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Making agriculture work for jobs

Obiageli Ezekwesili's picture

Woman farmer in Madagascar

There is a jobs cow waiting to be milked in Africa. It is agriculture and agri-business.

In its initial condition, Africa’s agriculture bears a striking resemblance to its telecom sector in the late 1990s. A decade on, a combination of right policies and strengthened  regulatory framework has seen the sector open up to free enterprise,  attracting about $60 billion in private investments and leading to today’s ICT boom: 450 million mobile phones in Africa, which is more mobile phones than Canada, Mexico and the USA combined.

As with telecom, the “early movers” into Africa’s agriculture are likely to reap the most rewards. And we are seeing significant interests from Middle Eastern, North African, South African and Asian firms seeking to establish commercial farms and agri-businesses along the value chain.

With only one-fourth of Africa’s arable land (50% of global arable land) currently in use accounting for a mere 10% of global food production, an agriculture and agri-business sector in full bloom is likely to result in even more transformational change in the lives of the world’s bottom billion than ICTs.

This is not some distant, future dream. Even diehard afro-pessimists now concede that the global tide is turning in Africa’s favor, revealing a virgin market of one billion people, and a potential trillion dollar economy with enormous staying power and no less than 29% of the world’s youth by 2025.

But timing matters, and huge windows of financial and economic opportunity are open to the pacesetters. Agriculture, I must reiterate, is not only Africa’s “next big thing.” It is already its life wire: it is Africa’s leading private sector. Some 70% of Africans depend on it for their livelihoods, and it accounts for about 40% of the region’s GDP.

During my dialogue last week with hundreds of young civil society leaders from 18 African countries, I was not surprised by their optimism about agriculture. Their eagerness to be involved in the sector was as infectious as it was enlightening for me and my colleagues. However, they were very clear as to what must be done by their governments and partners, to make agriculture work for jobs. I would summarize their views in four major areas.

First, governments (traditional, local and national) need to guarantee land rights for farmers, ensuring that large commercial farms – which are bound to employ fewer people -- co-exist with the millions of smallholder farms – which preserve and maximize the job opportunities the sector offers, as well as provide the nucleus for establishing small and medium-size agri-businesses along the value chain. Attention must also be paid to ensure that male farmers – often the first to hop on a tractor and the ones most likely in rural areas to manage the money flowing from agriculture -- do not marginalize women farmers, who hold the key to food security.

Valorizing land and ensuring that Africa’s banking and financial sectors recognize it as one of the most tangible economic assets of Africa is just as important as building and maintaining adequate infrastructure like farm-to-market roads.

Second, young Africans do not want to be the farmers their grandparents were: hoe in hand, tilling the soil in scorching sun all year round, harvesting barely enough to feed, shelter and house their families. Making the sector more attractive to the African youth – seven-to-ten million of whom join the labor force each year – must entail modernizing agriculture, raising productivity, boosting incomes, and expanding links to export markets.

Smallholder farmers would need access not only to more productive seeds and other farm inputs, but also to irrigation, research, technology and finance. Seed funding, notably in the form of grants, patient capital or loans from commercial banks guaranteed by some facility or the valorized farmland could make the difference between a farm start-up failing or prospering. Obstructionist policies, such as price controls, food export bans, and restrictions to cross-and within-border trade, need to be eliminated.

As one participant from Sierra Leone put it: “The market is the problem,” he said, complaining about the ban on his country’s food exports to such neighboring countries as Gambia, Liberia and Senegal.

A third priority must be that of linking farmers to markets, including the sale opportunities that school feeding or food voucher programs can generate by buying from local farmers. Pilot initiatives like the World Food Program’s “Purchasing for Progress,” which has sourced about $1 billion worth of humanitarian food directly from African farmers over the last three years, would need to be expanded. Electronic vouchers, provided through “scratch cards” similar to prepaid phone cards and mobile phone-enabled platforms, have offered funding for food purchases for the poor in Liberia.

Connecting African farmers to Internet-based platforms such as the Ethiopian Commodities Exchange, which made deals worth $1 billion in its first three years of existence would be as essential as linking these farmers to giant global retailers like the U.S.-based Walmart, whose foundation plans to plow about $1 billion in Africa in order to have direct influence over its supply chain. So, too, would be an integrated approach to infrastructure development that combines highway or railroad construction with the setting up of vast agricultural plantations under the so-called “development corridor” model.

Devising these and other smarter ways of reaching markets and consumers would help trim the estimated 35% of food supplies lost on the continent during the post-harvest, transport to market, storage, processing and conservation phases.

Fourth, reforms across Africa will work only if global food markets work for Africa and unfair trade practices are ended. The issue of subsidies by developed countries -- currently estimated at $360 billion – will need to be resolved. Young African farmers entering the sector will prosper not only if they can trade, but if trade is fair and if mechanisms to promote transparency on existing stocks help prevent speculators from using food as a commodity to make money on the backs of farmers.

