AGRA

The World Bank biennial report for 2019 has ranked Kenya as the second best country in Africa for providing enabling environment for agribusiness.

During a virtual launch of the ‘Enabling the Business of Agriculture 2019 report’ on February 23, 2021, Samjhana Thapa, a Senior Agriculture Economist at the World Bank said that Kenya has shown relative strengths on aspects related to securing water, trading food, registering machinery, and sustaining livestock.

“Kenya achieved the highest score observed in Sub-Saharan Africa in relation to those four aspects,” she said.

AGRA has been on the forefront in pushing for a micro reform approach to have policies and reforms passed within the shortest time possible.

“Usually policies take between 5 to 10 years to pass, but from what we have been doing, we have seen policies and reforms pass within an area of 3 to five years,” John Macharia, AGRA’s Country Manager told the virtual meeting during the launch.

The report, which was compiled as from 2019 after a global survey in 2018 found that by then, Kenya needed to improve on its regulatory framework on aspects related to protecting plant health, accessing finance, and registering fertilizers.

“In particular, Kenya’s score on the accessing finance indicator is restricted by the country’s lack of a specific regulatory framework to support the development of a warehouse receipt system. Similarly, Kenya’s score on the registering fertilizer indicator is restricted by the country’s lack of a requirement to register new fertilizer products,” reads part of the report.

However, Peter Munya, the Cabinet Secretary in charge of Agriculture, Livestock, Fisheries and Cooperatives noted that in the past two years preceding the survey, the government has intensified the fight against corruption, malpractice, and poor governance as part and parcel of creating an enabling agribusiness environment.

“The robust reforms in the Strategic Food Reserve Management and Warehouse Receipting Systems have been designed to improve efficiency and accountability, both in the use of the public resources and ensuring that farmers get a fair wage for their goods,” said CS Munya.

AGRA has been working directly with the national and county governments to improve the efficiency of the Warehouse Receipting Systems, the Electronic Voucher System for distributing farm inputs to smallholders especially those found in remote villages, Village Based Advisors model as part of innovative extension service provision that include distribution of farm inputs to smallholders, and mechanization of the smallholders among many other fronts.

In general, the EBA report presents indicators that measure laws, regulations and bureaucratic processes that affect agriculture in 101 countries. It covers eight scored indicators: supplying seed, registering fertilizer, securing water, registering machinery, sustaining livestock, protecting plant health, trading food and accessing finance.

According to the survey, Kenya’s scored 64.8 out of 100, which is higher than the average score observed globally (61.47), higher than the average score observed across countries in Sub-Saharan Africa2(40.69), and higher than the average score observed in lower-middle-income countries (50.58).

“On behalf of the Government, I wish to thank the World Bank for this timely report; and along with AGRA and the Agriculture Transformation Office who have also worked tirelessly to make this a reality,” said Munya.

African agribusiness Small and Medium Enterprises seeking to fundraise for their businesses can now go online and have access to a newly launched platform where they can find articulated requirements for accessing the funds.

“The SME Resource Bank, which is now a component of the AgriBusiness Deal Room, is a virtual repository of guiding materials that will help entrepreneurs to better prepare for and optimize their engagements with investors,” said Jennifer Baarns, the Head of Partnerships at the Alliance for a Green Revolution in Africa (AGRA).

The Agribusiness Deal Room is a matchmaking online platform under the Africa Green Revolution Forum (AGRF), which convenes close to 4,000 stakeholders from the entire eco-system to facilitate partnerships and investments in African agriculture.

“We usually come across entrepreneurs with great ideas, but they are not investor ready,” said Elizabeth Wamai, an Investment Analyst from Exeo Capital – an international investment company in the Sub-Saharan Africa region that regularly engages in the Deal Room.

“It is really frustrating to see great potential opportunities fall through the cracks during the screening process because the entrepreneur did not have critical financial information such as audited accounts, business plan, and financial projections among others required to assess the credibility of the business and maybe its growth potential,” she told a virtual audience during the launch of the SME Resource Bank on 19 February 2021.

