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Article by Kingsley Egbo, a Commonwealth Scholar writes from the UK - Image Source: www.tekedia.com
It has been a remarkably year, 2016, with its attendant successes and failures for peoples, industries and nations. More remarkably, it has been a year of great technological strides and achievements with technologies that provided avenues to solving big problems and opening up opportunities, ranging from self-driving cars to Advanced Robotics, Improved Data Science, Genomics, Improved Solar energy technologies etc.
Agricultural stakeholders and technology enthusiasts in Africa also witnessed the introduction of the Zenvus Technology, a unique innovation from a team of highly talented individuals led by Prof. Ndubuisi Ekekwe driven to exploit the ever burgeoning power of technology and science to revolutionize farming output efficiency and productivity in Africa.
“Zenvus is an intelligent solution for farms that uses proprietary electronics sensors to collect soil data like moisture, nutrients, pH etc and send them to a cloud server via GSM, satellite or Wifi. Algorithms in the server analyze the data and advice farmers on farming. As the crops grow, the system deploys special cameras to build vegetative health to help detection of drought stress, pests and diseases. The data generated is aggregated, anonymized and made available via subscription for agro-lending, agro-insurance, commodity trading to banks, insurers and investors”, Prof Ndubuisi Ekekwe.
The Zenvus technology among other things would allow farmers and stakeholders make informed decisions by providing real time data for the farmers and stakeholders thus eliminating guesses on timing, procedure and crops for farming. Indeed, as the American Data Scientist W. Edward Feming quipped , “Without data, you are just another person with an opinion” we have long continued to rely on opinions and poor forecast to make decisions on Agricultural investments and this has taken a toll on agricultural yield. The technology also provides data analytics that relate information on possible outbreak of pests and diseases in farms which usually reduces yield, allowing farmers to initiate preventive measures.
This is a timely innovation for an industry that has been tipped to boost many economies in Africa with many African leaders pledging commitment towards Agriculture in the present and future. It is a peerless stride in an industry seldom associated with innovation in Africa. However, as continuous push is being made for a deeper penetration of mechanized farming in Africa, it is necessary to remind ourselves that Agriculture has remained an industry driven by innovation and technology in the developed societies. Agricultural yields have been maximized through innovation, technology and science as demonstrated by countries like Israel. In the economic account of Israel in their phenomenal book, Start-up Nation, the authors recounted that President Shimon Peres had asserted that Agriculture is ninety-five percent science and five percent work. This drove his underlying commitment for innovation in Agriculture which saw Israel increase its agricultural yield seventeen times within twenty-five years.
The promise of this innovation is apparent and its impact is scalable and measurable. Little wonder that within months of its introduction, the technology was a finalist of the 2016 Singularity University Food Grand Challenge and have been featured in many leading technology reviews. The technology has also recorded noteworthy milestones within the last 6 months of launch, such as a grant support from Facebook to develop the artificial intelligence which will power farming decision making via Zenvus Bot which is on beta at the moment.
The technology has also been quickly adopted by leading Agricultural stakeholders and policy proponent in Africa. For instance, Zenvus will begin piloting its technology for African Development Bank which wants to deploy it across all farms it is providing funding. The Bank of Agriculture, Nigeria is also adopting Zenvus as the technology platform to drive agricultural innovation in Nigeria. More recently, Zenvus have signed a contract with an African farm union to support 12.2 million farmers from 2017.
Nonetheless, more commitment would be required by the government and its attendant social institutions across Africa towards delivering needed incentives that can encourage and support more farmers in integrating this technology to increase crop yield.
As Professor Joel Mokyr noted in his book, The Lever of Riches: Technological Creativity and Economic Progress.
…to encourage technological creativity and innovation in a society, …three conditions have to be satisfied,… there has to be a core group of ingenious and resourceful innovators who are both willing and able to challenge their physical environment for their improvement,… Secondly, economic and social institutions have to encourage these potential innovators by providing the right incentive structure and thirdly such society most encourage diversity and tolerance.
The team at Zenvus technology has done an exceptional job in developing this technology; it would be great if such technological creativity comes under the aegis of the governments and agricultural stakeholders in Africa who can devote resources towards scaling this technology for farmers because of the positive impact on farm productivity accruable to this technology. This could hold the key to more productive farming in Africa from 2017 going forward.
Kingsley Egbo, a Commonwealth Scholar writes from the UK
Digital Media for Africa Agribusiness Magazine by Alex Hitzemann
By Alex Hitzemann
This year’s FOECD-FAO Agricultural Outlook is a special edition featuring an in-depth look at the opportunities and challenges facing Sub-Saharan Africa in the next decade. The 140 page report is a wealth of information thanks to all the resources and talent employed by the UN, FAO, and OECD. We are very fortunate to have individualized predictions for each crop and analysis of which specific factors could trigger growth spurts in the Sub-Saharan agribusiness market.
The Sub-Saharan Africa (SSA) region contains around 950 million people, which is approximately 13% of the global population. Despite drastic changes to economies in this region, agriculture remains a crucial sector providing livelihoods for millions of people. Agricultural makes up a significant portion of most Sub-Saharan countries GDP, ranging from from 30-60 percent.
The report finds that while the outlook for agriculture in Sub-Saharan Africa is broadly positive, it could be much improved by improvements in government policies across the region, by an increase in strategic public and private investments (especially in infrastructure) and by suitably adapted research and extension. Such investments could improve access to markets, reduce post-harvest losses, and make much needed inputs more widely available.
A great example of exactly this kind of investment is the new Norwegian funded company Arise. Arise is a cooperation by Norfund, FMO and Rabobank which seeks to invests in financial institutions in SSA to grow their financial services and capability to supply capital to small-holder farmers in Sub-Saharan Africa. The establishment of joint ventures, such as this, will contribute more to the development of banking than just one bank or investment fund on its own.
FAO reports that foreign investment and external financial flows into Africa have quadrupled since 2000. These flows are expected to increase two times further in the next decade.
Sub-Saharan Africa will continue to experience rapid population growth. This, in combination with rising incomes, urbanization, and continuation of current policies and market structures, the production of food crops in many countries is projected to grow more slowly than demand.
Sub-Saharan Africa’s net imports of food commodities are anticipated to grow over the next decade, although productivity enhancing investments would mitigate this trend. Food import dependency of resource poor regions, such as North Africa and the Middle East, is projected to intensify providing a huge market for any grain exporters in Africa. In SAA countries grain imports will increase 50% in ten years. Comparatively, North Africa will only see only as 15% increase.
Due to extremely high population growth, SSA has a very young population. The World Bank predictes that more than half of young Africans will enter agricultural careers, mostly in the format of small family farms. Inovating ways for youth to participate in agriculture has the potential to greatly reduce poverty and hunger. Success for these young African farmers relies on their education of land access and tenure, access to financial services, access to markets, access to green jobs and involvement in policy dialogue. All of this has the potential to make the agricultural sector more attractive to young people, providing an additional push that may be needed for them to enter the sector
FAO believes that the single greatest factor in improve crop outputs over the next decade will be yield improvements. Currently, it’s not uncommon to see post-harvest crop losses above 50 percent in the region. In the next decade African farmers will gain new metholodgies and technologies to improve their yields. The opportunity for large fertilizers and machinery companies to penetrate the African market is likely to greatly increase as farmers seek new ways to improve their output.
Yield improvements will account for 80% in the increase in crop output in Africa from now to 2020.
Recently, there has been a furry of concern about land-use and crop rotation in the region. But continuous cultivation of existing plots would not necessarily pose problems for sustainable intensification if sufficient use of fertilizers, soil amendment practices and other land-augmenting investments are employed and coupled with continued education to maintain and improve soil quality.
