Agribusiness is Agricultural-related business that focuses on farming, processing and packaging, storage, warehousing, distribution, marketing and retailing of Agricultural produce. The goal of agribusiness is to improve operations of farming, making Agro produce available all year round in order to keep prices reasonable. Becoming an agribusiness entrepreneur, you need to take a look at the agricultural value chain, which is divided, into different productive sections such as: –
- Input Producers: There can be no agricultural revolution without input producers. These inputs can come in the form of improved seed technology, fertilizers (organic or inorganic) and machinery used on the farm. Farmers are able to realise more yields from a farming season when they adopt these inputs. You don’t need bag of rice, salt, garri, or #2000 from politicians but improved high yielding Agro input.
- Farmers: Farmers are the centerpiece of agriculture because they are responsible for locating a land that is viable for farming, identifying the right soil texture, tilling the land, planting the seeds and monitoring until harvest time.
- Agro Dealers/Storage: An agro-dealer is an individual or a business that deals in the sale and purchase of agricultural produce. They will store agric produce under the right conditions until it is ready to be distributed to the wholesaler, retailer or final consumer.
- Agro Processors: After crops are harvested, they need to be processed for human consumption. For example, after cassava is harvested, agro-processors are responsible for processing cassava into garri, cassava flour, animal feed, etc. More profit can be made after crops are harvested and processed than when you just harvest and sell.
- Brokerage, Distribution and Exports: This is more focused on logistics; properly stacking the farm produce and distributing to the wholesalers, retailers or consumers in different parts of the country or in the case of export, moving the produce to the point where it can be transported either by air or sea to different countries of the world.
- Every stage in the value chain is important and dependent on the other; and also every stage is profitable. You will need to do your feasibility study, decide on the stage that interests you and get the right knowledge for you to be successful, especially since you are approaching this value chain as an agricultural entrepreneur.
How To Start Agribusiness Enterprise
- Identify A Need: Carry out some research and find out what is needed in your society. As a startup that has limited capacity to transport your products over long distances, there is no need producing an item in an area where it is not going to sell. For example, don’t invest into piggery production in cultures where it is prohibited. Instead, find out what residents of your area of interest go out to buy and think of how to channel those outflows to your business.
- Identify Areas Where You Can Enjoy Some Competitive Advantage: As an aspiring farmer, look out for an area that produces high yield; an area which climate allows for the best yield for your targeted crop or livestock. It can’t be overstressed that even the best crop and animal breeds will perform very poorly if the climate is not right.
- Develop A Business Plan: As a start-up, a business plan is a very essential document that you must have. Apart from being the tool with which you’ll be able to secure funding for your business, a business plan gives the entrepreneur guidance and direction in executing the business development strategies.
A clear plan sets targets, achievement modalities and evaluation criteria as well as enables the entrepreneur to adapt the business to changing realities. In the course of preparing the plan, you must develop a business strategy, which would be clearly spelt out, in your business model canvass.
In developing a strategy, you must identify the part of the agricultural value chain you intend to venture into. Is it crop farming or livestock rearing?
- Seek Mentorship From Experienced Agricultural Entrepreneurs: There is almost no area of agriculture that you might want to venture into that has never been explored. Find out about those who’ve been through that line of business before and learn from their experiences. Like they say, a wise man learns not from his mistakes, but from the mistakes of others.
- Join Farmer Associations In Your Area: This is very important for a start-up because such an association provides free access to guidance and mentoring from those who have already been in the business before you such as All Farmers Association of Nigeria, Association of Poultry farmers.
Besides, membership of such associations would enable you to easily secure loans from financial institutions to finance your business as well as participate in agricultural intervention programmes executed by the government and other development partners.
Again, membership of farmer associations would expose you to market opportunities for your products; high profiled buyers, suppliers of high quality agricultural inputs who can offer amazing discounts, warranties and credit windows.
- Learn To Use Relevant Business Development Tools: Nowadays, agriculture is not as risky as it used to be in the past because of the presence of very powerful and innovative technologies. ICT-based tools exist to guide farmers on the choices they make regarding their businesses. For instance, mobile apps exist which allow farmers to learn about future weather conditions and obtain early warning signals on weather events that could be detrimental to their investments.
The e-wallet system, which is a phone-based solution, is connecting many farmers to high yielding agricultural inputs and several productivity enhancement technologies. Social media tools are enabling farmers access wider markets, network of suppliers as well as research outcomes that can positively impact their approach to agriculture.
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