Identifying key drivers to help transform African agriculture

By Mills Soko

The Green Revolution propelled India from a country plagued by famine and drought to the top wheat-producer in the world. It helped to fuel one of the fastest-growing global economies and it could be the example so many African countries need to realise their agricultural potential.1

 

While countries on the African continent have shown impressive economic development and growth over the past decade and are expected to grow on average by about 4% in 2019, the African Development Bank (ADB) has warned that there may be trouble ahead.2 The continent is likely to be negatively affected by increasing tension stemming from global trade wars, Brexit and the resulting changes to investment and lower demand for exports from Africa. This is in addition to the crop failures and lower yields that are already being experienced as a result of climate change due to higher temperatures and lower rainfall.3

To mitigate some of these impacts, the ADB has reiterated the need for greater trade amongst countries on the continent as well as placing more emphasis on generating and improving the state of agriculture in the region. Sub-Saharan Africa (SSA) has enormous agricultural potential – the region has 60% of the globally available, arable land, but has been unable to capitalise on it.4  The continent has gone from being an exporter of food in the 1960s to an importer of food and agricultural products. Agriculture currently accounts for nearly 24% of gross domestic product (GDP) in Africa.5

Farming in SSA is largely small-scale, with insufficient irrigation, a lack of modern technology and fertiliser resulting in poor output. Meanwhile, hunger is growing on the continent with the fastest growing population on the planet. According to the Food and Agriculture Organisation of the United Nations (FAO), 31% of the 821 million people globally who are affected by hunger come from Sub-Saharan Africa.6

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Yet, the World Economic Forum estimates that agriculture is 11 times more effective when it comes to reducing poverty in Sub-Saharan Africa than other sectors.7 And at the first Africa Food Security Leadership Dialogue held in August 2019 in Kigali, the ADB, FAO, the International Fund for Agricultural Development and the World Bank underscored the need to step up agricultural production in order to exploit its potential.

At the event, Rwandan President Paul Kagame stated that: “Increased agricultural productivity is essential for eradicating hunger and undernourishment. But food security is not where we stop. We want a continent that is truly prospering in every sense of the term. And agriculture is undoubtedly the foundation of Africa’s prosperity. That is the larger ambition we must challenge ourselves to achieve. We owe it to the generations that follow us.”8

 

Modernising agriculture

While trade agreements like the recently concluded African Continental Free Trade Agreement hold much promise in terms of reducing tariffs, promoting digital payments and improving African trade agreements, there is a more pressing need to modernise African agricultural practices, expertise and processes.9

African countries could learn so much from the example of India and its Green Revolution.10 After years of famine and food scarcity, the Indian government in the mid-1960s initiated a slew of reforms in agricultural practices, bringing in new technologies coupled with government funding for farmers. Within ten years, India had become the top wheat producer in the world. Some of the successful initiatives included:

• Introducing high-yield seed varieties;
• Making fertiliser and insecticides more freely available;
Producing farm equipment;
Improving irrigation practices;
Supporting farmers with subsidies, research into new seeds

In parts of Africa, like Ethiopia, new crop varieties have also been seen to drive growth.11 The introduction of a new kind of bean has helped local farmers move from subsistence farming to bigger operations capable of producing export crops. Beans currently contribute US$150m annually in exports.

Research into new seeds and crop varieties is critical – and making this information accessible to farmers and local producers even more so. Higher-yielding, stronger crops like semi-dwarf rice and wheat were central to India’s Green Revolution.12 Hybrid maize seeds have also been introduced in Ghana, allowing farmers to produce more tons per hectare, with crops that mature earlier and result in farmers increasing revenue.13

Another area is the so-called agri-tech field, where farmers invest in high-tech farming methods to reduce waste and raise productivity.14 New technologies that allow farmers to gather data on soil, plants and weather – and to even use drones to spray crops – are changing the farming landscape in more developed African countries like South Africa. While more cost-efficient than traditional crop-spraying equipment, drones can reach difficult areas, spray pesticides and fertilisers with precision, increasing crop yield as well as reducing costs.

