Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

14 October 2010

Investing in start-up agriculture in Mozambique

AgDevCo today agreed to provide a first round of loans to several start-up agriculture businesses in the Beira corridor region of Mozambique. The aim is to help create profitable companies which can provide jobs, link smallholder farmers to markets and address food security issues. The beneficiaries are involved in farming and marketing of a range of grains, livestock and tropical fruits – maize, wheat, cowpeas, soya, sesame, potatoes, goats, bananas and mangoes. All of the projects include active participation by smallholder farmers.

The loans ranging from $50,000 to $200,000 are provided as part of the Beira Agricultural Growth Corridor (BAGC) initiative. BAGC is a partnership between the Government of Mozambique, international donor agencies and private companies, launched in early 2010. The aim of the BAGC is to promote a competitive agriculture sector in central Mozambique, creating over 350,000 jobs and providing opportunities for large numbers of smallholder farmers to boost their farming incomes.

Pascoal Alves, a farmer in the Dombe region who grows mangoes and sesame, said:
“Support from AgDevCo will help kick-start a profitable mango industry in the Dombe region, creating jobs and income earning opportunities for large numbers of people. What’s more, we are supporting smallholder farmers to grow sesame and food crops among the mango trees, helping boost incomes and address hunger”

Roberto Albino, director of the Mozambique government's Centre for Agricultural Promotion (Cepagri), said:
“The first round of investments under the Beira Agricultural Growth Corridor initiative will kick-start a revival of the agriculture sector in the central provinces of Manica, Sofala and Tete. We call on development partners to help scale-up the programme so that it can provide income generation opportunities for hundreds of thousands of farmers and their families”

Chris Isaac, Director of AgDevCo, said:
“Mozambique has huge untapped agricultural potential. The BAGC initiative can help tackle rural poverty and increase food production through a public-private partnership. The government and donor partners should increase support for rural farming infrastructure, especially electricity connections and irrigation. Local and international investors can provide the capital to scale-up successful business”.

Despite huge potential, there is today virtually no competitive agriculture in the Beira corridor region of Mozambique. Of the 10 million hectares of arable land, less than 20,000 hectares (0.2%) is farmed commercially under irrigation, mostly sugarcane. 800,000 smallholder farmers operate at the subsistence level with almost no access to modern farming inputs, finance or markets.

The BAGC Investment Blueprint demonstrates how to transform opportunities for smallholder farmers by linking them to markets and giving them access to improved inputs, infrastructure and know-how. It calls for almost US$2 billion of investment by the public and private sectors over a twenty year period.