Youth with ‘swag’ can succeed in Agriculture

By Kofi Adu Domfeh, Luv Fm, Ghana

Cynthia Mosunmola

Cynthia Mosunmola Umoru is a young Nigerian lady passionately driving the beauty in agriculture in her home country. Proud to be a farmer, she’s got her swag – twitting @PrettyFarmer on her sleek tablet.

Cynthia produces food to feed her nation, and delights in inspiring other young persons to take up a profession in agribusiness.

Her company, Honeysuckle Ventures, distributes livestock produce to fast food companies and restaurants in Lagos and one of her farms is used for research and training of young farmers in the agri-food sector.

For Cynthia, it is critical that women and the youth focus less on the drudgery of agriculture and rather focus on the opportunities therein for financial independence and the nutritional security of families.

“If people are concerned about the quality of the food that they eat, they should be concerned about the quality of the produce that comes out of the farm…it means that we need to be involved” she noted. “Now if as women, as young people we love to eat, wear cloths, we love to spend money, then I think it’s critical that we begin to look closely at the agric sector”.

Cynthia inspires her peers not only in Nigeria but others of Africa to venture agriculture, a profession often perceived to be unattractive to today’s African youth.

“I think that people need to begin to look at the brighter side and then appreciate agriculture for what it is – a wealth creating platform. This is one sector that singly is capable of creating total employment across its value chain”, she added.

In Ghana, the government’s Youth in Agriculture Programme (YIAP) was established to increase employment opportunities and incomes, encourage entrepreneurship, and upscale food production.

With the average national farmer age at 55 years, the programme seeks to increase productivity in agricultural sector by tapping into the energy of the youth who compromise about 30percent of Ghana’s active population.

According to National Programme Coordinator, Alhaji Adam Mahama, the Ghanaian youth are interested in venturing agriculture but financial constraints remain major obstacle.

“My office, on daily basis, is filled with applications, proposals from youth, university graduates – both male and female – who are interested in going into agriculture but I’m constrained by funding”, he stated.

Alhaji Adam estimates that a minimum of Gh₵10,000 ($5,000) is needed to support a university graduate to be able to take off into full-time agriculture, but such funding is not readily available.

He however does not subscribe to the establishment of a fund by government to be accessed by the youth “because immediately government takes too much interest in funding such things, people don’t want to be independent”.

Hence, government should provide the farming inputs whilst the private sector is engaged in providing financial packages for such agricultural ventures, he opined.

“If a package is made in such a way that they take the money from the banks that they can use and pay back to the banks [and] account to the banks, then they’ll learn to be independent and good private sector”, noted Alhaji Adam.

Private sector agribusiness players believe the public-private partnerships are important to drive young people into agribusiness but this, they say, must be devoid of politics.

Prince Obeng Asante, Deputy Managing Director of Ghana Nuts Company, says concepts geared towards youth employment must move from a political platform to a pseudo-business organization for the private sector to buy into them.

“It should be partnership which is built on rock, not on sand which can easily be washed away when the political season comes to an end”, he observed.

Ghana Nuts is a leading agro processor, manufacturer and exporter of a gamut of edible oils, animal feed input materials and Shea Butter.

The company has been supporting the agricultural project under the National Service Scheme and recently received 4,000 bags of yellow maize from the NSS Wenchi Farm to produce feed for the local poultry industry.

The NSS project is making some inroads with an expected harvest in excess of eight metric tonnes of maize by end of 2012 from the combined 2,120 acres it is farming in five regions.

It is early days yet to ascertain what percentage of the young national service personnel engaged in the NSS agric project would opt for full-time ventures in farming or agribusiness at the end of their service.

But Prince Obeng says there is the need to critically show young people that agriculture could provide a dynamic and productive future for them.

Young people who see the profitability in agriculture will naturally move into the sector, he said.

“The cost of production vis-à-vis the revenue has been the major bottleneck; the guy is spending Gh₵1,000 per hectare and the revenue coming from it is Gh₵900, why do you think the youth will be there?” queried Prince. “But if today we say that you spend Gh₵1,000 but your revenue is Gh₵2,000, so the [profit] margin is Gh₵500, I tell you even the dead will resurrect and go into agriculture”.

To set the agenda right, Cynthia Mosunmola Umoru, who is currently a Youth Consultant to the African Union Commission, has emphasized the direct engagement of the youth in agricultural policy formulation whilst providing avenues for the youth to access mentors and role models to success in agribusiness.

Already, youth in agriculture is one of the driving issues on which the United Nation’s Food and Agriculture Organization (FAO) focuses its work.

“Granted that there are a lot of countries benefiting from oil and natural resources, but most of the countries in Africa today are primarily agriculture-based communities, so when you think about the future of agriculture you should start with the source which is the young people of Africa”, said James Tefft, Senior Policy Officer, FAO Regional Office for Africa.

He wants the subject of young people in agriculture to be embedded within national policies in the implementation of the Comprehensive Africa Agriculture Development Programme (CAADP) of the New Partnership for Africa’s Development (NEPAD).

He says investments in the agricultural sector should be about the people and integrating youth in agriculture is essential in addressing the demographic challenges.

“The policy framework in Ghana with respect to METASIP exists but we need to get into the specifics of how these partnerships between public and private actors actually take place… we need the young people, civil society [to be] engaged in the process. So to move forward, we need to move into the specific of the dialogues at very decentralized levels”, said James Tefft.

The Ghanaian government developed the Medium Term Agriculture Sector Investment Plan (METASIP) to implement the Food and Agriculture Sector Development Policy (FASDEP II) over the medium term 2011-2015.

Whilst expecting agricultural policies to be youth-centered, there is the potential for women and young people to strategically plug into the sector by “unlocking their minds and view agriculture as a business; it is not just about farming and tilling the soil – there is processing, packaging, distribution, cold storage, marketing – the opportunities across its value chain is enormous”, said Cynthia Umoru.

Transforming mindsets are the core values of the AgroMindset Organisation, which is educating a new generation of entrepreneurial minded agriculturists in Ghana.

“Our idea is using the bottom-up approach to transform youthful thinking from fork (state of consumption) to field (state of activity and productivity), and so we seek to introduce the concept of agric entrepreneurship to young people right from childhood”, said Founding Director, David Asiamah.

