AGRIBUSINESS Archives – Eagmark Agri-Hub

Climate unpredictability, fluctuating market prices, and rising input costs converge are some of the challenges faced by farmers globally, and financial planning has become as essential as ever for maximizing farm profits. A carefully crafted financial plan can help farmers not only survive these challenges but thrive by setting profitability targets, understanding break-even costs, and making strategic decisions that influence the future. In this brief, we delve into the key financial practices that can elevate profitability and offer a roadmap for the agricultural industry’s future.

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1. Begin with Break-Even Costs

Every farmer’s financial journey starts with a clear understanding of break-even costs which is the foundation of financial planning. In simple terms, a break-even analysis calculates the minimum price or yield you need to cover your production costs, without profit or loss. For farmers, understanding these costs is fundamental because it serves as a reference point for all future decisions, from seed selection to market pricing.

Consider the major factors contributing to break-even costs: seed, fertilizer, pesticides, labor, and equipment expenses. Beyond these obvious costs, it’s equally important to account for transportation, drying, storage, and tillage costs, which are often overlooked. Each decision that involves cost has a cumulative effect on your farm’s financial health, so having these values accurately recorded allows you to make more informed budgeting choices.

2. Budget Inputs to Improve Negotiation Power

The next step to maximizing profitability lies in budgeting inputs, ideally before purchase decisions and crop sales. Budgeting isn’t just about controlling expenses; it’s about increasing negotiating power. Suppliers are more likely to offer discounts or favorable terms to customers with a pre-defined budget for the year. Knowing your numbers enables you to negotiate from a position of strength, avoiding hasty purchases based on fluctuating market conditions.

Consider the effect on your farm when you approach suppliers with a well-researched budget for the upcoming year. A prepared farmer can confidently negotiate for better prices on seeds, fertilizers, and other inputs because they understand what they can afford and where compromises might need to be made. By setting these boundaries early on, farmers can capture more savings and optimize their input costs for the highest returns.

3. Field-Level Financial Analysis

While break-even costs give a broad perspective, it’s essential to drill down to the individual field level which provides a micro approach to maximizing profit. Each field has unique characteristics that influence production costs and yields—such as soil fertility, pest presence, and water availability. Conducting a financial analysis at this level ensures that each field is managed in the most cost-effective way possible.

Here’s how you can maximize profits by taking a field-level approach:

Pest and Fertility Management ̶ Calculate the exact cost of pest control and fertility inputs for each field to assess where expenses might be minimized.
Labor and Fuel Efficiency ̶ Record labor hours and fuel usage to determine if there are opportunities to reduce passes or optimize equipment use.
Transportation Costs ̶ Understand the distances from each field to storage or sales points. If a field’s transportation costs are high, consider bulk storage options or alternative market outlets to increase revenue.

4. Project Profits by Setting Realistic and Achievable Profit Goals

After understanding costs, the next phase in financial planning is projecting potential profits. Begin by setting a realistic profit goal based on market trends, yield projections, and your break-even cost. Knowing this goal provides clarity on your income targets and helps align purchasing and marketing decisions with profitability objectives.

For instance, if your goal is to generate a 10% profit margin, you’ll need to work backward to identify the sales prices or yields needed to meet that margin. For grain sales, going beyond cash prices and paying attention to strategic basis and futures markets can present new opportunities to secure better revenues. Setting price targets in advance ensures that your marketing decisions align with your profit projections rather than market emotions.

5. Expand Market Opportunities

A significant component of any farm’s financial planning is sales. Many farmers stick to the most convenient market channels, yet exploring additional outlets can significantly boost revenue. For example, local cooperatives, direct-to-consumer sales, or even value-added products can create new revenue streams and diversify income sources.

Additionally, contract farming, export markets, or joining agricultural cooperatives may present new sales channels, providing better prices or incentives for consistent quality and supply. As digital platforms continue to reshape the agricultural market, staying informed about these options will be increasingly important.

6. Using Financial Planning Tools: Pen and Paper, Excel, or Specialized Software?

In modern farming, financial planning tools have evolved from traditional pen and paper to sophisticated software that tracks expenses, projects yield, and even forecasts profits based on real-time data. Spreadsheets like Excel can be effective for smaller farms, while large operations might benefit from dedicated farm management software to streamline budgeting, break-even analysis, and profit projection.

The choice of tool will depend on the complexity of your operation and your comfort with technology. But regardless of the tool, having a structured financial plan is critical. Software tools can simplify decision-making by visualizing cash flow, costs, and profit margins across each phase of production, enabling farmers to adapt quickly to market or environmental shifts.

Embracing a Financially Resilient Future in Agriculture

Looking ahead, financial resilience will be key to farming success. Climate change, resource scarcity, and market volatility are likely to redefine traditional agricultural practices. As a result, farmers who integrate comprehensive financial planning, informed input selection, and diverse market strategies will be best positioned for success.

We may see an increased reliance on digital technologies, with more sophisticated data analytics enabling farmers to make predictive decisions based on past and projected financial performance. Global trends suggest a push towards sustainable and organic agriculture, potentially increasing demand for local produce and specialty crops. Financial planning will need to account for these shifts, enabling farmers to pivot quickly and capitalize on emerging opportunities.

The future agricultural will also likely see a greater emphasis on climate-resilient practices, incentivized by government programs and market demand for sustainable products. Financial planning will be instrumental in adapting to these changes, as it enables farmers to assess the long-term costs and benefits of adopting new technologies, infrastructure, or crop varieties aimed at resilience.

As we approach the end of 2024, the agroindustry continues to grapple with a complex interplay of global events. The “Black Swans” predicted at the outset of the year have indeed materialized, shaping the industry’s trajectory in unexpected ways. Let’s delve into the key developments and explore strategies for navigating this challenging landscape.

Black Swan 1: A Shifting Economic Paradigm

The initial prediction of agroindustry stagflation has evolved into a more nuanced reality. While inflation has been somewhat tempered, the sector is experiencing a delicate balance between price stability and economic stagnation. The decline in input costs, particularly for fertilizers, offers some respite. However, the recent surge in fuel prices due to production cuts by OPEC+ nations adds renewed pressure.

The global economic outlook remains uncertain. The International Monetary Fund (IMF) in its July 2024 World Economic Outlook update projected global growth to slow from an estimated 3.5 percent in 2023 to 3.0 percent in 2024 and 2025. The looming possibility of increased taxes in the United States, coupled with the ongoing impact of high national debt and rising interest rates in major economies, creates a challenging environment for businesses seeking to expand or innovate.

Black Swan 2: The Enduring Challenge of China

The Chinese agrochemical industry’s overcapacity continues to exert significant pressure on the global market. Despite efforts to address this issue, the oversupply of inexpensive products has eroded margins for many manufacturers. This trend is likely to persist, necessitating strategic adjustments by industry players.

Black Swan 3: Energy Dynamics

The energy landscape has been marked by volatility. While there was an initial oversupply leading to lower prices, recent production cuts by OPEC+ have driven a surge in fuel costs. This impacts the profitability of energy producers and increases costs across the supply chain, including agriculture. The ongoing search for new energy markets and the potential for geopolitical disruptions remain significant uncertainties.

Black Swan 4: Geopolitical Tensions

The global political landscape remains tense. The ongoing conflict in Ukraine continues to disrupt supply chains and impact market confidence. Additionally, escalating tensions in the Middle East and Northeast Asia add to the uncertainty. These conflicts, coupled with the lingering effects of trade wars, create a volatile environment that can disrupt supply chains and impact market confidence.

Black Swan 5: Interest Rate Volatility

Central banks around the world are grappling with inflation and economic uncertainty. The U.S. Federal Reserve has indicated a potential for further interest rate hikes in 2024, which could have a ripple effect on global markets. This, coupled with the potential for increased taxes in the U.S., could further strain businesses and exacerbate the challenges posed by high-interest rates.

Beyond the Five Swans

While the five primary Black Swans have dominated the narrative, other factors, such as labor shortages, climate change-induced extreme weather events, evolving regulatory pressures, and rapid technological advancements, have also played a significant role in shaping the agroindustry. These trends are likely to persist and will require ongoing adaptation.

Preparing for the Future

Navigating this complex landscape requires a proactive approach. Businesses should prioritize the following strategies:

Cost Control: Implement rigorous cost-cutting measures to maintain profitability in a challenging economic environment. Explore energy-efficient practices and consider alternative energy sources to mitigate rising fuel costs.
Strategic Investments: Identify growth opportunities and make strategic investments to expand market share and enhance competitiveness. This might include investing in R&D for climate-resilient crops or precision agriculture technologies.
Cash Flow Management: Maintain a strong cash position to weather economic downturns and seize opportunities when they arise.
Adaptability: Embrace flexibility and innovation to respond to changing market conditions and emerging challenges. Stay informed about geopolitical developments and adjust supply chain strategies accordingly.
Sustainability: Integrate sustainable practices into your operations to address climate concerns and meet evolving consumer demands.

The agroindustry in 2024 has been characterized by a confluence of global challenges. While the initial predictions have largely materialized, the evolving nature of these events requires ongoing assessment and adaptation. By understanding the key trends and implementing effective strategies, businesses can navigate this complex landscape and position themselves for long-term success.

Disclaimer: The information provided in this article is based on the current understanding of global events as of September 2024. The situation is dynamic and subject to change.

While venture capital might seem like a conversation reserved for swanky boardrooms, the reality is, it holds immense potential for African agriculture. Millions are being poured into ag-tech, funding the next game-changing innovations, and farmers have a unique opportunity to be part of the ground floor.

We, as innovators and farmers, are no strangers to mitigating risk with new technologies. Checkoff programs and on-farm experimentation are testimonies of the inherent R&D spirit. But there’s a whole new level of involvement waiting to be explored – venture capital investing.

Let’s break it down. Venture capitalists are essentially high-risk, high-reward financiers backing promising startups with the potential to revolutionize their field. These investments can take two forms: angel investors, individuals or groups providing seed funding, and organized funds managed by professionals.

The African agricultural landscape craves technologies that enhance not just yields, but long-term farm resilience and profitability. The beauty of venture capital lies in the potential to profit not just from the technology itself, but from being an early backer.

Here’s the thing: the deeper your understanding of the technology and its potential application on your farm or business, the better your chances of success as a venture capitalist. We’re constantly bombarded with pitches from companies, big and small. But the question is, are we content with simply trialing these innovations, or do we want a say in their development?

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Investing early, even with a modest sum, can yield significant returns. Imagine putting $10,000 into a startup that later explodes, raising additional funds and getting acquired for a hefty sum. Your initial investment could balloon to millions!

Here’s a table to illustrate this point:

Round	Capital/Services Invested	Ownership Stake	Equity Value	Company Valuation
Round 1	$10,000	5%	$10,000	$200,000
Round 2	–	4.5%	$45,000	$1,000,000
Round 3	–	3.6%	$90,000	$2,500,000
Round 4	–	2.88%	$216,000	$7,500,000
Exit	–		$864,000	$30,000,000

As you can see, a small initial investment can translate into a massive payout if the company thrives.

