Saturday, 1 October 2011

Agribusiness for sustainable rural development in Africa

Agribusiness refers to the business of farming and related activities which include agricultural production, farming inputs trade, agricultural finance services, processing of agricultural produce, and supply of agricultural goods.  The objective of agribusiness like any other business is to maximize profits. In most African countries farming business for a long time has been a domain of large scale producers and processors, as the majority of small scale farmers practiced subsistence rain fed agriculture. However in recent years, small scale farming in Africa has embraced commercial production of high value crops, due to increasing economic challenges. Various stakeholders and agriculture development agents including some African governments’ are currently  promoting small scale irrigation, rural processing of agriculture produce, record keeping ,farming business planning, value addition and entrepreneurship as strategies for improving economic opportunities and livelihoods of rural farming communities. 

Linkage of agricultural production in Africa to value addition through agro-processing is advantageous in stabilizing commodity markets, farm business returns, and planning production for a regular supply of adequate and good quality farm produce. In view of agriculture business considerations such as availability of commodity market, agricultural technology, agricultural skills and government agricultural policy, the people in farming businesses in Africa need to select the enterprises that are suitable for their regions. Agricultural marketing is yet another vital activity in farming business which needs strengthening and it refers to everything that is done for increased profit and consumer satisfaction. People involved in farming business need capacity building in marketing activities such as market planning, sales promotion, websites marketing, branding, advertising and keeping abreast with new effective technologies for profit optimization and sustainability of the farming business.

Farming businesses in Africa are not without challenges and they lack access to credits.  The existing credit institutions are harsh towards agriculture particularly small-holders in due to their inflexible requirements and high interest rates. Therefore more help from development agencies is needed to avail alternative ways of accessing credit. Agriculture in Africa is perceived as an occupation for the old, uneducated poor people. Focusing on the youth is compulsory for sustainable agriculture development in any country. Farming business development needs the strength, enthusiasm and innovation of the young people. Competitive profitable agriculture will ensure creation of employment opportunities in farming business which will help the young people in rural Africa to escape poverty and social vices. Agro-processing companies in the rural areas of Africa face numerous problems due to poor state of infrastructure such as roads, electricity, water, market information systems, and wholesale market facilities. Securing raw materials and selling the products is by no means easy. Furthermore agro-processing lacks recognition by policy makers and agriculture industry leaders as a competitive value adding sector with positive development impact.