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Revolutionising finance for agri-value chains

It is time for a paradigm shift in agricultural finance

Reinventing business or regulatory models

Agricultural finance institutions, and the policies, rules and regulations under which they operate, are lagging behind changes in the “real economy”. Recent years have seen significant innovations in certain countries but these are slow in spreading across borders or, for that matter, across institutions. In these circumstances, decision-makers in farmers’ organisations, financial institutions, government bodies and other institutions interested in agricultural finance should shift their approach from incrementally trying to improve on their existing models to reinventing their business or regulatory models in order to capitalize on all these new possibilities. It is time for a paradigm shift in agricultural finance.

Enabling a paradigm shift

The Fin4Ag conference will help create the critical mass of thinking that enables such a paradigm shift by bringing together leading decision makers from ACP countries to discuss what has been achieved through recent innovative approaches and how to realise their full potential.

3 Streams

More than 500 delegates from public and private organisations from Africa, the Caribbean, the Pacific and beyond will gather in Nairobi to share new thinking around three streams:

Innovative tools for agri-value chain finance

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A new legal and regulatory framework for agri-value chain finance

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Cross-cutting issues in agri-value chain finance

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Mark your calendar

Discover Innovations in Digital Financial Services for Agriculture at the Plug and Play Day, join us at the Continental Briefing and don’t miss the field trips.

Plug and Play Day

“Hands-on with Innovations in Digital Financial Services for Agriculture” for companies and developers who want to showcase innovations in ICTs for agricultural finance.

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Continental briefing

The second continental Briefing will address the challenges and opportunities in accessing financial services by farmer’s organizations in Africa and identify profitable opportunities for farmers in engaging with finance actors.

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Field trips

Field trips are organised for conference participants to experience innovative agri-value chain finance on the ground.

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Meet our co-hosts

Fin4Ag is co-hosted by the Technical Centre for Agricultural and Rural Cooperation (CTA) and the African Rural and Agricultural Credit Association (AFRACA)

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It is co-organised by an impressive array of partners listed below.


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The potential for agriculture to drive inclusive economic growth, improve food security, and create opportunities for millions of Africans is enormous

More than two-thirds of Africans depend on agriculture for their incomes. Research shows that, in sub-Saharan Africa, growth in agriculture is 11 times more effective at reducing poverty than growth in other sectors.

Investing in agriculture now could help lift tens of millions of people out of poverty by 2024.

In 2003, at the African Union (AU) summit in Maputo, African leaders made bold commitments to support agriculture: pledging to allocate at least 10% of national budgets to agriculture, to adopt sound agricultural development policies and to achieve at least 6% agricultural growth.

Governments developed country-specific plans through the Comprehensive Africa Agriculture Development Programme (CAADP). However, progress on the Maputo targets has been mixed, with many countries falling short on their promises.

In 2014, the AU is celebrating the Year of Agriculture and Food Security. At the AU summit in July, African leaders will have the chance to review and revitalise the Maputo Declaration, and to make new policy commitments for the next ten years of African agriculture.

To recognise this historic opportunity, ONE’s report, “Ripe for Change: The Promise of Africa’s Agricultural Transformation” assesses the achievements and the shortcomings of the last decade. It also presents valuable lessons and policy recommendations, developed in consultation with key stakeholders, which could accelerate the pace of agricultural progress in Africa.

KARI develops new chicken breed in Kenya

Chickens Africa hyper7proKARI has taken more than a decade to study strengths and weaknesses of local chicken breeds from across Kenya. (Image source: hyper7pro)The Kenya Agricultural Research Institute (KARI) has developed a new breed of indigenous chicken that attains better weights faster than other local breeds

Developed in KARI’s Naivasha Poultry Development Institute, the new breed known as kienyeji chicken, achieves a weight of 1.5 kg in five months.

According to KARI, the new breed is resistant to disease and parasites and is better suited for local climatic conditions.

“Its ability to withstand harsh climatic conditions is amazing. Its feathering system makes it adjust better to varying climatic conditions – including in arid and semi-arid conditions,” observed Dr Ann Wachira, a senior researcher heading the project.

