Whither Africa’s Agric Potentials?

Mapping Africa’s natural resources [Al Jazeera]

Accra, Ghana, March 22, 2019-Africa with over 60 % of its population living in rural areas has its economy basically dependent on agriculture.

 Historically, agriculture has been essentially the backbone of its economic growth for centuries. The sector has provided employment for the majority of its population for generations, and has served as a powerful force in transforming of economies towards an industry- and service- based.

In many African countries, through both productivity increases and farm land expansion, agriculture contributes to the transformation by releasing labour force for the other parts of the economy, providing food security, keeping wage down by providing low cost food, and generating foreign exchange.

Research shows that as an economic activity, agriculture can be a source of growth for the national economy and a provider of investment opportunities for the private sector.

Africa is regarded as a key centre of agricultural production because of availability of arable land. But experts say to tap into its potential; Africa has to invest in infrastructure, most notably storage infrastructure through grain silos and related infrastructure.

Agriculture remains the dominant sector in Africa, even though its contribution has fallen drastically since the 1980s, but the composition of its output has changed as dramatically as its value has increased.

The improvement in agricultural output is due to better use of arable land and improvements in productivity, for which there is still room for more

A challenge though is the lack of capital to produce inputs which, not only affects quality of seed but also the quantity and quality of fertiliser applied per hectare. Studies indicate that the amount of fertiliser application in Africa can be as little as 25 kilograms per hectare, which has no beneficial effect whatsoever. The normal application amount is anything between 250 and 350 kilograms per hectare.

Changes in the composition of agricultural output are also reflected in the pattern of exports, which has seen the emergence of totally new categories in the top ten goods. For example, statistics show that exports of cut flowers and fresh vegetables were practically non-existent in 2003 but figured in the top five exports by 2012.

Market watchers point out that increasing world populations and emerging markets will create a bigger demand for food production. Changing consumer demand is more focused on meat and other proteins. This in turn will affect the demand for commodities used in the feed industry.

Due to the fact that the private sector is the initiator of commercial enterprises and as such the main stimulus of agriculture, it only makes business sense for government and private sector to partner and collaborate in ensuring that the industry is well supported.

Focus should be on value chain activities whereby infrastructure, including road, rail and storage infrastructure, in established financial institutions will gain the necessary comfort to enter into financing agreements with primary producers who are assisted by industry leaders.

A developing phenomenon is that mining in Africa has been growing at an exponential rate and this creates the opportunity for agri-businesses to grow accordingly – a new approach should be considered whereby agric hubs are included in mining development plans. This is not only to create a stable source of nutrition, but will serve as the establishment of commercial agriculture that can be replicated through contract growing schemes. This can be an ideal development tool.

Despite Africa’s potentials, agricultural productivity remains far from developed world standards. Over 90% of agriculture depends on rainfall, with no artificial irrigation aid. The techniques used to cultivate the soil are still far behind from what has been adopted in Asia and Americas, lacking not only irrigation, but also fertilisers, pesticides and access to high-yield seeds. Agriculture in Africa also experiences basic infrastructural problems such as access to markets and financing.

Singapore is proving to be an engaged ally in the process of changing this reality. Some big players in the agricultural sector with their headquarters in Singapore are investing heavily in Africa.

Technology and skills are being transferred to smallholder farmers and the large-scale producers are cooperating, playing a fair game that will help develop the sector and make it more sustainable.

Agriculture subsidies make an important factor of imbalance in the international market. Although Africa has one of the lowest cost of production of agricultural commodities in the world, it loses competitiveness in the international market as wealthier countries subsidise their famers, sometimes to the extent that the selling price of crops is lower than the production cost.

That is the reality of cotton farmers in West Africa. The United States, the world’s largest cotton producer, paid its cotton farmers $32.9bn to grow their crops between 1995 and 2012. US farmers are subsidised so they produce more cotton than they would  otherwise, lowering the global price.

Also members of the Organisation for Economic Cooperation and Development (OECD) spent a total of $258bn subsidising agriculture in 2013. As a consequence, wealthy nations inflate their agricultural outputs to an artificial level, frequently flooding the commodities market and bringing prices down. This creates an unfair competition in the global market, where the most affected (negatively) are the small farmers in the poorest countries, where government subsidies are none-existent.

Since more than one third of the GDP of most African countries is directly related to the agricultural sector, these countries may be even more vulnerable to the effects of subsidies. They generate an indirect impact on reducing the income available to invest in rural infrastructure such as health, safe water supplies and electricity for the rural poor. Struggling to survive, many farmers migrate from rural to urban areas in search of alternative economic opportunities.

In July 2003, members of the African Union agreed to devote at least 10 percent of their government budgets to agriculture programs over the next five years; but the reality is that  only Rwanda and Zambia seem to have actually executed the plan.

Stakeholders are of the opinion that tAbstracthe major challenge for African farmers is to produce more and better in order to feed Africa’s growing population.

According to a report published in 2011 Africa could achieve this by developing a huge natural potential, exploiting the margins made possible by agricultural progress and fighting to obtain secure agricultural prices.

It explained: “With an ever-increasing agricultural population, the second challenge is to promote the available human capital within the smallholding farms. This capital is currently wasted due to the lack of training opportunities, innovation and a favourable social, economic and regulatory situation.

With the threat of a lack of employment, food-related problems, conflicts, exoduses and desertification, the third challenge are how to manage to make these efforts to develop and promote sustainable, both in the field and in the whole economy.”

“This requires implementing coherent agricultural, social and environmental policies and integrated regional management. African farmers and the leaders of their organisations are key players in terms of meeting these three challenges and bringing about these essential changes on farms, in regions and in the way agricultural industries are managed,”  it noted.,

The report emphasized: “The farmers carry a vision of the future of their farming and the rural world which is essential for orienting the transitions in Africa’s rural economies. This collective work will have met its objective if it helps change the way the world view the potential of Africa’s smallholding farms and if all those needed to promote it are given incentives to make long-term commitments.”

By Oppong Baah, African Eye Report


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