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AGCO Africa Summit tackles agribusiness challenges with vigor

Enthusiasm abounded at the fifth annual AGCO Africa Summit, held in Berlin during International Green Week by the global equipment manufacturer.

Building on the African Union’s vision of “inclusive growth and sustainable development” for the continent, AGCO brought together a range of financiers, farming entrepreneurs, NGO leaders, agribusiness executives and government officials—including German Federal Minister of Food and Agriculture Christian Schmidt and Zambian Minister of Agriculture and Livestock Given Lubinda, who had met with the IFAJ/AGCO Exposure-4-Development media tour participants in Lusaka last May.

AGCO updated guests in the crowded ballroom on its Future Farm in Zambia, a project that took shape a couple of short years after it was announced at an earlier Summit. The company also announced its plan to build a second Future Farm in Francophone Africa, extending its training and demonstration programs to French-speaking farmers.

The discussion quickly moved on to non-company issues including novel financing models to fuel African entrepreneurship, policy frameworks that encourage development and the role of the private sector in fueling home-grown African growth.

Mechanization Unleashes Potential
Dr. Rob Smith, AGCO Senior Vice President and General Manager for Europe, Africa and Middle East, announced the company’s new Emerging Farmers’ Mechanization Package, a “farm in a box” containing a 50-to-85-horsepower Massey Ferguson tractor, harrow, plow, subsoiler, planter and trailer or transport box, all for under $20,000 USD.

That’s a significant investment for many of Africa’s growing force of small commercial farmers, but Smith says stepping up to mechanization can unleash tremendous potential on the continent. University-led research at the AGCO Future Farm in Zambia compared traditional, hand-planted maize with mechanically farmed maize side by side. The hand-planted hectare yielded 1.5 tonnes of maize, while the mechanically farmed hectare beside it yielded 5.2 tonnes, reported Smith—more than triple the productivity.

Re-Thinking Finance
Of course, mechanization will require financing, and capital is often hard for farmers to secure.

Wiebe Draijer, CEO of Rabobank, described the challenges of doing business in markets where farmers often lack collateral.

“The challenge is to bring smallholder farmers and subsistence farmers up to a level where they can start to invest,” he said.

The key in many markets is to fund through the buyer’s side, funding the supply chain from above rather than below and helping ensure steady, well-funded markets for farmers’ produce. The result can be a sustainable income for farmers.

“As a bank, you can supply stability in a supply chain that is unstable,” Draijer said.

A Viable Choice
After more than two dozen speakers  and several buzzing networking sessions, AGCO’s Africa Summit drew to a close, sending participants back to farms and offices around the world eager to fuel the entrepreneurs who will push Africa’s agriculture to the next level.

“AGCO’s Africa strategy is designed to make staying on the land or, indeed, even returning to the land a viable choice,” said Smith. “The strategy aims to help provide the opportunity to turn a subsistence existence into a career, and gives farmers the opportunity to play a winning game, to be successful and create prosperity for their families and communities.”