AGRA

The partnership will create market transparency that is needed to unlock financing for agri-SMEs in emerging markets.

• Agricultural small and medium enterprises (agri-SMEs) face complex and persistent challenges in emerging markets, despite the vital role they play in these economies.
• On the one hand the agribusinesses do not meet market requirements to attract funding, often because they are not run as businesses. On the other hand, the financiers – which range from local financial institutions, regional lenders, and global investors – find the agricultural sector extremely risky and expensive to service.
• The partnership between MIX and SCOPEinsight will address this by using data to create transparency, help financiers make more informed decisions, and build a bridge between agri-SMEs and the capital they need to grow. This partnership’s first set of activities is supported by the Alliance for a Green Revolution in Africa (AGRA). 

Agri-SMEs – which include farmer organizations, input providers, off-takers and distributors, among others – play a crucial role in rural economies.  “These businesses create employment and connect smallholders to markets and opportunities to improve their livelihoods,” said Camilla Nestor, CEO of MIX. “Yet agri-SMEs are often unable to access the financing they need to grow.” Estimates place the financing gap for agri-SMEs at USD 100 billion for the segment in sub-Saharan Africa alone.

The financing gap is driven in part by low visibility into a pipeline of viable agribusinesses and a lack of reliable data for decision making and investment.

MIX and SCOPEinsight will leverage the support, guidance, and deep network connections of AGRA to develop and test a set of standardized metrics that enable investors and lenders to compare the financial and operational performance of agri-SMEs, leading to informed decision making. In order to build this set of metrics, the two organizations will first develop a common language for agri-SMEs in consultation with industry actors including investors, lenders, and the agribusinesses themselves. The partners will also tap into AGRA’s expertise and experience supporting agribusinesses. Beginning with select markets in sub-Saharan Africa, MIX and SCOPEinsight will aggregate existing information currently siloed by value chains and geographies, and will conduct outreach to agri-SMEs and their partners.

“Agricultural SMEs contribute to a dynamic marketplace by offering a diverse set of products and services to improve the yields and incomes for smallholder farmers,” said Hedwig Siewertsen, Head of Inclusive Finance for AGRA. “In order for these businesses to grow sustainably, extend their reach, and enhance their value for customers, they need access to appropriate financial services. Yet the current financial services landscape is exceedingly difficult to navigate for both the SMEs and the financial service providers. By supporting MIX and SCOPEinsight in this effort, AGRA aims to enable these players to more easily navigate the available financial services and, ultimately, better match the supply and demand of agricultural SME finance.”  

The partnership between MIX and SCOPEinsight brings together two organizations with deep experience solving intractable problems in the agricultural finance space.

SCOPEinsight was established 10 years ago with the aim to develop a system that would measure and score the level of professionalism of agri-SMEs with the aim to link these organizations in a scalable manner to finance. The graduation system has for the largest part been developed and is being rolled out with local partners. In the past years, nearly 4000 assessments have been conducted in 40 different countries. “SCOPEinsight has come a long way in these past years and the time is right to develop the last piece of the puzzle. We have a great partner in MIX, who has the complementary knowledge and network to make this a success.” Marise Blom, COO of SCOPEinsight, said of the partnership. She elaborates, “In the past, SCOPE scores with the underlying data have proven to be instrumental for the more professional agri-SME’s to gain access to finance. SCOPEinsight envisions a linkage between the bankability metrics and the SCOPE scores, building the bridge between the agri-SME’s and the financiers.” 

To propel the partners’ vision forward, the organizations are establishing an advisory board to include leading thinkers and practitioners with deep experience in emerging market agricultural finance.

###

For more information, contact:

Nikhil Gehani – ngehani@themix.org

Director of Marketing & Communications, MIX

Juliet MacDowell – juliet.macdowell@scopeinsight.com

Marketing Director, SCOPEinsight

About MIX

MIX is the leading global data resource for socially responsible investors and businesses focused on inclusive finance. MIX’s catalytic data initiatives encourage the growth of inclusive markets and support informed thinking on the future of financial services. MIX convenes stakeholders to build common data standards that create transparency and develops strategic insight from complex data to help sectors flourish. Founded in 2002, MIX has served as a trusted data partner for socially responsible investors who move USD 10 billion annually. Learn more at www.themix.org.

