Food Processing: A fancy makeover

COMESA 2018 Special Report, By Neeta Baporikar*

COMESA 2018 Special Report

The food processing industry is of enormous significance for development as it increases efficiency and effectively links nation’s economy, industry and agriculture.

COMESA is an agriculture dominant region, with agriculture being the main economic activity, especially for the rural poor, accounting for 31 percent of the region’s GDP. The most important agricultural exports to markets outside the region include coffee, tea and spices; edible vegetables and certain roots and tubers, fish, crustaceans, live trees, cut flowers, oilseeds, various grains, seeds and fruit; and cereals. Cattle production is a significant livestock activity. Notwithstanding the strategic importance of agriculture in the region’s economic development, the sector has grown in most COMESA member states at a lower rate than their national populations. However, the agriculture sector’s performance has been lacklustre due to unfavourable environmental conditions, including droughts and floods. Nevertheless, there exists a huge potential market in the region which needs to be better harnessed with improved agricultural management and better market access, supported by the provision of marketing information measures.

Rationale for food processing industry: A golden opportunity

The COMESA region offers a number of opportunities for agricultural development. With a population of about 379 million people, the region represents a major market in Africa. This large and varied regional market is an opportunity for member states to improve their economies through cross-border trade promotion. To do that, agricultural diversification that is complementary is necessary and overdue in the respective countries within the COMESA region. Furthermore, trends prevailing in the agricultural sector of the COMESA region dictate that a shift be made away from focusing solely on agricultural production, to paying more attention to analysing the actual and potential opportunities in agricultural processing, marketing and storage, commonly referred to as the Food Processing Industry.

The food processing industry operates across various segments, which generally include fruits and vegetables, meat and poultry, dairy, marine products, grains and consumer foods (which includes packaged food, beverages and packaged drinking water). The food processing industry is of enormous significance for development as it increases efficiency and effectively links nation’s economy, industry and agriculture. The linking of these three pillars synergises not only the development process but largely promotes economic growth (Halde, Nishtala, Annapure, Appaiah, & Kulkarni, (2013).

Therefore, the question is: what next for the promotion of the food processing sector? Credit facilities must be accessible if a successful shift has to occur from production to processing, preservation, storage and marketing. Training with a view to increase and enhance farmers’ technical and marketing skills is another important aspect. The lifespan or 'shelf life' of most agricultural products after harvesting is quite short. In fishing, for instance, the handling of the catch prior to processing, transporting and selling is very important. It is essential to use ice to store the fish in low temperatures immediately after it is caught. Sanitation through the insulation of containers, preservation through freezing, drying and smoking, all require specific skills and better management. The task is now to improve on the methods and techniques that are in use in the various stages of production, processing and consumption. In some instances, it might be more advantageous and cost effective to operate more in groups or cooperatives and less as individuals. The issue of how producers and farmers organise then becomes an important one. At the individual country level, as well as at the sub-regional level, integrated planning is prerequisite for a meaningful transformation of the agricultural sector.

Challenges to propelling the food processing industry

• Nature of African economies and lack of progress in regional integration;

• Absence or poor state of trade and logistics related infrastructure;

• Macro policy problems like weak macroeconomic coordination, multiplicity and inconvertibility of currencies;

• Other supply-side problems of trade facilitation like export promotion, inefficient customs administration.

The COMESA Secretariat, though, is aware of the problems and keen to address them; yet, issues of food and agricultural marketing information remain largely unaddressed, limiting both intra and extra COMESA trade and defeating the vision of the Free Trade Area (FTA) in agriculture. Agricultural Policy is the regional framework for agricultural development. Hence, the Comprehensive Africa Agriculture Development Programme (CAADP) now adopted will build capacity for member states to undertake safe and increased trade in agricultural and food items within and outside the region, with positive implications for regional integration, agricultural income generation and rural livelihoods.

Further, to address these daunting issues, including youth unemployment, a rational view is that food-processing industry can best develop through SMEs sector development. Hence, this marriage of SME sector with food processing needs to be the priority for COMESA. At present, SME segments are drawn and COMESA is working on five clusters, which include agro-processing, footwear, garments, etc. Noting that development must begin and end with the people, and especially the youth in the case of COMESA, the road should include the following:

• Access to markets and institutional strengthening for agriculture value chains;

• Banks and financial institutions must play a bigger role in extending credit;

• Creating an enabling environment to focus on policies, knowledge transfer, coordination of information and statistics;

• Developing better water management systems, labour saving technologies and enhance land productivity;

• Discussing mechanisms and develop frameworks to address low volumes, poor delivery, and sub-standard products and services;

• Including capacity development issues, based on an integrated and comprehensive approach to national and regional programmes;

• Supporting implementation of policies in higher education, science and technology adapted to economic priorities and job-creation and increase the volume of investments in support of agriculture and related research centres.

Gender inequities in access to credit, inputs, labour, markets, public services and technologies is widespread in rural Africa. There is indeed significant prior evidence of productivity differences by gender (Udry, 1996; Doss and Morris, 2000). Likewise, greater distances from paved roads and trading centres may proxy for prohibitively high transaction costs, which prior studies reflect as having a correlation to agricultural productivity (Stifel and Minten, 2008). Sub-optimal investment in infrastructure can lead to incomplete factor markets, for example, through stock-outs of seeds and fertilisers (because of prohibitively high transaction costs) or thin labour markets. Further, variation in the agro-ecological zone, which serves as a proxy for agricultural potential, explains variation in the degree of market failure.

Regional harmonisation of food processing policies is both a technical and political process. It requires strong political will and commitment at various levels within the governments and institutions of Member States. The progress made and political-buy in realised so far could be attributed to the fact that it is been a recurrent agenda item in various COMESA policy meetings. National sovereignty is a fundamental and sensitive issue. The convergence and divergence between national and regional frameworks need more clarity. Handling pertinent concerns carefully to dispel fears that the regional process may infringe on, or override national interests and decision-making powers is crucial. A policy on its own is insufficient to deliver desired changes to a society without proper implementation.

Awareness and outreach efforts need enhancement in order for countries to appropriate the benefits of a regional approach in food processing decision-making. This necessitates the need for a focused and demand-driven communication strategy and implementation plan to ensure delivery of credible evidence to target audiences in the formats best suited for them. Thus, with limited global resources, in the face of environmental changes, meeting future food security challenges will first require a shift in thinking from just ‘producing food’, to food systems where the food processing industry has, no doubt, a vital role to play. It is the right time for COMESA to carry out its much expected roles and responsibilities.

References

Doss, C.R., and Morris, M., (2000). How does gender affect the adoption of agricultural innovations? Agric. Econ. 25(1), 27–39.

Stifel, D., and Minten, B., (2008). Isolation and agricultural productivity. Agric. Econ. 39(1), 1–15.

Udry, C., (1996). Gender, agricultural production, and the theory of the household. J. Political Econ. 104(5),1010–1046.

Halde, P., Nishtala, S., Annapure, U., Appaiah, K. A., & Kulkarni, D. N. (2013). Skill Development in the Indian Food Processing Sector. In B. Narasimharao, S. Kanchugarakoppal, & T. Fulzele (Eds.), Evolving Corporate Education Strategies for Developing Countries: The Role of Universities (pp. 186-199). Hershey, PA: IGI Global.

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