The Organization seeks to erase negative perceptions about farming, showcasing that it can bring people great wealth and prosperity, through strategies like organising the Agro Summit and Agro Tourism events, embarking on outreaches, undertaking Green projects and promoting agribusiness, innovation and entrepreneurship.

“We have visited over 5000 young people in basic schools and our meetings attract interested students and industry experts to learn and share ideas at the same time churning them into entrepreneurs”, he said.

Without a clear policy strategy for engaging this rising group of rural youth, Africa’s leaders and the development partners that work with them risk creating an economic time bomb for their successors, warned David Asiamah.

Trade Barriers in Africa cause Food Crises

A new World Bank report says that Africa’s farmers can potentially grow enough food to feed the continent and avert future food crises if countries remove cross-border restrictions on the food trade within the region.

According to the Bank, the continent would also generate an extra US$20 billion in yearly earnings if African leaders can agree to dismantle trade barriers that blunt more regional dynamism.

The report was released on the eve of an African Union (AU) ministerial summit in Addis Ababa on agriculture and trade.

With as many as 19 million people living with the threat of hunger and malnutrition in West Africa’s Sahel region, the Bank report urges African leaders to improve trade so that food can move more freely between countries and from fertile areas to those where communities are suffering food shortages.

The World Bank expects demand for food in Africa to double by the year 2020 as people increasingly leave the countryside and move to the continent’s cities.

According to the new report?Africa Can Help Feed Africa: Removing barriers to regional trade in food staples ? rapid urbanization will challenge the ability of farmers to ship their cereals and other foods to consumers when the nearest trade market is just across a national border.

Countries south of the Sahara, for example, could significantly boost their food trade over the next several years to manage the deadly impact of worsening drought, rising food prices, rapid population growth, and volatile weather patterns.

With many African farmers effectively cut off from the high-yield seeds, and the affordable fertilizers and pesticides needed to expand their crop production, the continent has turned to foreign imports to meet its growing needs in staple foods.

“Africa has the ability to grow and deliver good quality food to put on the dinner tables of the continent’s families,” said Makhtar Diop, World Bank Vice President for Africa.

“However, this potential is not being realized because farmers face more trade barriers in getting their food to market than anywhere else in the world. Too often borders get in the way of getting food to homes and communities which are struggling with too little to eat.”

The new report suggests that if the continent’s leaders can embrace more dynamic inter-regional trade, Africa’s farmers, the majority of whom are women, could potentially meet the continent’s rising demand and benefit from a major growth opportunity. It would also create more jobs in services such as distribution, while reducing poverty and cutting back on expensive food imports. Africa’s production of staple foods is worth at least US$50 billion a year.

Moreover, the new report notes that only five percent of all cereals imported by African countries come from other African countries while huge tracts of fertile land, around 400 million hectares, remain uncultivated and yields remain a fraction of those obtained by farmers elsewhere in the world.

Poor roads and high transport costs blunt progress

Transport cartels are still common across Africa, and the incentives to invest in modern trucks and logistics are weak. The World Bank report suggests that countries in West Africa in particular could halve their transport costs within 10 years if they adopted policy reforms that spurred more competition within the region.

Unpredictable trade policies a liability

Other obstacles to greater African trade in food staples include export and import bans, variable import tariffs and quotas, restrictive rules of origin, and price controls.

Often devised with little public scrutiny, these policies are then poorly communicated to traders and officials. This process in turn promotes confusion at border crossings, limits greater regional trade, creates uncertain market conditions, and contributes to food price volatility.

Establishing a competitive market will enhance food distribution networks

A competitive food market will help poor people most, the report notes. For example, poor people in the slums of Nairobi pay more for their maize, rice, and other staple food than wealthy people pay for the same products in local supermarkets. The report underlines the importance of food distribution networks which in many countries fail to benefit poor farmers and poor consumers.

“The key challenge for the continent is how to create a competitive environment in which governments embrace credible and stable policies that encourage private investors and businesses to boost food production across the region, so that farmers get the capital, the seeds, and the machinery they need to become more efficient, and families get enough good food at the right price.” said Paul Brenton, World Bank’s Lead Economist for Africa and principal author of the report.

World Bank Group support for trade and agriculture in sub-Saharan Africa

The World Bank is recognized as a key source of knowledge on trade policy issues, analysis and investments for trade-related infrastructure at the country level.

The institution’s agriculture support for Africa has grown significantly over the past decade. Concessional lending totaled US$1.07 billion in fiscal year 12 (July 11-June 12): a fourfold increase from FY03.

The share of trade-related lending in total Bank lending has also grown from an average of two percent in FY03 to five percent in FY12. New trade-related commitments in FY13 are expected to increase to US$3 billion, 70 percent of which will go to Africa.

Since 2008, World Bank Group lending for agriculture and related sectors in sub-Saharan Africa total approximately US$5.4 billion.

Turning African Smallholder Farmers into Agric Entrepreneurs

A smallholder farmer demonstrating KickStart's irrigation pump.

Poor African farmers are understandably reluctant to invest a year’s income in agricultural equipment. However, for those who do take the risk, the rewards can be substantial.

KickStart, an NGO founded 20 years ago in Kenya, aims boost the incomes of smallholder farmers, not through handouts, but by selling them tools to improve their output. The company produces small-scale irrigation pumps that can increase farm income by up to 1,000%.

KickStart has a direct presence in five countries on the continent, namely Kenya, Tanzania, Mali, Burkina Faso and Zambia. It also has an office in San Francisco, mostly for fundraising purposes.

The pumps, branded MoneyMaker, are manually operated, either by hand or foot. They can pull water up from 7 metres and the most expensive model is capable of irrigating close to 1 hectare of land.

In Tanzania, farmers can buy the pump bundled with hoses and spare parts at Tsh.99,000 (US$56), for the cheapest model. KickStart says that it chose the name MoneyMaker because that is a poor person’s greatest need – a way to make money. The average net farm income in Tanzania is currently Tsh.120,000 ($67) a year; KickStart says that the average farm income for those that use its technology is Tsh.1 million ($562).