The table illustrates the potential windfall for an individual who invests early in a successful ag-tech startup. Let’s say you invest a modest $10,000 in a startup at its very beginning (Round 1). In exchange for this initial investment, you might secure a 5% ownership stake in the company. If the company performs well and attracts additional funding rounds, your initial ownership stake might decrease slightly with each round (due to dilution). However, the overall value of your stake would balloon as the company’s valuation increases. For instance, even after a few funding rounds, your $10,000 investment could be worth several times that amount, potentially reaching thousands of dollars if the startup is ultimately acquired by a larger company. This exemplifies the high potential returns that come with being an early investor in a thriving ag-tech venture.

So, how can we, as farmers and agribusiness owners, navigate the exciting world of angel investing? Here are some tips:

Band Together: Share information and opportunities with fellow farmers. Strength, after all, lies in numbers.
Embrace Innovation: Invest in technologies that resonate with your “hands-on” farming experience.
Value Expertise: Seek out founders who value your agricultural knowledge as much as your capital.
The Long Game: Consider where you see African agriculture evolving and base your investments on that vision.
Diversify Your Portfolio: Spread your investments and services across multiple ventures to hedge your bets.
Find Your Partners: Partner with experts who can connect you with field trials, focus groups, and promising investment opportunities.

Pitfalls to Avoid in the Investment Landscape

It’s important to acknowledge the current challenges within the African startup scene. While the “Silicon Savannah” dream has fueled a surge in interest, a recent funding drought has cast a shadow. This can be attributed to several factors, not limited to the viability of some business models. The fast-paced tech industry and ever-changing consumer preferences demand constant innovation and adaptation. Some startups may be struggling to offer unique solutions that address real problems in the market.

In other instances, entrepreneurs might be overly focused on building businesses solely for high valuations and eventual buyouts. Sustainable success, however, requires more. Continuous innovation, operational agility, and a deep understanding of market dynamics are crucial for survival in today’s tech-driven world. The focus should shift towards long-term planning and building businesses with a clear vision for the future.

By embracing venture capital while keeping these challenges in mind, farmers can transform from passive technology adopters to active participants in shaping the future of agriculture. It’s a win-win – we gain a voice in developing solutions for our farms while potentially reaping significant financial rewards. So, let’s roll up our sleeves and delve into this exciting new frontier!

ALSO READ: The Troubled Waters of Agricultural Startups and Why They Quickly Turn Into ‘Sinking Ships’ Rather than ‘Unicorns

Kenya’s vast Arid and Semi-Arid Lands (ASALs) encompass a staggering 80% of the country’s landmass. This region, home to roughly 16 million Kenyans, is a land of stark beauty and harsh realities. Pastoral communities have carved out a life here for generations, their existence intricately linked to the health of their livestock. These regions, though crucial for Kenya’s beef industry, grapple with food insecurity due to unpredictable rainfall, economic hardships, and even conflict.

Despite these challenges, the potential for a thriving beef sector in ASALs remains. Beef cattle make up a significant portion of Kenya’s national herd, with nearly half originating from these very regions. However, there’s a disconnect between this potential and the reality of poverty faced by ASAL communities.

In spite of their ingenuity and deep understanding of this unforgiving environment, ASAL residents grapple with some of the nation’s highest poverty rates. The land itself presents a multitude of challenges. Rainfall is erratic and scarce, punctuated by devastating droughts. This unpredictability makes crop cultivation a gamble, and forces pastoralists to constantly be on the move, seeking grazing pastures for their herds.

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Limited access to finances, infrastructure issues like poor roads, and the harsh environment itself all contribute to this disparity. Traditional pastoral practices lack formal financial inclusion, hindering investments in better grazing lands, veterinary care, and essential supplies. Additionally, the unpredictable nature of droughts constantly threatens livelihoods.

These challenges are further compounded by a lack of infrastructure. Remote locations make it difficult for farmers to get their cattle to market, limiting profit margins and hindering investment in their herds. The absence of reliable financial systems also restricts access to loans and insurance, crucial tools for weathering the inevitable storms, both literal and metaphorical.

The consequences of these hardships are stark. Food insecurity is a constant threat, malnutrition rates are high, and disease outbreaks can decimate herds, plunging families deeper into poverty. Conflict, often sparked by competition for scarce resources, adds another layer of complexity to this already precarious situation.

However, amidst these struggles, there are glimmers of hope. The Kenyan government recognizes the critical role that a thriving ASAL region plays in the nation’s economic well-being. Beef production is a cornerstone of the ASAL economy, with these regions contributing nearly half of Kenya’s national herd.

There’s immense potential for growth, but unlocking it requires a multi-pronged approach. Strengthening market access is crucial. Reliable transportation networks and improved marketing infrastructure are essential for connecting farmers to lucrative markets and ensuring they receive fair prices for their cattle.

Cooperatives offer a promising pathway towards a more secure future for ASAL communities. By pooling resources, farmers gain greater bargaining power, access to better deals, and opportunities for value addition. This collaborative approach can empower them to become more resilient in the face of climate shocks and economic downturns.

Investing in education and promoting financial inclusion are equally important. Equipping communities with the knowledge and tools to manage their herds more effectively and navigate financial systems can go a long way in building a more secure future for the people living in the ASALs.

The ARCH Cold Chain Solutions Fund, with significant backing from the European Investment Bank (EIB), has introduced Africa’s first cutting-edge cold storage facility. Nestled within the Tatu City Special Economic Zone in Nairobi, Kenya, this facility, boasting a total investment of US$81 million, including a substantial US$15 million infusion from the EIB, promises to transform the food distribution landscape in East Africa. The main goal is to combat food waste and elevate safety standards in the region.

Spanning an expansive 17,700 square meters, the flagship facility is a marvel of design, offering unparalleled flexibility to accommodate a diverse array of products while operating seamlessly across various temperature ranges. With a storage capacity of up to 18,000 pallets—equivalent to a staggering 18,000 tons of perishable goods and pharmaceuticals at full tilt—the facility is envisioned to make a substantial impact on the region’s supply chain dynamics.

Setting itself apart, the facility is committed to adhering to the Leadership in Energy and Environmental Design (LEED) Standard, with aspirations for a coveted LEED Gold Certification. The European Investment Bank noted in a press release that, if achieved, this would mark a historic moment as the first facility in Africa to attain such recognition, signifying a significant stride in sustainable infrastructure development across the African continent.

According to IEB, the facility is committed to sourcing up to 30% of its energy needs from off-grid renewable power production, primarily leveraging solar photovoltaic technology to minimize its climate impact. The primary objective of the cold storage facility is to contribute to the reduction of food waste in East Africa.

According to data from the Food and Agriculture Organization of the UN (FAO), an alarming 37% of food produced in Sub-Saharan Africa is lost along the value chain. The ARCH Cold Chain Solutions Fund, through its state-of-the-art facility, aims to address this challenge by providing efficient cold storage and temperature-controlled solutions.

According to the Managing Director and Co-Head of ARCH Cold Chain Solutions East Africa Fund, the facility’s strategic expansion plan includes Mombasa, Kigali, Dar es Salaam, Addis Ababa, and Kampala, with an overall vision to reach a combined capacity of 100,000 tons in cold storage space.

The Head of the EIB Regional Hub for Eastern Africa expressed pride in supporting the ARCH Cold Chain Fund, highlighting the unique quality and flexibility offered by the facility for cold storage and acknowledging its role in reducing waste and setting global food safety standards in the region. The ARCH Cold Chain Solutions Fund is dedicated to developing and operating large-scale, energy-efficient cold chain solutions with a comprehensive logistics and distribution network across Eastern and Central Africa.

Eni Engineer at the oilseed collection and pressing plant (agri-hub) in Makueni, Kenya.

The International Finance Corporation (IFC) is planning to inject a substantial loan of up to $210 million into Eni Kenya, an Italian firm, in a strategic effort to fortify its Agri-Feedstock Project in Kenya. This visionary initiative by Eni is set to transform agri-business activities in the region, particularly through the establishment of four cutting-edge Agri-Hubs with a combined annual output capacity of 200,000 metric tons of vegetable oil.

The financing from IFC will be channeled into diverse facets of Eni’s agri-business operations, ranging from setting up working capital for feedstock sourcing to the formulation of a risk-sharing facility in collaboration with a Kenyan commercial bank. The latter will play a key role in supporting portfolios of eligible loans, amounting to $60 million, for farmers and aggregators supplying Eni’s Agri-Hubs.

Eni’s Agri-Feedstock Project aspires to make a positive impact on over 700,000 farming families by 2026, escalating to over a million by 2030. This ambitious undertaking aligns with the broader goal of enhancing food security through the production of one million tons of animal feed and fertilizers by 2026, with even more substantial contributions in the subsequent years.

This narrative is not an isolated case in the global agricultural landscape. It resonates with similar success stories from various corners of the world where agri-tech initiatives have spurred socio-economic development. Particularly noteworthy is the trend of rejuvenating degraded lands, a phenomenon witnessed in diverse geographical settings globally.

The Agri-Feedstock Project involves a collaborative effort with third-party aggregators and farmers, a model reminiscent of successful agri-tech ventures worldwide. This cooperative engagement revolves around the supply of agri-feedstock, encompassing cultivated oilseeds and residues from agro-processing and agroforestry, to Eni’s state-of-the-art Agri-Hubs. These hubs serve as transformative platforms where biomasses are processed to yield vegetable oil, subsequently destined for Eni’s bio-refineries in Italy. The refined products, including various bio-energy derivatives like biofuels, contribute significantly to the renewable energy sector.

READ: Bayer and Microsoft Forge Partnership to Address Data Interoperability Gap in Agriculture

Eni’s global footprint in the Agri Feedstock program is expanding, with a target production of 700,000 tons of vegetable oil in 2026 set to soar to over a million tons by 2030. Notably, Eni has already operationalized one Agri-Hub in Makueni County, with construction underway for a second in Kwale County. Looking ahead, plans for the third Agri-Hub slated for early 2025 are in motion, and the location for the fourth Agri-Hub, boasting a production capacity of approximately 100,000 metric tons per year, is currently under assessment.

The Makueni Agri-Hub, commissioned in July 2022, exemplifies the success of Eni’s vision, producing a substantial 15,000 metric tons of oil annually. The feedstock processed here includes non-food oilseeds, such as castor, cultivated in degraded lands, residues from agro-processing like cotton seeds, and residues from nut processing. Additionally, the hub incorporates other oilseeds, like croton, sourced from spontaneous trees abundant in Kenya.

Biofuels produced from non-edible oilseeds like castor and croton are derived from feedstocks that do not compromise food production. These are grown on degraded lands, primarily in arid and semi-arid areas where traditional food production is impractical. Additionally, some of these oilseeds are cultivated in rotation or intercropping with food crops, ensuring a delicate balance between agri-business expansion and food security.

The world is bracing itself for a potential increase in chocolate prices due to cocoa crop shortage in the leading cocoa-producing regions of Ghana and Ivory Coast. These two countries collectively supply two-thirds of the world’s cocoa, and their struggles with adverse weather conditions and crop diseases have sent cocoa prices surging by approximately 47% over the past year.

The cocoa market is no stranger to fluctuations, but the combination of recent challenges has raised alarm bells in the sector. Cocoa prices have been on a relentless climb, largely driven by concerns over adverse weather conditions and crop diseases in Ivory Coast and Ghana. These issues have significantly impacted cocoa production, sending shockwaves throughout the industry.

