Covid-19 Hits East African Agric Value Chains

African agric

September 5, 2020//-As the African Green Revolution Forum (AGRF) kicks off on September 8, agriculture and food security will take the spotlight.

While agriculture provides food and income security to more than half of the population in developing countries, the opportunities are mostly low paying with poor working conditions.

Drought and unstable weather brings farmers increasingly low yields, as they grapple with limited access to markets or competitive prices for their crops.

With increased global food, financial and health crises plaguing the world, about 1.3 billion people are not able to access sufficient or nutritious food, and close to a billion people suffer from chronic hunger.

As a result, many African countries have refocused attention on the agricultural sector, implementing policies that will enhance public and private sector investments, trade, and markets to promote food and nutrition security.

the goal is to create and grow businesses leading to economic transformation. A growing share of agro-food trade in commodities such as common beans, green grams and maize, sold as food or processed products, are happening in global value chains (GVCs).

Nutritional importance

Common beans, green grams and maize are some of the essential food crops consumed by a majority of the poor and a growing number of health-conscious consumers in Sub-Saharan Africa.

Common bean grown by millions of smallholder farmers in eastern and southern Africa is an essential staple. Per capita consumption ranges from 14kg to 66kg per year.

Common bean is rich in several micro-nutrients including iron and zinc, several vitamins including B6, folic acid, and protein which are essential to health and well-being. Beans offers a range of tradable food products including dry beans, green beans, fresh grain, pods and leaves.

To respond to consumer needs and improve smallholders farmers’ livelihoods, the Pan Africa Bean Research Alliance develops climate-resilient, highly nutritious and consumer-demanded varieties with complementary technologies using bean corridors to facilitate domestic, regional and international trade.

Green gram contains iron and protein and is an excellent source of dietary fibre, low in fat and calories. It contains bioactive compounds with antioxidant and antimicrobial properties and can prevent neurodegenerative diseases, with anti-diabetic and anti-cancer effects.

Maize, on the other hand, is a staple in East Africa providing food security, livelihoods and incomes for millions of people. Maize is an important cereal and a source of carotenoids, phenolic, and phytosterols, which prevents chronic diseases.

Trading in agricultural products has changed over time. Export markets have been growing significantly with south to south and south to north trading. For example, white pea beans grown in Ethiopia are exported, generating income for producers, traders and processors and other players along the value chain.

Inter-regional imports into the East African Community (EAC) for green gram over the past decade have been increasing at an average annual rate of 17% and 25.5% annually, mainly attributed to increased demand in the Kenyan market. Tanzania and Uganda are the biggest exporters of green grams to their regional counterparts and South Asia.

In 2014, these two countries exported about 12,879 metric tonnes (MT) and 1,013 MT respectively of green gram, largely to Kenya, despite Kenya having the highest production in the region.

In 2018, all inter-regional exports from Tanzania valued at $2m were destined for Kenya while Uganda shipped 1,000 MT valued at and $0.55m to Kenya in the same year.

Covid-19 disrupts emerging value chains

The World Bank’s biannual Africa’s Pulse report predicts that economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to -2.1% and -5.1% in 2020 due to Covid-19, contributing to what is likely to be the first recession in 25 years. This will negatively affect Africa’s participation in trade and agro-food value chains.

According to the Kilimo Trust 2017 report, expected maize demand in EAC by 2020 is 16million MT. However, the region may experience a deficit of 2.7m MT, attributed mainly to Kenya. EAC is a maize surplus region, but deficits are attributed to export sales to more lucrative markets in the Democratic Republic of Congo and South Sudan. In the first quarter of 2020, around 135,000 MT of maize was traded regionally. This was 70% lower than the previous quarter and slightly lower than the past five-year average for the first quarter.

Approximately 82,000 MT of dry beans were traded in the region in the first quarter of 2020. This was similar to the last quarter, 21% lower than the 2019 first quarter but 18% higher than the five-year average for the first quarter.

The East African Community will lose $5bn in foreign earnings from agricultural exports due to Covid-19, and trade data shows that maize commodity parity price trends will be near and below average across most markets except Ethiopia as a result of Covid-19.

Trade on common beans, mung beans and maize from neighbouring countries have reduced during the period, due to border restrictions and rocketing transport and logistics costs. Agro-food may cross multiple borders before reaching final consumers, creating significant ripple effects for smaller businesses.

Even though inter-regional trade is vital in promoting economic development and food security, restrictive trade levies, regulations on food safety measures and non-tariff barriers affect the flow of agro-food products across borders. Thus, we need policies that do not distort trade and limit the benefits that international agro-food markets can deliver for consumers.

1) Support interventions that enable farmers to access inputs at affordable costs.
3) Policies to ensure EAC countries borders (which are interdependent) remain open, facilitating efficient trade flow.
3) As the COVID-19 situation changes rapidly, there is a need to support the national government with evidence to base mitigation policies and measures.
4) New business models to cope with the pandemic, such as investment in capacity building of SMEs to adopt efficient ICT based business models and advisory services should be in place.

Jean Claude Rubyogo, Eileen Nchanji, Justin Mabeya, Patricia Onyango, Janet Ngombalu at The Alliance of Bioversity International and the International Center for Tropical Agriculture (CIAT)

https://africanbusinessmagazine.com/sectors/agriculture/covid-19-hits-east-african-agri-value-chains/

Photo Gallery

Log in | Designed by Village Pixels