“Studying different breeds followed by selection and interbreeding under laboratory conditions led us to produce this breed,” added Dr Wachira.

Before releasing the new breed to farmers, KARI researchers ensure that they are vaccinated against deadly Mareck’s diseases and culls the weak ones before they reach the market.

“We are currently at the research level of the project where we are collecting genetic resources, producing the breeding stocks and hybrids for later dissemination to farmers,” observed Professor Alexander Kahi, the project leader at Kenya’ Egerton University and a researcher in animal genetics.

Agriculture no longer just for farmers

Agricultural teacher David Friend waters impatiens planted by his plant science class inside the new greenhouse, which is part of the new Agricultural Research Facility at Kiel High School. / Sue Pischke/Gannett Wisconsin Media

Agricultural teacher David Friend waters impatiens planted by his plant science class inside the new greenhouse, which is part of the new Agricultural Research Facility at Kiel High School. / Sue Pischke/Gannett Wisconsin Media

Agriculture is a booming business. A recent Associated Press report says careers related to agriculture are growing nationwide with tens of thousands of jobs opening up each year in the “broader” agriculture field. Many of the jobs have nothing to do with “cows and plows.”

High school ag programs give students a head start for further study and jobs in fields like urban forestry, natural resources or genetic engineering of crops.

In other words, ag studies are no longer only for those students who want to farm. Many do study to farm, but opportunities exist for those looking to branch into other fields of ag study.

Credit local ag officials for recognizing and acting upon the trend. For example:

• Kiel High School used funds from a $6.5 million referendum to construct a new Agricultural Research Center wing, which will drastically improve agricultural education in the school district. It includes state-of-the-art technology that provides hands-on learning in plant and animal sciences not available previously.

• A capital campaign was launched recently to build a new Food Science and Agriculture Center at Plymouth High School.

It is expected to open in the Fall of 2015 and include a 5,100-square-foot building, comprised of a 30- by 90-foot greenhouse attached to a 30- by 80-foot classroom. Students are already learning new advanced ag techniques such as aquaponics, raising fish that provide nutrients to grow plants hydroponically. A greenhouse at the school, built in the 1970s, is inadequate for the number of students interested in learning about food production.

• Planning continues for an Agricultural Education Center in Manitowoc County. It would, according to organizers, create a fun and educational discovery center where non-farm visitors can learn what farming and agriculture are really about. It could further spur interest in non-farm ag careers.

• As the number of farms dwindles, membership in Future Farmers of America continues to grow. Nationally, FFA has about 580,000 members, nearly double the total of the 1980s, even though there are 4 percent fewer farms today than in 2007. The report suggests even FFA members are becoming increasingly interested in non-farm ag careers.

Rural high schools in Manitowoc and Sheboygan counties have strong FFA programs.

Norval Dvorak, a longtime champion of agriculture in Manitowoc County, recently visited Mishicot High School and left with students lists of 24 major areas of study related to agriculture, along with another list of more than 100 companies seeking workers in those fields. Many of the careers are off-farm.

Dvorak told students that at least three jobs openings exist for each student graduating from the Wisconsin College of Agriculture, at an average salary of $41,000. Many of our local high schools can provide a jump-start to these careers through the agricultural and related programs they provide.

Experts predict the need to feed a a growing world population, along with technological advances in plant, animal and genetic science, will keep agriculture — on and off the farm — a going concern for decades to come.

It won’t be your father’s agriculture, but the need for workers will continue to be great in the brave new world of husbandry.

Investments made in ag education locally will continue to reap dividends as opportunities grow.

Why Keep Farm Records as a small farmer?

Keeping farm records is a key component of managing your small farm. Farm records serve a number of purposes on the small farm – even if it’s a hobby farm or homestead. Here are some of the reasons to keep farm records:

  • Monitoring progress. If you are serious about running your farm, you will want to make sure that you are making progress toward your goals and that you are moving forward on your business plan.

Even if you’re a hobby farmer or homesteader, keeping track can make sure you meet your goals, and can help you be more efficient in your work on the farm. Farming is more satisfying when you are making positive progress versus spinning your wheels. Good farm records help you see what works, what doesn’t, and help you figure out why so you can make changes moving forward.