The recent surge in cocoa prices has raised concerns among major chocolate manufacturers such as Hershey Co. and Lindt & Spruengli AG. They have cautioned about potential price hikes that could potentially affect demand in both Europe and the crucial growth market of Asia. This situation has caused ripples across the cocoa supply chain.

“The current situation is looking relatively dire unless there is a dramatic improvement in the outlook. Further price increases could weigh on consumption,” noted Darren Stetzel, Vice President of Soft Commodities for Asia at broker StoneX.

The cocoa crisis is not solely the result of one factor but rather a confluence of challenges. Excessive rainfall, pest infestations, and crop diseases have wreaked havoc on West African cocoa crops. The key question revolves around the size of the two annual cocoa harvests in Ghana and Ivory Coast, with Ivory Coast initially forecasting a nearly 20% decrease in output for the main-crop season.

Rabobank and Marex analysts have projected a drop in West African cocoa output for the 2023-24 season, with Marex even anticipating a global deficit of 279,000 tons, surpassing the combined shortfalls of the previous two seasons. This poses a significant threat to the livelihoods of African cocoa farmers, many of whom are already living below the poverty line.

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Agricultural inputs like fertilizers and pesticides have also become scarcer and more expensive for these farmers, hampering efforts to rejuvenate or treat damaged cocoa trees and address the swollen-shoot disease, which threatens Ivory Coast’s cocoa output, affecting approximately 20% of the nation’s crop.

Despite the jitters, Ghana has taken proactive steps to address the crisis. The country has increased cocoa farmer pay by over 60% to curb smuggling into Ivory Coast and encourage investment. This move may lead to increased cocoa production in Ghana, but challenges remain.

One such challenge is the aging cocoa trees in Ghana, which could contribute to a declining production trend. The cocoa market’s tight supply chain has also resulted in reduced processing of cocoa beans into confectionery products globally. High cocoa prices are starting to impact demand in Asia, with Swiss grinder Barry Callebaut AG reporting lower sales in July.

Image Credit: KALRO

The Kenya Agricultural and Livestock Research Organization (KALRO) has raised the alarm over the dire consequences faced by farmers who unwittingly fall victim to counterfeit seeds that have proliferated in the Kenyan market. Dr. Lusike Wasilwa, the director of Crops at KALRO, spoke passionately about the pressing issue, emphasizing the need for immediate action to safeguard the livelihoods of countless farmers from these deceptive practices.

Dr. Wasilwa revealed that the infiltration of counterfeit seeds into the Kenyan agricultural market has been a persistent and devastating problem. These fraudulent products have been identified as the primary cause of poor crop yields and decreased agricultural productivity, ultimately leading to elevated living costs due to a higher dependence on food imports.

Speaking at the opening of a new Mkulima shop in Mwea, Kirinyaga County, Dr. Wasilwa unveiled KALRO’s proactive approach to addressing this crisis. The organization plans to establish an impressive total of 16 additional shops across Kenya. These shops will serve as a beacon of hope for farmers, offering them access to authentic, certified, and high-quality seeds directly from KALRO.

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One startling revelation from Dr. Wasilwa is that even KALRO’s own bean variety, ‘Nyota’, has fallen victim to counterfeiting. Unscrupulous actors have taken to branding counterfeit seed bags with the KALRO and ‘Nyota’ labels, duping unsuspecting farmers into purchasing fake products. This nefarious practice not only jeopardizes farmers’ yields but also tarnishes the reputation of dedicated scientists and researchers who work tirelessly to improve agricultural practices.

Dr. Wasilwa conveyed KALRO’s unwavering commitment to combating counterfeit seeds by expanding the reach of the Mkulima shops. The organization’s ambition is to establish these vital outlets in all of its 54 centers nationwide. By doing so, KALRO aims to ensure that every farmer in Kenya can access genuine, top-quality seeds, thereby bolstering the agricultural sector and fostering food security.

The issue of counterfeit seeds is not unique to Kenya, as it has plagued farmers globally, undermining food security and economic stability. Counterfeit seeds not only pose a direct threat to farmers’ income but also impact the wider economy.

Namibia has suspended the import of live poultry, birds, and poultry products from its neighbor South Africa following the persistent outbreak of highly pathogenic avian influenza (HPAI). This precautionary step, communicated by Namibia’s Ministry of Agriculture, has been put into effect immediately and is set to endure until further updates are provided.

South Africa finds itself in the throes of a significant bird flu outbreak, marked by disheartening reports that nearly two million chickens have succumbed to this debilitating disease. Poultry producers, including industry giants Quantum Foods and Astral Foods, are grappling with substantial losses, tallying up to approximately R22 million.

Namibia’s reliance on South African poultry products, especially chicken, is substantial, with an estimated monthly consumption of 2,500 tons. Consequently, the suspension of imports from South Africa will reverberate through Namibia’s poultry industry and impact its consumers significantly.

Highly pathogenic avian influenza, a contagious viral disease, casts a shadow of menace over poultry populations. Namibia’s decision to halt imports from South Africa shows its commitment to protect its domestic poultry sector and shield its territory from the disease’s introduction.

Namibia’s Ministry of Agriculture has issued prudent advice, urging both the public and stakeholders within the poultry sector to remain vigilant and diligently adhere to biosecurity measures. Hopefully, the authorities in both Namibia and South Africa will collaborate closely to contain the outbreak in South Africa and curtail its repercussions on the broader regional poultry sector. This united effort will curtail the spread of avian influenza within Namibia’s borders.

In the interim, the Namibian public and stakeholders in the poultry industry have been encouraged to actively cooperate with relevant authorities to contain the disease’s spread and mitigate its economic impact.

Earlier in the year, the United States Department of Agriculture (USDA) announced that it was conducting trials for a new avian influenza vaccine designed to prevent the spread of the virus. The vaccine targets a specific part of the avian flu virus and is designed to be highly effective and provide long-lasting protection against the disease. The trials are being conducted in partnership with several poultry producers across the US. If successful, the vaccine could be made available to producers in the near future, providing a valuable tool in the fight against avian flu and helping to protect the health and wellbeing of both poultry and humans.

During the official launch of the 2023 Agricultural Society of Kenya’s (ASK) Nairobi International Trade Fair, Kenya’s President William Ruto unveiled a comprehensive plan to breathe new life into Kenya’s coffee sector. The Coffee Revitalization Program (CRP) is planned to uplift 72 coffee factories, aimed at addressing the persistent challenges that have beleaguered the industry for years.

The president’s announcement was met with anticipation and optimism among the gathered stakeholders, and for good reason. He shared his government’s commitment to providing farmers with subsidized seedlings and fertilizers, a move expected to significantly boost coffee production. The government’s goal is to double the annual coffee production from the present 50,000 metric tons to an impressive 102,000 metric tons by 2027.

Beyond the promise of higher yields, President Ruto conveyed his unwavering commitment to eliminating wastage, inefficiency, and corruption within the sector and ensure that coffee farmers truly reap the benefits of their toil.

Kenya’s agricultural productivity has been stagnant in the face of a burgeoning population. This, coupled with the failure of food production to meet domestic demand, has led to increased imports, trade deficits, and rising food prices, which now constitute a staggering 54 percent of household expenditure. It is a vicious cycle that urgently requires intervention.

In his statement, President Ruto further stated that increased agricultural productivity holds the key to breaking this cycle, further adding that agriculture has the potential to employ a substantial 70 percent of the population, making it a linchpin in the battle against poverty. By harnessing this full potential, Kenya can reduce its dependence on food imports, safeguard its foreign exchange reserves, and insulate itself from international price shocks.

“Our global competitiveness in agriculture,” the President added, “extends beyond traditional crops like tea, coffee, cut flowers, and vegetables. It also encompasses emerging export crops such as macadamia and avocado.” It’s a testament to the nation’s agricultural prowess, which, if tapped to its fullest, can propel Kenya to even greater heights on the global stage.

In addition to the coffee sector, President Ruto also addressed the challenges facing the sugar industry. He emphasized that the government is actively working on measures to ensure that farmers in the sugar belt regions reap the benefits of their labor. He reiterated that the sugar sector holds a special place in his vision for national development, wealth creation, and employment generation, adding that he is in discussions with leaders from cane-growing areas to devise strategies that address issues like aging mills, institutional indebtedness, soil fertility, land competition, and low adoption of researched cane varieties and fertilizers.

Kenya’s regular chili exports to the European Union (EU) have been successfully resumed after a two-month hiatus. This interruption in exports stemmed from the interception of chili shipments in July that failed to meet the EU’s stringent phytosanitary standards. This breakthrough signifies Kenya’s commitment to global trade and quality standards.

The Kenya Plants Health Inspectorate Service (KEPHIS) has played a pivotal role in resolving the chili export issue. According to KEPHIS’s Managing Director, Theophilus Mutui, there have been no further incidents since July, and Kenya is actively collaborating with the EU to establish clear and consistent export standards to maintain its reputation as a reliable supplier of agricultural products to international markets.

The EU has proceeded to proactively show its support in helping Kenya meet its export requirements and prevent future disruptions by donating laboratory testing equipment worth 3.1 million Kenya Shillings. These Certified Reference Materials (CRMs), calibrated to EU standards, will enable Kenya to meet Global Good Agricultural Practices (Global GAP) criteria for pesticide residue levels, aligning its agricultural products with EU regulations.

READ: $1.6 Million US Investment Partnership to Boost Coconut Processing and Export in Kenya

Adolfo Cires, the EU’s Manager for Finance and Private Sector Development in Kenya, emphasized that these testing capabilities would streamline the evaluation of pesticide residue levels in crops, making the process more accurate and efficient. This enhancement in testing infrastructure is not only beneficial for Kenya but also sets a positive precedent for global agricultural trade.

Kenya will indeed increase its agri-produce exports to the EU market significantly by meeting international phytosanitary standards, aligning perfectly with the concept of ‘one test accepted globally,’ which promotes seamless international trade and harmonized standards for agricultural products.

The EU is a crucial trading partner for Kenya, with the country earning an estimated 188 billion Kenya Shillings in foreign exchange primarily from the export of vegetables, fruits, and flowers. The previously signed EU-Kenya Economic Partnership Agreement, which removed tariffs and quotas on all Kenyan exports of goods (excluding arms), further solidifies this vital economic relationship.

Kenya is taking significant strides towards restructuring its agricultural taxation system. The Kenyan government’s recent proposal to introduce a 5% withholding tax on agricultural products delivered to cooperatives or other organized groups has sent ripples through the country’s farming community.

In his statement, the Cabinet Secretary, National Treasury & Economic Planning, Prof. Njuguna Ndung’u, disclosed that in FY 2022/23, Kenya’s tax gap was estimated at 11.5% of GDP, indicating the need for the government to take measures to increase the tax-to-GDP ratio and ensure effective provision of services to the public.

Revenue collection from the agricultural sector has long been a challenge for many African governments. Historically, a substantial portion of agricultural income has escaped formal taxation due to the fragmented nature of the industry. The Kenyan government’s move to impose a 5% withholding tax seeks to remedy this issue by ensuring that revenue from agricultural produce is captured more efficiently. It is worth noting that this tax is designed to target agricultural producers delivering their goods to cooperatives or organized groups rather than individual small-scale farmers.