 

Greener infrastructure

Closely linked to a more modern agricultural sector, is the development of infrastructure to support farming operations, aid in manufacturing products and distributing foods – access to energy and water is vital.  Green infrastructure is a growing trend that has the potential to solve many of the complex dilemmas faced by rural African farmers. These include innovative solutions, like solar irrigation devices that make use of new technology to solve problems. In Uganda, a company called GrowFast  provides thousands with pay-as-you-go solar irrigation via a smartphone and an app. The business concept enables farmers to rely on more than rainfall for irrigation, allowing for greater productivity as well as for insurance in the event of unexpected crop loss.15

In one of the continent’s poorest countries, Malawi, local farmers struggling to survive due to drought are also making use of solar-powered pumps while also choosing to grow drought-hardy sweet potatoes to supplement maize crops. Water pumps installed with the backing of the Global Environmental Facility move water from new borehole wells into reservoir tanks, where it is then piped to hydrants into nearby fields as well as for use in local houses. The water systems can irrigate about 20 hectares of land each.16

Water is needed not only for irrigation – but also to produce electricity. In Ethiopia, hydropower accounts for about 90% of electricity.17 This makes the country particularly sensitive to droughts and lower rainfall – or floods. Even a 5% decrease in rainfall can cause nearly a 10% decrease in agricultural productivity.  Workers from the REACH programme, a global research programme to improve water security for the poor, recommends that climate-resilient policies for allocating water and planning for reduced water availability ought to be implemented to support farmers in the area. They underscore the need to provide easier access and dissemination of scientific information and an understanding of current and future hydroclimatic situations. Their research points to the need to sustainably develop additional water sources like ground water, and to educate government officials and employees in related institutions about climate change and water management. While their research pertained to Ethiopia in particular, such recommendations could be applied to the rest of Africa as well.

Agriculture is heavily reliant on energy and the lack of stable sources of electricity hamper many farmers and manufacturers in the sector. In more developed areas, where better infrastructure exists, like South Africa, for instance, larger-scale farmers have installed solar panels to generate their own power and reduce dependence on the national supplier.18 Other farmers have even built their own hydroelectric plants – like the small L’Ormarins Hydro Plant on a wine estate in Franschhoek, which is able to supply not only the farm itself but could also provide additional energy to the national power utility. Unfortunately, red tape, policy uncertainty and political tensions have adversely affected the productivity of the plant.19

 

An integrated approach needed

A recent report by McKinsey&Company researchers examined what was needed for a Green Revolution to succeed on the African continent.20 They concluded that the solution lies with developing an integrated approach that includes market-friendly policies and greater investment in agricultural sectors as well as attracting investment for farming-related initiatives. The authors point to the efforts of bodies like the Comprehensive Africa Agriculture Development Partnership Platform, an annual forum that aims to address the issues related to agricultural transformation in Africa, and to support local governments in dealing with challenges such as:

A lack of technical agricultural knowledge and skill;
Corruption,
Political tensions and instability;
Inadequate infrastructure;
Shifting priorities.

The McKinsey report assessed ways of implementing agricultural development plans in more than 10 African countries, across public, private and social sectors. Their findings included:

 

Focusing on higher-impact initiatives

Instead of having many strategies and programmes, efficacy improves when there are only a few targeted programmes with high-level support. In Morocco, for instance, the government decided to invest in a couple of high-value crops that would raise GDP growth while increasing income for farmers. Hundreds of thousands of acres were converted from cereal to citrus fruit and tomato cultivation, while in Ethiopia, a switch in the 1990s saw the agricultural sector revived through government and private sector collaboration in sesame and cut flower production. In 2011, oilseed and flowers were Ethiopia’s fastest-growing exports.

 

Developing markets

This is a critical and often overlooked area – looking at where the increased agricultural output will go. Exploring export markets, domestic urban markets and the possibilities around food processing can determine much of the success of farming efforts. In Morocco, government helped facilitate the export of high-value crops to Europe by assisting farmers to meet European certification requirements, as well as through technical assistance and reaching agreements for tariff-free access for Moroccan producers. And in the Ivory Coast and Ghana, by cutting export taxes, these countries increased their share of cocoa processed in the country by up to 50%.

 

Producing for local populations comes with a few requirements as well. The need for quality standards, roads for transportation, and electricity for processing and storage is important.