  • Managing the farm. Although this is similar to monitoring progress, here I’m referring to keeping track of things like how many animals you have, what their health is, what health issues you may have had with them, what you’re feeding them and how much/how often, what vegetable varieties you have and how they perform. If you keep a detailed farm record about the specifics of your farm operation – the animals and crops, not just the finances – you’re getting a full picture of how your farm is functioning.

Sometimes you may be succeeding at generating positive income on your farm, but you’re struggling with an aspect of animal care that requires adjustment. Or, you may find that your profits are suffering, and the root cause is that you are simply charging too little. You won’t be able to trace that root because unless you record how much feed you’re buying and how many chickens that translates into, for example. You need both sides of the equation to run your farm effectively.

  • Obtaining loans and grants. Many grants and loans for small farmers require that you have financial records to show what you have earned, what your expenses are, and so forth. Certainly if you’d like to borrow money from a bank or other financial institution, they may require financial statements to prove that the farm is financially viable.
  • Taxes. Income tax returns will need to be filed for your small farm. You will want to keep detailed track of expenses and income for tax returns, to ensure that you are paying the proper taxes for your farm. Consult an accountant for details specific to your situation, but tracking income and expenses is a must for any farm.

What Records Should You Keep?

This is where it gets tricky and very individual. It’s hard to make blanket recommendations about what you need to track on a small-scale sustainable farm, hobby farm, or homestead. It really depends on what your goals are. So start with your business plan and work from there. What do you need to track to find out whether you’re meeting your stated objectives? How will you know if marketing is succeeding?

Financially, all farms should track income and expenses. Consult a tax professional for specifics here, but you’ll want to categorize expenses to match your income tax return categories and you will want to make sure you’ve captured every penny spent and earned.

Tips for Keeping Good Farm Records

  • Use farm records to track progress toward goals. Setting farm goals is a very important part of running a small farm business. A business plan should also include these goals. When your record-keeping focuses on the goals you’ve already identified for your farm, you know that you’re tracking the right things. Sounds simple, but in reality it makes a huge difference and people don’t always take the time to yoke these two things together.
  • Track both income and expenses. Sometimes it’s all too easy to get hyper-focused on either income or expenses and let the other languish. Track what goes in and what goes out religiously and you will reap benefits in terms of your farm business. Use whatever method works for you, but keeping farm expenses and income in a separate account from the household will help when it comes to tax time.
  • Monitor your labor time. Most farmers ignore their potentially biggest resource: their own labor. Track the hours you spend doing various tasks on the farm, and if you have employees or other workers, track their time as well. This can be really eye-opening when you take the time to collect and then analyze it. If you wonder why the income/expenses are balancing but you don’t feel like you’re getting anywhere, take a look at how much labor you have to put in to each product and where it comes from.
  • Keep up with records. Obvious, but the key is to build habits that you can continue over time. For some people, this will mean keeping up every day. For others, every week. Still others, monthly or quarterly will work. If you have a way to track things even during the busiest season, you can catch up on data entry when things slow down.
  • Review periodically. Data doesn’t do any good if you don’t look at it, so take the time monthly or quarterly to evaluate your farm record-keeping, looking back to see what works and what doesn’t.


Farming Is Africa’s Best Bet for Jobs

Cereal yields in Africa are less than 50 percent of those in Asia or South America. FAO estimates that one in five Africans is undernourished. Malnutrition, as measured by stunting affects nearly 40 percent of children in Africa. Moreover, Africa will need to feed an additional 900 million people by 2050.

Agriculture supports the livelihoods of 80 percent of the African population, provides employment for about 75 percent but contributes less than 15 percent of GDP. For Africa, sustainable and equitable growth is inextricably bound to agriculture. Africa’s ubiquitous poverty and economic decline becomes easily explicable when you take into account the dire state of agriculture.

Hunger, malnutrition, disease and poverty present formidable barriers to Africa’s productivity, growth and prosperity. According to President Museveni, malnutrition impairs educational achievements, undermines economic productivity and places a huge burden on Uganda’s fragile public health system. The African Development Bank (AfDB) recognizes that Agriculture is vital to promoting growth and reducing poverty in Africa.

