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Africa urged to prepare for $1 trillion food marketThursday, September 14, 2017 > 09:49:48
With Africa’s growing food market, the continent stands to earn more than $1 trillion a year by 2030 by substituting imports with high value food made on the continent.
According to a new report by the Alliance for Green Revolution in Africa (AGRA),
That figure would surpass earnings from the continent’s minerals, and would help restart its economic growth.
The report said entrepreneurs and the free market were driving growth from food production to strong demand from an increasing food market.
Launched in Abidjan at the African Green Revolution Forum, the report said agriculture would be the continent’s quiet revolution.
“This will focus on small and medium enterprises (SMEs) and smallholder farmers who will create the high productivity jobs and sustainable economic growth that failed to materialise from mineral deposits and increased urbanisation.
AGRA said despite the fact that 37 per cent of the continent’s population now were living in urban centres, most jobs had been created in lower paid, less productive services rather than in industry.
Smart investments in the food system could change the picture dramatically if planned correctly, according to the report.
“Africa has the latent natural resources, skills, human and land capacity to tip the balance of payments and move from importer to exporter by eating food made in Africa,” said Dr Agnes Kalibata, President of AGRA.
“This report shows us that agriculture involving an inclusive transformation that goes beyond the farm to agribusinesses will be Africa’s surest and fastest path to that new level of prosperity.”
To succeed, AGRA suggested that the continent’s “agricultural revolution neededs to be very different to those seen in the rest of world”.
“It requires an inclusive approach that links millions of small farms to agribusinesses, creating extended food supply chains and employment opportunities for millions including those that will transition from farming.”
This model is different from the one often seen elsewhere in the world of moving to large scale commercial farming and food processing, which employs relatively few people and requires high levels of capital, the report said.
It highlighted the opportunity to feed the continent with food made in Africa to meet the growing demand from affluent, fast growing urban populations looking for high value processed and pre-cooked foods.
The demand is currently being met by huge imports but the report notes that the continent’s existing smallholder farmers could take over this massive market.
Africa currently spends $35 billion a year on imported food, and the figure is projected to rise to $110 billion by 2025.
AGRA said that that was why Africa should improve the productivity and global competitiveness of its agribusiness and agriculture sectors.
The report acknowledged that the private sector held the key to the transformation of the food system.
“Impressive value addition and employment is being created by SMEs along value chains in the form of increased agricultural trade, farm servicing, agro processing, urban retailing and food services,” said the technical director of the report, Peter Hazell of the Washington DC-based International Food Policy Research Institute (IFPRI).
“Large agribusinesses like seed companies, agro processors and supermarkets are also playing an increasing role in the food value chain in many regions.”
The report said private investment should be backed by governments to drive the agrifood business.
They need to create an enabling business environment and meet targets to invest 10 per cent of GDP in agriculture, as agreed in 2003 by the African Union (AU) as part of the Comprehensive Africa Agriculture Development Programme (CAADP).
The report urged governments to “nurture a globally competitive food production sector” by increasing investment in infrastructure in secondary cities and towns and improving the reliability of energy and water supplies.
It calls on governments to build more wholesale market spaces, promote open regional trade, identify and invest in first mover crops and introduce stricter standards for food safety and quality.
The authors said government should encourage new private public partnerships for more innovative financing and insurance provision to strengthen farmers and their households. They added that while global agricultural insurance accounted for about $2 billion business, Africa accounted for less than two per cent of the market.
The report urged governments to back digital technology such as satellite tracking and big data to bolster smarter financing and food security polices, especially in the face of climate change.
“Smart support is just as important as scale of support for Africa’s highly diverse group of famers and agribusinesses,” said Dr. Kalibata.
“To step up their game, businesses need assistance tailored to distinct groups of viable small farms and agribusinesses at different development stages, rather than blanket support for all.” The authors concluded that although progress was being made, Africa needed to pick up the pace if it was to feed its people with food made on the continent while exporting surpluses.
“Hopefully the prize of a rapidly growing and valuable market for food made in Africa will spark widespread political will and attract the best business talent to build a high value food sector,” said Mr. Hazell.
“This private public partnership will be essential to provide the trinity of high productivity employment, sustainable economic growth and food made in Africa for Africa and the world.”