However, a large body of literature in SSA points to soil degradation arising from unsustainable cultivation practices in regions with a high population density, for example parts of Kenya and Malawi. Continuous cultivation and lack of crop rotation deplete organic carbon levels, making soil less responsive to fertilizer application. This also makes it more difficult for smallholder farmers to benefit from yield gains offered by plant genetic improvement.
There is also an opportunity to improve output by increase agricultural area sustainability. This is likely to make up a much smaller part of the growth in the region. The majority of new crop areas in Africa will be dedicated to cereals. Africa’s existing agricultural resources (crops and fisheries) can all be characterized as underutilized.
Maize production is expected to increase considerably, especially in Eastern Africa. Ethiopia alone accounts for almost 40% of additional production to 2025, followed by Nigeria (14%) and Sudan (10%). Increases in caloric intake in Africa will remain modest.
East Africa will see the greatest changes. Its possible that the eastern part of the continent will see up to 8 percent increases in daily caloric intake by 2020. On the other hand, central Africa will remain relatively the same in the coming decade only increasing daily intake by 1.5 percent in the same time period.
There is a large opportunity for fisheries. Projections reflect a 36% increase of food fish supply by 2025 compared to the average 2013-15 level, but accounting for significant population growth, the per capita increase is a mere 3%.
Milk production also has enormous potential in economic development and food security in rural areas. This makes dairy an important subsector in SSA. Particularly in Southern and Eastern Africa, commercialisation of the sector has illustrated dairy’s potential to provide a regular income source that reduces poverty and improves living standards. Eastern Africa currently constitutes more than half of total milk production in SSA and a vibrant
Check out the whole report here:
By Nawa Mutumweno
Zambia is among 12 countries in Sub-Saharan Africa expected to benefit from the newly launched Stress Tolerant Maize for Africa (STMA) project that will develop improved maize varieties with resistance and tolerance to drought and diseases affecting maize production.
The varieties have been launched to help the region boost food security.
The STMA project introduced by the International Maize and Wheat Improvement Centre (CIMMYT) and the International Institute of Tropical Agriculture (IITA), will help increase maize productivity by about 30 to 50 percent and provide 5.5 million smallholder farmers with improved maize varieties.
According to the ProAgri latest report, other beneficiary countries are Benin, Ghana, Ethiopia, Kenya, Malawi, Mali, Nigeria, Uganda, South Africa, Tanzania, and Zimbabwe.
STMA project leader, Tsedeke Abate, said the four-year project will improve maize production for over five million smallholder farmer households by the end of 2019 in the targeted beneficiary countries.
‘‘STMA will use modern breeding technologies that will confer the desired resistance to pest and diseases, and tolerant climate stresses like drought and heat to benefit farmers within their socio-economic capabilities, that often dictate their access to important farm inputs such as fertilizer and improved seed,’’ he said.
The project will apply conventional breeding techniques to develop maize varieties and hybrids capable of resisting environmental shocks, including drought, low soil fertility, heat, pests and disease.
‘’The project also seeks to increase commercialisation of improved multiple stress-tolerant maize varities with gender-preferred traits,’’ he elaborated.
STMA will also link up national and regional initiatives to develop strategies that bridge the yield gap and dramatically increase maize production at smallholder farm level.
Continued collaboration with partners will enhance sustainable maize research and development systems in target countries through sustained variety release deployment and adoption which has been insufficient in many sub-Saharan countries, Mr. Abate added.
STMA is funded by the Bill and Melinda Gates Foundation and the United States Agency for International Development (USAID).
By Skye Lawrence, Africa Agribusiness Magazine
AAM: You recently participated in a panel discussion entitled, How to Build Resilience in the Face of Climate Change and Weather Shocks. What is your vision for a resilient global food system, particularly in Africa?
Shenggen: I think a globally resilient food system is one where everybody has constant, stable access to nutritious food. It is as simple as that. A resilient system occurs at a global level where there are functioning and efficient systems with no trade barriers, restrictions, and food can move to where it is needed. That is on the global level; the national level needs to produce enough nutritious food, which includes imports and stocks. We need to have the right amount of stocks because when there are shocks, whether they are weather or conflict-related, there needs to be adequate food in the national pantry so that food can be distributed efficiently.
AAM: Which “links” of the value chain are the most important to creating this system?
Shenggen: Storage is really important for building the value chain in Africa. It has two purposes. One is to help poor, hungry people. The other is for farmers to get higher prices. As you know during harvest season everybody’s trying to sell, so the prices go down, but if they can store their produce they can wait until later in the season when there is high demand and therefore get higher prices. For this farmers really need to have good infrastructure: warehouses, facilities, and in many cases cold storage.
Storage is one example of a business in Africa where private sector players can play important roles to build commercially viable businesses. Not all farmers need to individually have these facilities. The farmer could pay a fee to store their grains in a commercial structure, which allows the private sector to make money. Storage for commercial farm goods would work just the way a personal storage unit does. If you go away, you can leave your stuff there. All you have to do is pay a fee. This allows farmers to “go away” to wait for higher prices before they retrieve their grain to sell.
The private sector can also provide other important “links” in the chain, for instance traders, seed companies, post-harvest processing, and transportation. Private sector activity can really increase the value of the entire value chain, and smallholders can benefit when they capture some of that value addition. An example of this is the Ethiopian commodity exchange. It sets up warehouses in different parts of the country where farmers can store coffee, tea and grain.
But I have to say, this is all production side. For the consumption side, having adequate reserves plays a crucial role in preventing malnutrition crises. For example, during the 2007-2008 food crisis Bangladesh did not have enough reserves. In the meantime there wasn’t enough food in the international market. That’s why the country was really panicked. We need to avoid that situation in Africa with adequate warehousing for reserves.
In 2002 the Horn of Africa food crisis taught us a hard lesson. We learned that the international aid agencies like the World Food Programme needed access to food to purchase in order to distribute it to the poor in Somalia. We need regional reserves in the appropriate quantity that are close to hotspots. Having too much reserve is a waste, but not having enough is a major problem. Trade is a very important element because it is the best way to ship food from surplus areas to deficit areas. In the meantime the reserve can help the poor through the shock. Overall trade, stock, and reserve have to be looked at very carefully.
We have talked a lot about having a globally resilient food system, but more importantly is the resilient community food system. Everybody needs to make sure they have certain strategies to ensure their families have access to food, for example through insurance, their own storage or community sharing mechanisms.
AAM: What is the difference between “stock” and “reserves”?
Shenggen: Stocks and reserves are sometimes used interchangeably, but there are important differences. Stocks are commonly used as a way to stabilize prices. By buying and selling grain at strategic times, marketing boards or governments can help support farmers and improve food availability to consumers through physical grain stocks. But this strategy has limitations—in particular, they do not effectively address food security emergencies during a national or international food crisis.
Strategic grain reserves are primarily intended to guarantee availability of food in situations of extreme weather or crisis. Some reserves also function as a part of pricing policies, but this is not recommended. Most of the time, strategic grain reserves with this kind of price support does not work well. But a reserve like Ethiopia’s Emergency Food Security Reserve Administration, which is not involved in buying and selling grain, has been very successful. They have helped address quite a few food security emergencies since its creation in the 1990s.
There are ways to develop smart strategic grain reserves, but they must be well managed and their policies must be market-friendly and context specific. Establishing linkages with pre-existing food safety nets, like school feeding programs, can help improve the effectiveness of reserves. Overall, developing a functional grain reserve will provide an extra measure of food security in times of crisis.
