International Development CommitteeWritten evidence submitted by Farm Africa and Self Help Africa
1.1 Farm Africa and Self Help Africa share common strategic objectives of reducing poverty, improving environmental sustainability and developing an economically prosperous rural Africa. Together our work aims to increase the ability of rural Africans to play an active role in local and global supply chains.
1.2 Farm Africa and Self Help Africa believe that the private sector has a significant role to play in securing global food security by promoting improved production and generating income for smallholder farmers. We urge the Government to broker this role by promoting partnerships between smallholder farmers and companies; supporting African governments to establish a positive environment for smallholder farmers to access domestic and international markets; and continuing to provide appropriate levels of capital to enable public/private partnership projects to get off the ground (see recommendations in section 4 below).
1.3 We also believe the following should be key questions for the inquiry:
What is the private sector’s potential as a vehicle for scaling up income generation opportunities for smallholder farmers?
What needs to happen to fulfil this potential and ensure the greatest benefits to smallholder farmers and their communities? What action is required from governments, donors and NGOs?
How is the benefit to smallholder farmers measured and what best practice ensures that those benefits are maximised?
How do companies find smallholder farmers who can supply particular goods? Are there challenges and what could make this easier?
How will the UK use its Presidency of the G8 and its position as co-chair of the Leadership Council of the New Alliance for Food and Nutrition to promote more and better partnerships between the private sector and smallholder farmers?
2. Context: Smallholder Farmers and Food Security
2.1 The global food system is facing an unprecedented challenge in meeting anticipated population growth, with forecasts suggesting that food production needs to rise by over 70% over the next 40 years.1 Within Africa, and sub-Saharan Africa in particular, the pressures on food supply are even more striking. Chronic hunger, under-nutrition, and persistent poverty have been exacerbated by continuing droughts. Africa’s net food imports are substantial, and growing;2 and the recent surges in global food prices have seen food import bills soar. In Africa, 65% of the population (80% in some countries) rely on smallholder agriculture for their living. While most smallholders own less than two hectares of land, they deliver 90% of the continent’s agricultural production.
2.2 Despite increasing concerns over food security, donor investment in agriculture has actually decreased. Globally, the agricultural share of total ODA decreased from 20% in the 1980s to 4% in mid-2000s and 6% by 2009.3 Agriculture represented only 3.1% of the UK Government’s total ODA in 2009 and 1.4% in 2010.4 Of the top 10 countries receiving bilateral ODA for agriculture from the UK Government, only four were in Africa.5 And Government expenditure on agriculture is also low: in sub-Saharan Africa, the share of Government expenditure on agriculture averaged 3–6% in between 2003 and 2007.6 It was only in the 1980s that the share was close to the Maputo Declaration target of 10%.
2.3 Women smallholders comprise an average of 43% of the agricultural labour force of developing countries (50% in Sub-Saharan Africa).7 Of those women in the least developed countries who report being economically active, 79% identify agriculture as their primary economic activity.8 Yet, despite many communities’ dependence on women to grow food, women often lack access to productive assets such as land, and services like extension services, credit and quality inputs, that can enhance farm productivity. For example, women receive less than 10% of all credit going to smallholder farmers.9 Women farmers could grow 30% more food if they had access to the same resources as men: by helping women farmers boost production, we could reduce global hunger by 150 million people.10
2.4 Extreme weather events such as drought or flooding are likely to become more frequent and they hit the poorest, hardest. Agriculture also contributes to climate change: land use change, principally as a result of deforestation, is responsible for between 12% and 20% of global greenhouse gas emissions11 (in Ethiopia, or example, forest areas decline by 1% each year12 as land is cleared for wood fuel or to plant crops). Fertilisers, ruminant digestion, rice cultivation and fuel use all contribute to green house gas emissions. Innovative and affordable ways to mitigate the effects of climate change, such as drought resistant seeds, or water harvesting and irrigation techniques, are essential if smallholder farmers are to mitigate the impact of the changing climate. Sustainable practices that will reduce agriculture’s environmental footprint are relatively easy to introduce and allow farmers and their communities to become more resilient to climate change challenges and protect natural resources.
