Financial Investment And Commercialization of Family Farming Will Boost Agribusiness In Africa

Recently, I interviewed Grace Wanene, the co-founder of Agrinovations Enterprises, an agribusiness company in Kenya.  

Grace shared her view on how agriculture can be revitalized as a catalyst for growth in Africa and she say financial investment in agribusiness companies and commercialization of family farming for instance through producer groups will sustain agribusiness growth in Africa.

Excerpt: 

How flourishing is agribusiness in Kenya?

Agribusiness, as it relates to seed, fertilizers and agrochemicals, flourishing in Kenya. This is evident due to the large number of companies trading in seed and agrochemicals as well as the large number of new entrants into the field.

Companies that deal in agricultural technologies, especially greenhouse and irrigation technologies are also flourishing. There are several new entrants into this field as well.

The growth of agribusiness in your country: is it mainly through the government or private individual? 

Kenya’s growth in agribusiness has been fuelled mainly by private companies. Some government owned agribusiness companies such as the Kenya Meat Commision and New Kenya Co-operative Creameries Ltd are expected to be privatized soon.

For a list of government owned agribusiness companies see http://www.kilimo.go.ke/index.php?option=com_content&view=section&layout=blog&id=12&Itemid=38

With particular reference Kenya, what do you perceive as the challenges facing agri-business in Africa and what are those unexploited agribusiness opportunities in your country?

Agribusiness opportunities in Kenya, especially those relating to agro-processing, haven’t been fully exploited. There are two reasons for this. First, most of Kenya’s farmers are small holder farmers and they usually cannot meet the demand for raw materials for processing industries. Therefore, the few processing companies who have succeeded in this area often have to enter into some kind of contract farming agreement with the farmers. Secondly setting agricultural up an agricultural processing plant is also rather costly.

Another unexploited opportunity is in produce aggregation. There are several companies who aggregate produce for export but few who do it for processing companies.

What is needed as a catalyst to sustain agribusiness growth in Africa and your country region (East Africa) in particular?

I will say financial investment in agribusiness companies and commercialization of family farming for instance through producer groups.

The world is going through a boom time in Agriculture. Why must Africa not be left out of this race? Why should African countries and investors focus more on agriculture entrepreneurship?

African countries should focus on agriculture entrepreneurship because subsistence and non-commercial agriculture hasn’t worked out so well so far. While the continent has a large amount of unused arable land (60%) it still has the lowest agricultural output. It is therefore more important than ever to commercialize small scale farming.

The agriculture sector has the biggest potential for growth due to the continent’s growing population and urbanization which will undoubtedly create more demand for food.

Most of those in agribusiness today are small scale farmers and much is needed for their effort to make their business more productive. What is the role of infrastructural facility in agricultural development? And what other things are needed to make agribusiness more vibrant in African nation’s economy?

Infrastructural development helps to increase farmer’s access to processors and markets. This way, the country is able to produce value added products which in turn fetch a better price.

In addition to infrastructural development, governments and private companies need to invest more in agribusiness.

By 2050, Africa will have 261 million more youth (age 15to 24) than today. Why is it important for young entrepreneurs to focus on agricultural entrepreneurship?

The continent’s growing population will only create more demand for food. Africa’s youth population could become an invaluable labor force for the agricultural sector. Young entrepreneurs should focus on agricultural entrepreneurship because no other industry has as much potential for growth and job creation as the agriculture industry.