Embed Size (px)
Citation preview
UNLEASHING THE
AGRICULTURAL POTENTIAL
Delivered by: Nomalanga Mosala
Executive Chairman
Nomalanga Estate
2
Structure of Presentation
Agricultural Sector in Developing Countries
Constrains in the Primary Agricultural Sector
Opportunities in the Primary Agricultural Sector
Investing in Agriculture
An inclusive Agriculture and Agribusiness
3
Agricultural Sector in Developing
CountriesAgriculture and agribusiness are projected to be a US$ 1 trillion industry in Sub-Sahara by 2030 (compared to US$ 313
billion in 2010) according to World Bank Report. But no magic wand will cause a $313 billion agribusiness sector to
grow into a $1 trillion behemoth. The World Bank cautions that everyone will have to work hard—governments, the
private sector and farmers.
Some Developing Countries:
Brazil, Ghana, and South Africa
Agriculture is the most important sector in Brazil and had successes in reducing inequality, growing the economy and inclusion of small grower farmers while maintaining a successful commercial agricultural sector. There are valuable lessons to be learnt in this context.
In Ghana, cocoa is a quintessential smallholder crop and is extremely important in promoting inclusive growth in the region, over 700 000 smallholders produce the crop and has become a major source of poverty reduction. However, there is still a need for better-organised and more skilled smallholder farmers. Ghana has already halved poverty by boosting cocoa farmers, becoming the first sub-Saharan country to achieve the first Millennium Development Goal, which is to reduce by half the proportion of people living in poverty and hunger by 2015.
The National Development Plan (NDP) vision through the Integrated Food and Nutrition Security Initiative (IFNSI aims to plant 1 million hectares with grains as a way of boosting primary production through smallholder farming, particularly in the former homelands and create a million jobs by 2030
Agriculture and Agribusiness accounts for nearly half of the GDP of Africa. Africa has more than half of the World’s agriculturally suitable land, yet it is underutilised. The impressive water resources remains optimally untapped. Whereas Private Sector interest in African agribusiness is unprecedented. As Mr Gettu says “There is a harsh paradox of suffering amidst plenty; of a continent with rich, arable land but unable to feed its citizens. “Hunger and malnutrition remain pervasive on a continent with ample agricultural endowments,”
Agriculture is:
Catalyst for Economic Growth;
Source for Social Development and Wealth Creation;
Cornerstone of Poverty Reduction; and
Addresses Inequality
As a Continent we should put Agriculture and Agribusiness at the top of the Agenda
4
Constraints in the Primary
Agricultural Sector
Access to Arable and Irrigable LandWhile Africa is bestowed with half of the World’s agriculturally suitable land and impressive water resources, the majority of primary producers remain marginalised due to structural, financial, skills , lack of social cohesion, and legacies such as apartheid for example
Access to MarketNot enough concerted effort is placed on ensuring that primary agriculture is integrated in the value chain of produce so that growers don’t remain the price takers
InfrastructureThe infrastructure cost remain high as the Agriculture is by and large rural orientated where there is limited or no infrastructure. Governments infrastructure investment should include significant overhaul to of the status quo to stimulate a vibrant agricultural sector
Lack of Adequate SkillsAgriculture is a scientific discipline. While is practiced by the majority of the African and Global population for survival, it remains a technical phenomenon. The lack of skills in the production of produce results in the limitation for some of the producers to make meaningful returns on their investments due to the quality and quantity of produce which impacts on sustainability
FundingFunding remains a challenge in the primary agriculture due a number of reasons such as land ownership, collateral, market/ off take agreements, bankable business plans, sustainability and competition amongst others
Subsidies by likes of United States and EuropeLack of subsidies by Governments in the Africa remains a barrier to primary produce as the costs of production remains high and uncompetitive as compared with some developed countries that provide agricultural subsidies
Government PoliciesPolicies that results in private sector disillusionment due their impractical and sub economic premise. As well as the time lag in implementation of programmes and projects in real time
Lack of investment in the YouthAfrican generation is getting younger. Lack of focus in investing in the youth representing the future productive work force and leadership presents a negative dichotomy given the 1 billion African population and rising
5
Opportunities in the Agricultural
SectorA sector projected to be a US$ 1 trillion industry in Sub-Sahara by 2030 is to be reckoned with. The nexus between Agriculture and development highlights two key issues:
Eradication of hunger and rethinking agriculture in light of sustainability and equity
Enabling Policies and Strategies The African agricultural plan known as the Comprehensive African Agriculture Development Programme (CAADP) is
intended to bring about jobs, large economic gains, a reduction in hunger and, through increased productivity, a reduction in food imports.
