Africa is also on the verge of turning an existing and farm-centered system into a more commercialized and productive business. There is a growing need to respond swiftly to urbanization, changing diet and a growing economy.
In Africa today, about 70 percent of the population is involved in agriculture (small scale). Naturally, agriculture is among Africa’s top options for economic development and job creation for its youth. The massive growth of Africa’s food market is acknowledged by the World Bank with an estimated worth of $1 trillion US Dollar by 2030. This means there will be twice as much demand for food by 2050 in Africa. The combination of this trend with Africa’s food import bill leverages an estimated $30–50 billion US Dollars, indicating an opportunity for Africa’s largest entrepreneurs – small scale farmers to grow their agricultural businesses.
Africa is also on the verge of turning an existing and farm-centered system into a more commercialized and productive business. There is a growing need to respond swiftly to urbanization, changing diet and a growing economy. Agricultural value chains are also becoming more urbanized and consumer-driven, with exceptional standards on process quality and food safety. Agricultural productions are on the rise and more employment is being created along value chains in the form of agricultural trade, farm servicing, agro-processing, urban retailing and food services. These dynamics are creating opportunities for growth within Africa’s food system.
However, to sustain or maintain these advances and drive Africa’s agricultural transformation, much more investment in agriculture needs to be made. These investments are set to create better-living conditions for Africans; according to the Malabo Declaration, in the Sustainable Development Goals (SDGs), and in Africa’s Agenda 2063. Also, and more importantly, these investments need to be of primary benefit to the small scale farmers and small and medium enterprises (SMEs) operating in the agri-food system. With the numerous limitations in small scale farming and the advanced requirements of urbanized markets, small scale farmers and SMEs in the agric-food system face the danger of being left out while bigger and commercial farms reap all the benefits.
In the last decade, India and Africa have seen great cooperation in the area of food security. India’s development pact with Africa in the field of agriculture is envisioned through four mechanisms:
i. Bilateral Cooperation: India has enjoyed long-standing cooperation with several African nations through training programs, institutional development, providing soft loans in the agriculture and allied sectors for the improvement of farming techniques, irrigation, soil quality assessment and improvement and the provision of farm equipment.
ii. Trilateral Partnerships: Some of India’s notable trilateral partnerships to ensure food security in Africa include; interventions through ongoing India, Brazil and South Africa (IBSA) Fund, the United States Agency for International Development (USAID), and the United Kingdom’s Department for International Development (DFID)-funded Supporting India’s Trade Preference for Africa (SITA) program.
iii. Private Sector Participation: The Indian government encourages private sector partnership initiatives in Africa; primarily by creating export-friendly policies. This is well received by African policies to attract Foreign Direct Investment (FDI) through financial and regulatory structures that create easier business processes.
iv. Partnering with Civil Society: Indian NGOs like the Self Employed Women’s Association (SEWA), are committed to sharing knowledge and models on female empowerment and self-reliance based on proven experiments in rural India to their counterparts across Africa. In the past decade, the organization has also started to work on women-to-women (W2W) partnerships in African countries.
SEWA shared its proven strategy of learning and sharing of experiences with the smallholder women farmers in Ghana. Today, women in Ghana have built a supply chain and export about 200 tons of Shea butter to Japan. For every container of Shea butter, they collectively earn a surplus of 600 Euros from the recent contracts with the Japanese importers. SEWA has been working on such exposure and dialogue programs with women farmers of Burkina Faso, Mali, Ghana, Ethiopia, Nigeria, Zimbabwe, Mozambique and Kenya. This is a source of FDI and capacity building in local and small scale agricultural practices.
Africa has great potentials to become a global food provider, however, with about 60% of the globally available, but neglected, arable land, Africa remains deficient in food. India faced a similar food shortage scenario; accordingly, India initiated and implemented a ‘Green Revolution’ model to develop its agricultural sector. This was achieved through government grants, government support for the private sector, research into mechanized seed and equipment and infrastructure development, amongst others. Africa can learn from India’s ‘Green Revolution’.
The primary driver of India’s ‘Green Revolution’ in creating food security was its Political will, accompanied by state and institutional enforcement. This measure ensured the participation of small farmers and SMEs in the Green Revolution. Also, the private sector was regulated to maintain a balance between profit-making and the ‘Green Revolution’ model. It is evident from this scenario that the government needs to work closely with the private sector to ensure that small farmers and SMEs have access to the market with minimum loss and maximum profit on their agricultural products.
Indian FDI for Capacity-Building and Value Addition to the Agricultural Sector on the Continent through both Government-Led and Private Sector-Driven Initiatives
India and Africa have long been cooperating through sharing knowledge, conducting training, building institutional capacity, providing soft loans in farming techniques, irrigation, soil quality assessment, conservation and improvement, and supplying of farm equipment. Some of the ongoing initiatives of the Indian government for capacity building in Africa include:
• (1) Developing agricultural research institutes and training programs. (2). Supporting technical exchanges in the agro-processing and allied sectors. (3). Awarding of scholarships to African students to study in agricultural universities in India (4). FDIs led by the private sector and on a Public Private Partnership (PPP) model.
India is also collaborating with Africa on multiple fronts towards developing value chains and partnerships for capacity building by:
• Developing local food production through the enhancement of yield/land through the export of ‘triple-A – appropriate, adaptable and affordable – technology’ in agricultural equipment, transfer of skills in water management (micro-irrigation), more crop per drop through drip irrigation and precision agriculture, seeds, fertilizer and the agro-processing sector.
