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Growing African Agriculture Businesses

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Image Source: AGRA May 2017

The journey to Beatrice Nkatha’s shop in Tharaka Nithi, North East of Kenya’s capital nearly never happened. The only dry-weather road leading to this great story of success was almost impassable with the current rains that are pounding most parts of Kenya. The 4X4 vehicle that we used skidded and swerved for the better part of the 40-kilometer journey from Meru town on the slopes of Mt. Kenya.

“Welcome to Mukothima, the heart of sorghum farming”, said the very cheerful Beatrice when we finally arrived as she quickly gave instructions to her 5 workers in the shop to continue serving the swelling group of customers.

Beatrice’s is a testimony of the huge business potential that agriculture has. Starting off as a local tailor mending clothes of struggling farmers in this largely arid to semi-arid area, she got involved in agriculture almost by accident. She was first contracted by “wealthy” businesswomen from Nairobi as their local contact buying maize from local farms and collecting it in her small tailoring shop for a small commission. Gradually, she gained the trust of the businesswomen who would send her money to pay the farmers and the trucks to transport the maize to Nairobi.

As maize yields in her area continued dropping due to the ever-intensifying drought conditions, the businesswomen shifted to other more productive areas. Armed with the basic business skills she had acquired and a resolve to improve the wellbeing of the farmers, Beatrice converted her store into an agro-shop in 2009. She contacted local and international seed and ago-chemical companies who stocked her shop. She mainly specialized in seeds adapted to the local conditions. She also started offering farmers information on best farming practices which she had acquired from the inputs companies.

Gradually, productivity in her region started improving. Framers also diversified and started growing cow peas, green grams and sorghum. Beatrice saw an opportunity to link them directly to the market by aggregating the produce in her store and transporting them to markets in the major towns.

In 2014, her business received a major boost from the Strengthening Agricultural Input and Output Markets in Africa (SAIOMA) program which supported her to improve her agro-dealer business by partially meeting the business improvement costs including store refurbishment. It also trained her in business management, in product knowledge and in the safe handling of agro-inputs.The programme also supported the growth of her new business by linking her to program-supported farmers by holding exhibitions and field days, where Beatrice and other agro-dealers promoted their services and products. Program support to farmers, specifically in post-harvest management and crop aggregation played a crucial role helping them to meet market quality and volume requirements.

The programme also supported the growth of her new business by linking her to program-supported farmers by holding exhibitions and field days, where Beatrice and other agro-dealers promoted their services and products. Program support to farmers, specifically in post-harvest management and crop aggregation played a crucial role helping them to meet market quality and volume requirements.

Recognizing Beatrice’s business acumen and access to capital, SAIOMA worked to further develop her business into a wholesale agro-dealer that now services 13 retail agro-dealer outlets, with each serving about 150 rural farmers.

As a result, her agro-shop has grown extensively and now serves close to 200 farmers a day. She has also been contracted by the East African Breweries to supply them with Sorghum for the new “Senator’ beer meant for the low end market. This has created a steady market for sorghum and consequently uplifted the economic status of the farmers. She has also been appointed by the Kenya Commercial Bank and the Equity Bank as their agent offering financial services to the 14,000 farmers that are part of her network.
She is now providing all-round services to farmers including the supply of agro-inputs, over the counter-extension services, produce purchases from farmer, input and other emergency loans to some farmers while paying cash for crop purchases.  Her business aggregates produce for onward sale to large buyers and millers. She has also urchased 2 tractors and threshers that provide mechanized labour to farmers at a fee

Beatrice’s business now employs 12 full-time employees working in the shop, produce stores and to operate the machines. She also employs about 40 casual labourers, Last season, for instance, she sold 12.5MT of seed and fertilizer and bought over 800MT of sorghum, green grams and cowpeas. Her network of agro-input shops reduced the average distance covered by farmers to purchase quality inputs from 70 to 18kms.
The visit to her thriving business, 7 months after the SAIOMA project was completed, clearly demonstrates sustainability and that African-owned agri-businesses can prosper. Local entrepreneurs only need initial support to get them started. Public investment, especially in transport infrastructure, remains a critical component.

SAIOMA implemented the input and output marketing agro-dealer model across Kenya, Malawi and Zambia which aimed to increase the availability of, and access to improved seed varieties and fertilizers for smallholder farmers, and to integrate these farmers into structured trade. The programme was designed to improve operational capacities of farmer organizations, with a specific focus on developing women’s skills and opportunities in agribusiness.

In Kenya, SAIOMA operated in the semi-arid areas in the Eastern region of the country where improved farm inputs are needed most, and was implemented by the Agricultural Market Development Trust (AGMARK), the Cereal Growers Association (CGA) and the Cooperative Consultancy and Insurance Agency (CCIA).

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