Africa’s agricultural industry has a significant social and economic impact. Smallholder farmers make up more than 60% of the population in sub-Saharan Africa, and agriculture accounts for around 23% of the region’s GDP. The continent’s full agricultural potential is still unrealized. In a recent analysis, it was found that Africa could produce two to three times more cereals and grains, which would increase the present global output of 2.6 billion tonnes of cereals and grains by 20%. The production of horticultural crops and cattle both saw similar improvements.
AFRICA’S AGRICULTURAL PRACTICE
On the other hand, smallholder farmers with less than five hectares still own the majority of the land. But for these farmers to increase productivity, the region’s economic conditions must considerably improve. One startling illustration of this is the fact that, due to regional differences in input costs and product prices, the return on investment for smallholder farmers using enhanced inputs in some countries may be almost zero.
Smallholder farmers in sub-Saharan Africa may require a greater investment threshold than their counterparts in other regions, even in areas where the ROI is higher. This is due to the absence of risk mitigation measures that are present in other locations and which would make investments a safer bet. These include government welfare programmes; guaranteed offtake; and access to affordable food, which would enable them to concentrate on cultivating higher-value, non-food crops rather than those for their own livelihood.
For instance, it’s been reported that smallholder farmers in southern Tanzania knew that utilising better inputs and planting methods would increase yields, but the investment became unreasonable for them due to marginal returns brought on by difficult market access or low crop prices. One effect of this was that farmers would only buy hybrid seed and fertiliser every two to three years, opting to store seed despite the yield reduction.
Even so, in order to boost productivity, open up markets, and lower risk, some African nations are attempting to combine some of the smallholder farmers’ activities.
ADDRESSING THE FARMERS CAPITAL CHALLENGE
Many farmers in Africa still struggle to get access to financing to buy inputs (or hold onto outputs to sell at higher prices) because of the fragmentation and difficulties around credit worthiness. In this field, organisations have innovated few solutions. For instance, social enterprises are playing a major role in funding financial products that are specific to regional farmer income flows and behaviors. These enterprises also provide farmers with training and a field force that works directly with farmers.
Another answer to this problem is provided by the increasing use of mobile phones and advancements in satellite and other kinds of data communication. Farmers’ creditworthiness and loan size are now determined based on mobile money transactions, voice, SMS, and data consumption, as well as social connections.Agronomic elements are included in credit-scoring systems by using satellite and remote sensing data.
NOT ONLY YIELD MUST IMPROVE, BUT SO MUST COMPETITIVE PRICING
Africa’s growing urban middle class and increasing urbanisation could increase consumer spending by $645 billion between 2015 and 2025. Food and beverage sales might account for $167 billion of that growth. Urban consumers are anticipated to consume more fresh fruit, dairy, meat, and processed foods. This offers African agriculture both a chance and a problem.
Currently, sub-Saharan Africa imports food crops such as grains, edible oils, and sugar worth $15 billion, mainly from South America and Asia. Imports are not always a bad thing; in fact, they can be crucial to ensuring food security and sustainability, especially in nations whose production is limited by factors like lack of land or water. If African agriculture is to supply more of the local (and even global) food demand, it will need to increase food crop cost competitiveness in comparison to its major trading partners.
In some cash crops, such as cashews, coffee, processed horticulture, and tea in East Africa, and cocoa in West Africa, Sub-Saharan Africa has already proven to have a competitive edge. Africa has some of the lowest production costs worldwide for some of these crops, including cocoa. The same is not often true for food crops, where cost competitiveness is frequently not improved by yield advances alone. One outstanding example of this difficulty is rice.
HUNGER AMIDST ABUNDANCE
A terrible paradox exists between pain and abundance: a continent with fertile, arable land that is unable to feed its people. On a continent with abundant agricultural resources, hunger and malnutrition are nonetheless widespread. Africa has the expertise, the resources, and the ability to put an end to hunger and instability.
But according to the UNDP (United Nations Development Programme), Sub-Saharan Africa is the region with the highest levels of poverty and food insecurity in the world. Up to 25% of Sub-Saharan Africa’s 856 million people are malnourished.
The deteriorating food situation tempers positive assessments of Africa’s rapidly expanding economy, which has grown by an average of 5% to 6% annually over the past ten years. It should be highlighted that despite great GDP growth rates in Africa, there are still issues with hunger and malnutrition. Experts assert that efforts to create a future of food security for all Africans “can only be effective if they span the entire development agenda.” For instance, without good roads, surplus food cannot reach the market.
While numerous countries have made progress in combating hunger, malnutrition, and extreme poverty, Africa remains a net food importer and produces far less than its potential. The main culprits are faulty policies and, to a lesser extent, weather fluctuations. Despite giddy economic predictions that Africa will be the next big emerging market, persistent food shortages are stubbornly resistant to solutions. The African Union is aware of this weak connection and is seeking to persuade its members to increase agricultural investment. As the continent’s economic development rates exceed those of the rest of the world, it must move faster to supply empty stomachs with nutritious food. And time will unravel how Africa will provide for itself.