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Women entrepreneurs: key factors to success in agribusiness

Dossier: Agribusiness leaders

Agribusiness leaders: The women driving agricultural innovation

Women around the world are overcoming barriers to establish profitable businesses in the agricultural sector. However, strong links to high-value markets, access to necessary finance and resources, and sufficient business training are essential requirements for women business leaders to break through the ‘glass ceiling’ and expand their agribusinesses to compete on an international scale.

In Africa, 62% of economically active women work in agriculture as producers, traders and processors. Despite their high representation in the sector, rural women are still worse off in terms of productivity and earnings than men. At a session on Investing in women entrepreneurs at the European Development Days (EDD) in June 2017, CTA director Michael Hailu highlighted, “When you look at the entire value chain, women have a much bigger role in production, which is not very lucrative, but as you go further along the value chain they have much less of a role because they don’t have access to the resources that are needed, in terms of capital or land, for example.”

This limited access to resources contributes to a consistent wage gap between rural men and women in Africa, which ranges from 15-60% depending on the country. For instance, if women were given the same access to productive resources, such as fertiliser, machinery and (market or weather) information as men, studies show that they could increase farm yields by 20-30%. The EDD session went on to discuss how to address this disparity between men and women in the agricultural sector and debate the best practices to support women’s entrepreneurship in agribusiness, including the importance of giving them an equal voice and representation in decision-making at policy level.

Supporting women’s empowerment

The economic empowerment of women in agriculture, through their increased participation in commercial, value-added agribusinesses, is essential to transform the productivity and prosperity of the sector as a whole. “The future of our continent depends on it,” stated Dr Jemimah Njuki, senior program officer at the International Development Research Centre (IDRC), at the recent African Green Revolution Forum (AGRF) in Abidjan, Côte d'Ivoire. “In sub-Saharan Africa, gender inequality costs us an estimated US$95 billion [€79.47 billion] a year,” she added.

In spite of the current challenges, there are approximately 187 million women-owned businesses worldwide, including many in the agricultural sector in ACP regions. Spore’s value chain article, Beautiful benefits: Natural beauty the Pacific way, and Field Report, Leading lights for Caribbean agribusiness, provide some inspiring examples of successful women-led agribusinesses in these regions. The success of such businesses not only relies on resilient leadership of women entrepreneurs, but is also dependent on strong market linkages and sufficient access to resources and finance, as well as opportunities for capacity building and mentorship. Njuki argues that a concerted and coordinated effort needs to be made to increase women’s opportunities in all these areas, citing IDRC’s experience that 93% of young women who receive business support in addition to funding succeed in their ventures, compared to the 57% success rate of those who receive financial aid alone.

Access to profitable markets

Analysis of key barriers to the success of women’s agribusinesses has revealed the limited opportunities for women to access high-value markets and connect with large-scale buyers. Dr Peter Hazell, technical advisor for the African Agriculture Status Report 2017, stressed the importance of facilitating such market access at the report launch during the 2017 AGRF: “Connecting small farmers to the value chains feeding into geographically growing urban markets is the key for commercialising them. You can make a lot of farmers rich and prosperous if you can get them into those value chains.” He believes this task can be bridged by actively engaging the private sector.

It is vital that women embrace the potential of technology to make their businesses more competitive and relevant

To support women-owned businesses to access global markets and strengthen linkages between private sector companies, WEConnect International identifies and registers women-led businesses on its online database (eNetwork) of local and multinational corporate buyers. To qualify companies must be based outside the United States and at least 51% owned and managed by women. After an individual consultation with a WEConnect International assessor, businesses are certified as a Women’s Business Enterprise (WBE) and receive customised feedback on their readiness to access new markets and connect with global buyers. Certified WBEs are offered training on how to leverage their certification and interact with large multinationals, as well as the opportunity to connect with and learn from other WBEs. Between 2009 and 2015, WEConnect International held 143 market access trainings, attended by 6,643 women business leaders, and facilitated 388 connections between WBEs and corporate companies.

