AGRI-FARM INSTITUTE

KEVAN ARNOLD (English First) - NEW ZEALAND

DANNY CROWLEY (English First) - NEW ZEALAND
BOITUMELO MASILELA (English Second) - SOUTH AFRICA
ALAGBE CHRISTY IYANUOLUWA (English First) - NIGERIA
DONGYU MO (English Second) - AUSTRALIA
NESLISAH TURKMENOGLU (English Second) - NETHERLANDS
QUENTIN VAN NIEUWENHUIZEN (English Second) - NETHERLANDS
KHADIJA AHMED HUSSEIN AL HUSAINI (English Second)- MALAYSIA

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Table of Contents
EXECUTIVE SUMMARY .............................................................................................. 2

KEY PROBLEM: AGRICULTURE IN ZIMBABWE.......................................................... 2-3

BUSINESS BACKGROUND........................................................................................... 3
OVERVIEW AND STRATEGY .................................................................................... 3
OBJECTIVES ........................................................................................................... 4

PRODUCTS AND SERVICES ...................................................................................... 4-5

Marketing Strategies ................................................................................................. 5

Financial Analysis ...................................................................................................... 6

References ................................................................................................................ 7

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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Agriculture is considered one of the most important sectors for the African economy as it provides food
as well as raw materials to non-agricultural economies. It also provides employment opportunities and
remains a vital source of livelihood for rural households in underdeveloped as well as developing
countries

Through agricultural activities and practices, African countries could potentially meet their food needs
and economic needs by diversifying their production as well as trading internationally. According to
AGRA (2017), the African continent, if intensively farmed with the aim of achieving maximum
agricultural production, it could produce an additional 100 million tons of grain yearly as it still has the
resource base.

In most Sub-Saharan African countries, household farmers are largely subsistence farmers, who
predominantly grow and produce just enough crops for their families to eat and survive. One such
country is Zimbabwe.

KEY PROBLEM: AGRICULTURE IN ZIMBABWE

Maiyaki (2010), indicated that most of the population of Zimbabwe is directly or indirectly dependent
on land for livelihood, that approximately 71 % of their female population gain employment as
communal area farmers. The unemployment rate is the proportion of the economically active
population that is unemployed and actively looking for employment. In 1990, Zimbabwe embarked on
a program of Economic Reforms popularly known as Economic Structural Adjustment Program (ESAP)
and 1991-1992 saw one of the worst droughts.

With close to 70% of the population living in the rural areas (CSO 1992) and dependent on agriculture
for their livelihood, this constituted a major disaster. One result of these events was increased
migration to the urban areas by people in search of employment. A further drought in 1995-1996
compounded the effect. Worsening economic conditions plus ever-increasing corruption and crime
have been the norm since 1995. Unemployment is currently soaring, and the current rate stands at
70%. This has been from retrenchments as well as business closures to name a few.

According to the EMCOZ survey, approximately 6000 jobs in the different sectors of the economy were
lost by the end of 2001. The figure for 2002 was much higher because of the worsening business

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environment due to the government’s failure to create opportunities to stimulate industrial expansion.
To date, it is clear that all farmers in Zimbabwe have the following needs: Access to affordable finance,
an end to isolation from international financial markets, access to collateral value, a reduced country
risk, Farm investment security and transferability, wealth creation opportunities, new technology, skills
and other resources, greater access to all commodity markets, government policies which support
viability and many others.

BUSINESS BACKGROUND
OVERVIEW AND STRATEGY

The implementation of such an incubation service is aimed at assisting subsistence farmers to generate
agricultural produce as well as break into new and more emerged markets. It is essential that after the
24month incubation period, the farmers enrolled in the incubation program have been developed to
such a high level that they are and will be able to generate income on their own, maintain their
networks, be able to train and upskill others in the same field as well as create employment from their
agricultural business ventures (Nurcombe-Thorne,2017).
Another goal of the program is not to merely enable the participants to continue farming on their own
land, but to also expand their operations and trade with neighboring as well as international countries.

The program directors will make use of both theoretical and practical skills, educating participants on
the importance of sustainable farming; that sustainable farming involves and is associated to concepts
such as but not limited to soil conservation, plant health, pollution, biodiversity, crop rotation, water
management, job creation, marketing skills, interpersonal and negotiating skills, financial planning skills
as well as farming for profits.

Our future plans include; potential partnership with the Ministry of Lands, Agriculture and Rural
Resettlement in Zimbabwe to enable us acquire pieces of land within various districts of the country
on which to carry out the practical incubating processes. In the interests of rural farmers and taking
into consideration that not all participants will be in good financial standing to get themselves to more
equipped towns for training purposes, through a second partnership between The Department of
Transport, as well as the Ministry of Lands, Agriculture and Rural Resettlement, we would acquire
mobile training vehicles which will be responsible for bringing rural farmers to the incubating centers.

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OBJECTIVES

The objectives of AgriFarm will be to train rural subsistence farmers, both theoretically and practically
on the importance of sustainable farming as well as how to farm in a sustainable manner in order to
make them competent farmers as well as enable them to expand their operations and trade with
neighboring as well as international countries. Our theoretical incubating program will equip the
farmers with the necessary skills and knowledge required in order to produce high quality crops as well
as how to run a profitable business. We are also confident that the practical aspect of this incubating
program will empower the subsistence farmers to such a high degree that they will be able to maintain
the quality of their crops outside of the incubating period, look after the environment as well as
maintain new and existing networks.

