Africa is home to the fastest-growing population in the world, which is projected to increase by about 50 percent over the next 18 years, growing from 1.2 billion people today to over 1.8 billion in 2035. As a result of this rapid increase, land parcels in the areas of high agricultural potential are decreasing in size, affecting food production.
According to the United Nations, Kenya’s agricultural sector accounts for 27 percent of GDP directly and indirectly through linkages with other sectors. The sector employs more than 40 percent of the total population and more than 70 percent of the rural population. The sector also represents 60 percent of the country’s exports.
That said, it is important to note that the Kenyan agricultural sector is based predominantly on smallholder farmers, mainly from the rural areas, producing around 75 percent of the agricultural production. In the recent past, there has been a rapid uptake of farming and agribusiness by the youth. By encouraging and nurturing youth investments in agriculture and agribusiness, Kenya can curb food scarcity and food security issues. Improved food security means higher agricultural output, higher incomes for farmers, food resilience within their households and, highly productive farms.
Agribusiness the world over is rapidly shifting with its growth increasingly demanding as the world’s population continues to increase. This increased population growth has triggered a mindset shift from looking at agriculture as a way of life to seeing it more as a business. This ensures that those doing the primary production get a fair return for their produce while those further along the agribusiness value chain can also get business.
To run a successful agribusiness venture, farmers and investors need to research all the elements that go into running a successful agribusiness venture from routes to market, value addition, contract farmers, partnerships of technology, manufacturing strategies, and marketing and sales strategies.
Agribusiness provides a transformational opportunity for agriculture in Kenya and Africa as a whole if exploited strategically. Kenya’s potential in agribusiness is great but is grossly unrealized, thus the need for increased investments.
Investors in agribusiness are faced with a myriad of problems from the poor utilization of arable land, post-harvest losses estimated at 40 percent, declining productivity, farm degradation, and poor production management. By understanding these problems and learning how to mitigate them, agribusiness investors can reap the full benefits of agriculture.
Our Investing in Agribusiness Primary Production Programme seeks to explore ways of creating wealth in agricultural production by addressing these challenges. This Programme further helps potential investors develop the right agribusiness investment ideas, equip themselves with research skills in a dynamic sector, develop viable business plans, and manage their farm working capital. Learn more about our Investing in Agribusiness Primary Production Programme
Article by Juliet Hinga
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