The onset of the rains portends glad tidings to farmers, given that our agriculture is mainly rain-fed. Though the long-awaited rains had given hope of a possible bumper harvest, the good news was short-lived. Some strange pest was wreaking havoc on farms.
With farmers having spent a lot on fertiliser and seeds, the idea of spraying, which seems to be the only solution, may be a challenge to many of them, who live below a dollar day.
These are some of the hurdles that the small-scale farmers in Africa encounter daily, yet agriculture promises to be the panacea to the many challenges they face. According to the World Bank, raising crop yields by as little as 10 per cent reduces poverty by about seven per cent, which may be more effective in reducing poverty than through other sectors.
Agriculture contributes 32 per cent of Africa’s GDP and employs 65 per cent of the workforce, hence the need to make it sustainable. The continent is endowed with immense natural wealth. It has 10 per cent of the world’s renewable water resources and 60 per cent of arable land, a vast expanse of which remains uncultivated.
IMPROVED FOOD SECURITY
So, what ails Africa? Small-scale farmers, account for a large portion of food produced in many parts of Africa. Investment should target them to increase the welfare of citizens, improve food security and drive the economic development. One setback the smallholder farmer has suffered from time immemorial is financing. The African Union, through a number of development blueprints, has tried to address funding as a major factor in the agribusiness transformation.
Through the Comprehensive African Agricultural Development Programme (CAADP), the Malabo and Maputo declarations, countries should allocate 10 per cent of their national budgets to agriculture towards a hunger- free continent to realise the AU Agenda 2063.
This is a good starting point, but other stakeholders, including donors, banks and other financial institutions must look at sustainable agribusiness not only as an invaluable venture, but also for its role in food security. Banks have been reluctant to finance agriculture due to the inherent risks and cases lack of collateral.
However, the time is ripe for key players to understand the role of agriculture value chain finance since it underpins the success of others. But financing alone might not do the trick. It calls for integrated strategies so that benefits are reaped and costs and risks curtailed. Some of the tactics financers have embraced in countries where value chain finance thrives make them competitive and market efficient.
This may mean providing non-financial products such as market intelligence through ICT, technical support for capacity building, gathering and storage, which contribute to the improved value chains. Banks and other financial institutions ought to take the lead in the value continuum. They should study entire target chains, identify opportunities to finance or support, and risks to transfer to those best suited to handle them along the chain, instead of waiting for farmers to approach them for loans.
While agriculture value chain finance may not be the silver bullet for a food secure Africa, it is a significant factor that if well implemented, can help put the continent on the path towards feeding its projected 2 billion population by 2050. Unless this happens, the challenges facing the smallholders might only become chronic now that climate change continues to rear its ugly head.
By Florence Kadenge
Ms Kadenge is the vice-president of the Ecosystem-Based Adaptation for Food Security Assembly (ebafosa). The views expressed here are my own. @fkadenge1