Most smallholder farmers in Tanzania are entirely reliant on rainfall, which has become increasingly erratic due to climate change. Because farmers receive the same rainfall, all crops are harvested at the same time, and hit the market together. This drives down prices as well as farmers’ earnings. In addition, by relying on rainfall, most farmers can only harvest once or twice a year.

With their own irrigation systems, farmers can greatly increase their earnings. “The idea . . . is . . . that farmers can get three or four crop cycles a year. When it is dry season and no one else has crops, they are growing things, taking them to the market, when the prices are high,” Alfred Wise, KickStart’s Tanzania country director, told How we made it in Africa in an interview.

KickStart is trying to position smallholder agriculture as serious business. “For many poor Africans, farming is not an ‘aspirational’ activity. People dream of being a successful business person but see farming as a dirty, backbreaking chore. We are trying to change that. We’ve launched a comprehensive marketing campaign built on the message, ‘Farming is My Business’, to link farming with success,” says the organisation on its website.

To date KickStart has sold 45,000 pumps in Tanzania. However, according to the organisation’s estimates, there are up to 800,000 Tanzanian farmers with access to water who can benefit from the technology.

While KickStart operates as an NGO, the pumps are sold for profit by agricultural dealers. In Tanzania alone, MoneyMaker pumps are available in around 230 outlets. The organisation’s strategy is for everyone in its supply chain to benefit financially. “It can only be sustainable through these [dealers] making their margin,” notes Wise. “And then understanding that the farmers they sell irrigation equipment to, can become better farmers, then have money, then come back and buy a lot more seed and fertiliser and pesticide from them.”

Poor farmers are usually extremely “risk averse”. KickStart is well aware of this. “We know that our tools represent a significant investment for a family,” says the organisation.

Wise explains that most customers buy the pumps on recommendation from other farmers. “Our strongest way of getting new farmer adoption is through existing farmers that have used it and it has proven itself to them. They are usually reluctant. We are asking some of the poorest people in the world for money to invest in technology. So they are rightfully wary. In Tanzania, we have sold . . . about 45,000 pumps. So in a sense it is getting a little bit easier because farmers will talk to their neighbours about how they are making money, how they have moved from a mud house to a block house. How their kids are going to school. So it is getting a little bit easier.”

Source:How We Made It in Africa

New Investment Models for Agric in Africa

Agricultural projects take more time to mature and investors are developing new models to encourage businesses to appreciate a longer bottom line.

 

Investing in agriculture takes patience – not something a lot of investors, eager for quick returns, have in ready abundance. However, a new investment model is gaining traction, using professional fund managers to invest donor funds as 'patient capital' in small and medium-sized enterprises (SMEs).

UK-based social venture capital firm AgDevCo has become one of the model's pioneers after investors chose it to manage a catalytic fund for the Beira Agricultural Growth Corridor in Mozambique.

AgDevCo has $28m under management; $23m of that consists of funds for investment in the Mozambique catalytic fund, from donors including the UK, Dutch and Norwegian governments. So far, it has made nine investments in SMEs plus three larger investments with its own capital. Unlike some venture capital investors, AgDevCo invests in both primary agricultural production and agribusinesses.

Chris Isaac, business development director of AgDevCo, says the lack of bankable projects is the main constraint facing private equity funds and commercial banks looking to invest in African agriculture. "Our role is to invest to create a pipeline of bankable agriculture businesses which can attract third-party investment," says Isaac.

AgDevCo deems an investment successful if it can exit by replacing its investment with private capital. Any profits from the Beira catalytic fund will be reinvested back into the country. For other investments, profits will be reinvested back into AgDevCo projects.

The average SME investment is $200,000-$500,000 and the management approach – which it sees as project incubation – is very hands on. Sometimes strategic partners are brought in from the outset, such as with banana company FrutiManica when AgDevCo's $150,000 was matched by a private investor.

Another investee company – extension and marketing company Empresa de Comercialização Agricola – will soon sell grain to the World Food Programme and is about to sign a contract with a large brewer.

AgDevCo is also investing in the livestock sector, as demand grows. Founded in 2009 by executive chairman and principal sponsor Keith Palmer, a former vice president at investment bank Rothschild, AgDevCo was modelled on InfraCo, an infrastructure fund also run by Palmer.

But there is a difference in the size and timeframe of the projects: whereas a typical InfraCo project could go through the project development cycle in two to four years, it could take six to seven years for an agriculture project.

No shortcuts

"Where one has seen investment fail in the agriculture sector in Mozambique, in the biofuels sector for example, is because that process of developing the project was not done properly and there were short cuts taken,"says Isaac.

AgDevCo has made "significant process" in Mozambique, says Patrick Guyver, managing director of Prorustica, which advised on the blueprint for agricultural corridors in Tanzania and Mozambique. He says the jury is still out on the catalytic fund model, which is not a "silver bullet" approach but shows potential as a means of supporting the development of smallholder farmers.

Outside of Mozambique, the company has investments in five large irrigation projects in Tanzania and Ghana, and is working on more in Zambia.

In Ghana, it is investing in three projects involving irrigation and food crops, each requiring $30m-$40m. AgDevCo expects to commit the first $2m-$3m, according to Isaac, and hopes the World Bank will step in as a source of patient capital. It is also waiting for the launch of a tender process to run a catalytic fund that will invest in the Southern Agricultural Growth Corridor of Tanzania.

Source: The Africa Report

Developing innovation systems for African agriculture

This policy brief, published by the Comprehensive Africa Agriculture Development Programme (CAADP) at the Future Agricultures Consortium, examines how an African 'green revolution' could be underpinned by the development of innovation systems rather than technology transfer.

While science and technology (S&T) is widely seen as key to advancing the continent's agricultural productivity, policymakers and institutions have largely focused specifically on delivering technology to farmers, rather than wider S&T initiatives. But inclusive agricultural development has been difficult to achieve through market-led approaches. 

This brief draws from research to look at alternative innovation systems, how such systems can benefit the poor, and what changes are needed to realise sustainable agricultural development.

It highlights an alternative approach — Agricultural Innovation Systems (AIS) — which focuses on strengthening the capacity of smallholder farmers to innovate, and recognises the need for a continuous process of innovation. 

