Mainstreaming agribusiness incubation for inclusive development

SVCDC - KenyaIDPA - UgandaCURAD - UgandaCAF - MaliAgBIT - Zambia CCLEARr - Ghana

Ralph von KaufmannUniBRAIN Facility Coordinator

Forum for Agricultural Research in Africa

8 February 2012 NIABI 2112, New Delhi, India

MAINSTREAMING

AGRIBUSINESS INCUBATION

FOR INCLUSIVE DEVELOPMENT

MAINSTREAMING AGRIBUSINESS INCUBATION FOR INCLUSIVE DEVELOPMENT

• Food price and security projections

•Why the African context matters to the world

•Dare to hope that Africa can and will respond

• An emerging African agribusiness incubator network

•What is needed to create an enabling environment for agribusiness incubation and commerce

•Conclusions

CONTENT


FOOD PRICE AND SECURITY PROJECTIONS

MAINSTREAMING AGRIBUSINESS INCUBATION FOR INCULSIVE DEVELOPMENT




• FAO Indices March 2011 to 2010:

Food Prices (FFPI) + 37% Cereal Price Index + 60%Dairy Price Index + 37%

• Oils/Fats Price Index nine months consecutive rise • Demand for animal source

foods and cereals will rise rapidly due to:

increasing populationsrising incomes

increased urbanisation



• The consequences of changing demographics, world markets and climate, etc. are:• Hunger is most severe in

Africa, despite abundance of human & natural resources

• Undernourishment is responsible for 25,000 deaths each day. Responsible for stunting physically and mentally in 150m children – the fabric of national development is impaired


DARE TO HOPE THAT AFRICA CAN AND WILL RESPOND

Africa accounts for:

•1/5 of global land area (80 x the size of Japan)

•1/6 of world’s forested area and diverse ecologies (biodiversity)

•1/4 of the world’s arable land

•Huge deposits of important minerals

1/6 of global population (44% under 15 years in 2006)

http://strangemaps.files.wordpress.com/2006/11/africa_in_perspective_map.jpg



• Comprehensive Africa Agriculture Development Programme (CAADP) goal is 6% per annum increase in food production:

to meet the needs of rapidly expanding populations

achieve MDG 1 of halving extreme poverty and hunger

while also ensuring environmental sustainability MDG 7

• The failure to meet these challenges will:

fuel conflicts, swell the numbers of internally displaced persons, increase economic migrants, threaten global security and environmental stability

• The application of new knowledge (R&D) is required to achieve Africa’s vision for agriculture

• ‘D’ i.e. The application of new knowledge depends on the private sector and the private sector also does a lot of ‘R’ research



CAADP encourages investments in agriculture in four mutually reinforcing priority areas (pillars):

• Pillar I: Improving land and water management

• Pillar II: Improving rural infrastructure and trade-related capacities for improved market access

• Pillar III: Increasing food supply and reducing hunger

Underpinned by:

• Pillar IV*: Agricultural research, technology development and dissemination with crosscutting human and

Institutional capacity building

*FARA is the Lead Institution for CAADP Pillar IV



Conclusion

• Food production in Africa is declining, the landscape is blighted and efforts to bring about improvements are doomed to failure

• WRONG!

• “ There are per capita problems in keeping food production in line with population growth, but there are regions where over the last few decades Africa has outperformed the world and particularly Europe.” *



1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

0

50

100

150

200

250

Figure 1. The usually quoted dataChanges in per capita net agricultural production

(1961-2007)

Asia

South America

World

Africa

Per

cap

ita

foo

d p

rod

uct

ion

(19

61=1

00)

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

0

100

200

300

400

500

Figure 2. less quoted data Changes in net agricultural production (1961-2007)

Asia

South America

Africa

World

North America

Europe

Fo

od

pro

du

ctio

n (

1961

=100

)



• 40 projects in 20 countries involving 10 million farmers yields roughly doubled over last few years

• But yield is only one measure e.g. new sweet potato variety allows two plantings per year

