Cato Foods and Agroallied Limited (Cato), established in 2014 and based in Ileogbo, Iwo in Osun State, Nigeria, produces and processes cassava into garri, fufu, cassava flour and custard for both domestic and export markets. The company has historically sourced roots from community outgrower farmers and aggregators, supported by its subsidiary Optimum Valorem, which delivers extension, inputs and mechanisation services to farmers on credit.

Under the WISE programme, Cato is scaling a young outgrower model that brings around 1,000 young farmers, ~ 80% of them women into commercial cassava production through community block farms, with land access facilitated by the company, a first-year starter pack of inputs and mechanisation, and guaranteed offtake. Semi-processing centres run by the young women are also being introduced close to the farms. This Inclusive Business Analysis assesses the commercial viability of that model for Cato and its income implications for the young women farmers it is designed to reach.

Key findings and observations from this IBA were:

1. Direct farmer sourcing is the route to reliable supply, and young women farmers are central to it. Onboarding first-season farmers requires investment in starter packs, land support, training and mechanisation, making entry-stage sourcing more expensive per tonne than buying through aggregators. As farmers graduate from subsidised establishment and self-finance production, the cost of serving each farmer falls by around three quarters over the projection period, while giving Cato greater supply security, quality control and traceability. At peak, WISE farmers are expected to account for ~ 70% of the volumes Cato sources, making them its dominant supply channel alongside community outgrowers and its own farm.
2. Higher capacity utilisation is the main driver of company profitability. Filling the existing facility through larger sourced volumes lifts margins steadily and brings the plant to full utilisation by 2028. Revenues currently lean heavily on garri, the lowest-margin of Cato's four products; Shifting progressively toward high-quality cassava flour (a wheat flour substitute for the baking industry) and custard, which carries more than double garri's margin, delivers stronger returns than any single-product strategy. Growth beyond full utilisation depends on further processing investment, but Cato should first maximise the capacity it already has.
3. Farmer economics are the weak point of the model. The starter pack allows young outgrowers to record a positive income in their first year. From the second year, as farmers scale from 0.4 ha to 1 ha and take on input finance, costs rise faster than revenues and farmers are expected to make losses of around USD 48 per farm before yields recover to restore modest profitability by year five. Farm-level income is more sensitive to price than to yield at prevailing farmgate prices, even a 50% productivity gain leaves margins thin. Cassava prices have been declining since 2024 following a supply glut, and a cheap import policy shock in 2025 left farmers with unsold harvests.
4. Sustaining the model requires price protection, financing and diversification. Price floors embedded in guaranteed offtake contracts would give farmers income security through glut years, and a premium for the biofortified variety would reward the shift Cato needs for custard. Because first-year profits are insufficient to fund second-year expansion, affordable input finance, potentially through tripartite arrangements backed by offtake contracts, is needed to bridge the gap. Intercropping with vegetables or legumes offers a further income buffer against attrition, provided markets for those crops are secured.
5. Sequencing and internal systems will determine whether the model replicates. Until Cato's processing expansion is operational, farmers are expected to produce more than the company can absorb, making interim offtake arrangements important to prevent farmer distress. Alongside this, Cato should strengthen data collection and use, annual business and budget planning and financial controls, and support the governance and management capacity of Optimum Valorem given its central role in service delivery.