'Enabling Rural Innovation', an initiative that promotes agricultural market access for poor and marginalised groups, particularly women, is one example of how a participatory approach has been used to create an entrepreneurial culture in poor economies and improve farmers' decision-making capacity. The initiative has revealed barriers to market access for women and the poor, and the need for stronger input from research and policy.

A different approach ('Zooming-in,  Zooming-out'), which focuses on communicating fresh ideas and educational tools about agricultural innovation, rather than supplying ready-made technology, shows that experiential learning can work, says the brief,  but requires more support from research centres. 

The example of seed systems also shows that efforts to develop African agriculture rely on technology over innovation systems. Formal seed sources, such as gene banks and commercial companies, marginalise informal sources, like farmers saving and exchanging their own seed in local markets, for example. These informal sources are an opportunity to link formal system technology with local innovation systems. 

The brief concludes that alternatives to market-led technology transfer can be developed, creating opportunities for small farmers — including women — to participate in innovation, research and farmer organisations. But to be successful, alternative innovation pathways require policy changes to promote better collaboration between stakeholders and a strengthened role for the public sector. 

This policy brief was written by Kate Wellard Dyer for the Futures Agricultures Consortium.

FAO launches project to boost food security in Egypt

CAIRO -  The UN Food and Agriculture Organization (FAO) is leading a US$3 million project to boost food and nutrition security for women and youth in Egypt, through increased food production, nutrition education, and governmental capacity building.

Women harvesting onions in Ghana. © Afrikafarms

The four-year project, announced last month (18 June), is funded by the Italian government and will be implemented in collaboration with Egypt's Ministry of Agriculture.

Moujahed Achouri, the Egyptian FAO representative, told SciDev.Net: "The programme is part of the FAO's [regional] contribution to reducing and mitigating [...] concomitant financial and political shocks, which are heavily affecting food and nutrition security at household level". 

The project aims to improve the nutritional status of households, particularly of women and youth, in Egypt's poorest villages, by creating secure access to diversified foods from both animal and vegetable sources, and ensuring target groups have the knowledge and skills necessary to follow nutritionally adequate diets. 

The FAO in Egypt told SciDev.Net that before the revolution of 2011, "women and youth faced constraints in accessing the labour market — it is expected that this situation will worsen with the prevailing economic slow-down". 

According to the UN Development Programme's Human Development Report 2010, the percentage of unemployed women and youth was significantly higher than the national average, (24–24.5 per cent versus ten per cent). Egyptian health surveys show that malnutrition is the root cause of more than one third of illnesses affecting children under five. 

A new fund will promote training, not only on environmentally-friendly and bio-secure ways of producing food and rearing animals, but also on the skills and knowledge necessary to running small enterprises, says the FAO in Egypt. 

Training will be delivered through women's groups and will engage community members in in-depth analyses of their villages' nutritional statuses and in the preparation and implementation of nutrition education and communication plans. 

Akila Saleh, a coordinator at the Egyptian Ministry of Agriculture, told SciDev.Net that "There is a steering committee for the project made ​​up of [officials from] the ministries of education, health and agriculture".

An institutional mechanism will be established to coordinate implementation, monitor impact and ensure that good practices are integrated into national strategies.

"Target villages will be selected on the basis of their poverty ranking [...]," according to the FAO in Egypt. "Preference will be given to those located in governorates with high rates of poverty, low food security, and malnutrition".

Source: Science and Development Network

The East and Southern Africa Agribusiness Network

The East and Southern Africa Agribusiness Network (ESAANet) is a network that aims at facilitating increased regional Exchange of information, best practices and trade cooperation among Agribusiness-oriented organizations providing services to small holder farmers for increased productivity and market access.

 

Formed in 2007, as a follow-up to a 4-year Business Experience Exchange Program (BEEP), ESAANet is funded by the Royal Norwegian Society for Development (Norges Vel). The main aim of BEEP was to enhance the business performance of small holder farmers through exchange of experiences supported by formative process research. ESAANet’s objective is to foster increased regional integration and collaboration among Agribusiness-oriented Organizations in East and Southern Africa, for increased regional information sharing as well as trade in agricultural and forest products.

To view ESAANet current Partners please click here

Through ESAANet, partners are able to:

Share experiences on best practices and business concepts at national and regional level;
Replicate successful business models and avoid bad practices;
Increase access to regional market information; and
Create opportunities for regional trade cooperation for agribusinesses and
Rural Producer Organizations;

 Source: ESAANet

Benefits of Agribusiness in Africa

June 2011: The UN Industrial Development Organization (UNIDO) has published the sixth edition of its magazine, “Making It: Industry for Development.” The newest edition is sub-titled “Agribusiness: From farm to fork.”

The magazine features an article on “Agribusiness: Africa’s way out of poverty,” which argues that a shift to an agribusiness development growth trajectory is crucial for poverty reduction. Along the same line, the article “Agribusiness in Africa” outlines some of the issues and challenges facing agribusiness development, such as low productivity in the agriculture sector, lack of affordable finance and access to credit, and underinvestment in infrastructure.

This issue of the magazine also features an article that highlights the benefits of energy efficiency, including increased productivity and economic output, reduced demand, reduced energy bills and enhanced energy security. Other articles featured in the magazine address: the development challenges faced by small island developing States (SIDS); Cape Verde's graduation from Least Developed Country (LDC) status; carbon capture and storage (CCS); nuclear energy; the poverty footprint; and the importance to business strategy of corporate social responsibility, philanthropy and environmental compliance.

How a banana flour company is bringing relief to small-scale farmers

A Kenyan banana farmer transporting his produce.

Banana farmers in Kenya often find themselves incurring huge losses due to surplus fruit that basically ends up rotting away. Smallholder farmers in remote areas face challenges in reaching markets for their produce because of bad roads and a lack of information.

In a bid to reduce post-harvest losses, Eric Muthomi – a 26 year old entrepreneur – started Stawi Foods and Fruits, an award winning enterprise involved in the production of banana flour. The company works with a team of banana farmers in the agricultural town of Meru in central Kenya. The idea to process raw bananas into flour was conceived in 2010 following Muthomi’s consultations with Kenya’s ministry of agriculture.

