New Business Models and Financial Schemes to Transform Food and Farming
Global food and nutrition security is a major global problem, as the world plans to feed a growing population on an insufficient resource base in an era of increased instability coupled with uncertainty.
Statistically more than 870 million people are now hungry and this number will increase considerably with time, yet they are more at risk from climate occurrences and price increases; rigorous efforts to improve food security have never been more urgently needed. Therefore, the focus of this article will be to uncover some key business models and financial schemes required; to develop and transform food and farming in much places like Africa and other parts of the World.
So, some organisational models to consider will include:
(1) Engaging and including key stakeholders – In order to ensure a well-rounded and effective approach, partners can be more involved by strengthening engagement of key stakeholder groups, which will include farmers’ associations, civil society, organisations, local private sector companies, financial institutions (i.e.: DFIs) and logistics providers, and governmental branch organisations outside of agriculture. All acting/relevant stakeholders should be engaged in all stages from very early on since inception to execution, creating both opportunity for a consensus and collaboration of key actors to drive progress.
(2) A Role Call to Action: Stepping Up to Scaling Big – A large-scale transformation in agricultural productivity and sustainability can potentially be achieved, in order to deliver food and nutrition security and new level economic opportunities to smallholder farmers. Nonetheless, to ensure such initiatives really works key actors within the agricultural value-chain needs to step-up and play a significant role required to ensure the successful delivery of such initiatives. Some of the actors’ roles and responsibilities will include: (i) Governments: can and should strengthen national plans, enhance policies to improve the enabling environment for domestic and international agriculture-related investments, and increase investment in agriculture-related infrastructure and programs. (ii) The private sector: can increase agriculture sector-related investment with an emphasis on developing sustainable, innovative smallholder inclusive business models. Local companies can actively engage in partnerships and work closely with financial institutions and development partners to find solutions to increase access to capital. Global companies can ensure involvement and alignment of their business units and corporate social responsibility units and ensure close coordination between regional offices and corporate centres as they seek to scale up. (iii) Farmers: can cooperatively organize to improve access to market opportunities, financing, and training schemes and actively engage in multi-stakeholder partnerships and advocacy to influence the direction, decision/s and impact of such partnerships. *(There are more options to consider on actors’ roles and responsibilities but those described here for this section are the only ones that will be discussed).
(3) Focus on core business – Farmer organisations need to focus and succeed on their core function/s first; by supporting members to improve productivity, production planning and marketing, and, second, ensure the accessibility to the right marketing and management capacities, before diversifying activities and resources into additional enterprises such as capital-intensive value adding agroprocessioning technologies of such.
*There are other points that could be raised under this section; but it is important not to focus all energy here alone and move to the next section required.
Interchangeably some financial schemes to consider will include:
(1) Increase Investment into enhancing Hard and Soft Infrastructure: In order for this to work it means: (i) There needs to be an increase in the availability of finance for investments into hard infrastructure (e.g.: roads, energy, water, logistics) that support the feasibility and cost competitiveness of scaling agricultural production and agribusiness. (ii) Develop ICT platforms to support financial transaction, simplify market information, and enable value chain modernization. (iii) Develop the level of human capital in agribusiness by attracting talent and enhancing skills.
(2) Catalyse flows of increased Agricultural Finance: Steps that needs to be followed in this instance will include: (i) Promote regional trade by increasing access to trade finance. (ii) Develop facilities to reduce the risk and cost to serve under-financed areas of the agribusiness value chain and increase financial inclusion. (iii) Create structured finance facilities to leverage private (including institutional) capital into the agribusiness sector to provide financial instruments needed to scale agribusiness at large.
(3) Realize the value of accelerated production: To capture the full value of the production level, some simple steps to follow will include: (i) Catalyse investment into activities to add and fully capture production value. Especially areas which shows signs of enhanced growth. (ii) Generate investments into market structures: production, inputs/agro-dealer businesses, functional agri-focused processing plants and storage capacities to enhance overall competitiveness of the agricultural value chains. (iii) Facilitate/ create market governance systems (e.g.: market corporations, business & social groups) to ensure a concrete overall value chain governance.
There is an unending opportunity which lies therein to change the current socioeconomic costs related with the productivity of the agricultural sector. More so there is a vast amount of points that can yet be discussed within this huge topic highlighted in this article; and yet these points can be argued through multiple different scope. However, due to the simplicity in the focus which this article has taken it is within the author’s interest to bring the article to a close at this point.