Successful agricultural enterprises and smart policy: Eight case studies
From tomato processors in Nigeria helping to reduce the country’s import bill to cooperation between governments to establish a minimum price for cocoa, Neil Ford examines some examples of cutting-edge agricultural practice from across Africa: Source: https://africanbusinessmagazine.com/sectors/agriculture/successful-agricultural-enterprises-and-smart-policy-eight-case-studies/
Promagric: Tackling crop disease with AI
Despite the vigilance of farmers, crop diseases continue to exact a heavy toll on agricultural production across Africa. Many of the continent’s varying environments provide the ideal conditions for diseases and crops to prosper. Large producers can employ specialists to identify and tackle diseases but such expertise is out of the financial reach of most farmers. Promagric has therefore developed its Clinicplant platform using artificial intelligence (AI) to diagnose crop diseases from images uploaded by farmers to help combat crop disease and reduce agricultural losses.
Farmers upload either still photos or videos of the affected plants for instant feedback and solutions. It also suggests biological treatments and provides advice on disease prevention.
Featuring a forum led by experienced agronomists and farmers, the company aims to improve productivity and profitability. Farmers and agronomists pay €3 ($1.18) for every 20 images they have analysed for the condition of plants, or €8 for 60 images. The company expects to have 500 customers by the end of this year by making use of its database of the 3,000 farmers with whom it has worked for four years on other projects.
Founded in Cameroon in 2017 by Pyrrus Koudjou, the company has now expanded into Côte d’Ivoire, Mali and Senegal by integrating a mobile payment solution developed by Ivorian startup CinetPay. In November 2019, the company won the Med’innovant Africa prize for sustainable development in Africa and the Mediterranean region.
AgriEdge: Targeted data and solutions for farmers
Moroccan startup AgriEdge has developed a precision agriculture services platform to reduce the operating costs and maximise the yields of smallholder farmers. Taken together, this should increase the income of producers and increase food supplies for consumers. The company takes a wide range of data, including satellite and drone imagery and weather data, to determine the optimum level of water and fertiliser to give to each crop.
AgriEdge is seeking to expand its commercial operations, while supporting as many farmers as possible by offering two options, including Freemium, which provides smallholders and cooperatives with access to basic crop monitoring and yield estimates. Its Premium service, which is targeted at governments, NGOs, large scale farmers and agri-business companies, provides precise irrigation, plant disease management, and yield prediction. Information can be provided daily or less frequently and at anywhere from farm to national level, and AgriEdge’s managing director Faissal Sehbaoui says that the platform reduces farmers’ costs by 20%.
The founders spent two years developing the business plan and testing their concept with farmers in different regions across Morocco. They sought to develop platforms that were tailored to the needs of individual farmers, rather than providing blunt, “one size fits all” advice. One of the Mohammed VI Polytechnic University’s first startups, the company hopes that the success of those using the platform will encourage other farmers to adopt it and plans to roll it out across the African continent.
AgriEdge seeks to act as a bridge between smallholder farmers and advanced research and development by working with the international scientific community to promote sustainable agriculture. It organises its annual international scientific event called Agri Analytics Days to bring experts in digital agriculture from different continents together to discuss the latest advances. The company has also developed a separate platform, called AgriSoo9, which is a marketplace that allows farmers and farming cooperatives to market their products.
Tomato Jos: Import substitution in Nigeria
While some social enterprises seek to support producers in an entire sector and across a whole country, others focus their energies on a far narrower, targeted niche. Tomato Jos supports tomato producers around the northern Nigerian city of Kaduna, where the tomato farmers it works with now achieve yields above the national average. For many years, Nigeria produced about two-thirds of all of the tomatoes grown in West Africa but was simultaneously the world’s biggest tomato puree importer because of the lack of local processing capacity. Nigeria’s tomato puree import bill has averaged $360m a year over the past few years.
