What do you think is the most profitable agricultural business in Africa? I have received tons of questions from young Africans who are hoping to join the Agricultural revolution in Africa.
As a consultant with many years of experience I am always skeptical in providing answers to such question, but hopefully at the end of this article on ‘the most profitable Agricultural business in Africa’ we will come to a conclusion together.
The Most Profitable Agricultural Business in Africa
Origin of Agriculture in Africa
They are so many documentations that claimed that life started in Africa, but farming was not. The progenitors of this ideas believed that although modern humans came from Africa, ‘independent farming’ started in West Africa at about 3000 BCE in the present day Nigeria and Cameroon with the people farming primarily as a way to feed cattle not people.
One of the professor I engaged with on the origin of agriculture in Africa opined that farming before 3000 BCE was mostly in form of community farming and foraging not independent farming. According to him, community then decides what kind of crop or agricultural venture was suitable for the community at a time and they exchange what they have with other community to get what they don’t have. They were also people who were specialist in hunting for food and other resources for the survival of each community or settlement. Off course, this is very debatable.
From foraging, community farming to independent farming, Agricultural revolution in Africa has continue to evolved as the need for food, and source of livelihood continue to rise.
Why Invest in Agriculture?
We have so many young Africans who are currently inspiring the Agricultural landscape in Africa. From poultry farming, fish Farming, pig farming, goat farming to vegetable farming, etc., they work day and night to ensure the available of food for use in Africa and exportation to other continents.
Here is why you should invest in Agriculture:
- There is a Demand for Agricultural product : The demand for Agricultural produce continue to rise everyday; meaning there is availability of market for your agricultural output.
- Less Volatility and not Risky: Unlike stock and other investment opportunity, investment in Agriculture is less volatile and not risky.
- Opportunity for Diversification: Agriculture provides an avenue for you to diversify your investment
- Good Returns on Investment: Investment in Agriculture always yield good returns on investment when it is done properly. etc.,
Type of Investment Opportunity in Agriculture
There are many investment opportunities in the agricultural sector. As a guide, you either invest in Plant farming (Vegetable farming, mushroom farming, etc.,) or Animal farming (Poultry farming, fish farming, goat farming, etc.,). Most investors invest in both.
For starters, the common denominator for any agricultural opportunity is Land, you need a land to either plant or raise animals for profit; the other alternative is investing via a mutual fund; the problem with mutual fund is availability of fake investment opportunities which makes its practically impossible to recognize a real opportunity.
If you are investing via a mutual fund, you just need to find an opportunity that align with your investment need, invest, then wait for the returns on your investment as stipulated within the contract you signed with the Agricultural mutual fund managers at the investment stage.
If you building a farm on your own, you need a land, business plan and a feasibility study.
Investing in Plant Farming
If you are investing in plant farming, let say’s something like mushroom. You need a land and a good species of mushroom (white button mushroom and oyster mushrooms are some of the most common example). Mushroom farm are very easy to manage and the opportunities are enormous. According to research mushrooms are rich in vitamins and antioxidants that may help prevent cancer, so there is a ready market for mushroom
Mushroom takes about 40 days to mature and you can grow them in an enclosed moist environment with little or no light. I have been privileged to visit many mushroom farm or mushroom garden and the innovation is endless. Have you tasted mushroom soup? This was one of the delicacies I enjoyed in a client’s mushroom garden I was consulting for in 2020. They are a lot of legendary mushroom farmers in Africa who are making millions from mushroom farm. The bottom line is, growing mushroom is not capital intensive and it is very easy to manage.
Other plant based farming like vegetable farming, Cucumber farming, Tomatoes farming, Pepper Farming are also fairly easy to manage and very lucrative.
Investing in Animal Farming
If your interest is in goat farming, poultry farming of fish farming, then you need to invest in structures; this includes building where they farm animal will stay, an open space for grazing, water control structure and parameter fence around the farm.
Let’s say you want to invest in goat farming, you need to:
- Build structures where the goat will stay
- Select the breed of goat you want in your farm, for starters I recommend your local breed. About 30 goats is okay for a start.
- Once the goat arrive in your farm, tagged all of them with numbers, conduct vaccination, etc.,
- The rest is feeding of the goats and day to day running of the farm till the goats are ready for sales
Selling your Agricultural Produce
The profitability of any agricultural investment is determined by the rate of return on your investment. Mutual fund manager will tell you their percentage before you sign the investment contract, but It is not so if you running the farm on your own. You can only calculate your returns after selling your agricultural produce. That is while, this is also one of the most critical aspect of your agricultural journey.
For starters, It is good to create a relationship with prospective buyers from day one. Some years back, as part of marketing strategy, the poultry farm I consulted for did a mini opening ceremony for their farm; inviting only those who were selling eggs in supermarkets and hotels within their location. Currently, farm is assisting other farms to market their eggs because their farm daily production is not enough to satisfy the increasing demand for eggs in that community.
So it’s very important to start creating a market for your agricultural produce from day one. If you are dealing with perishable agricultural product like Tomatoes, start thinking of storage and processing alternative from day one.
So what is the most profitable agricultural business in Africa
This depends on many factors including:
- Location: A fish farm in Lusaka may succeed more than a fish farm in Njeru
- The demand: The demands drives the profit, high demands means high profit
- Your management prowess: I have consulted for more than 30 farms across Africa and I must confess, proper farm management practice is very vital to the profitability of your Agricultural business.
- The business model and plans: I have meet farmers with a business model of re-investing their profit for a period of say 5 to 10 years in the farm or to start a related farming business. This always prove to be a game changer in the long run.
On a final note, all agricultural opportunities are profitable, you just need to decide your interest and go for it. All the best.