• The important point is that across Africa, many efforts to innovate are “working well”

• But more and better investment in research and capacity strengthening is needed to accelerate innovation

MAINSTREAMING AGRIBUSINESS INCUBATION FOR INCLUSIVE DEVELOPMENTAN EMERGING AFRICAN AGRIBUSINES INCUBATOR

NETWORKBANANAS ARE: NOT JUST BANANAS

THEY ARE ALSO:VACCUUM PACKED MATOKE

CHARCOAL BRICKETTES

COOKING GAS

WINE

VINEGAR

ROPE

BIODEGRADABLE PAPER BAGS

AFORDABLE SANITARY PADS


NETWORK

UniBRAIN’s development objective is:

• to contribute to enabling African countries to create jobs and raise incomes through sustainable agribusiness development.

UniBRAIN’s Immediate Objective, which is also its value proposition, is:

• to enable universities, business and agricultural research institutions to commercialise agricultural technologies and produce graduates with entrepreneurial and business skills through agribusiness incubator partnerships.


AN EMERGING AFRICAN AGRIBUSINES INCUBATOR NETWORKUniBRAIN’s objectives will be realised by:

Output #1: Commercialisation of agribusiness innovations supported and promoted.

Output #2: Agribusiness graduates with the potential to become efficient entrepreneurs produced by tertiary educational institutions.

Output #3: UniBRAIN’s innovative outputs, experiences and practices shared and up-scaled.


NETWORKUniBRAIN agribusiness incubators

• The Consortium for enhancing University Responsiveness to Agribusiness Development (UniBRAIN-CURAD) focusing on plantation cash crops Specific value chain: Coffee

• The Incubation and Diversification of Banana Products for Agribusiness (UniBRAIN-ABP or Afri Banana) focusing on staple food and cash crops Specific value chain: Banana

• The Sorghum Value Chain Development Consortium (UniBRAIN-SVCDC) focusing on smallholder dry land food grains Specific value chain: Sorghum

UniBRAIN CCLEAr

UniBRAIN CURAD

UniBRAIN IDBPA

UniBRAIN AgBIT

UniBRAIN CAF

UniBRAIN SVCDC

UniBRAIN

Global Agribusiness

Incubator network

(GABI)

Indian network of Agribusiness

Incubators

NIABI

Indian agribusiness Incubator

Malaysian Agribusiness

Incubator network


Agribusiness (jobs – wealth)

Agribusiness

(jobs – wealth)

Agribusiness

(jobs – wealth)

Agribusiness

(jobs – wealth)


Agribusiness

(jobs – wealth)

• The Creating Competitive Livestock-bias Entrepreneurs in Agribusiness (UniBRAIN-CCLEAr) focusing on Smallholder livestock Specific value chain: Livestock

• The Innovative Centre for Agro-forestry (UniBRAIN-CAF) focusing on agro-forestry products Specific value chains: non-timber forestry products, cereals and fruits

• The Agri-Business Incubation Trust (UniBRAIN-AgBIT) focusing on tropical fruit Specific value chain: Mango


NETWORK

UniBRAIN CCLEAr

UniBRAIN CURAD

UniBRAIN IDBPA

UniBRAIN AgBIT

UniBRAIN CAF

UniBRAIN SVCDC

UniBRAIN

Global Agribusiness

Incubator network

(GABI)

Indian network of Agribusiness

Incubators

NIABI


Malaysian Agribusiness

Incubator network



Agribusiness

(jobs – wealth)

Agribusiness

(jobs – wealth)

Agribusiness

(jobs – wealth)


Agribusiness

(jobs – wealth)

UniBRAIN CAF

UniBRAIN CCLEAr

UniBRAIN AgBIT

Uni

BRAIN

SVCDCUni

BRAIN

ABP

Uni

BRAIN

CURAD

AN EMERGING AFRICAN AGRIBUSINES INCUBATOR NETWORK



CREATING AN ENABLING ENVIRONMENT FOR AGRIBUSINESS INCUBATION

JOHANNESBURG DECLARATION ON ENGAGING THE PRIVATE SECTOR INFURTHERING AFRICA’S AGRIBUSINESS, FOOD SECURITY AND NUTRITIONAGENDA 19 OCT. 2011