According to Dr Debisi Araba, the Managing Director for the AGRF, Africa has the potential to transform its agriculture sector to contribute a healthy percentage of economic growth on the continent. “However, there is a financial deficit in ushering in this reality,” he said.

“We have a deficit of over 100 billion dollars to ensure the flow of capital in the agricultural sector across the continent, and that is what we are trying to mobilise through the SME Resource Bank,” he told online participants during the launch.

“One of the things we want to do at the deal room is to reduce this scarcity of finance,” he said. “We are not seeing a proliferation of bankable agribusiness projects across the continent, so what we are trying to do is not just to increase the flow of capital but also improving the investment readiness to enhance agriculture finance.”

According to Yosuke Kotsuji, a Senior Investment Officer at the International Finance Corporation (IFC), there is need to encourage local and regional agribusiness trade if we have to build agricultural food systems resilience.

“Lessons from the COVID-19 pandemic have taught us that we cannot always rely onglobal food supply,” he said.

The SME Resource Bank will contain fundraising materials such as comprehensive investment memos, robust financial models and market analysis information that will inform SMEs about the investment process and requirements and how to prepare for participation in the Agribusiness Deal Room.

The resource bank will be intensely used in the capacity building and Deal Room preparation of hundreds of SMEs and Business Development providers. It will be an evolving open-source depository that will be open to other contributors for its expansion.

You can access the resource bank here and watch the recording of the launch here.

Contributing partners to the Resource Bank include USAID, U.S. International Development Finance Corporation, Prosper Africa, GiZ, IFC and CrossBoundary.

The Agribusiness Deal Room is delivered by a consortium of partners namely: AECF, AfDB, AGRA, Bonrezo, CASA, CrossBoundary Group, GAIN, Grow Africa, Generation Africa,  IDH,   IFC, IFAD, KPMG, Rockefeller Foundation, SAFIN, Tanager, Blair Institute for global change, USAID and the World Economic Forum. The Deal Room is hosted annually at the African Green Revolution Forum (AGRF) which is hosted by AGRF partners and the Government of Rwanda.

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VALUE4HER digital platform is Africa’s first agribusiness intelligence platform aimed at facilitating growth and development of women owned agribusiness enterprises. The platform seeks to expand visibility for women’s businesses, expand their presence in markets where they trade, access new markets nationally, regionally and internationally, and to acquire the capital, business and technical partners and resources required to support their growing businesses. The platform has so far registered representation from 36 countries, with over 750 businesses registered.

TalkCorner is a virtual platform organized by the VALUE4HER programme to spotlight women’s agribusinesses, enable them to share their experiences and lessons and inspire other women to join agri-entrepreneurship journey and grow their businesses and secure more incomes. TalkCorner sessions aim to build the confidence and capacity of the woman speaker, profile her business and facilitate meaningful partnerships and mentorship.

This year’s first TalkCorner featured Dr. Agnes Fasehun, the Managing Director of SwanCape Ltd. SwanCape Ltd is a producer and distributor of premium quality vegetables, herbs and fish sold in major Nigerian supermarkets, restaurants and their farm shops.

Having been brought up in a farming family, Dr. Fasehun was taken aback when, armed with a veterinary medicine degree, prospective employers turned her down, declaring her unable to handle large animals like cattle

“Luckily I had served my national youth service stint at a financial institution and I found an alternative job with a bank,” says Dr. Fasehun as she narrates her journey in agribusiness.

But the banking sector was not where her passion was, she left the financial stability and predictability of the banking career to start her own agribusiness. 

Her interest in agriculture and food systems was nurtured by the realization that whenever she visited major supermarkets, a lot of vegetable items were imported, despite the fact that her country Nigeria was producing enough local vegetables.  She was determined that she would one day ensure local products could compete with imports.

She discussed the specific challenges she encountered along the way, including cash flow issues, identifying markets, appropriate staffing and developing competitiveness in product quality.