AgriFarm has a customized program which is designed to assist participants to expand on their
agricultural activities by transforming them into sustainable business ventures. The AgriFarm program
directors are well informed agricultural experts who are determined to provide guidance as well as
empower the participants. Most importantly, at the end of the 24-month incubating period,
participants will be provided with seeds together with farming implements which they will be able to
use for their own business ventures to aid them with transforming into becoming commercial farmers.
Ade
PRODUCTS AND SERVICES

AgriFarm will generate revenue through the following products and services:

1. Annual or monthly AGRO_GRESS Subscription

Analysts have shown that by 2025 half of Africa’s population will have internet access with about
360 million smartphones on the continent. In addition, based on their estimation, internet
technology could increase annual agricultural productivity in Africa by $3 billion per annum. Our
AGRO_GRESS subscription service provides farmers with up-to-date and full climate data. Farmers
that are subscribed to it, receive specific information on growth, soil and other general questions
through SMS. The app is supposed to help farmers grow better crops by employing environmental
friendly techniques, learn ways to increase productivity, ensure food security and protect their
crops during bad weather. This is designed to run both online (as mobile app or website) and offline
(via text message and phone calls).

2. Selling of fertilizers, good quality seeds and some other farming equipment at subsidized rate.

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3. Renting of farming equipment needed by the farmers at subsidized rate.

4. Sustainable agriculture training.

Note: all are at a very reduced and affordable price.

Marketing Strategies

Seen as Zimbabwe has a bimodal farming system, with more than a million smallholder farmers and
with around five thousand large scale farmers, the smallholder farmer market is a very interesting
marketplace to look at. Even if after the liberalisation of the markets, smallholder farmers saw their
market share grow, they still suffer from a lack of knowledge often leading to their product
maintaining an insufficient quality standard. In fact, most smallholder farmers in Zimbabwe lose a lot
of money to the quality of their products, and thus they need to learn a lot about managing their
crops, from when they mature to when they go to the market and they also need to learn to grade
their communities in order to prevent them being taken advantage of by buyers (Masanganise, 2002).
The Zimbabwean Agricultural Investment Plan (ZAIP) has as an overall program goal to facilitate a
sustainable increase in production (Zimbabwe agriculture investment plan (ZAIP), 2013).
Furthermore, Zimbabwe has just secured USD $242 million from the European Union (EU) and the
Food and Agriculture Organization (FAO) to bolster agriculture (Zimbabwe secures USD $242 million
to bolster agriculture, 2017).

Taking all of this in consideration, the best strategy for the AGRO_GRESS Subscription would be a cost
leadership strategy, meaning focusing on low prices and product availability for the vast Zimbabwean
marketplace. In combination with the Zimbabwean government who could subsidiaries the product, a
payment plan could be realized for the smallholder farmers in order to receive the product, meaning
that the costs will be put to a minimum, potentially attracting up to a million farmers.

Then concerning the selling of fertilizers, the renting of farming equipment and the sustainable
agriculture training, these services/products can be set in a differentiation strategy where the
AgriFarm Institute opts for more quality and thus higher prices in order to target a higher segment in
the Zimbabwean agricultural market. Higher quality products and services in this marketplace are
required to assure a truly sustainable form of farming, which is the goal of the AgriFarm Institute.
These fertilizers, farming equipment and sustainable agriculture trainings can be linked to the initial
product of the AGRO_GRESS Subscription in a way where discounts are given to farmers who are
subscribed to the services, in order to facilitate their growth and make the subscription more
appealing for smallholder farmers seeking sustainable growth.

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To get the AgriFarm Institute Products to reach the marketplace, a collaboration with the
Foundations for Farming and the Crown Financial Ministries could be set up. Their forces combined
with their methodologies will help the small hold farmers to become the first sustainable farmers on
a continent where farming is still emerging as a business. Together they have already collaborated to
420 incentives, and they constitute the best channel to promote our products and services to the
farmers; they also have partners which could help us set up and test the early versions of our
products (Foundations for farming, 2018).

Financial Analysis

The tax rate of Zimbabwe is 11.41% according to Doing Business. The net income will be expected as
$7,179.30 in the end of the second year. After the sixth year of operation, the profit may increase to
$17,995.37. The gross profit needed to breakeven is $21,324.32. As a result, the investment payoff
period will be approximately 9 years.

NB: Capital not shown as income

In the AgriFarm program, capital is not described as the economic assets which can accumulate the
wealth. Instead, capital stands for tractors, greenhouses and hand tools in the organic farming industry.
Furthermore, what we benefit from the natural system is called natural capital. Natural capital can help
promote a sustainable growth and gain profits.

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References

1. Nurcombe-Thorne, S. (2017). SMME incubator for emerging farmers in rural areas. Retrieved
from https://mg.co.za/article/2017-07-03-smme-incubator-for-emerging-farmers-in-
rural-areas

2. AGRA. (2017). Africa Agriculture Status Report: The Business of Smallholder Agriculture in Sub-
Saharan Africa. Nairobi, Kenya: Alliance for a Green Revolution in Africa.

3. Maiyaki, A. A. (2010). Zimbabwe’s agricultural industry. African Journal of Business

Management, 4(19), 4159-4166. Retrieved from
http://www.academicjournals.org/journal/AJBM

4. Department of Trade and Industry. (2014). South Africa Business Incubator

Establishment Handbook. Retrieved from
http://www.governmentpublications.lib.uct.ac.za/news/south-africa-business-
incubator-establishment-handbook

5. Foundations for farming. (2018). foundations for farming. Retrieved from

http://foundationsforfarming.org/new/

6. Masanganise, P. (2002). Marketing agricultural commodities through the Zimbabwe

Agricultural Commodity Exchange. Harare.

7. (2013). ZIMBABWE AGRICULTURE INVESTMENT PLAN (ZAIP). Zimbabwe.

8. Zimbabwe secures USD242 million to bolster agriculture. (2017, july 17). Retrieved from
COMESA: http://www.comesa.int/zimbabwe-secures-usd242-million-to-bolster-
agriculture/

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