$1trn food market shows potentials for smallholder farmers
The Africa Agriculture Status Report which was released at the end of this year’s African Green Revolution Forum (AGRF) in Cote d’Ivoire, has emphasised that the power of entrepreneurs and the free market is driving Africa’s economic growth from food production.
Businesses are now waking up to opportunities of a rapidly growing food market in Africa, that may be worth more than $1 trillion each year by 2030 to substitute imports with high value food made in Africa.
The AGRF report particularly highlighted that the African food market continues to grow with World Bank estimates showing that it will be worth US$1 trillion by 2030 up from the current US$300 billion. Demand for food is also projected to at least double by 2050.
These trends, combined with the continent’s food import bill, estimated at a staggering US$30–50 billion, indicate that an opportunity exists for smallholder farmers—Africa’s largest entrepreneurs by numbers—who already produce 80% of the food we eat to finally transition their enterprises into thriving businesses.
The prospects for African agriculture look very favorable over the decades ahead. Demand for food continues to grow strongly, and is projected to more than double by 2050.
National diets are shifting away from food staples like grains towards horticultural and livestock products, and processed and pre-cooked foods, all of which add value within the agri-food system. Imports of raw and processed foods have increased to about US$35 billion per year, and are estimated to rise to about US$110 billion by 2025, and many of these could be produced at home.
Peter Hazell, technical director of the report remarked that “impressive value addition and employment is being created by SMEs along value chains in the form of increased agricultural trade, farm servicing, agro processing, urban retailing and food services. Large agribusinesses like seed companies, agro processors and supermarkets are also playing an increasing role in the food value chain in many regions,” AASR’s acknowledged that the private sector holds the key to the transformation of the food system so far.
To seize these new opportunities, it is noted that Africa’s smallholder farmers need to grow as businesses, and for this they need business rather than welfare support. They will need access to improved technologies and natural resource management practices, knowledge, modern inputs (like seeds, fertilizers and machinery), financial services, and markets, and secure access to land and water.
Many smallholders will also require help acquiring the necessary knowledge and skills to become successful farm business entrepreneurs, especially women and young farmers. Managing market and climate risk is also a growing challenge for many small farms and, in addition to insurance and access to safety nets, they need to develop resilient farming systems.
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