Under CAADP, which was adopted in 2003, African leaders committed to allocate at least 10% of their national budgets to agriculture and rural development.
The Millennium Development Goal (MDG) : “The African farmer is primarily a woman farmer,” Mr. Roy concludes. “This goal can to a large extent be achieved through gender equality”. Women are recognized as agents of change and key in the cause to push back the frontiers of poverty.
National Development Plan (NDP): Vision for 2030 supports the need for investment in a “strong network of economic infrastructure designed to support the country’s medium and long-term objectives” in order to achieve sustainable and inclusive growth, with a target of creating a million jobs in agriculture by 2030 .
Facilitating Access to MarketsGovernments to create set asides for indigent primary producers in their procurement policies as Governments are the main buyers of finished goods and services.
Investment by Governments in Large Scale Infrastructure ProgrammesCompetitiveness as involving “what the government is prepared to do to support its producers to gain access to their markets.” His solutions include boosting rural development through a chain of activities that add value to agricultural products, providing necessary infrastructure to stem urban migration and empowering women and youths to run small businesses.
Population GrowthIt is projected that Africa as the World fastest growing population will account for 40% of the global population growth in 2030
Skills Development and Entrepreneurship A World Bank review of agricultural education and training found that few institutions have made the major changes
required to produce significant different types of graduates for agribusiness Universities such as Makere have partnered with private firms to provide the skills demanded in the labor force,
furthermore, the African Rural University for Women is poised to “produce entrepreneurs who are self-motivated and innovative
6
Investing in Primary Agriculture NEPAD researchers have estimated the initial investment of irrigating 20
million more hectares of African farmland at $37 billion, with anadditional $31 billion in operating costs through 2015.
CAADP requires signatories to spend at least 10% of their budgets onagriculture and to strive for an annual 6% growth in agriculture.
While several countries have made inroads in tackling the challenges ofhunger, undernourishment and extreme poverty, Africa remains a netfood importer and produces far less than its potential.
The NDP’s 2030 vision includes better integration of the country’s ruralareas, achieved through successful land reform, job creation andpoverty eradication. The driving force behind this are the expansion ofirrigated agriculture, supplemented by dry-land production wherefeasible.
7
An inclusive Agriculture and
Agribusiness Governments
Convincing leaders to treat agriculture not only as a solution to end poverty and hunger but also
as a major contributor to economic development deserving of public investments
Fast-growing economies that can cut poverty and create meaningful jobs, particularly for
youths, require political will from leaders and huge injections of investment in agriculture,
according to Professor Mandivamba Rukuni, a Zimbabwean researcher and land policy analyst.
Food security requires the same seriousness and resources as national security, if not more. In
fact, national security loses its legitimacy if thousands of citizens die not from enemy firepower
but from starvation,
ensuring that rights to land and natural resources are recognized and enforced to secure the
transfer of rights to encourage productive use of land and boost investor confidence;
Private Sector
A robust agricultural sector is necessary for sustained economic growth and high-paying jobs in
Africa, according to the International Labour Organization. Making it a reality is a major task for
the next 10 to 20 years.
Women and Youth
In a 2013 report, Agriculture as a Sector of Opportunity for Young People in Africa, the World
Bank added its voice to data by other organizations showing that agriculture is Africa’s largest
employer and has the potential to absorb millions of new job seekers. According to the report,
increased focus on agriculture could enhance productivity, reduce food prices, increase
incomes and create employment. Young people’s involvement in this process is crucial.
Investing in women is key in Africa’s agricultural transformation.
As Christine Lagarde, the MD of the IMF, said at the World Economic Forum in Davos,
Switzerland, last year, “When women do better, economies do better.”
8
THANK YOUPresented by:
Nomalanga Mosala
Executive Chairman
Nomalanga Estate
D222 Greytown 1784
Tel: 27 33 417 8910
Fax: 27 86 242 7581
9
