Tag Archives: agribusiness

Uganda Inflation Rises Above Eight Percent – allAfrica.com

Uganda Bureau of Statistics (UBOS) has announced Headline Inflation for the year ending October 2015 has increased to 8.8% compared to 7.2% recorded the year ending September 2015.

Source: Uganda Inflation Rises Above Eight Percent – allAfrica.com

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Irrigation effects on climates

We would like to share this interesting article we found on the World Economic Website about how irrigation could affect climates…do not miss it and give us your opinion about it.

http://agenda.weforum.org/2015/09/how-does-irrigation-affect-climates/

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About the importance of a good Business Plan

Questions of an expert for a good Business Plan

http://www.fwi.co.uk/business/8-business-plan-questions-answered-by-farm-finance-expert.htm

via Farmers Weekly http://www.fwi.co.uk

Mobile devices for plant clinics

We do not want any of you to miss this interesting post we just found… How tablets and mobile devices with plant clinics can be helpful to improve crops. http://www.hivisasa.com/machakos/agriculture/151566/sponsored-plant-clinics-help-improve-yields-machakos

Analysis of the Global Value Chains in Kenya and Uganda

Analyzing is not always easy, though it is important, almost essential for an aproppriate action plan, this is ours for the Global Value Chains in Kenya and Uganda (GVC)

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KENYA

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Kenya has a range of value chains in floriculture, textiles, leather, automotive production, intermediate and final manufacturing, music industry and tourism. It is evident that the country is generally at the low end of the value chain, given that a large component of Kenya’s exports is in raw materials (e.g. coffee, tea, animal products) which have low foreign value added content. For example, though Kenya has been integrated in the global leather value chain, this has not been done in a manner that is beneficial to the country and the local industry players. There is little value addition and about 70% of the exports from Kenya are raw hides and skins. Analysis also shows an industry that has been neglected after liberalization, one that suffers from poor regulation and weak policy support. The production of processed leather has actually declined and installed capacity utilization is below 50% in all tanneries. The competitiveness of the sector is weak compared to Asian countries.

Regional and international barriers include tariffs and quotas, technological barriers, currency fluctuations, political risks and market failures, among others. Though Kenya has surplus and fairly well trained manpower, some industries have not been able to find ready and appropriately skilled personnel due to mismatches between the training provided by Kenyan institutions and labour market requirements. However, as part of Kenya’s long-term plans contained in the Kenya Vision 2030 and occasional curriculum updating, a number of policy reviews are being made to ensure schools equip graduates with market demanded skills.

In promoting growth, trade, jobs and development, Kenya has sought to increase domestic value added from GVC participation, through such policies as import substitution, subsidies, tax holidays, export processing zoning, export promotion, export compensation, and industrial property legislation. Many of these policies have had implementation and/or outcome challenges; for example the import substitution policy failed to build international competitiveness, but instead created a scenario where Kenyans paid higher prices than they would have otherwise while the country’s ability to export diminished, leading to skyrocketing and enduring balance of payments deficits, before it was finally abandoned.

The EPZs, through such programmes as AGOA (where Kenyan-based firms primarily make and export apparel to the USA), have led to significant increase in exports and employment, though the expected technology and skill transfers as well as backward linkages have not been realized, which suggests a low chance of sustainability once the AGOA arrangement comes to an end. The tax holidays ended up benefiting foreign investors at the expense of Kenyans, as most of them tended to relocate at the end of their respective grace periods.

UGANDA

Global value chain (GVC) development is receiving in2000px-Flag_of_Ugandacreasing attention in Uganda. The National Development Plan (NDP) 2010/11-2014/15, for instance, includes as a key intervention “supporting and strengthening key product value chains to access high value markets and penetrate global value chains through Public Private Partnerships and inter-government sectoral collaboration”. The NDP document goes further and identifies key products that should be the focus of these efforts. These include: dairy products and poultry, beef, fish products, coffee, floricultural and horticultural products, maize, beans, cassava, processed bananas and processed mineral products.

Value chain development in the Ugandan context, however, is largely seen through the lens of domestic value chain development; i.e. as a strategy for strengthening production integration within the Ugandan economy and increasing value added generation at the sector level, with the aim of capturing domestic and, to a lesser extent, regional markets for selected products. It is not, in this sense, seen as a strategy for deepening Uganda’s integration in the world economy through the participation in selected segments of key global value chains. Similarly, value chain development is largely seen as a means for developing production capacities and enhancing value added generation in primary sectors, not as a strategy for industrialization, as can be seen by the list of products identified for value chain support in the NDP.