About SCOPEinsight

We are the leading company offering standardized data for the middle of the agricultural value chain.  Our system is applicable to every country, every type of organization, and every crop. Since 2010, we have trained over 700 assessors who conducted nearly 4,000 assessments in 40 countries spanning 19 agricultural sectors and reaching more than 9.2 million farmers. Our clients include global agribusinesses, NGOs, financial institutions as well as multilateral development and food security organizations.

About AGRA

Alliance for a Green Revolution in Africa (AGRA) is a partnership-driven institution that is African-led and farmer centered. Established in 2006, AGRA places smallholder farmers at the center of the continent’s growing economy by transforming their farming beyond the solitary struggle for survival, into thriving businesses. Our partners include African governments, researchers, development partners, the private sector and civil society working primarily with smallholder farmers – men and women who typically cultivate staple crops on two hectares of land or less. Our five-year strategy (2017 – 2021), aims to catalyze and sustain an inclusive agricultural transformation through integrated, country-based investment plans in 11 countries with a high potential for success.  The focus is on increasing incomes and improving food security for 30 million farm households with support that strengthens the capacities of governments and private sector through policies, programs, and partnerships that increase productivity and access to markets and finance. AGRA drives the bulk of its investments through the Partnership for Inclusive Agricultural Transformation in Africa (PIATA) with funding from the Bill & Melinda Gates Foundation, the Rockefeller Foundation, The German Federal Ministry of Economic Cooperation and Development (BMZ), the UK Department for International Development (DFID), and the United States Agency for International Development (USAID). For more information, visit www.agra.org, Twitter, Facebook, LinkedIn and YouTube.

AGRA worked and supported Ethiopia’s Agricultural Transformation Agency (ATA) with studies and technical support to exempt levies and charges on specific agriculture inputs to trigger better acces​​s by agripreneurs in Ethiopia.

The directive that exempts imported agricultural machinery and inputs from duties reached the final level.

Drafted by the Ministry of Agriculture, the directive has been in the making for the last eight months to waive taxes and duties on selected agricultural machinery, irrigation technologies and animal feed processing machinery, as well as agricultural inputs.

The 96-page draft directive is now tabled to the senior officals  of the Ministry and waiting for final approval. It will waive duties on a total of 591 types of agricultural machinery, accessories and agricultural inputs including tractors, combiners, generators, pumps, fertiliser and seeds.

The Ministry started the drafting process after the Agricultural Transformation Council proposed the duty exemption on selected agricultural machinery and technologies in December 2017. The Council called for the exemption hoping to enhance agricultural productivity and ensure food security through agricultural mechanisation.

Agriculture contributes to close to 46pc of GDP and employs over 80pc of the population.

The Ministry of Agriculture identified and listed the machinery and inputs sent to them from the Ministry of Finance, for approval. The Ministry sent the letter to the Customs Commission last May to be effective as of the same month.

However, the directive could not be enacted, since the implementation requires a legal framework and tractors were excluded from the list, according to Tamiru Habte, director of mechanisation at the Ministry of Agriculture.

Mulay Weldu, tax policy director at the Ministry of Finance, says that tractors were excluded from the original list with the main aim of not discouraging domestic tractor assemblers.

“But we included tractors in the list after learning that the local production doesn’t satisfy the demand,” Mulay said.

After getting the green light from the Ministry of Finance to include tractors in the list, the Ministry of Agriculture drafted the directive and sent it back to the Finance Ministry two months ago for comment.

The draft directive limits the number and types of machinery that will be imported tax-free by private agricultural training centres, youth and women’s organisations, non-governmental organizations (NGOs), rental service providers, universities, technical and vocational education & training schools (TVETs) and garages that are engaged in maintaining agricultural machinery.

However, it posed no limit on agricultural machinery importers, manufacturers, assemblers, agricultural institutes, government enterprises, public enterprises, cooperative unions, associations and federations.

To import the machinery and the inputs, the importers should get a certificate of competence, which must be renewed every two years, from the Ministry of Agriculture. The Ministry is also supposed to report – every six months – to the ministries of Finance and Revenues and the Customs Commission on the performance of the scheme.

The Ministry also prepared a logo or a plate number for differentiating the machinery imported through this programme by working with the concerned stakeholders, according to the draft directive.

Machinery and equipment that are imported through this scheme cannot be transferred to a third party as gifts, through inheritance or sales. But if transferred, all the necessary taxes must be paid.

The beneficiaries are also supposed to file reports to the Ministry of Agriculture every three months. The report should include the number of equipment they sold along with the prices, the type of rental agreements, the name and address of the buyers and the renters. The directive has also waived the Value-Added Tax (VAT) for renting these agricultural machines.