AAM: How important a role does research into diverse crop varieties play in creating a resilient food system?
Shenggen: There are two answers. One is for the existing crops. We still have great potential to improve their resilience by increasing tolerance against heat waves, flood drought, frosts. The new variety should be able to withstand these elements. The second important factor is nutrition. The new varieties could have enhanced nutrition through the selection of seeds and through breeding to increase nutrition.
Farmers also need to diversify their crops so they are growing more than just one staple crop such as rice or wheat, which can be vulnerable to the elements. However, if farmers diversify, particularly with vegetables and fruits, they become quite resilient and they have the benefit of consuming more nutritious and micronutrient-rich foods. You don’t actually need to do much research because it’s more about knowledge transfer, effective policies and incentives.
AAM: Where is climate change effecting farmers the most?
Shenggen: Right now we still don’t know a lot. There’s a data problem and some modeling issues. However, we do know that in some of the dry areas, particularly just south of Sub-Saharan Africa (south of the desert) the droughts are already happening. I’m afraid that because of climate change their frequency and intensely will increase. The Sahel and the Horn of Africa, these are probably the two areas that will suffer the most from climate change.
AAM: What government/private sector responses have been successful in regions combating climate change? Which responses have failed?
Shenggen: Responses have been somewhere in the middle; well, perhaps closer to the failing side of the spectrum. There are some small successes where farmers have begun to plant drought resistant crops, invest in irrigation, and diversify away from planting just one or two crops which are very vulnerable to climate change. We have seen some successes, but definitely more needs to be done. For example, we need more research on drought tolerant varieties, and more investment in irrigation and water catchment systems capable of moving water from surplus to deficit areas.
AAM: How important are farms of scale for a secure food system? What tools are needed to move “smallholders” to becoming “medium holders”?
Shenggen: At the global level I think it is clear that the size of farms has to be increased, particularly in emerging economies such as China, India, Brazil and Vietnam. This is because people are moving to the cities. For Africa we have to be careful because urbanization has to happen, and the non-farm sector has to develop before farm size increases. Without development of rural nonfarm sector you push the people off of their land. These people will become homeless, the people without jobs in the city. Then you will have African spring! Not just Arab Spring. It is very critical to make sure that unless they can move out voluntarily, simply increasing the size of farms would do more harm than good. I think the first thing Africa needs to think about is the development of the rural, nonfarm sector. This is the experience of Asia. You need to move people outside of the agricultural sector, without moving them to cities. This is where smaller cities can be a good solution because they present economic opportunities for non-farm employment and are an alternative to megacities.
“Pulling out” is better than “pushing out”. Pulling out means that there are jobs in cities so people voluntarily go to the city for a better life, income and entertainment. We call this pulling out. Pushing out means that because of population pressure, the available land in your village continues to be divided to the point where there is not enough land for everybody. Because people don’t have viable livelihoods in the rural area they move to the city. This is how you create urban slums. The good lesson is Vietnam and China because farmers move to the cities voluntarily. The bad lesson was India some years ago, small holders lost their land and moved to the cities, but they did not have jobs so now you see big slums in Calcutta, Bombay and New Delhi.
AAM: Is another reason for getting “pushed out” the increasing size of farms spurred by foreign investment? If this is not happening yet, do you see this being a factor in the future as foreign investment increases in the agricultural sector and land concessions are given in Ethiopia, Ghana, and other countries?
Shenggen: As I mentioned, increasing farm sizes can push people out, particularly in Africa where the rural, non-farm sector is not as developed. It has not happened to the extent we have seen in India. Foreign investment in land is happening in Africa, though there is no consensus yet of its impact on smallholders getting “pushed out”, or on food security.
Foreign investment in land in Africa can benefit smallholders in need of investment in agriculture, but there are serious risks. There are risks of displacement of smallholders and reduced access to resources for local communities. There are also implications for food security, as often times foreign investors buy fertile land in poor, food-insecure countries. These lands are often used to produce biofuels. There is not much of a market for alternative energy in Africa. Investing in food projects would yield higher returns to local food availability.
Foreign direct investment in land must not undermine the food security and nutrition or the livelihoods of poor people. To get to a win-win situation, there must be contracts in place so that poor farmers are not forcibly displaced, but can reap the benefits of increased investment and shared knowledge. Innovative joint ventures, such as contract farming, can meet the needs of both investors and rural communities. It is a task for the government to provide a strong legal and institutional framework to ensure that investments in agriculture benefit the poor. We also need to empower local communities by increasing their capacity for land governance and contract negotiation skills.
AAM: What role do local scientific institutions play in creating in-country policy and extension services?
Shenggen: A huge, huge, huge role! Currently the major policies and technologies came from outside of Africa from organizations such as the World Bank, Food and Agriculture Organization and IFPRI. This is good for now before Africa has its own capacity. My vision is that in the future major policies should be analyzed, recommended, proposed, monitored and implemented by local agencies at the national level in Africa. Technologies need to be adapted to local weather, climate, soil, and economic conditions. This is not just for the public sector, but also the private sector. Local companies that know the area can effectively disseminate knowledge and technology to farmers. Africa lacks capacity; that is the major weakness. Unless Africans have their own capacity to lead, own and drive their strategies and technologies development will not come.
AAM: Are there any exemplary universities in Africa that have created successful programs?
Shenggen: There are some good universities in Africa, for example the University of Ghana, Makerere University in Uganda, and many universities in South Africa. They have trained lots of good scientists, researchers and government officials, but the scale is just too small. We need hundreds, thousands, of universities where they can train Africans in technology, business, and policy. Capacity building in Africa is key!
By Dave Ramaswamy, Africa Agribusiness Magazine
Conducted during US-Africa Leaders’ Summit, Washington DC, 8/7/14
Dave: Martin, thanks for your time. Could you please describe AGCO’s lines of business? And, particularly, what lines of business you’re offering in Africa?
Martin: AGCO is a pure player in the area of agriculture. Our traditional product lines are farm equipment, so mainly we are a leader in tractors, in wheel tractors, but also in tractors on tracks, and we have everything, so to speak, a farmer needs: combine harvesters, self-propelled forage harvesters, balers, seeding equipment and so on. In our industry, we call this “full line of product.”
We’re in a way different from some of our competitors in that we are a multi-brand company. We own some of the finest brands in the industry, with long traditions, like 160 years for Massey Ferguson or more than 100 years for Fendt and so on.
Recently, about two years ago, we also acquired a company—GSI and that did broaden our product line. GSI specializes in grain logistics, which includes grain storage, grain drying, and grain transportation. They also do chicken and layer installation, and swine stables, called “swine houses.”
Dave: What is your current market share in Africa, and what are your projections over the next decade?
Martin: We’ve been a market leader in Africa for many, many years. The leading brand in Africa is Massey Ferguson. If you add all the volume our licensee TAFE from India is bringing to the continent, it’s even more so. Our market share varies a little bit across each country, but is fairly stable.
We’re optimistic about growing our Africa market share because we have a good brand image, we have a long tradition, and we also have a good dealer and distribution network.
Dave: At the recent US-Africa investment events in Washington [“Leading the Way in U.S.-Africa Investment” conference, which ended Aug. 8], we heard a lot of talk about food and nutrition security. With Africa having 60 percent of the world’s available land, it has the ability to feed itself. What does food security mean to AGCO? How do you intend to tackle it in Africa over the next two decades with your “full line of product”?
Martin: There are two completely different areas and two different businesses you can talk about. First, we have some big professional farmers in Africa who need the most modern, high-technology solutions, like we offer in South America, Europe or North America.
