The escalating global food crisis is threatening to destroy most of the advancements made in poverty reduction over the past decade. But this crisis could be turned into an opportunity for Africa says the author.
Based on even the most conservative estimates of food price increases across the globe, at least 100-million people will be pushed back into absolute poverty, defined as living on less than $1 a day.
Undoubtedly, there is an urgent need for immediate relief to those most affected by the emergency. Yet this crisis should also serve as an opportunity to remove the policy distortions introduced over the years by developed countries eager to protect their markets, and thus fragmenting the international food market.
Among developing countries, on the other hand, it is an opportunity for renewal in a sector that has been neglected for too long. Demand for food is indeed likely to continue to grow, both globally and within Africa, where food imports are expected to more than double by 2030. At the same time, Africa’s supply base offers significant room to expand from its position of hosting the world’s lowest ratio of arable to total land use. Beyond increasing land use, though, the focus should first and foremost be on increasing agricultural productivity in the continent.
Excluding SA, agriculture remains the largest economic sector, accounting for close to a third of sub-Saharan Africa’s gross domestic product. At the same time, the agricultural sector consistently under-performs, with food production per capita stagnating — even slightly decreasing — since the 1960s.
The priority for African governments should therefore be to sensibly confront the various complex and context-specific problems pertaining to land distribution and ownership. Land is a politically and symbolically charged notion across much of sub-Saharan Africa. Land redistribution issues tend to grab most of the headlines and attention, but land tenure reforms are just as relevant to economic growth and poverty reduction. The aim of these reforms can, and should, be to enhance the land rights of the poor, securing their rights over the land, and devolving power over land administration away from central authorities to local democratic institutions.
Once farmers own their land, they are far more likely to invest in it, thus boosting agricultural productivity. Yet despite this reality, some governments have been loath to give up control, and go on perpetuating both inefficient and ineffective schemes to support farmers. This must change.
The agricultural sector’s consistent underperformance is also directly linked to
decades of underinvestment. Whether it is the proportion of irrigated farmland, the application of fertilisers, or overall government expenditure
dedicated to agriculture, sub-Saharan Africa massively lags behind other regions of the world.
Yet governments are not the sole parties concerned; rising food prices have also fundamentally changed the equation for the private sector. Indeed, as competition for commodities increases worldwide, food and beverage multinationals have started reaching down the value chain, eager to secure and control both the quality and steadiness of their supply chains.
These same companies, which used to buy unprocessed food from brokers and wholesalers at fairly low cost, have thus shortened their supply lines by cutting out the various middlemen. They have, as a result, begun investing in agriculture in a way unseen before — by building ties with international bodies, nongovernmental organisations and, most importantly, local communities to ensure farmers go on growing food for human consumption rather than maize for biofuel producers.
Apart from getting access to technology and seeds, these local communities thereby gain previously denied access to a dependable, high volume outlet, which should boost their profitability and allow them to specialise in fewer crops — as they do not need to hedge against volatile prices and demand anymore.
Paradoxically then, the international food crisis both impoverishes the average African farmer while strengthening his strategic position in the food value chain, where he used to be chronically and structurally disadvantaged. This position could be further strengthened if there was a consolidation of Africa’s agricultural sector, which is typically dominated by a myriad of small
farms not easy for investors to bankroll.
It is this on these and related issues that the organisation I represent will come together in Cape Town, from tomorrow until Friday. Under the theme Capitalising on Opportunity, the World Economic Forum on Africa will once more bring together Africa’s top leaders and decision makers to forward the African agenda.
The forum will highlight how many of Africa’s seemingly intractable problems, ranging from the food crisis to energy shortages, often bear hidden opportunities for business, government and communities willing to rise to the challenges by engaging in partnerships.