In addition, 13 agricultural operation services are exempted from any VAT, following the approval on November 1, 2019.

Between 2011 and 2016 a total of 12 billion Br worth of agricultural mechanised equipment was imported, and 3.3 billion Br in taxes and duties were paid on its behalf.

The Ministry of Finance also lowered its target of duties and tax revenues from the import of machinery this fiscal year. It plans to collect 3.2 billion Br in revenue from machinery imports, 308 million Br lower than the preceding year.

Tadesse Lencho (PhD), an assistant professor at Addis Abeba University’s School of Law & Governance, doubts if this is beneficial for farmers.

“Importers would only be compelled to increase the prices even though the tax pressure is lifted from them,” said Tadesse. “It’s naive if the government thinks this will lessen the pressure on the farmers.”

Tadesse says that the government should propose a finance leasing scheme for these kinds of capital goods, as they are a means of product.

Originally published

February 10, 2020, Addis Ababa, Ethiopia –The African Union today launched the second Biennial Review Report on the implementation of the June 2014 Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods. Out of the forty-nine (49) Member States that reported on progress in implementing the Malabo Declaration during this 2019 biennial review cycle, four countries are on-track towards achieving the Malabo commitments by 2025. While this number is significantly less than the 20 Member States that were on-track in 2017 during the inaugural biennial review cycle, it is cardinal to note that 36 countries have made significant improvement in their score from the 1st BR to the 2nd BR. The benchmark for the 2019 cycle 6.66, is much higher than that of the 2017 cycle which was 3.94.  In the Malabo Declaration, AU Member States committed to report on a biennial basis, the progress in achieving the 7 commitments of the Declaration which were translated into seven thematic areas of performance:

1. Re-committing to the principles and values of the CAADP process; 
2. Enhancing investment finance in agriculture;
3. Ending Hunger in Africa by 2025;
4. Reducing poverty at least by half, by 2025, through inclusive agricultural growth and transformation;
5. Boosting intra-African trade in agricultural commodities and services;
6. Enhancing resilience of livelihoods and production systems to climate variability and other related risks; and
7. Strengthening mutual accountability to actions and results.

 The four Member States, which obtained or surpassed the benchmark of 6.66 to be on-track toward achieving the commitments of the Malabo Declaration by 2025 are: Rwanda (7.24), Morocco (6.96), Mali (6.82) and Ghana (6.67).  H.E Abiy Ahmed Ali, Ethiopian Prime Minister and AU Leader of the Comprehensive Africa Agriculture Development Programme (CAADP), presented the Biennial Review Report to the AU Assembly of Heads of State and Government. The document captures the continent’s agricultural progress based on a pan-African data collection exercise led by the African Union Commission’s Department of Rural Economy and Agriculture (DREA), AUDA-NEPAD and Regional Economic Communities in collaboration with technical and development partners. Member States were assessed on the seven commitments in the Malabo Declaration, across 47 indicators.  Analysis of the reports shows that the continent remains off-track in achieving the overall Malabo Declaration commitments, obtaining an overall score of 4.03 compared to the benchmark of 6.66 to be on-track.  The continent lost its traction in Recommitment to the CAADP Process, Halving Poverty through Agriculture, and Mutual Accountability for Action and Results. Regarding Commitment 5 on Boosting Intra-African Trade in Agriculture Commodities, 29 countries are on track even though the continent as a whole is not on track.   Only four countries Burkina Faso, Burundi, Mali and Mauritania met the target of spending at least 10 percent of the total national expenditure on agriculture. The report tracks progress in commitments made by AU Heads of State and Government through CAADP and the Malabo Declaration to increase prosperity and improved livelihoods for transforming agriculture. The indicators chosen to track the performance categories were defined on the basis of the strategic objectives derived from the Malabo Declaration. AUC Commissioner for Rural Economy and Agriculture, H.E Josefa Sacko, said, “The BR Report is a performance assessment tool as well an advocacy tool to guide planning and decision making for Africa’s Agricultural Transformation.” 

For more information, please contact:Ms. Carol Jilombo CAADP Communications AUCJilomboc@africa-union.org

Dambai (Oti Region), Feb. 04, GNA – The Ghana Standards Authority (GSA), as part of efforts to protect public health and facilitate trade, has visited the Oti Region to educate the general public on its mandate.

The visit took the GSA team to markets in Dambai, the Oti regional capital, and farming communities in the Krachi East District of the Region.

