What is agribusiness? Agribusiness is turning your farming activities into business or inculcating business principles into agriculture. Investopedia defines agribusiness as any business related to agricultural production. Agricultural production is basically about plants and animals.
To ensure that agricultural production continue, we must take agribusiness seriously. Without business activities in agricultural production, agriculture will still be a way of life and we will still rely on rains for farming whilst the world is facing climate change which has thrown our predictions of rains overboard. Without realizing the need for investing in agribusiness, we will still rely on seeds of yesteryears which cannot give us the yield we need for food security.
Without practicing proven business principles in our agricultural production, we cannot improve on yields and realized profits from what we planted or reared. Without seeing farming as a business, we will not train more labour for the industry and leave the sector to unskilled labour which from time past has proven to produce low efficiency in agricultural productivity. We need specialized and skilled labour in the agribusiness industry and it will take us to invest in it to see this being realized.
Thumps up to ENI Ghana, an Italian oil and gas company for establishing an agribusiness centre under the Okuafo Pa Project in Dorma East District, Bono Region which specializes in training the youth, theory and practical agribusiness ventures, helping such youth to acquire skills and affording them to specialize in areas in the agribusiness industry.
Such skilled youth are furthermore sponsored to undertake their first production in their chosen fields in agribusiness. They target to train about 800 people per year. This investment by ENI Ghana in our agribusiness sector is worth commending and emulating.
It is imperative that we drum home the urgency of investing in agribusiness as long as man will rely on plants and animals for food, fuel, bedding, livelihood etc. The quantum of investment needed varies. It ranges from any amount depending on what agribusiness venture one seek to go into.
It can be as low as GH¢100 to produce confectionaries from agricultural produce such as ‘kube toffee’, ‘kulikuli’ and ‘dzowe’ to as much as a million dollars to build agro processing plants, irrigation dams, research laboratories, etc. Everyone can and must invest in agribusiness. It is well yielding and when managed well it can exist for generations to generations like the Irani Brothers & others who have been in the wheat flour business in Ghana since 1967 and still surviving.
The rich must invest in agribusiness ventures, the middle income earners must invest in agribusiness ventures, low income earners must also invest in agribusiness ventures, husbands and wives, families must invest in agribusiness ventures, and young entrepreneurs as well as governments must also invest in agribusiness.
This is because our very survival since creation of man has depended on agribusiness and will continue till there is no man on earth. Investments in agribusiness will ensure that there is food for everyone, raw materials for industry production, efficiency in production, employment, incomes for owners and workers as well, revenue for the state and development of new ways of doing things.
One individual gathered resources to produce tilapia from the Volta lake. With his investment in the agribusiness sector of producing tilapia from caged culture in the lake, he ended up providing about 6,200 tons of fish to the Ghanaian market, employed directly over 400 people, paid thousands of Ghana cedis as salaries to people, gained millions of Ghana cedis as profits for himself, paid thousands of Ghana cedis as revenue to the state and para state agencies and helped in developing new technologies in growing fish in caged systems.
This is how much of a value an investment in agribusiness can generate. Such investments can also go down the drain as it has happened to some we may all be aware of but I strongly believe 95% of investments in agribusiness survives and thrives with few regrettably blown away by the wind.
USAID- Financing Ghanaian Agriculture Project (USAID-FinGAP) produced a document on their five year programme designed to unlock finance and investment in the rice, maize and soy value chain in Northern Ghana. Perusing the document dubbed, Agribusiness Investment Opportunities in Northern Ghana, I identified that the investment value sought by the agribusiness enterprises under the programme ranged from US$150,000 to US$15,000,000.
The enterprises involved were farms, processing firms, aggregators, consultancy firms etc. Such investments are needed for purchasing tractors, expanding warehouse, constructing abattoir, packaging equipment, trucks etc.
Reading further there is indications that when the various enterprises get what they are seeking for, they can expand, produce more, employ more and ensure we are secured in terms of food. The project developed an Investment Mapping system, an online interactive map that allows potential investors visualize future agribusiness opportunities in the rice, maize and soy value chains in Northern Ghana.
These figures may look huge but we also have agribusiness enterprises in our communities who are looking for investment of about GH¢1,000 to increase productivity. One can invest in agribusiness by participating in it directly or indirectly. Directly means, you starting a company or firm in agribusiness yourself with your own resources or with resources gathered by you.
You can participate indirectly also by investing resources in an existing agribusiness enterprise or sponsoring the establishment of agribusiness enterprise with the aim of gaining benefits from it at the end of an agreed period. It is worth to note that investments in agribusiness is not solely limited to money, we need to invest time, technical and business know how, lands, market links, credit links etc. We need to invest anything that will propel agricultural productivity.
To know what really agribusiness entails and enable one to generate the needed investment, the value chain of agribusiness must be clearly defined. To venture into agribusiness will depend on your strength, preference and where opportunities are from going through the agribusiness value chain.
Value chain is a set of activities that an organization or industries carries out to create value for its customers and users. I have drawn out how the value chain of agribusiness is and I believe this will aid as to know where to invest in to make the industry thrive. Every step or link provide opportunities for individuals or groups to venture into agribusiness.
In my subsequent article, I will present agribusiness value chain and help readers identify the various sectors and enterprises they can invest in and how profitable such enterprises will be.
>>>The writer is an agribusiness analyst. He can be reached on [email protected],0249014342.