One of Tomato Jos’s founders, Mira Mehta, saw tomatoes piled by the side of the road because a bumper crop meant that there was insufficient local demand and too few opportunities for exports. She responded by launching Tomato Jos in Panda, Nasarawa state, in 2014, to support the production of tomato puree and paste within the region, thereby reducing the country’s import bill. The for-profit social enterprise is particularly innovative because it involves growing and processing food products for local consumers. Most other African agricultural initiatives aim to process food for export or produce raw foodstuffs for local consumption. Replicating the pattern of many successful agricultural and social enterprises in the region, participating farmers are guaranteed a fair, consistent price when their crops are ready for harvest.
Farmers are trained in the application of the inputs required to increase yields and harvest crops more efficiently. Tomato Jos also provides logistics and supply chain support to navigate the “last mile” to smallholder farms and securely transport produce to the processing facility. Finally, it handles food processing and packaging at the plant that prepares and brands finished goods for distribution within the domestic market.
Flamingoo Foods: Getting rice to market
Flamingoo Foods is another agricultural startup that uses the latest weather and satellite technology to improve food distribution. Based in Tanzania, the company predicts food shortages and surpluses in East Africa, developing storage capacity and processing plants to ensure that any surpluses are retained and channeled to drought-hit areas rather than wasted. Most companies work within a limited range of agricultural production, whether as farmers, traders, retailers or in developing seeds, fertilizers or other agricultural inputs, but Flamingoo Foods is also involved in producing and marketing the rice itself.
The company operates processing facilities in the Rukwa Valley in western Tanzania, where rice is dried, cleaned, milled and stored, to support local farmers. Rukwa Valley farmers previously transported their paddy by donkey but Flamingoo Foods now uses a truck to transport more than 200 tonnes a month. Its storage facility in Majimoto, Katavi, has the capacity for about 800 tonnes. Stored rice is regularly inspected and kept clean, with the additional option of fire insurance.
The milled rice is then marketed in Tanzania and also neighbouring Burundi, Rwanda, Uganda, Zambia and Democratic Republic of Congo. It is also sold directly from the mill and in the company’s own shops in Musoma and Mwanza. It produces about 1,000 tonnes of rice a year, which is sold in bags of 25kg, 50kg or 100kg.
While irregular and insufficient rainfall has always been a problem in eastern Africa, climate change is making it even more unpredictable, so it is vital that the agricultural and agribusiness sectors become more agile in ensuring that demand is met. Sufficient food is grown across the region almost every year, as drought affecting one area may not affect another, but the big challenge has been ensuring that food is transported to those who need it.
Givefood.ng: Providing food to those in need
Emergency food relief platform Givefood.ng raises money via crowdsourcing to provide food to those living in extreme poverty. Both donors and beneficiaries are sourced and identified online. Working through a network of supermarkets, it uses existing food supply chains in many parts of Nigeria, including Abuja, Lagos, Kano, and Cross River and Delta states. It aims to expand to become a truly nationwide operation by working through local communities and religious organizations.
The voluntary organisation was formed by a coalition of leading public and private partners including the Lagos State government, Babban Gona, Shoprite, Facebook and Flour Mills. As of 10 July, it had donated more than 200,000 meals to vulnerable Nigerians during the Covid-19 pandemic and has set itself the testing target of providing 1m meals to those most in need during the crisis. In a statement, the organisation said: “To increase support from anyone in the Nigerian diaspora as well as the open-hearted international community, we have implemented a PayPal payment option across all Givefood.ng platforms. Thanks to this improvement, more people can share their resources seamlessly.”
Coca-Cola and financial services company Stanbic IBTC are among the companies working with the voluntary organisation during the coronavirus crisis, including by helping to market its service, attracting more donors and providing food and drink themselves. Stanbic IBTC has agreed to support 5,250 people throughout the pandemic. While the Nigerian government has eased its lockdown, the associated economic crisis is affecting people more deeply than previously. Many poor households have lost whatever source of income they previously had. The United Nations World Food Programme estimates that the number of people facing acute food insecurity in the country has doubled as a result of Covid-19.
