REPORT: Effectiveness of agri-business incubation in emerging markets

REPORT: Effectiveness of agri-business incubation in emerging markets

7 September 2020The Commercial Agriculture for Smallholders and Agribusiness (CASA) Programme held its first Global Agribusiness Investor Summit at this year’s African Green Revolution Forum (AGRF) Virtual Summit. (See: panel discussion 07/09 Effectiveness of Agri-Business Incubation in Emerging Markets).

The CASA programme is implemented by NIRAS ; Swisscontact ; CABI ; TechnoServe ; iied ; Malabo Montpellier and funded by DfID (now replaced by Foreign, Commonwealth & Development Office (FCDO).

At that occasion, three of CASA’s ground-breaking research reports were released:

Effectiveness of agri-business incubation in emerging markets.

Alberto Didoni, Varcando Ltd., 2020©FCDO. 33 pages 

Agri-business incubators play an important role in developing technology and value chains that let small agricultural businesses thrive in developing countries and emerging markets. However, scant evidence has been collected on the effectiveness of such interventions at generating additional investments in the sector. This paper remedies this. 


The research aimed to: 
  1. identify examples of incubators of small and medium enterprises (SME) that have successfully catalysed investment into the agricultural sector over the last 10 years; 
  2. identify and analyse types of agribusiness incubators; and 
  3. provide evidence on the results and impact of the different incubation models and, where applicable and information is available, on gendered impacts.
Recommendations
  1. Donors should keep financing high-risk incubation work
  2. Stronger links with early-stage investors are essential 
  3. Funders should insist on better data capturing 
  4. A stronger focus is needed on value for money
  5. Reducing gender disparity via incubators is possible
  6. The impact of the COVID-19 pandemic

  • Alice Chapple Alice is an economist and a specialist in impact investment and impact assessment. She is CASA’s investment Adviser – Introduction to CASA and CASA’s Investor Summit at AGRF’s Deal Room
  • Alberto Didoni, Alberto is the founder and Managing Directorof Varcando Ltd, a consulting firm that provides advisory services to companies and investors on cross-border transactions and investment projects in emerging and frontier economies. – Presentation of research, main findings and recommendations
  • Srinivas Ramanujam, Srinivas is the Chief Executive Officer of Villgro, which is one of India’s pioneering incubators of social enterprises
  • Jonathan Philroy, Jonathan Philroy is a Manager with the Agribusiness & Innovation Platform (AIP) at ICRISAT, Hyderabad.
  • Louise De Klerk, Louise is the Chief Executive Officer and founder of Timbali Technology Incubator. Timbali Technology Incubator in the Mpumalanga region of South Africa seeks to help rural farmers whose livelihood has been undercut by high-volume large farms.
  • Ralph von Kaufmann. Ralph is the co-founder of Hakika Ltd and an associate consultant for African Agribusiness Incubators’ Network (AAIN). Previously, he was responsible for the coordination of the facility for the Universities, Business and Research in Agricultural Innovation (UniBRAIN) initiative which is supporting the establishment of agribusiness incubators in Ghana, Kenya, Mali, Uganda and Zambia.

ICTs for improving investment readiness of small and medium agribusinesses

Alvaro Valverde, September 2020 ©FCDO, 75 pages

This study analyses the factors behind successful deployment of mobile technologies to improve agribusiness productivity and investment readiness. It aims to analyse agricultural value-added services (agri-VAS) that have SME agribusinesses as their main clients, as they are more likely to positively impact the investment readiness of SME agribusinesses than agri-VAS with smallholder farmers as their only clients, which are also the most evaluated type of agri-VAS.


  • Alice Chapple. Alice is an economist and a specialist in impact investment and impact assessment. She is CASA’s investment Adviser – Introduction to CASA and CASA’s Investor Summit at AGRF’s Deal Room
  • Keynote by Richard Teuten, OBE – Head of the Growth and Resilience Department at the Foreign, Commonwealth and Development Office.
  • Alvaro Valverde, CASA – He is currently working for CABI as Private Sector Engagement Manager and as Relationship Manager for DFID’s funded Commercial Agriculture for Smallholders and Agribusiness (CASA) Programme: Presentation of research, main findings and recommendations
  • David Davies, AgUnity. AgUnity is a philanthropic venture applying block chain and smartphone technology to improve the lives of small farmer cooperatives in developing countries
  • Jan Willem van Casteren, Non Executive Director or eProd Solutions Ltd, which offers an ERP (Enterprise Resource Planning) tool for supplier management for SMEs active (e.g. traders and food processors) and member-based organizations (e.g. cooperatives)
  • Prof. Muhammadou Kah, Malabo Montpelier Panel. Vice President of Academic Affairs/Provost & Professor of Information Technology & Computing at American University of Nigeria.

Bridging demand and supply of private investment capital for small and medium

agribusinesses 

T.S. Jayne, Richard Ferguson, Sloans Chimatiro, September 2020 ©FCDO, 56 pages
This study is motivated by an apparent contradiction: suppliers of capital report a lack of investible opportunities in Africa, while demanders of capital cannot find willing partners to provide capital to them. In spite of significant amounts of private capital being available for investment worldwide, institutional and impact investors have found it difficult to mobilise large amounts of private investment for agribusiness opportunities in Africa. 

This study identifies strategies for development and impact-investment actors to bridge the gap between the risk-reward demands (or adjusted risk-returns) of investment capital and the available supply of agri-businesses for investment. 

The study assesses whether what is needed is different forms of capital; greater work to provide the pre-conditions for private investment in agri-food systems; or both of these.The resulting analysis addresses the needs and interests of both investors and investment-support stakeholders.
Proposals and recommendations are grouped into considerations for: 
  1. African governments; 
  2. impact investors; and 
  3. development partners and donor organizations. 

    African food staple value chains are important long-term endeavours that will still require grant financing, blended finance, technical support, and de-risking guarantees if they are to be considered fertile ground for impact investors. Philanthropists and foundations are well suited to lower investment risk by providing grants to early-stage impact enterprises

    Grant-based interventions have to be designed carefully in order to avoid crowding out private sector spending or under-cutting long-term system-wide philanthropic efforts.

    Philanthropy can risk subsidizing businesses that should fail. It is thus best used on sector-level investments and not to artificially create winners. 

Panel discussion:
  • Alice Chapple Alice is an economist and a specialist in impact investment and impact assessment. She is CASA’s investment Adviser – Introduction to CASA and CASA’s Investor Summit at AGRF’s Deal Room
  • Prof. Thomas Jayne. Thom Jayne is University Foundation Professor of Agricultural, Food, and Resource Economics at Michigan State University. He is a Fellow of the Agricultural and Applied Economics Association and a Distinguished Fellow of the African Association of Agricultural Economists. In 2017, he became the Flagship Co-Leader of the CGIAR Policies, Institutions and Markets research program on Economy-wide Factors Affecting Agricultural Growth and Rural Transformation. In 2019,
  • Julia Wakeling, Julia oversees the management of environmental, social and governance (ESG) risks, and the monitoring and reporting of the impact of Silverstreet Capital’s investments. SilverStreet Capital is a UK based investment advisor managing African agricultural funds.
  • Timothy Strong. Tim is the Head of Agriculture Finance at Opportunity International. Opportunity International provides microfinance loans, savings, insurance and training to over 14.3 million people who are working their way out of poverty in the developing world.

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