How Withholding Tax Works

Tax withholding is a way for the government to maintain its pay-as-you-earn income tax system. This means taxing individuals at the source of income rather than trying to collect income tax after wages are earned.

In the case of the proposed taxation system by the Kenyan government, this will mean that whenever a farmer delivers produce to the cooperative or farmer society and gets paid, the entity withholds five percent of the amount due to them as income tax. This is then paid by the cooperative or society (withholder) to the Kenya Revenue Authority (KRA). The amount withheld should be remitted online by the withholder to KRA on or before the 20th of the following month.

Upon successful remittance of the withheld amount to KRA, the system generates and sends copies of the Withholding Certificate to the registered email addresses of both the cooperative or society (withholder) and the farmer (withholdee).

The amount deducted appears on the farmer’s payslip or statement, and the total amount deducted annually can be found on the P9 Form, which is a standard tax deduction card or form issued by the employers (in this case, the cooperative society) to the farmers with total emoluments. The cooperative or farmer society will then send the P9 Form to their members each year so they can file their annual income tax returns. The farmer will then be required to download the IT1 return form from the KRA online system and declare income earned as well as the tax withheld.

Although this proposal by the Kenyan government seems outrageous to many, it aligns with a global trend towards modernizing agricultural tax policies. In an era where governments are seeking innovative ways to boost revenue collection without overburdening the farming community, this approach warrants attention. This initiative by the government will be closely monitored by policymakers and experts, as it could serve as a case study for fine-tuning agricultural taxation systems in other regions.

While this may seem like a financial maneuver, it directly affects the lives of countless farmers and their families. The tax burden may result in disincentives for farmers to engage with cooperatives or organized farmer groups. However, if done correctly and with the right intentions, the system can have the transformative power of effective agricultural taxation. If appropriated well, the government can allocate resources more efficiently towards rural development, infrastructure, and agricultural extension services. This, in turn, empowers farmers with knowledge, resources, and market access, ultimately improving their livelihoods.

Only time will tell the effects this new tax system will have on the farming community in Kenya and on the country’s prominence as an agricultural hub in East Africa once it is implemented.

READ: Taxes on Alcohol and Sugar-Sweetened Products to Increase

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Increased tax on alcohol, sugar-sweetened products, and tobacco are on the horizon in Kenya as we look ahead to 2024. The newly proposed taxes are the government’s proactive measures to promote healthier lifestyles and discourage excessive consumption, aligning with global efforts to combat the rising tide of diet-related non-communicable diseases.

Historically, studies have linked excessive sugar consumption to a host of health issues, including heart disease, type 2 diabetes, and obesity, which is increasingly prevalent in Kenya and across Africa. In line with this concern, the Kenyan government is planning to reevaluate its taxation approach for sugar-sweetened non-alcoholic beverages. The new proposal aims to tax these products based on their sugar content, effectively creating an economic disincentive for their consumption. This move is part of the government’s broader strategy to combat obesity and related non-communicable diseases.

This development follows the earlier introduction of a tax on locally manufactured sugar confectionery, including white chocolate, in July 2023. This tax imposition was also justified as a means to promote healthier living.

Targeting Alcohol Consumption for Public Health Benefits

Alcohol consumption, too, is in the government’s crosshairs due to its association with various health risks, including high blood pressure, heart disease, stroke, liver disease, and digestive problems. The United States Center for Disease Control (CDC) has further stressed the risks by linking alcohol consumption to injuries, such as motor vehicle accidents, falls, drownings, and burns.

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In the upcoming fiscal year, consumers of spirits and other high-alcohol-content products can expect an upward revision in taxes. The Treasury has explicitly stated that this tax hike is intended to discourage their consumption, given the elevated health risks they pose. The adjustment in tax rates will be guided by quantitative analysis to determine the optimal rates for each alcoholic product.

Tobacco Products Also Under Scrutiny

Taxes on cigarettes and tobacco-related products are also set to increase as part of the broader strategy to promote healthier living. This will apply to both filtered and non-filtered cigarettes, as well as other tobacco products. The objective is to harmonize excise duty rates across all tobacco products, ensuring fairness and equal treatment in taxation.

The government’s rationale is clear – the negative health consequences associated with these products necessitate action. Tax rates will be determined based on the extent of these health consequences, as well as recommendations from an ongoing study conducted in collaboration with East African Community partner states.

These changes, outlined in the draft three-year tax revenue strategy beginning in July 2024, will inevitably lead to higher prices for the affected products and will unquestionably have an impact on consumer behaviors, industry dynamics, and, ultimately, the country’s GDP.

READ: Kenya Implements Stringent Measures for Duty-Free Sugar Imports

Kenya has shipped its inaugural avocados consignment to India, an occasion presided over by Kello Harsama, the Principal Secretary of the State Department for Crops Development, on September 16, 2023. During the event, Harsama emphasized the government’s unwavering dedication to strengthening international partnerships in agriculture, adding that the milestone was not just significant for Kenya but also for India, marking the fruitful outcome of their persistent bilateral negotiations. He stated that the move underscores Kenya’s status as a leading avocado exporter in Africa and the sixth-largest in the world.

This achievement aligns with Kenya’s pursuit of exploring new markets for its agricultural produce. Harsama affirmed that Kenya will continue to seek more markets for avocado farmers in line with the spirit of the government’s ‘bottom-up’ economic transformation agenda.

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Kenya’s ascent in the global avocado export landscape has been remarkable. According to the United Nations’ Food and Agriculture Organization (FAO), Kenya now ranks among the top 15 avocado exporters globally. While Mexico leads the pack with a staggering 2.4 million tons of production, Kenya’s presence in this league is a testament to its agricultural prowess. The country rubs shoulders with the likes of Colombia, Peru, Indonesia, and the Dominican Republic in the upper echelons of avocado exporting nations.

Among those who witnessed the flagging off of the avocado export to India were Ms. Namgya C. Khampa, the High Commissioner for India in Kenya, and Ambassador Willy Bett, Kenya’s High Commissioner in India, symbolizing the strengthening of diplomatic and trade ties between the two nations through the lens of agriculture.

Kenya’s foray into avocado exports to India echoes a broader narrative of the continent’s potential in global markets, a move that aligns with advancing the nation’s agricultural agenda.

In a significant milestone for Kenya’s fisheries sector, the nation has recently exported a substantial shipment of 52 tonnes of Silver Cyprinid, locally known as ‘omena,’ to Changsha Huanghua International Airport in China’s Hunan Province. This achievement is a direct result of a bilateral agreement inked between the two countries in January 2022, demonstrating the mutual benefits stemming from international cooperation.

This remarkable feat finds its roots in a broader narrative of strengthening trade ties between Kenya and China. The recent export success resonates with the ongoing efforts in Kenya and Africa as a whole to expand their agricultural exports and tap into international markets.

China’s commitment to importing freshwater fish from Kenya, as stated by Wu Peng, Director-General of the Department of African Affairs at China’s Ministry of Foreign Affairs, signifies a significant shift in trade dynamics. Kenya’s export of anchovies to China marks the culmination of previous developments in the fish industry, highlighting China’s growing appetite for African agricultural products, ranging from anchovies to other fish products.

In June, Kenya commenced the export of anchovies to China, starting with a 315kg batch. The landmark event took place during the third China-Africa Economic and Trade Expo, emphasizing China’s determination to diversify its sources of high-quality food and agricultural products. This mirrors previous reports on the evolving trade relationships between China and Africa, where African nations strive to meet China’s increasing demand for their produce.

READ: Kenya Ramps Up support for Fish Industry in a Move to Boost GDP

The successful export of Kenyan ‘omena’ was facilitated by Huawen Food, a Kenyan subsidiary of the Jinzai Food Group. The company, based in Kwale on Kenya’s coast, collaborates with local fishermen to source ‘omena’ for their processing plant.

Huawen Food’s value addition to ‘omena’ involves the infusion of various ingredients, including vegetable oil, onions, spices, sauce, and chili, to create snacks in 12-gram packages. The process has resulted in a final product that is distributed in China and sold in more than 30 countries worldwide, underscoring the global reach of African agricultural products.

In Kenya, these value-added anchovies are available at selected supermarkets, priced at an average of $6 per packet. The move towards value addition aligns with the ongoing efforts in Kenya’s agricultural sector to increase the value of their exports and capture a larger share of the international market.

Anchovies have found a versatile place in Chinese cuisine, featuring in a wide range of dishes from stir-fries to street snacks, and salads to heartier meals like anchovy fried rice. The trend showcases the adaptability of African agricultural products to diverse culinary traditions.

However, this success story also highlights the challenges facing Kenya’s local fish industry. Dwindling fish stocks have led to a heavy reliance on Chinese fish imports, valued at over 2 billion Kenyan Shillings and accounting for more than 80 percent of the Kenyan fish import market. This echos calls for the imposition of a 20 percent excise duty on imported fish to safeguard the interests of local fishermen.

Directors representing the 71 tea factories managed by the Kenya Tea Development Agency (KTDA) are gearing up for a crucial series of meetings this September to focus on the review and approval of their respective factories’ annual financial accounts for the year 2022/2023. The timing of these deliberations is pivotal, as they precede the eagerly awaited declaration of the second and final payment to farmers scheduled for October 2023.

KTDA announced that the directors’ primary agenda will revolve around assessing the performance of their individual factories during the financial year that concluded in June 2023. It is only after this comprehensive evaluation that the directors will unveil the second payment rates pertinent to their specific factories.

The backdrop against which these discussions are taking place has been marked by twin challenges for the tea industry in Kenya. First, a severe drought has plagued the tea-producing regions, significantly affecting farm output. Secondly, the global tea market has posed a formidable challenge due to the limited access to the US dollar by key tea-buying markets. In his statement to stakeholders, the KTDA Managing Director gave assurances that the organization remains unwavering in its commitment to ensure that farmers receive just compensation for their unwavering dedication and hard work.

This announcement harks back to the January disbursement by KTDA, which saw a total of Ksh.5.5 billion distributed. This sum encompassed Ksh.2.8 billion as payment for December’s green leaf deliveries and an additional Ksh.2.7 billion disbursed as mini-bonuses. These mini-bonuses were allocated to factories whose directors had passed resolutions to implement them. During this disbursement, farmers received bonuses ranging from Ksh.5 to Ksh.10 per kilogram of green leaf delivered to their respective factories for the six months leading up to December the previous year.

READ: Kenya’s Agriculture Sector Confronts Surging Interest Rates

According to KTDA, it adheres to a two-step payment model, encompassing monthly payments, interim payments (mini-bonuses), and a final payment (bonus) contingent upon the performance of each individual factory. The current meetings to determine bonus payments are being convened at a juncture when preliminary data reveals a marginal decline in both green leaf production and sales prices at the Mombasa tea auction.

Green leaf volumes delivered to factories managed by KTDA dwindled by 8.5 percent in the year concluding in June 2023, plummeting from 1.3 billion kilos to 1.1 billion kilos when compared to the preceding year. This decline is attributed to the enduring drought conditions that have plagued the region, leading to decreased farm output. In addition, the prices fetched at the tea auction experienced a modest decline of three percent. The average price per kilo across all factories stood at $2.7 (Ksh.394) during the 2022/2023 financial year, in contrast to $2.8 (Ksh.409) recorded in the previous year.