Staff educated the traders on issues ranging from the importance of calibrated scales in trading activities, the use of standards in farming, among several others.

The team told the traders in the market that using calibrated scales would not only ensure that customers were not cheated but would also in turn help them to get good returns on items sold.

“Calibrated scales will ensure that customers get value for money since they get items worth exactly the amount they are buying,” Ms Ruth Alando, a Business Development officer at the GSA explained.

During the community visits, farmers were educated on the dangers and management of aflatoxins in grains and other food commodities. The training also highlighted the importance of standards in farming activities.

Mrs. Araba Incoom, a Scientific Officer at the Histamine and Mycotoxins Laboratory at the GSA, bemoaned how cereals and grains from Ghana were being rejected by the European Union (EU) due to high levels of aflatoxins.

“Grains from Ghana are being rejected due to high levels of Aflatoxin contamination,” she disclosed.

“These Aflatoxins found in our grains can be reduced if we adhere to standards,” she added.

The GSA in collaboration with Ministry of food and Agriculture (MOFA) with support from the Alliance for a Green Revolution in Africa (AGRA) is embarking on a National Aflatoxin Sensitisation and Management (NASAM) project in the Oti and Volta Regions.

The sensitisation was to educate Agriculture Extension Officers, Farmers, Traders and the general public on standards and the dangers and management of aflatoxin.

On Dec. 30, following three consecutive years of drought in Zimbabwe, the World Food Programme issued a plea for the international community to support the country. WFP plans on doubling the number of people it assists there and hopes to raise over $200 million to import food from various other nations.

This sort of news out of Africa contributes to the single story: that the continent cannot feed itself and is dependent on the rest of the world for succor and survival. However, what this single story excludes is the vibrant and active entrepreneurial ecosystem that provides food within Africa. It also fails to reveal the dangers of international interventions, ones that often crowd out the African private sector and create distortions.

This must change. Instead of importing nutritious food into African countries facing a food crisis, humanitarian and development agencies should prioritize engagement and partnership with the local private sector.

Consider the findings of the “Africa Agriculture Status Report 2019,” published by the Alliance for a Green Revolution in Africa, which stated that the private sector handles 80% of the food consumed on the continent. Referred to in the report as the “hidden middle,” these companies are the drivers of growth and innovation, providing the inputs, logistics, processing, distribution, and retailing of food, sourced locally.

Consider Monica Musonda of Java Foods and Ram Ray Vijayvargiya of Seba Foods, who are both producing nutritious food in Zambia. They source their grains locally and build the capacities of smallholder farmers, thereby directly contributing to increasing efficiencies in the soybean and maize value chains and improving the livelihoods of smallholder farmers in Zambia.

There are many African entrepreneurs who support the landscape, by providing inputs such as seeds, fertilizer, and equipment, while others supply training, financing, insurance, and logistical and storage support. Many leverage digital tools and innovations. In fact, according to CTA’s “Digitalisation of African Agriculture Report, 2018-2019,” there are at least 390 distinct, active “digitalisation for agriculture” solutions across the continent. Kenya has over 80% of its farmers registered and is home to 20 of the largest solutions. Zimbabwe and other countries hit by drought also currently leverage these solutions, which are connecting farmers to markets, reducing the transaction costs, enhancing traceability and transparency, and increasing the competitiveness of the sector. Many of these innovations can predict droughts and help farmers and stakeholders across critical value chains institute climate mitigation strategies.

Entrepreneurs largely operate in isolation, with very limited support from their governments and in very difficult operating environments. The majority of them do not work with international development agencies and have not been engaged by WFP and other humanitarian agencies looking to address the food crises in Africa.

In fact, in some countries, they are being crowded out, especially when large inflows of food aid find their way back into the local markets, often at rock-bottom prices. The limited coordination between international development organizations and the local private sector is also linked to the reluctance of some African governments to foster and enforce lines of communication and active collaborations, and it is connected to pressure from the funders — usually countries in Europe and North America — to source from their home countries.Get development’s most important headlines in your inbox every day.Subscribe

Thankfully, there are a few exceptions to this trend, such as Africa Improved Foods in Rwanda, which began operations in December 2016 and is already supplying Super Cereal products to the World Food Programme. A public-private partnership with investments from the government of Rwanda, DSM, IFC, CDC Group, and FMO, AIF proudly sources its grains from Rwanda and neighboring countries. The Rwandan government, as an investor in the company, has also created an enabling environment for AIF and actively supports its engagement with the World Food Programme. This example reveals what is possible when governments, international organizations and the private sector work collaboratively.