“I was looking for ways of providing a market for small-scale farmers and increasing the shelf life of bananas, which would rot in farms, especially those belonging to farmers who could not reach the collection centres set up along the tarmac road on market days,” says Muthomi.

The company’s main product is banana flour made from processed green bananas. The banana flour is gluten free, nutritious and can be used to make baby food, porridge, mashed food, baked foods and soups.

Bananas are sourced from small-scale farmers in Meru and processed using both manual labour and processing equipment to make the flour. Muthomi works with a team of four full-time employees and 15 casual workers.

“We are working with a group of 100 farmers. As we scale we will need additional farmers to meet the demand for more raw materials. Farmers benefit by earning more income. They also have a ready market for their produce and do not have to incur additional costs of transportation to Nairobi,” says Muthomi.

Traditionally banana farmers in Meru had to drop off their produce at designated collection points for transport to Nairobi. Since farmers do not have direct access to consumers they sell to middlemen at throw-away prices. The perishable nature of bananas and logistical challenges give middlemen the bargaining power over farmers.

Stawi banana flour is distributed in major supermarkets like Nakumatt, Uchumi and Chandarana across the country.

Some of the challenges Muthomi has faced have been accessing start-up capital, lengthy licensing procedures, and complying with the many regulations that businesses dealing with food have to adhere to. The company also has to invest heavily in marketing and raise awareness about the benefits of banana flour given that most consumers are used to maize and wheat flour.

“Banana flour can play an important role in providing nutrition to consumers and solving the malnutrition problem in marginalised areas. Bananas are rich in nutrients, which are absent in conventional flours such as maize and wheat flour. This means that banana flour is a good source of nutrition to consumers ranging from infants to adults,” explains Muthomi.

Stawi Foods and Fruits has received three national awards for innovation, value addition, employment creation and environmental conservation.

Muthomi’s future plan is to begin exporting Stawi banana flour to the greater East African region.

“The food processing industry is critical in providing a market for farm produce, creating employment and curbing rural-urban migration. Value addition promotes the export of finished goods rather than raw materials and earns the country more foreign exchange,” says Muthomi.

Source: How We Made It in Africa

Marketing dilemma of the Ghanaian Farmer

By:  Felix Appiah-Ankam / CIGMAG – Assin, Central region
        feliangh@gmail.com / assincigmag@yahoo.com

"A soldier walks on his stomach", so the popular adage goes. Similarly, "a hungry man is an angry man". The computation of these two noble sayings goes to conclude that farming is the strength of almost every nation on the earth regardless of their status quo, of either being a developed, or, a developing nation. It is however harrowing to notice the lack of interest in farming by the Ghanaian youth with the covert disrespect for farmers by governments who have over the years paid only lip service to these farmers without helping them make any meaningful gains with the exception of a few who happen to produce cocoa especially.

The backbone of the African economy in general, and that of Ghana in particular, is agriculture. Agriculture accounts for about 30 per cent of the nation's GDP though a large chunk of it is from cocoa to the neglect of other crops especially the abundant citrus in the country which can equally fetch the nations millions of dollars if proper attention is accorded it.

The Ghanaian farmer will appreciate a subsidy on their farming equipment and the facilitation to the market for their produce than assisting in non-beneficial public holiday (National Farmers’ Day). In the absence of capital intensive or mechanised farming in Ghana, our old stumped subsistence farmers are able to produce almost enough to feed the nation. However, their aspiration to better their lives through farming always hits the rocks. In a year of abundant produce resulting from favourable weather conditions, the Ghanaian food stuff farmer runs a heavy financial loss let alone breaking even or making any profit. This is the sad predicament of farmers. We cannot find buyers who will even be ready to offer a purchasing price far below the production cost. The produce goes rotten without any form of compensation from any quarters to the farmers.

For citrus farmers in the Assin area of the Central Region overabundance is not a gift, but a burden. The Burkinabes, who were the only vibrant external market for their citrus have, for strange reasons, been stopped from coming to Ghana to purchase the oranges. Since then, the Ghanaian market is so saturated with oranges that nobody buys them any longer until lately (which is good news). The Ivorians and Malians have started coming to buy some of the oranges while local fruit juice manufacturing companies (who are struggling to operate at full capacity due to high cost of production) also purchase some. The sad news is farmers still gets about 30% of their citrus going waste because these marketing avenues are not enough to absorb all the oranges harvested every season. For nearly the GHC 9,000 annual expenditure on ones' farm paying the workers’ wages and buying insecticides and herbicides if in the end there is not a pesewa in return, the person is sure to go ballistic. This is why citrus farmers in particular and Ghanaian farmers in general are calling for pragmatic approach by various stakeholders in solving their myriad of problems, marketing being particular.

The citrus farmers have of recent years become victims of the policies of government which were meant for their good. A classic example is the Ghana School Feeding Programme (GSFP). The school feeding programme is an initiative of the Comprehensive African Agricultural Development Programme (CAADP) Pillar III and part of government’s efforts to attain the Millennium Development Goals (MDGs) One and Two, which seek to eliminate extreme hunger, poverty and achieve universal basic education. The programme commenced in 2006 with support from the Dutch Government to reduce poverty in deprived communities for Ghana. Though the main idea was to provide market for local farmers in the communities where the programme operates, this has not been the case for most commodity groups since most caterers buy their supplies from other parts of the country to prepare meals for the school children.
The issue is especially worrying in the Assin area where the caterers could have bought citrus from the farmers. These caterers either do not buy the oranges at all for the school children or rather buy from the market women, who do not necessarily buy from farmers in the Assin area, at a higher cost to the detriment for the local farmers. This defeats the very purpose of the GSFP.
A research conducted by Citrus Growers and Marketing Association of Ghana (CIGMAG – Assin Chapter) with funding from the Business Sector Advocacy Challenge (BUSAC) Fund indicated that most stakeholders in the GSFP in the Assin area approve of the provision of citrus compared to other fruits (such as banana and pineapple) for pupils because of its abundance in the area and its cheaper cost in relation to other fruits stated above. The only bottleneck as the captured by the research was funding. The programme handlers contend the current funding (Gh40p/head, tax inclusive) makes it virtually impossible to add citrus to the meal though I am tempted to disagree with them to some extent.

