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Agribusinesses and African smallholders Seize US$1 trillion food market: AASR

The recent Africa Agriculture Status Report (AASR) has demonstrated that the power of entrepreneurs and the free market is driving Africa’s economic growth from food production, with the food production in Africa expecting to reach more than US$1 trillion per year by 2030

The report has been launched at African Green Revolution Forum (AGRF) in held Cote d’Ivoire from 4-8 September 2017.

According to the report, agriculture will be Africa’s quiet revolution, with SMEs and smallholder farmers creating high productivity jobs and sustainable economic growth. More number of jobs has been created in lower paid and less productive services rather than in industry. Planned investments in the food system can created even more employment opportunities, said the report.

Commenting on this year’s report findings, Dr Agnes Kalibata, president of the alliance for a green revolution in Africa (AGRA), said, “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. This report shows us that agriculture involving an inclusive transformation that goes beyond the farm to agri-businesses will be Africa’s surest and fastest path to that new level of prosperity.”

Kalibata explained that in order to succeed, Africa requires an approach to link small farms to agribusinesses, creating extended food supply chains and employment opportunities. 

The report has further highlighted the importance of domestic food production to meet the growing demand of the people. Currently, Africa relies on imports to meet the demand. According to the report, this presently amount to US$35bn per year and is expected to cost US$110bn by 2025, unless Africa improves its food productivity.

The report acknowledges the role of private sector for the transformation of food system. Peter Hazell, technical director of the report, stated, “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. Large agribusinesses like seed companies, agro processors and supermarkets are also playing an increasing role in the food value chain in many regions.” 

The study has also said that government support is needed for stimulating and guiding the transition. Governments needs focus on creating infrastructure such as improving reliability of energy and water supplies, building more wholesale market spaces, promoting open regional trade, identifying and investing in first mover crops and introducing stricter standards for food safety and quality.

The report has further pointed points out the need for digital technology such as satellite tracking and big data to help to locate new high value agri-economic zones and smarter financing and food security polices, especially in the face of climate change.