REVOLUTIONIZING AFRICA’S ECONOMY THROUGH AGRIPRENEURSHIP
By Chibukizo Okpiri
Many African countries have been hit hard by the present economic lacuna. Economic recession is the headlines in Nigeria, Zimbabwe is plunged in debt exacerbated by lack of a diversified export base and declining terms of trade that make it difficult for the country to adjust to changing world demand for tradable goods. In a bid to match its present economic and financial situation, Egypt devalued her currency. In 2015, Ethiopia faced one of the worst droughts in 30 years caused by El Niño which led to poor harvests and shortage of livestock forage. The fall of oil price has left Angola struggling with the reins of its economy. This begs the question which way Africa?
Agripreneurship is the solution. Agripreneurship is a union between agriculture and entrepreneurship; an agripreneur is a risk-taker, opportunist, initiator who deals with uncertainty in the agricultural business environment. The managerial, technical and innovative skills of entrepreneurship applied in the field of agriculture may yield positive results and well trained agripreneurs may become role models to all disheartened farmers. Upcoming agricultural entrepreneurs aim to reduce agricultural burden, generate employment opportunities for rural youth, control rural to urban migration, increase national income, support industrial development in rural areas and reduce pressure in urban cities.
Most African countries have comparative advantages of producing agricultural produce more than other countries yet they have nothing to show for it. Nigeria is the highest producer of cassava in the world but exports little to nothing. Cote d’Ivoire is the highest producer of cocoa in the world yet they have no local chocolate company that can compete globally and capitalize on the availability of raw materials; Ethiopia which is the major producer of oilseeds, grains and spices, which now account for nearly $750 – $800 million in export revenue. Lack of local processing and packaging ensure that food products exit the country as cheap raw products and enter local western markets as more valuable processed goods after being processed in a local environment or in another western country.
There is a need for African countries to step up to their full potentials which is a carved out niche in the global market for themselves. Agribusiness report 2013 opined that African countries have big opportunities to export into international markets. Almost all successful cases of African agricultural exports involve commodities like; cocoa, coffee, cotton, tobacco, tea, groundnuts, cashews, rubber, and more recently horticultural crops that tend to be grown in restricted areas with specialized agro-climatic characteristics which limits global supplies. Many of these commodities also require large amounts of labor/land for production or processing, which gives a clear advantage to African producers with plentiful low-cost labor and/or land. In the long run, given the more favorable outlook for world markets, African countries with relatively good land and water resources and low population density should be able to tap booming markets in rice, maize, soybeans, sugar, palm oil, biofuel, feedstocks, and emerge as major exporters of these commodities on world markets, following the example of recent successes in Latin America and Southeast Asia.
The time for Africa is now as Asian countries are crowded, face stiff competition and it is very expensive for most agribusiness firms and Agripreneurship which is the catalyst that will help Africa achieve this great fete. African governments should encourage and create an enabling environment for Agripreneurship to foster by encouraging financial institutions and banks which provide finances to agripreneurs to create special cells for providing easy finance to agripreneurs at concessional rates of interest and on easy repayment basis. Rural entrepreneurs should be ensured of proper supply of scarce raw materials on priority basis. Subsidy may also be offered to make the products manufactured by agripreneurs cost competitive and reasonable; training which is essential for the development of entrepreneurial skills. This enables the rural agripreneurs to undertake the venture successfully as it imparts required skills to run the enterprise.
Some lessons from Agri in Pakistan – as in, the Sugar and Cane industry
People say ,Y is the sugar industry run by mafias and politicians ?
Y ?
1st people have to understand that the sugar industry is based on the thesis,that cane is the easiest and highest risk adjusted return,for the farners – and to keep farners from starting a Tahrir or joining ISIS. Hence,over supply of cane and over-production of sugar,is an accepted reality of cane farming,in Pakistan
This ensures perpetual raw material supply for the mill,and a PASS THROUGH of all costs to the state – on a defacto basis.Defacto basis,is key,as there is no contractual arrangement for the pass through – which is a threat to the economic security of the state,as the mill owner can create shortages,spikes and supply and payments crisis and easily manufacture repetitive, but ingenious reasons for debt waivers,tax reliefs,export subsidies and drawbacks.
Excess cane production and sugar,is the disaster scenario for the Pakistani state.If there is a bad crop,international sugar prices would not rise,to an extent,to make imports on a duty free basis, costlier than the NSR to the sugar mill.
In fact,the inported sugar could be sold at a profit to dealers,to more than offset the indirect tax revenue earned, by the state,on cane purchases by mills (mandi/purchase tax) and sale of sugar by mill (excise and sales and VAT tax)
Y is the mafia required in sugar ? dindooohindoo
Phase 1
To start strikes in mills of competitors
To divert raw material supplies of competitors
To set fire to bagasse stock of competitors
To monopolise truckers for mill logistics
To choke off the logistics for the mill competitors
To break unions in workers and truckers
For the above,a mill owner needs the support of the police,mafia and the neta
Phase 2
To manipulate raw material supplies,as under:
To downgrade and reject materials purchases
To delay purchase payments w/o delayed interest
To pick and choose cane suppliers
To tamper quality,moisture and weighnent tests
Using dummy names to route purchases from captive plantations
Route farmer purchases,as captive plantation purchases
To run a racket of farmers cane bills discounting
To organise dharnas/riots/logistics blockades, with the aid of farners
To charge financial conversion charges for payments to farners in cash
For the above,a mill owner needs the support of the police,mafia and the neta
Phase 3
To recover the costs of fire insurance and LOP insurance, there are accidental fires in bagasse stocks – once in 5 years, to recover,in bogus claims – the aggregate premiums paid over 5 years
Phase 4
To con the state in export subsidies and drawbacks
To con the state w.r.t CDR/OTS with banks
To con the state w.r.t capital and interest subsidies
To tamper the power consumption meters of CPP and power from grid – which is the only forensic proof of production
Phase 5
Bogus exports to eat up the subsidy and drawbacks – from land dry ports and sea ports
Routing exports proceeds on actual and bogus exports,via hawala and other modes
Manipulating cost,production and stock records to inflate costs,make off the books sales and purchases and hide stocks of finished goods
Selling bagasse in cash,instead of selling power to the grid
Creating shortages and spikes in prices of raw and processed/refined sugar Make fake cash purchase bills to generate cash for the sugar mill
For all the above,you need the mafia and the neta, AND also, since the farnmers are voters for the netas.Since the netas cannot outsource the political risk of the cane souring and payments,to a private party – and that,it is a no-loss, monopoly business,the netas are in the sugar mills,and will stay so,forever