Let consider the current market price of GH¢5.00 for 100 oranges (which translates to Gh5p/orange). Can someone tell me it is impossible to include citrus in the meal of school children under the programme in the country? Absolutely not! I believe these farmers will be more than willing to cut down the price knowing very well that this is a viable market for their produce which goes to waste every season.

I strongly suggest that government takes a second look at the programme to remove all bottlenecks that militate against providing market for produce of local farmers especially citrus. Such bottlenecks include inadequate funding and lack of monitoring to ensure caterers buy from local farmer in the areas they operate. I believe the fortunes of farmer across the country would change if remedies are found for these bottlenecks.

As a long term approach I suggest whatever problem that culminated in the stopping of the Burkinabes from coming into Ghana to trade in oranges is re-examined. There could be an effective way of dealing with the problem other than a total ban where the farmers are made to suffer such financial losses without any sort of compensation from the government. We need all marketing avenues that would auger well for these farmers. It is sad to note that some farmers have either abandoned their farms or started chopping down their citrus crops to plant palm in their stead.

The citrus farmers need more factories built in the country to guarantee them an assurance that their efforts will not be in vain. The Ghanaian farmers need subsidies. They need compensation. They desire silos and other storage facilities built for the storage of their cereals, citrus and other agricultural produce. We need our scientists to come up with practical solutions to our food insecurity and to push mother Ghana forward.

African Agribusiness: 9 specific Investment opportunities

Many African brewers have started producing beer with sorghum instead of barley. This creates opportunities for sorghum producers.

There has been much talk about the potential for investment in Africa’s agribusiness and food industries. But what are the particular opportunities? In a recent report the United Nations Development Programme (UNDP) revealed nine specific investment options for business people and entrepreneurs.

1. Fruit juice concentrate processing facility in Nigeria

Around 90% of the fruit juice produced in Nigeria is based on concentrates imported from abroad. Nigeria’s fruit juice market is projected to be worth more than US$2 billion per annum. Interested investors could have discussions with established fruit juice producers such as Coca-Cola Nigeria and Chi-Nigeria to investigate their quality specifications, volumes and potential prices.

2. Cassava value chain investment

While cassava is one of Africa’s main staple foods, the opportunities for the crop in ethanol, bio-fuel, processed foods, industrial starch and pharmaceutical applications have not been exploited. There is a huge market for starch in Nigeria and other countries, with strong demand from textile and food processing companies. Currently Nigeria’s local textile industry and food companies import over 90% of their starch requirements.

“One weakness along the cassava value chain is the absence of in-country large-scale cassava processing facilities, which could turn cassava from subsistence use into industrial use,” notes the report.

3. Cultivation of soya bean and other oil seed plants

“Soya bean has become a strategic commodity for sub-Saharan African countries,” says the UNDP. The crop’s importance in the food, animal feed and edible oil industries have grown in recent years. Sub-Saharan Africa however contributes only 0.2% to global soya bean output.

Africa presently has a large demand for soya bean related products – including soya cake and soya oil. BIDCO, a company with a presence in a number of east African countries, could process an additional 30,000 tons of soya beans using its existing processing capacity.

According to the UNDP, the demand for crude palm oil is even higher than that of soya beans.

4. Sorghum production

Sorghum has evolved from a commodity for subsistence farmers into a popular household and industrial crop. East African Breweries, Nigeria Breweries and Ghana Breweries have started using sorghum for beverage production. The report notes there are currently opportunities for the private sector to invest in sorghum production expansion and mechanisation.

East African Breweries is currently seeking farmers to produce sorghum on contract to reduce its reliance on more costly barley. It is expected that by 2015, demand in Nigeria for domestic use and exports to neighbouring countries will reach over 980,000 tons.

5. Intensive production technologies for fresh vegetables

Aubergine and Onion garden, Accra.

© EnterpriseAfrik

The growth of modern supermarkets in Africa coupled with urbanisation and a rising middle class, has led to a high demand for quality vegetables that can be obtained using intensive production technologies.

Earlier this year How we made it in Africa reported that in some places in Africa, fast-food giant Kentucky Fried Chicken (KFC) doesn’t serve lettuce on its burgers. This is not to save on costs or due to a difference in local tastes, but rather because there are no local lettuce producers who can supply the quantities and quality required by KFC.

The use of intensive production technologies has transformed the horticultural industry in Kenya. West Africa holds considerable potential for the introduction and commercialisation of intensive vegetable production systems.

“The investment opportunity does not only reside in production but a strategic and integrated approach to market production equipment, transfer technologies and provide market linkages for producers,” says the report.

6. Production of milk powder in west Africa

West Africa Milk Company (WAMCO) currently imports 90% of its milk powder. Imports of milk powder into west Africa is estimated to be over US$2 billion per year.

Milk yields are low, quality is poor and supply is inconsistent. Processing facilities are required to process fresh milk into powder and provide the intermediate product (powder) imported by the multinationals for tin milk production.

7. Aquaculture

“Nigeria alone imports over US$900 million worth of fish annually. Ghana and Senegal spend over $100,000 annually on fish imports. Almost every country in west Africa is embarking on aquaculture and incentives packages have been designed to attract investment. Investors have immediate domestic and regional markets to supply,” says the report.

CHI Limited has started with a large aquaculture project in the Nigerian city of Ibadan although this project will account for less than 2% of the country’s total demand.

8. Equipment leasing

One of the greatest challenges facing African farmers is a lack of farming equipment.

A solution is a private sector led centralised equipment hiring model – especially for tractors. Although governments have been involved in such initiatives in the past, it has in many cases not proved very successful.

“Such operations led by the private sector are expected to ensure sustainability, efficiency and free government funds for infrastructure development. Private sector agribusiness men in Nigeria are keen on investing into such a model,” says the report.

9. Market centre infrastructure investment

Whereas the larger players have the necessary infrastructure and logistics for their operations, many smaller agribusiness and food companies don’t have access to quality warehouses, cold store facilities and loading machines. This has resulted in fire outbreaks, high post-harvest losses and food safety concerns.

