After spending 4 or 5 years in higher education, most graduates never imagine building a career or business in agriculture. They believe the greatest honour of going to school was to get a white-collar job, threaten sick patients or defend clients in the courtroom.
Or if they had thought about business, they probably imagine building a startup in fintech, education or any other cool industry. For the farming and agric-business is what happens to people live had dealt a tough path and have no other option left.
In today’s video, I’ll share with you 5 convincing reasons to start a business or invest your money in agriculture. Each of these reasons complements each other. And there is a bonus point at the end. So be sure to watch this video to the end. Before we get to it, it’ll be good if you subscribe to After School TV so that you don’t miss more insightful videos like this.
If you are an investor or an entrepreneur in agriculture, tell us in the comment section why you choose the sector. Here are 5 convincing reasons to invest in agriculture. Plus a bonus point at the end.
1. Africa is ripe for a Green revolution
It’s only Africans that take agriculture and farming – the most important human activity – as second class economic activity. Graduates think going to school makes the only industry that keeps them alive, beneath them. It will interest you to know that the economic transformation of most developed countries around the world began with the mechanization and industrialization of agriculture. In fact, the British Agricultural Revolution is considered a major cause of the first Industrial Revolution. Improved agricultural productivity freed up workers to work in other sectors of the economy.
The Green or agricultural Revolution occurred between 1950 and the late 1960s when the productivity of global agriculture increased drastically in parts of the world as a result of advances in research technology. During this period, new chemical fertilizers and synthetic herbicides and pesticides were created. The Green Revolution was estimated to have saved up to one billion people from starvation.
However, at the time the world was undergoing an agricultural revolution, African countries like Nigeria discovered oil and other natural resources and abandoned their agricultural potential. Today, there is a continental and national awareness on the need for Africa to stage a revolution in the agric sector to be able to feed over 1.2 billion people in the continent. Governments, financial institutions and private organizations are creating incentives to encourage and support businesses in the agric sector.
2. Africa has the capacity to feed the world
An analysis by Mckinsey determined that Africa could produce two to three times more cereals and grains, which would add 20 percent more cereals and grains to the current 2.6 billion tons of global output. Similar increases could be seen in the production of horticulture, crops and livestock if the continent intensifies its agricultural productivity.
Africa has a vibrant young population, holds about 60 percent of the world’s uncultivated arable land, 10 per cent of renewable freshwater resources. If we can harness this potential, the continent could potentially capture 60 percent of global food production. The Democratic Republic of the Congo alone could feed two billion people, according to some estimates.
Sub-Saharan Africa has registered a 160 per cent increase in agricultural output over the past 30 years, yet it spent over $45 billion dollars importing food items in 2019. This shows that despite the progress made so far, the demand for agricultural produce is still higher than production. Africa’s agricultural potential is still largely untapped. There is a huge market to sell your locally produced agric product to both locally and internationally.
3. Agriculture is more about technology than land mass
The Netherlands land area is about 41,543 square kilometres – less than double the size of Rwanda and a population estimate of 17.4 million – about the population of Senegal. Yet this country is the world’s second-largest exporter of food and the 17th largest economy. In 2020, the Netherlands exported an estimated 95.6 billion dollars worth of agricultural produce. That is roughly the GDP of Kenya or Ethiopia.
They achieved this by relentlessly focusing on finding innovative ways to produce higher yields with fewer inputs and smaller space. For example, while the global average yield of potatoes per acre is approximately 9 tons, farms in the Netherlands produce more than 20 tons. Between 2003 and 2014, new production technology in the Netherlands has resulted in a 28% increase in vegetable yields, a 6% reduction in energy used and a 29% reduction in fertilizer required. This proves that agriculture is much more than landmass. It is about technology and innovation.
According to Disrupt Africa, agric-tech has grown by 110% since 2016, due to a variety of startup technology services in the agric industry; from drones for crop surveillance and examination to solar-powered cold storage, supply chain, farm security, organic fertilizer and pesticide production. Mobile devices, data analytics, high-quality satellite imagery, precision equipment, and artificial intelligence could contribute to increasing productivity, sustainability and resilience across the sector. If you are a tech innovator, scientist or engineer, there is an important place for you in the agric industry.
4. The industry has many problems to solve
As you already know, the fastest way to create wealth is to identify a problem, find a way to solve it and scale your solution. The agric industry has many challenges that solving one of it could easily be worth millions of dollars.
For example, across Sub-Saharan Africa, as much as 50% of fruits and vegetables, 40% of roots and tubers, and 20% of cereals, legumes, and pulses harvested are lost before they have poor access to major markets. Farmers would lose more than half of their tomatoes after each harvest.
An innovative solution in the food preservation sector alone will produce huge financial results. If you like taking on challenges as an entrepreneur, agriculture has many opportunities for you to make an impact and a lot of money.
5. Women are major stakeholders
If as woman, you believe that the agric industry is reserved for men, you are totally wrong. According to World Bank, analysis of individual labor input data from Ethiopia, Malawi, Niger, Nigeria, Tanzania, and Uganda puts the female share of labor in crop production at 40%. Another report by the International Food Policy Research Institute estimates that more than 60 percent of all employed women in Sub-Saharan Africa are in agriculture.
In addition to that, there is increasing support for women in agric-business from organizations like African Women in Agricultural Research and Development (AWARD).
There are a number of women entrepreneurs who are playing their role in Africa’s growing agribusiness. These women are building successful businesses that harness the potential of the raw materials by transforming them into products that people want to buy. Some of these women are moving from white-collar jobs into the agricultural value chain to beat their own path. If you are woman and have interest in agriculture, there are many women in agriculture to encourage you to take the step.
Since you are still watching, here is a bonus.
6. Earn passive income
Realizing Africa’s full agricultural potential will require significant investment. According to McKinsey, Sub-Saharan Africa will need eight times more fertilizer, six times more improved seed, at least $8 billion of investment in basic storage, and as much as $65 billion in irrigation to fulfil its agricultural promise. For entrepreneurs, this means that a lot of capital is moving into the agric sector. For investors, it means that the industry can use a lot more investment than is currently going into it.
Startups are innovating on agric investment using crowdfunding technology. For example, Farmcrowdy and ThriveAgric, among others, offer funding opportunities to the public to invest free money in agriculture and earn passive income. If you don’t have the time or interest to go fully into the agric industry, you invest your money and earn passively.
With these few points of mine, I hope I have been able to convince you and not to confuse you that investing in agriculture in Africa is a lucrative opportunity to create wealth. If you found this video helpful, thumbs up and share it with someone. If you are yet to subscribe to our channel, now is a good time to hit the subscribe button. Until next time, YOUR SUCCESS MATTERS.