There is clearly a need for more success stories on the continent of companies that are scaling and filling critical gaps in the food ecosystem. However, these companies need to be identified and supported. The hub nourishingafrica.com, launched in December of last year, showcases these entrepreneurs and their companies. It is envisioned as an online home that attracts, empowers, equips, connects, and celebrates over 1 million dynamic and innovative entrepreneurs who will drive the profitable and sustainable growth of the African agriculture and food landscapes. This hub provides linkages to funding sources, talent, knowledge and e-learning, and markets. It is just one example of the momentum that is building on the continent to promote more food self-sufficiency.

Climate change, extreme weather temperatures, droughts, and flooding will continue to challenge the global food ecosystem in 2020 and beyond. As a result, it is imperative that African governments — and the international development agencies they engage — recognize and embrace the rise of African food entrepreneurs and the role that they are playing in driving food innovation on the continent. By sourcing locally and sharing best practices, knowledge, and funding, they can empower the private sector and local NGOS to address their own crises. This will not only reduce the cost of interventions, curb the number of international staff they must bring in, and ensure more sustainable ecosystems, but will also foster greater local ownership and resilience in the medium and long terms.

By: Ndidi Okonkwo Nwuneli is an agriculture and nutrition expert based in Nigeria with over 23 years of experience in international development. A graduate of Harvard Business School and Wharton School, she is currently engaged in transforming the food and agriculture landscape in Africa, through two companies that she has co-founded, AACE Foods and Sahel Consulting. She is currently a fellow at the Harvard Kennedy School, where she is writing a book on “Africa Nourishing the World.”

SDG500, a $500m impact investment platform, has launched, combining partners from the private and public sectors, including United Nations entities, non-governmental organisations and a private equity firm, to catalyse investments that will help achieve the Sustainable Development Goals (SDGs).

SDG500, a $500m impact investment platform, has launched, combining partners from the private and public sectors, including United Nations entities, non-governmental organisations and a private equity firm, to catalyse investments that will help achieve the Sustainable Development Goals (SDGs).

The platform will raise $500m for hundreds of businesses in emerging and frontier markets.

SDG500 will offer an exposure to six different underlying funds: the ABC Fund, an impact investment vehicle targeting smallholder farmers and small and medium agribusinesses in developing countries; BUILD, a fixed income fund aimed at early stage enterprises in the Least Developed Countries; the CARE SheTrades Fund, a gender lens fund which will use debt and equity to invest in businesses in Asia; BLOC SmartAfrica and BLOC Latin America, venture capital funds targeting technology enterprises in Africa, Latin America and the Caribbean respectively; and HEAL, a venture capital fund investing in healthtech businesses in emerging and frontier markets.

Each of these funds is or will be managed by impact asset manager Bamboo Capital Partners.

Jean-Philippe de Schrevel, Founder and Managing Partner at Bamboo Capital Partners, said: “The launch of SDG500 is a unique milestone for the impact investing industry. We have never seen a coalition from the private and public sector come together to achieve the SDGs on this scale before.”

The financing gap to achieve the SDGs in developing countries is estimated to be $2.5trn per year.

To achieve the SDGs by 2030, more innovative and sustainable financing solutions are required.

“The missing middle financing gap is real, and it is suffocating early stage enterprises which have the potential to transform some of the world’s poorest and most underdeveloped regions. We believe that by working together to finance and scale these businesses, we can achieve the SDGs and take another step closer to a better, more sustainable future for all,” de Schrevel said.

The funds will use debt and equity to invest at Seed, Series A and Series B stages in hundreds of businesses in emerging and frontier markets.

The blended finance structure of SDG500’s underlying funds is designed to catalyse and de- risk further funding from institutional investors in order to make a significant contribution to achieving the SDGs by 2030.

SDG500 aims to address the ‘missing middle’ financing gap that affects entrepreneurs in these markets, where growth is constrained by a lack of access to follow-on financing.

The funds will target businesses in the agriculture, finance, energy, education and healthcare sectors across Africa, Asia, Latin America, and the Caribbean and Pacific regions.

There will also be a gender-lens focus and some of the funds will specifically invest in businesses that empower and provide jobs for women.

The funds composing the SDG500 platform each include a catalytic first loss layer designed to encourage and protect senior tranches of funding.