Through continuous training of staff, networking and working with her suppliers to maintain high standards, Dr. Fasehun has today managed to get her produce side by side with imported products on several major supermarkets in Nigeria.

Since she had already transitioned her business to digital commerce, the COVID-19 pandemic did not pose that much of a challenge to her business. The only barrier she faced was delivering goods to her customers due to the lock-down but she was able to overcome this with the government issued permits.

In a poll held among participants in the first virtual TalkCorner webinar, most participants cited financial support as the biggest barrier to entry and growth of women businesses. 

VALUE4HER aims to close the gender gap in agri-entrepreneurship and help women business owners to overcome the unique challenges that dissuade them from starting and growing businesses.

TalkCorner is a monthly webinar hosted by AGRAs VALUE4Her women’s agribusiness digital market, to spotlight successful women’s agribusinesses, to use their stories to inspire confidence in themselves and other women.

VALUE4Her is AGRAs continental program aimed at assisting women grow their agribusinesses through access to markets, capital, skills and capacities and business information and intelligence services.  

Join the VALUE4HER digital platform.

For more information please contact Ms. Sabdiyo Dido, Head of Gender and Inclusion, AGRA on sdido@agra.org

By Apollos Nwafor, Ph.D. – Vice-President, Policy & State Capability

Even before the COVID-19 pandemic, Africa was already grappling with serious food security challenges, driven by factors such as drought, flooding and a major invasion by desert locust swarms in the Horn of Africa.  The Food and Agriculture Organization estimated in 2019 – before the COVID-19 pandemic – that half of the people in Africa were food insecure.

Early estimates indicate that as a result of COVID-19, Africa’s real GDP is shrinking by 3.4%, down by 7.3% from the growth projected before the outbreak of the pandemic, with smaller economies facing contraction of up to 7.8%.   

Commendably, most African governments implemented swift response measures such as cash transfers, tax breaks, and loans to businesses or subsidies on farm inputs.  However, the measures were short-term and some have already lapsed.  Yet the risks for the vulnerable persist and could get worse.

Policy makers must urgently identify priority areas to mitigate the effects of the pandemic on food systems and to build back better if the continent is to make headway in the first Sustainable Development Goal (SDG) of ending hunger, while leaving no one behind.

One objective is to boost food production and distribution.  Policies need to support private sector players in the agriculture sector through lower interest rates for facilities and policy predictability for trade in agriculture.

Policies need to support provision of financing incentives for SMEs in the agriculture sector and developing resilience for smallholder farmers.  Increasing government investment in the sector will drive financial institutions to increase their portfolio of lending to the sector, which currently lies at less than 1%.

Another priority should be fast-tracking of Digitalization for Agriculture (D4Ag) in Africa.  The global workforce is digitising faster than ever before. Post-COVID, automation will take an ever more central stage. The fast mobile phone penetration in Africa has potential for driving innovation and building a tech savvy workforce in the sector.

Africa needs to strengthen intra-regional agricultural trade.  Evidence suggests that regional trade agreements increase welfare by providing a rules-based trading system and trade liberalization. Officially commencing in January 2021, the Africa Continental Free Trade Agreement (AfCFTA) can be used to consolidate and strengthen intra-regional agricultural trade in the continent.

Policy actions should aim at propelling Africa through technological leapfrogging to overcome existing challenges.

You can read the full report ‘Agricultural Policy Actions for Building Back Better: A COVID-19 Mitigation Supportive Mechanism’ here

For more information please contact Apollos Nwafor, Ph.D, Vice President – Policy and State Capability, AGRA on anwafor@agra.org

It is mango season in Kenya and in Murang’a County, in the Central part of the country, farmers are enjoying a bumper harvest, evident not just in the trees sagging under the weight of juicy mango’s but also by the number of farmers who have set up stalls along the busy highway to sell their produce.