These are the state-of-the-art farmers. They’re huge. They are, let’s say, between 2,000 and 20,000 hectares. We have a customer who farms 30,000 hectares in Zambia. This is a business segment we’re used to serving. It’s not that difficult. We have the products these farmers need because this is our specialty: high-quality, high-tech solutions.
Then you have the smaller farmers, the subsistence farmers. What people outside Africa don’t understand so well is that their situation is not as romantic as one might think. The burden of work on this small farm, which may measure about one acre, falls mostly on the women. They don’t have a power source, they don’t have water, and they don’t have electrical grid connectivity.
The women farmers wake up early, usually at sunrise, they walk to get water. That takes quite a while since they have to walk two to five miles. They prepare breakfast for their kids, they make sure their kids go to school if there is one, and then they start to work on their farm. Between farm activities, they prepare lunch and dinner. Meanwhile, the men tend to gather at the marketplace and have a cup of tea and smoke.
It requires a groundbreaking change in thinking to help these women subsistence farmers become more professional. What does that mean? It means they need to produce more than they consume. This would put them into the position of selling some of their surplus product to generate income.
Individually, these farmers cannot invest in a tractor. Yet everybody knows that there are two major factors that improve productivity. The first is mechanization, and the second is using fertilizers. We talk to governments and to private institutions and tell them that what they need to do is to group these smallholder farmers together and to create co-operatives (co-ops).
You see that in some countries; Algeria has them, Morocco has them, and Nigeria has them. The co-op is the right way for small farmers to share equipment. If, for example, a hundred of the small farmers would come together, they could afford to buy one tractor.
What happened in the past often was a farmer would get a tractor as a gift from an aid program. Then after a short period, he would have sold the seat and replaced it with a wooden structure, then sold the hood, and the tires. And after a year, the tractor had disappeared and the engine is somewhere used as a generator. We need to avoid that. There are solutions, but it’s not easy.
Recently we had a meeting with Guy Scott, the vice president of Zambia, where we were talking about this. In Zambia, you have 1.4 million subsistence farmers and the government would like them to — they have co-ops already — mechanize, so this is a vast undertaking. There’s nothing much we can do as a company in this regard. It’s something that farmers have to do, and maybe they have to do it with the support of the national and local government.
It’s less about financial support and more about the structural support. Someone has to organize this farmer network, and then organize appropriate farmer training. We’re interested in supporting these efforts.
Dave: What you’re saying is smallholder rural farming is romanticized, but the reality is that it involves a huge daily struggle with little reward. Yet a lot of the donor agencies focus on promoting subsistence farming. So it may be the wrong focus. Smallholder farming is like candlelight dining, it’s only romantic if it’s by choice. Most African smallholders don’t have a choice.
Martin: Exactly. If you’re a journalist in Washington and have a small farm in Virginia, that’s fine. You go there over the weekend and enjoy it because you like to drive a tractor for two hours. Super, but if you have to subsist from it every day, it’s very tough.
Dave: Martin, you talked about concept of cooperatives, of creating a farming network where “the network is the farm” for providing sales and support. This responsibility lies more with the governments and civil society rather than AGCO.
I’d like to dwell a little deeper on that point, which is purchasing equipment as a cooperative. What are some of the financing tools available through AGCO? This could be standalone through AGCO or working in partnership with banks or governments.
Martin: We do financing of programs, like leasing or rental programs, through a finance institution. It’s a joint venture between AGCO and Rabobank that we created 20 years ago. It’s called AGCO Finance. It’s a 50-50 joint venture. We offer financial solutions and do the necessary financial engineering.
Now, this works all over the world. Of course, there are certain countries with high risk where it’s more difficult to come up with a solution. With the small holders, the additional problem is they don’t have collateral. That means, to stay with the example, we can’t take the risk of selling them 5,000 tractors. That’s the number the government identified being needed because this has to be then orchestrated and organized.
Therefore, this is where aid programs or other institutions normally come in. What we see is, they do get some traction, but sometimes we have countries that have too much donor money. Ghana is an example. Ghana’s problem is to find projects in order to digest all the money available. Other countries don’t have donor money at all. The donors are into big investments like power stations or roads and bridges, airports, railways. They’re not so much geared for a smaller investment in farming.
I think what it needs is a “proof of concept,” and we try to work on that. There is a demand, but then it is split into so many hundreds of thousands of individuals. That means in farming, typically, you don’t have the big investment as you have in power.
What we do offer, of course—and this helps us also to get closer to governments—is grain logistics. A lot of African countries have a problem with infrastructure. With the grain logistics business through GSI, we can now help there. Many countries face a problem in post-harvest losses in grain due to poor storage, and with factors such as humidity and pests. Here we can come in with a solution that actually makes us even a better partner for local governments.
Dave: That’s a great point. Post-harvest losses are as high as 40 percent to 50 percent in certain countries in Africa. Reducing that is an easy win. Before talking of fertilizers increasing yields, the easiest way to increase yield is by reducing crop waste.
Martin, that leads to the topic of sustainability and environmental sustainability. There’s debate now that the mainstream Western model of farming, industrial farming with intensive use of pesticides, chemicals, and fertilizers, leads to ecological death zones with agro-chemical runoff and pollution of groundwater systems. What’s your vision of sustainable agriculture for Africa and where do you see AGCO playing a role?
Martin: I think you can do sustainable farming much better in large-scale farming if you want to. Of course, you have to have the right ethical standards. I’ll give you some examples.
You can only achieve the reduction of soil pressure by using less cropland with modern technologies. You need the right tractors and you need to make sure you have the right equipment. The soil preparation with regard to minimal tillage can only be done through the right equipment.
When it comes to pesticides, certain solutions are, I think, kind of old-fashioned and antiquated, and therefore nobody invests much anymore in them. For example, the famous crop dusters: They might be efficient; but it’s a waste of pesticides because they’re not precise, it’s a waste of fuel because those planes use a lot of fuel, and, finally, you spray not only the farm, but also the village and farm surroundings.
It’s a problem that can be fixed easily, and this why we’ve developed very sophisticated self-propelled sprayers. With this equipment, you can really apply the amount of pesticides precisely to the area where you want to have it. Plus using our Fuse Technologies, which includes AGCO precision farming tools, you can track and measure the results.
Dave: You mean the yield?
Martin: Not only the yield. You can start from harvest and then say, “This is what I harvested so far.” You have recorded the whole process, and you know exactly how you did your soil preparation, how much you fertilized and where, with what fertilizer. Additionally, you know what kind of pesticides you used and in what amount.
From the result, you can then readjust the process the following year and fine-tune it. This is another high-tech solution, which is creating a financial and environmental return immediately, because you’re avoiding the environmental harm and health issues of crop dusting. By reducing the amount of pesticides you’re using, or the amount of fertilizers you’re using, you get a fast payback. The payback for this self-propelled equipment is within less than two years.
We work together with some of the big companies in that area like Pioneer, Monsanto, and so on in order to develop solutions. There’s a certain problem in Africa, which is that some big farming operations and foreign investors who go there think about using lower standards in Africa than they might use in Europe or in America. We would like to prevent that.
Dave: Martin, when it comes to buying equipment in Africa, we see a new class of investors who are not farmers, say, with backgrounds in real estate or hotels, who think agriculture is attractive, they’re entering the business.
Two things: A lot of these people (1) don’t really have an idea of what they want to buy, and (2) how different pieces of equipment work together. I know you have a demonstration farm in Zambia. Could you please speak to that?
Martin: Yes. The idea was that we need to train, or teach, or explain how modern mechanized farming is done, both for a small farmer and also for a big farmer. That’s why we bought 100 hectares of land in Zambia [in 2012] and started to farm there. We generated very good yields. The yields for corn in Africa are about 1.8 tons per hectare. We did 8 tons per hectare in the first year, so that means obviously we know how things work.