READ: Nairobi Coffee Exchange Auction Resumes After Brief Suspension

These recent developments in Kenya’s tea industry echo the recurring challenges faced by the sector in recent years. The ongoing drought conditions serve as a stark reminder of the vulnerability of tea farming to climatic fluctuations. In the past, we have witnessed similar struggles as farmers grappled with unpredictable weather patterns, resulting in diminished yields and financial strains.

In addition, the international tea market’s dynamics have proven to be a persistent challenge. Limited access to the US dollar by key tea-buying markets has often left Kenyan tea exports vulnerable to currency fluctuations and market uncertainties. The need for diversification and risk mitigation strategies in tea trading has been a recurring theme in discussions surrounding the industry’s future.

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In recent years, Kenya’s tech startup scene has garnered substantial attention and investment, with hopes of realizing the Silicon Savannah dream. However, beneath the surface, there are unsettling signs of distress, as at least eight Kenyan-born tech startups have shuttered their doors in the past two years, while a ninth appears to be teetering on the brink despite substantial investor funding. We delve into the challenges faced by these startups and seek to shed light on why they may be heading towards what some have termed a “sinking ship.”

The Startup Saga

A comprehensive analysis by the Business Daily published on September 11, 2023, reveals a grim picture: eight startups, fueled by a total investment of over Ksh.11.2 billion, have crumbled in the face of adversity. The situation becomes even more concerning when we examine the case of Twiga Foods, an agri-tech firm that has raised an astounding Ksh.23.4 billion (USD 157.1 million) in venture capital. Recently, Twiga Foods announced plans to trim its workforce by a third, citing a harsh funding climate.

As quoted by the newsroom, Twiga’s CEO, Peter Njonjo, lamented the funding drought that has enveloped the market, despite the company’s impressive cumulative funding of $160 million since its inception in 2013. This raises an important question: Are funding challenges the sole culprits behind the demise of these startups?

Beyond Funding Drought

While many startups point fingers at the funding drought, a closer look at available data and resounding sentiments from previous interviews with founders suggests a more nuanced narrative. It appears that factors beyond funding may be contributing to the ‘sinking ship’ phenomenon.

One of the reasons is business viability. Some startups may have struggled due to questions surrounding the viability of their business models. It is essential for these companies to offer unique solutions that address tangible problems in the market. Without a solid foundation for providing value, even the most significant investment can’t guarantee success.

Secondly, the ‘short-term vision’ effect is another reason, as some entrepreneurs may be too focused on building businesses for valuation and hoping for buyouts. Without continuous innovation and operational models that keep changing with the tech landscape and trends, it is almost impossible for any business to thrive in today’s tech-driven world. It essentially boils down to sustainability and long-term planning, as well as a deep understanding of market dynamics, which are crucial for survival.

Existing Support System

The success of any business is directly proportional to the business ecosystem in which it operates. A perfect example is what is currently happening between China and Apple Inc., which has resulted in a loss of an estimated $30 billion for the company—a story for another day.

The existing support system and business environment play a crucial role in the success or failure of businesses, especially startups. Recent developments, including the introduction of new taxations and low interest rates, have added to the challenges faced by these young businesses. While taxes are necessary to fund public services and infrastructure, excessive or poorly designed taxes can burden startups, making it difficult for them to grow and thrive.

One would say that the current tax systems have created a financial burden and strain on startups, limiting their financial resources and making it challenging to invest in growth and innovation. Investors may have also been spooked by the new stringent fiscal policy moves by the government, as well as low interest rates, and potentially this may have had a dipping effect on the flow of capital into the startup ecosystem, increasing investors’ appetite in other emerging markets.

Despite Kenya’s President being a vocal advocate for the nation’s ambition to become Africa’s ICT hub, the recent setbacks in the startup ecosystem call for a reevaluation of the Silicon Savannah dream. While ambitions are high, the practical challenges faced by startups demand a more comprehensive approach to fostering innovation.

The Collateral Damage

Several startups, including Sendy, Gearbox, Zumi, SkyGarden, Notify Logistics, Kune, BRCK, and WeFarm, have succumbed to these challenges. These entities collectively raised substantial sums of money before their unfortunate closure. Sendy, for instance, secured $26.5 million in funding before it had to make significant cutbacks.

Despite the challenges, some entrepreneurs are still bullish and are hoping to regain solid footing in the market by curving a path forward through cost-cutting strategies. The troubles facing Kenyan agricultural and other startups are likely not ending soon based on the statistics and trends, underscoring the need for a holistic approach that combines visionary leadership, sustainable business models, and robust long-term planning. Kenya’s Silicon Savannah dream may still be within reach, but it will require careful navigation through the turbulent waters of the tech startup world. Only then can the nation’s ambition to uplift livelihoods through technology and innovation gain the impetus it deserves.

South Africa is abuzz with activities as leaders of the five-member BRICS nations — Brazil, Russia, India, China, and South Africa — began a three-day summit in Johannesburg on Tuesday, 22 August 2023 with the agenda of expanding the club as an alternative to a geopolitical alternative to Western-led forums such as the Group of 7.

The latest assembly of the BRICS leaders has sparked international interest at a level not witnessed since its formation 14 years ago. Collectively, BRICS nations contribute over a third of the world’s agricultural output and this could even be more after Argentina, Nigeria, Iran, Belarus, Saudi Arabia, and Indonesia expressing interest in joining the coalition, which will further add to the diversity of the BRICS bloc, accounting for 40% of the global population and a quarter of the global economy.

Agriculture featured as one of the headlines during the BRICS Business Forum in Sandton, Johannesburg, given the industry’s transformative shift, propelled by the integration of technology which has been pivotal in reshaping and modernizing the global agriculture. The evolution of the industry promises to increased food security and presents an opportunity to reduce costs and promote sustainability.

Notably, this paradigm shift could pave the way for Africa to become the world’s food basket. The integration of technology enhances food security and presents an opportunity to reduce carbon emissions, presenting a path towards de-carbonization and food security.

The 2023 BRICS Business Forum discussions on sustainable agricultural development and the promotion of trade and investment within the agricultural sector across member nations featured esteemed voices from various sectors who shared insights on the potential impacts of technology in agriculture.

Jai Shroff, Chairman and Global CEO of UPL, and a member of the BRICS Business Council from India, emphasized the impact of climate change on the agricultural sector. Shroff advocated for rewarding farmers for adopting sustainable practices, suggesting that such incentives could catalyze a significant reduction in carbon emissions. Beyond carbon credits, he proposed rewarding farmers either monetarily or by offering improved shelf space in stores as a means to drive sustainable behavior.

Bruno Ferla, Vice President of BRF – Brazil’s leading animal protein producer and largest poultry exporter – stressed the role of technology in meeting the growing food demand. He highlighted how technology can optimize resource allocation, such as water and soil, and improve livestock management. Ferla urged BRICS nations to embrace technology and play an active role in shaping global agricultural policies.

In the words of Ferla, “Everyone wants a seat at the table, but what’s the point if there’s no food on the table?” He emphasized the need to strike a balance between various factors while providing quality food at an affordable price. This sentiment underscores the importance of aligning sustainability efforts with consumer demands.

Vladimir Nosov, Head of Competence Centre: PhosAgro in Russia, highlighted the multifaceted challenges facing the agriculture sector. He advocated for smart products, including bio-fertilizers and eco-efficient solutions, to address these challenges. Nosov’s insights shed light on the innovative strategies required to enhance agricultural productivity sustainably.

Sharing China’s strategic agricultural approach, Jun Lyu, Chairman of COFCO Group, China’s largest food processor, manufacturer, and trader, shared the county’s unique perspective. Despite limited arable land and fresh water resources, China plays a pivotal role in global food provision. Lyu emphasized the strategic use of technology and innovative methods that have contributed to China’s success in agricultural production.

These discussions underscored the transformative potential of technology in modernizing the agricultural industry. As the world looks toward a future marked by both challenges and opportunities, embracing technological advancements remains paramount for a thriving agricultural sector.

In the vibrant heart of Nairobi, a transformation is underway in the coffee industry that promises to reshape the fortunes of coffee farmers. The Nairobi Coffee Exchange (NCE) auction, after a brief suspension aimed at implementing substantial reforms, has now resumed operations, breathing fresh hope into the lives of coffee growers across the nation.

A mere month-long hiatus was all it took for the NCE auction to recalibrate its approach and implement reforms that hold the potential to revolutionize the coffee sector. These reforms, geared toward enhancing the financial prospects of coffee farmers, are grounded in the concept of direct sales through the auction. This novel approach allows farmers to bypass intermediaries and directly sell their coffee, curbing the profiteering practices that have plagued the industry.

Breaking the Chains By Eliminating Middlemen

One of the cornerstones of this transformation is the introduction of the Direct Settlement System (DSS) technology platform, brought forth through a partnership with the Co-operative Bank. This innovative platform is the conduit through which all future coffee trading will occur. By embracing technology, the auction is not only modernizing its operations but also streamlining the trading process for coffee farmers, making it more efficient and transparent.

Transparency is a key ingredient in fostering trust and growth within any market. In line with this ethos, the Capital Markets Authority has stepped up to oversee the proceedings of the NCE auction. This measure adds an additional layer of oversight, ensuring that every transaction is conducted fairly and every participant has a level playing field.

Empowering farmers and Educating the Market

Before the auction resumed, a comprehensive training forum was organized to familiarize all stakeholders with the intricacies of the new Direct Settlement System. Brokers, traders, warehouse operators, and coffee farmers convened in Nairobi to gain insights into the workings of the DSS, fortifying their ability to participate effectively and maximize their returns.

Empowering coffee farmers lies at the heart of these reforms. To this end, 11 coffee co-operative unions have already secured licenses to directly sell their produce at the exchange and internationally, effectively eliminating the role of middlemen. This move not only ensures better financial remuneration for the farmers but also enhances their agency in the coffee trade.

The momentum of change continues as an additional five unions are set to be licensed before the end of August. This will increase the total number of farmer-owned coffee brokerage companies to 16, according to the Cooperatives Principal Secretary. This diversified landscape promises to provide more options and opportunities for coffee farmers to find the right avenue for their produce.

In a bid to ensure fairness and equity, three distinct licensing authorities are now involved in the process: county governments, the Capital Markets Authority, and the Agriculture and Food Authority. This multi-layered approach establishes checks and balances along the entire value chain, safeguarding the interests of coffee farmers and promoting a sustainable trade ecosystem.

Acknowledging the diversity within the coffee farming community, the government is collaborating with county governments and the Capital Markets Authority to enable small, medium, and large estates to form co-operatives or associations. This move aims to democratize access to brokerage licenses, ensuring that all categories of farmers can benefit from the reforms.

Kenya’s coffee production is characterized by two distinct systems: smallholder farming and larger estates. The smallholders, totaling around 700,000 growers, are organized into 559 active coffee cooperative societies operating 1,065 wet mills. Meanwhile, the estates, estimated at 3,000, operate 2,132 wet mills. This dynamic landscape reflects the intricate fabric of the coffee industry in Kenya.