Technology: opening new doors

Seeking to harness web and mobile technology to broaden women’s access to agricultural markets, Awa Caba co-founded Sooretul, an online marketplace for Senegalese women to promote and sell their agricultural goods to the country’s 7 million digitally-connected consumers. Customers can find and purchase the products they are looking for online and have them delivered to their chosen location. By providing an online platform for agricultural products, Sooretul bypasses the difficulties women producers have in travelling long distances to markets to sell their products.

It is vital that women embrace the potential of technology to make their businesses more competitive and relevant, and CTA is well aware of the need to support young women, as well as men, to develop ICT innovations that help strengthen women’s capacities in agriculture. As the winner of CTA’s Pitch AgriHack 2016 advanced-stage category, which aims to support young entrepreneurs to scale-up their ICT-enabled agribusinesses, Sooretul received a €15,000 grant, as well as networking and mentorship support from Prohaus VC – a global, women-led venture capital platform for tech start-ups.

In addition to facilitating market access, technology can also improve rural women’s access to finance to allow them to build more profitable businesses. CTA identified this potential in Rose Funja’s innovation, which uses GIS technology to provide farm data for financial services to assess farmers’ creditworthiness. This service is particularly valuable for women farmers, who often face difficulties acquiring loans due to limited collateral and land ownership rights. Funja’s Tanzanian-based company, AgrInfo won €4,000 as runner-up in CTA’s 2013 Eastern Africa AgriHack Talent Programme, during which she received technical advice and support to develop her idea into an investible business model. Explaining the centrality of this support to AgrInfo’s success, Funja stated, "CTA’s help and the training we received took our idea to a whole new set of levels… That's when everything started rolling out, and it's been a roller coaster ever since."

Expanding capacities of women entrepreneurs

Capacity building and mentorship support are often key to the commercial success of new agribusinesses. Initiatives specifically targeting gender responsive businesses – such as the African Women Agribusiness Network in East Africa, which provides business support and needs-based services to women-led enterprises in agricultural value chains, and the Gender in Agribusiness Investments for Africa (GAIA) fellowship – are vital in the promotion of gender equality in the agricultural sector. In 2016, in partnership with the African Development Bank and UN Women, African Women in Agricultural Research and Development piloted GAIA in East Africa, sending out a call for innovative agribusinesses with high profit-earning potential, which demonstrated clear benefits for groups often marginalised in agriculture. Over 100 applicants from Ethiopia, Kenya, Tanzania and Uganda were narrowed down to 31 quarter-finalists who participated in GAIA’s 2-day Bootcamp, where they learnt how to improve their pitches to investors, evaluated each other’s ideas and innovations, and had the opportunity to network with potential partners.

Sarah Mubiru, managing director of Uganda-based Aroma Honey Toffee Ltd, described how GAIA has helped her company to create a value-added honey product, which it has been able to sell at a premium price (a packet of 12 toffees costs €4.64) to increase profit margins and pay its women producers more. She explains that, as a result, “We are also looking forward to being able to build the capacity of these women beekeeper groups, in terms of the technical skills in their honey production businesses and also their business skills.” With sufficient support and resources, agribusinesses can thus extend efforts to empower other women in the agricultural sector.

Inter-continental collaboration

By capitalising on the knowledge and experience of its network of women entrepreneurs from Canada and 15 African countries, the Canadian and African Business Women’s Alliance facilitates the access of African women-led businesses to training and resource information. Such inter-continental collaboration offers strong potential to help women-led agribusinesses scale-up their operations, as can be seen from the experience of Lucy Karuga, managing director of Eldoville Dairies in Kenya. Under the Danish government’s Danida Private Sector Development Program, Eldoville Dairies has been able to utilise dairy processing and waste management technologies to improve efficiency and productivity with close support from Danish consultants.