2.5 Smallholder farmers’ income has a direct impact on production and ultimately on food security, yet income levels are subject to a variety of constraints. Population increases mean farmers have to cultivate the same land season after season. Fertilisers, or grazing cattle, are required to ensure the land remains productive: fertilisers and cattle cost money. Pest infestations require pesticides to save the crop: pesticides cost money. When the rains are no longer consistent, farmers need to buy improved, drought resistant seeds: improved seeds cost money. As household income decreases, so too does family labour: young men frequently move to the city to earn cash for the family. Now the farmer needs to hire local labour to help with weeding or harvesting: labour costs money. And smallholder farmers themselves spend days on other people’s farms to earn cash for their families, taking time away from their own farms, potentially missing opportunities to plant seeds before the rains come. Breaking this vicious cycle of poverty is key to increasing smallholder farmer incomes and food security.
2.6 Farm Africa and Self Help Africa believe smallholder farmers are at the heart of the solution to food insecurity. Our work has shown that investing in smallholders not only helps them to lift them and their families directly out of poverty, but helps produce sufficient food for themselves and the wider region. There is potential to scale-up this work to impact global food production. Productivity improvements are vital given the low yields prevalent in much of rural Africa (2 to 3 times lower than global averages). But our experience shows that productivity improvements alone are not sufficient. Demand side solutions are also critical: farmers need to be able to maximise increased production through improved post-harvest technologies and better links to markets. In addition, there is also greater recognition of the importance of markets and the role that the private sector—both multi-nationals and local African enterprises—can play. Long-term change lies in ensuring long-term sustainability by developing value chains, lobbying to change unfavourable trade policies and improving access to finance.
3. The Role of the Private Sector in Improving Smallholders’ Productivity and Incomes
3.1 Smallholder farmers are, of course, already part of the private sector, but recent years have seen growing interest from the international private sector in African farmers as suppliers of goods. The growing African middle class and potential expansion of domestic and regional markets also promise to increase the opportunities for smallholder farmers to benefit from greater market access closer to home. This interest from both international and African companies is reflected in the creation of Grow Africa, which brings together the international private sector, African and donor governments, and the announcement of the New Alliance for Food Security and Nutrition at this year’s G8 Summit. In the latter, individual African and international companies as well as donors identified the ways in which they would be working with or supporting smallholder farmers based on country plans developed by African governments around Pillar II of CAADP.
3.2 The private sector is therefore increasingly seen as a key player in scaling up support to smallholder farmers and providing them with the markets and access to inputs they require to increase their productivity and income. Yet, there remains a gap between the recognition of the importance of the private sector, the development of related policies, and practice on the ground. Greater emphasis must be placed on turning theory into practice.
3.3 The private sector cannot act alone. Action is required by a range of other actors if smallholders are to benefit from the opportunities that expanding supply chains can bring and if private sector actors are to invest:
African governments need to provide the right conditions to encourage domestic and international investment—for example, investing in agriculture and rural infrastructure; implementing policies that encourage smallholders to form cooperatives; taking steps to reduce delays or costs to smallholders; and working with neighbours to promote the expansion of regional trade.
Farmers’ organisations are often vital in bringing together individual farmers so that they can aggregate production and collectively improve access to inputs and markets.
International NGOs can provide expertise and support for the development of supply chains and to help farmers and farmer organisations reach the standards required by companies for their supply chains.
Private and public donors, investors and regional trade structures can provide the “patient capital” (both in terms of finance and the appropriate environment) necessary to get projects off the ground.