With a commitment to bolster coffee production from the current 51,000 metric tonnes to 81,000 metric tonnes by 2024 and ultimately to 260,000 tonnes by 2027, the government is paving the way for a more prosperous future for coffee farming in Kenya. These ambitious targets underscore the transformative power of the NCE auction reforms and their potential to reinvigorate the coffee sector.

The revival of the Nairobi Coffee Exchange auction marks a watershed moment in the history of Kenyan coffee. Through innovative technology, enhanced transparency, and a renewed focus on empowering farmers, the auction is poised to create a fairer, more equitable, and thriving coffee ecosystem. As Kenya sets its sights on greater coffee production, these reforms stand as a testament to the resilience and determination of the nation’s coffee industry.

The avocado trade is experiencing a significant boom, with the market witnessing robust growth over the past decade. As per the latest RaboResearch Report, the increasing demand for avocados, driven by their attractive product attributes, combined with higher profitability, has led to a surge in global production and trade. However, the soaring popularity of avocados has also intensified competition, prompting industry players to focus on efficiency and sustainability.

Avocado production has expanded by approximately 7% globally in the last ten years, with key regions like Mexico, Colombia, Peru, and Kenya leading the charge. Mexico, the largest avocado-producing country, has seen a 6% increase in production, accounting for 30% of the global output. In tandem, Colombia, Peru, and Kenya have experienced production growth rates of 15%, 12%, and 11%, respectively, collectively contributing 27% to global production. Notably, the United States, while previously a top 10 producer, has slipped in the rankings.

One crucial factor contributing to the year-round availability of avocados in key markets like the US, the EU, and some Asian countries is the complementary harvesting seasons of these countries. While Mexico maintains year-round production, it experiences a seasonal low in June and July when other major producers, like the US (California) and Peru, step in, ensuring a steady supply to the US market.

Mexico retains its position as the largest exporter, with exports growing at an average annual rate of approximately 8% over the past decade, surpassing 1 million metric tons in 2022. The primary destination for these exports is the US market, which continues to be the largest importer of avocados globally, witnessing an 8% increase in imports from 2012 to 2022. Moreover, countries like Peru, Spain, and Kenya have also seen significant growth in exports, primarily supplying the European market.

The commercial market value of fresh avocados reached an estimated USD 18 billion in 2022, and experts believe there is still ample room for growth, especially in regions with lower per capita consumption. Mexico and Chile lead in per capita avocado availability, with approximately 9kg and nearly 8kg of fresh avocados per person per year, respectively. Australia and the US also show considerable consumption, each with over 4kg per capita.

However, amidst this success story, sustainability concerns loom large, with water usage being a crucial issue for avocado producers. Recognizing the importance of preserving natural resources, avocado growers have been investing in advanced irrigation systems to enhance water efficiency.

In a significant development, the UN FAO has recognized Kenya as one of the major players in the global avocado industry, ranking among the top 15 avocado-producing countries. With a current production of 417,000 metric tons, Kenya leads other African countries and is set to boost production further by tapping into the Indian market. The country aims to double its avocado production in the next five years, with plans to expand farming land to over 50,000 hectares.

Kenya’s avocado production is not fully commercialized yet, with a substantial portion being grown by small-scale farmers for domestic consumption, local markets, and exports. However, there is a growing trend among farmers in regions like North Rift and South Rift to shift from traditional cash crops like maize and wheat to avocado farming due to its lucrative returns.

As the global avocado trade continues to thrive, it becomes essential for industry players to strike a balance between meeting the escalating demand and adopting sustainable practices. By embracing efficient technologies and environmentally responsible methods, the avocado industry can not only remain competitive but also contribute to a greener and more prosperous future.

Eagmark is proud to bring you this comprehensive report on the booming global avocado trade, combining insights from top agriculture economists, industry experts, and UN FAO data. Enroll to the Eagmark Avocado Production Course for more insights and comprehensive understanding of avocado cultivation and management.

Rotten cocoa pods after torrential rains experienced from mid-May, affecting cocoa production in all regions, at Akressi village in the Aboisso region, Ivory Coast. Image source: REUTERS

In a significant development impacting the global cocoa market, the Ivorian Cocoa Coffee Council (CCC) has announced the suspension of cocoa futures sales for the 2023/2024 campaign until further notice. The decision comes in light of ongoing uncertainties surrounding the cocoa supply chain, exacerbated by adverse weather conditions and the outbreak of brown rot disease.

Yves Brahima Kone, the director general of CCC, revealed that concerns over the availability of an adequate quantity of raw materials from production areas to cover sales, combined with heavy rains between May 15 and July 10, have severely affected cocoa production. The persistent humidity has also provided ideal conditions for the proliferation of brown rot, a fungal disease that poses a threat to cocoa trees. CCC acknowledged the disease’s rapid spread across many plantations and is promptly assessing the situation to gain a comprehensive understanding.

Mr. Kone expressed apprehension about the cocoa harvest in the initial stages of the main season, expecting a considerable decline compared to the current year. He emphasized the importance of the production from January to March in offsetting potential volume imbalances. Currently, the cocoa sales have already exceeded one million tonnes, accounting for approximately 50% of the projected harvest of 2.2 million tonnes.

The impact of the brown rot outbreak and the suspension of cocoa sales will be felt by various stakeholders, including major commodities trading houses such as Cargill, Olam, and prominent chocolate manufacturers like Barry Callebaut, Hershey, and Nestle. Furthermore, this development represents a significant blow to Ivory Coast, a nation heavily reliant on cocoa, with the United Nations estimating that it contributes 40% of the country’s export earnings. Ivory Coast and other major cocoa producers including Ghana, Nigeria and Cameroon that account for around 70% of global production, have witnessed heavy tropical downpours in recent weeks.

Farmers, cocoa pod counters, and exporters based in Ivory Coast are bracing for a notable decline in cocoa output during the initial phase of the main harvest. The CCC’s initial projection for the current season was a total cocoa output of 2.2 million tonnes.

Ivory Coast, recognized as the world’s leading cocoa-producing country, supplying 45% of global cocoa, is aiming to increase domestic cocoa processing. The country plans to process 49% of its production starting from October by adding several new processing plants. Currently, approximately 35-40% of cocoa is processed within the country, with the remainder exported. However, the government intends to raise the domestic processing share to at least 50%.

To support this goal, Ivory Coast has entered into contracts with the United Arab Emirates for the construction of a new plant in San Pedro, with a grinding capacity of 120,000 tonnes, and China for the construction of two factories, each with a production capacity of 50,000 tonnes. Upon completion, these new facilities will enable the country to process over 1 million tonnes of cocoa annually, solidifying its position as the world’s leading cocoa grinder.

The global cocoa market will closely monitor the situation in Ivory Coast as stakeholders navigate the challenges posed by the supply chain uncertainties and the brown rot outbreak. Eagmark will continue to report on the developments and their potential ramifications for the international cocoa industry.

Kenya’s Milk Production Improves to New Heights as Taita Taveta County Reports Promising Increase in Milk Output, Boosting Agricultural Sector

Taita Taveta County’s Department of Livestock in Kenya has announced a significant rise in milk production thanks to the implementation of subsidized artificial insemination (AI) services, enhanced livestock disease and pest control, and the adoption of improved animal feeds and management practices. The county is now on track to reach an annual milk production of 30 million liters.

Erickson Kyongo, the County Executive Committee Member in charge of Agriculture, Livestock, Fisheries, and Irrigation, expressed optimism about the county’s progress. He highlighted the efforts made to provide affordable and high-quality AI services, as well as support for best practices in animal feed management and disease control.

“Our continuous efforts to make cheap and high-quality AI services accessible, along with the promotion of best practices in animal feed management and disease control, are driving us towards achieving an annual milk production of 30 million liters,” stated Kyongo.

He further projected that by the end of 2023, farmers in the county would have produced at least 20 million liters of milk before the onset of the dry season, which typically slows down production.

The journey towards this significant milestone began in 2018 when the county leadership signed a Memorandum of Understanding (MoU) with the Kenya Animal Genetic Resources Center, leading to a substantial reduction in the price of AI services. The cost per animal dropped from between Sh1,500 and Sh2,000 to an affordable Sh200.

Dr. Margaret Kibogy, the Managing Director of the Kenya Dairy Board, provided insight into the broader national dairy industry. She noted that Kenya’s dairy sector has been experiencing an estimated annual growth rate of 5%, with current milk production standing at 5.2 billion liters per year.

Dr. Kibogy emphasized the importance of the dairy industry, stating, “Kenya’s dairy sector contributes 4% to the national GDP, 12% to the agriculture GDP, and 44% to the livestock GDP. Approximately 1.8 million smallholder farmers depend on dairy production for their livelihoods.”

Meanwhile, the government has pledged support for dairy farmers through various interventions as part of its agricultural reformation efforts, aiming to create wealth and expand job opportunities within the sector. Cooperative union members have expressed optimism about the transformative initiatives of the government and have vowed to leverage them to advocate for and reform the dairy industry in the country.

During the launch of the Meru Central Dairy Cooperative Union Factory Phase, President William Ruto made commitments to further support the dairy sector. He pledged to reduce the cost of semen from the current Sh8,000 to Sh1,500, along with plans to establish a Sh400 million plant producing 500,000 doses of semen locally, eliminating the need for imports.

According to the 2020 Kenya National Bureau of Statistics Food Balance Sheet report, milk and its related products have the highest per capita consumption in Kenya, with 93.3 kilograms per person annually. This is followed by maize (69.5 kg), wheat (41.3 kg), and vegetables (32.6 kg).

The rise in milk production in Taita Taveta County and the government’s commitment to supporting the dairy sector are encouraging signs for the agricultural industry in Kenya. As the nation continues to prioritize the dairy sector’s growth, it will contribute to improved livelihoods for smallholder farmers, increased economic prosperity, and enhanced food security.

A groundbreaking initiative has been launched with the aim of expanding market opportunities for fruits in Eastern Africa, including pawpaw, mango, avocado, and citrus. This three-year project, specifically targeting Kenya, Uganda, and Burundi, seeks to address the challenges posed by invasive scale insect pests that have been wreaking havoc on these regions. The project, funded by the Standards and Trade Development Facility (STDF), is a collaborative effort involving esteemed partners such as CABI, KEPHIS, KALRO, the National Museums of Kenya, and the Fresh Produce Exporters Association of Kenya (FPEAK).

Scale insects, particularly adult females, have emerged as a formidable threat to these vital crops, causing alarming yield losses of up to 91%. These minuscule pests tend to hide beneath plant leaves, often evading detection or being mistaken for diseases. By inserting their needle-like mouthparts into the bark, fruit, or leaves, they wreak havoc and disrupt agricultural productivity.

The primary objective of this ambitious project is to strengthen the monitoring and mitigation capabilities of Kenya, Uganda, and Burundi in dealing with these destructive pests. By doing so, the project aims to facilitate intra-regional trade, unlock the full potential of the agricultural sector, enhance food security, and foster sustainable economic growth within the region.

Considering that agriculture provides substantial employment and contributes significantly to the regional GDP, addressing the issue of scale insects and their detrimental impact on key fruits becomes imperative.

To achieve its objectives, the project will prioritize training agricultural extension staff and plant protection officers in the identification of scale insects and educating smallholder farmers on effective management strategies. By mitigating the risks associated with these pests, the project aims to improve market access for Eastern African produce and foster collaboration among regional stakeholders.

