Duncan Logan, the CEO of RocketSpace, made an interesting observation last year; “You only get 40 attempts at farming. From your 20’s to your 60’s, you get 40 seasons. In tech you get 40 attempts a week.”. His message is clear, technology will pave the future of farming for decades (perhaps longer) to come. Investment in farming technology will shape every sinew of agriculture’s value chain, and Africa is set to be a key player in that sector.
The World Bank has reiterated multiple times on multiple platforms that Africa has the capacity to “feed the world”, but mismanagement of resources and lack of proper funding continues to hinder our progress in achieving this goal. An estimated 1.3 billion people depend on forests for their livelihoods, 20% of the global population. Despite this, formal wage employment is scarce in the sector, with self-employment and micro-enterprise dominating markets. This gives way to informal dealings, especially in Africa, which robs governments of taxes, consumers of quality control, and the sector of proper supervised growth. Africa’s industrial wood demand is set to increase by 500% in the next two decades and a continually informal agriculture sector will force a hike in importation when in fact exportation is what ought to expand.
Agriculture is almost exclusively the business of rural persons (though urban farming is becoming more popular each year), and Africa is by distance the least urbanized continent on the planet. In addition to this, we have favourable climates for a huge variety of species not indigenous here, and we have an untapped market for our own indigenous species (Madagascar has the greatest concentration of unique species on the planet). Under proper guidance Africa could make exponential profit from agriculture; the World Bank estimated in 2012 that removal of cross-border restrictions within the continent could garner an extra 20 billion USD in revenue for farmers, and that’s just one measure.
Additionally, the global economy is increasingly being controlled by tech giants. Monopolies established by Google, Facebook and Amazon will soon be imitated in other sectors and agriculture is no exception. The first truly innovative African agriculture giant stands a good chance of controlling much of the sector globally, since as outlined above, Africa has the most agricultural potential of any continent.
The current state of innovation
Investment in agriculture has suffered a slow reduction on the global market despite the fact that agriculture, along with real estate, can never really cease to be important. Despite this, many African companies (particularly in Kenya) operate innovative tree-centred businesses and make profit from it. Komaza is one such company. The Kenya based forestry company focuses on addressing Africa’s wood supply crisis by working with small-holder farms to cultivate trees. The Program on Forests (PROFOR) found in a study on 5 sub-Saharan African nations (Ethiopia, Malawi, Nigeria, Tanzania and Uganda) that 1 out of 4 farms grow trees in addition to other crops, and that said farms make more revenue on average. Komaza bases its objects on those same principles, it provides support to small-scale farmers across the forestry value chain, thereby hoping to eventually become Africa’s largest forestry company. The company has thus far planted nearly 7,000 farms with 2 million trees and associates with over 6,000 Kenyan farmers. It has plans for expansion and aims to plant 1 billion trees by 2030.
F3 Life is another Kenya based company that innovates in the agricultural sector. The company provides “climate smart” credit designs to financial institutions tailored for small-holder farmers who wish to get a loan. The company also mitigates the risk of default by said farmers by managing their “climate risk” thus helping to ensure favorable yields. The company is expected to become profitable by 2020 , and addresses the concerns explained above surrounding informality in the agricultural sector by providing structured business models for farmers and lenders alike. It has already broken even on the initial investment package of 200,000 USD.
Plant a Million
The IUCN estimates that restoration of 150 million hectares would yield 85 billion USD revenue per year worldwide, and many companies are already seeking a share of that profit. The restoration market in the United States generated 9.5 billion USD in 2014 in annual economic output, and a further 15 billion in indirect and induced output, thereby employing 126,000 people. That figure was 59% more than that of the US mining sector, and the gap continues to widen.
Plant a Million (hereafter “PAM”) seeks to add Zambia to the global conversation, while making profit for its investors and rebuilding the atmosphere. PAM will achieve this by working with small scale farmers (thereby formalizing Zambia’s agriculture sector as much as possible) at every stage of the forestry value chain, as exemplified by our Kenyan companies explained above. PAM seeks to address Zambia’s poverty by utilizing its greatest strength, its land. Our population density is 22 people per square kilometer, making us one of the 50 most sparsely populated nations on the planet. We are also one of the least urbanized nations, according recent OED studies. Surrounding nations Angola, Botswana, Congo and Namibia have similar or even much lower population densities; Southern Africa is perfect for forestry related innovation.
Malawi has already taken extensive steps in this regard, saving nearly a hundred million dollars in subsidies each year by planting trees on wanting farmland. Zambia’s indigenous forests contain roughly 4 billion cubic meters of wood, of which merely 5% is commercially exploited. The total round wood production from natural forests is estimated to be 10 million cubic meters and 95 percent of the total round wood production is used for fuel wood and subsistence use in rural areas. The industrial round wood production from indigenous forests averages about 0.5 million cubic meters per year and will need structured afforestation to sustain current harvesting levels. PAM seeks to stabilize this and other parts of the agricultural sector, thus empowering rural communities and ensuring that our economy becomes self-sustainable.