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June 1, 2009
by Obadiah Ayoti,
Africa Science
News Service
Africa’s market for milk, meat and
staple food crops such as maize, banana, sorghum, rice and
millet stands at over $150 billion a year which is more than
what it fetches from pet cash crops like coffee, tea and
flowers.
Researchers say that seven out of ten Africans earn their living
by engaging in subsistence farming making the sub-sector to be
the continent’s market leader.
It is for this reason that the farmers are encouraged to embrace
modern farming methods to produce more food in order to make
economic sense.
On the other hand, governments are obliged to ensure that farm
inputs are affordable and farmers have access to markets to sell
their harvests at competitive prices to reap fruits of the
labour.
To this end, a conference organized by Alliance for a Green
Revolution in Africa (AGRA) and International Livestock Research
Institute (ILRI) recently examined the role of markets in
increasing Africa’s economic growth and improving rural
livelihoods.
It discussed successes, challenges and opportunities that exist
in Africa’s farm sector with the aim of coming up with
strategies for opening up domestic and regional markets to
farmers while at the same time improving their livelihoods and
lowering food prices for urban consumers.
“New approaches are needed to create vibrant food markets in
Africa ,” said Ade Freeman, Director for ILRI's Targeting and
Innovation Program. “African farmers can produce enough food to
feed Africa , and help feed the world. But first, governments
must enact policies that support farmers’ ability to grow more
food and provide access to markets that give farmers a good
price for their hard work, and consumers with food they can
afford.”
It emphasized that improving farmers’ access to regional markets
for staple food crops within Africa was key to transform
agricultural sector in the continent.
Only a tiny fraction of the food produced in the region is sold
in regional markets; the rest is either consumed on the farm or
lost to pests or disease after harvest.
Meanwhile, Africa imports about 20 percent of the food it
consumes, spending scarce foreign currency reserves. Regional
markets therefore represent a large and growing market that
could offer growth opportunities for African agriculture and
farm income, and help reduce widespread hunger.
New research and innovations presented at the meeting
highlighted strategies that could help Africa produce and sell
its own food at lower cost and take advantage of new market
opportunities offered by the global food crisis.
To become a food breadbasket with surplus for export, policies
are needed to expand investments in rural roads, communications,
farm storage, commodity exchanges and improvement in grades and
standards.
Farmers will also need accelerated access to farm inputs,
especially improved seeds, fertilizers; livestock feed and small
scale irrigation and integrated pest management technologies.
A new paper by AGRA and its grantee CNFA reports on the impact
that AGRA ’s Agrodealer Development Program (ADP) has had with
helping small retailers in rural villages in Malawi , Kenya ,
Tanzania , and Mali reach out to smallholder farmers. These
agrodealers provide crucial inputs to farmers at affordable
prices.
According to the report, the program has helped 4,264
agrodealers receive loans, business management and technical
training in Malawi , Kenya and Tanzania , which has benefited an
estimated 1.8 million farmers.
An estimated USD$42 million worth of improved seed, fertilizer,
and other farm supplies have been sold through agrodealers in
the last 12 months, representing an increase of 15 percent over
the previous year.
Successes are emerging from Africa on how home-grown policies
can dramatically help secure national food security. The
landlocked nation of Malawi is one example. It went from being a
net importer of maize, depending on food aid, to a net producer
with a large maize surplus in just three years. In 2007, Malawi
even exported some maize to neighboring countries.
According to a paper presented by the Overseas Development
Institute (ODI), the program was costly, but, if handled well,
the benefits of such initiatives outweigh the negatives of
chronic food shortages. The paper highlights the important role
of government in agricultural development.
It points out the importance of targeting subsidy and voucher
programs to each country’s specific conditions in order to
maximize social gains while building the private sector. It also
analyzes potential risks associated with fertilizer subsidy
programs if they are not designed and implemented properly.
These risks include the potential for market disruption; for
unsustainable burgeoning costs and fiscal outlays; and for the
side-stepping of intended beneficiaries.
Another is ensuring that African farmers have a place to sell
their harvests. Poor roads and infrastructure are chronic
problems in Africa .
At the same time, the revolution in information and
communications technologies is changing the face of market
opportunities for farmers. Researchers at the conference
revealed how the Kenya Agricultural Commodity Exchange and the
Malawi Commodity Exchange are linking small farmers with vital
market information through local kiosks, radio broadcasts,
email, and mobile phone messaging services.
Three-quarters of farmers tapping into this information report
getting better prices for what they produce. Increased
agricultural production stimulated by market development
generates not only food but also income for farmers.
Livestock products are particularly relevant in this regard, and
an important example is seen in the enormous success of the
smallholder dairy sector in Kenya.
Beginning in 2004, policy reforms in Kenya ’s dairy sector
helped nearly 40,000 small-scale milk vendors to enter formal
milk markets.
The reforms were sparked by almost a decade of research that
persuaded regulators to engage and support Kenya ’s
predominantly informal milk market, which trades in ‘raw,’ or
unpasteurized, milk.
New training and certification schemes as well as innovative
mechanisms to bulk, process and distribute a highly perishable
product like milk have been critical to the success.
Economists assess the direct impacts of the evidence-based
policy changes on the Kenyan economy to be at least USD$33.5
million per year. Participants will discuss how similar
smallholder-focused initiatives could be implemented and
scaled-up across the continent. The conference explored options
for nurturing more regional trade.
Currently, Africans trade only a miniscule share of the crops
they grow—a paltry USD$2 billion worth per year. Research by
Joseph Karugia shows that this hampers self-sufficiency and can
send food prices skyrocketing.
Food policy experts say ratcheting up regional, cross-border
trade would give farmers the option to focus on the commodities
they grow best.
They could tap this comparative advantage to go head to head
with imports and begin reclaiming the markets they’ve lost. In
2004, the East Africa Community established the East African
Customs Union to knock down tariffs between East African
nations. But that hasn’t been enough to ignite trade.
According to Karugia, the likely culprits that continue to
stifle trade, including non-tariff barriers like customs
backups, permits, taxes, roadblocks, and roadside corruption and
bribes. “African farmers deserve better lives and livelihoods.
We must make markets work better for them so they earn higher
incomes, send their kids to school, afford better health care
and build their savings.
Africa cannot be the world’s largest museum of poverty and
misery,” said Akin Adesina, Vice President for Policy and
Partnerships at AGRA . “African governments can no longer
continue to pursue policies of abandoning their farmers.
The subsidies that rich nations offer their farmers and high
tariff and non-tariff barriers keep African farmers out of
lucrative markets. The time to level the playing field for
African farmers has come.” |
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