The lack of adequate data for GVC analysis makes it difficult to assess the extent to which Ugandan producers are integrated in global value chains. The most recent available input-output table for Uganda dates back to 1991 and it is reasonable to assume that the structure of the Ugandan economy has changed significantly since then.

The apparel industry has traditionally been chosen by many developing countries to accelerate the process of industrialization and structural transformation. In the African context, the US African Growth and Opportunity Act (AGOA) of 2002 presented LDCs in the region with a unique opportunity to enter this value chain, an opportunity, which some countries, such as Lesotho or Madagascar, successfully seized. Uganda has been eligible to benefit from AGOA provisions for apparel and textiles since October 2003. However, despite policy pronouncements to the effect, it has never managed to establish an apparel industry on the back of AGOA.

Uganda has been more successful in entering the floricultural global value chain. This industry started in Uganda in 1993, with a focus on exporting to the EU market. Initially, exports of roses and cut flowers experienced a sharp increase, from 1.150 metric tonnes in 1995 to a peak of 7 500 tonnes in 2005, employing around 6.000 workers on 15-20 farms on the shores of Lake Victoria and indirectly providing livelihoods to 30.000 people. However, exports volumes have gradually declined since then, down to only 3.436 tons in 2011 (UBOS,2014). Some of the reasons cited for this decline are the increasingly unfavourable climatic conditions that exist in flower producing areas in Uganda, due to the effects of climate change and the resulting increase in disease. However, weak government support, high production costs, including high energy and air freight costs, and the competition from other East African countries have also played an important role in undercutting Ugandan flower producers’ market share in the EU and other advanced economies.

The fish and fish products industry, heavily concentrated around Nile perch fishing in Lake Victoria and mainly focused on the EU market, has experienced a similar fate.

Altogether, the review of these three case studies and those for other key value chains in Uganda (e.g. coffee, horticulture), point to a number of common constraints hindering Uganda’s insertion in GVC and the maximization of its benefits. These include high production costs, including transport and energy costs. Also, weak policy frameworks that provide for adequate support to the development of specific value chains, in the form of improved sector-specific business environment conditions, training and business development support services, etc.

by Agrolution Agribusiness Solutions SL

www.agrolution.com

Knowledge for Health…

Today we´d like to share with all you this very interesting article we just found on the Agriculture Worldwatch Blog. It tries to make us aware of how important is to know what our body needs to stay healthy and how and where to find it…

http://blogs.worldwatch.org/reconnecting-people-with-local-farms-and-sustainable-foods-globally/

Changing gas per sun…Quiet Solar Revolution in Tanzania

Check this very interesting post we have found on the CSMonitor.com blog and find out some of the stories about why there is a Quiet Solar Revolution going on in Tanzania…

Africa’s quiet solar revolution – CSMonitor.com.

AGRIBUSINESS CENTER IN KENYA

Spain and Kenya are going to be linked by a new project for the good of the agribusiness sector of the Eastern Africa Region.

A project to create an Agribusiness Center in Kenya has been agreed to be developed by qualified promoters: the universities of Chuka (Kenya) and Cartagena (Spain), the RIDA rural development agency (Kenya) and the company AGROLUTION (Spain)

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The goal is to transfer cutting edge knowledge and technology in agribusiness from Spain to Kenya and from there to neighboring countries like Uganda.

The deal was sealed by videoconference last month and the project is expected to take off on 2013.

You shall find further news about this project in this blog.

 

SWOT Analysis of the African Agriculture

A very comprehensive and realistic SWOT Analysis has been carried out and published by the Montlpellier Panel, a group of reputed experts on agriculture, trade, sustainability and global development. The Panel is working together to make recommendations to enable better European government support of national and regional agricultural development and food security priorities in Sub-Saharan Africa.

Let´s have a look to their findings:

Strengths:

  • The diversity of African agricultural ecosystems furnishes resilience although this heterogeneity also requires sophisticated and nuanced management
  • Smallholder agriculture can be highly efficient producing five or more tons of grain per hectare with appropriate inputs and management
  • Farm-level production costs in Africa are often relatively low
  • There is a strong tradition of village-level farmer associations providing a basis for growth and innovation
  • Acceleration in GDP growth in SSA has been, in part, driven by faster agricultural growth
  • More organized and concerted African leadership through CAADP
  • Foreign direct investment (FDI) in the continent increased from US$2.4 billion in 1985 to US$55 billion in 2010 although most of this was in the oil and gas sectors

Weaknesses:

• A lack of coherent, cross-ministerial policies and leadership on agriculture

• Poor incentives for small business investment

• Access to input and output markets is often weak

• Average cereal yields are only one ton per hectare

• The predominant rainfed agriculture is vulnerable to unreliable and unpredictable rainfall

• Total agricultural R&D spending in Africa grew at only 1.9% between 2000 and 2008, although there is wide variability between countries

• African soils are heavily degraded and depleted of nutrients

• Tenure over more than 90% of land remains outside the formal legal system in Africa and is therefore at risk of dispossession.

