Africa’s Farming Revolution
Modern farming techniques will spur Africa’s transformation from a continent dependent on food aid to one of the world’s leading food producers
On the Usangu wetlands in Tanzania’s Rufiji river basin, vibrant green rice paddies stretch as far as the eye can see.
Five years ago, the Kapunga Rice Plantation was producing barely one metric tonne of rice per hectare. Today thanks to a comprehensive modernisation programme that includes providing farmers with irrigation dams, high-quality seed, effective fertilisers and sophisticated logistics, yields have risen nearly sevenfold to 6.8 metric tonnes per hectare.
Kapunga is one of the most compelling successes for the founders of Dubai-based ETC Group, “ETG”, a diversified agricultural conglomerate whose mission is to empower smallholder farmers across Africa, with a wider objective of turning Africa into a global breadbasket. Mitsui & Co. is partnering with ETG out of a belief that transforming the farming sector in Africa – home to 60 per cent of the world’s arable land – will enable the continent to become one of this century’s inspiring success stories.
“In addition to eradicating hunger and developing African agriculture, we have a wider vision of laying the foundations for Africa’s industrial transformation,” says Shusaku Okamura, Mitsui’s Team Leader of Global Affairs & Solutions Dept., Corporate Planning & Strategy Div.
In addition to eradicating hunger and developing African agriculture, we have a wider vision of laying the foundations for Africa’s industrial transformation.
ETG enables farmers across Africa with advanced farming methods, transportation, storage systems, and continent-wide information networks – all cited by experts as critical to tapping the huge potential of African farming. Meanwhile, Moroccan poultry producer Zalar – another Mitsui partner – is at the forefront of the other critical piece of Africa’s farming picture: livestock breeding. According to the United Nations, “demand for livestock products in sub-Saharan Africa will increase several folds by 2050.” That means modern production and delivery methods are critical to meeting development needs.
From tragic continent to world’s breadbasket
In East and West Africa respectively, ETG and Zalar represent the promise advanced agriculture and livestock breeding hold for transforming the continent’s future. The narrative is about more than eradicating hunger. It’s about driving Africa’s aspirational journey, leveraging farming’s power to provide nourishment, both literal and figurative, for Africa’s industrial awakening.
“Agriculture is critical to some of Africa’s biggest development goals,” the World Bank says. “It is a driver of inclusive and sustainable growth.”
According to McKinsey, 60 per cent of sub-Saharan Africa’s population is smallholder farmers, and about 23 per cent of the region’s GDP comes from agriculture. This only scratches the surface of Africa’s potential as a global force in agriculture. The global consultancy says investment in fertilizer, storage systems, irrigation and infrastructure could allow Africa to triple its production of cereals and grains – boosting worldwide production of by an astonishing 20 per cent.
Despite the promise, Africa is being held back by lack of advanced farming tools and cultural resistance to change. Approximately 30 per cent of total African farm produce is wasted due to scarcity of quality warehousing and transport systems. Sub-Saharan Africa deploys tractors for only 5 per cent land cultivation, compared to over 60 per cent in Asia and over 80 per cent in other developed markets.
Africa uses only one-tenth of the world’s average fertilizer per hectare. Less than 3 per cent of smallholder land in sub-Saharan Africa is irrigated. And 84 per cent of Africa’s smallholder farmers do not use agro-chemicals. According to ETG Chief Treasury Officer Anish Jain, “mechanization, quality fertilisers and modern farm management could increase farm yields by up to 30 per cent.”
Mitsui is committed to overcoming Africa’s challenges, engaging in ways that go beyond investment. As a sogo-shosha, it has global expertise and networks not only in nutrition and farming but also infrastructure, energy, and more. That enables it to take a comprehensive approach that emphasises on-the-ground collaboration with local partners to provide new value to existing business, as well as insights and know-how for new enterprise.
