Fixing local value chains key to transforming food systems
A worker in a factory in Abidjan, Cote d’Ivoire holds a block of rubber meant for export for processing into finished products abroad. PHOTO | ISAIAH ESIPISU
What you need to know:
- Kenya, for example, produces wheat, which is mainly milled into flour that costs approximately Sh100 per kilogramme, or Sh100,000 per tonne.
- However, the country imports processed wheat products such as noodles expensively, yet they can easily be produced locally given a conducive environment.
Kenneth Kurui, a smallholder wheat farmer in Narok County, sells unprocessed produce to local millers at Sh6,000 per 90 kg bag, or Sh66,000 per tonne. In the same breath, Indofood, an Indonesian company that adds value to wheat by making Indomie, sells the beef-flavoured noodles to Kurui at Sh45 per 120 grammes packet, which translates to Sh375,000 per tonne.
With the difference of more than Sh309,000 between a tonne of unprocessed wheat and a tonne of indomie, still, Kurui has to lease the land on which he grows the wheat, cultivate it, buy the seed and other farm inputs, and weed before counting the cost of harvesting, activities that consume more than half of his gross income.
“Due to poor local market prices against the ever-rising cost of inputs, coupled with devastating climatic conditions, we as smallholders are forced to invest with a lot of caution because many are times when we end up with losses,” said Kurui, who also works in Nairobi to supplement his wheat farming venture.
However, the recently released 2023 Africa Agriculture Status Report (AASR) points out that there is still a window of hope for smallholder farmers like Kurui, but only if governments puts in place policies that are friendly to local agro-processing and also if the leaders embrace the African Continental Free Trade Area (AfCFTA).
The AfCFTA is an initiative by the Africa Union Commission created to enable free flow of goods and services across the 55 member countries of the African Union and to boost the trading position of Africa in the global market.
“Unless we put in place correct policies that will favour local manufacturing, we will continue talking about cocoa in Ghana and Chocolate from Switzerland,” said Mohammed Dewji, President of MeTL Group of Companies in Tanzania.
“Tanzania produces cotton and it is perhaps the third largest producer. How come it has only three textile firms? We farm the cotton, ginning it, then export it to China, where the final product is produced, dyed, printed and returned to us. But because of punitive taxes involved at the local manufacturing level, we cannot compete,” he said during the recently concluded Africa Food Systems Forum.
His sentiments were echoed by Dr Johan Swinnen, director general at the International Food Policy Research Institute, who said that despite being home to nearly 60 per cent of the world’s uncultivated arable land, Africa remains a net processed food importer; spending billions of dollars annually to meet its food demands.
Kenya, for example, produces wheat, which is mainly milled into flour that costs approximately Sh100 per kilogramme, or Sh100,000 per tonne. However, the country imports processed wheat products such as noodles expensively, yet they can easily be produced locally given a conducive environment.
The country is now a huge exporter of raw avocados to China but a net importer of expensive avocado hair food and other products from China. Other African countries like Ivory Coast are major farmers of rubber trees but net importers of tires and other expensive rubber products.
“The journey ahead may be challenging, but the promise it holds is worth every effort as we continue to empower policymakers, farmers, entrepreneurs, youth and all players to rally around a shared vision,” said Swinnen, who also doubles as the managing director of Systems Transformation at the Consortium of International Agricultural Research Centres
Beyond value addition, the AASR calls for lowering of trade costs through strengthening regional trade infrastructure such as transport networks, trade finance and telecommunications and eliminating non-tariff barriers. This, says the report, will facilitate access to cheaper inputs and allow small and medium entrepreneurs to participate in bits and parts of a production process that provides affordable food to African consumers.
According to Gerald Masila, the executive director and CEO at the Eastern Africa Grain Council, in many cases, when one community has plenty of harvests and is experiencing post-harvest losses, there is another community somewhere starving to death.
“Strong regional value chains premised on agro-processing could help reduce post-harvest losses, create jobs and increase the availability of processed and value-added food products,” reads part of the agriculture status report.
Dr Agnes Kalibata, the AGRA president, said Africa’s abundant natural resources, rich cultural tapestry and dynamic population are a lifeline for the continent's resilient and sustainable food systems.
However, she noted that intra-African trade continued to dwindle from its peak in 2013 to less than 15 per cent in 2022. “Nonetheless, the AfCFTA, which is the main instrument in driving this agenda, has the potential to transform food systems in Africa significantly,” she said.
The AfCFTA is also expected to increase market access, ensure reduced tariffs and non-tariff barriers, advance food safety and quality standards across jurisdictions, and increase the diversity of produce from different regions across the continent.