Success would require an integrated approach such as that offered within the Comprehensive Africa Agriculture Development Program (CAADP) framework – with the strategic pillars of land and water management, markets and infrastructure, food security and vulnerability and agricultural technology. It would also require significant investments. The Food and Agriculture Organization (FAO) says the $22 billion pledged by the G20 at the Pittsburgh Summit barely gets things started. However, while foreign investors and donors can help, African countries which committed in Maputo in 2002 to devote at least 10% of their national budgets to agriculture are those who must step up to the plate.

Mali, which currently devotes 13% of its national budget to the sector, is one of very few countries that have either met or surpassed this target. Too many other countries invest far too little. Cameroon, for example, devotes an estimated one percent of the national budget to the agriculture sector, although the sector employs 70% of the population and accounts for 40% of the country’s GDP. Without significantly higher investments, the sector will not deliver on the millions of jobs it promises.  Much worse: the 2002 World Food Summit warned that business as usual in agriculture could mean that the aim of halving world hunger by 2015 will only be met in 2150.

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Comments

While it is conceded that agriculture holds the greatest promise for Africa, unequal and unfair rules in the international trade regime have militated against this potential. For one, agri-business will mostly involve value addition which results to tariff escalation in developed countries as they prefer raw products. I'll give an example, Germany, the world's second largest exporter of processed coffee doesn't have extensive plantations of the same. A farmer in Kenya gets around $0.5 for a kilo of coffee beans which when processed can produce over 100 cups of coffee. One mug of coffee in a typical European restaurant costs $ 2.5. Question is, why can't the farmer just process the coffee and market it directly, or at least get a fairer price for it? I must however add that the mindset and argument of a conspiratorial west that is hell-bent on exploiting Africa has no place in today's discourse. This is because having realised what the problem is, it is incumbent upon us to fix it through open negotiations and reasoning. For one, Agribusiness has picked up very well in Kenya and is driving growth for farmers who previously made no income from it. Sectors like dairy products and fruit processing have seen increased growth in a few years. What we could do is seek to integrate SMEs and other small-holder players into global value chains through targeted support programmes like training on value addition and assistance in sub-contracting.

Submitted by Seye Olowu on
Indeed, Agriculture has great potentials for creating jobs, but finance remains an essential ingredient towards actualising this goal. Using Africa as an example, agricultural financing has a wide and deep history in the continent, owing to the fact that the African economy has huge potentials for growth especially from its agriculture sector which is one of the largest contributors to GDP in most States. For instance, the establishment of the Agricultural Credit Guarantee Scheme in Nigeria has over the years provided a total sum of 647,351 loans amounting to over N34 billion disbursed to farmers as at 2009. The impact of this finance has been effective on providing agricultural financing as well as stimulating agricultural production in Nigeria. The credit provided under the Scheme has had a significant effect on aggregate output. Therefore, governments around the world should replicate, promote and support the operations of such agricultural scheme in favour of the agriculture sector in order to encourage investment in food production, enhance agricultural export and most importantly create jobs for the ‘second economy’. However, in this age of market liberalisation, globalisation and expansion of agri-businesses, a strategy focused to realise an optimal job advantage from agriculture, is that African governments takes a tow from Nigeria, by adopting efficient credit finance schemes to encourage farmers and potential farmers (job seekers) to invest their best efforts in chains of agricultural production, which increases GDP output. This will also resuscitate agricultural production which leads to food security. Finally, in order to achieve FAO’s millennium development goal (MDG) of halving the number of the hungry by 2015 (currently estimated at close to 1 billion people), it will be in Africa’s interest to follow suit by enhancing agricultural production, investment and agri-businesses.

Submitted by Seye Olowu on
Indeed, Agriculture has great potentials for creating jobs, but access to finance remains an essential ingredient towards actualising this goal. Using Africa as an example, agricultural financing has a wide and deep history in the continent, owing to the fact that the African economy has huge potentials for growth especially from its agriculture sector which is one of the largest contributors to GDP in most States. For instance, the establishment of the Agricultural Credit Guarantee Scheme in Nigeria has over the years provided a total sum of 647,351 loans amounting to over N34 billion disbursed to farmers as at 2009. The impact of this finance has been effective on providing agricultural financing as well as stimulating agricultural production in Nigeria. The credit provided under the Scheme has had a significant effect on aggregate output. Therefore, governments around the world should replicate, promote and support the operations of such agricultural scheme in favour of the agriculture sector in order to encourage investment in food production, enhance agricultural export and most importantly create jobs for the ‘second economy’. However, in this age of market liberalisation, globalisation and expansion of agri-businesses, a strategy to realise an optimal job advantage from agriculture, is that African governments takes a tow from Nigeria, by adopting efficient credit finance schemes to encourage farmers and potential farmers to invest their best efforts in chains of agricultural production, which increases GDP output. This will also resuscitate agricultural production which leads to food security. Finally, in order to achieve FAO’s millennium development goal (MDG) of halving the number of the hungry by 2015 (currently estimated at close to 1 billion people), it will be in Africa’s interest to follow suit by enhancing agricultural production, investment and agri-businesses through access to finance.

