AGRIBUSINESS & DEVELOPMENT BY OKELO MICHAEL ACCOSCA

AGRIBUSINESS & DEVELOPMENT

MARKET ANALYSIS- IDENTIFICATION AND EXPLOITING OPPORTUNITIES IN THE LOCAL AND GLOBAL MARKET. DOES ONE PRODUCE AND IDENTIFY THE MARKET OR IDENTIFY THE MARKET AND PRODUCE?   QUESTIONS TO PONDER. Are smallholder producers sufficiently informed about the market for their products? Do they engage in market research and gather market intelligence? Are the products aimed at particular target markets? Do they know the size of their market share in the market segment for their products?

. What are the prospects of increasing market share or risks of losing it? How can products reach the consumer in the most efficient and effective manner? Which information channel is best to reach the consumer to make the product known, valued and demanded? Are they price sensitive? Marketing knowledge is therefore of primary importance in making production plans, sales and marketing decision. It is key to being competitive.

Agricultural markets change over time sometimes cyclically and sometimes permanently. They are not only subject to annual seasonality that is peculiar to agricultural production but they also have periods of relative calm or instability that can last for several years. Example:- 1999-2006 – characterized by low prices 2007-2013 – high and volatile prices 2014 – Prices have generally stabilized The prediction is that prices for all agricultural products are expected to decrease over the next ten years as a result of increased productivity due to low input prices.

By 2050, the world’s’ population will reach 9. 1 billion By 2050, the world’s’ population will reach 9.1 billion. Nearly all of the population will occur in developing countries. Urbanization will accelerate with about 70% of the world’s population expected to be urban compared with 49% today. To feed this larger, more urban and potentially richer population, production will need to be increased by about 60% (FAO). What is the implication to the small holder producers?

GLOBAL PREVIEW OF EXPORTS/IMPORTS OF AGRICULTURAL PRODUCTS. ASIA – Net importer LATIN AMERICA- Net exporter EASTERN EUROPE AND CENTRAL ASIA- Net exporters. SUB-SAHARAN AFRICA- Net importer The trade in agricultural products has continued to expand in recent years possible reasons. High demand in the emerging economies i.e. Brazil, Argentina, China, India etc. Increased urbanizations and the growing number in the middle income group. The growing population Changing consumption patterns

The change in food crops use. The supermarket revolution Stringent quality standards The formation of the regional trading blocs Improved infrastructural development The role of the multinational corporations

WAY FORWARD Concentration in the non- traditional and high value crops especially fruits and vegetables. Product differential and quality upgrading.-After exploring and selecting the target market, there is need to differentiate the products in-terms of product quality, safety, price etc. In the fresh food sector, products are often poorly differentiated as they are sold in bulk without a brand via an intermediary However a combination of quality, price and efficient logistics has differentiated and positioned certain products i. e Indian basmati rice, Philippines bananas etc.

Promote long-term farm level group based value addition on traditional crops i.e. cassava, sweet potatoes, dairy products etc. Production of high yielding GM food crops that are resistant to weather shocks and fast maturing. The yellow passion variety grown in Kenya takes two years to mature compared to the one in South Africa and Zimbabwe which takes 5 years Diversification Engage in GAPs-Good Agricultural practices

Exploit opportunities in the developed countries example USA through AGOA. The statistics on the USA trade with Sub Saharan Africa January-December, 2016 indicated that the top 5 countries which exported to the USA were: Value (USD) Sector Energy related 3,478 Nigeria Transport equipment 2,896 S.Africa 1,956 Textile /apparels Angola 775 Minerals/metals Chad 395 Agricultural Products Kenya

Source; International trade association Explore more market destinations and avoid reliance on few markets. Example Kenya relies on the EU,EAC COMESSA for almost 60% of her export revenue. Strategic production timing to avoid gluts, shortages and price volatility Encourage use of irrigation and reduce reliance on rain fed agriculture. Manage food contamination and other forms of post-harvest losses Removal of artificial barriers to cross-border food trade. Explore more South-South trade opportunities

CONCLUSION There is great need to enhance the productive capacity in the rural areas. Improved infrastructure, development of agro based industries , intensified production, improved water management and enhancing access to profitable markets would go along way towards improving the economic well being of the smalholder producer. The co-operative financial institutions can play a key role in identifying market outlets and even financing value chain which would further attract the unemployed youth to agribusiness. China has emerged as a super power due to the emphasis that was made in the rural areas. Why not Africa?