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Why Agribusiness remains a haven of investment opportunities

Although international trade will continue to be essential to rural livelihoods in food-importing countries, the OECD-FAO Outlook Report 2021–2030 predicts that in the coming decade, weather variability, and resulting animal and plant diseases, will vary around projections. can.

In addition, the report indicates that changes in input prices, macro-economic growth and other uncertainties around projections are likely to contribute to this shift.

According to the Food Agriculture Organization, global crop production is expected to increase in 2030, with 87% projected to come from yield increases, while 6% comes from expanded use of land and 7% from increased cropping intensity.

The FAO’s Assistant Director-General and Regional Representative for Africa, Abebi Haile Gabriel, urged that it is in agriculture where the ambitions of the African Continental Free Tax Area (AFCTA) can find the most fertile ground, particularly around priority commodities inclusive regional By developing the value chain.

This, says Abebe, should be led by a dynamic and diverse private sector of smallholders, commercial farmers, processors and service providers.

Accordingly, an annual import bill of approximately $35bn in sub-Saharan Africa provides a ready export market for Uganda, especially on the back of ratification of the AfCTA.

According to a market report, robusta coffee from Uganda represents 7% of world production and provides a livelihood for about 8 million people (about 19% of the population). According to experts, this presents a huge opportunity to increase both livelihood and investment.

Uganda provides 1% of the global Arabica haul where Arabica is traded as a single-origin coffee and earns a premium in the international market.

Despite this relatively strong performance, Emmanuel Iyamulemi of the Uganda Coffee Development Authority says there is still great potential to increase coffee production in Uganda.

However, Iyamulemi maintains that creating the financial infrastructure for agro-industrialization is key to achieving the latter objective.

According to Turner, a senior private sector expert, 8 out of 10 export products through agribusiness present a huge opportunity.

“Agro-processing is a priority for the Government of Uganda and is a key industry that presents opportunities for all actors along the value chain,” he said.

He says areas of opportunity in agribusiness sub-sectors include fisheries, dairy and maize. He says that agro-processing is the backbone of the manufacturing sector, which accounts for 60% of the total production which presents opportunities in the long-term outlook.

challenges

According to Joseph Kibuka, Head of Fund Management ABI Finance Ltd., apart from poor agricultural practices including poor land use, access to affordable long-term financing is a missing link in the agribusiness sub-sector.

He said that the productivity of small farmers is low due to limited access to agricultural services and credit and dependence on traditional production methods.

According to Bank of Uganda statistics, only 10% of private sector credit is allocated to agriculture. According to experts in the field, this is a huge gap that needs to be closed in order to bridge it.

Mona Muguma Cebuliba, CEO of ABI Finance, says investing in innovations that protect and respect all stakeholders, especially children, refugees and women, as well as their role in the decision-making process about food systems Ensuring participation is a very essential part of this sector.

“We need to invest more in terms of skill development and entrepreneurship in the agriculture sector and not only in the local market but also at the regional level. This will help in generating both the capacity and employment required for sustainable development,” Mona said.

According to the United Nations Food System Summit held in September 2021, innovation was recognized as the key to enabling food system transformation.

According to Martha Vandera, Managing Director, Kimco Coffee Limited, the ultimate goal of introducing innovations in agriculture is to achieve competitive advantage through innovations.

“The introduction of new practices in production processes, in field management, new ideas for obtaining information on daily work, the adoption of new technologies, among many other possibilities, helps to guarantee good results,” she said. .

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