Submitted by Olaleye Olatubosun on
Dear Sir, I am a quality control scientist. I have interest in farming and converting the waste materials into useful materials. These ranges from utilisation of Cassava starch to many value added products, conversion of animal waste to useful material, development of oleochemicals from plant oil,and many more. Please, i sincerely have passion to develop many things as a scientist in africa. i can be contacted on bsnola001@gmail.com on facebook. Regards

Submitted by adegboyega adeyefa on
a few things on agriculture for jobs cow....1.the sector is a major source of income and must be explored totally,especially from the rural areas.2.from Abraham maslows' heir achy of needs,food is one of the essentials of humans which cannot be done without for a long time.3.the earth is what actually sustains other physical activities.having said the above, ways of making the sector the most viable should be a matter of urgency. we also have a lot of things in our favour,the availability of land mass,manpower and a great filed of potential still lying untapped and undeveloped. i believe the economies of the Africa region will be boosted and enhanced if concentration is put on agriculture. the youths and the unemployed will also be empowered.

Submitted by Ann Kesohole on
Hi,am a youth & love farming, in Kitale Kenya, but no one is empowaring me about it plz give us a chance to make our own maney & emprove the economy.

Submitted by Meagan on
I am doing a project researching about agriculture, education, and women's rights in Africa. Your few words inspired me, and I just want to let you know there are people who want to empower you to make your dreams come true. It is your voice, however that empowers me to continue working on this project. Thank you

Submitted by Nelson Agyemang on
Dear Sister, Keep the Good work up, I commend the Vice Presidet of the Bank for her hard work and real knowledge and help for Africa! The bank is by far the only institution which has the leverage to do innovative things. Can't the bank give money directly to CSOs in rural agriculture, so many innovative things can be done along the value chain to develop farming into jobs for many youth in poor stricken rural areas. I would like to ask the Vice-President of the Bank for Africa if this can be done for example through Youth Development Foundation(YDF) in Atwima Kwanwoma District Assembly, where youth farmers badly need between Gh.c 20-Gh.c 100 per farmer for the July cereal minor season starting July-August, 2011. Is there a small grants fund from which you will draw to do this, and take personal keen interest, and ask your Ground staff in-country to assist. Nelson Agyemang President and Managing Expert, Youth Development Foundation-YDF e-mail:nelsonagye@yahoo.com +233-241-888-167

Submitted by Mangaraj Panda on
Please practice System of Rice Intensification process for making agriculture more viable and less costly. Using the process of SRI now a day small and marginal farmers with less irrigation faclities and rain dependant farmers have got good results in India and other countries. So, to provide more income to farmers and participate in supply chain of agri-bussiness to create employment will become meaningful.

Submitted by Oladeinde Oloyede on
We in Nigeria are more interested in having a stable power supply than having our agriculture revived. I keep telling people there is no amount of money we spend on power that can actually give us stable power. My opinion is that what ever amount of money the Government want to spend on power lets divide the money into two and use part of it for agriculture. Make it compulsory for every state government to have a farm that caters for their needs. The surplus can now be sold .

Farm subsidy in the developed world is something that cannot simply be turned off. It is not going to happen. Quite often it is not a farm subsidy as such. Take for example a farmer in Canada who is unable to make money from their farm. This farmer will be provided with financial support, like any other Canadian (whether working as a banker, driver, teacher etc) to enable them maintain their high standard of living. Barriers to entering the market in developing countries are not limited to farm subsidies, i.e. where such subsidies exist if at all. How does Africa convince the rest of the world that they have food to sell when all the time reports indicate that Africans are dying from hunger, disease and malnutrition is rampant? The image that the world has of Africa is that of long queues of emaciated men, women, and children, bowl in hand, at a food distribution centre. However, if we really want to sell to the developed world, we can and it is easy. Only two things matter: quality at low price. If you don’t believe me, ask the Chinese.

Submitted by Earnest Ekokobe on
Auntie Obiageli, first of all congratulations for the brilliant work you did prior to your new appointment, you are like others the women LIGHT OF AFRICA. The continent desperately needs voices and leadership that you provide. Congratulations too for this new position as Vice President of the African Division. As an advocate and free lance researcher in economic development in Africa and the Diaspora community in the UK, I would like to suggest that you actively engage, consult and listen and why not facilitate a conversation with the diaspora community in the UK too about how we can together with the bank make Africa the place that we dreamt it to be. I am making this suggestions as a follow up to a similar call I made to the African Development Bank wherein I said it is curious to know that all the development agencies working in the continent hold working sessions with other partners and ignore the most relevant partner- the diaspora community that contributes more through remittances, have a great talent pool the continent needs and are the greatest stakeholders. I hope you will follow through with this initiative having followed you on that speech you gave at Columbia University. I am encouraged by your strong love and passion for the prosperous future of the continent we need you to infect us too with your enthusiasm. I am putting myself forward help make this meeting happen. Godspeed, Godheed.

Submitted by Milcah Walusimbi on
Earnest Well put my dear, I am also a diaspora living in the UK and I am currently doing a FDSC Agriculture, I have only listened to madam Obiageli's speech this morning and I thought it was inspiring. But I also curious to find out how the African community in the diaspora can get together and contribute the developments in the agriculture industry, believe that thats where the future will be for Africa and like you I will be happy to be involved in any intiatives that will see this happen.

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