Protein to power Africa’s economic ascent
As advanced techniques energise African agriculture, the continent can expect a similar dramatic transformation in its livestock industry. In fact, the U.N. says in a policy brief that livestock production for all products and in all scenarios is expected to grow 250 per cent by 2050.
Zalar, Morocco’s leading poultry producer, deploys a unique vertical integration model to meet nutrition needs in North and West Africa. Leveraging Mitsui’s know-how and network capacity, the model integrates grain imports, animal feed production, poultry farming, logistics and meat processing for control over the entire value chain. Economic dynamism and population growth in these regions fuel demand for animal protein, which is critical to urban industrial development. Prosperity, meanwhile, will create appetite for protein variety among emerging middle classes. Zalar’s extensive range of poultry offerings works to satisfy this proliferating demand.
“Poultry in particular is projected to capture growth in demand for animal protein, as there are fewer religious constraints on its consumption,” says Naohiro Matsuda, Zalar’s Chief Project Manager to the CEO, seconded from Mitsui.
Zalar’s vertical integration model can serve as a role model for emerging industries across Africa: “Being a vertically integrated group enables Zalar to benefit from more control over the entire value chain,” according to Zalar CEO Ali Berbich, “while optimizing resource utilization and reducing operating costs.”
Winning hearts and minds of African farmers
Changing the conservative mindset of African farmers is an important part of the picture. Mitsui is striving with ETG to demonstrate the powerful gains that can be achieved with modern farming technology and management. This includes comprehensive approaches that go beyond fertiliser and irrigation, to include mobile financing and online information networks.
“Generally, farming families are tradition-minded. Therefore they have a tendency to hesitate to adopt new techniques,” says Takayoshi Oku, Mitsui Middle East’s General Manager of ETG・African Business Development Div. “Even when they are willing they are often held back by lack of funds. To work toward a solution, we’re considering measures such as micro-financing, resource sharing, and agricultural apps for mobile device distribution.”
Ripple effects for total transformation
As Mitsui & Co. establishes nutrition and agriculture as one of its four growth pillars, fostering the efforts of companies like ETG and Zalar will help ease African food shortages and put the continent on the road to prosperity. Positive farming sector impact reaches deep into social ecosystems and can transform the lives of millions.
In Tanzania, the Kapunga Rice Plantation has revitalized the entire surrounding region, turning remote villages into centres of commerce and trade, attracting migrants from nearby towns, and allowing farmers to invest in lodges, guesthouses and education.
“Agriculture is the panacea to Africa’s biggest constraints,” says ETG Executive Chairman Mahesh Patel. “It all starts with agriculture, within this sector lies the potential for total transformation.”
Africa’s role in feeding the planet
Although some 60% of Africans are employed in agriculture and the continent has most of the planet’s uncultivated arable land, Africa is currently a food importer. This is unsustainable, unaffordable and unnecessary. With increasing use of modern machinery, farming techniques, fertilisers and high-yield seeds, as well as improvements to infrastructure and the streamlining of supply chains, the continent is set to become food self-sufficient in coming decades. With the global population growing and demand for food predicted to rise dramatically by 2050, Africa will also play an increasing role in feeding the world.
Mouse over and click the infographic to see the potential Africa represents and the challenges it faces in its journey to becoming a leading global food supplier.
- By 2050, the global population is expected to top 9 billion, a jump of about 35% on the present day. Crop production will be required to outpace population growth because demand will jump an estimated 70% or more. This will be due to the bulk of population growth occurring in the developing world, where increasing affluence will modify diet and demand.
African agriculture overall currently suffers from low productivity. While agriculture accounts for some 60% of jobs across the continent, it accounts for only 16.5% of African GDP. Africa’s cereal yield is currently 41% of the international average.
The value added per worker in agriculture in Africa is the lowest of all world’s regions, estimated in 2017 at US$1,990. This compared to US$16,000 in East Asia and US$6,000 in Latin America. Low productivity is due to several factors, including low levels of mechanisation, limited use of high-yield seeds and fertilisers, and poor infrastructure.
Source – FT