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By Patrick Mayoh
Frankly, I was delighted to have so many feedbacks on PART 1 of this post. And I am humbled by the many remarks and criticisms I received from this article. Some feedbacks came as very challenging questions that required very deep and tough answers[1].
Having said that, I would equally like to talk about a video link a friend sent me on Facebook. This was a documentary (je mange donc je suis[2] is the title) about the difficulties faced by Africans trying to practice Agriculture as a trade. It is a shame the content is in FRENCH but for those who can understand the language I have put the link below[3].
But the bottom-line of the documentary is that as long as Africans are disfavoured by the stock markets in favour of other countries like Brazil, they will never be able to fully reap the economic benefits of doing Agriculture[4]. So how is it possible to ensure that Africans fully benefit from their trade is a very tough question and I hope you can start providing some answers that will hopefully benefit us all. This article is just beginning to scratch the surface about this and probably in its own way help shape our discussion on this crucial topic for the African Continent.
Meanwhile I strongly believe that Agriculture should be the main focus for Economic Development and prosperity for Africans despite all the present hurdles. Last week I suggested this could be done through the following four ways:
1) Technology to boost productivity and optimise information among key stakeholders
2) Benchmarking of China’s agricultural revolution
3) Perceiving the big picture
4) Adopting a market-based approach
The first two were discussed in part 1[5] of this post and I will set about discussing the remaining two in this last post.
Perceiving the big Picture
Maybe African leaders would be more enthused about heavily investing in Agriculture if they were informed about the enormous benefits at hand. Figures from MC KINSEY actually provide a very strong case for making agriculture a priority on the African continent.
Research by MC KINSEY shows that:
v A green revolution in Africa means the continent’s economies could raise their collective output to $500 billion in 2020 and $880 billion by 2030 from $280 billion now
v Sub-Saharan Africa alone could increase the value of its agricultural production by $235 billion annually if it could increase its yield of major crops
v Brazil between the late 1980s and mid 1960s expanded its land under cultivation by 1 million annually. MC KINSEY predicts that if Africa could increase its Agricultural Production by $225 billion annually by 2030 if it could expand its area of cultivable areas by half the same portion as Brazil
Those three facts in themselves are compelling enough to get African Leaders thinking about the prospects of stimulating growth on the continent through stronger regulatory (economic, legal) frameworks that will boost the Agricultural productivity of the continent.
Not only that but real investments in Agriculture through the building infrastructure will surely provide jobs for millions of unemployed young Africans (see my article entitled: Africa could be the next economic success story[6]).
Adopting a market-based approach
Lastly because we live in a globalised economy, products and services are no more produced from a local perspective only. From the outset a business of the 21st century usually thinks in terms of a region, a continent or the world. Bananas from Africa are consumed virtually everywhere in the world and British rely on the flowers from Kenya on Mother’s day to cite just a few examples.
My point is, instead of producing low value crops like beans or soya for example, Africa’s vast areas of uncultivated lands should be dedicated to producing high value crops (fruits and vegetables[7]) meaning those that easily sell globally especially in the developed world.
Kenya just mentioned earlier tripled its exports in horticulture to 700 million annually by focussing more on market rather than local needs. MC KINSEY posits that if high value crops replaced low value ones in Africa, the Agricultural output could rise by $140 billion a year from 2030.
The “breadbasket approach” for example is a good example of how to encourage the production of high value crops only. A given country for example decides to concentrate investment for a particular high value crops within a specific region/province. Mali is for example considering a similar approach in the Sikasso region which will hopefully raise cereal production by 60% in the country. In the 1970s for example Brazil concentrated investment in the Cerrado region around Infrastructure development, Agricultural research and soil recuperation. Such a system would mean that a country that has highly areas like Cameroon (Central Africa) could identify 5 key regions where investment could be concentrated for the development of highly value crops like fruits and other delicacies enjoyed in the developed world.