The overarching goal of this project is to foster regional collaboration in managing scale insects through various measures, including sharing pest reports of invasive species, improving cross-border inspection regulations and practices, exchanging pest interception reports, providing training to the staff of national plant protection organizations (NPPO) in Burundi, Kenya, and Uganda for identifying and monitoring incursions, and incorporating biological control as an integral part of the solution to produce safer crops, reduce pesticide residues, and sustain trade.

Specifically, the project will target several species of scale insects across different countries. In Kenya, the avocado mealybug has been adversely affecting the trade of fresh avocados to China, while the papaya mealybug has been decimating entire pawpaw orchards, causing significant losses in internal trade. In Uganda and Rwanda, the mango mealybug poses a severe threat, potentially leading to crop failure and further spread eastwards. Across Eastern Africa, the papaya mealybug impacts the cultivation and yields of pawpaw, cassava, vegetables, and other crops, while the citriculus mealybug poses a significant challenge to citrus crops.

The export of fresh fruits significantly contributes to the economic growth of Eastern African countries. However, the presence of quarantine pests in exported produce has hindered the growth of this sector. Consequently, the project aims to enhance compliance with phytosanitary requirements for targeted horticultural products. This will be achieved through improved surveillance and management of scale insect pests, ultimately resulting in enhanced production and better market access for fresh fruits such as pawpaw, mango, avocado, and citrus.

To accomplish these goals, the project will undertake several key activities. Firstly, taxonomists, NPPO staff, and extension officers will undergo comprehensive training in the identification and management of invasive scale insects. The project aims to develop two training curricula and provide training to 15 inspectors and taxonomists per country, as well as 24 agriculture extension officers across the three countries.

Furthermore, the project will strengthen the capacity of NPPOs in identifying, surveilling, and monitoring invasive scale insects. This will involve the development and updating of surveillance and monitoring protocols, conducting surveys on the pest status, delimiting the spread of scale insects, and generating reports on their occurrence. The project will also establish and update checklists of scale insects for each country, create a comprehensive database of scale insects and associated organisms at the national, regional, and global levels, and facilitate the sharing of information on invasive scale insect pests at a regional level. Additionally, the Pest Information Management System (PIMS) will be enhanced and updated to ensure effective pest management.

Moreover, the project aims to enhance the capacity of farmers to manage invasive scale insects at the farm level. This will involve the development of awareness and training materials on managing scale insects, certification of nurseries for the production of clean planting materials, and the release of biocontrol agents specifically targeting the Papaya Mealybug in Kenya and Uganda. The project aims to develop awareness materials for at least 30 priority scale insects, produce management decision guides for 10 invasive scale insects, publish training curricula, and ensure that 10 nurseries meet the certification requirements.

To promote stakeholder engagement and the application of a systems approach for managing scale insect pests, the project will conduct a series of workshops. These workshops will sensitize and train stakeholders on the systems approach and biosecurity, foster stronger linkages between the public and private sectors, create broader awareness of the project’s findings and recommendations, and culminate in the publication of proceedings from a final seminar and various communication products.

The project’s comprehensive approach, which encompasses capacity building, surveillance, biocontrol, and stakeholder engagement, aims to combat the menace of scale insects and ensure the production of safer crops with reduced pesticide residues. By enhancing market access and compliance with phytosanitary requirements, Eastern Africa’s fresh fruit industry can flourish, contributing significantly to the region’s economic growth and food security. Through collaborative efforts and concerted actions, this initiative strives to create a sustainable and prosperous future for the agricultural sector in Eastern Africa.

In a world where citrus production is facing various challenges and fluctuations, South Africa’s mandarin industry is defying the odds and reaching new heights. Looking at the global citrus production outlook, South Africa’s higher citrus production, coupled with strong overseas demand will increase its exports of tangerines/mandarins by approximately 8 percent by the end of 2023 season, reaching an unprecedented record of 560,000 tons.

The European Union and the United Kingdom are the primary recipients of South Africa’s citrus bounty, accounting for 45 percent of total exports. Following closely behind are Russia and the United States, each representing 10 percent of the export market. South Africa’s fruitful partnership with the United States under the African Growth and Opportunity Act (AGOA) has been a key driver behind the exponential growth of mandarin exports to the American market. Over the past five years, exports to the US have quadrupled, soaring to nearly 50,000 tons in the previous season.

Global Citrus Outlook

Source: The USDA Foreign Agricultural Service – Global Citrus Production Outlook

This upward trend is expected to continue as consumer preference for tangerines/mandarins in the United States continues to rise, bolstered by the ongoing duty-free market access provided by AGOA. While local consumption of tangerines/mandarins remains relatively smaller compared to oranges, the industry’s focus on export markets and the implementation of pest management netting have resulted in higher quality produce and reduced surplus fruit. However, there is a niche market within the country, where high-end retail chains cater to domestic consumers by offering export-grade citrus.

Looking ahead to the 2023 season, the outlook for South Africa’s citrus production is remarkably optimistic. Tangerines/mandarins are expected to see a 6 percent increase in production, reaching a total of 670,000 tons. This growth can be attributed to favorable weather conditions and the increasing number of newly planted orchards entering full production.

Over the past seven years, the area dedicated to tangerines/mandarins has experienced significant expansion, driven by global demand for seedless varieties and the comparatively higher profit margins they offer. However, this rapid growth in planted area is anticipated to slow down in the upcoming season due to concerns of softening demand and rising costs. Economic growth projections indicate potential weakening in key markets such as the European Union and the United Kingdom, accompanied by inflationary pressures that may dampen consumer spending on imported fruit.

Furthermore, challenges related to rising farm input costs, higher shipping rates, infrastructure inefficiencies, ineffective port operations, and deteriorating road networks have started to impact the industry’s profitability, limiting further investment. As a result, the forecasted growth in the area planted for tangerines/mandarins in the 2023 season is only 1 percent, amounting to approximately 28,225 hectares compared to the previous year’s estimated 7-percent growth.

Within South Africa, the Western Cape province dominates tangerine/mandarin production, accounting for 37 percent of the country’s total output. Following closely behind are the Limpopo and Eastern Cape provinces, contributing 28 percent and 25 percent, respectively. With more than 50 percent of the orchards in the country being younger than 5 years, there is a substantial potential for increased production in the coming years.

While South Africa stands at the forefront of mandarin production and export, the global outlook for citrus, including oranges, grapefruit, and lemons/limes, is experiencing fluctuations and challenges of its own.

Source: The USDA Foreign Agricultural Service

For oranges, global production in the 2023 season is estimated to decrease by 5 percent, reaching 47.5 million tons. Lower production in the European Union and the United States is only partially offset by a larger crop in Egypt. In the United States, citrus production has been significantly impacted by several factors, including the spread of citrus greening disease and extreme weather events such as hurricanes.

In the European Union, citrus production is projected to decline due to unfavorable weather conditions and disease outbreaks. Spain, one of the largest citrus producers in the region, has been particularly affected by adverse weather patterns, leading to a decrease in orange production. Additionally, the spread of the citrus black spot disease has resulted in stricter import regulations imposed by the European Union, affecting the availability and trade of citrus products.

The United States, another major player in the global citrus market, has been grappling with the challenges posed by citrus greening disease. This devastating bacterial infection has significantly impacted citrus trees, leading to a decline in production and the need for extensive pest management efforts. The state of Florida, which historically produced a significant portion of the country’s oranges, has been heavily affected by citrus greening, resulting in a notable reduction in orange output.

Source: The USDA Foreign Agricultural Service

To compensate for the decrease in production in traditional citrus-growing regions, Egypt has emerged as a key player in the global orange market. The country has experienced a significant increase in orange production, driven by favorable weather conditions and expanding cultivation areas. Egypt’s strategic location, allowing for convenient access to major markets in Europe, the Middle East, and Asia, has further strengthened its position as a major citrus exporter.

Despite the challenges faced by the global orange industry, demand for citrus products remains strong. Oranges are a popular fruit worldwide, consumed both fresh and in processed forms such as juices and concentrates. The nutritional benefits and versatile uses of oranges continue to drive consumer demand, contributing to a steady market for orange producers.

In addition to oranges, other citrus fruits like grapefruit and lemons/limes also face their own set of challenges. Grapefruit production has been declining in several countries, including the United States, due to factors such as disease pressure, competition from other citrus varieties, and changing consumer preferences. The popularity of grapefruit has waned in some markets, leading to decreased demand.

Source: The USDA Foreign Agricultural Service

Lemons and limes, on the other hand, have seen a relatively stable global production trend. These citrus fruits are widely used in culinary applications, beverages, and various consumer products. However, fluctuations in production and trade can occur due to factors such as weather conditions, disease outbreaks, and market dynamics.

Source: The USDA Foreign Agricultural Service

While the global citrus industry is navigating a complex landscape of challenges and opportunities, it is crucial for citrus producers to adapt to changing market conditions, invest in research and innovation, and implement effective pest and disease management strategies to ensure the long-term sustainability and profitability of the industry.

Read Full Report on the Global Citrus Production Outlook from the The USDA Foreign Agricultural Service

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The US Meat Export Federation (USMEF) is actively working to overcome supply chain challenges in Africa to tap into the region’s potential as a major market for U.S. meat exports. According to USMEF President and CEO Dan Halstrom, Africa has the world’s youngest demographic and a growing spending power, making it a promising market for American meat products.

According to Halstrom, Africa as a continent and specific countries such as South Africa, Angola, Ghana, Congo and Senegal prove to be valid markets for US beef and pork exports.

To achieve this goal, USMEF is collaborating with individual exporters and packers to introduce sample products to key customers throughout Africa. Developing relationships with key players in the region is seen as critical for the U.S. to fully realize Africa’s market potential, according to Matt Copeland, USMEF Africa representative.

He further added that in the past, Southern, West, and East Africa have been “dumping grounds” for protein products from around the world, with trading companies taking advantage of these routes. To overcome this, USMEF is working to engineer trust and integrity within those trade routes back to the United States.

Currently, Africa is a solid market for variety meat exports, and beef variety meats are already popular, but there is additional opportunity for growth potential in exports of U.S. pork and beef muscle cuts. USMEF’s efforts to overcome supply chain challenges and develop relationships in Africa are expected to benefit American meat exporters and help them tap into this promising market.

Source: Brownfield News

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Picture this – you are a farmer based in the country side, a remote underserved and underdeveloped rural village with ownership of less than an acre under your name, subdivided into several portions for your homestead, with the rest set aside to grow crops and rear a handful of livestock, all these mostly for subsistence. You however try to make ends meet and venture into some less-capital intensive but viable agricultural pursuits like poultry farming, cultivation of some cash crop (sugarcane, tea, coffee, avocado, et cetera) or any other “high-potential” farming initiative that take months to reach maturity and harvesting, not to mention the long hours spent tending to the crops or flock, as well as input costs incurred to ensure the product is of premium-quality to meet the market and consumers’ expectations before they can fetch somewhat, a fair price for you – which in most cases doesn’t happen and you end up unable to break-even or at a negative, just because of the “artificial” forces and odds that are always working against you!

