Agribusiness presents a variety of business models for the farmer
By EDWIN MOINDI
As a young boy growing up in Nanyuki, I remember the annual trek to the village in the highlands of Kisii, and how excited I would be when we passed through the farms in Naivasha owned by wealthy companies with John Deere tractors on display and large trucks carrying tons of produce to silos. This was in stark contrast to the cluttered farms that dotted the rich Kisii highlands; with farmers who settled on fertile farms clouded in poverty and barely able to feed their large families; with their produce fetching meagre returns at the market.
The dire contrast clearly reveals how lack of capacity to maximally utilise resources serves as a hindrance to the smallholder farmer. A keen look at the multinationals that provide agrichemicals desperately needed by smallholder farmers; the genetically modified plants and animals; farm machinery from John Deere, JCB and Kubota, or seed supply by Monsato; the thousands of companies that market, distribute and retail produce in its various forms including Farmers Choice, Del Monte and Brookside Dairies, exposes the disadvantage suffered by farmers, especially subsistence farmers in comparison to all those along the value addition chain.
Downside to Agribusiness
However, largescale farming, especially agribusiness has its down side more so to the environment. In developed countries where Agriculture is big business, food is massively overproduced and much of it ends in landfills. The food wasted in developed countries is equal to the net amount produced in sub-Sahara Africa. Agribusiness in the developed world is one where large corporations using farm machinery, fertilisers and genetically modified plants and animals, have taken a toll on waterways, energy, the soil and the ecosystem. The narrative is a reemphasis on small-scale, organic farms. I quote,” where we consume locally raised crops and animals produced using manpower, natural soil nutrients and crops of diverse genetic backgrounds, rotated over the years. The latter are produced for the nearby communities, minimising transportation costs, pesticide pollution and greenhouse gas production.”
In AgriBusiness versus AgriCulture, Jack and Milton, explain that Agribusiness tends to destroy ecosystems for several reasons. First, land destined for agribusiness purposes is completely modified; native plants are killed and invasive species are introduced. Secondly, water is added or withdrawn which can change whole ecosystems, and if transported distances, or derived from underground sources, that water is often more saline than are local sources. Thirdly, instead of natural sources of nutrition, chemically generated fertilisers from far away are used in large quantities. These flow into rivers, lakes and the sea, causing algal and bacterial blooms (eutrophication) accompanied by oxygen depletion and fish kills.
Fourthly, large-scale agribusiness causes tremendous pollution not only due to the use of fertilizers but also of pesticides of all types (herbicides, antibiotics, fungicides, etc.). Meat production is particularly polluting, creating greenhouse gas pollution as well as massive amounts of excrement, as is always the case when animals are raised under crowded conditions. Finally, agribusiness, in contrast to agriculture, depends on a large source of cheap labour which widens the rift between the rich and the poor.
Why then should agribusiness be recommended for Africa?
Africa is not reaping the full benefits of Agriculture. With millions starving or living in abject poverty, Africa holds the largest uncultivated arable land in the world. The majority of farmers are uneducated, poor and unskilled in producing high yields that feed both family and society. It is difficult for these farmers to access technologies, information, skills and finance to scale and make profitable their agricultural activity.
Agribusiness promises increased yields and innovative business models to sell produce. A focus on value chains, rather than supply chains, to add value to produce becomes critical; an example is when an avocado farmer packages high quality avocado products to net exponentially more income.
Farmers can leverage on shared economy
The power of technology allows for farmers to function in a sharing economy. Where financing is crowd sourced, costly machinery is shared, and previously unprofitable small farms are combined in collaborative effort to function profitably.
Take FarmCrowdy, a digital agriculture platform that gets middle class Nigerians to fund a network of existing small holder farms. FarmCrowdy insures, funds, equips and provides technical support to these farms through a harvest cycle, when a crop is sold, and profits guaranteed. Their approach is to guarantee a buyer of the produce even before the crop is planted. By managing critical steps in the harvest cycle they are able to reduce the risk involved in agribusiness and guarantee a handsome return for the investor and the farmer.
Trotro Tractor Service is a sharing service where you can order for a tractor by simply dialling a mobile phone code. These and others ensure through collaboration and sharing challenges like finding markets for produce, knowledge acquisition, sourcing funds and transportation become low impediments for entry for millions of young vibrant African youth, who are concentrated in the cities of Africa, but would like to dabble in agribusiness.
In conclusion governments still have a part to play. Infrastructure bottlenecks need to be overcome including transport capacity, access to energy, rural roads development, irrigation, warehouse and storage facilities.
Edwin Moindi is the author of “Self & Identity: The Nine Conversations the Question, Empower and Transform for the 21st Century”. Email: edwin.moindi@gmail.com