• Agricultural mechanisation is poorly developed

Opportunities:

  • There is a large agricultural workforce: 65% of Africa’s population lives and works in rural areas
  • The workforce will be predominantly young: by 2040, one in five of the world’s young people will live in Africa
  • Large opportunities to improve yields through increasing fertilizer application rates and irrigating more land
  • Fertilisers are applied at average rates of about 11kg/ ha of arable land (compared to 154kg
    ha in India and 468kg/ha in China). There is a huge potential to use local African sources of rock phosphate fertilizer at affordable costs
  • Only around 4% of cultivated land in SSA is irrigated. Potentially over 20 million hectares of land under irrigation
  • Already in motion are agricultural growth corridor projects in areas with high agricultural potential that will stimulate investment and develop regional value chains
  • Mobile and internet connectivity is growing rapidly: mobile phone subscribers have risen from less than two million in 1998 to over 400 million in 2009 and internet users in SSA between 2005 and 2010 grew by almost 430%

Threats:

  • 80% of all African farms (33 million farms) are less than two hectares in size, which can increase transaction costs
  • The success of investments in agriculture depends on the engagement of women who make up 50% of the agricultural labour force and have relatively poor access to resources and services
  • SSA has many pests, diseases and weeds such as Striga, Black Sigatoka, Banana wilt, Cassava mosaic virus, Maize leaf streak, Maruca beetles, stem borers, downy mildew and locusts that are capable of destroying harvests
  • SSA farmers face the lowest agricultural incentives in the world
  • Three quarters of African countries are net importers of agricultural products and African trade tariffs are on average 50% higher than comparable tariffs in Latin America and Asia
  • Climate change is likely to reduce crop yields across much of SSA

Definitely, any plan to tackle the problem of food production in Africa cannot be simplistic, but to include actions from a very broad number of areas simultaneously. However, I would like to highlight a very clear conclusion derived from this analysis -in alignment with other similar reports-, and this is how important is for the future of a successful growth of agriculture in Africa the extensive implementation of those technologies of irrigation, crop protection and climate control, like greenhouses, which could be denominated as “modern” in the african context, though are long time existing in other parts of the world.

We don´t have to invent the wheel, we don´t have to test, but simply to transfer technology and know-how that are easily available and which results are predictably.

Did you know…?

Dear all,

Find below some key figures that help to figure out in our minds a broad picture of essential facts of world agriculture.

So, did you know that…

  • World agricultural production has grown nearly 300%  over the last 50 years, while the cultivated area only did it by 12%. Furthermore, more than 40% of the increase in food production came from irrigated areas.
  • In the same period, global cultivated land per person declined from 0,44 to 0,25 Has/person. This shows how successful intensive agriculture has become.
  • Rainfed agriculture is the world´s predominant agricultural system. Current productivity of rainfed systems is, on average, 50% of its potential, and in the poorest countries only 20%. Increasing climate variability is bringing grater uncertainty in production levels.
  • Around 350 million people were affected by drought and other natural disasters between 2010 and 2011, mostly in Africa and Asia.
  • Until 2000, agriculture was the mainstay of employment around the world. Since then, the services sector has assumed this mantle and the gap between the two has widened. Although employment growth in agriculture has slowed, the number of workers in this sector reached over 1 billion in 2009. In sub-Saharan Africa, growth in agricultural employment accounted for half of all employment growth between 1999 and 2009.
  • In the coming decades, climate change may bring further risks and unpredictability to harvests; it is anticipated that key agricultural systems will have to cope with new temperature, humidity and water stress.

(Source: FAO)

To me, all the above mentioned clearly shows:

  • How successful agricultural intensification has been.
  • The need to increase the efficiency of land and water use.
  • The need to prevent food production be affected by weather conditions.
  • It also leads to the consideration of modern intensive agricultural production systems as an strategic pillar of the food sufficiency in this planet.

What do you think?