From newspaper editors to TV anchors to bloggers, the default symbol of African agriculture is an African woman holding a hand hoe. This imagery highlights the drudgery African women face in farming. But it also conflates family farming with the broader agricultural enterprise.
As I argue in The New Harvest: Agricultural Innovation in Africa, farming is only a small but important part of the agribusiness value chain. The value chain includes resource data processing, input provision, production, aggregating (covering bulking, cleaning and grading), processing and packaging, retailing and recycling. Making the value chain work efficiently involves connecting farmers to markets.
As noted in a recent report by the Tony Elumelu Foundation, Unleashing Africa’s Agricultural Entrepreneurs, the sector “accounts for 32% of Africa's gross domestic product, and employs over 65% of its labour force.”
Taking the value chain approach, the World Bank has estimated that Africa’s agribusiness market will reach $1 trillion in 2030. This estimate does not include auxiliary industries that will arise from the expansion of the sector.
For example, efficient markets rely on effective information flow. New firms such as Gro Intelligence are emerging to fill the data gap. Similarly, the expansion of rural energy, transport, irrigation and telecommunications infrastructure will also spur the rise of support industries.
Too much focus on farming
This is one of the ways the long value chain of agribusiness serves as a driver for industrial transformation. Few other sectors offer Africa such a broad range of opportunities for technological innovation and entrepreneurial development. There are templates for business models that can be readily adopted. The key is to define agribusinesses as learning opportunities from the outset, as demonstrated by the work of the Africa Atlantic Holdings.
Past efforts to promote agribusiness were not successful partly because of the narrow focus on farming. This approach also failed to appreciate the importance of investing in basic rural infrastructure without which neither production nor markets can function. In addition, the focus on farming precluded consideration of the role of higher technical training in agribusiness.
The general policy prescription was that farmers did not need more than primary education to function. In many cases, agriculture is more complex that manufacturing, where many functions can be automated and products can be generated just in time. The complex process of plant or animal growth demands more versatile knowledge sources and husbandry that cannot be readily automated.
The focus on farming also created biases in the provision of incentives such as credit, insurance and technical support to farmers. Urban enterprises, especially those involved in manufacturing, have access to a wide range of enabling incentives. The same is not true of agriculture, especially where it is perceived narrowly as farming. Agribusiness needs to be supported like other ventures. Farmers need to be viewed as entrepreneurs and innovators, not simply as producers for downstream operations.
A bright future for agribusiness in Africa
The good news is that young people in many parts of Africa see great potential in agribusiness. But it needs to be put on par with other sectors. Because of a long history of neglect, young people venturing in to agribusiness lack access to capital. But even more critical is the lack of mentors who can guide them through the early phases of their start-ups.
In addition to mentorship, young agripreneurs could also benefit from investment in adequate infrastructure. They already know the power of mobile technology. But what they might need most is access to broadband, which also helps link them to knowledge centres given the absence of extension services. Today, the cost of broadband is prohibitively expensive, despite the fact that it is essential for dynamic business operations.
One possible way to resolve this could be to provide “broadband grants” in the same way the US government provided “land grants”. Private enterprises can also purchase broadband and donate it to selected agribusiness start-ups as part of their corporate social responsibility.
There are many opportunities for leveraging the growing interest in agribusiness to expand the sector. These opportunities are diverse and lie not only along the full value chain, but also in farms of all sizes – small, medium-sized and large. The starting point should not be driven by opportunity or ideology or dogma about farm size. There are many enterprises that do engage in agribusiness but if given an opportunity they could diversify into the sector. This could be enterprises that are seeking new opportunities.
In China, for example, coal-mining firms are starting to diversify into agribusiness in light of new restrictions imposed on the sector to reduce carbon dioxide emissions. In Africa, some oil companies might also explore moving into agribusiness given the uncertainties in the sector.
Agribusiness in Africa needs to be nudged towards a tipping point from which it can take off. The push will need to come from a collaboration between government, business, academia and civil society. It will require a collective effort.
Modernizing African agriculture
One additional way to promote agribusiness is to recognize individuals or organizations that have made outstanding contributions to different sections of the value chain. Many of the existing prizes tend to focus on production, thereby reinforcing the narrow farming image. The newly established Africa Food Prize, with a judging panel chaired by former Nigerian President Olusegun Obasanjo, could serve as a role model in emphasizing the agribusiness approach in its awardees.
The good news is that African governments, as illustrated by the case of Nigeria, are starting to appreciate the importance of agribusiness in long-term economic transformation. But appreciation is not enough. We not only need heads of state and government to serve as champions, we also need policy consistency. The two are important because of the long-term nature of agricultural transformation.
In one of her signature appeals for the modernization of African agriculture, the chairperson of the African Union, Nkosazana Dlamini-Zuma, said that hand-held hoe should be in the museum, not in the hands of African farmers. The quickest way to consign this symbol of drudgery to the history books is to shift our thinking from traditional farming to agribusiness. That is the root of Africa’s coming prosperity.