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.

9 July 2012

Voxtra invests in Mtanga Farms Limited

The Voxtra East Africa Agribusiness Fund (Voxtra) has completed an investment of US$ 1.5 million in Mtanga Farms Limited (MFL), a commercial farm engaged in seed crops, arable farming and livestock. The investment marks the first of a projected 8 to 10 investments targeting companies with pivotal roles in improving the livelihoods of smallholder farmers. Voxtra’s investment will enable MFL to take its seed potato business to a commercial scale, triple its farmed acreage and significantly ramp up its budding livestock operation.

Mtanga Farms is an integrated agri-business based in Iringa, Tanzania. Its operations extend over 2,600 hectares, previously farmed but long neglected when MFL secured its long-term lease of the land in 2009. MFL has since made significant strides to rehabilitate the land and put in place essential infrastructure to support the further growth of the business. MFL focuses on high value seed crops and the protein value chain. Its seed activities are centred around the establishment of a seed potato operation providing clean seed potatoes to smallholder farmers across Tanzania. The protein business includes the growing of animal feed, a livestock breeding business and downstream processing of meat. The company is run by a dedicated team of farmers and business developers, and is now well-positioned to become the leading integrated farming operation in the Southern Tanzanian Highlands.

Core to the company’s strategy is the provision of improved seed material to local smallholder farmers. In partnership with the Tanzanian government, MFL recently announced the registration of four new potato varieties – the first varieties to be released in Tanzania in 30 years. Whilst potatoes are a major cash and food crop for Tanzanian smallholder farmers, the lack of clean seed material has long been a major impediment to farmers’ productivity. MFL’s clean seed potato will enable a tripling of smallholder farmers’ yields: whereas the national average yield is 5-7 tonnes potatoes per hectare, smallholders have demonstrated yields of 15-20 tonnes per hectare when planting clean seed. By scaling up its production of clean seed potato, MFL could provide a pathway out of poverty for a sector employing an estimated 150,000 smallholder farmers. Voxtra intends to make use of its technical assistance facility – funded by the Norwegian Agency for Development Cooperation (NORAD) – to evaluate, support and increase the social impact made by MFL.

African agriculture needs a green revolution that is powered by an emerging class of sustainable small and medium enterprises (SME). SMEs are best placed to increase local food production and integrate local farmers into value chains and create employment. Through its investment in MFL, Voxtra joins forces with a strong partnership of existing investors comprised of Thirty Degrees East, a Mauritian investment company, UK-based Lion’s Head Global Partners, U.S.-based Calvert Foundation, Nigerian investment firm Heirs Holdings and its philanthropic arm, The Tony Elumelu Foundation, as well as the African Enterprise Challenge Fund.