December 7, 2022

Umuaka Times

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Issues and Challenges on Agribusiness in Umuaka (2).

4 min read

By Mazi Chinedu Michael Igbokwuwe. (CHINYEREUGO 1)

Continued from last week.

(3)   Specialization and Output from Agriculture:

Specialization in agribusiness provides the use of machinery to complement human efforts which make it possible for the increased use of capital, better organization and more productive technologies. These activities combine to raise the productivity of labour, land and capital. In this process, production for self-sufficiency yield place dependence on the market. The more we cater for external markets (agribusiness), the less the proportion of total output that originates from farming due to the use of high productivity inputs obtained from farm machinery, chemicals, credits, transportations and extension services. Hence, the development of agribusiness sector will enhance this aspiration that should be able to satisfy and sustain domestic demands of products for human consumption and local industries in Umuaka.

(4)   Agribusiness Markets:

Limited geographical location with few buyers and sellers under an equally limited central political organization give rise to poor agricultural existence which agitates a change by credit institutions to advance loans, transport to move the goods and services from producers to consumers, emergence of insurance to safe-guard transactions, expansion of the market and the operation of commodity exchange system. This entails an evolutionary process that grows out of the marketing needs to reduce price risk inherent in agricultural production. This market which is a product of agribusiness growth and development is elusive in Umuaka due to poor agricultural development. Thus, the major problem governing our present approach is that the risk of price fluctuation is handled within the marketing channels. Therefore, its solution implies the capability for shifting the risk in price fluctuation outside the marketing channels. Reinforcing trade and land tenure policies, investing in agricultural educational and research institutions, easing government engagement in fertilizer availability, seed availability and input supply, distribution, storage, packaging and financing, providing incentives for credit institutions, ensuring strong and effective extension support services, establishing agribusiness development programmes at the state and local government levels, providing adequate infrastructures especially feeder road networks, consistent and affordable electricity are all ingredients to boost and improve agribusiness growth and development in Umuaka.

(5)   Organizational Structure in Agribusiness:

The transformation from peasant to agribusiness provide some characteristics which implies that many small-scale farms are producing less than 10% of marketed food and fibre products; farm suppliers and processors-distributors class shows a tendency to horizontal and vertical integration and shift of manpower from farm to off-farm jobs which are the outgrowth of research advances and technological development. Parallel to this is the increased productivity of workers on the farm and the need for more workers in the supplier and processor-distributor aggregates.

(6) Drawbacks of Agribusiness:

Certain drawbacks shows imbalances and maladjustment resulting from uneven progress in the growth and development from agriculture to agribusiness, for example, glutted markets, unstable process, uneconomic farm units, poor managerial training and lack of broadly conceived agribusiness policy. The problem is the cost-price squeeze which influences the income of farm families, the rate of capital formation and the degree of progress of the farming aggregates. This results to the farmer’s inadequate management ability to relate output and capital accumulation to market demand. Because of the large number of entrepreneurs in the farming aggregate, management cannot easily relate output to market demand at a price comparable to national economic levels. Because of small amount of agro-based industries, there is an arrangement of output cuts till the balance of demand and supply is again achieved. Therefore, the management of agribusiness is diversified and so cannot balance production, processing and consumption at short term notice. No overall plan for agribusiness  irrespective of farm production and it’s processing being related to weather and climatic conditions and to the life cycle of animals despite the influence of technology. The three aggregate management decisions are isolated within the separate respective aggregates. The supplier, cooperative, processor-distributor make internal decisions without relating them to the total economy of Umuaka. Government efforts to promote agriculture have been better but their best is yet to be achieved.

Conclusion:

Umuaka farmers had lived and worked as subsistence farmers. At the subsistence level, they have shrinking and depleted farms, an aging population with limited interest from the youth to engage in agriculture hence, there is an urgent need to explore the potential profitability of every agricultural investment which will boost ultimatum finance/income in the short, medium and long-term (agribusiness). A good organized agribusiness policy shows that the low-income farmers will have to move out into part-time or full-time productive work in off-farm operations. Other factors than price incentive must stimulate farmers to greater efficiency and production for example, research and agricultural extension. Most research in agribusiness should focus on production and processing than marketing in Umuaka.

concluded.

Mazi Chinedu Michael Igbokwuwe. (CHINYEREUGO 1), a youthful Akalite is an Imo University trained agro scientist.

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