• MINDFUL of the resolve taken by the members of the G8 Countries during their 2009 Summit in L’Aquila, Italy to develop the $20 billion L’Aquila Food Security Initiative to take decisive action to free humankind from hunger and poverty through improved food security, nutrition, and sustainable agriculture;

• AWARE that further engagement with and support of the private sector, especially Africa’s agribusiness and agricultural corporate community, is needed to successfully implement the abovementioned public sector commitments and initiatives;

• CONSCIOUS of the on-going food crisis which has been characterised by a continued rise in food prices, combined with intermittent food shortages, and climate change effects that reduce food security and results 2 in increased malnutrition - as currently manifested in drought in various parts of Africa, and famine in the Horn of Africa;


• RECOGNISING the importance that has been placed on agriculture as a development catalyst on the African continent towards achievement of the Millennium Development Goals

• NOTING the increasing efforts of private agribusiness companies in Africa to work with small holder farmers and expand their backward and forward linkages within national, regional and international value chains;


• ACKNOWLEDGING Africa’s increasing urbanisation, rapid economic growth, the fact that the continent accounts for more than forty percent of the world’s available arable land, increasing global food security concerns, increasing global food demand, and noting that these factors have spurred increased private investment interest in Africa’s agriculture sector;

• REALISING that a historically unique opportunity exists to align the agricultural development agenda of the African Union and its member states, with the business expansion and market based opportunities that are increasingly being pursued by the private sector in Africa, including targeted public-private sector collaboration to help improve nutrition amongst the most vulnerable and to reduce structural deficiencies in Africa’s food systems;




HEREBY URGE the Public Sector to:

• Incorporate private sector stakeholders in agriculture policy, design, development and programme implementation efforts - particularly to unlock private sector investments in regard to the implementation of CAADP investment plans and toward the development of value chains for strategic food commodities;

• Expand policy development efforts that support transformation and value addition in the agriculture and agribusiness sector;


• Ensure that comprehensive efforts are made to support the economic development of rural populations, in addition to providing them with technical agriculture/agribusiness support interventions;

• Promote increased public investment in agriculture-supporting infrastructure (e.g. roads, electricity, warehousing, irrigation and distribution) to reduce costs and increase the competitiveness of agricultural value chains





• Redouble efforts to create a conducive investment environment and to improve the ease of doing business on the continent;

• Implement policies that help improve access to finance within the agricultural/agribusiness sector, especially for smallholders and small and medium enterprises (SMEs);


• Develop and promote inclusive economic growth strategies that support the incorporation of small hold farmers into local, regional and international agribusiness value chains;

• Encourage and guide bilateral and multilateral development partners to support national and regional related efforts to engage and develop the private sector in the agricultural and agribusiness sector, particularly around national and regional agribusiness value chains ;






• Strengthen efforts to remove all barriers to intra-African trade;

• Establish and engage in public private dialogues and action-oriented platforms, at the pan-African, regional and national levels to further public private partnerships and collaboration;

• Reinforce capacities to develop skills, technologies and mind-sets that improve and empower entrepreneurship and productivity in food production, processing and related agribusiness activities;



URGE the Private Sector to:

• Engage in public private dialogues and platforms, at the pan-African, regional and national levels to explore and further public private partnerships and collaboration;

• Expand inclusive business models to create new jobs and income-generating opportunities within the agribusiness/ agriculture sector;

• Review the AUC agribusiness and agricultural regional development programmes (e.g. CAADP Pillar II, ACTESA, 3ADI, AIDA) to explore areas of potential alignment, collaboration, and investment with these national and regional value chain development initiatives;


CREATING AN ENABLING ENVIRONMENT FOR AGRIBUSINESS INCUBATIONURGE the Private Sector to:

