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Transforming Farmers to Investors

  Apr 13, 2017
 

The Investors Technical Roundtable

Africa holds the largest tracts of arable land suitable for agricultural production; with many reports on its economics illustrating that Africa could be the World’s food basket. However, these trends continue to battle their endurance to the test of time characterized with the rapid emergence of industrial firms and a thriving real estate sector set to accommodate the ever increasing population.

“The need to change one’s mindset from undertaking agriculture to agribusiness as well as equipping oneself with correct information is crucial in the transformation from being a farmer to an investor in the agribusiness sector” said Grace Kariuki, The Ag Director in charge of Agribusiness Programs at Strathmore Business School.

Speaking about the patterns and trends in the sector, Mr. Bimal Kantaria – Managing Director Elgon Kenya Limited one of Strathmore Business School’s industry partners, advised the audience with the tools of running a successful agribusiness enterprise. His address strongly discouraging the rapid growth of urban based telephone farmers who are uninvolved in their enterprises, advised that, “If you want to be a serious investor, you have to take the operational management of the enterprise seriously. Owners must know the business in depth and breadth.” In doing so, he encouraged the use of research in informing production practices, “You need to spend time in doing research. What are some of the production technicalities does one require in the production phase?  What are some of the irregularities with the cash flows that are challenging the growth of the business?”

Most farmers have been unable to successfully transition from domestic food production into subsistence farming that is commercial in nature. Addressing this, he highlighted one of the major challenges in the production value chain of the sector, describing it as myopic in nature. This he expounds by explaining that most farmers do a poor visualization of the production process, often because the information they consume is ill informed. Most farmers tend to produce what seems to be trendy, with the mindset that there is a ready market existing. He called for a thorough research based market assessment before production.

Crop health management can be a daunting task if not properly managed. To overcome the numerous challenges in its management, one must devise a risk strategy that observes the production process so as to take note of early signs of pest and disease attack. Crop health can be managed efficiently through taking note of the following pointers: Early detection of irregularities in the produce, identification of pests and their nature of damage, the ability to differentiate between the damage caused by pathogens, insects and a nutrient deficiencies and lastly, preparation of field applications to crop protection.

Speaking about their key lessons derived from the Investing in Agribusiness Primary Production program, investors shared the following key take out from the program.

Alex Muinde – Investor, Tomatoes Value Chain

“Never trust data that has not been tested. What are some of the market needs assessment of your produce? Knowing what the customer wants is how an investor makes profitable business.”

Lawrence Kinyanjui – Investor in the Fruits Value Chain (Mangoes)

“Cash flow management is crucial in ensuring that an agribusiness investor takes advantage of seasonal crops and crop rotation, consequently optimizing on peak selling periods. There is also a lot of growth potential that is underutilized in primary production. This is because most individuals are not aware of pesticide control measures and hence the produce does not attract large and profitable markets such as the Middle East. Most investors end up resulting to poor selling prices of their produce in the local market.”

Consolata Gituto (Mwangaza Trust) – Investor, Herbs and Onions Value Chain

“Investors must keenly evaluate the quality of their produce, by constantly monitoring the produce and its market efficiency.  What markets are you targeting and how does your market respond to the quality of your products? Do you as an investor have a vision for your business that addresses quality standards, consistency patterns and volumes of scale for your produce?”

About the Primary Production Program

The investing in Agribusiness Production Program will seek to explore various ways of creating wealth in agricultural production, addressing the various challenges that face primary production investors, primary production financing as well as routes to markets. Click here to read more about the program.

The program will run from 26th to 28th April. Application Deadline is 19th April 2017 at noon.

 

Contact Details:

For more information regarding the primary production program kindly write to Peter Kibe through pkibe@strathmore.edu  or Veronica Muniu on vmuniu@strathmore.edu .

 

 



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