We invite dealers and customers, but we also invite politicians or those from the academic world in order to demonstrate what we call the “future farm.” We want to show them how that works, of course, with the idea in mind that they might also then buy product from us. We’re planning to have a second “future farm” in Nigeria because it’s also a very big market.
The problem is, there’s such a pull that we could come to Africa with thousands of those farms, but this morning the Prime Minister of Algeria said to me, “You are like a diesel engine. It’s difficult to start, but then once you get going, you never can stop.” Therefore, I think we want to do it in a way and in a speed that we can handle and manage.
Dave: Based on your model farm, have you thought about the possibility of having AGCO run a summit with the different countries and stakeholders coming in, not just Zambia? Also inviting investors with purchasing budgets? The idea would be bringing everyone together in one location, and pitching jointly to them.
Martin: Not only have we had the idea, we started to do that three years ago. We call it the AGCO Africa Summit. We do it in Berlin in January. http://agco-africa-summit.com/
The reason why we do it in Berlin is that they have a big farm show called “Green Week,” Grüne Woche, and a lot of the donor countries and agencies are there, as well as brands and farmers, and a lot of the producing countries and a lot of African decision-makers.
That’s why we decided to do the summit in Berlin, but we also joined forces for a similar event in Africa this year, but I wasn’t there.
Dave: Martin, having advised on some commercial farms in East Africa, what I’ve seen is, the decision-makers, especially this new class of investors who are financial investors, hedge funds, private equity types, they’re sitting in London or Singapore, and …
Martin: They have no idea about farming.
Dave: Yeah, they have no idea of farming, they’ve never set foot on a farm, and they’ve appointed some farm manager from South Africa or Zimbabwe to manage the farm. These people are purchasing farm equipment, and there’s a lot of turnover because this talent comes, and soon leaves. Every new farm project seems to be poaching and rotating through the same core group of people.
So one or two years after the start of a project, a “fruit salad” of equipment ends up on the farm from different manufacturers. Things don’t work together, and tractors are being stripped and cannibalized for parts. In three or four years, the farm is dysfunctional, at the verge of bankruptcy.
How do you see this situation improving? I give an example of the IT industry. IBM, from the 1960s to the early 1990s, used to make and sell its own hardware and software. Then in the mid -’90s, IBM decided to get into “system integration” – working with other hardware and software vendors.
Do you see a similar future in “farm systems integration?” I see a lot of disincentives on this front at the dealer level. Dealer incentives are to sell as much product, which is great for AGCO, but in terms of client success stories, it may or may not work.
I talked to the president of GSI, one of your five core brands, and he said, “Yes, we can do the client sales and service directly on some of these big-volume deals.”
Martin: Of course, we try to explain to the end user, to the farmer, that it’s very important to select the right product and the right hardware. It’s very important to have a dealer nearby who does support the product, and it’s very important to have a manufacturer who comes in with the right support for parts.
We not only think about selling product, we also make sure that the after-sales service is available. We do have parts in stock, and we also invest a lot in user/operator training.
That’s why we invested in a parts company called Sparex in South Africa. They’re doing non-original parts for all leading equipment brands. That means we can support this kind of multi-brand equipment. So we can offer all those guys with different equipment, a single source for parts. Our AGCO Massey Ferguson dealer can also help them to fix a Case, New Holland or John Deere product. That’s already a big advantage for us, and a key differentiator in our offering.
Now let’s talk about what you described as the future way of farming—connected intelligent and integrated systems. We call it Fuse, and we decided for a completely open architecture. We want our products, whether it’s a baler, tillage equipment or a combine harvester, to be in a position to communicate with every competitor’s product and the other way around.
This is completely different from the approach John Deere is using. The idea of John Deere is pretty much to create a closed environment, a little bit like Apple or Microsoft, which forces you into only using their equipment.
This is what farmers hate. They want to be in a position to make their own decision, so our solution does get a lot of traction, and we’re just at the beginning of the development. I think in the future we’ll be much better off than some of our competitors.
Dave: What you’re saying is, your competitors are forcing this equipment lock-in for farmers, and they don’t like that. AGCO’s approach is more plug and play.
Martin: Imagine you want buy a car for yourself and then you are forced by your cellphone carrier to buy a BMW, not only for you but for your wife and your kids. I’m not sure you’d like that so much. I think it’s the wrong approach, and I think we took the right decision there.
Dave: Are you moving from a “tractor-centric” to an “implement-centric,” plug- and- play model?
Martin: Yes. That’s also a very important point to make here because, in history, the tractor was dominant. What we say is, in the future, the implement will control the tractor, and not the other way around. For example, in seeding, the speed requirement and the power requirements of the tractor are defined by the seed air drill.
Dave: Absolutely. Different implements are attached and the tractor adjusts, based on the implement spec.
Martin: The tractor has to be adjusted, not the other way around.
Dave: As you know, there’s a lot of specialty implement manufacturers whom buyers like to pick from, sort of and mix and match. Your approach seems it would make it easier.
Martin: Yes, and [the specialty implement manufacturers] are actually very, very good. They have certain skills that big companies normally are not very good at. I happen to know some of the guys very well.
They’re in niches. It’s either a regional niche, where you have very specific requirements—like rice farming in the north of Italy—or they have a product niche, perhaps a self-propelled grape harvester, which is only used in South Africa, California and France. Those products, normally, the big companies are not very good at.
We serve large volume and more global applications, than those specific niche manufacturers. Therefore, it’s very important that we can work with those guys. We have alliances with those smaller players, like car manufacturers in Germany or France or England and so on.
Dave: Speaking of implements, and especially tractor import, there’s a lot of used tractors being purchased, and also used implements from both Europe and the U.S. into Africa.
As a manufacturer, you only sell parts into this after-market, and you’d ideally want to upgrade the farmers to your new equipment. What is your take on these brokers or traders selling used equipment, and how does it affect your business, or how you partner with them?
Martin: We’re not in the business to regulate markets. That means this is a free market. What you can typically see in Europe is that the smaller equipment goes to Africa, the bigger equipment goes east, to Ukraine and Russia. In the Americas, used farm equipment is going from Canada and the U.S. into Mexico and further, into South America.
There’s nothing wrong with this. The farmer, the buyer, of course needs to make the right decision. There’s some very good used equipment available, and there’s a lot of very bad equipment out there as well. Used tractors are not the big problem, but used implements typically are. A customer might buy a big piece of used equipment that is not suited to a used tractor. Therefore, it doesn’t hurt for a customer to know a little bit about equipment.
The problem also for used, is that instead of buying it from a broker, you should buy it from a dealer close to you, who knows about your other equipment and who is also in a position to service it.
Dave: As you know, in most of Africa, 50 percent of the population is under 25, and there aren’t enough office jobs to go around. Given Africa’s arable land, many of these young people could become farmers or agribusiness entrepreneurs.
How do you see AGCO involved in training thousands of young people, using an apprenticeship system like that in Germany? This youth training could start in high school, teaching young people to work with tractors and farm equipment besides classroom study. Eventually young people could be set up so that they can be farming for themselves and self-sufficient when it comes to income generation.
Martin: Today we have apprentices or trainees on our farm. We have them also in our factory in Algeria but of course not enough to cover the continent. That’s something that has to be developed over time.
Schools can also be important here. When you think about the development of the farming sector in Africa, this is something which nobody really takes into consideration enough. For example, in Ghana or Nigeria, it would be ideal to start with a school program where young people learn proper farming.
