Time to View Small-Scale Farming as a Business

By Willy Foote, Founder and CEO, Root Capital

Time to View Small-Scale Farming as a Business

How can we feed the world’s growing population? It’s an age-old question that has resurfaced following the economic shocks and environmental stresses of the past decade.

According to the latest data, the global population is expected to surpass nine billion by 2050, and much of this growth will take place in developing countries. For instance, in sub-Saharan Africa – where cereal crop yields are only one-tenth of those in the United States – the population is projected to quadruple by the end of the century.

This population growth, combined with rising incomes and changing diets, will require us to produce around 60 percent more food by 2050 – a perplexing task given looming resource constraints as well as increasing frequency and intensity of droughts and floods due to climate change.

While there is no single “quick fix”, the world’s 500 million family farmers who cultivate small plots of land are a crucial part of the solution. Collectively, these smallholder farmers, many living on less than $2 per day, grow food for a substantial proportion of the world’s population, especially in sub-Saharan Africa. However, they are unable to achieve their full potential due to a wide-range of constraints, from lack of access to crop inputs and credit to inadequate infrastructure to bring their crops to market– the trucks, roads and storage facilities that are critical, yet often overlooked, parts of food systems.

Having spent the past 15 years financing farmer cooperatives and rural businesses, I’ve learned that the surest path to overcoming these barriers and realizing the promises of agriculture is through enterprise. By organizing previously disaggregated farmers, combining their production and connecting them to modern markets, small and growing businesses become powerful economic engines that help move rural communities out of poverty while improving food security and building climate resilience.

For instance, take AgroKen, a start-up agro-processor that has revived an old mill in central Kenya. Established only three years ago, the enterprise is now purchasing crops from hundreds of smallholder farmers to produce nutrient-fortified flour for the Kenyan market. Yedent, a business in northern Ghana, is also sourcing from smallholders to produce a similar product enriched with nutrients – the first of its kind on the market.

Additionally, in remote rural communities, these enterprises are often the first, last and only provider of essential products and services, such as seed, fertilizer, training and credit – filling the holes left by deep market failures. For example, Northern Seed Company is a family-owned business that is producing and marketing high-yielding hybrid seeds for Tanzanian smallholders. And in Uganda, a private enterprise known as the Joseph Initiative is providing a network of storage and processing centers within food-insecure communities to reduce post-harvest losses and increase availability of staple grains. Within its first year of operations, the enterprise worked with more than 1,000 smallholder farmers to aggregate over 500 metric tons of maize.

Feeding more than nine billion people within the next 35 years in ways that ensure human well-being, contribute to economic growth and sustain natural environments is a tremendous challenge. However, agriculture is among today’s best growth industries, and it is finally beginning to receive the attention and funding it deserves, after decades of underinvestment. In fact, there has never been a better time to support the agricultural entrepreneurs who are helping to grow rural prosperity on the fields and farms of low- and middle-income countries around the world.

Editor’s Note: This blog was previously published on Skoll World Forum and is reproduced with permission.

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