Initial sponsors of the catalytic layers of the funds of SDG500 include the European Union, the African, Caribbean and Pacific Group of States, the Governments of Luxembourg, Togo and Tunisia, CARE and the Alliance for a Green Revolution in Africa.

The European Union, Alliance for a Green Revolution in Africa, The African, Caribbean, and Pacific Group of States and the Government of Luxembourg have committed funding to the first loss layer of the ABC Fund, which has been initiated by IFAD in partnership with them.

EAST African bigwigs Tanzania, Kenya and Uganda are set to benefit from an initiative that seeks to enable domestically produced rice to competitively substitute the current over US dollars 300m worth of rice imports to the regional Common Market.

The three East African Community (EAC) member countries will get funded under a three-year East African Rice Initiative (EARI) with an overall goal to contribute to inclusive transformation of the rice sector.

EARI targets East Africa for sustainable increase in incomes of 220,000 women, men and young people employed in the value chain of locally produced rice in the project that runs through 2022.

It will be implemented by Kilimo Trust (KT) in partnership with the EAC Secretariat, commissioned by the United States Agency for International Development (USAID) through the Alliance for a Green Revolution in Africa (AGRA).

A statement made available to the ‘Daily News’ from KT, EARI and EAC revealed one of specific objectives is to increase productivity, commercialisation, profitability and resilience for enterprises of smallholder.

Others are to strengthen and expand access and competitiveness in the national and regional markets for locally produced rice as well as strengthen local, national and regional enabling policy and institutional environment for optimal commercialisation of the rice sector.

The trio said the objectives are pursued through delivery of results such as a 50 per cent increase in net incomes for paddy farmers; at least 75 per cent of smallholder farming households using structured markets in input and output and a 50 per cent increase in average yield (MT/ha) of rice.

Also on the cards is a 20 per cent increase in volumes of rice sold by households through structured trade in household commercialisation level; 500,000MT of paddy sold through structured markets valued at 111,500,000$, at least 50 per cent increase in the number of farming households using post-harvest technologies and facilities.

The project is to realise at least 30 per cent increase in adoption rate of target improved productivity technologies or management practices at farmer level, at least three climate smart technologies and/or management practices introduced to paddy farmers.

Major envisaged outcome is that the supported SMEs processors will increase efficiency in local sourcing of paddy from smallholder farmers including quantity, quality and consistency in supply through village-based aggregation supported by contract farming model that will contribute to reducing transaction costs of the millers and increase the profitability of SHFs’ enterprises, facilitate sustainability beyond the current funding.

Implementation approach of EARI project is to build strong and sustainable business trading consortia led by processors and millers as anchor partner linked to farmers business organisations, such as cooperatives and input agro-dealers such as suppliers of agricultural production enhancing technologies like seeds, fertilisers, agrochemicals and post-harvest handling technologies and business development service providers.

KT is a not-for-profit organisation working in agriculture for development across the EAC. It has increasingly become the go to partner organisation for market-led agricultural value chain development in the region.

It envisions sustained and equitable wealth creation, food and nutrition security for smallholder farmers.

By Deus Ngowi, Daily News

“All my kids can go to school now, whereas before I might only have been able to send one” reports Balaynesh Kasa, a farmer in Debre Yakob Watershed, close to Bahir Dar town, in Amhara Regional State, Ethiopia, and mother to four children.

Balaynesh’s ability to grow and sell produce has increased over the last eight years as a result of a project implemented by Water and Land Resource Centre at Addis Ababa University, Food and Land Use Coalition (FOLU) partner, that has restored degraded lands to increase its productivity. Through practices including soil and water conservation, fertility management, increased tree planting on farmland and irrigation techniques, she now boasts production of banana, avocado trees and hops, home gardens, livestock and beehives on her small farm. This means she can now afford schooling, medicine as well as nutritious food for her family.

Putting nature at the heart of agriculture and land management can unlock huge benefits for people, health and the environment, like those which Balaynesh is enjoying. Productive and regenerative agricultural systems that combine local, indigenous and traditional knowledge and techniques such as crop rotation and tree planting with advanced farming technologies like drip irrigation and seed selection can increase yields, reduce input requirements, boost transparency, and improve the incomes and livelihoods of smallholder farmers.

Beyond the farm, functioning ecosystems are at the heart of local economic and resilience to mounting climate impacts, including rising global temperatures. Natural capital (which includes soil, water and plant life) accounts for over a third of total wealth in sub-Saharan Africa alone, where over 70 per cent of people depend on forests and woodlands for their livelihoods.

