Saturday August 15, 2020
Nuradin Osman, a Somali entrepreneur who knows first-hand what famine means, is determined to accelerate a new era in African agriculture, offering profitable agribusiness investment and solutions to address existing gaps in African agriculture and eradicating extreme poverty across the continent. He spoke to African Business about his new ventures
How can a breakthrough in African agriculture change African food systems, address hunger and malnutrition and change the livelihoods of many Africans living below the poverty line?
This is what Nuradin Osman asks himself as he continues his mission to bring about food security and profitable agribusiness development in Africa.
Food security and agribusiness to help create an inclusive economic model of growth has always been at the centre of Nuradin’s life. Before the age of 16, he had twice experienced famines, first as a three-year-old boy living with his mother in a small village in Somalia, and later as a teenager living in Mogadishu during the civil war in Somalia in the early 90s. These tragic events led to an unforgettable experience of what chronic hunger and famine means for people.He left Somalia to go and live in the Netherlands and went on to gain experience and skills in global agriculture, best farming practices and innovations for developing high yielding crops and livestock production. With extensive experience in the corporate world for agricultural equipment manufacturer AGCO, he lived and worked in different countries across the globe such as US, Brazil, Switzerland and across the continent of Africa.
Over 30 years of experience – working on global agriculture, innovations, businesses and implementing agricultural projects in Africa and across the globe – has given him a full understanding of the African agricultural landscape from the political to the social as well as the business environment that the agricultural sector has to contend with.
A new era for African agriculture
Back in the Netherlands, Osman set up Grosso Foods B.V. last year, an agribusiness investment company dedicated to promoting profitable investment in African agriculture while accelerating agribusiness growth across different value chains.
“The disruptions in food systems due to the Covid-19 pandemic, re-affirm a new transformation agenda and desire to promote profitable agribusiness in Africa for investors, farmers, government and for the continent.,” says Osman.
Grosso Foods B.V., he says, will focus on resilience in food production; mechanisation, technology, and innovations for agribusiness; optimisation of value-chains and value addition; skills and capacity development; integrated agricultural trade and market access; boosting competitiveness in the livestock sector; boosting irrigation for high-yielding crops; setting up storage and processing facilities and other key areas of agriculture.
His first two projects, he tells us, will be on livestock: a pork processing unit in Uganda and beef production in Tanzania. In Uganda, he has an exclusive contract to buy pork from a pig farm that his production line will process at a rate of 2-3 tonnes per day. He plans to then replicate this model with fish, using the existing supply chain.
His firm is also specialised in project design, implementation and managing and assisting in raising finance from investors for profitable agribusiness investment in Africa. For example, there is an ongoing advisory and project management service for a Canadian company looking to grow cannabis for medicinal use out of Lesotho.
A glance at African agriculture
Osman says one major issue is that agricultural land is fragmented. Accounting for over 60% of the world’s arable land, with billions in investment potential, Africa has resources capable of feeding its population and the world, but slow progress has been made due to issues such as low yields, low mechanisation level, post-harvest losses, finance, dependency on rain-fed agriculture and others. For example, he explains, we generally have two tomato harvests a year on the continent as opposed to six a year in the Netherlands.
Post-harvest loss is a big challenge in Africa as it reduces smallholders’ income by nearly 15%. “Perished food products are often thrown away, such as tomatoes which could be transformed into animal feed,” he says. “Likewise, manure from livestock can then be used for farming purposes, taking a circular economy approach.”
As regards agricultural mechanisation in Africa, he comments that most agricultural operations are carried out using light hand-held tools and equipment. In Nigeria for instance, the National Centre for Agricultural Mechanisation (NCAM) has estimated that only 3% of agricultural work is done with engine-powered technology, while hand tools account for 90% and 7% is performed using animal power.
Agriculture he argues, is disjointed and as a result, it is far from optimised, which calls for an integrated approach that is also based on price stability and an enabling policy environment.
Creating integrated value chains
Osman cites some international companies as his benchmarks. These include: CP Foods, a vertically integrated Thailand-based agro-industrial and food business; Tyson Foods, the largest beef exporter in the US; and Amazon, which has shown great innovation when it comes to mastering the value chain and getting goods to the end user.
However, he says that to function effectively within the African agriculture market, “it is crucial to understand the local markets in which you operate.”
To optimise integrated agricultural value chains for Africa, it is important to help Africa reduce its food importation bill.
“Africa spends $40bn annually importing food. Across the continent, food takes the biggest percentage of monthly income for most Africans,” he says. “Yet a deep analysis of the whole value chain reflects that most food production, distribution, processing outlets and many other chains are not owned by Africans.”
Value chains drive profitability. This is why a country like the Netherlands ranks as the biggest exporter of onions, animal feed and fish feed. Osman says that one way to efficiently benefit from agriculture is to effectively control its value chain from farm to fork, a concept he calls “the last mile or uberisation of food”.
One limiting factor to an integrated value chains approach especially in Africa is the issue of scale and price control. “Without scale and price regulation it will always be cheaper to buy foods off the international markets,” he says. “Although, several approaches to stabilise prices for farmers, such as voucher schemes, insurance schemes and others, can be adopted.”
He says that policy plays an important role in building a robust agriculture for any country. In Africa, policymakers often fail to look at the problem holistically and, as a result, policy is not effectively formulated or implemented to connect the dots for African agriculture.
Building back better from Covid-19
He says that the pandemic has exposed the necessity of building resilience and profitable food systems. Food is an important factor for survival and thus needs a new approach in order to position African food systems to meet growing demand.
The Covid-19 pandemic has heightened the importance of self-sufficiency and put a lot more focus on local production of foods, he says. Grosso Foods B.V. will create a new era by developing the capacity of local farmers and working with different players to establish modern farms, processing facilities and market linkages as a means to close the weak links in African agriculture.
To boost local production and develop capacity across value chains, he says that his company will roll out a mechanisation strategy for African agriculture to drive rural employment, increase productivity and economic livelihood. Part of this strategy will work on using petrol stations as a point of contract where farmers can rent a tractor to help with farm activities such as soil preparation, planting, weeding and harvesting.
A light for a new era
What drives his passion for Africa is the desire to help the continent achieve food security, drive profitable agribusiness and create values across the agricultural value chains as a holistic approach to break Africa’s cycle of poverty, says Osman.
He says that with one hectare of land, 2-3 tonnes of soybean can be produced, and with just 1 tonne of soybean, it is possible to feed 400 children three meals a day. This is evident from a tested model in Zambia.
Beyond achieving food security and building profitable agribusiness for economic prosperity for the continent, he says that building capacity and skills, facilitating knowledge exchange and implementing projects and programmes that address lack of youth involvement in agriculture, rural development and technology adoption are part of the integral mission for Grosso Foods B.V.