Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

29 May 2011

Food prices continue upward trend

Maize prices show no sign of falling from recent highs. On Friday 27 May the Gulf of Mexico price for a tonne of maize, as reported by Index Mundi, was US$322.64. That represents a doubling in twelve months and a nearly four-fold increase in a decade.

Continuing dry weather in many parts of Europe has led the FAO to warn of food riots. Abdolreza Abbassian, senior grains economist at the FAO, said: "If the current situation continues prices will respond very aggressively. . . Our fear is that we still haven't seen the worst of food inflation in vulnerable countries and that could be coming".

The Economist also warns of potential for food prices to trigger unrest. It reports that people living in the towns of sub-Saharan Africa spend a bigger share of their income on food than do urban residents almost anywhere else in the world.

Initiatives to stimulate investment in agriculture, such as the Southern Agricultural Growth Corridor in Tanzania, could do much to boost yields and farmers' incomes. But time is running out. As Jawaharlal Nehru the first Prime Minister of India said, "Everything else can wait but not agriculture".  

23 May 2011

Seeds can change the world: Mozambique, Beira Corridor

Associated Press: Peter Waziweyi is bouncing around the lush countryside of Mozambique in his 30-year-old truck, visiting his customers' maize fields and relishing the sight of their rich, ripening crops.

In an East African country that tried and failed to run its economy on Marxist lines, it is now the turn of small-time businessmen like Waziweyi to step forward. Waziweyi is a seed salesman and part of a chain linking scientists and farmers that experts hope will help Mozambique and other African countries solve their chronic food crises.

Waziweyi has gone from aid worker to entrepreneur, producing high-yield, drought-resistant hybrid seeds and selling them through the company he and his wife founded last year, called "Nzara Yapera" — "an end to hunger."

"That's what we call positive results with immediate impact," he says after meeting a farmer who has seen what hybrid maize seeds can do and wants to buy them.

Better seeds fueled the "green revolution" of higher, more reliable crop yields that transformed farming in many parts of the world.

But Africa has come late to the green revolution, and Mozambique later than most. The former Portuguese colony is almost a laboratory specimen of the continent's post-independence woes: 17 years of civil war, spells of flood and drought, one-party rule tainted by corruption and antidemocratic tendencies. Like several African countries last year, it suffered riots over high food prices.

Gradually, the government is relinquishing control of the economy. A state-owned seed giant was broken up recently into an array of private producers, and Antonio Limbau, Mozambique's deputy agriculture minister, said he wants the profit motive to spread.

Across Africa, experts say, only 20 percent of farmers are using state-of-the art seeds. In Mozambique, Limbau said, it is just 5 percent.

While genetically modified seeds raise objections here just as they do in some Western societies, hybrid seeds and other modern techniques go down well in Africa. Success stories cited by researchers include cocoa in Ghana, cotton and coffee in Uganda, flowers in East Africa and beans in Rwanda.

But the World Watch Institute, a Washington, D.C. think tank, cautions that better seeds are not enough: Farmers need ways to keep their soil nourished, reliable customers and roads to bring their produce to market.

While free-market approaches may have some effect in Mozambique and elsewhere, however, the drive for better seeds is led by charities and other nonprofit organizations, because Africa is too poor to be of interest to big international seed companies, says Joe DeVries, a Kenya-based seed expert. He works for the Alliance for a Green Revolution in Africa, or AGRA, set up in 2006 by The Rockefeller Foundation and the Bill & Melinda Gates Foundation.

AGRA is working to get governments to leave seed distribution to the private sector. In Mozambique, it gave $1.5 million to train small merchants to run better businesses, develop links with suppliers and learn tips to pass on to farmers. The three-year project is run for AGRA by the International Fertilizer Development Center, based in Muscle Shoals, Alabama, and financed by the U.S. and other governments.

One of those attending an IFDC dealer-training session last year was Paulinho Wilson. He used to sell packets of vegetable seeds and the odd bag of maize seed out of his grocery in Catandica, a town in west-central Mozambique. Now, using his newly acquired entrepreneurial know-how, he has sold 20 25-kilogram (55-pound) bags of hybrid seed. He also advises farmers on how to use fertilizer wisely.

He has even come up with an advertising ploy, hiring a farmer to plant a crop of hybrid-seed maize outside town where farmers would notice it. Now, he says, customers are urging him to sell less soap and cooking oil and more seeds out of his tiny store. "Business has really expanded," he says.

The IFDC's Gil Mucave said some 25,000 farmers in northern Mozambique saw such demonstration plots or received other information about hybrids last year, and he is hoping to reach 60,000 this year. The training projects also put dealers in touch with banks willing to give loans.