The United Nations (UN) Food and Agricultural Organisation (FAO) estimates that Africa loses at least 4 billion dollars worth of its total food production to post harvest losses. Yet the solution would be as simple as getting farmers to process their produce, value addition, before sending it to the market. That is what one local government in Kenya is doing with mango’s, changing fortunes for farmers.

It is a familiar scene on major highways in Africa, the race to put food on the table. Like everywhere else, the fittest takes home the money. It is mango season in Kenya and in Murang’a County, in the Central part of the country, farmers are enjoying a bumper harvest, evident not just in the trees sagging under the weight of juicy mango’s but also by the number of farmers who have set up stalls along the busy highway to sell their produce.

But times are hard, that’s according to a Kenyan trader Sarah Njeri.

“The market is so bad, take for example yesterday, I did not sell anything, I had nothing to buy my baby milk.”

Their other marketing options are selling in bulk to bigger markets but they say that puts them at the mercy of middlemen who undercut them making their profit margins unsustainable.

So when the sun goes down, they begin to count their losses, the cycle repeats itself until the next season.

“The challenge that we have is that we planted these trees, tend for plants, but we don’t have a market, sometimes we leave here without selling anything, we have a lot of problems,” says another Kenyan trader Florence Wairimu.

The Kenya Agriculture and Livestock Research Organisation (KALRO), estimates that every year mango farmers in the country suffer between 40-45% post-harvest losses due to lack of markets, denying farmers their much deserved earnings. According to the UN’s Food and Agriculture Organisation, in Africa, at least 30% of the food produced for human consumption is lost or wasted along the supply chain every year.

“Some people made some calculations they are estimating the value of post-harvest losses to be the value of almost 4 billion us dollars. Per year and this is more than the food that we get from our other partners including the developing partners,  so imagine if we are able to contain post-harvest losses we could really add to our food security and nutrition,” explains AGRA’s Head of Markets in Kenya Dr. Ones Karuho.

Several kilometres from Murang’a county in Eastern Kenya, in Makueni county, the Kalamba fruit processing plant, an initiative of the local government, known in Kenya as the county government.

Governor Kivutha Kibwana says the plant, which started in 2017, could not have come at a better time.
“When we didn’t have the factory, one of the things that happened and hurt farmers was the fact that the prices were very low, especially when the mango’s are just about to get very ripe, you are told that the price is one shilling per mango therefore three shillings per kilo take it or leave it, if you refuse, then you will have to throw the mango’s away or feed them to dogs.”

The county is Kenya’s top mango producer, with a yearly harvest of 184,000 Metric tonnes, the mangoes have the potential to earn the county $500M.

The plant, according to Kibwana, cuts the middlemen and earns the farmers a decent living.

“The reason to introduce this plant was to be able to buy mango’s and to process them and to sell the pure and eventually the juice and this made the prices to go up, when a lose because of the fruitfully we began to have a problem of reaching the overseas markets.”

Currently, the plant only produces pulp but the county is also among the country’s top producers of tomatoes. It’s in the process of adding a line that will make tomato paste, as well as ready to make juices and bottled water.

Plans are at advanced stage to begin marketing in the European Union countries, following an ongoing campaign to eliminate fruit flies.

“When we began we were just thinking mangoes but over time, it is starting to tell us we have so much potential to deal with tomato, orange and bananas,” says Agriculture Minister in Makueni County Bob Kisyula.

Experts say, is crucial in spurring growth of grassroot economies in Africa, while at the same time ensuring food and nutrition security.

“When farmers or other agribusinesses add value to the commodities they are harvesting it creates other opportunities in the economy all of a sudden they impact other sectors like manufacturing, those who produce technology to process raw materials into finished products, it can also impact even the service industry, the packaging and everyone who is involved in that sector,” says Dr Ones Karuho.

Kibwana worries that agriculture will not be helping the people as much if marketing is not properly done.

“If you do not get marketing right and of course value addition marketing right, then it means that agriculture is not helping your people as much as it should and the rural populations continues to experience significant poverty,” says Kibwana.

