THE VALUE ADDITION IMPERATIVE IN AGRICULTURE

Local agricultural processing is vital as Africa’s food imports continue to rise – but not all commodities are well suited to domestic value addition

A rising middle class and expanding population are pushing Africa’s food import bill to worrying highs. While rising capital imports suggest growing productive capacity, booming consumption imports – especially for products that can be produced domestically – are a red flag, according to Jean-Louis Ekra, president of the African Export-Import Bank in Cairo. They suggest economies are failing to keep pace and running up unnecessary trade imbalances.

Africa lost its status as a net exporter of agricultural products in the early 1980s when prices for raw commodities fell and local production stagnated. Since then, agricultural imports have grown faster than agricultural exports and by 2007 reached a record high of $47bn, yielding a deficit of $22bn. The value of agricultural exports from Thailand is now greater than for the whole of the African continent below the Sahara.

Nature is partly to blame. Weather-related damage has hit rice crops in Benin, Burkina Faso, Cameroon, Niger and Madagascar. Foot and mouth disease has hurt Egypt’s bovine exports, and cassava – one of Africa’s major offerings to world agricultural trade – is being felled by a fast-spreading virus. Policy volatility is also at fault. Nigeria – Africa’s largest rice importer – announced heightened import taxes last year, which prompted a sudden rise in purchases. And across Africa, weak infrastructure hinders markets.

But rising food imports are also a consequence of wealth and one of its tell-tale effects: a taste for protein. Poultry import growth last year was around 12 percent, driven by higher incomes in the likes Angola, Benin, Ghana, and the Democratic Republic of the Congo. “Africa is growing at a base of 5 to 6 percent a year, which translates into a growing middle class with an increase of consumption,” says Mr Ekra. “In west Africa, for instance, you see an increasing taste for luxury Thai rice.”

This is not only the case in the more affluent economies. In Sierra Leone, which languishes towards the bottom of the United Nations’ Human Development Index, rice imports have run to about 15 percent of consumption in the last few years, and have reached as much as 45 percent in the recent past. “That means an import bill of several hundred million dollars, a truly frightening percentage of the $3.8bn GDP,” says Paddy Docherty, chief executive of Phoenix Africa, a company investing in post-conflict countries.

Companies testify to the challenges of agricultural import-dependence in their continental operations. “We have 13 factories in Africa that use products like soft oils, tomatoes or starch-based compounds on a daily basis, but much of this is imported, wasting foreign exchange and increasing our carbon footprint,” says Marc Engel, chief procurement officer at Unilever.

But to an optimist, import-dependence spells opportunity. Firstly, structural imbalances are a symptom of fast growth. China’s annual agricultural consumption needs have now overtaken production too. For companies and investors, the import profile signals strong domestic demand which could be tapped through investment in domestic agribusiness and food retail.

Attention is turning to greater domestic processing of agricultural resources, to ensure raw products can reach finished form within African markets. Raising productivity is key to this. “In order to have a sustainable, solid rural sector you cannot have poverty. You must have prosperity,” says Howard-Yana Shapiro, global director of plant science and external research for Mars. “And how will that come without productivity? So productivity is the key piece.”

Mr Docherty agrees that productivity increases are needed to drive local value addition. “The vast majority of imports are of bagged rice, i.e. already milled and packaged,” says Mr Docherty. “There is great potential to do this milling in situ in places like Sierra Leone, if there is the primary production in country to feed the mills. I know from experience that the tiny areas in production in Sierra Leone, and the low yields currently being achieved because of the lack of inputs such as fertiliser and lime, means that there is milling capacity which is unused.”

One Beijing-funded demonstration farm in the Bo region has a decent rice mill which is shut because it lacks the raw product to justify keeping it in operation, says Mr Docherty: “Processing capacity alone is no good without sufficient volumes of local production. I do not imagine the economics would work if raw rice was imported for local processing. Processing capacity must grow alongside local production, and the two together are essential for achieving food security and more efficient markets in Africa.”

It is also important to ensure local processing is technically advanced, otherwise it can consume large amounts of labour without a value payback. Cassava processing, for instance, is often low productivity – and traditional processing methods can lead to contamination of cassava crops.

Practitioners must distinguish between commodities which make sense to process locally, and those that do not. Technoserve, the NGO, has conducted analysis across several African markets and their findings challenge the view that local processing is always best. Measuring the domestic resource cost of a range of Mozambican commodities threw up a number of interesting insights. Local processing of cashew nuts was seen to be highly advantageous, while local varieties of rice (Chokwe and Zambezia varieties) were not found to be financially profitable without credit access and technical assistance. Potatoes command low prices but production costs are modest, suggesting a good market, while paprika was found to be “somewhat profitable” for farmers, although pesticide and fertiliser interventions would be needed.