3.4 Self Help Africa and Farm Africa both work to help smallholder farmers to access supply chains:
Farm Africa has been supporting smallholder farmers in Ethiopia to supply Diageo’s Meta Brewery with barley. Earlier this year, Ethiopia’s Agricultural Transformation Agency (ATA) prioritised barley as one of the country’s key value chains and Diageo pledged to source an initial 1,000 metric tonnes of malt barley locally from smallholder farmers. Farm Africa played a key role in supporting smallholder farmers to negotiate and secure their contracts with the Meta Brewery, as well as using research and knowledge to increase productivity and quality. Having a trusted partner on-the-ground (Farm Africa) has been vital to both Diageo and ATA and the pilot project has yielded important lessons for the government, for Diageo and for private sector engagement in agriculture more generally. Diageo eventually want to source 20,000MT of barley per year in Ethiopia, and advance contracting will be a key pillar of the ATA’s “Barley Roadmap”. There is clearly potential for scale-up and replication of this supply chain model.
Self Help Africa has an initiative for cashew value chain development working in Benin alliance with the private sector. The cashew sector presents huge potential for growth in Benin. With approximately 200,000 smallholders engaged in cashew nut, yields are remarkably low at just 120,000 tonnes, of which only 5% is processed in country. This initiative has started by working with 1,000 smallholders to increase the quality and quantity of cashew yields by improving farmers’ skills, organisational capacity and access to markets. The initiative has three key private sector partners: PepsiCo as investor and ultimate market buyer; Tolaro Global as the processor and which has recently opened a factory in Parakou; and DREDAS as the local partner with many years’ experience working with cashew producers in the area. Self Help Africa played an initial brokerage role and is overseeing project implementation and capacity building. Self Help Africa aims to use the project to document and disseminate scalable, proven good practices for integrating farmers into value chains.
3.5 Farm Africa and Self Help Africa are also both members of the African Smallholder Farmers Group of UK NGOs. We are working with other members of this group to look at what factors contribute to smallholder farmers’ ability to increase their income through access to markets and entrepreneurship. Self Help Africa, Practical Action, CAFOD and Christian Aid have formed a steering group that has commissioned research into what factors are most important in enabling farmers to successfully benefit from market access. One of the aims of this research is to feed into the development of the “Doing Business in Agriculture Index” being developed by the World Bank, as referenced in the text launching the New Alliance for Food and Nutrition at this year’s G8.
4. The Way Forward—Recommendations
4.1 If the UK government wants to ensure that the private sector plays a positive role in promoting improved production and income generation for smallholders, enabling them to ensure their own food security, it should:
Support African governments in generating a positive environment for smallholders to access domestic and international markets. It should also support the development of a Doing Business in Agriculture Index by the World Bank that includes factors relevant to small-scale producers.
Support or promote mechanisms that enable more successful partnerships to be formed between smallholder farmers and those domestic and international companies looking to integrate them into their supply chains. This should include facilitating access to knowledge, support services, markets and investment.
Build on the work they are already doing through the African Enterprise Challenge Fund and the New Alliance, to provide capital to enable projects to get off the ground.
1 FAO (2009) “How to Feed the World in 2050.”
2 East Africa’s total food net imports (excluding fish) have risen from $805 million in 2001 to $3.7 billion in 2008 (a 24% year on year increase over the period) (Source: FAOStat)
3 Lowder, S K and Carisma, B (2011). “Financial resource flows to agriculture: A review of data on government spending, official development assistance and foreign direct investment.” ESA Working Paper No. 11-19, Agricultural Development Economics Division, Food and Agriculture Organization of the United Nations, December 2011.
5 Zimbabwe, Ghana, Rwanda, Malawi (Source: http://www.donortracker.org)
6 Lowder, S K and Carisma, B (2011). “Financial resource flows to agriculture: A review of data on government spending, official development assistance and foreign direct investment.” ESA Working Paper No. 11–19, Agricultural Development Economics Division, Food and Agriculture Organization of the United Nations, December 2011.
7 FAO (2011). “The State of Food and Agriculture in 2010–11: Women in Agriculture”
8 FAOSAT quoted in Doss, C (2011). “If women hold up half the sky, how much of the world’s food do they produce?” FAO, March 2011
11 ODI, Climate Funds Update (November 2012). “Climate Finance Thematic Briefing—REDD+ Finance”.
12 Final Report from the Commission on Sustainable Agriculture and Climate Change (March 2012), “Achieving Food Security in the Face of Climate Change, Final Report from the Commission on Sustainable Agriculture and Climate Change”