Grain council inks deal to increase yield and income

Two regional firms have signed an agreement that aims to improve food security by boosting efficiency in production.

EFKen Leasing Limited’s deal with Eastern Africa Grain Council (EAGC) will see them provide lease finance trade facilitation services to micro, small and medium enterprises (MSMEs).

EFKen Leasing managing director Ms Judy Wanjiku said the deal was also aimed at creating jobs and alleviating poverty.

“We are pleased to partner with EAGC to support mechanisation in the agricultural value chain by enabling the MSMEs to access financing through our flexible terms and accommodating solutions that ease agricultural processes and improve output in terms of volume and value,” she said.

She added: “We are interested in the economic well-being of our clients. Supporting them to mechanise their operations results in improved incomes, job creation, poverty alleviation and food security for the economy as a whole. These are our key objectives as a company.” 

EAGC executive director Mr Gerald Masila noted that the partnership would provide access to agricultural financing which grain value chain actors struggle with a few service providers dare to venture into. He said the partnership would complement EAGC’s role in structuring trading systems in the region. 

Mr Masila noted that EAGC will sensitise its members among them millers, warehouse operators and farmers including Grain Trade Business Hubs (G-Hubs) to adopt mechanisation for lease financing and trade facilitation.

He said the arrangement would promote mechanisation in the value chain for reduced costs, improved efficiency, better quality standards, access to better markets and higher income. 

“The partnership which will be implemented through the G-hub model (Grain Trade Business Hubs) will seal the trade linkage gap of input services which will improve output volumes and quantity, allowing smallholder farmers to aggregate their produce for collective sale to bulk volume buyers among them millers and warehouse operators,” he said.

Mr Masila said the MOU illustrated the potential that lies in agricultural financing even the existing huge demand in the market to access similar financial services.

He said the deal will see farmers and other players in the value chain consequently adopting these services to improve agricultural production with efficiency and low costs.

In a statement, Ms Wanjiku and Mr Masila noted that agricultural mechanization has the potential to transform Africa’s agriculture by helping farmers to intensify their businesses.

However, they noted that the mechanisation levels remained low across the continent.

Africa Renewal noted that in 2019, the continent had an average of about one to two tractors per square kilometre in Rwanda to about 43 tractors per square kilometre in South Africa compared to 128 tractors in India and 116 tractors in Brazil.

This was attributed to the fact that mechanisation of agriculture is capital intensive which required special financial products such as long-term capital, credits or leasing arrangements.