Flourishing forests, grasslands and wetlands can help to reduce risks of and vulnerability to flooding, drought and soil erosion, which are forecast to increase with climate change. Similarly, sustainable fishing and aquaculture management can optimise the long-term availability of fish, reducing demand for land-based proteins and supporting healthier, more diverse diets.

The Food and Land Use Coalition reveals that these ‘nature-based solutions’ could generate a $2.4 trillion economic prize by reducing costs linked to malnutrition, rural poverty and environmental damage. What’s more, they could unlock a US$102 billion business opportunity globally by providing forest ecosystem services, tapping into low income food markets with new and sustainable products, boosting yields by applying technology on smallholder farms, and more.

Importantly, people stand to benefit hugely from a transition to sustainable agriculture, forestry and land management. For example, agroforestry or planting trees among agricultural crops can generate new revenue streams and fresh produce for the household, boost yields of existing crops by improving soil health, and strengthen the resilience of the farm to extreme weather events such as storms.

Back to Ethiopia, the opportunities linked to nature-based solutions are remarkable. The recently launched Action Agenda for a New Food and Land Use Economy in Ethiopia outlines how the country can transition to sustainable food systems and scale up the benefits that Balaynesh and her family are enjoying. Going forward, the Food and Land Use Coalition is prioritizing advancing commercialization of crop and livestock production that leads to innovations in food production and land use practices.

These innovations provide more inclusive economic opportunities, improve health, and reduce food loss while restoring degraded landscapes, expanding tree cover, and protecting ecosystems within agricultural landscapes. Public and private actors are increasing lending to the agriculture and forest sectors and rural areas overall—all aligned with sustainable value chain improvements are envisioned results and potential benefits of successful actions.

Action in these areas can improve the incomes for over 700,000 smallholder farming households and increase agricultural GDP by over US$360 million. Overcoming rural financing gaps could increase the value of credit-constrained smallholder producers by up to 60% per hectare. In addition, the Action Agenda provides a roadmap to boost the efficiency of Ethiopia’s food systems to reduce post-harvest loss and save the country millions of dollars.

Already, Ethiopia is an international leader in sustainable land use management and practices that boost resilience, generate new revenue streams and drive economic growth. In July 2019, the country set the world record for the most trees planted in one day, with the population planting 353 million trees as part of Prime Minister Abiy Ahmed’s broader plan to plant four billion trees in the 2019 rainy season between May and October. The government also aims to restore up to 33 million hectares of degraded land and to ensure that agricultural productivity does not occur at the cost of Ethiopia’s forests, wetlands and other ecosystems that serve as the home for millions of people and wildlife.

Furthermore, the Alliance for a Green Revolution in Africa (AGRA) supports the Ethiopian government to implement its second Growth and Transformation Plan (GTP II) through its focus on commercialising agriculture. AGRA, an alliance working to increase the income and food security of 30 million smallholders in 11 countries including Ethiopia by 2021, supports farmers to adopt yield increasing and climate smart technologies and gives them access finance and markets.

Furthermore, the Alliance for a Green Revolution in Africa (AGRA) supports the Ethiopian government to implement its second Growth and Transformation Plan (GTP II) through its focus on commercialising agriculture. AGRA, an alliance working to increase the income and food security of 30 million smallholders in 11 countries including Ethiopia by 2021, supports farmers to adopt yield increasing and climate smart technologies and gives them access finance and markets.

Other countries can learn from and build on Ethiopia’s successes. Action is urgently needed to prevent further losses and to tap into emerging opportunities from nature-based solutions. The scale and breadth of transformation requires innovative partnerships across public and private sectors, drawing on the experience and expertise of each. Governments can create the enabling environment for the private sector, financing players and civil society to engage in nature-based solutions at scale. Private sector players can transition existing operations while investing in the innovations of tomorrow. Critically, this work must be led by front-liners themselves – smallholder farmers, small and medium-sized entrepreneurs and communities.

A sustainable food and land use economy can deliver a brighter future for people and planet. By seizing this moment, Ethiopia can continue to serve as a world leader and support its population at home – and so we can hear the inspiring stories from more farmers like Balaynesh.

By Dr. Agnes Kalibata – President, AGRA and Special Envoy for the 2021 Food Systems Summit

The current global food system is not structured to cope with a rapidly growing population, climate shocks and the rise of both hunger and obesity. Under business-as-usual scenarios, an estimated 637 million people will still be undernourished, while health systems could face a bill of $1.2 trillion every year for treating medical conditions related to obesity. We will also have no hope of reaching the Sustainable Development Goal of net zero emissions by 2050, given that today’s agricultural supply chain, from farm to fork, accounts for around 27% of greenhouse gas (GHG) emissions.