Indeed, the success of the processing plant has seen the county open a milk processing plant, and the agriculture minister says work is on to add value to traditional crops. Challenges are, however, abound.

“We now have 4,000 drums of 200 kgs each of puree, well explaining that the fact last year was a really depressing year because of covid, many markets closed or shrunk, but we need a good market locally and internationally for the puree but also for the fresh fruit,” says Agriculture Minister from Makueni Bob Kisyula.

To get the fruits to the factory, the county government works with farmers organized in cooperatives.

“We are trying to teach our people that when you aggregate whatever you produce and then you sell it together, you are more competitive, you can negotiate better,” says Kibwana.

One of the marked differences we notice in this area, the smallholder farmers no longer line the highway in their numbers seeking a market for their produce and the few who are still selling to traders from other regions now earn up to tenfold what they previously earned.

Back at the factory, the machines continue to roll as the workers quicken their pace to meet the demand, while along the Nairobi- Nyeri highway the race to make ends meet continues, with the hope that a value addition intervention will save them this daily struggle.

Originally published on SABC News

In June 2006, the AU member states adopted the “Abuja Declaration on Fertilizer for the African Green Revolution” and resolved to increase fertilizer consumption rates across the continent from 8 kilograms per hectare to 50 kilograms per hectare by 2015, a target whose deadline has been surpassed.

In Tanzania, fertilizer usage stands at 13.68 kg/ha of fertilizer use, falling 3.6 times lower than the AU target. Although limited awareness, access and affordability are cited as some of the limitations hampering farmers’ ability to utilize fertilizer, the policy context presents a further challenge to the fertilizer adoption process.

Despite generating interest amongst multiple agencies and creating an overlap of regulatory mandates, compliance costs, such as chargeable fees and levies, and the requirements for doing business could discourage private sector investment as well as potential investments in research and development for the production of new types of fertilizer to meet farmers’ needs.  In turn, this could prevent farmers from accessing new technologies.  

On the other hand, fertilizer registration requirements are time-consuming and costly.  According to the Tanzania Fertilizer Act (2009) and its associated fertilizer regulations of 2011, a three-year trial at the cost of US$ 10,000 per year is compulsory for new fertilizer, fertilizer supplement and/or blended formula prior to market entry. The high costs and logistical bottlenecks limit the number of farmers that can access fertilizer, this in turn hampers productivity, income and ultimately the food security of farmers.

AGRA’s policy and advocacy strategy is key to resolving the policy challenges already described. The twin- track approach combines evidence generation demonstrating the worth and merit of reforms and public-private engagements to validate reform options and to navigate the policy process along the government’s bureaucratic phases on the reforms.

These are the steps AGRA took to support the government-led policy cycle:

• AGRA commissioned an ex-ante economic impact assessment study of policy and regulatory reforms, a legal analysis and a cost-benefit analysis to demonstrate the rationale for the proposed reforms and amendments to overcome conflict or lack of alignment in the provisions.
• AGRA provided a grant to the Tanzania Fertilizer Society of Tanzania (FST) to support private sector engagement in the coordination and monitoring process of existing regulations. Private sector has firsthand experience of the challenges facing agribusiness investors; hence it is better placed to articulate and advocate for reforms to improve the business enabling environment.
• AGRA provided a grant to the Ministry of Agriculture to coordinate the policy process along the bureaucratic channels. Engagement with the government is important because they formulate and enact policies, and understand the processes through which reforms can be effected.
• Finally, a key factor was a policy network, spanning key institutions, including research institutes and partners (such as the Tanzania Fertilizer Regulatory Authority (TFRA)).

