INCLUDE Platform
«Back to questions

Question of the Week 2

To what extent should agricultural transformation policies in Africa focus on entrepreneurship?

Reactions (1)

Julius Gatune
2016-07-7 11:21

Agricultural value chains in Africa remain largely fragmented and underdeveloped. There are numerous challenges across the value chains as shown in fig 1. As a result agriculture has not been able to respond to new demand for food. New demand has been taken up by imports which are estimated at about $40 billion and expected to rise to $110 Billion by 2025 if trends continue.

Overcoming this challenge presents important opportunities for guaranteeing food security but more importantly for creating much needed jobs. However, this will require...

  • In Kenya, a business model of franchising and branding small independent AgroVet shops to increase trust has helped lower incidence of fake inputs ( a serious challenge that make risk averse farmers avoid high technology inputs), lower cost of inputs (due to economies of scale) and ultimately increase uptake of high quality inputs.

  • In Uganda, a symbiotic contracting business model where that processor buys millet grains and the same time also sells livestock feeds (made from by-products of processing grains) to the contracted farmers. The two way relationship creates trust and has seen side-selling by farmers stop. Further farmers have diversified incomes and can thus deal with emergencies and are now less risk averse and thus can invest in high quality inputs.

  • In Ghana, a sub-contracting model between artisanal processors and urban based medium scale (SME) processors has seen two key challenges solved. Artisanal processors who are also farmers usually have solved consistent supply problems but are unable to produce to standards mandated by regulatory authorities due to low knowledge and lack of equipment. SME processors struggle to get regular supply of inputs but are good at production of quality foods and also in marketing and branding. By having artisanal processors deliver a bulk product (under supervision and support of the SME) and the SME handle packaging and marketing a symbiotic relation has emerged where each part focuses on a their key strength. Under this arranged a women processors group in the North Ghana has seen their product being sold in African stores in Europe which serve African diaspora.

  • In Kenya, a trader has been able to grow with her suppliers through constantly solving her farmers problems and developing new line of businesses in the process. For instance when she realizes that trucks went empty to pick eggs she saw an opportunity to supply farmers with feed and come back with eggs. When she saw demand for feed was significant she opened a feed factory to supply the farmers. Today the trader is one of the biggest feed manufacturers and the farmers working with her have grown with her.

  • In Ghana we are seeing innovative street selling where well packaged breakfast foods sold in attractive street stands are sold to middle class consumers, a class that is usually not associated with consuming street food. This is creating new markets for millet products which have been losing market share as they have an image of food for poor and rural people.

  • Entrepreneurs thus play a central role in upgrading value chains. Incubating and developing entrepreneurs across agriculture value chain should be a major focus of agricultural policy. The key to developing entrepreneurs able to catalyze and scale innovations will be upgrading of skills across the whole value chain. Skills needed to upgrade value chain go beyond skills in agricultural science. Skills in engineering, logistics, quality control, operations management, marketing are key and must be developed as they are crucial to supporting innovative business models. Skills will be developed through formal schooling, apprenticeships/mentorships and also inclusive business models that allow ideas to flow from big business to small business. This requires rethinking of training models. Key emphasis in schools should be problem solving skills and multi-disciplinary approach in design of curriculum.

    The large private sector players can do much to help scale innovations by building inclusive business models that includes start-ups in their supply and marketing chains and thus help further upgrade skills.

    Government policy should also have a sharp focus on creating a vibrant agricultural innovation system that link policy makers to researchers and to entrepreneurs. Research is critical to generating new technologies while entrepreneurs are key to developing business models that can see the uptake of new technology. Policy makers are needed to facilitate investment needed especially in public research institutions and also provided needed incentive to private sector to make investment needed to commercialize research.

    Dr. Julius Gatune, Senior Research and Policy Advisor, ACET, Ghana read more »

    Reply to this reaction

    Share your answer

    Your email address will not be published. Required fields are marked *


    Submit your own question

    • This field is for validation purposes and should be left unchanged.