and midline periods. Yet average fuel spending among the farmers surveyed at midline was about N136,000 lower per season than among those surveyed at baseline. High fuel costs, cited as a constraint on yields by 71% of farmers at baseline, were mentioned by only 7 per cent at midline.
Farmers said some of the money saved went instead to food, school fees, and paying debts. The farmers surveyed at midline were also doing better on the farm. Average yields among comparable groups were 11 per cent higher, at 4.1 tonnes per hectare, and mean net income was 12 per cent higher. Because the baseline and midline surveys did not follow exactly the same farmers, those figures should not be read as proof that the pumps caused the increases. But they added to the evidence that removing the cost of petrol was improving the economics of irrigation.
What happened next interested me more.
Researchers asked farmers what was now stopping them from producing more. Fuel, once one of their biggest problems, had almost disappeared from the list. Fertiliser had taken its place. That sounds obvious in retrospect. It changed how I thought about the problem. We had not solved the farmer’s problem. We had solved one problem, and in doing so revealed the next. Much of agricultural development is organised differently. There are irrigation programmes, fertiliser programmes, mechanisation programmes, credit programmes, and market-access programmes. Institutions need categories like these to organise themselves. Farmers do not. A farmer is running a business. What matters to him is whichever constraint is preventing that business from making more money.
Follow him through the season and the problem keeps moving. Cheaper irrigation helps him grow the crop, but he still needs seed, fertiliser, and labour. Once the crop is harvested, another question takes over: what can he sell it for? Our evaluation found something puzzling here. Researchers compared what farmers reported earning with what their reported harvests would have been worth at AFEX’s reference market price for paddy. The median selling price implied by their reported income was 56 per cent below the reference price. That number needs treating carefully. We did not know exactly where, when, or through whom each farmer sold. A price quoted at a commodity market is not necessarily available at the farmgate. Quality and location matter. Transport costs money. AFEX itself cautioned against interpreting the difference as value simply taken from farmers. The evidence showed a gap; it did not fully explain it.
The qualification led to a better question: what use is a good market price to a farmer who cannot get it? A farmer may know his rice is worth more in another market, but moving it there costs money. He may expect the price to rise after harvest, but waiting requires storage and cash. His children’s school fees do not wait for the rice market. Neither do workers, lenders, or household expenses. A buyer who can wait and a farmer who needs money today arrive at the same negotiation with very different choices. Storage, transport, finance, and aggregation can sound like dull subjects compared with drones, artificial intelligence, or a new agricultural technology. But they help determine how much of the value created on a farm remains with the person who created it. They also help explain what happens at the other end of the chain. The IMF estimates that transport accounts for roughly a quarter of the retail price of food in Nigeria.
It also finds that Nigerian food prices are shaped by domestic fuel costs and climate shocks as well as exchange rates and international prices. Nigeria imports about 30 per cent of the food it consumes. The price paid by someone buying food in Lagos therefore contains much more than the cost of growing it. Between the farmgate price and the supermarket or market-stall price sit transport, storage, processing, finance, spoilage, and risk. Expensive food does not necessarily mean a rich farmer.
Then rice prices fell.
AFEX’s closure report records the price of a bag of paddy falling from a high of ₦61,500 in 2024 to around ₦30,500 by November 2025. AFEX linked part of the fall to temporary government measures intended to increase food imports and bring down prices. Some farmers produced more but earned smaller margins. In Kebbi, AFEX reported that many struggled to recover their production costs, and repayments on the financed pumps slowed. For consumers, cheaper rice was welcome. For farmers, it could be brutal. Both things can be true. A farmer cannot recover the money he spent on fertiliser because the market changed after he applied it. Labour already hired cannot be unhired. A harvest that sells for less does not retrospectively make the preceding months cheaper.
This is where Project Clean Green changed the question I was asking. The solar pumps worked. They sharply reduced farmers’ dependence on petrol. Farmers saved money. Yields among the midline group were higher. But technical success did not guarantee that the farmer’s business would succeed, because irrigation was only one part of its economics. Nigeria certainly needs more productive agriculture. Better seeds, irrigation, mechanisation, and other technologies can help. But there is a dangerous “therefore” in the familiar argument that higher productivity will therefore make farmers richer. Sometimes it will. Sometimes another constraint will absorb part of the gain. The lesson I draw from this is not that agricultural programmes must solve everything at once. Trying to do so would produce expensive and unwieldy programmes. It is that the binding constraint moves. That suggests a different way to think about agricultural investment.
Before backing an intervention, I increasingly find myself asking three questions. What is stopping the farmer from making more money now? If we remove that constraint, what is likely to become the next one? And who must eventually make money from solving it if the solution is to survive without subsidy? Those questions can change where money goes. If cheaper irrigation allows farmers to cultivate more land, fertiliser or finance may become more valuable. If higher yields create bigger harvests, storage and access to buyers may matter more. If a farmer has somewhere to store his crop but cannot afford to wait for a better price, working capital may be the constraint. Another thousand pumps will not solve any of those problems. The same reasoning changes how I think about Nigeria’s food-price problem. It is tempting to frame food policy as a contest between consumers who need lower prices and farmers who need higher ones. But that is an unnecessarily grim choice. The better objective is to reduce the costs between the two.
If transport accounts for around a quarter of retail food prices, then better logistics are agricultural policy. If farmers sell early because they need cash, working capital is agricultural policy. If poor storage forces produce onto the market or allows it to spoil, warehouses are agricultural policy. If petrol determines whether irrigation is profitable, energy policy is agricultural policy. The point is not that everything is agricultural policy. It is that food is produced by a system, even when government departments, development organisations, and businesses divide that system into sectors. This matters for anyone putting money into African agriculture. Governments, development banks, foundations, and investors can spend millions proving that an intervention works and still discover that the market around it does not.
Measuring the technology is not enough. We have to follow the economics. Project Clean Green began, for me, with a fairly straightforward question: could solar irrigation reduce farmers’ costs and improve their incomes? I still care about the answer, and the evidence on fuel use is encouraging. But I have become more interested in the question that follows it: if this works, what happens next? That question takes us beyond the pump. It takes us to fertiliser, credit, warehouses, roads, buyers, and eventually public policy. More importantly, it keeps the farmer’s economics rather than our intervention at the centre of the analysis. There is a simple test at the end of all this. After the harvest has been sold, the loan instalment paid, and the household’s bills met, ask the farmer whether he wants to plant again. Nigeria’s future food supply depends, in part, on his answer.
*Okubor is a Nigerian development economist and practitioner.
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