One way to ensure that agriculture is treated as a business is to get the private sector more involved.
Smallholder farmers in Africa are part of the solution to global food security and should be supported to not only produce enough food for their households but also for the rest of the continent.
Smallholder farmers, however, cannot make this dream a reality by working alone. International Fund for Agriculture Development (IFAD) says that “what farmers need is that rich and poor countries alike invest in and support agricultural and rural development, creating the conditions to move poor rural people out of subsistence farming and into the marketplace.”
It is not until recently that Africa has implemented macroeconomic, sectoral and institutional reforms aimed at ensuring high and sustainable economic growth, food security and poverty reduction. These changes in agriculture have helped the continent sustain its GDP, but more has to be done to eliminate the poverty that still looms in the continent.
According to the President of the African Development Bank, Akinwumi Adesina, “agriculture is not a way of life. It is not a social sector or a development activity, despite what people may claim. Agriculture is a business. And the more we treat it as a business, as a way to create wealth, the more it will promote development and improve people’s lives to boot.”
To grow agriculture to the next level, there is the need to change strategy on how this sector is approached for the economic benefit of the farmers and the continent as a whole.
One way to ensure that agriculture is treated as a business is to get the private sector more involved. Although governments have a role to play in terms of drafting feasible policies, creating strong institutions, and building conducive and sufficient infrastructure, the private sector would deliver much more transformation in the sector.
Leaving the government to solely run the sector can have a detrimental effect on agriculture. This is because the needed tools of production may not get to the smallholder farmer in time, thus deterring the system.
AfDB president noted that when he was Nigeria’s Minister of Agriculture, he realized that “government can’t create agricultural transformation”. Instead, it can only enable agriculture by creating platforms for business to intervene.
He added that by involving the private sector and dismantling the public procurement system, seed companies operating in Nigeria at the time grew from 11 to more than 100. Other non-governmental organizations and companies stepped in to work with farmers by offering training, support, and markets for their products.
Working with the private sector enables farmers to acquire inputs like transport, processing and selling of their products without the need of the long government bureaucratic processes. This builds a system of good supply chain needed by smallholders in the rural communities, which in turn grows the economy of the region.
Even as important as the private sector is, the government needs to offer attractive incentives to the sector, to make agriculture flourish. If the government capacity is low, so will be the private sector. But when the government strategies are aligned with those of the private sector, the results are fruitful.
Private sector such as farmers’ organizations, warehouse operators, traders (local and international), input suppliers and buyers, provide the right value chain connection between the farmers and the markets. Through such connections, private investment is made possible. The investments lead to varied results including the development of infrastructure which has a ripple effect on agriculture.
As it is commonly known, private sector works directly with the farmers on the ground and as such, they have knowledge about their areas of operation at their fingertips.
This makes it easier for the sector to provide the most reliable information to the smallholder farmers. Since the market is competitive, the private sector has to keep up with modern practices which enable their farmers to produce quality products needed in the market.
The private sector also provides quality seeds, farm inputs, credit, environmental protection standards, training and access to new markets for farm output. These qualities further enable smallholder farmers to produce more effectively and earn revenues from their agricultural activities.
For agriculture to make major economic impacts in the continent and the world, it needs to be treated as a business at any scale with farmers being treated as entrepreneurs and not just mere people trying to make a living.
Former Nigeria’s President Goodluck Jonathan told CNBCAfrica that “the key thing is not to just produce enough food for our local consumption but also creating jobs along that value chain.”
By so doing, agriculture will attract the young people as they will see it as a business and a source of employment instead of an activity that was previously practiced by their parents and grandparents.
Creating clear linkages along the value chain (production to consumption) will further grow agriculture in Africa contributing to sustainable food supply and a healthier region and world.
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