Agriculture

Sliepa Source 10:

Agriculture: What Can Sierra Leone Offer You?

• Ideal growing conditions and large amounts of available land
• Proven export potential
• High local demand
• Opportunities for production of biofuels, biolands, and organic foods
• Favorable trade arrangements
• Opportunities in agricultural goods and services
• Growing sector with scope for improving local links

Sector Overview

  Sierra Leone remains predominantly an agricultural economy, in spite of the high profile the mineral sector receives. In 2011, agriculture contributed about 51 percent to GDP, 17 percent of exports and employed 61 percent of the work force. Sierra Leone has strong underlying agricultural potential which, in the past, enabled the export of significant quantities of agricultural commodities such as coffee, cocoa and oil palm. Over the past decade, agriculture has demonstrated its underlying potential growing at an annual average of 4 percent. Growth in this sector was due to steady increases in domestic production of major crops and livestock.

·         The sector is dominated by smallholder farmers, in subsistence farming, using traditional methods and limited use of farming inputs

·         Yields are generally , even by African standards, with current levels for rice ranging between 1.5 MT and 1.9 MT per hectare

·       There are fairly large agricultural estates, both government and privately owned, particularly in the Eastern and Southern parts of the country, which grow coffee, cocoa, kola-nuts, rubber and oil palm.

Growth Potentials

·         The current performance of agriculture represents a fraction of the underlying potential of the country.

·         The use of more intensive methods in the farming of existing cropped areas, together with increasing cultivable land, could accelerate agricultural growth from current levels.

·         The improvements in infrastructure planned by Government are expected open up substantial new areas for profitable agricultural use.

·         The sector is also attracting investments in new farm estates; the evidence also shows that, with even modest investments in rehabilitating existing farm estates and the introduction of more intensive farming, it is possible to earn attractive returns on agriculture.

Unique Selling Points of the Agriculture Sector

1.       Significant  Arable Lands

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           SOURCE: Statistics Sierra Leone

Si       Sierra Leone has significant amounts of arable land, most of which remains uncultivated, with up to 4 Million hectares of arable land still available for cultivation.

·         Even though the dominant form is customary tenure under communal ownership, the country is now very advanced in developing and harmonizing procedures for private acquisition lands, through long-term leases, for agribusiness investments.

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Where necessary, and depending on the merits of a particular agribusiness project, the Government of Sierra Leone is prepared to take a head lease on provincial lands and sub-lease to foreign investors in order to mitigate risks

              Favourable Supporting Ecology

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zzzz   Sierra Leone has a diverse ecology, which altogether provides ideal conditions for the cultivation of a wide range of crops.

·         The coastal plains of the Atlantic stretch approximately 200 miles; relatively flat surfaces that are frequently flooded in a range of between 5 and 25 miles off the coast; suitable for the cultivation of rice, ginger, vegetables and cassava.

·         The interior plains comprise seasonal floodplains (or ‘Bolilands’); rolling wooded areas; and a variety of savannah covered low plains and hills; suitable for the cultivation of rice, sugar, oil palm, cassava and cashew.

·         The interior plateaus, mountains and inland valley swamps of the east are suitable for the cultivation of rice, cocoa, coffee and oil palm.

·         The Western Area, which consist of thickly wooded mountains running parallel to the sea for about 25 miles, are suitable for mangoes, citrus fruits and livestock.

3.                      

         Favourable Climate

·         The country has a tropical climate with principally two seasons; the dry season, which lasts from October to March, and the rainy season lasts from May to October; July and August are the wettest months

·         Rainfall levels range between 1,500mm in the interior areas of the country and 5,100 mm in the coastal areas

·          Sierra Leone’s rainfall is classified into 3 climatic belts; the first belt spans from the Coast up to 80Km inland; the second belt spans between 80Km to 190Km inland; and the third belt ranges between 190Km inland to the border areas.

           Adaptable Topography

·         The country’s topography, high rainfall levels and numerous ground water sources offer huge potentials for irrigation all around the country

 

·         The country has a dense drainage pattern, with 9 major rivers, coastal creeks and tidal streams. Together, these conditions make it relatively easy to irrigate up to land for the cultivation of crops such as rice, which can have up to 3 cycles in a single calendar year.

·         Up to 300,000 Hectares of land  have been identified as priority targets for irrigation in the next 5 years

                        Average Rural Labour Cost (US$/Hr)

        

         Cheap Labour

·         Sierra Leone has among the lowest wage levels in the region; the agriculture sector falls among those attracting the least in the country’s wage structure.

·         This offers huge comparative advantage particularly for large scale agriculture projects

Government Policy and Strategy

The main focus of the National Sustainable Agriculture Development Plan, especially the Smallholder Commercialisation Project component, is the commercialization of the sector, increasing food production to create food self-sufficiency and enable exports. The medium term strategy for the country’s agriculture sector development focuses on the following key areas:

·         Improved Land and Water Management: Developing irrigation infrastructure covering at least 300,000 Hectares of land for improved cultivation

·         Improvement of Roads and Other Infrastructure: Constructing feeder roads to increase links between production centres and markets and processing infrastructure for prominent products within localities

·         Improved Access to Rural Finance: Enhancing effectiveness of rural financial services institutions at local level to directly support farmers’ access to financial services.

• Diversification into Livestock Production: Improving the productive livestock industry, to increase the production levels of cattle, sheep, goats, pigs and poultry
• Sustainability: Introduce and ensure the use of more sustainable agricultural practices and methods for the conservation of soil, water, forest and biodiversity resources
• Promoting Large Scale Private Investments: Provide incentives for large private investors operating alongside and supporting smallholder farmers in out-grower schemes and training.