Then these young people would be hired, let’s say, from farms, and then they would be making the right decisions because they’d know already that they shouldn’t buy this random pieces of equipment from China or whatsoever. They would make better decisions.
This is not our job. We already train more people than we hire later on. We train more than we hire because we know that they’re consumed by the labor market.
Dave: Where do you see potential partnerships with AGCO and some of the development agencies like USAID, GIZ [the German Society for International Cooperation] or banks? How do you see the stakeholder partnership working out?
Martin: We developed our Africa strategies six years ago, so when we talked about Africa at that time, everybody thought, “They’re crazy.”
Then last year President [Obama] came in and talked about Africa, but there was no action. Now all of a sudden, at the investment summit it does get increased traction. Therefore, I could imagine that we’ll see more of those strategic alliances in the area of education. What I also think is that in this very fragmented and dispersed rural environment, training via the Internet could be a solution.
For me, it’s amazing how slow the educational system all over the world, in schools and universities, adopts modern technologies. You don’t need schoolbooks anymore because the very same day you print it, it’s already dated. If kids want to know something, they go to the Internet.
Why don’t we have, instead of the schoolbook, content that you can access through the Internet? I think that’s what we’re doing already with our dealers. We do a lot of training through our website.
Dave: I have a question on water management. In Africa a lot of agriculture is still rain-fed. What’s your strategy or any moves to acquire a company in the irrigation space?
Martin: We looked into that, and we were always of the opinion that this doesn’t fit with our organization. There are very good companies that are specialized, like Valley Irrigation, or companies like that in this field. It’s a different distribution channel. It’s more like project management.
That was reconfirmed to me in a way after John Deere decided to sell its irrigation business. Therefore we don’t look into that. If some very interesting target would become available, we would of course analyze that again.
Dave: Finally, what’s your takeaway message for a government or a public policy official, either in a ministry of agriculture or, say, the president of any African country? What would be your message to nonprofits who have led the discussion on agriculture development in Africa?
Martin: I think the message is pretty much the same for both. They need to step down from the “jumbo-jet pilot’s point of view,” come down to earth where the farmers are. They need to come up with a pragmatic strategy that fits the requirement of their country, and then they need to think about a roadmap for implementation in steps.
Very often, projects fail because they’re completely theoretical. Not because they don’t have enough money or they’re not funded, but they’re completely theoretical, and nobody knows exactly how to implement that. Like we talked about, if you now say, “I have 1.5 million small holders and I want them to mechanize.” It doesn’t help if the government loudly says, “OK, let’s buy 5,000 tractors.”
You need a very precise plan for implementation, and what I learned in Africa is that you need to do it in steps. This is why we started with one demonstration farm, and not with 10. Then you also learn by doing, and can improve the process with each implementation.
We also said, “Let’s start with the tractor business in Algeria.” We didn’t start with 10,000 units. Last year we built 1,000, this year 2,000, and maybe next year 5,000. I’m not against being fast, but you have to also be reasonable.
When it comes to the question of localization, like in Eastern Europe, every president you meet makes the proposal that you should invest in a factory in his country. What they don’t understand is we don’t have steel supply in Africa because Africa doesn’t produce steel. We don’t have the supply chain for components like transmissions, exhausts, engines, hydraulics—everything you need to assemble tractors.
That means if you started now to manufacture on the Ivory Coast—4 million people, a small country—there would be no cost-savings. It would be more expensive than bringing a ready-made tractor in from Brazil or China. Therefore, they very often are not very realistic, and Africa needs to think more in broader structure.
That means African countries have to cooperate better. If the best of the African countries would come and say, “Actually, we have in this economic grouping, like ECOWAS or COMESA, 400 million people, and this market needs 20,000 tractors a year from you [AGCO],” then of course you can talk about a factory in one of the countries, but not in all of the member countries.
Currently each country comes individually to us. Even Ghana, which has 27 million people, doesn’t have enough volume to justify production. Therefore, they need to be reasonable. Just like in Europe, you don’t have car manufacturing in Portugal or Greece. Some of the countries need to allow imports because they don’t have that kind of domestic business.
There could be other reasons why it’s interesting to invest in a country. It can be wages, it can be infrastructure, it can be security, a legal environment and things like that, or taxes. Let’s say, in Europe, people go to Switzerland not because they’re so productive there, or wages are low, but because you pay only 3.5 percent or 4 percent of taxes. That’s the reason why some companies have decided to go there.
Dave: How do you share those success stories from the demo farm in Zambia with your network, meaning all over Africa? Do you use video distribution of farming techniques?
Martin: We do videos. We have also a lot of people visiting our factory in Bavaria, Germany. Typically we have about 20,000 people coming to the factory every year. Every two years we have what is called the Fendt Field Days. We do pretty much similar things like we want to do in Zambia in a different scale. We show them, demonstrate the latest equipment and explain to them what our new products look like.
Dave: Do you produce videos in the local African languages as well?
Dave: All right, Martin. Vielen Dank for your time.
Martin: You’re welcome. Thank you very much.
Story and pictures by Jennifer Hyman, Director of Communications
Land O’Lakes International Development
Working as a community health volunteer (CHV) in Madagascar since 1998, Jeannie Razafinadramanana never imagined that her passion and commitment to volunteerism would enable her to play an important role in transforming the dynamics within her hamlet of Tataho.
But after joining forces with the Strengthening and Accessing Livelihood Opportunities for Household Impact (SALOHI) program, she significantly bolstered her knowledge base beyond her traditional focus on maternal and child health. Not only did she learn how to provide more substantive health and nutritional support to a wider segment of the community, but she also became deeply engaged in the promotion of Village Savings and Loan (VSL) programs that sparked community cohesion and newfound trust.
Led by Catholic Relief Services (CRS) and implemented by a consortium of international partners including Land O’Lakes International Development, Adventist Development and Relief Agency (ADRA) and CARE, since 2009 the United States Agency for International Development (USAID) funded SALOHI program has been tackling food insecurity in 100,000 households — for nearly 650,000 people — across 110 rural communes in eastern and southern Madagascar.
In collaboration with Malagasy community leaders, the 5-year SALOHI program addresses a range of development issues, including health, nutrition, agriculture, emergency preparedness and resource management. Through this multi-faceted approach, SALOHI has helped communities become more resilient to disasters and economic shocks, while improving food security and decreasing dependency on external assistance.
“Before the training, I did things like distribute medicine to women, administer vaccines and hand out mosquito nets,” Jeannie explained. “But most mothers gave birth traditionally. They never saw a doctor for pre- or post-natal care. They didn’t weigh their children to find out whether or not they were malnourished, nor did they pay much attention to what constituted a healthy diet.” Those who were sick were typically only provided with traditional natural compounds, she said, rather than any type of western medicine, and children were rarely vaccinated. Now, she says, 100 percent of the children in her hamlet are vaccinated for a variety of potentially detrimental illnesses, including Hepatitis A, B and C, Rubella and Polio.
Through SALOHI and the Land O’Lakes team working in her community of Tataho, Jeannie learned how to sensitize pregnant mothers to prepare healthy, nourishing foods. “In general, the dietary training I’ve provided has focused more on how to improve existing staples to make them more nutritious, rather than trying to switch residents’ diets altogether. For example, I’ve shown my clients how they can add meat, small fish or oil to cassava dishes, to make them more nutritious.” She has also shared with others her newfound knowledge on the seasonality of crops, so that villagers have a better understanding of when it’s an appropriate time to plant peanuts, cassava or rice.
Traditionally, the women in her community exclusively breastfed their children for only 2 months, and then they would be transitioned to solid food. She now counsels women on the importance of exclusively breastfeeding for the first 6 months, and about how prolonging breastfeeding for an extended duration can even be an effective means of family planning.
