Tag: Published: May 2010

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Can farming be cool? Especially on a continent where it has long been associated with hardship and poverty, can agriculture be attractive to a young generation looking for big opportunities? A young woman in Nigeria thinks so and is on a mission to show farming is a great way to get ahead in modern Africa. And she hopes more people attracted to farming will boost the continent’s food security and reduce costly imports.

Cynthia Mosunmola Umoru’s company, Honeysuckle PTL Ventures (http://www.tootoo.com/d-c3015227-Honeysuckles_Ptl_Ventures/), is based in Lagos , the business capital of Nigeria. The West African country has become dependent on food imports, despite many attempts to modernise its agricultural sector.

The country’s heavy dependence on oil exports for its income has led to poor investment in its domestic economy. Over 80 percent of Nigeria’s university graduates struggle to find work. And it is these two problems – food security and high unemployment among the country’s young, educated and ambitious – that Umoru wants to change.

Leading by example, Umoru has set up a successful and modern agribusiness focusing on high-quality food products using modern packaging and fast delivery. She produces meat products, from seafood like shrimps and prawns to snails, beef, chicken, and birds. Her niche is to deliver the product however the customer wishes: fresh, frozen or processed. Her business has its own farms and ponds but also has developed a sophisticated network with other farmers, providing them with standard contracts and benefits. This extra capacity means she can meet the demand and handle large volume orders.

She is proudly self-taught. “I didn’t have a mentor in farming! Though I have other mentors,” Umoru told the Guardian Life Magazine. “My knowledge of agribusiness has been largely from personal education and research. The Internet has served greatly as my resource bank.”

Umoru was initially on the path to study medicine, but had that dream upset by riots in the late 1990s. She then moved on to study zoology at Lagos State University. In her final year, she became interested in agribusiness. Her company was officially registered in 2004, but she had already begun at university providing meat products to fast-food outlets in Lagos.

“It took five years to gain relevance,” she said. “My involvement in the agribusiness sector is really impacting people, particularly young people like me, who I always hear say ‘If you are involved with farming then it is probably not as bad as it seems’. Farming, before now in Nigeria, was termed business of low-lives and with the barrier to entry being so high for young people to actively participate.”

“I have successfully, in my little way, impressed on my generation that farming could be glamorous and cool enough for us to trade places with the business executive in the large conglomerate and also the bank’s middle management cadre, which is the initial attraction for most young graduate(s) in Nigeria.”

She is not shy talking about how rough it was in the beginning: “As a young entrepreneur, in my very early days, I lost a lot of the seed capital I got from financial mentors to poor and bad business decisions I took because there was no one to talk to.”

Overall in sub-Saharan Africa, the long-term prospects for agriculture are good. The Food and Agricultural Organization (FAO) found in a 2009 paper that “the sub-Saharan agricultural sector — 80 percent of which consists of smallholder farmers — grew more than 3.5 percent in 2008, well above the 2 percent rate of population growth.”

Sub-Saharan Africa’s population is predicted to grow from 770 million in 2005 to 1.5 to 2 billion in 2050 (FAO). Despite rapid migration from the countryside to cities and the growth in urban population, the absolute number of rural people is also likely to continue to increase.

Agriculture is the motor for rural development, poverty and hunger reduction in sub-Saharan Africa. The FAO paper said that agricultural growth in sub-Saharan Africa is likely to be led by domestic and intra-African demand for food commodities due to urbanization and the growing population.

African farming has been able to benefit from rising global food prices and demand. The policy environment has also become more favourable, according to the FAO. The paper found “There is a particular need for programmes and policies to increase the capacity of smallholder farmers to enter dynamic sectors of national, regional and international markets.”

African farming can see serious productivity gains if it changes and it takes on new techniques. At the moment only 3 percent of the region’s food crops are produced using irrigation, compared to more than 20 percent globally.

The irony is that Nigeria has already hatched one of the world’s most successful food companies, Olam (www.olamonline.com). A global food supply company in ‘agri-products’ that got its start in Nigeria, it shows Umoru is on to something – a Southern brand can grow and go global, and overcome the difficulties of cross-border trade in Africa.

Olam currently supplies well-known global food brands including Cadbury (chocolate), Nestle, Lavazza (coffee), Mars (chocolate), Tchibo and Planters (peanuts).

With some 218 million people in Africa — around 30 percent of the total population — estimated to be suffering from chronic hunger and malnutrition, a thriving local food sector would bring many gains.

Turning to more sophisticated business models offers solutions to chronic problems. With 80 percent of Africa’s farms less than two hectares in size – and there are 33 million of them – cereal yields have grown little and are still around 1.2 tonnes per hectare in the region, compared to an average of some 3 tonnes per hectare in the developing world as a whole. Fertilizer consumption was only 13 kg per hectare in sub-Saharan Africa in 2002, compared to 73 kg in the Middle East and North Africa and 190 kg in East Asia and the Pacific. The FAO has estimated that the potential additional land area available for cultivation in sub-Saharan Africa amounts to more than 700 million hectares – a boon to the continent’s and the world’s food needs in coming years if handled well.

And the demand is there: Between 2001 and 2007, annual increases in the global consumption of agricultural commodities were larger than during the 1980s and 1990s. The quantity of agri-products harvested in the world is 5.2 billion metric tonnes a year.

“I have been able to reach out to so many people across the nation, preaching the agribusiness development and adoption gospel,” said Umoru. “I have also worked closely with other youth agencies to empower many more young people to aspire in Nigeria.”

One such agency is the Harambe Nigeria Endeavour. Harambe Nigeria (http://www.hendeavor.org/content/bgroups/nigeria.php) is a programme designed to stimulate growth in the agricultural sector and open up opportunities for youth to become leaders and entrepreneurs in this area. And this means future young entrepreneurs going into the agricultural sector will not feel as alone as Umoru once did.

As Obinna Ukwuani, creative director of Harambe Nigeria says: “We wish to rectify the tarnished image of agriculture in Nigeria, making it a viable investment for Nigerian youth from all walks of life.”

Published: May 2010

Resources

1) World Vegetable Center: The World Vegetable Center is the world’s leading international non-profit research and development institute committed to alleviating poverty and malnutrition in developing countries through vegetable research and development. Website: http://www.avrdc.org

2) Marketing African Leafy Vegetables: Challenges and Opportunities in the Kenyan Context by Kennedy M. Shiundu and Ruth. K. Oniang. Website: http://www.ajfand.net/Issue15/PDFs/8%20Shiundu-IPGR2_8.pdf

3) 2050: Africa’s Food Challenge: Prospects good, resources abundant, policy must improve: A discussion paper from the Food and Agricultural Organization (FAO). Website: http://www.fao.org/wsfs/forum2050/wsfs-background-documents/issues-briefs/en/

4) African Alliance for Capital Expansion: A management consultancy focused on private sector development and agribusiness in West Africa. Website: http://www.africanace.com/v3

5) Branding Strategy Insider: This blog provides advice and case studies on how to build trust for your brand. Website: www.brandingstrategyinsider.com

6) Growing Inclusive Markets, a web portal from UNDP packed with case studies, heat maps and strategies on how to use markets to help the poor. Website: www.growinginclusivemarkets.org

7) Starting a SME (small, medium enterprise): This website is packed with advice and tips for starting a small business and how to grow it with limited resources. Website: http://www.smallbusiness.co.uk

8) World Business Fair: The World Business Fair is an international trade platform for global entrepreneurs and professionals. Website: http://www.worldbusinessfair.com

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

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