Inter-continental collaboration offers strong potential to help women-led agribusinesses scale-up their operations

Karuga’s staff have also received training from world-class cheese makers in France and Kenya, enabling them to diversify production to seven different types of cheese, in addition to a range of full- and low-fat yoghurts, butter, as well as jam, marmalade and honey. The capacity-building support from Danida has facilitated the expansion of the company’s operations resulting in the establishment of a second branch in Mombasa to supply the coastal tourist circuit and help to broaden supply to the country’s leading hotels, hospitals, airline caterers and supermarkets, as well as to Rwanda and Uganda.

Engaging the private sector

While business training and mentorship are key to commercial success, agribusinesses cannot expand if they do not have access to the necessary resources, including labour, equipment and finance. Dawn Hines, co-founder of Aventura Investment Partners, realised that difficulties in accessing resources were holding many women back from running and growing their own agribusinesses when she first visited Senegal. To address the issue, Aventura invests in input service providers in agricultural value chains to increase the affordability and accessibility of such services for smallholder farmers wishing to increase their yields and income. In an interview for the Overseas Private Investment Corporation, she explained, “Women manage 56% of rice production in Senegal... Aventura offers ploughing and harvesting services on a per-hectare basis, providing these women with financially viable access to machinery services that increase yields and improve paddy rice quality.”

For Hines, the key to economic growth and empowerment of women is investment from the private sector. As Malian business leader, Halatou Dem, stated in her interview with Spore, “Financing is a major handicap for most of these women, but it is impossible to industrialise and develop with sparse funds.” To increase financial investment, it is crucial to engage banks in efforts to reduce the current financial exclusion of 2.5 billion people in developing countries. Plan International and CARE International capitalised on the potential of collaborating with a commercial bank through their Banking on Change partnership with Barclays. Between 2009 and 2015, the partnership successfully extended basic financial access to over 758,000 people in Africa and India and, since 2013, more than 4,400 informal savings groups have been linked to formal financial institutions. Spore’s Nigerian Field Report, Inclusive cassava business grows from strength to strength, offers an inspiring example of the widespread economic benefits that can result from fostering such links between banks and women-led agribusiness.

Beninese businesswoman’s thirst for success

Beninese entrepreneur, Bertille Guedegbe Marcos, has successfully realised her childhood dream to become an agribusiness leader with the growth of her internationally competitive pineapple business, Les Fruits Tillou. The combination of strong and ambitious leadership, a profitable business model that responds to market demand, and availability of the necessary financial resources has allowed her to achieve this success. In 2000, with less than €1,000 of her own savings, Marcos rented an 11 ha plot in a small village in the municipality of Allada, Benin. She began by cultivating maize as it is less expensive to plant and maintain than pineapple and it has a shorter production cycle. After 3 months she had earned enough revenue from the maize to start her first pineapple plantation, and within 3 years she was producing 2 t of pineapple a week.

In 2009, Marcos began processing pineapple juice, as she knew that there was greater demand for juice both within Benin and internationally, and she would be able to fetch a higher price compared to fresh pineapples. The commercial success of this venture enabled her to acquire a pineapple crusher and expand production from 24 to 2,000 bottles a day, which she sold in local markets and exported throughout the rest of West Africa. Despite this growth in production capacity, she realised that, “The daily demand for juice is strong and ever increasing and it exceeded the real production capacity of the factory.”

Consequently, in 2015, she sought financial assistance from the Société Générale de Banques au Bénin to build a modern juice processing unit. The new unit, which was built in 2016, has the capacity to process 24 t of pineapple a day, allowing Marcos to commit to supplying 1.5 million litres of quality tested organic pineapple juice to businesses in Marmande, France. Les Tillou Fruits now exports 50-60 t of fresh pineapples each week to France and West Africa, relying on 1,600 local producers and 60 factory employees. Looking back at the long journey to reach this point, which began with the completion of her diploma in agronomy in 1986, she declares that, "The existence of the market, the raw material, the human resources and the determination to succeed, has enabled us to achieve these objectives".