“At first, the community didn’t fully embrace the new ideas I was trying to spread. But, later on, mothers were able to see for themselves the difference in their children’s health and mortality when they sought medical care for their families. This helped convince them of its importance,” Jeannie explained.
Promoting Village Savings and Loans
Even though Jeannie’s a CHV focused on health and nutritional support, she promotes the group banking model known as a Village Savings and Loan (VSL) through her regular household visits. The VSL operates with clear regulations that stipulate that the money can only be used for critical needs such as medical expenses and medicine, emergencies, and even investing in a business, but not for luxury items like clothing or luxury goods. When members borrow, they must pay back the principal, plus a 10 percent interest rate that goes back into the fund; meanwhile, at the end of the year, savers benefit from earning 10 percent interest on what they save.
“The VSL helped give birth to love in our community. People really started to like each other more, to care about each other more,” she said of the VSL’s impact. “During hard times, people don’t have to go far for help anymore. It not only changed our access to finance, but it changed how we related to one another.”
The people in Tataho not only had no concept of VSLs before, but also they rarely engaged in any sort of banking or savings. Jeannie explained that when people urgently needed financial support in the past, they had very few options. Those who would lend resources often charged astronomical interest rates at 100-200 percent. “Now, when there are happy events or sad events in the community – from birth to death – there is now an outpouring of broad community support. In the past, select individuals would help out a struggling close family member, but now the entire community is really devoted to the health and wellbeing of the entire population.”
As one of the 36 CHVs providing support to her hamlet, which has 3,000 households, although she hasn’t received a penny in earnings since she began her service in 1998, she is motivated by the advantages volunteering provided her in taking better care of her family and community. “Health has been my vocation for a long time, even if it’s not paid work. But, now I’m devoting energy more broadly on the health of the entire community, while providing more meaningful support to the women and children who are the greatest focus of my work.”
Another new focus for Jeannie as a result of SALOHI has been sensitizing the community to the importance of hygiene and basic sanitation. “I’m teaching people that they should only drink potable water, that they should wash their hands after using the bathroom and to use latrines when they need to relieve themselves. Honestly, these are things our community never regularly did before, but we’re changing our practices collectively.”
Importantly, Jeannie says that working as a CHV has made her and others like her feel empowered and gain an elevated status in the community. As most of the CHVs are women, their position gives them more clout and negotiating power within the family structure.
Her husband agreed, saying, “I’m very proud of her and seeing her take this kind of initiative in the community. Much of her work can be done from home or nearby, and things are going well. In fact, our dialogue as a couple and the ways we problem-solve have become much more effective, and we can really work things out together. I used to feel like the burden of family care was all on me, but now we treat each other as equal partners.” In total, the family has 19 family members, including three sons, six daughters, and numerous grandchildren.
Even though the SALOHI program is drawing to a close, Jeannie is emphatic that her CHV and VSL work will continue on. In fact, she and several other CHVs in her community are already planning for their next collective effort: literacy training for women. She says that 75 percent of the women in Tataho are illiterate, as they tend to start school as late as 10 or 15-years-old, and are often encouraged by parents who see them as a financial burden to drop out of school early and marry.
“I want to ensure that more women can read and have greater agency on their own futures, and also invest positively in the VSL. It would help empower them to get out of poverty.”
hiweshe Chirevo holds up some of the veterinary medicines he’s procured to care for his goats.
Story and pictures by Jennifer Hyman, Director of Communications
Land O’Lakes International Development
Until recently, eking out a living was a huge struggle for Chiweshe Chirevo, who lives in the parched Zimbabwean town of Buhera, in Manicaland Province. With little arable land to speak of and insufficient rains to nourish soil that more closely approximates sand, meeting the nutritional and household needs for his nine-member family was a significant challenge.
To get by, he did some basic subsistence farming of maize, millet and sorghum, and would earn a little money by drying and selling limestone on credit, which he would exchange for more grains. However, getting any protein in his family’s diet – particularly meat – was rare.
As beef and dairy cattle have difficulty surviving and getting adequate nourishment in such an arid environment, Chiweshe and other smallholders in the area also regularly keep goats.
However, Chiweshe found it hard to maintain his herd, as he often had no choice but to sell these few assets that he had when times got tough. “I obtained my first goats in 1989 and once had as many as 20. However, I had to sell them all off over time in order to pay the school fees for my seven children, while others died of disease.”
Although 97% of Zimbabwe’s national goat herd is owned by smallholders, farmers rarely work together to leverage economies of scale. As they do not treat their goats as assets that require adequate care, feeding and shelter, they are often viewed as scavengers. When farmers are forced to sell their underweight animals at the farm gate, they cannot fetch a good market price, and they typically miss out on the many benefits these animals can provide as a key source for valuable milk, meat and fertilizer.
But, through the Zimbabwe Livestock for Accelerated Recovery and Improved Resiliency (ZRR) program, made possible by the United States Agency for International Development’s (USAID) Office of Foreign Disaster Assistance, Chiweshe and his neighbors are learning how to manage and market their goat herds collectively to improve their livelihoods. The program provides farmers with training on goat husbandry and health management, and trains Community Livestock Workers on preventative and curative animal health techniques.
Implemented by Land O’Lakes International Development, ZRR is assisting 2,000 farmers, who collaborate through 10 marketing groups of 200 farmers each. Farmers like Chiweshe receive three female goats, and are ultimately required to pass three female kids onto their neighbors, with one buck provided to service the breeding needs of each village’s goats.
To qualify for the program, ZRR requires that all the recipients already have other goats, and be willing to build a raised goat structure with one or two other families, with whom they can pen their animals together. Penning the animals in at night on a raised structure prevents them from being attacked by other wild animals, facilitates collection of their manure for fertilizer, and also helps to minimize an issue goats often face of foot rot, by providing them with a dry shelter.
“When the program started, I had 10 goats and received another three. I started taking better care of them and proactively working to breed them, which has already enabled me to pass on the three goats I was required to, sell 16 at the market, and still have 12 left over for future breeding and growth,” Chiweshe explained. Prior to ZRR, Chiweshe says he never thought about the importance of disease prevention, even though five of his animals previously died from preventable illnesses. “Through the program, I realized that buying the products required to dip and spray my animals was an important investment in my livelihood. I saw how spraying made the ticks on my animals disappear, and then I was convinced.”
Chiweshe Chirevo and his wife stand in front of the new home they’re building.
As a result of their new shelter, disease prevention efforts, and providing them with appropriate feed, Chiweshe says his goats now appear markedly healthier, with their coats free of lice. ZRR also trained him how to keep detailed records of goat births and sales for the first time. Moreover, since he started spraying and vaccinating his animals, none of them have died.
But, most importantly, times are simply a bit easier than they once were. He says he’s now able to pay all of his children’s school fees without issue, and the family now even slaughters a goat once every two months to enjoy some meat over the course of several weeks, which they used to only eat once or twice a year on special holidays. And he’s even started building a new, sturdier home to accommodate his large family, which he’s constructing as funds permit, brick by brick.
The support he received through ZRR has also allowed him to dream about the future, and to think about how he might expand into owning some local cattle one day. “I used to think that taking care of my family, by nature, had to be a struggle. But now, the program has convinced me – made me believe – that I can be a business man. And if I want to succeed, I must invest in what I do in order to grow.”