Incentives

In addition to the general incentives offered by Government to support investments in the country, the following sector-specific incentives apply:

·         To a foreign investor irrigating at least 500 hectares or cultivating least 2,500 hectares of land or investing at least US$1 million in livestock and livestock products; or

·         To a domestic investor irrigating at least 100 hectares or cultivating least 500 hectares of land or investing at least US$ 0.5 million in livestock and livestock products.

  Complete exemption from corporate income tax up to 2020; plus, 50% exemption from withholding taxes on dividends paid by agribusiness companies

  Complete exemption from import duty on farm machinery, agro-processing equipment, agro-chemicals and other key inputs; 3 year exemption from import duty on any other plant and equipment; reduced rate of 3% import duty on any other raw materials

  100% loss carry forward can be used in any year

  125% tax deduction for expenses on R&D, training and export promotion

  3 year income tax exemption for skilled expatriate staff, where bilateral treaties permit

A Case for Agriculture Investments

Upward Price Trends

·         There has been a global Increase in market prices for several agricultural commodities such as rice, cocoa, coffee as well as agro-based products such as ethanol, cocoa butter and chocolate

·         Daily international prices for cocoa beans have risen, from their lowest level of $774 per MT in 2000/2001, to a peak of $3,637 per MT in 2009. World market prices in real terms were 86% higher in 2009/10 compared to 2000/01.update data to establish between past present and projections

Trends in World Rice Prices (US$/MT)

	SOURCE: OECD - FAO Agricultural Outlook 2011 - 2021 NB: Milled, 100% grade b, FOB Bangkok ( Jan / Dec) )

 

 Increasing Domestic and International Demand

·         As domestic incomes rise due to ongoing economic growth, and with increasing international demand, the market for agricultural commodities is projected to be fairly buoyant

  

Regional Rice Import Trends (MT)

SOURCE: Africa Rice Center (WARDA) 2008

Africa Rice Trends 2007 - Lancon et al 2002

Sites Already Identified for New Investors

·         The Government, through SLIEPA has already identified suitable sites for the cultivation of rice, cocoa, sugar and oil palm; there have already been notable investments in the sugar and oil palm sectors.

·         The key areas identified for mechanical rice cultivation are Torma Bum in the Bonthe District, with about 51,300Ha; Gbondapi Rice fields in Pujehun District with about 41,100Ha and Kumrabai Mamilla in Tonkolili District with about 35,500Ha.

·         The areas identified for cocoa expansion are in the Luawa Chiefdom Kailahun District, with gross available land of about 12,000 Ha and in the Small Bo Chiefdom, Kenema District with about  8,000 Ha.

Source: SLIEPA

Source: SLIEPA

High Yield Potentials

·         Sierra Leone offers very high potential yields per hectare of cultivation for most crops

·         Opportunities for value chain processing

Investment Opportunities

Rice

·         There are huge opportunities to invest in the production, processing and marketing of domestically produced rice produced.

·         The World Bank and United Nation’s Food & Agricultural Organization have confirmed that Sierra Leone has a comparative advantage in supplying its domestic market.

Oil palm

·         Oil palm is an important cash and export crop that can be produced in many parts of the country.

·         Production has rebounded to around 195,000MT despite the fact that many of the plantations are neglected, Government-owned estates comprising mainly of aged, low yielding trees.

·         Current yields are about 1.5MT of Crude Palm Oil per Hectare.

·         Exports remain modest compared with periods over 2 decades ago; about 1,500MT of crude palm oil was exported in 2003.

·         The Government is promoting the rehabilitation and expansion of its oil palm estates throughout the country with private sector participation.

Cocoa and Coffee

·         Cocoa and coffee both have the potential of becoming major cash and export crops, as they were during the 70s and 80s.

·         The current average yields for cocoa and coffee beans are 410 Kg/Ha and 390 Kg/Ha respectively; relatively very low even by African standards.

·         There are opportunities to invest in the rehabilitation of existing plantation or establishing new plantations.

Cassava

·         Cassava has become the second most important food crop in terms of level of consumptions and area under cultivation.

·         As the diet of many Sierra Leoneans become even more diversified to include cassava based foods such as gari and fufu; and with opportunities for industrial production of starch and cassava flour, the cultivation of cassava offers tremendous opportunities.

Groundnut, Pepper and Vegetables

·         There are favourable opportunities in the cultivation and processing of all these crops both for local consumption as well as for export.

·         There are a number of local farmers and farmer groups looking for strategic partnerships to expand their farms as well as to enter into bulk off-taker agreements as a means of minimizing post harvest wastage of these perishable crops.

Fruits

·         Over the past 3 years, there have been notable fruit juice factory investments in the country, whose operating input demand levels are significantly higher than current production levels of these fruits.

·         There is scope to facilitate the regeneration of the nucleus-estate activity that existed before the war, stimulating also growing by smallholders and in developing the marketing infrastructure for these high value crops.

Livestock

·         This sub-sector contributes about 6 percent to agricultural GDP.

·          Cattle numbers in 2011 were estimated to be about 178,000 heads; sheep about 95,000 heads; goats 65,000, and 900,000 poultry.

·         Total domestic production is not sufficient to meet the needs of the growing population which is gradually recovering purchasing power and so consuming more meat.

·         There is scope to invest in animal rearing, slaughter facilities and developing a more efficient marketing chain.

·         Other investment opportunities include;

·         cotton, rubber, ground nut planting, processing industries for fruit juice, meat processing factory, rice processing factory, fish processing and poultry etc

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Agricultural Inputs

·         The supply of fertilizer, improved seeds, agro-chemicals, animal feeds and veterinary inputs is well below potential demand and domestic requirements.

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