• Improving local infrastructure

Producing for local populations comes with a few requirements as well. The need for quality standards, roads for transportation, and electricity for processing and storage is important. In 2002 in Ethiopia, a maize surplus went to waste as the crop could not be moved to areas with food shortages due to the high cost of transportation and the lack of existing export infrastructure.

 

• Better partnerships with the private sector

Agricultural programmes that are built through public and private sector collaboration have a greater chance of success. The McKinsey researchers found evidence that the active engagement of private agents like farmers organisations, input suppliers, warehouse operators, buyers, traders and international trading programmes are hugely beneficial to agricultural efforts. Linking small farmers to markets, educating them about soil conditions or new seeds, even private investment to improve roads and ports make a vast difference. Private sector participants have competitive know-how as well as operational expertise that can plug the gaps that exist in local authorities’ knowledge banks. 

In many instances, a case can be made for simply working smarter. Like cluster farming, which has helped farmers in the Arsi Zone in Ethiopia to increase production of wheat, barley and other crops. The cluster farming model often sees farmers grouped together and given communal access to farming equipment, fertiliser etc. with the help of government funding. Due to the success of the cluster farming programmes, Ethiopia is on track to within a few years stop importing wheat and solely relying on national production of wheat.21

But what works in one country will not work in another. There is no one-size-fits-all solution. Africa is a vast continent with 54 countries, some with unstable governments, ethnic conflicts as well as serious developmental, health and economic challenges coupled with rising environmental concerns. But even in these countries – some might argue that especially in these countries – the need to transform agriculture is critical not only to improve economic conditions but also to transform communities from day-to-day subsistence farming to surplus-providing farmers, business owners and proud members of their societies.

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Mills Soko is Professor in International Business and Strategy at Wits Business School.  His research focuses on business strategy, international trade, economic diplomacy, emerging markets especially the BRICS countries, regional integration in Africa, financial globalisation, and business-government relations in South Africa.


References
1.https://www.thehindubusinessline.com/opinion/the-paradox-of-indias-green-revolution/article27472671.ece
2.https://www.businesslive.co.za/bd/world/africa/2019-08-18-risks-to-growth-increase-daily-african-development-bank-warns/
3.https://reliefweb.int/report/world/2018-africa-regional-overview-food-security-and-nutrition-addressing-threat-climate
4.https://www.farmersweekly.co.za/opinion/by-invitation-africa-can-emulate-indias-agricultural-success/
5.https://www.modernghana.com/news/948444/how-agriculture-impacts-african-economies.html
6.https://www.weforum.org/agenda/2016/05/3-ways-to-transform-agriculture-in-africa/
7.https://www.un.org/en/sections/issues-depth/population/
8.https://www.newtimes.co.rw/news/kagame -end-hunger-africa
9.https://mg.co.za/article/2019-07-10-africas-free-trade-agreement-curse-or-blessing
10.https://www.farmersweekly.co.za/opinion/by-invitation-africa-can-emulate-indias-agricultural-success/
11.https://www.syngentafoundation.org/news/recent-news/breeding-better-crops-home-and-abroad
12.https://www.devex.com/news/opinion -protect-our-food-fund-the-seed-95295
13.https://www.ghanaweb.com/GhanaHomePage/business/Seed-producers-schooled-on-hybrid-maize-seeds-774251
14.http://www.702.co.za/articles/356195/crop-spraying-drones-are-taking-africa-into-greener-pastures
15.https://www.esi-africa.com/industry-sectors/future-energy/uganda-solar-irrigation-solution-enables-agricultural-benefits/
16.https://www.engineeringnews.co.za/article/as-crops-dry-malawi-turns-to-solar-irrigation-2018-07-23
17.https://www.cnbcafrica.com/news/east -africa/2019/08/22/this-east-african-countrys-future-is-tied-to-water-a-vital-yet-threatened-resource-in-a-changing-climate/
18.http://netwerk24.com/ZA/Eikestadnuus/Sake/green-energy-gaining-momentum-20190717-2
19.https://www.news24.com/Video/SouthAfrica/News/watch-red-tape-thwarting-sas-green-energy-projects-analyst-20190822
20.https://www.mckinsey.com/industries/public-sector/our-insights/four-lessons-for-transforming -african-agriculture
21.https://reliefweb.int/report/ethiopia/cluster -farming-improving-farmers-productivity-food-security-arsi-zone