Written by Rukondo Haam, CEO Rhamz International
The Agribusiness Development & Management Centre in Uganda
Uganda, the pearl of Africa, has taken important steps in transforming conventional agricultural production into an organic farming system, with significant benefits for its economy, society and the environment. Organic Agriculture (OA) is defined by the Codex Alimentarius Commission as a holistic production management system, which promotes and enhances agro-ecosystem health, including biodiversity, biological cycles and soil biological activity. It prohibits the use of synthetic inputs, such as drugs, fertilizers and pesticides. An Agribusiness Expert in Uganda shared with our reporter the future of organic agriculture in the Banana Republic (Uganda).
Why Organic Agriculture?
Perhaps the most unique feature of Uganda’s organic agriculture is the high coordination, involvement and commitment from all stakeholders in the organic sector. From public institutions including the Ministries of Trade, Agriculture, Uganda Export Promotions Board, Uganda National Bureau of Standards, Uganda Coffee Development Authority, Cotton development Organization, the President’s office, to private institutions (all under the umbrella of NOGAMU) these include farmer`s associations, export companies, NGOs, CBOs, and private Universities. There is a high spirit of working together among all stakeholders under the public private partnership arrangement. Due to Uganda’s geographical location, a wide range of organic products can be grown in the country throughout the year. These could be looked into two categories: i.e. these largely targeting the export market and the other grown or processed targeting the local/domestic and regional markets. The local market crops range from staple foods like plantains (locally known as Matooke), millet, cassava, local and exotic vegetables and fruits, juices, honey, to processed and livestock products like eggs.
What are the Facts and Figures?
Uganda has one of the fastest growing organic certified lands in Africa. The products grown organically and sourced from Uganda include cotton (lint, yarn and finished garments), coffee (Arabic and Robusta), sesame (simsim), dried fruit (pineapples, apple bananas, mangoes, jack-fruit), fresh fruits (pineapple, apple bananas, passion fruits, avocadoes, papaya (pawpaw), ginger), jack-fruit, , vanilla, cocoa, fish, shea butter and shea nuts, bird eyed chilies, dried hibiscus, honey and bark cloth. These products are exported to Europe, USA, Asia and other parts of Africa among others. The numbers of organic exporters in Uganda has been growing and are fully certified or in conversion, from internationally accredited certifying bodies operating in Uganda.
Currently, Uganda has over 400,000 internationally certified organic farmers, the first and second largest certified farmers in Africa and world over respectively. The highest number is found in India. Uganda had the world’s 13th-largest land area under organic agriculture production and the most in Africa. By 2013, Uganda had around 350,000 hectares of land under organic farming covering more than 2 percent of agricultural land. There are 44 certified export companies. Member organizations are over 500 in Uganda and outside the country. The value of trade less organic turnover is currently over US$37 million per annum. The demand for organic products from Uganda is high about US$600 million.
Uganda uses among the world’s lowest amount of artificial fertilizers, at less than 2 percent (or 1kg/ha) of the already very low continent-wide average of 9kg/ha in Sub Saharan Africa. The widespread lack of fertilizer use has been harnessed as a real opportunity to pursue organic forms of agricultural production, a policy direction widely embraced by Uganda. According to International Federation of Agriculture Movement (IFOAM), the global market for organic foods and drinks is estimated to be around US$50 billion, and increases by 10- 20 per cent annually. This sub-sector provides a unique export opportunity for many developing countries, owing to the fact that 97 percent of the revenues are generated in the Organization for Economic Co-operation and Development (OCED) countries, while 80 per cent of the producers are found in developing countries of Africa, Asia and Latin America. As a significant producer of organic products, Uganda benefits from an important source of export earnings and revenue for farmers. In terms of price premiums and income for farmers, the farm-gate prices of organic pineapple, ginger and vanilla are 300 percent, 185 percent, and 150 percent higher, respectively than conventional products.
What is the Policy Environment for Organic Agriculture?
On the policy side, in 2004 the Uganda Organic Standard was adopted, while in 2007, as part of the East African Community, Uganda adopted the regional standard, the East African Organic Products Standards (EAOPS) developed under a joint UNEP-UNCTAD initiative. In July 2009, the government released a Draft Uganda Organic Agriculture Policy. The draft policy describes the vision, mission, objectives and strategies to support the development of organic agriculture as “one of the avenues for delivering self-sustaining growth as it provides mechanisms for individual farmers to improve productivity, add value and access markets which are keys to achievement of the Poverty Eradication Action Plan objectives”.
The strategy put in place to implement the policy is based on interventions in nine policy areas: the promotion of organic agriculture as a complementary agricultural production system; the development of a system of standards, certification and accreditation; the promotion of research, to enable technology development and dissemination; support to the development of local, regional and international markets for organic products; the generation of information, knowledge and skills through education and training; the improvement of post-harvest handling practices, preservation, storage and value addition; the sustainable use of natural resources; and participation of the special interest groups such as women, youth, and the poor and vulnerable.
Uganda has taken an apparent liability – limited access to chemical inputs – and turned this into a comparative advantage by growing its organic agriculture base, generating revenue and income for smallholder farmers. Through organic farming, Uganda not only gains economically, it also contributes to mitigating climate change, as Green House Gas (GHG) emissions per ha are estimated to be on average 64 per cent lower than emissions from conventional farms. Various studies have shown that organic fields sequester 3–8 tonnes more carbon per hectare than conventional agriculture.
By Deborah B. Hamilton
Feed the Future Partnering for Innovation
Most companies want to “do well by doing good,” and Jose Jaar, president and founder of DelCampo Soluciones Agricolas, proves this is possible. Over the past two decades he has built an agribusiness that earns nearly $2 million per year selling drip irrigation supplies to smallholder farmers in Central America.
Jaar recently attended Feed the Future Partnering for Innovation’s AgBusiness Lab in Tanzania to discuss his business model with African drip distributors. The Lab was an interactive event featuring system design simulations, expert-led discussions, site visits, and farmer interviews all aimed at identifying profit-driven opportunities for African drip distributors to engage a largely untapped smallholder market potentially worth billions of dollars.
So, how did Jose Jaar build a profitable business in a smallholder market?
Business success depends on knowing the target market, creating products that fit the customers’ needs, providing excellent customer service, and pricing products to sell. Over the years, Jaar and his team of agronomist salesmen have cultivated customer relationships built on trust. They started by visiting the farms, listening to smallholders’ needs, and then providing training, advice, and support along with equipment sales. Today more than 60 percent of DelCampo’s sales are repeat business, and its sales representatives earn nearly 80 percent of their competitive salaries from commission.
In 2009, to build momentum, Jaar used funds from the Millennium Challenge Account-Honduras to offer credit to farmers to finance their purchases, which allowed many to access irrigation equipment for the first time. Today, DelCampo provides $250 in revolving credit to its regular customers, which they repay after the growing season.\
Approximately 40 percent of the world’s food producers are smallholder farmers, and estimates of potentially irrigable land in the developing world top 110 million hectares. So why do only 3 percent of the world’s one billion smallholder farmers have access to drip irrigation? Because, as Jaar notes, most irrigation systems are too large and too expensive for smallholder farmers.
Feed the Future Partnering for Innovation is a USAID program that helps to commercialize agricultural technologies and promote sustainable partnerships that benefit smallholders. Its sponsorship of the AgBusiness Lab included providing participating drip distributors with extension advice, and system design and cash flow tools, in addition to highlighting the Del Campo model as one that successfully adjusted in products to meet smallholder size and budget requirements – and made a good profit doing it.
Partnering for Innovation recognizes that drip irrigation is a critical piece in solving the food security puzzle, and projects that increased access will double yields and incomes for millions of African farmers. The program has additionally invested almost 20 percent of its total grant portfolio in companies that are scaling drip technologies to meet smallholder needs.