Sustainable Agriculture

Why agriculture and agribusiness can change Africa’s story

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Plunging cocoa prices in the past few months have been a major worry for more than 700,000 farmers located in the lush green forests of Ghana who depend on this cash crop to feed themselves and provide education and health to their families. But the inadequate capacity of Ghana to add more value to a large quantity of its cocoa is even more a bigger issue.

Global demand for chocolate is expected to grow 25 percent by 2020, so cocoa prices will eventually recover. But cocoa farms must increase Ghana’s share of the final retail price of chocolate, which is only 5% at present. By increasing the country’s processing capacity, farmers in these countries can increase their incomes and create more critical jobs in the process.

Ghana’s cocoa example mirrors the overall condition of Africa’s export commodities. Africa still exports more raw agricultural produce with little or no value addition.

It has become increasingly obvious that while Africa is growing, it is not transforming. One well-known policy solution that has been offered to create more jobs is to scale up the manufacturing sector. And this includes making agricultural processing active.

To do this, Ghana like any other African nation will need the roads, energy, transport and markets to power the factories that process agricultural produce. With lower labour costs and easy access to raw materials, agro-industries in Africa offer an excellent opportunity for private investors too. It has the right markets for agro-industries to thrive and its regional market remains hugely untapped.

But there are several opportunities. Global food demand, for example, is set to double by 2050. Africa’s agriculture and agribusiness markets could reach US$1 trillion in 2030. For any economic transformation to happen, agriculture and agribusiness must grow and rightly combine to make value addition possible.

Africa loses billions of dollars for due to its inability to produce enough and process its agricultural commodities. The Africa Progress Panel chaired by Kofi Annan, in its 2014 report ‘Grain, Fish, Money’, estimates that Africa spends US$35 billion per year in food imports. Indeed, connecting farm production, processing and distribution could create numerous jobs and lift millions of Africans out of poverty.

We must think of linking farmers to the market through mobile technologies and give accurate and timely information to smallholder farmers to enable them reduce the threats weather extremes pose. While we have witnessed mobile technology revolutions across Africa, we need to reinvent our meteorological institutions to enable them predict the weather and disseminate accurate and relevant data to farmers in the village. Here, forging a good partnership with the private sector initiatives like Esoko – an agricultural information service operating in 10 African countries – is key.

Agribusiness must center on smallholder farmers. Agribusiness investments must not, therefore, ignore “land-grabbing”. Smallholders need the land and infrastructure to help feed themselves and others. Agriculture and agribusiness pursued in this manner could be the next frontier to change Africa’s growth and transformation story.

Photo credit: John Rae 

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About Author: Stephen Yeboah is currently working as Research Fellow at the Africa Progress Panel, a non-profit organization chaired by former UN Secretary-General Mr. Kofi Annan. (Geneva, Switzerland). He has published more than 100 articles on migration, aid, agriculture, mining, and oil and gas. He is also a Research Consultant for the European Centre for Development Policy Management (ECDPM) working on the nexus between the extractive sector and agricultural value chain in Ghana. You can read his original article here . To read his other article visit the Africa Progress Panel

 

Comments

Kattrina Nikulina
Stephen, such a well thought and written article. Do you think small community initiative from micro finance institute will help people?
Stephen Yeboah
Thanks Cliff. I will definitely read the book you've recommended. As much as we support the growth of agribusiness, we must not lose sight of the fact that the majority are smallholders and they are driving agricultural production. A 'win-win' situation must be the outcome.

This is to inform you that we will launch our report on Friday June 5th on energy and climate. It feeds into the debate on how climate change could unmake agriculture, including water resources in rural communities. Find out more here: http://www.africaprogresspanel.org/homepage/ and follow us on twitter: @africaprogress and @stephen_yeboah
Stephen Yeboah
Thanks for the kind words Jan. It's great to know you have been moving along the lines of agribusiness in Kenya. Grow Africa, an initiative hosted by World Economic Forum, also fulfills similar objective by bringing together governments and private sector to promote agriculture. Keep me posted on your activities.
Cliff Love
Well written, Stephen. The local farming community must be preserved. The local citizen must be allowed to better their own life as they see fit. For a history lesson in how agriculture can become somewhat imperialistic I would encourage your to read "Alchemy of the Air" by Thomas Hager as you continue with you work. It is a history lesson in fertilizer and food at a national and world level. A subplot in it tells of how nations went to war to secure necessary fertilizer and mineral rights for increased food production. Chilean nitrate wars and the Guano Islands Act of 1856 are just two examples.
Jan Willem Van Es
Very true! We applaud your thoughts. We contribute towards the same objectives through our Western (Kenya) Agribusiness Investment Symposium & Exhibition.
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