• Promoting duty-free access to Least Developed Countries (LDCs) for the exports of 98 percent of Indian goods under India’s Duty-Free Tariff Preference Scheme (DFTPS), launched after the first India-Africa Forum Summit in 2008, which has been subsequently revised since 2014.
• Supporting Africa’s agenda in the agriculture sector through bilateral and multilateral diplomatic initiatives such as the three India Africa Forum Summits (2008, 2011 and 2015); and the Indian Prime Minister’s four-nation visit to Africa in July.
Africa’s ability to become a global food provider may lie in technology. To maximize agricultural production in Africa, some possible technological interventions which can be adapted from India are:
1: Seed technology: Seed is the backbone of agriculture; however, many times, traditional seeds are low-yielding, consume more water and are prone to pests and diseases. With biotechnological innovations in Africa, a collection of high-yielding seeds appropriate for the given climatic conditions guarantees the accessibility of the right quality of seeds for a given geographic area. To ensure growth and productivity, Africa requires a consistent supply of high-quality seeds that suits its agro-climatic conditions. India is capable of providing useful technology to African farmers in the form of hybrids (e.g. maize and cotton) and transgenic technologies, with the capacity for future growth.
2: Zero-till agriculture: Zero-till agriculture is one of the innovations in conservation agriculture based on three principles: 1) minimum soil disturbance, (0 to 20-25% tillage). 2) Retention of crop residues on the soil surface, and 3) use of crop rotations or intercropping where land is limited. It has special relevance to Africa where land degradation is a major issue.
An example of where zero-till agriculture has maximized yields is the rice/wheat fields is the Indo-Gangetic plains of India. Zero-till minimizes the turnaround time between rice and wheat crops and encourages timely planting of rice. The no-till technique is now being practiced by farmers in Kenya and Uganda.
3: Precision farming: Traditional agriculture techniques entail planting, irrigating or harvesting against a fixed schedule. By collecting real-time data on the weather, soil, crop maturity, and equipment, farmers can make better-informed decisions.
Precision farming differs from traditional agriculture by its level of management, where, instead of collective field management, management is modified for small areas within the field. However, this form of agriculture is mostly implementable in large fields where there are substantial differences in the field area. In India and Africa, where most farms are small, precision agriculture mainly provides specific use of agricultural inputs on the basis of soil, weather and crop requirements to maximize productivity, quality and profitability.
In assessing specific value chains, factors such as the diversity of geographic, environmental, agronomic, business, and cultural factors between value chains of different sub-sectors make it impossible to implement a general and consistent approach. This is due to a distinct lack of financial analysis of value chains in Africa. However, some major needs across the agricultural value chain include:
Development of Catastrophic Risk Reinsurance Pool: Agricultural finance would benefit greatly from a reinsurance pool through diversification and limiting of losses on insurance products covering catastrophic risks by insurers or bank assurers. These models influence the private sector’s abilities to develop products and accept some risk, whilst relying on the state to funds truly unique situations.
Technical Advice for the Development of Infrastructure: Agricultural practices in Africa is heavily disadvantaged by the lack of decent public infrastructure (and sometimes also services). This includes • Road and rail transport; • Air- and seaports; • Warehousing and cool storage; • Irrigation and commercial water supply; • Power and energy; • Telecommunications.
Supplier/Buyer Finance for Expansion of Working Capital to Producers: Producers lack two kinds of finance; 1: long-term capital required for investment in capital items and infrastructure required to maintain and improve long-term competitiveness, and 2: short-term finance called working capital for day-to-day operating expenses such as input supply. Naturally, financial institutions are less likely to lend long-term compared to short-term. This is because long-term lending presents more future risks than short term lenders. Moreover, financial institutions have their own regular cash commitments to meet.
Finance for other Agricultural Value Chain Enablers: In many value chain cases, competition is affected by ‘enablers’. In modern agricultural practices, these are additional goods and services that support the timely and cost-effective movement of produce through the value chain from producer to consumer. Some of these services in a typical value chain map include; haulers who provide transport services, or warehouse operators who provide storage services. Despite their significant role in the value chain, they rarely seem to get attention from development agencies.
Support Formalisation of Financial Activities: Regardless of the benefits of encouraging savings, measures to advance the formalization of financial activity are important in the long-term. This measures open access to credit for small producers. Savings provide cash-flow for the local banking system, and also an opportunity to generate additional revenue. Also, a good savings record puts a customer at a better credit proposition than one who simply goes to the bank for credit. Efforts to advance this formalization is linked to financial literacy, marketing and product development for financial institutions, and also the application of the IT systems and systematic understanding of the use of data.
India and Africa share similar landscapes, colonial history, and similar economic and demographic challenges. This paves the way for India and Africa to work well together. Today, there are new and great opportunities are on the horizon for India-Africa relations, as Africa’s transformation is taking shape. By 2050, Africa’s population will be the same as the combination of China and India with high consumer demand from a growing middle class. African’s population is expected to rise exponentially. On envisioning a successful sustainable development partnership, Wanjiru Rutenberg, Director, African Women in Agricultural Research and Development, Kenya, noted the need for acknowledging and understanding the power dynamics of the stakeholders involved in agricultural development.
And as Africa’s business environment keeps improving; with easier regulations and more conducive government policies to attract global investors, successful partnerships must be created between interdependent actors who have equal agency, characterized by trust and mutually beneficial outcomes.
Prof. Barwa Kanyane, Senior Research Director, HRSC, South Africa, through his analysis of Agenda 2063, advised that despite the importance of the private sector, the government should ultimately champion and facilitate these partnerships. India and Africa will need to work in a time-bound manner to unleash the potential of the agriculture and related sectors for achieving food security on the continent.