Simon Winter, senior vice president for development at Technoserve, says market dynamics signal where and how to go about value addition. “Once you have identified the market and where processing needs to be, then you optimise your logistics,” he says. It does not make sense, for instance, to develop cashew roasting and packaging facilities too close to the production source if the consumer market is far away, due to the damage that will be caused during transportation. “If cashew kernels are in vacuum packed 2kg bags, they are less likely to get broken and crushed than in a small foil packet,” Mr Winter notes. Chocolate, on the other hand, would make more sense to process locally (currently, Europe and North America dominate this segment). While high temperatures are a struggle in west Africa, there is less risk of product damage during transportation of chocolate. “You have to understand this commodity by commodity,” says Mr Winter.

There are many constraints to value addition, even where economic arguments are strong. First is a lack of resources, including refrigeration and cold storage, vehicles and skilled personnel. Then there are deficient or confusing standards, especially between countries. And there are serious health dangers to some locally-grown produce, such as aflatoxin that can be found in large quantities in maize and nuts.

Local processing means being able to identify and have the means to flush out such health dangers, for instance through aseptic processing. Important assistance here can come from government agencies. The Kenya Agriculture Research Institute, for instance, provides disease and pest management support, as does Cocobod, the cocoa sector agency in Ghana.

When exploring the market dynamics of local processing, it is also important for companies and practitioners to distinguish between producer- versus buyer-driven chains. Buyer-driven chains can be evident in agriculture, when freshness standards and protected varieties are important, when there is high product differentiation, when packaging and logistics are complicated, or when R&D and other knowledge elements in production or processing are critical. So it may well be large retailers and brand companies – from Massmart to Unilever – who could provide the impetus to local processing in Africa, saving themselves money and reducing supply chain complexity.

ADAM ROBERT GREEN
Contributor to "THIS IS AFRICA" Development Section
Read original article from the link below

http://www.thisisafricaonline.com/Development2/The-value-addition-imperative-in-agriculture?ct=true

Images From National Animal Science Conference 2013

The Animal Science Association of Nigeria held their annual conference at the Women Development Centre, Garki Business District Abuja where a host of topics were discussed by the experts and speakers that graced the three day long event.
The event was well attended by Animal scientists from all over the federation. This are some of the images from the event.

Youth Agro Entrepreneurs (Y.A.E) At Nigerian Economic Summit

This years (2013) edition of the Nigerian Economic Summit was held in Abuja with Agriculture as a business being the central theme . The Youth Agro Entrepreneurs media team took the opportunity to speak to some of the major stakeholders and organizations in attendance.

How To Fund Your Small Farm Business Start-Up

The sceptics have been quick to point out to me that growing food is a relatively cheap thing to do. Farming is part of the Africans DNA, it is our culture, and it is in our history - Just throw some seeds in the soil, add water and watch the plants sprout. It is that simple.
But growing food commercially to feed hundreds or thousands of people isn’t cheap. Farming is expensive. Tractors cost millions of naira, barns don’t build themselves, personnel require high salaries to keep them motivated and you can’t grow marketing materials. Like any business, starting a farm from scratch takes resources. Agro-entrepreneurship is neither cheap nor easy but it is extremely fulfilling and profitable.
For young people venturing into agro-entrepreneurship, finding money to pay for those resources can be difficult, even impossible. Traditionally, farmers have had far fewer lending options available to them compared to other areas of the economy. Obtaining a loan from the bank or other financial institutions has historically required documented farming experience and lots of collateral (typically large expanse of lands). Agricultural loans from commercial banks or farm credit agencies were aimed towards giant agricultural corporations, and haven’t taken young farmer seriously in the past. This are part of the problems limiting youths floating more agro-enterprises start-up.
In the vacuum created by these barriers, the government and various non-profits and business people have stepped in to try and ensure a future for young farmers with creative new funding models to help solve these problems

Here are a few ideas for raising funds for establishing a small farm business.