In a nutshell the focus should be on the demand rather than the supply side of the spectrum. Crops should be produced to reflect the real needs of the market or what people actually want to buy. Unless this approach is adopted Africans will continue to waste its vast agricultural potentials to the detriment of farmers and the population at large.
Interestingly nearly three quarters of the increase in Agricultural output could come from 11 countries which include: Angola, Cameroon, Cote dIvoire, Ethiopia, Ghana, Kenya, Madagascar, Mozambique, Nigeria, Sudan and Tanzania.
Conclusively because so much has already been said about the vast potentials of the African continent; the Continent will need a combination of visionary leadership, strategic and creative decision-making regarding investment (in physical infrastructure especially) and strong regulatory frameworks to create the necessary conditions for reaping the full benefits of its large uncultivated lands.
References
Acha Leke, Jens Riese and Sunil Sanghvi (2011) Sizing Africa’s Agricultural Opportunity MC KINSEY Quarterly
Steve Davis and Jonathan Woetzel (2011) Chinese Agriculture: a model for Africa MC KINSEY Quarterly
[1] One reader from Nigeria for example, asked me: “No doubt this is very educative and revealing. You have really opened up the reason why agriculture should be the number one priority of the African governments. My question is how best can we make funding available to the real farmers (Bearing in mind the level of corruption)? {...} Lastly, how do we ensure a price control in an unstable economy like ours?”
Or what about another reader that observed that: “What feeds Agricultural development is investment. Like everything you absolutely reap what you sow If you invest in seed improvement, access to credit facilities for real farmers, supply chain to get crops to market and processing of those crops to a finished good, then by all means hunger will be a figment of our imagination in Africa. Until that happens, let's keep donating our $20 to Oxfam to solve Africa's problem.” Regarding China the same reader observed that: “China is united!!! This means you have no idea about China. China is a vast country with many races and different languages. The China that many people see, The Hans, oppress most other Chinese such as the Uiygurs, Mongols and the Tibetans. “I fully agree with this last observation. By no means is China a fully integrated society. Much still has to be done in terms of bringing all the different groups together, but one has to recognize that China’s rise to economic prosperity is in a sense down to the commitment by the Central Government to unite and organize the nation towards the same goal which: economic prosperity through a more productive agricultural system.
[2] I eat so I am
[4] The WTO (World Trade Organization) determines the rules of the game and in principle demands that all countries sell their crops at the market price which is usually the lowest. How low the price is much depends on individual countries and the cost associated with production in those. So an American Corporation that bought very cheap land in Brazil spends $30 producing a ton of corn using strong “Economy of Scale” techniques while a farmer in Africa spends about $230 to produce the same amount of corn. So in the end not only does the market buy from the American corporation in Brazil but it also demands that Africans sell their tons of maize or corn at the same price. So what happens is many Africans (50 million each year) give up farming as a trade and flock to cities in search of more lucrative trades.
[5] http://patrickmayoh.blogspot.com/2011/05/africa-agricultures-potential-enough-is.html?spref=fb
[7] From MC KINSEY ARTICLE
Patrick ,Good Perspective here.
ReplyDeleteI fully agree with you first part "perceiving the big picture".
However while reading the "Market-based Approach" Part, I was not convinced this is the line Africa agriculture should follow. I mean producing high value crops to be more efficient in "developped markets".Actually For me this is where the weakness of African agriculture comes from.
I agree that Africa has a huge potential as far far Agriculture is concerned, but do you really think that Focusing on export and global markets will help developping the continent.
I think that Africa do not yet have to focus on that, instead on the basic and internal needs of the population. Like for example beans and soya...
I hereby raising the point that one of the crucial problem of Africa's agriculture is basically the fact that "AFRICANS DO NOT CONSUME WHAT THEY PRODUCE" , and this is an hindrance to their economy and efforts because they have to rely on international markets to raise benefits!
But we know that aficans products are not really value on international markets! the ratio product/price is always on the disavantage of Africans.
My point basically is that Africa agriculture has to focus on their internal markets in other to build a consistence strong enough to compete globally afterwards.
Kindly,:)