Babban Gona: Equipping small-scale farmers
The lead coordinator of Givefood.ng, Babban Gona is a social enterprise that has successfully supported more than 70,000 smallholders by equipping them with the right skills, products and services needed to significantly improve their living standards. Through its franchising model, smallholders are able to access seeds, fertiliser and extension services, while securing a guaranteed market price for their crops. The end result has been consistently higher than average yields.
Nigeria’s agricultural sector was neglected for many years as successive governments focused on oil production but the sector’s economic and employment value has become increasingly recognised by both the federal and state governments. Most initiatives have been targeted at large scale, export-orientated producers, but Babban Gona, which means “great farm” in Hausa, seeks to support the many small-scale farmers who make up the bulk of the country’s agricultural workforce.
It seeks to end persistent poverty among as many Nigerian smallholder farmers as possible. It has set a target of increasing the income of 1m smallholders by 2025 and creating 10m jobs by 2030. Babban Gona Franchise Farmer Groups receive tailored and cost-effective end-to-end professional training, input, credit and marketing services, plus access to storage facilities for maize to reduce the proportion of crops lost. Members now have 12,000 hectares under sustainable cultivation.
Funded by financial institutions and governments, including the Nigerian government and the Entrepreneurial Development Bank, it focuses on four key services, including financial services, agricultural inputs, farmer training and marketing services.
Frutos da Lagoa: Integrating smallholders into supply chains
Prior to independence, Angola was self-sufficient in all key food crops except wheat and was an exporter of cash crops, in particular coffee and sugar. However, despite the country’s favourable climate and extensive arable land, the sector was neglected following the oil boom.
Microfinance institutions (MFIs) tend to see farmers as high risk. One company trying to break the chain is Frutos da Lagoa. Alongside Coopera, a local financial cooperative, it is running a pilot programme to integrate smallholder farmers into an existing supply chain. Its joint business plan entails proving credit to small farmers to enable them to farm fish at scale.
More specifically, Frutos da Lagoa provides the fingerlings, feed and training to small farmers and then buys back the grown catfish to process in the processing facility. This creates a win-win-win situation for all parties involved. Farmers have a buyer for their product, guaranteeing an income and reducing operational risk. The financial cooperative gets a competitive return on its capital, knowing that the market exists for its debtors, and Frutos da Lagoa has a more robust source of fish.
Mario Mendes, founder of Frutos da Lagoa, says that the key is to offer financial support and training around farming but also around financial literacy.
The cooperative model ensures these smallholder farmers have greater bargaining power when buying their inputs. This system works, he argues, because it removes the “uncertain factor” so that the farmers only focus on the production of their products. Now it’s about scaling up this model and work towards tackling Angola’s $8bn food import bill.
Governments of Ghana and Côte d’Ivoire: Floor price mechanism for cocoa
While many of the most innovative solutions to African agricultural problems are online platforms, supportive pricing structures can have just as much impact. Wildly fluctuating crop prices make it difficult for producers to predict their revenue, both in terms of generating income and the ability to invest in their operations. The governments of Ghana and Côte d’Ivoire have therefore decided to set a joint minimum trading price for cocoa production.
In 2019, they struck a deal with big chocolate producers to ensure a minimum price and therefore provide farmers with a minimum income from this October. They agreed a floor price of $2,600 a tonne for 2020-21 and beyond, incorporating a premium of $400 a tonne, to increase farmer incomes by about a fifth. Prices had been static for the three years prior to the 2019-20 season. Cocobod chief executive Joseph Aidoo described it as “an historic meeting during which suppliers and buyers have engaged and agreed on a price below which the producers will not sell.”
The two countries are by far the biggest cocoa producers in the world, accounting for more than half of global output. In the past, their cocoa marketing boards – the Coffee and Cocoa Council (CCC) in Côte d’Ivoire and the Ghana Cocoa Board (Cocobod) – set different prices, resulting in widespread smuggling across their common border.
The Covid-19 crisis has had a big impact on global demand, with mounting surpluses and prices 30% below average. This could threaten the deal, although Cocobod is confident that farmers will still receive a higher price than would otherwise have been the case. However, the two governments and marketing boards are confident that the mechanism will work well in the longer term.