• Engage with the African public sector through sustained dialogue to see how best policy makers, regulators and administrators can support private sector led efforts to establish agribusiness corridors, incubation facilities, aggregation and market centres, regional growth clusters, processing facilities and zones, and export programmes;

• Accelerate efforts to mobilize private capital in support of value chain development, along with important technical assistance to improve smallholders and SME’s capacity to produce quality products in a timely manner; and

• Promote capacity development, technology transfer and innovation, including the expansion of shared risk financial facilities, mobile money solutions, cellular communications applications, and improved storage and transport capacity;



URGE the Public and Private Sector jointly to:

• Support the development of the African food industry through inclusive market and value chain development;

• Pool financial and technical resources to establish more finance facilities that support agribusiness development, particularly among SMEs and small holders;

• Accelerate efforts to collaborate to increase food production to meet the continent’s growing demand;

• Develop local, market based food nutrition solutions that support small farmers and leverage available resources to make a sustainable impact in reducing hunger and poverty;

• Support follow-up activities of key agribusiness development stakeholders, such as the United Nations Development Programme’s (UNDP) African Facility for Inclusive Markets (AFIM) - as a regional platform to support inclusive market development in Africa, in collaboration with other UN agencies and other development partners





REQUEST Africa’s Development Partners to:

• Increase the resources deployed and programmes initiated to support inclusive private sector development in Africa in the agriculture, agri-food and agribusiness sectors and related value chains,

• Increase support for catalytic financing mechanisms and matching grant facilities to promote the development of inclusive models and inclusive markets; and 3. Advance development effectiveness by working collaboratively and in an aligned and coordinated manner with African recipients of development resources.

This Declaration was adopted by the High Level Public Private Dialogue on Engaging the Private Sector in Furthering Africa’s Agribusiness and Food Security Agenda on 19 October 2011.



Putting the New Vision for Agriculture into Action:A Transformation Is HappeningA report by the World Economic Forum’s New Vision for Agriculture initiativePrepared in collaboration with McKinsey & Company


CREATING AN ENABLING ENVIRONMENT FOR AGRIBUSINESS INCUBATION• Element 3: A Concrete Investment and Entrepreneurship Pipeline

• A lasting agriculture transformation is one that is ultimately supported by real market forces. Bringing new and existing innovations into the system requires market stimulus to induce potential entrepreneurs and investors to take on a defined set of initiatives.

• Transformation leaders need to define “bankable” investment opportunities across the chain, including their location, value and size — farms and nucleus farms, distribution, processing, inputs and supporting services, out-grower schemes, and aggregation mechanisms – to drive farmer competitiveness and link them to the market.

• Best practice transformations engage the right groups and organizations to participate in these opportunities, and the incentives to motivate them. Who would be the likely people or organizations to drive breakthrough solutions? Who will be our entrepreneurs, and how will they aggregate, leverage and empower the target region’s smallholders in a fair and efficient



Growing out of poverty: A UK Parliamentary Inquiry into supporting and developing African agriculture, on behalf of the All Party Parliamentary Group on Agriculture and Food for Development

FOCUS ON THE PRIVATE SECTOR

• Farmers are entrepreneurs, and by partnering with companies they can get the access to the markets, financing and technology they need.

Chengal Reddy, co-chair of the Indian Farmers and Industry Alliance

• Business can help transform agriculture, but we can’t do it alone...by working collaboratively with farmers, governments and others, we can achieve our common goals of increasing health and prosperity while protecting the planet.

Paul Polman, CEO Unilever


Patient capital makes markets work for the poor by balancing seemingly competing aims: it is an investing approach with long time horizons; it’s about building systems that encourage – indeed demand – real, sustained, and honest engagement with low income people as active participants; it uses markets not to maximise profits but as a listening device, because when someone has the choice to pay for a product (even at a subsidised price) she has the chance to have a say about what she desires, what she feels is worthwhile, what she does and does not want.

Jacqueline Novogratz, Acumen Fund


THANK YOU

Mainstreaming agribusiness incubation for inclusive development

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