Money in Agribusiness

Agriculture is our wisest pursuit, because it will, in the end, contribute most to real wealth, good morals and happiness”  Thomas Jefferson.

Gone are the days when agriculture was seen as an old folk activity. Today the young generation actively participates in the growth of agricultural products and expansion of industries especially because of the rampant unemployment in the country.

Like any other business, there is a need to take stock of what you want to produce, the target market, challenges expected, and mitigations before you start.

Below are some of the factors to consider before venturing into Agribusiness:-

  1. The Type of farming to Venture in

The major agricultural products in Kenya include tea, coffee, dairy farming, horticulture, maize, wheat, sugarcane, beef, pork, and poultry.

Every product is unique in terms of resources required to establish and sustain, demand for the end product, agro-climatic conditions, product cycle, and maturity duration among others. There are many agribusiness opportunities you can venture into.

  1. Capital Requirement

Evaluate how much capital is required to start and sustain your agribusiness venture. How many people will you require and with what skill?

How much money will you require from the onset till your product gets to the market?

To ensure the longevity of your agribusiness, there must be a projection of your operational costs to start the agribusiness and for a considerable period thereafter. It is important to have a clear picture of your source of capital to ensure the business’s overall success.

You may source for capital from personal savings, sale of personal assets, loans from friends and family, loans from Saccos or banks, loans or special loans, and grants from the government reserved for agribusiness.

     3.   Site Selection

Depending on the agribusiness, the factors you need to consider when choosing a site include;

Soil quality – Ensure you test the soil for production capacity. This enables you to save on more expenses when you are aware of the crops that need to be planted. For instance, if you plan to plant maize, you should lookout for a fertile plain with loamy soil as opposed to one with clayey soil which is more suitable for planting cabbages. 

Facilities & Infrastructure – Access in terms of proximity to your target market, having motor-able roads as well as the cost and duration of transportation as this will translate to keeping your produce fresh, appealing, and ensuring it stays competitive.

If venturing into horticultural or livestock farming, water availability and quality are key.

Cost-The cost of acquiring the site is a significant aspect, the site may be self-owned, leased on a long or short term basis, or leased temporarily.

Neighbours – Do they support the farming you want in that area? For example, if you do organic farming and your neighbours spray their plantations with harsh pesticides and herbicides, this can impact your success.

If you acquire a site to operate a poultry or piggery business in a residential area or estate, you may have to contend with constant interruptions, complaints from homeowners within the area due to air, noise, and water pollution generated from your business. Essentially, you must certify that your agribusiness will not conflict with any area association regulations which are against your specific type of business or commercial activities generally.

  1. Target Market

Consider who will buy your end product, their location, age, and income levels.

You need to consider whether there is a demand for your produce or product in the market and whether or not the market is over-saturated with your produce or product. Identifying these factors will help you create a clear and defined channel of supply to your target market.

This also guides on what needs to be done to the product before being delivered to the customers such as cleaning, sorting, boxing, icing, re-packing, and arranging for transportation.

George Washington once said, “I would rather be on a farm than be an emperor of the world”

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