By Isaac OYEGBADE
Agriculture has traditionally served as the foundation of economic stability for many developing nations, yet today, it is evolving into a dynamic business sector with transformative potential.
By leveraging agro-scientific advancements and structured agribusiness models, agriculture can drive sustainable economic development, generate employment, and improve food security across regions such as Africa, Asia, and Latin America (World Bank, 2020).
For countries striving to boost economic resilience and reduce poverty, advancing agriculture from small-scale operations to scalable enterprises offers significant promise (Pingali, 2012).
Agro-science innovations—including biotechnology, precision farming, and soil enhancement techniques—empower farmers to maximize yield and efficiently utilize resources (Altieri & Nicholls, 2020).
In parallel, agribusiness facilitates supply chain expansion, investment, and access to international markets, helping local producers meet both domestic and global demands (Reardon & Timmer, 2014). However, scaling agriculture as a business involves addressing critical challenges such as financing, infrastructure, and market integration.
This article examines the crucial role of agriculture, agro-science, and agribusiness in promoting economic growth in developing nations, with particular focus on West Africa. It also explores the business strategies necessary for these sectors to advance beyond primary production, fostering a diversified economy, attracting investment, and accelerating national progress.
The economic potential of agriculture in developing nations
Agriculture remains a significant sector for many developing nations, contributing a substantial portion to GDP, employment, and export revenue (FAO, 2019). For countries with abundant arable land and favorable climates, agriculture offers a path to economic stability and growth.
In Africa alone, agricultural expansion could contribute over $100 billion to annual GDP by 2030 (World Bank, 2020). However, to unlock this potential, countries need to shift from subsistence farming to a business-oriented model of agriculture, allowing for scalability, investment, and access to broader markets.
By prioritizing agriculture as a business, governments can create a ripple effect that boosts various sectors, including manufacturing, transportation, and retail. For example, when agriculture is managed efficiently, the resulting increased productivity can support food-processing industries and export opportunities, further contributing to economic growth (Pingali, 2012).
The role of agroscience in modernizing agriculture
AgroScience innovations—such as improved crop varieties, pest-resistant seeds, and precision farming—are transforming the agricultural landscape. Through genetic engineering, crops can now be developed to withstand environmental stressors, increasing their viability in diverse climates (Altieri & Nicholls, 2020).
Additionally, precision agriculture, which leverages data analytics and satellite technology, allows farmers to optimize water usage, minimize chemical inputs, and improve yield, thereby addressing resource constraints and boosting productivity (Lowder et al., 2016).
In developing nations, however, the adoption of such technologies faces barriers, including high costs, limited technical skills, and lack of access to research institutions. Partnerships with international agritech firms and investment in local R&D can facilitate knowledge transfer and make AgroScience innovations more accessible, accelerating the shift to modern agricultural practices.
Agribusiness as a catalyst for supply chain expansion and market integration
Agribusiness, encompassing all activities from production to distribution, is pivotal for creating value-added products and ensuring food reaches both local and global markets. In developing countries, where agricultural output often suffers from post-harvest losses and market inefficiencies, agribusiness can reduce waste and enhance distribution networks (Reardon & Timmer, 2014).
Companies in the agribusiness sector help bridge the gap between farmers and markets by providing logistical support, financing, and market information—key elements that empower smallholder farmers to scale their operations.
Expanding agribusiness also attracts foreign direct investment (FDI), vital for economic growth in resource-constrained countries. For instance, Brazil’s transformation into a leading agricultural exporter was largely driven by its agribusiness sector’s ability to integrate domestic production into the global supply chain, drawing lessons that other developing nations could replicate (OECD, 2020).
Addressing challenges to agricultural transformation
Transforming agriculture into a profitable business sector is not without obstacles. Developing nations face challenges such as inadequate infrastructure, limited access to financing, and insufficient policy support. Rural infrastructure—roads, storage facilities, and energy supplies—is critical for moving produce to markets, reducing post-harvest losses, and improving farm profitability (FAO, 2019).
Moreover, financing options for smallholder farmers remain limited, often requiring collateral that many farmers cannot provide. Government-backed financing schemes and partnerships with microfinance institutions can offer alternative funding sources. Additionally, policy frameworks that protect farmers’ rights and encourage investment in agriculture are essential to foster a conducive environment for growth (Barrett et al., 2021).
Policy and private sector roles in agricultural development
The public and private sectors have complementary roles in fostering an agriculture-based economy. Governments can create favorable policies, such as subsidies for agro-tech equipment and tax incentives for agribusiness investments, that attract private sector participation.
The private sector, on the other hand, brings efficiency, innovation, and expertise necessary for scaling agricultural operations. For example, public-private partnerships (PPPs) have proven successful in several countries, where private sector companies help develop supply chains and provide essential resources to farmers (Kahan, 2013).
In India, for instance, PPP models have been used to develop dairy cooperatives that streamline milk production and distribution, providing small farmers with better income opportunities. Similar models could be explored in developing regions of Africa and Latin America to enhance agriculture’s commercial viability.
Conclusion
Agriculture, agro-sciences, and agribusiness collectively hold the key to transforming developing nations into competitive economies. By treating agriculture as a business, integrating agro-science innovations, and fostering robust agribusiness ecosystems, countries can unlock substantial economic potential, creating jobs, ensuring food security, and positioning themselves within global markets.
However, achieving this vision requires strategic investments, supportive policies, and robust partnerships that empower local farmers and attract private investment. With these elements in place, agriculture can serve not only as an economic driver but as a catalyst for sustainable development and resilience in the face of global challenges.
>>>the writer is the co-founder of AKRSM AgroSciences Ltd., a dynamic startup advancing Africa’s agricultural sector and enhancing revenue from agricultural exports. With nearly a decade of experience as a business consultant and external auditor, Isaac has advised leaders in financial services, consumer and industrial goods, agribusiness, and healthcare on critical strategic initiatives. His expertise spans complex capital-raising transactions across public and private markets for firms in Africa, the UK, and the US.
As a published author, Isaac frequently writes on topics relevant to African businesses, covering areas like Initial Public Offerings (IPOs), debt and equity issuances, and financial regulations. His hands-on experience in the agrosciences and agribusiness sector allows him to provide unique, practical insights to other founders and industry executives.
He holds a B.Sc. from Ekiti State University, Nigeria, and is currently an MBA candidate at Duke University, USA. Isaac is also an Associate of the Institute of Chartered Accountants of Nigeria and a Fellow of the Institute of Management Consultants, Nigeria. For inquiries, he can be reached at [email protected]