AGRA’s twin approach to working with both the private sector and the government to successfully resolve problematic policies and regulations lead to multiple outcomes. Obstacles to registering customized and specialist blends of fertilizers were removed – with testing reduced to one year and taxes and fees charged by various regulatory authorities during importation and clearing abolished. The number of fertilizer businesses jumped from 420 to 2500 as a consequence of reform, fertilizer prices paid by farmers went down by between 10% and 40% while fertilizer usage went up from 302,450 tons to 435,178 tons. Preliminary field tests show that the reforms yielded a return of Tsh 0.99 for every shilling invested compared to a yield of 0.13 under status quo.

Indeed, AGRA’s twin strategy approach to policy and advocacy has brought about significant and positive impacts to the productivity and incomes of farmers, and has the potential for further unlocking sustainable growth in Tanzania.

Read the full policy here authored by Boaz Keizire – Head, Policy & Advocacy, Tinashe Kapuya – Senior Program Officer, Policy & State Capability and Liston Njoroge Program Officer, Policy & Advocacy

The usage of fertiliser under the Planting for Food and Jobs (PFJ) initiative increased significantly from 121,000 tonnes in 2016 to over 400,000 tonnes in 2019.

The national fertiliser use per hectare also increased from an average of eight kilogrammes (kg) per hectare in 2017 to an average of 20kg per hectare in 2019. This means the country is getting closer to meeting the international standard of fertiliser usage of 50kg per hectare. Agricultural experts believe the implementation of a fertiliser expansion programme will enable Ghana to achieve that objective and thereby boost food security.

Event

Addressing a validation workshop on a five-year strategic plan (2020-2024) for the Ghana fertiliser expansion programme in Accra yesterday, the Minister-designate for Food and Agriculture, Dr Owusu Afriyie Akoto, said: “It is interesting to note that fertiliser consumption is more than four times the quantity supplied at the beginning of the PFJ initiative.”

Dr Akoto’s speech was read on his behalf by the Director of Crop Services at MoFA, Mr Seth Osei Akoto.

The workshop is the third, after similar ones in Tamale and Kumasi, to get the input of stakeholders to finalise the strategic plan on fertiliser usage for improved productivity, food and nutrition security and job creation.

It was organised by the Ministry of Food and Agriculture (MoFA), with sponsorship from the Alliance for Green Revolution in Africa (AGRA) and the United States Agency for International Development (USAID).

Increases

Since the roll out of the PFJ, Dr Akoto said, there had been significant yield increases recorded for selected crops, adding that maize yields, for instance, had increased by 67 per cent from 1.8 tonnes per hectare to three tonnes per hectare.

He said rice yields also increased by 48 per cent from 2.7 tonnes per hectare to four tonnes per hectare, while soya yields also increased by 150 per cent from one tonne per hectare to 2.5 tonnes per hectare.

“Certified seed usage increased from 4,400 tonnes in 2017 to 6,800 tonnes in 2018 and 18,333 tonnes in 2019. Two of the key pillars under the Food Crop Module of the PFJ is the promotion in the use of improved seeds (notably hybrid seeds) and improvement in fertiliser application,” he added.

On the fertiliser expansion programme, Dr Akoto said its objective was to develop the fertiliser industrial sector, including the establishment of the first fertiliser manufacturing plant in the Western Region.

It was also to optimise the entire fertiliser value chain through improved agronomic services, training, farmer education and development of soil fertility maps and formulae to customise fertiliser application, he said.

According to the minister-designate, with the existence of natural gas in the country, it was important to ensure maximum investment in local fertiliser production to reduce Ghana’s dependence on fertiliser importation.

Commitment

The Technical Adviser on Agriculture at the Office of the President, Nana Serwaa Amoako, said the investment in initiatives by the government to improve the agricultural sector was to create better conditions for smallholder farmers.

The Head of AGRA West Africa, Mr Foster Boateng, said the agenda of the development partners was for effective collaboration between the government and smallholder farmers.

According to him, building the capacity of the smallholder farmer would drive and increase productivity.