1. Bring In Your Rich Friend, Family

In an industrial agricultural system set up to feed billions of people and grow profit for shareholders, small-scale farmers don’t stand a chance raising the much needed capital to set up an efficient enterprise. The equipments and processes need to be put in place requires money. Hard cash, which most small scale farmers don’t have a lot off ( nor do the youths being encouraged to take up farming as an option to unemployment) is needed. Involving your rich friends or family is the traditional way of starting a fundraiser for a business idea. Agriculture is no different. It is true that most rich people would rather not engage in farming due to the general stigma towards farming as a poor person’s survival technique but most rich folks would invest in farming business if you have a concrete business plan clearly stating the return in investment. Forget the fear of your idea being stolen by a wealthier, greedier friend. Agriculture is not such a novel idea and some would rather die than do the work. It is okay, that’s why you are an entrepreneur. As the saying goes; man must chop! Therefore food business is always good business.



2. Reach Out To Rural Leaders

A decade ago, in Abuja a choice plot of land could be obtained from a traditional ruler in your area if he deems you worthy. Be it through honest service to the community, underhand payments, marrying his daughter, putting his sons through school or just about any act to get yourself in his or her good books. These powers to allocate land at will have been taken away by AGIS for a more modern system of land allocation fitting for a 21st century city that Abuja aims to be. That is all prim and proper, but these traditional leaders of rural communities still control and own vast expanse of lands which most of them are left unpopulated and uncultivated. While Abuja is going ultra-modern, majority of the country is still ruled by rural leaders with the power to allocate lands. It is worthy to always remember as an educated young person in the city searching for opportunities that big population is big business and majority of Nigerians live in rural communities. Reaching out to these leaders can be a genuine opportunity to own a piece of land to start your farm business, plus they also control large amounts of human resources. Empowering a traditional ruler in rural areas through setting up agro-enterprises under their watch can boost their popularity amongst their subjects and help create opportunities for the community and what is more you get to make start your business with the two key resources needed for agriculture – land and labour.

3. Connect With Other Would-Be Farmers and Set-up a Co-operative

Self - preservation is the first law of nature. Networking and meeting up with like -minded individuals who are looking to start a farm biz is vital. Joining a co-operative is an innovative way of sourcing for funds and there are various interesting groups out there helping to build their own vision and enterprises. These co-operatives operate varying financial models which could help you start plus applying for a loan as a group also increases your chances of convincing the banks and loan institutions

4. Apply For Fund/Grants/Loans Specifically Aimed At Farmers

A major downside to taking loans from financial institutions are the high interest rates incurred from taking these monies they offer. This is slowly being overcome as the government and various agencies and organizations are beginning to realize the potential of agricultural business and its importance to prosperity. There are specific loans aimed at funding young people. The Bank of Agriculture has been active, National Export Import (NEXIM) Bank, and various Microfinance Banks have loans specifically tailored to the peculiar business of agriculture. Take the bold step and speak to one of these organizations you had be genuinely surprised. Those involved in National Youth Service Corp (NYSC ) can speak to their CDS officials and find out about non interest loans available to them. For a global approach, there are crowd funding websites like AgFunder that can help your kick-starter campaign.

Jovana Farms; A Mushroom Farming Start-Up Company

My personal experience as an agric entrepreneur has proved that farming mushroom, antelope, quail, rabbit, grass cutter, snail, laboratory rat and guinea pig is second nature.In the case of mushroom cultivation, its production gives smallholder farmers a big chance to increase their income, improve their health and offers an alternative means of livelihood to urban and rural farmers.

The process of growing mushroom is one of the easiest ways to earn a living and not much physical strength is required in its production.The potentials in mushroom farming makes it an investor delight as a viable money making option. Investment in mushroom production will in the long run contribute to food security, wealth, and health and employment creation.Getting started on a mushroom farm is a potentially lucrative way of getting into the farming business. This kind of farming is highly remunerative enterprise with quick return.

There are many types of mushrooms and they can be categorized into Four Saprotrophic, Mycorrhizal, Parasitic, and Entophytic. Edible mushrooms are considered as healthy food because their mineral content is higher than that of meat or fish and most vegetables.

Nigeria job seekers can succeed in overcoming the challenges of poverty and unemployment through micro, small and medium scale rat breeding. But first we must empower our people with the right resources and skills then they’ll be able to create a brighter future for themselves and for the country.Good market. Many opportunities abound in the growth of mushrooms as many hospitality industries in the country still import the product to add to their meals. Majority of big hotels in Nigeria have mushrooms in their daily menu, but this mushrooms came from abroad, this means local production will have a ready market. There is opportunity to even export mushroom, once you can produce good quality that can be exported to Europe and America.

