7 REASONS FOR DOING URBAN BASED AGRI-BUSINESS

Agriculture is as old as civilization itself. At the beginning, agricultural practices were primitive.  Harvests were low and for domestic consumption. As the world industrialized, agriculture became a global industry.  Agricultural practices improved leading to increased yields, preservation and distribution of food.  People stopped depending on rain fed agriculture and switched to irrigation fed agriculture.

This has not been the case in many agriculturally dependent economies.  For example, most African countries economies have agriculture as their backbone.  Agriculture is the biggest employer. However, many African countries still depend on rain to guarantee their food security.

High prices of agricultural foods mean that agri-businesses are viable.  These businesses include farming, distribution and retail related agri-businesses.

Here are seven reasons for engaging in urban based agri-businesses.

1. Irrigation fed agriculture means that an agri-business can farm all year round. They are not dependent on the two rainy seasons commonly found in many areas. This means that small urban spaces dedicated to home gardens can meet home food needs. They can also grow enough for sale in local markets. Therefore, an agri-business entrepreneur can leverage on both farming and retail-based agri-businesses.
2. Technological advances have brought food producers and consumers closer together. The distribution chain has cut out non-essential middle men and reduced post-harvest loses and wastage. Social media remains the strongest means of marketing your own agricultural produce. This means that agri-business controls the entire farm to plate process. Further, apps like jiji, twiga and soko among others connect agri-business entrepreneurs to their customers.  This eliminates middle men who are responsible for inefficiencies in the supply chain.  This leads to high consumer costs of food.
3. Technology is also crucial in running effective agri-businesses. Automation in certain aspects of farming works well. Irrigation is can be controlled remotely.  For livestock farmers, feed formulation and feeding benefits from using technology. This translates to lower overheads plus having a data trove that helps in strategic management of the business.
4. Urban areas have space restrictions. Further, laws and by-laws zone urban land usage for commercial use rather than agricultural use.  Never the less, there are numerous technological advances that allow an investor to engage in urban farming.  For example, hydroponics is an agricultural practice where small spaces can be utilized to yield maximum results. There is little or no use of soil.  This agricultural practice makes use of nutrient rich water to grow food. For entrepreneurs interested in livestock farming, certain animals can do well in constricted urban spaces. Chicken, rabbits, sheep, goats and cattle can be reared easily.  Zero grazing is an old perfected method of raising livestock in small spaces.
5. Finally, there are multiple areas of agri-business that one can engage in. There is farming itself, distribution and wholesale, plus retail of farm products. For any entrepreneur, all these are areas which can be very profitable. The entrepreneur is able to take control of the entire agri-business chain.
6. Agri-business is a profitable venture in Africa. Urbanization has caused people to live around cities and towns. This has caused a reduction in manpower needed in farms, leading to many agricultural zones becoming idle due to younger people relocating to urban areas. Robust population growth also means that there are more mouths to feed. The world is also looking to unexploited land in Africa to feed their own populations. Food prices are constantly increasing. Agri-business entrepreneurs can do harvest great return from their products.
7. Value addition has not been readily embraced in the agri-business industries. The bulk of agricultural products goes straight to the plate. Through value addition and branding, new avenues of food preservation and distribution can be explored.  This reduces losses occasioned by the highly perishable nature of foods that cannot make it to the market.  Africa’s climate is generally tropical.  It reduces the longevity of food. Infrastructural challenges impact agri-business negatively.  However, through value addition, a lot of waste can be reduced.

Many years ago, agriculture was seen as a venture for older citizens and retired pensioners.  Many were not well educated. Due to the inefficiencies in the agricultural chain, loses discouraged entrepreneurs from venturing in agri-business. Exploitative middlemen, brokers post-harvest loses were common.

This is no longer the case. Improved agricultural practices have meant that farming is becoming more efficient. Technological advances have seen agri-business management practices become more efficient.  Young African entrepreneurs are also seeing the value of engaging in agriculture.  African agri-business holds the key to food security for the world.