The Agribusiness Deal Room is a year-round matchmaking platform at the African Green Revolution Forum (AGRF) with the aim of catalyzing new business deals, partnerships and commitments. It hosts agribusinesses on the continent, providing an investable pipeline to a wide range of investors. In addition to access to finance, it also provides companies in the agriculture and agribusiness sectors with mentorship, partnership and market entry solutions to support their growth objectives. The Agribusiness Deal Room also positions governments to present investment opportunities, promote investment incentives and engage with interested investors and other stakeholders.

The Agribusiness Deal Room supports enterprises and governments through a combination of in-country project preparation, pipeline development, project bankability, investment promotion, and an enabling policy environment. The Agribusiness Deal Room facilitates substantive transaction-centered dialogue and connections amongst key stakeholders including enterprises, farmers, governments, investors, financial institutions, NGOs and development partners. Deal Room activities are year-round and driven by eight main and interrelated components.

2020 presented the world with unique challenges that, in one way or another, impacted us all. The Covid-19 pandemic posed a stress test to global agrifood systems in ways previously inconceivable. For the first time ever, the AGRF summit took place in a virtual format and a hybrid component, comprising both a scaled down physical event in the host country, Rwanda, and digital participation from around the world. This was the best-attended AGRF Summit of all time, with over 10,400 registered, and close to 7,000 active delegates from 154 countries, including 492 global speakers. Over four days, we had meaningful engagements on how to capitalize on the economic power of rapidly-growing urban populations to create prosperous, sustainable food systems for Africa. Without a doubt, the conversations at last year’s Summit presented a step-change in our approach towards the pursuit of food & nutrition security and the increasing shared prosperity across Africa. The conversations yielded tangible resolutions to foster the transformation of the agri-food sector to sustainably feed the continent, and the rest of the world. In this report, you will read about these resolutions in light of the current state of food and agriculture in Africa, as well as their implications on the future.

In the early 1990s, Ghanaian Ben Kemetse was studying biology and aquaculture in Norway. He would watch the news about the famine in Somalia, seeing aid agencies drop food parcels from the air to assist those who were starving.

“Seeing that, it sat in my heart. It challenged me to become a farmer,” Kemetse says.

In 1996, he returned to Ghana and began farming, mainly cultivating exotic vegetables like bird’s eye peppers and green chillies for export and using irrigation in the dry months to grow leafy green vegetables for the local market.

Financially, it was a challenge. The yields he was achieving did not translate into sustainable income streams to make the farm viable.

“I lost a lot of money; the overhead costs were too much. I realised I had to increase my productivity and this could only be done through better, improved seeds.”

Kemetse researched the benefits of using different types of seed – especially the hybrid varieties – to boost yields, but it was only after a friend prompted him to apply for an Alliance for a Green Revolution in Africa (AGRA) grant targeting aspiring seed companies, that the idea for M&B Seeds and Agricultural Services firmly took root.

With a start-up grant of $149,000, Kemetse and co-founder Monica Awuku established the company in 2008.

“During my career as a farmer from 1996 to 2008, I had dealt with many people; unfortunately, not all of them were faithful or truthful but Monica was an exception,” says Kemetse. “When the opportunity came to form a company, she was the partner I wanted.”

Awuku was working in the extension services department of the ministry of agriculture.

Today M&B uses genetically pure breeder seeds procured from the International Institute of Tropical Agriculture (IITA) to grow its own foundation seeds. These seeds are provided to farmers who are part of the company’s outgrower supplier base who grow the certified seeds the company treats and processes for sale. M&B offers three types of hybrid maize seed to the public, as well as rice and beans seed. It also provides consultation services to farmers.

Early days, early challenges

Quite early in the company’s existence, Kemetse decided hybrid seed was going to be much more viable and profitable than the open-pollinated varieties. A hybrid is created by crossing two different varieties of the same plant. It provides better yield but seed produced by the plants grown from a hybrid seed cannot be re-used like its open-pollinated counterpart.

The very first hybrid foundation seed that M&B received through the official research institution channels of the country also posed its first big challenge.

