African agriculture won’t thrive on fertiliser subsidies but working markets

 

The UN Secretary-General Special Envoy Agnes Kalibata works with the United Nations system and key partners to provide leadership, guidance and strategic direction towards the Food Systems Summit.

Dr Kalibata is the founder and executive director of Connecting Africa Now. She has also served as president of the Alliance for a Green Revolution in Africa (Agra) for a decade. Prior to joining Agra, Dr Kalibata was Rwanda’s Minister of Agriculture and Animal Resources from 2008 to 2014.

She spoke to Jackson Mutinda on the sidelines of the Standard Bank Africa Unlocked 2025 in Cape Town about the future of African agriculture.

What myths about African agriculture do we need to bust?There are quite a number of myths about African agriculture. And being here in this meeting, where we are with bankers, the private sector, and institutions that fund agriculture, it's important that we paint a picture, and help them understand where the sector is at and where it's going.

African agriculture has tripled in volume, in a way matching the population. Of course, there are still issues of access, and those problems will always be there. But, in the last 30 years, we grew from 400 million metric tonnes in volume of food to 1.2 billion metric tonnes per year. That's important, the sector is growing.

It’s critical to understand the drivers of growth. One of the biggest drivers of growth, of course, is urbanisation. Africa has urbanised pretty fast.

In the same period, we moved from around 135 million people living in cities to around 500 million. That's a huge population, which is diversifying its diets, demanding different types of food. So, we've seen a surge in vegetable need, we've seen a surge in fruit need, a surge in meat need. We've also seen a surge in the need for processed food.

Another thing is that lot of people think about African agriculture as subsistence, meaning we all grow food in our backyard, especially the rural population. But, the truth is, 55-60 percent of the food eaten in rural Africa is bought, meaning it's not grown in the backyard.

It’s bought, either because economies are improving and people can afford it, or people need different things from what they grow. Whatever the cause, that market is growing.

The next myth is that we need big business versus the type of businesses we have. The average African business today, an SME in agriculture, is $300,000-$500,000.

They’re pretty small, compared to businesses we have out there. But these businesses are putting in a lot of weight -- 85 percent of the food we are eating in cities, in villages, is moved around by these SMEs. They provide the logistics to 1.2 billion metric tonnes of food a year.

So, these are some of the things you want financial institutions to hear, because you want these businesses funded.

We still have limitations, of course. But where the market signal is clear, the businesses move -- agriculture moves. And many of the limitations are because we still need to invest in infrastructure; to invest in market development; in policies and finance needs to catch up. But the growth is there.

What is the place of technology in African agriculture?There are a number of ways to look at technology in African agriculture. Technology is making it easier for agriculture to be profitable. So, in terms of productivity, if I talked about technology that is responsible for productivity, you want to be using high-yielding seeds, good fertilisers -- very specific fertilisers so that there's value for money. You want to be doing mechanisation. (Kenyan software company) Hello Tractor was born out of something like that.

That’s how economies are built. That’s why in the past, they had projected that if we invested 10 percent of our budgets in agriculture, we should see a 6 percent increase in GDP. So, there’s no sector that is more responsive to investment than agriculture. But, of course, it has to be accompanied by credible access to markets.

So that is one role of technology on the productive side. There’s now an increasing role of technology where access to information is much better, and we need information now more than before. Weather information is becoming really critical. Market information: It is the only real reason farmers farm -- they want to have markets.

And then there’s an opportunity for extension, because it’s an area that is weakly invested by governments. So, if we can find ways of using modern technology -- AI-driven -- to reach farmers faster and better in their environment, then we can get a lot more done. So, there are opportunities there.

But also technology is fast-tracking research. Things that would have happened over 100 years are happening in months. And the technologies are getting to farmers. So, the place of technology is huge. The last and probably most important, it is attracting young people to agriculture.

You see young people that have all sorts of drones monitoring insects, that are influencing spraying, that are influencing irrigation systems. Now, there's real focus on innovations in the agricultural sector, through and by young people.

Looking at Africa, what countries would you say have real potential for agricultural production, for feeding regions, and perhaps whose potential has not been exploited?There are a number of ways to look at Africa’s production potential. Again, looking at it in general is a good place to start, without pushing it in any particular country.

We talked about Africa importing commodities it can produce. So, let's talk about the four commodities worth $34 million we are importing. That's rice, wheat, maize and oilseeds.

Wheat and oilseeds can be comfortably produced in Southern Africa. Zambia, Zimbabwe , and South Africa are very good producers of wheat.

Mozambique and Malawi are very good producers of soybean. Tanzania is a good producer of sunflower.

A huge part of East Africa can produce good rice, at very low cost, and competitively. A huge part of West Africa can produce rice, and very competitively.

The real market is the person who can produce as much and has to import. Earlier we were talking about neighbouring countries: One is importing from Brazil; one is producing surplus and has nowhere to put it, mostly because the connectivity in those two countries is very poor. They share borders, but the transport ecosystem is poor.

If we are transporting, we are using trucks instead of rail, which costs $200, as opposed to $6 a tonne. What type of business would that be? When I was working at Agra, a number of regions had been mapped out as food baskets, based on the production potential. These regions can produce enough food for Africa. But for that to be of value, Africa would have to trade with Africa. Countries would have to open borders more, and the African continental trade would have to work.

What is your assessment of Africa’s policies towards agriculture? Are we doing well? Why hasn’t the 10 percent budget allocation worked in many of the places you know of?You know, I’m not so much worried about the 10 percent of money going into agriculture as I am about the quality of whatever money that goes in, and where it goes. I’m worried about the quality. Because, you see, if you put in 5 percent in the right places, it adds up. But if you put in 10 percent in the wrong places, then the value is not there. It’s as simple as that. And if you keep putting it in the same place, it leaves many other places uninvested.

So for agriculture to work, infrastructure must work. You must reach farmers; you must have proper roads and rail. For agriculture to work, markets must work. It’s not just production. Even production needs irrigation. But many of our countries are investing 70 percent of agriculture budgets on fertiliser subsidies.

That’s what I’m worried about -- fertiliser subsidies. Because fertiliser subsidies will not deliver African agriculture. I’m not saying we don’t subsidise the sector. I really care about how we make it easy for farmers to access what they need. they need irrigation, they need localisation, they need access to finance.

Where are women in the agricultural revolution?Women in many places are 50 percent, sometimes even 60 percent of the workforce in agriculture. For a number of reasons.

Women haven’t had the level of access to finance or to means that they need to be productive. But this is changing. For example, Agra created a platform that has 10,000 women businesses that are registered. It’s called Value4Her.

It ensures that women can access information on agriculture: information on value addition, information and support in financing, information on how to support and create businesses.

As they grow bigger, they go on to have an investing fund, the African Enterprise Challenge Fund. But the young businesses are supported through small merchant grants.

So, this type of ecosystem allows women to be in business in agriculture and to be creative.

But it’s not the only one. We do have a programme with MasterCard Foundation that puts emphasis on funding. At least 80 percent of the target financing is for women in agriculture.

Let’s talk about the stocktake of the Food Systems Summit that is coming up. What are we looking forward to?Every two years, from the summit that happened in 2021, we take stock of the progress we are making because the agriculture sector needs to be transforming.

It needs to increase productivity in some areas. It needs to reduce waste in others. For us in Africa, we care about increased production and improved access to nutrition.

For other parts of the world, where excessive production is happening, we care about reducing the impact of that on the environment. So, that means the sector needs to be transforming.

This year, the stocktake will be looking at what type of innovation ecosystem has been put in, what type of progress we have made, with a real focus on investment.

Source: ZAWYA.com

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