Waziweyi, a short, white-goateed man, buys stock from government researchers to mass-produces seeds for sale to dealers — Wilson is one of them — or directly to farmers. Last year he produced 100 tons of seeds on more than 100 hectares (250 acres), and believes he has enough buyers to justify tripling his output this year.

One of his favorite farmers is Joseph Dzindwa, who has expanded his maize fields eight-fold to eight hectares (about 20 acres) in the last few years. Dzindwa said he could not have done it without hybrid seeds.

Waziweyi visits Dzindwa regularly to check on his progress and offer advice. "If he continues to grow, then our company will grow," he said.

Meanwhile, Catandica offers plenty of evidence of how hybrid seeds can help improve lives. The fruits and vegetables in the roadside market stalls are testimony to the soil's richness and the farmers' hard work. Yet behind the stalls, Mucave, the development worker, points to row after row of stunted maize raised from traditional seeds and untouched by modern technology.

"It's really true," he said, "seeds can change the world."

17 May 2011

Global food waste tops 1bn tonnes a year - FAO

More than a billion tonnes of food is being wasted globally every year, unnecessarily exploiting land, water and energy, the United Nations Food and Agriculture Organisation (FAO) has claimed.
A report commissioned by the FAO said improved harvest techniques and farmer education was needed to reduce the 1.3bn tonnes of food which is lost along the food chain or wasted every year.

The study says food loss - which occurs during production, harvest, post-harvest and processing phases - was more significant in developing countries. But in the developed world, consumer food waste was the biggest trend - accounting for 222m tonnes - more than the entire net food production of Sub-Saharan Africa (230m tonnes).

Making a series of recommendations, the FAO report says greater investment in processing facilities in developing countries was needed. It also calls for the creation of contract farming linkages between processors and farmers, as well as a "better enabling environment" to stimulate the private sector investment in the food industry.

Marketing cooperatives and improved market facilities, with funding from public and private sources, were also essential, with a role for farmers markets to narrow the gap between producers and consumers, the report adds.

6 May 2011

World Economic Forum: Innovative Partnerships Are Essential for Development Success

Innovative partnerships are essential to the success of African development, said business, government and civil society leaders in a plenary session on the second day of the World Economic Forum on Africa. “Partnerships are desirable and necessary and have worked well for us,” Tanzanian President Jakaya M. Kikwete told participants.

Kikwete described how his government has worked with farmers, local and international business, donor partners and civil society groups to develop the Southern Agricultural Growth Corridor (SAGCOT), a public-private initiative to drive growth and productivity in Tanzania’s breadbasket region. A SAGCOT Centre has been established and a Catalytic Fund will be launched in a few months. He also noted that his government is collaborating with the Alliance for a Green Revolution in Africa (AGRA) chaired by former UN Secretary-General Kofi Annan. “The innovative partnerships that we have created address one particular problem we face – how to transform Tanzanian agriculture, which is predominantly subsistence and marked by low productivity.” Added Annan: “Our vision is not just to help farmers to feed themselves but also to feed the markets so Africa can become part of the global food security system. This is not a pipe dream.”

Governments cannot do everything, Annan argued. “That mindset has to change.” Partnerships offer a way to different players with differing skills and resources to join together and create a venture that is greater in value than the sum of the parts. “We in the private sector live with partnerships,” explained Strive Masiyiwa, Group Executive Chairman of Econet Wireless Group. “Anyone trying to build a global business knows you cannot do anything without a sincere approach to partnership.”

Sustainable businesses regard the communities in which they operate as partners, Godfrey G. Gomwe, Executive Director of Anglo American South Africa, stressed. “We look at ourselves as partners of development with host governments.” For some governments, partnering with business is hard enough; joining together with civil society requires a major leap of faith, said Lindiwe Majele Sibanda, Chief Executive Officer and Head of Mission, Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN). “This is a sector that is not incorporated in formal structures,” she explained.

According to Mark Suzman, Director, Policy and Advocacy, Global Development, at the Bill & Melinda Gates Foundation, there are three keys to successful partnerships: clear definition of the roles of each partner, understanding that joining together offers clear mutual benefit and the willingness to be flexible. “Very few partnerships work seamlessly from the start,” Suzman noted. “The difficulty is doing the upfront mapping [to determine if] the partnership will really add value and be self sustaining.” Reckoned Annan: “For partnerships and relationships to work and be sustainable, there has to be social trust. Otherwise, some groups will not get into partnerships, or if they do, they will not last.” Building that trust, however, takes time, warned Rajiv J. Shah, Administrator of the US Agency for International Development (USAID) and a Co-Chair of the World Economic Forum on Africa. “It takes a lot of time working together.”

To African business, government and civil society leaders considering partnerships, Masiyiwa offered this advice: “You must first know your partner. If you want to go into a partnership, start building them among yourselves as Africans. Know the terrain. Go travel. Africans often don’t know Africa.”