This situation provides an opportunity for the private sector to get involved in the modernisation of local market centres.

Source: How We Made It in Africa

Saudi Investment in African Farmland

Saudi Arabia is investing in agricultural land in Africa as the state’s local crop production diminish.

Saudi Arabia has a major problem with water scarcity and only 1% of its land is suitable for agriculture.

“Saudi investors have reportedly planned or concluded investments covering 800,000 hectares of land in Africa (accounting for almost 70% of all large deals struck by Saudi firms globally),” says Standard Bank in a recent report.

But why Africa, and what are the opportunities and problems Saudi investment in Africa might catalyse?

The Saudi agriculture problem

Saudi Arabia is approaching a food production crisis that is a major problem for its growing population that is consuming more food. “Local poultry production in 2012 is likely to be almost 800,000 tonnes lower than consumption, while wheat production will be deficient by around 1,800,000 tonnes and maize by 1,880,000 tonnes,” notes Standard Bank’s report. Saudi Arabia’s water scarcity is also problematic, with water consumption having more than doubled since 2006.

This has led to the Saudi government deciding to phase out local wheat production. By 2016 it will no longer purchase locally-grown wheat. The country is already estimated to import around 2.5 million tonnes of wheat between 2012/2013, and this is expected to increase to 3.3 million tonnes annually in the coming years.

However, relying on food imports is not ideal, with the country becoming vulnerable to unstable global supply and costs.

The solution: invest in foreign agricultural production as a “means to ensure a long-term, reliable supply of stable commodities,” says the report. It is because of this that the “Saudi government established the King Abdullah Initiative for Saudi Agriculture Investment Abroad under which large Saudi agribusiness firms are provided with credit, as well as strategic and logistical support to invest abroad”.

The Africa solution

With 60% of the world’s uncultivated arable land being in Africa, it’s no wonder that Saudi Arabia has an eye on the continent, with almost 70% of all concluded and planned investments in offshore agriculture being in Africa.

“Factors considered in identifying suitable host countries for agricultural investments include the availability of resources and infrastructure, political and socio-economic stability, and favourable relations with the Saudi government,” notes the report. “Under this initiative, bilateral government-to-government deals can be struck which allow more fluid access for Saudi firms in target markets.”

An example of a Saudi investment in agricultural land in Africa is the Ethiopian government leasing 10,000 hectares to the Saudi Star Agricultural Development in 2008. The company has plans to acquire another 290,000 hectares of land.

“A guiding principle of the initiative is that the investor must have the right to export at least 50% of the farmed produce to Saudi Arabia,” says the report. “The primary products targeted are wheat, barley and maize.”

Weighing up the pros and cons for Africa

Africa needs investment for the improvement of infrastructure and to boost employment opportunities and skills development. Agricultural investment by Saudi firms could help with all these things and more.

However, Standard Bank points out that attention needs to be given to the possible negative ramifications. “Under-selling of agricultural assets (both land and, perhaps more critically, water) remains a profound threat. Meanwhile, as large tracts of land are sold or leased off to foreign investors, the social strains brought about by the relocation of local inhabitants has the potential to be deeply destabilising.”

An ideal investment in Africa’s agricultural land would include directing investment into agricultural infrastructure (such as storage and transport); providing employment and training for local communities; and ensuring that a generous portion of the crops go to local markets. The report also argues that “transparency in the manner in which land deals are struck, and adequate consultation with affected local communities, must be compulsory”.

Source: How We Made in Africa

Attaining Green Revolution In Ghana – The Role of Agra

Human beings depend greatly on grains for subsistence. Grains are man’s source of food and grains are agricultural products. Man does not live on grains alone but on other foods like vegetables, meats and fish to make his meals more palatable. Like grains, these other foods come from the soil, which have to be grown with great care.

Agriculture is the major source of food and the major component of household expenditure. Aside being man’s main food, it also serves as his source of wealth. 

The cocoa, rubber tree and the oil-palm bring millions of cedis to man and the nation as a whole. The agriculture sector also provides the greater number of employments to many people, especially those in the rural settings of the country.

Ghana’s agriculture sector is the backbone of the country’s economy, and smallholder farmers represent about 80 percent of the total agricultural production in the country. However, despite the important role and economic growth the sector plays in man’s livelihood and in the country’s economic development, a lot of these smallholder farmers seem to be living below the poverty line.

In order to complement the Ghana Government’s efforts to help millions of these small-scale farmers and their families lift themselves out of poverty and hunger, the Alliance for a Green Revolution in Africa (AGRA), a non- governmental organization, is working to increase the productivity, profitability and sustainability of these small farms.

AGRA’s programs and partnerships target major obstacles faced by Ghana’s smallholder farmers through improving farmers’ access to good seed, fertilizer, and sustainable farming practices; to credit; to crop storage; to markets; and to strong farmer-based organizations.
  AGRA is five years in its supportive role to helping ensure food security in Ghana and Africa as a whole. As part of activities marking the event, AGRA is organising a national consultative forum titled “Ghana Agricultural Investment Forum” on Thursday, 24th May, 2012 at Alisa Hotel.

With the aim of working to increase productivity, profitability and sustainability of small farms across the agricultural value chain, AGRA is organizing this forum to provide the platform for key government officials, relevant donor partners, actors along the value chain, the private sector and the media to deliberate on how to effectively operationalize African Green Revolution in Ghana and also to discuss Ghana’s readiness to implement a full-scale agricultural green revolution.

AGRA believes that Ghana has the potential to transform its smallholder farming into a commercially viable and sustainable enterprise and is therefore strengthening smallholder agriculture in the country’s potential “breadbaskets.”

In the northern region, for instance, farmers grow 66 percent of the country’s rice and AGRA is supporting these smallholder farmers with the necessary resources to help transform Ghana into an exporter of rice, and free up US$500 million now spent on rice imports. AGRA is also helping private seed companies which multiply and disseminate soybean, sorghum, maize, rice and groundnut to resource-poor farmers in northern Ghana and other areas.

Also, among its numerous contributions to the sector, is the support to the over 2,200 agro-dealers and 150 seed producers across the regions in the country to increase the availability of agro-inputs such as improved seeds and fertilizers for about 850,000 smallholder farmers.

