Exploit Agro-processing industry opportunities

farmers there is need to buttress this resurgence by making use of the indigenisation and empowerment programme to initiate investments in agro-processing industries.
Agro-processing industry refers to the subset of manufacturing that process raw materials and intermediate products derived from the agricultural sector.
This can be done for conservation and handling of agricultural produce to make it usable as food, feed, fibre, fuel or industrial raw materials.
The Zimbabwe Investment Authority has realised the opportunity in agro-processing and has placed agro-processing/value addition as a project seeking further investment and strategic partnerships.
This is particularly true for Zimbabwe where the agriculture sector is the mainstay of the economy contributing 15.5 percent of the country’s Gross Domestic Product.
The potential for agro-industrial development in the developing countries, like Zimbabwe, is largely linked to the relative abundance of agricultural raw materials and low-cost labour.
Hence, the agro-processing industry can be regarded as the sunrise sector of the Zimbabwean economy in view of its large potential for growth and likely socio economic impact specifically on employment and income generation.
The role of agriculture in the process of development has been reappraised and revalued from the point of view of its contribution to industrialisation and its importance for harmonious development and political and economic stability.
Agro-processing industries also facilitate access to food and other necessities to large groups of population.
They are, therefore, essential elements in the attainment of food security goals.
On the other hand, agriculture itself has become a form of industry, as technology, vertical integration, marketing and consumer preferences have evolved along lines that closely follow the profile of comparable industrial sectors, often of notable complexity and richness of variety and scope.
Agro-processing industry can be classified into food and non-food categories, or upstream and downstream industries. Upstream industries are engaged in the initial processing of agricultural commodities. Examples are rice and flour milling, leather tanning, cotton ginning, oil pressing, saw milling and fish canning.
Downstream industries undertake further manufacturing operations on intermediate products that are made from agricultural materials. Examples are bread, biscuits and noodles, textile spinning and weaving; paper production; clothing and footwear manufacturing; and rubber manufactures.
The development of agro-industries also has many beneficial feedback effects on agriculture itself. The most direct one is the stimulus it provides for increased agricultural production through market expansion.
The establishment of processing facilities is itself an essential first step towards stimulating both consumer demand for the processed product and an adequate supply of the raw material.
The provision of transport, power and other infrastructural facilities required for agro-industries also benefits agricultural production.
While agro-processing industry can take our agriculture sector to another level because of its high degree of interdependence with forward and backward activities, the industry can play a very important role in accelerating economic activity in other sectors.
For example agro-processing industries can be a major source of employment and income.
They can therefore contribute to the relief of the rural underemployment which is characteristic of developing countries like Zimbabwe.
The development of agro-industries further provides the stimulus for increased provision of transport, power and other infrastructural facilities that also benefit other areas of development in rural Zimbabwe.
The Zimbabwean agriculture sector is well positioned for the development of either category.
The country has abundant agricultural raw materials ranging from oranges in Mazowe, tomatoes and vegetables in Mutoko, fish in Kariba, sugarcane in Triangle and mangoes and guavas in Mudzi.
In Gokwe there is cotton and tobacco throughout the country that is currently being transported to auction floors mostly for export to Western countries for processing.
To reduce reliance on the West and to be able to open new markets, for example for market gardening products in the desert areas of the Middle East, there is need to use the indigenisation programme to empower local farmers.
This can be done by financing their entry into agro-processing ventures and seeking strategic partners for them from experienced countries like India and China among others.
While the Indigenisation and Economic Empowerment Act list agro-processing as one of the key areas exclusively reserved for indigenous Zimbabweans, I believe for lack of technology, expertise and financial resources, this important sector should be opened up for investment by foreign companies who can come in as minority partners.
I suggest the formation of agro-processing investment vehicles fronted by organisations like the Agriculture and Rural Development Authority (ARDA) and the Rural Electrification Agency (REA).
Indigenous farmers in a particular area should constitute the 51 percent indigenous component while agro-processing technology conscious foreigners take the remaining 49 percent as strategic partners.
Through these vehicles indigenous farmers can guarantee the provision of raw materials, thousands of unemployed local people can provide low-cost labour while the strategic partners can finance the acquisition of onion drying machines, tomato crushing and canning machines, and various other agro-processing machines.
REA can facilitate the electrification of rural or farm based agro-processing centres while ARDA will provide local expertise and the technical know-how.
Once these investment structures are put in place the Government can proceed to legislate and enforce compliance mechanisms where consumers and traders are provided the necessary assurances that build the type of confidence required for food products to be acceptable for both local and international markets.
l The writer is CEO of ZvavaBudya Empowerment (Pvt) Ltd t/a ZV Empowerment He can be contacted on [email protected] or on 077 7 096 334.