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How to select viable agribusiness

Saturday March 30 2019

Nyeri youths park carrots in bags for sale in Nairobi.

Nyeri youths park carrots in bags for sale in Nairobi. A sustainable agribusiness is one that is selected using guidelines, passion and expertise back-up. PHOTO | JOSEPH KANYI | NMG 

JECINTA MWIRIGI
By JECINTA MWIRIGI
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To venture into agribusiness, many people opt for what their neighbours, friends or relatives are doing, without putting into consideration quite a number of key factors.

Sadly, such businesses end up collapsing soon after because the entrepreneur does not understand what it takes to run them.

A sustainable agribusiness is one that is selected using guidelines, passion and expertise back-up. To select a viable agribusiness, one needs to follow some guidelines, which can also be used by an individual, group, company, county or national government that intends to promote agriculture in a given area.

How to select a value chain

Agricultural value chains include crops, livestock, fisheries and forestry.

In crops, plant options include fruits (bananas, passion fruits, oranges and mangoes); tubers (potatoes, cassava and sweet potatoes); industrial crops (cotton, pyrethrum and African bird eye chili); cereals (maize, rice and sorghum); legumes (beans or soya); vegetables (indigenous vegetables, snow peas, French beans, sukuma wiki and tomatoes); pulses (green grams) and nuts (groundnuts or macadamia).

In livestock, the choices include dairy (cattle, camels, sheep and goats); red meat (camels, beef, mutton and chevron); white meat (rabbits, broilers, pigs and indigenous poultry) while eggs can be from indigenous chickens or commercial layers.

In aquaculture, one can select fish such as tilapia, catfish, trout, common carp and so on. The forestry section has tree plantations and agroforestry.

To begin the selection process, list the critical areas that can limit or favour the agribusiness. The list should be big enough to reduce the margin of error.

Depending on whether one is an individual, a group or an organisation, some of the business enablers or hindrances include the ability of the value chain to do well in the area where you intend to set up; market demand for the product; potential for value addition; environmental sustainability; available resources; infrastructure; ability to promote social inclusion and gender equity; income and employment generation and increase in food and nutrition security.

Taking dairy as an example, if you are in the cold climate of the highlands, goats and cattle can do well. The same might not be the case for camels due to climatic adaptability.

ENVIRONMENTAL SUSTAINABILITY

Infrastructure include land, water, power, road networks, labour (human and mechanised) and machinery.

Market demand could be local or wider while value addition means you get more money from a given product. On capital and infrastructure, dairy goats for example might require less land and initial capital than cows.

Fish might require less land than tree plantations while agroforestry can capitalise on a small piece of land by intercropping trees with crops.

Checklist to select a viable agribusiness enterprise to establish.

Checklist to select a viable agribusiness enterprise to establish. TABLE | COURTESY

While an individual might be tempted to prioritise her business using income, market demand and value addition only, considering other factors, no matter how small, is important for sustainable agribusiness.

For example, an entrepreneur who installs his business in a locality and fails to hire locals or discriminates against a certain gender might face hostility from those who are socially excluded.

Further, global trade looks into issues of good agricultural practices that consider social issues like employment of underage persons.

In the long run, environmental sustainability is very important as a business that pollutes its environment will eventually face challenges.

Viability of a value chain in an area is not difficult to establish as most landscapes in the country are dotted by them. For example, in some areas, you will find tea while in others maize, potatoes or beef. In others, egg and broiler meat production will give the clue.

Assuming that the value chain you intend to promote is viable in your area, the next step is to weigh the factors under consideration such that the one that is most limiting is given the highest weight (score).

See the table above to get a picture of how a youth group or individual can choose a viable agribusiness in a county where a number of value chains can be done.

Once you choose the agribusiness, the third step is to acquire expert extension advice on the selected value chain. (Refer to the article, “A model to make extension services work for the farmer” available online since July 21, 2018).

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Some popular agribusinesses

1.Vegetable farming: Spinach, lettuce, pumpkin, coriander, broccoli, cabbage and traditional vegetables.
2. Mushroom farming: With a punnet going for Sh150, mushroom has a huge potential as demand rises.
3. Poultry farming: Broilers, Kienyeji chickens or layers offer some of the best enterprises under this category as demand for the products has been on the rise.
4. For someone who is trained in agriculture, consultancy or running an agrovet is also a viable businesses.