As an African scholar and public intellectual, I am scandalized and my pride is deeply wounded by the unending specter of hunger and malnutrition. It is shameful, beyond measure or pardon, that fifty years with Africans at the helm, little progress has been made to guarantee every African child sufficient and nutritious food. I am sure there is enough blame to go round; the UN system and the multi-billion dollar international aid honchos are not innocent.

But, ultimately, the burden of responsibility must rest with people like me, Africa’s intellectual elite. Stagnation of agriculture has been the defining feature of Africa’s economic policy over the last four decades. Spending in agricultural research and development by African countries declined by 27 percent between 1981 and 2000. Conversely, spending in agricultural research and development rose by 30 percent in rest of the developing world; Asia and Latin America.

Egged by experts the African Union, through the Comprehensive Africa Agriculture Development Programme (CAADP), has set a growth target of 6% per annum for agriculture and encourages every country to allocate 10 percent of the national budget to agriculture. CAADP called for $251 billion to fund investments in irrigation, infrastructure, education and markets. Today, less than handful countries allocate 10 percent of their national budget to agriculture and critical investments in agricultural research and development lag behind other developing regions.

ike all areas, which are critical to Africa’s development, such as education, energy, biodiversity conservation and the extractive sector, experts have besieged agriculture. Africa is drowning in advisors. Invariably, the overabundance of external advisors diminishes the cachet of local experts. As Bill Easterly argues in his new book, The Tyranny of Experts: Economist, Dictators and the Forgotten Rights of the Poor, the appeal of technocratic ideas persists beyond overt racism and colonialism.

Africa has been through a multitude of expert-led technical solutions but hunger still persists. Evidently, agriculture is not a vaccine. You cannot have a breakthrough in Boston and roll it out in Vihiga. Ultimately, African universities and national research systems must engage, define the problems and offer appropriate solutions. But one fundamental question remains, can African scholars or their institutions deliver the research and development breakthroughs that have eluded agriculture for more than half a century? And is government and private sector ready to put their money where their mouth is?

Africa has a large and growing population of young people. Where will young Africans currently entering the labor force find employment? Africa has the lion’s share of the world’s arable land. Agriculture is uniquely positioned to absorb this young and dynamic workforce. Africa’s youth dividend will not be credited automatically into the national treasury. We can harness the youth dividend by accelerating the transformative change in agriculture.

African governments and their expert advisors must wake up. There is no such thing as a dual economy in which agriculture is a passive actor – a low productivity supplier of food and a subordinate driver of national growth and economic transformation. Agriculture is the real driver of Africa’s economic growth. There will be no transition to China-style labor-intensive manufacturing until agriculture is productive, efficient and profitable.

Our path to middle income and economic prosperity must be different. Africa must shun technical advisors external beholden to the antiquated linear growth models – from hunter-gatherer to agrarian to industrial to service and knowledge. Our research and academic community must re-imagine our unique path to prosperity.

Dr. Awiti is the director of the East Africa Institute and assistant professor at Aga Khan University.

Scientists in Kenya advocate Insects as food

Scientists at the Nairobi-based International Center for Insect Physiology and Ecology (ICIPE) called Wednesday on food insecure countries to consider insects as food and animal feeds.

The scientists observed that the 870 million people who are currently going hungry globally can feed on the 2,000 kinds of insects that are consumable by humans, adding that Insects are healthy, nutritious and an alternative to mainstream staples such as chicken, pork, beef and fish.

What we eat and how we produce it needs to be re-evaluated by rectifying inefficiencies and food waste reduced as well as finding new ways of growing food,” The Director General of ICIPE Dr. Segenet Kelemu said.

She disclosed that insect harvesting and rearing is a low-tech, low-capital investment option that offers entry even to the poorest sections of society, such as women and the landless.

The governments need to encourage insect farming as a new way of addressing food security to help replace meat and fish that are consumed and at the same time used as animal feeds,” Dr. Sunday Ekesi, ICIPE’s Principal Scientists and Head of Arthopod Pathology said.