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huge potential for expansion. From its
strong connections to farming communities
where poverty is widespread
to its rising importance in urban centers,
agribusiness touches all levels of
African society, making it crucial to the
continent’s success.
Therefore, what happens in agriculture—and,
more specifically, agribusiness—will
have a major impact
on overall development and poverty
reduction across Africa. Besides the
upstream connection with farmers
and the downstream connection to
urban marketing, agribusiness links to
many intermediate inputs: agricultural
machinery, fertilizers and insecticides,
agro-processing machinery, packaging
materials, transportation, refrigeration
equipment and telecommunications,
to name a few. A good illustration of
this can be found in the dairy industry.
Large local processors are developing
fairly sophisticated local and regional
markets in certain African countries
for the processing, promotion and
distribution of milk and other goods.
The agribusiness value chain spans
the entire pyramid, from top to bottom,
and has the ability to affect all
areas of the labor market. As noted,
farm families are often among the
lowest-income groups and make up
a large percentage of the population.
Meeting the rising demand for agribusiness
products translates directly
into more jobs for these families.
Because the supply of labor in rural
areas is generally not elastic—in other
words, people there are busy, especially
during growing seasons, even though
they earn little—rural wages are likely
to rise as a result. Further up the value
chain, jobs will be created in transport,
packaging and the other industries.
And recently, large corporations have
been playing a more prominent role in
the sector. Driven by rising world agricultural
prices and growing demand
for renewable fuels, these corporations
have been expanding their operations
and are experiencing a greater need for
management and leadership talent.
To take advantage of these current
trends and reach the full potential of
agribusiness in Africa, linkages along
the value chain need to be strengthened.
The connections between agribusiness
and farmers are particularly
crucial to achieving shared economic
growth with positive social impacts.
Cultivating Agribusiness Leaders
In the 2007 U.N. Food and Agriculture
Organization (FAO) report, Approaches
to Linking Producers to Markets, agribusinesses
were shown to provide a
wide range of extension services to
farmers—services traditionally supplied
by the public sector. These
included provision of material inputs
(often on credit), education and training
on new technologies and farming
techniques, and other services such as
produce transportation. More important,
the farm-agribusiness connections
studied for the report demonstrated
Much of the accelerated growth of African economies in recent
years is in agribusiness writ large. Urbanization and rising
incomes increase demand for food.
success in incorporating smallholder
farms. Where the relationship between
agribusiness and farmers was strong,
smallholder farmers benefited from
the certainty of having a reliable buyer
for their produce, and the agribusiness
benefited from a stable source of quality
produce.
The linkages between agribusinesses
and farmers studied in the FAO
report showed there can be mutual
benefits to such relationships. However,
as the report points out, these
connections are often the exception
rather than the norm. Strong, effective
linkages require mutual trust on the
part of both players; profitable business
models; and competent managers
to supervise the sequencing of transactions,
oversee financial planning and
take into account the seasonal fluctuation
of the supply chain.
Unfortunately, there is a shortage of
skilled managers with the local knowledge
necessary to effectively capitalize
on the opportunities in these emerging
markets. This critical component of
strong farm and agribusiness linkages
can be positively influenced by
investing in both human capital and
applied research. Business schools
are uniquely poised to add value in
both areas: They represent an effective
model of education, merging theory
with practice to teach basic management
and leadership skills relevant to
the specific needs of the agribusiness
value chain. Business schools also play
an important role in creating knowledge
networks, diffusing new information
and building local capacity.
In Kenya, the Global Business
School Network (GBSN) is working
on a program to train agribusiness
entrepreneurs at the Chandaria School
of Business. This program, which will
offer a certificate in management and
innovation for agribusiness entrepreneurs,
seeks to provide analytical
tools, market-oriented skills and information
to strengthen the quality and
productivity of the agricultural sector.
On a larger scale, the Association
of African Business Schools is leading
development of a Pan-African program
to bring business and leadership education
to agribusiness managers at all
levels of the value chain. A focus of the
program is the integration of smallholder
farmers with the goal of reducing
rural poverty through agribusiness
opportunities.
Although both of these efforts are
in the development phase and do not
yet have results to share, development
professionals interested in finding new
ways to catalyze growth in agribusiness
should watch them. As Africa
looks to the future, investing in these
kinds of interventions will be key to
producing an agriculture sector that
can compete in the global market
while providing jobs and food security
at home. n
Guy Pfeffermann is chief executive
officer of the Global Business School
Network, a nonprofit organization that
promotes management education as
an important element of international
development. Nora Brown B’04, ’05 is
chief operating officer of GBSN.
2011–2012 49