AGRA also established and supports the West Africa Centre for Crop Improvement (WACCI) at the University of Ghana, Legon, a PhD program to offer training to young scientists. The NGO is also supporting an MSc program in seed science at the Kwame Nkrumah University of Science and Technology.

The Ghana Agricultural Investment Forum, AGRA believe will offer the requisite platform for all stakeholders to dialogue on Ghana’s agricultural strategies and to discuss Ghana’s readiness to achieve food sufficiency. The outcome of this forum will complement the efforts of government and all the other actors along the value chain to help improve on the lives of the smallholder farmer and the country’s economic development as a whole.

From: Mrs. Praise Nutakor

World Bank approves $120m for agric production in Ghana, Senegal

The World Bank has approved One hundred and twenty million dollars for agricultural production in Ghana and Senegal.

The funds will promote the use of agric technologies to cope with the increasing demand for food in West Africa.

In a statement issued in Accra, World Baank Director for Sustainable Development, Jamal Saghir, said the programme will increase economic growth, improve food security and reduce poverty.

The statement said while West Africa’s population is set to grow from 300 million in 2011 to about 500 million in 2030, the region was facing the challenge of meeting its food demands.

It said the recent food, fuel and financial crisis had demonstrated the need for West Africa to utilize the region’s agricultural potential.

Restoring Angolan agriculture to its former glory

Many might find it hard to believe that Angola’s capital Luanda used to be the party capital of the central African region up until 1975, when the country gained independence from Portugal.

Working the fields at a project in Angola's Huila Province.

“Luanda was a place of fun,” says Pierre Sauveur, commercial advisor at TAAG Angolan Airlines, the country’s national carrier. “While Portugal was an underdeveloped European country, the fun was in Angola .  .  . Angola was the place where the Portuguese would really enjoy life . . . Movies would come out first in Luanda before Lisbon. New cars would be presented first in Angola before Portugal. They had race tracks; they had a very much developed society.”

At the time Angola had a thriving agricultural sector. The country was one of the world’s foremost coffee exporters. It also produced crops such as palm oil, cocoa and cotton, among various others. “Before 1975, Angola was an extremely productive place, both in terms of animals and crops,” notes Roger Ballard-Tremeer, chief executive of the South Africa-Angola Chamber of Commerce.

The good times, however, came to an end when the Portuguese left. For the following three decades the country was involved in a brutal civil war. The conflict destroyed much of the infrastructure and had a negative impact on business and the economy.

Renewed focus on agriculture

The return of peace in 2002 led to significant economic growth, albeit from a very low base. According to The Economist, Angola experienced an average annual GDP growth of 11.1% between 2001 and 2010, largely sustained by the oil industry. With very little manufacturing in the country, almost all products are imported and sold at prices up to ten times more as what they would cost elsewhere in the world.

The government has, however, committed itself to diversify the economy, with agriculture being one of the focus areas. “As the circumstances improved from 2002 onwards, so they were able to build into their national plan several agricultural projects. For example, [a number of] big irrigation schemes that had existed in one form or another were rehabilitated and they are all now being developed as productive entities,” says Ballard-Tremeer.

One of the projects initiated by the government is the Capanda Agro-Industrial Zone, situated in Malanje Province about 300 kilometres from Luanda. The project is next to the Capanda hydropower dam on the River Kwanza. The zone has a total area of over 400,000 hectares, of which 256,000 ha has been earmarked for rainfed agriculture and 13,500 ha for irrigation. Crops and livestock indentified for the initiative include soya beans, maize, cassava, sugar cane, cotton and dairy. There is also a very strong emphasis on processing activities.

Gesterra, the Angolan state owned agricultural enterprise, currently operates on the Pungo Andongo farm within the Capanda zone. The total area of the farm is 33,000 ha, although only 5,000 ha is currently under cultivation. Gesterra has planted maize, soya beans, rice and beans. Maize and feed mills have also been established.

The entire Capanda zone is managed by a special entity called Sodepac, whose responsibility it is to enter into negotiations with the private sector.

The project is being run on a public-private partnership (PPP) model. The Angolan government has already put in place infrastructure such as a railway line between Luanda and Malanje as well as road access to the zone. Electricity is available from the hydropower station. A nearby airport is also already in use. The exact details on how the PPP structure will work regarding shareholding is, however, still unclear.

The Development Bank of Southern Africa (DBSA) is also actively looking at the project. “We have paid a visit to Capanda to assess what is already on the ground . . . the policies that government has put in place to enable investment in agriculture, and also to identify the key players . . . What we will be doing now is working together with businesses and South African farmers to help put together vertically integrated agribusiness projects. We are going to be spending a bit of money to bring in a couple of experts that can help us do the necessary assessment on these opportunities, do the scoping of the projects as well as the feasibility studies and business plans,” says John Rocha, a manager of the Bank’s Spatial Development Initiative Programme.

Opportunities for the private sector

Rocha says Angola holds considerable potential for agribusiness. “The Angolan agricultural sector was completely decimated during the civil war. Before independence Angola was self sufficient in food production. At the moment everything, and I mean everything, is imported . . . So clearly there is an opportunity there.”

Ballard-Tremeer agrees, “Angola has many times the number of high potential agricultural land that South Africa, for example, has. And in Angola you don’t have to wait for the rain to come. So that is a good start.”

Inadequate infrastructure as well as nutrient-depleted soil are, however, some of the challenges farmers would have to deal with.

So how can companies get involved in projects such as Capanda? “What one needs to do, if possible, is to arrange to visit the facility and to meet people that may be looking for expertise, technology and investments. One can either sell expertise and technology packages into that project, or actually go and participate with an Angolan partner directly,” explains Ballard-Tremeer.

Rocha says that there is also scope for companies to get involved in the supply of services and inputs such as seed. “If [Angola is] going to succeed in attracting the relevant private sector . . . you need to ensure that the services are there. As part of the assessment that we are doing, we are beginning to look across the value chain and what the requirements are going to be. Our job is then also to introduce companies from South Africa or elsewhere who will provide those products and services, to bring them on board so that we can close the missing links in the value chain.”

Source: How We Made It in Africa