Promoting sustainable agriculture and trade for inclusive growth

Addressing inequalities through private sector development and investment

A1
High-level panel - Auditorium
Wednesday, June 19, 2019
14:30 to 16:00

Promoting innovative sustainable agricultural business models in developing countries, and in Africa in particular, can strengthen national and regional economic development and contribute to the implementation of the 2030 Agenda. Sustainable impact investments in food production and trade can create decent jobs through new transformative partnerships. The potential of trade and business cooperation is key to support the development of agri-food enterprises  and fully maximise trade and enhancing new markets in regional and global value chains. Inclusive and remunerative models which address the inequality factors across the value chains need to be shared and upscaled. New skills development able to match the market needs in value-addition products, blending facilities and innovative solutions to scale up are needed. 

Key points

  • African agriculture holds important potential for economic growth, job creation and import substitution.
  • African farmers will need to take advantage of new smart technologies, but should not necessarily follow the mechanisation models of industrialised countries.
  • There is some evidence that small-scale rather than large-scale farming is more productive.
  • Private investment could provide some of the finance for African agricultural expansion, but foreign investors are looking for predictability and reliable judicial systems.
  • Transparency throughout the agricultural value chain will be needed, to ensure that both the producers and the consumers really benefit from the sector’s potential.

Synopsis

Agriculture will provide many opportunities for economic growth and job creation in the coming years, particularly in Africa. The advent of the African Continental Free Trade Area will liberalise the potential of the African agricultural market and could create millions of jobs for young Africans. Most of the growing demand for food could be met through increased national and regional production in Africa. But if the current reliance on imported food continues, Africa’s import bill is projected to increase to US$110m by 2025. However, regionalisation of agricultural trade faces a number of obstacles, not least the very large gap in agricultural technology between some African countries and others. It could also conflict with the national self-sufficiency policies of some African countries, for example as regards rice. But achieving an agricultural value chain that truly benefits all is a matter of policy as much as economics. It should be made easier for the private sector to participate in the development of African agriculture. The pyramid of the agricultural industry has a “missing middle” when it comes to financing, it was suggested. The big corporations have no difficulty in attracting capital. The smallest farmers are increasingly well catered to by microfinance initiatives. But medium-scale agricultural businesses are left out. Investment from outside Africa could help here. However, foreign investors are looking for predictability, transparency and reliable judicial systems. African agriculture needs to modernise. But it should not necessarily follow the mechanisation and industrialisation models adopted by Europe and North America in the 20th century. There is evidence that small agricultural enterprises are more productive than the larger ones. Smallholders manage only 12 % of the agricultural land, but produce more than 80 % of the world’s food. Capacity building will be important to enable small and medium agricultural enterprises to take advantage of smart technology. The growing demand for organic food could also open up new market opportunities for African farmers. In addition, greater African processing of African agricultural produce could create many new jobs both in both rural and urban areas. One case mentioned by several speakers was cashew nuts, which Africa mainly exports unprocessed

Insight

Climate change is already having a significant impact on African agriculture. Farmers often grow just one kind of crop and this can leave them vulnerable. Maize, for example, is a major staple crop, but needs a lot of water. Diversification will be needed towards more drought-resistant crops.

Organised by

Speakers

Moderator
Michael Hailu
Director
Technical Centre for Agricultural and Rural Cooperation
Zhi Yong Heng
Principal / Head of Trade Finance & Special Situations Group
TLG Capital
Mwala Mooto
Young Leader - Zambia
Patrick Gomes
Secretary General
ACP Group
Isabelle Durant
Deputy Secretary-General
United Nations Conference on Trade
Leonard Mizzi
Head of Unit
European Commission - DG for International Cooperation and Development
Maria De La Concepcion Blanco Aguado
Head of Sustainable Finance Solutions
BBVA Microfinance Foundation
David Laborde
Senior Research Fellow
IFPRI