More farmers are of late going into the farming of mushrooms, a neglected and forgotten healthy food, which is not only improving the financial status of the producers but the health of the consumers’ as well.The rate at which Nigerians have shown interest in the eating of mushrooms is given a massive boost to production of the delicacy.ViabilityThe technology for the cultivation of mushroom species could be easily adopted by individuals, co-operative societies, families, and famers, schools in the rural and urban centers without difficulties. The cultivation of the mushroom can be done all year round as sources of the mushrooms are from agricultural wastes which are always available in abundance in Nigeria.The high rate of returns and low cost of investment as well as farming them are some of the reasons many farmers are fast resorting to mushroom cultivation these days.Prince Arinze Onebunne, is the CEO Jovana Farms and can be reached on E-mail:info@jovanafarm.com.

BREAKING NEWS : STUDIES CONFIRM BIOFORTIFICATION OF TUBERS (Sweet Potatoes)

A study published today in the Journal of Nutrition provides conclusive evidence that orange sweet potato (OSP) provided significant amounts of vitamin A to malnourished Ugandan children and women and that a modest improvement in vitamin A levels in the body was measurable in some cases.Vitamin A deficiency (VAD) is a major public health concern in poorer countries and accounts for more than 600,000 deaths a year among children under five years of age. In Africa, VADprevalence is estimated at 42% among children under five.Uganda is among the African countries reported to be at high risk, with 28% of children and 23% of women estimated to be vitamin A deficient. VAD can impair immunity and cause eye damage that can lead to blindness and even Annually, up to 500,000 preschool children go blind from VAD, and about two-thirds will die within months of going blind.

Biofortification is the process of breeding new varieties of foods crops that contain higher amounts of nutrients to improve nutrition and public health. Agricultural approaches, such as biofortification, are now being looked upon to fill the nutritional gap for vitamin A and other nutrients.Traditionally, white or yellow sweet potato varieties are grown and eaten in Africa, but these provide little, or no, vitamin A. OSP was conventionally bred, not just to provide more vitamin A but also to be high yielding and drought tolerant.From 2007–2009, HarvestPlus and its partners disseminated new OSPvarieties to more than 10,000 farming households in Uganda for whom sweet potato is a key staple food.

The project provided OSP vines for farmers to grow, as well as extension services and nutritional information so that farmers could incorporate OSP into their cropping systems. Since sweet potato is available for about 10 months a year, it can be a rich and steady source of vitamin A.The project resulted in 61% of households adopting the vitamin A-rich OSP to grow on their farms. They were also willing to substitute more than one-third of their traditional white and yellow sweet potato consumption with OSP. This level of substitution was enough to push large numbers of children and women over the threshold, ensuring that their daily requirements for vitamin A were met.Vitamin A intake increased by two-thirds for older children and nearly doubled for younger children and women by project end. For children 6–35 months, who are especially vulnerable, OSP contributed more than 50% of their total vitamin A intake.The high prevalence of inadequate vitamin A intake among a subset of children 12–35 months who were no longer breastfeeding fell from nearly 50% to only 12% as a result of the project. This is a very positive finding as young children who have recently stopped breastfeeding are at higher risk of VAD. This is because breast milk has been their primary source of vitamin A and their vitamin A needs continue to be high.Researchers were also able to measure a small positive impact of eating OSPon the amount of vitamin A in the blood among children 5–7 years that had lower levels of vitamin A at the start of the project. At project end, researchers also found that women who got more vitamin A from OSP had a lower likelihood of having marginal VAD. (VAD was unexpectedly low among the women sampled in this study, thus making it harder to detect changes.)“Overall, these results add to the growing evidence base that OSP provides large amounts of vitamin A in the diet,” says Dr. Christine Hotz, former HarvestPlus Nutrition Head who led the nutrition study. “We were also able to show a modest increase in vitamin A blood levels among children, despite this being challenging to measure given the changing nutritional landscape over two years under real-world conditions.”This project was undertaken concurrently in Mozambique where results showed even higher levels of adoption—and consumption—of OSP by vulnerable households.“We now have evidence from two very different countries and contexts that show that farming households are willing to adopt OSP, incorporate it in their diets, and get the vitamin A that they need,” says senior IFPRI economist, Dr. Daniel Gilligan.HarvestPlus is now scaling-up OSP to reach another 225,000 households by 2016.