According to Kemetse, the three-way hybrid cross was not pure; two of the parent lines were not what was indicated on paper. “This meant we were giving seed to the farmers that did not deliver on what we promised. We wrote reports to AGRA and I did not relent until there was a solution,” he explains. This was one of the first business lessons he learnt: always do your own research.

M&B procured the foundation seed directly from the IITA to ensure its quality and purity. This was not accepted good practice at the time; however, he persisted in using the direct link and not working through local sources who were promising high quality but not delivering.

Initially, Kemetse used the foundation seeds to start production on some land. Within two years, he produced about two tonnes of seed for sale, with himself and his co-founder as the only employees. Today, M&B produces 300 tonnes of seed annually and has approximately 20 permanent staff members, with double that number in casual workers employed part-time in the processing facility and M&B’s fields.

Expansion through outgrowers and mechanisation

Four years after M&B’s launch, Kemetse realised they would need to expand production and started recruiting farmers as outgrowers. With a loan facilitated by AGRA, Kemetse purchased equipment from China to assist in the processing of the seeds which, up to that point, had been done by hand.

Currently, the company has 150 outgrower farmers who each produce the seed on plots of land ranging from two to 10 hectares.

The total outgrower tally is a rolling number. Every year, M&B recruits more farmers as well as terminating the relationships with others who did not adhere to the conditions set by the company.

This was another important lesson, notes Kemetse. “I found plenty of challenges in the farmers’ attitudes. People were not honest about their operations and we were not achieving our yield.” M&B now provides extensive training and support to its supply base and evaluates it regularly.

Grassroots marketing

Market acceptance for M&B seed did not come easy, adds Kemetse.

A lot of time was spent on educational drives; firstly, regarding the benefits of using certified hybrid seed as opposed to using seed taken from existing harvests. He had to combat market perception that this was a way to control the purchasing of seed every season, instead of a method to boost yield and production.

He did many radio interviews and hosted demonstrations and invited farmers. “We put the seed in small packs and would distribute them at churches. I would drive around and when I saw farmers growing maize, I would hand them some seed and ask them to listen to the radio programmes. Those days were difficult as the original grant was not enough to cover all these costs.”

It took five to six years to get proper market acceptance from the farmers. The policymakers and officials took even longer. “They only listed our seed in government tenders in 2019,” he says. “It was resilience, commitment and passion that ensured this company still exists.”

Hands-on distribution channels

About 80% of M&B’s distribution is through agro-dealers.

In some areas, where there were no agro-dealers, M&B set up shop themselves and paid someone a stipend to manage it. Once these shops developed into viable ventures, the company would exit.

Kemetse adds that M&B does not have the capital to have an office in every region where it would like to operate. Its reach, however, is expanding steadily outside the Volta region where the company has its base.

In 2017, the government’s Planting for Food and Jobs policy was implemented and subsidies for seed came into play. M&B still distributes through the agro-dealers but the subsidy is paid directly to the company.

Future plans

“My actual competition is the farmer who still thinks he can recycle his seed,” says Kemetse. He explains that the use of certified hybrid seed is still not widely used in the country. “Yes, the multinationals are coming, but they will also find it difficult to sell. Our seed matures fast, dries fast and the yields are competitive. It also requires less fertiliser than some of the seed from multinationals,” he says.

Even though some of the farmers have requested M&B fertiliser and agro-chemicals, this is not the company’s priority. “If I have enough finance to cater for the seed needs of the country, then we will diversify,” he says.

Finance remains a big challenge. In 2017, a bank approached M&B with the offer of a possible loan. Kemetse and the team spent a substantial amount of money to get the application finalised and have still have not had a response. Any finance secured will go towards the building of a larger warehouse where surplus seed can be stored.

“My first priority is to increase seed output, educate the farmers and bring quality seed as close as possible to the doorstep of the farmer. The profit-margin on farming is extremely thin. We don’t want the farmer to lose that small profit they make because they have bad seed, bad inputs or bad agronomic inputs.”

M&B Seeds and Agricultural Services CEO contact information