Well, unfortunately, this is the situation most smallholder farmers in Africa are in and seldom, the circumstances change for the better despite agriculture being the backbone of many African economies – providing livelihoods for millions of people across the continent.

Putting Our Money Where Our Mouth Is!

Smallholder farmers in African often struggle to get a just compensation for their products and effort, with many facing significant challenges that limit their productivity, profitability, and ability to access markets.

Action needs to be taken to support these hardworking farmers, rather than just talking about the importance of agriculture and its potential for economic development while seated in posh “air-conditioned” offices. We must have concrete solutions and investment to address the challenges faced by farmers in accessing markets, finance, and technical skills, among other issues.

In this article, we explore some of the key factors that contribute to this situation and discuss possible solutions.

Limited Access to Markets

One of the biggest challenges facing African farmers is limited access to markets. Many farmers struggle to connect with buyers who are willing to pay fair prices for their products due to inadequate transportation infrastructure, high transaction costs, and limited access to market information. This makes it difficult for farmers to earn a decent income and limits their ability to invest in their farms.

For this reason, Eagmark has developed an eCommerce Marketplace where farmers and agricultural professionals can purchase agricultural inputs at competitive prices and sell their farm produce at fair prices. This platform also connects farmers with consumers and food processors directly, helping in managing the supply chain effectively and therefore reducing the chances of food waste.

Limited Access to Finance

Access to finance is essential for small-scale farmers to purchase inputs, machinery, and equipment. However, African farmers often have limited access to credit due to lack of collateral, high-interest rates, and limited farmer-oriented financial institutions. This makes it difficult for farmers to invest in their farms, improve their productivity, and access higher-value markets.

To mitigate this challenge, Eagmark’s innovative financing solution “FarmBoost”, provides financing for farmers and agribusinesses, ensuring fair access to capital and promotes social development in the sector. By providing bespoke financial lending processes and requirements, the platform aims to level the playing field and provide equal opportunities for all farmers.

Lack of Technical Skills

Many African farmers lack the technical skills required to produce high-quality crops, add value to their products, and manage their farms efficiently. This often leads to low yields, poor-quality products, and difficulty in accessing higher-value markets. There is a need for improved training and extension services to help farmers improve their skills and productivity.

Thanks to solutions such as the Online Learning Campus (OLC) developed by Eagmark and dedicated to provide valuable learning resources for agricultural students, farm apprentices, farmers, and farm managers.

Climate Change

Climate change is increasingly affecting agricultural productivity in Africa. Erratic rainfall patterns, droughts, and floods can damage crops, reduce yields, and affect food security. This can lead to lower incomes for farmers and make it difficult for them to get a fair deal. There is a need for climate-smart agriculture practices and technologies to help farmers adapt to the changing climate.

Dependence on Middlemen

Many African farmers are dependent on middlemen to sell their products. These middlemen often exploit their lack of market knowledge and bargaining power, leading to lower prices for their products. Improved market information systems and support for farmer-led marketing initiatives can help farmers connect with buyers and improve their bargaining power. The Eagmark eCommerce Marketplace does just that by cutting the middlemen off the supply chain to try and enable fair market competition and fair market prices for farmers.

Limited Access to Inputs

Many African farmers have limited access to high-quality seeds, fertilizers, and other inputs. Most often than not, this results to lower yields, lower quality products, and difficulty in accessing higher-value markets. Improving access to inputs and support for farmer-led seed production and distribution systems are some of the initiatives that can be initiated through capacitated farmer organizations.

Poor Infrastructure

Poor infrastructure, such as inadequate storage facilities, lack of electricity, and poor transportation networks, can make it difficult for farmers to get their products to the market in a timely and cost-effective manner. This can lead to spoilage and damage, reducing the quality of their products and lowering their income. Prioritizing investments that improved infrastructure can leapfrog agricultural development.

Governments need to intervene and build well-networked transport infrastructure which can play a great role in ensuring farm produce take the shortest possible time to reach consumers when they are still fresh, thereby reducing the cost of investment on expensive storage equipment, and for those who cannot afford these storage facilities, which is always the case with most small-scale farmers, and their products end up going bad leading to food waste and devastating losses.

Lack of Land Tenure Security

In many African countries, land tenure is insecure, with farmers having limited rights to their land. This makes it difficult for them to invest in their farms and obtain credit, and can also lead to conflicts with larger landholders or the government. With proper government interventions, here can be improved land tenure security and support for community-led land governance systems.

Unfair Trade Policies

Agricultural trade policies in many countries are biased against small-scale farmers. Subsidies, tariffs, and other trade barriers can make it difficult for African farmers to compete in global markets and earn a fair price for their products. Legislation must be put in place to ensure that there is improvement in trade policies that support small-scale farmers and promote fair trade practices.

Inadequate Research and Development

The infrastructure for agricultural research and development is weak in many African nations. Lack of access to cutting-edge technology, industry best practices, and market data may result from this.

In Africa’s agriculture industry, the lack of access to new technologies and techniques reduces productivity and profitability, making it more challenging for farmers to obtain a fair price. Farmers find it difficult to compete in international markets and unable to produce the right quantity or quality of crops required to earn a stable income without access to the most recent technologies. Similarly, without access to market information, farmers cannot make well-informed decisions about what crops to grow, when to sell, and how much to charge.

To address these issues, African governments and international organizations must invest in research and development infrastructure and make it more accessible to small-scale farmers. This can involve providing funding for research institutions, promoting collaboration between researchers and farmers, and disseminating information on best practices and new technologies through extension services.

Promoting public-private partnerships (PPPs) is also another strategy that can bring together government, industry, and academia to drive innovation and create sustainable value chains. PPPs can help address the gap in technology development and innovation by combining the knowledge and resources of different stakeholders.

Lack of Proper Coordination among Farmers

The problem of market fragmentation is somehow a reflection of how poorly disorganized and uncoordinated African farmers are among themselves. It is a well-known fact that when farmer groups come together, they stand a chance and are in a better position to negotiate better prices for their products, as buyers would find it difficult to find alternatives elsewhere.

We have created a curriculum on “The Power of Farmer Organizations: Building a Farmers Community” available on the Eagmark Online Learning Campus (OLC). This course is designed to explore the importance of farmer organizations in building a strong and resilient farming community. It introduces the concept of farmer organizations and the key benefits they offer to farmers, including increased bargaining power, access to information and resources, and the ability to participate in policy-making processes.

Gender Inequality

Putting the buzzwords and all the conundrum aside, women farmers in Africa have often faced significant barriers to accessing resources, such as land, credit, and market information.

According to a study by the World Economic Forum (WEF), women account for nearly half of the world’s smallholder farmers and produce 70% of Africa’s food. However, less than 20% of land in the world is owned by women and over 65% of land in Kenya is governed by customary laws that discriminate against women, limiting their land and property rights – something to critically think about! The WEF study highlights the perspective, but we believe that women truly form the majority or smallholder farmers in Sub-Saharan Africa (SSA).

These circumstances have continuously limited women’s farm productivity and profitability, and has led to lower incomes and fewer opportunities to improve their economic status.

Additionally, women farmers are often discriminated against in terms of access to productive resources, such as land, credit, and training. Women typically have less access to these resources than men, which limits their productivity and profitability. This gender inequality affects not only the women themselves but also their families and communities.

In recent times, however, there have been efforts and initiatives across many institutions, organizations and programs to promote gender equality and empower women farmers through policies and programs that promote their access to productive resources.

Eagmark Online Learning Campus (OLC) is offering a “Gender Mainstreaming in Agriculture” course that aims to equip participants with knowledge and skills on how to integrate gender considerations into agricultural policies and programs. The course is open to anyone interested in gender mainstreaming in agriculture, including policymakers, program managers, researchers, and development practitioners.

Insufficient Extension Services

Extension services, such as training in new farming techniques, access to credit, and market information, are often limited in many African countries. This can limit farmers’ ability to adopt new technologies and practices and take advantage of market opportunities.

Extension services play a crucial role in supporting farmers to improve their productivity and profitability. However, they are often limited in many African countries due to inadequate funding, limited human resources, and poor infrastructure. It is therefore essential to invest in extension services and ensure that they are adequately funded, staffed, and equipped to meet the needs of farmers.

Environmental Degradation

Environmental degradation, such as soil erosion, deforestation, and water pollution, is a major hindrance to full productivity of African farms and reduces their profitability. This has led to lower incomes for farmers and makes it more difficult for them to get a fair deal.

Environmental degradation affects not only the immediate productivity of farms but also the long-term sustainability of agricultural production. It is therefore essential to promote sustainable agriculture practices and invest in environmental conservation efforts to ensure that African farmers can continue to produce food and earn a fair income in the long run.

Summing It All Up

All of these factors contribute to the challenges faced by African farmers in getting a fair outcome based on their efforts and toil. While some of these issues may be difficult to address all at once, there are steps that can be taken to help farmers improve their competitiveness and position in the market, just like we are doing through Eagmark’s initiatives – plans into action – and with the right strategic partners and support, such small efforts can be compounded to make greater impacts for the betterment of the farming community and the society’s wellbeing at large – with less talk, and more action!

Governments often use agricultural subvention as a policy tool to assist farmers in increasing their agricultural productivity. Subsidies can take various forms, such as direct payments, price supports, and tax breaks, to name a few. The primary aim of agricultural subvention is to promote food security, sustainable agriculture, and rural development.

Agricultural subvention has the effect of enhancing agricultural productivity. By reducing production costs, subsidies make it more affordable for farmers to obtain necessary inputs, such as fertilizers, seeds, and farm equipment. Farmers can also invest in advanced technologies that enhance crop yields, reduce waste, and promote food safety.

In addition, agricultural subventions encourage investment in the agricultural sector by incentivizing farmers to expand their operations, resulting in increased production levels and improved supply chain efficiency. This increased production leads to a more stable or even lower price of agricultural products, which benefits consumers by making healthy and affordable food more accessible.

Moreover, agricultural subventions create employment opportunities, especially in rural areas, where farming is a major source of income. Higher agricultural productivity leads to additional labor demand, resulting in job creation and economic growth in rural areas.

According to the World Bank, growth in the agriculture sector is two to four times more effective in raising incomes among the poorest compared to other sectors.

Agricultural subvention is a form of financial assistance given to farmers by the government to help them produce more food. While subventions can help farmers increase their productivity, there are also concerns that they can lead to overproduction and lower prices for farmers.

However, there are potential downsides to agricultural subvention. For instance, it may lead to overproduction, which can cause market surpluses and reduced prices, harming farmers in developing countries who rely on agriculture for their livelihoods. Additionally, agricultural subvention can be expensive for governments, which may find it more beneficial to invest funds in other sectors. Thus, it is crucial to ensure that subsidies are well-targeted and efficiently allocated to encourage agricultural productivity and promote long-term sustainability.

Agricultural subventions can be an effective tool for increasing productivity and reducing poverty among farmers. However, it’s important to ensure that subventions are used in a way that promotes sustainable agriculture practices and doesn’t lead to overproduction or environmental degradation. By providing farmers with the resources they need to produce more food sustainably, we can help ensure that everyone has access to healthy and nutritious food while also protecting our planet.

Fish farming is a sustainable and efficient way to produce healthy and delicious seafood. With the demand for seafood on the rise, fish farming is becoming an increasingly important industry.

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