The International Potato Center (CIP) plans to scale-up OSP to reach more than 600,000 households in 10 countries by 2015, including 120,000 households in Mozambique.About the ProjectFrom 2007-2009, HarvestPlus and its partners disseminated orange sweet potato—to see if VAD could be reduced—to more than 24,000 households in Mozambique and Uganda. HarvestPlus leads a global effort to breed and disseminate micronutrient-rich staple food crops to reduce hidden hunger in malnourished populations. It is part of the CGIAR Research Program on Agriculture for Nutrition and Health (A4NH). It is coordinated by the International Center for Tropical Agriculture (CIAT) and the International Food Policy Research Institute (IFPRI).Journal Article Introduction of β-Carotene–Rich Orange Sweet Potato in Rural Uganda Results in Increased Vitamin A Intakes among Children and Women and Improved Vitamin A Status among Children. Journal of Nutrition.Partners in Uganda Association for Strengthening Agricultural Research in Eastern and Central Africa (ASARECA) and Regional Potato and Sweetpotato Improvement Network in Eastern and Central Africa (PRAPACE), Farming for Food and Development Eastern Uganda (FADEP-EU), International Food Policy Research Institute, International Potato Center (CIP), Makerere University, National Agricultural Research Organization, Natural Resources Institute, University of Greenwich, Uganda Bureau of Statistics, Volunteer Efforts for Development Concerns (VEDCO).

Thanks go to the district and provincial officials in Uganda (Bukedea, Kamuli, Mukono) and to the many people of Uganda who participated in the project and the research study.DonorsThe Bill and Melinda Gates Foundation provided a direct grant that made this research possible. Additional HarvestPlus core funding was also used to support this work, which included support from (in alphabetical order): Denmark (DANIDA), Sweden (SIDA), the Syngenta Foundation, the United Kingdom (DFID), the United States (USAID), and the World Bank.

Media ContactYassir Islam, Head of Communications (Washington, D.C.) y.islam@cgiar.orgTel: + 1 (202) 862-560

Pumping up potatoes for poor communities - iron biofortification

Iron deficiency is the most common nutritional disorder in the world - affecting 50% of pregnant women and 40% of preschool children in developing countries, according to the World Health Organization. Since potatoes are naturally good sources of iron, the International Potato Center (known by its Spanish acronym CIP) is working to add further nutritional value through breeding, or biofortification, of potato.


It is a very promising alternative for improving health in poor communities, where access to meat is limited and people cannot afford commercially fortified foods and vitamin supplements.The bioavailability of iron in potato is also important, and can be greater than that from cereals and legumes. Potatoes have high levels of ascorbic acid, which promotes iron absorption. They also have low levels of phytic acid, which inhibits of iron absorption. CIP efforts are focused on identifying and breeding varieties that are rich in both iron concentration and bioavailability.Health consequences of iron deficiency include impaired physical and cognitive development, increased risk of morbidity in children, and reduced work productivity in adults.

In the Peruvian highlands, up to 60% of preschool children suffer the stunting effects of malnutrition, with iron deficiency as the main contributing factor.The potato is recognized as a key food staple, but its potential for combating malnutrition is not well known or exploited. “For example, in Huancavelica in the Peruvian highlands, women and children consume an average of 800g and 200g of potato per day, respectively,” explains Gabriela Burgos, who leads the Quality and Nutrition Laboratory at CIP. “So improving iron concentrations and bioavailability in potato can have real impact in these areas.”Five years ago, with funding from the HarvestPlus program, CIP started to screen the potato germplasm in its genebank for micronutrients (iron, zinc, vitamin C, and phenolic). Initial screening of 579 native Andean potato varieties and 315 improved varieties showed a wide variation for iron and zinc concentration and a large genetic diversity that could be exploited in breeding programs.CIP agronomist Walter Amorós explains: “We selected a group of potatoes for their high levels of iron, and we have done a whole series of crosses with them and studied the progeny,” he says. “From a baseline iron content of 19mg / k, we’ve achieved levels as high as 40mg / k after two selection cycles.”The future challenge is to combine these cultivars with CIP’s advanced breeding lines that have disease and pest resistance, high yield, and high acceptance from farmers.

http://cipotato.org/press-room/press-releases/pumping-up-potatoes-for-poor-communities-iron-biofortification

OutStanding in Their Fields (A poem for Farmers)

Out standing in their field, the old joke goes.
Farmers are their own breed to be sure.
Growing boys, and girls, strong and true.
Raising food, caring for the land – in their blood.
Outstanding in their fields, doing what they love.
Farmers are true to one thing, and one thing only.
Growing it better, one eye to the sky and one to ground.
Raising hopes, raising dreamers – in their hearts.
Out standing in their fields, eyes to those they love.
Farm wives washed in blood, sweat and tears.
Growing it at home, in the field and in their souls.
Raising it generation after generation – in their DNA.
Outstanding and insane, outstanding and obscure.
Farmers are a special breed, and so it should be.
Growing it started in God’s own first garden after all!
Raising hands deep in soil, blooded on the land. Forever.

By Shanyn Silinski & BrandonManitoba