Where the money is in agribusiness

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Kenyans are always looking for the next business opportunity. A way you can find more of them is by looking at entire industry sectors and sub-sectors. This gives you a bird’s eye view of what is really available.

It also allows you to choose passions that suit you. This is better than going off on what another person feels is suitable for you. They don’t even know you or what you actually want. You would also appreciate the prospects of the industry – is it mature? Or will your investment generate less return? Where is everyone in the business sector moving onto next? Success in entrepreneurship can feel like being in the right place at the right time. This doesn’t diminish the amount of work you have to do, of course.

One trick for you to find business opportunities, in the stated manner, is to follow the money. You have to read and know things to know where the money is. You can be keen on Government intents as well – beyond tenders and looting with all due respect.

The President has been harping about the big 4 agenda that will cement his legacy. There’s a lot being said about this plan. One of the 4 things Kenya wants to work on in these 5 years is ensuring food security. The Government is promising to increase production of select food crops, waiver duty for agricultural equipment, train farmers and subsidize players in the sectors as is possible. This signals that agribusiness in Kenya is a good thing to think about.

Others moved in long before. It’s nice to see highly educated and skilled Kenyans opting to invest in agribusiness sub-sectors. The template for any country to develop is usually to improve commercial agriculture first (cheap food, rich farmers, the works). In Kenya, there’s a long way to go in this regard meaning there are plenty of upsides to you getting involved in agribusiness.

So, what are these areas in agribusiness where the money really is?

Primary production

Do you know the Kenyan version of the backyard? A place where you keep your poultry or rabbits or any easier-to-manage animal. Many grow a few crops as well. Since our production or yields for food doesn’t match up to demand, Kenyans are appreciating the economic opportunity to contribute to greater production. The Government too is targeting some of the most commonly consumed food crops like maize, potatoes and rice. Many other things we eat regularly like tomatoes and onions are not easily or cheaply available all-year round either. Even a cash crop like coffee is nowadays in the news again. Modern practices are making cultivation and livestock keeping simple but it’s still a great deal of work requiring attention to detail.

Value addition

One of the attractive areas for value addition is dairy. The industry has a dominant player with links to ahem ahem, we don’t want to be the first victims of the new cybercrimes law. Good news is that almost every other crop grown in Kenya is listed as an opportunity for adding value. If uncooked dead animal guts doesn’t make you squirm then livestock products are a consideration for you. The end goal of processing is to bring it closer to the final form of consumption. More, there are different ways to process foods it’s amazing. You can dry them, ground them, package them or turn them into paste. I definitely cannot exhaust the list.

READ: LIST OF THINGS YOU CAN MAKE FROM POTATOES

Inputs

One of the things that makes agriculture in Kenya difficult is the cost and availability of inputs. This includes stuff like fertilizer and seeds. Dealers struggle to connect to farmers meaning a market is left not quite served. One of the reasons for this, as discovered by the UK’s Department for International Development, is that most farmers in Kenya (the far majority being women) cannot afford to buy inputs in the standardized quantities they come in. A sort of kadogo economy is going on and they need the bulk broken down into smaller quantities. An encouraging finding is that farmers in Kenya are increasingly willing to commit to utilize input that will improve their production, unlike before when experimenting with yields was not done.

Wholesale and Retail

Remember our list of retail opportunities in Kenya? Agricultural products are one way to explore them. In fact Kenyan women have been retailing fruits and vegetables for the longest time. The industry is valuable but it is actually dominated by wholesalers (majority are men). The informality of the sector has led to that. Solving distribution challenges where farmers wait with their products by the roadside and lack of adequate storage facilities are some of the opportunities. Wholesalers of fruit and vegetables also dominate because they are the only ones who operate on scale. Mama Mbogas are usually small solo sole entrepreneurs with lesser bargaining power. Another distribution challenge (or opportunity as entrepreneurs call them *wink*) is the long line of middlemen looking to cash in on the farmer’s work and make food expensive for all of us.

Business Development Services

It seems only tech entrepreneurs get incubation services in Kenya. Participants in agribusiness only have extension officers but this is not enough. There are initiatives like County Biashara Centers to give services of marketing and management training. Many app-developers are also connecting farmers to markets and helping them access financing. But with 75% of Kenyans working in agriculture, there’s always room for you to exploit the opportunity too. Even deceptively simple work of availing information, as blogs do, goes a long way for both you and the farmer. These services improve the capacity of agribusinesses and have only just began being offered on commercial basis.

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Web Content and stuff. You can reach me you know: editor@herbusiness.co.ke, malitrobert@gmail.com

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