As the heads of leading multilateral and commercial agricultural finance institutions, we are convinced that fragmentation within the current food systems represents the most significant hurdle to feeding a growing population nutritiously and sustainably. We urgently need collective action on an unprecedented scale, with innovative alliances that pool capital, resources and knowledge. This could unlock investment and generate impact leading to more sustainable, efficient, inclusive, nutritious and healthy food systems worldwide.

Stalling at smallholder level

For example, many agribusiness clients struggle to establish a reliable supplier base of smallholder farmers in developing economies. High upfront costs to train farmers and ensure access to inputs, finance and markets add significant investment risk for our clients, and financing risk for Rabobank. Hundreds of initiatives have aimed at establishing these prerequisite conditions for private-sector investment. Yet despite individual successes, these initiatives are too small to achieve impact at the scale needed to unlock finance for large-scale infrastructure investments – from hard infrastructure such as roads and mechanization, to soft infrastructure such as climate-risk insurance and market information systems – along with the distribution and training systems needed to make these accessible to farmers.

Meanwhile, the International Fund for Agricultural Development’s investments in increasing food security and nutrition can only deliver sustainable economic benefits for rural populations – especially the poorest and most marginalized, women and youth – if there is a strong market-based economy, backed by private-sector capital focused on providing smallholder farmers with access to high-value markets for their produce and the services they need to increase production levels.

Fragmentation in the system also results in a lack of knowledge-sharing and coordinated efforts to address sustainability. Many agricultural value chains and farming practices that are successful in increasing output deplete or pollute natural resources such as water, soils and forests, making them unsustainable in the longer term. Yet at both value chain and national level, efforts to assess, mitigate and balance the effects of agriculture on the environment and health continue to be inadequate and fragmented.

New solutions

Fragmentation also continues in the financial value chain, with too little coordination and collaboration between lenders to jointly leverage their resources and skills. For example, relatively small amounts of capital from donors and multilateral finance institutions that do not require an immediate or guaranteed return – known as “blended finance” – can be used to de-risk commercial lending, thereby mobilizing private-sector investment. However, both the number of these instruments available, and their limited scope due to the size of the projects available for them to support, means that their impact is insufficient to meet the challenge of food systems transformation.

We need far better and more structured collaboration between initiatives and food system players, to share best practices and to develop new projects, solutions and financial instruments in the rural space where financial markets are in their infancy. Most critically, we need to aggregate opportunities, resources and complementary expertise into large-scale projects that can unlock investment and deliver impact.

This is why the Food Action Alliance was recently launched by a coalition with IFAD, Rabobank, the World Economic Forum, the International Centre for Tropical Agriculture, the African Development Bank, the Alliance for a Green Revolution in Africa and an increasing roster of private- and public-sector partners. This coalition of initiatives and organizations works to address fragmentation across the food systems in developing economies by accelerating and expanding the impact of existing food value-chain initiatives.

The Alliance provides partners with a framework for collective action, significantly strengthening the impact of agricultural value chains to produce food efficiently and sustainably, that is accessible to all, in support of a transition to healthier diets and improved environmental outcomes. It builds on partnership models such as the New Vision for Agriculture in 25 countries and many other initiatives, aimed at integrating value chains through innovative partnerships and mutual learnings. For instance, the launch of Grow Asia, a regional partnership in ASEAN, has reached over 1 million farmers. Three state-level partnerships in India catalyzed a national platform supported by the federal government to set a more holistic approach to value-chain integration and development.

The Food Action Alliance doesn’t replace or directly support individual agribusiness initiatives or platforms. It connects projects, initiatives and organizations that are needed to achieve change at scale. It facilitates implementation of transformational ideas that, stand-alone, would struggle to realise their potential impact. It provides access to tools, research, lessons learned and solutions. Together, we believe that coordinated, collective action has the potential to improve the economic livelihoods of hundreds of millions of smallholder farmers, deliver on the SDGs and create sustainable and nutritious food systems for future generations.

This article is part of the World Economic Forum Annual Meeting

How are Ugandan farmers adapting to climate change? By abandonning maize for new varieties of rice in response to changing weather patterns – found Isaiah Esipisu in this investigative report from Amuru district in the country’s north.

In Amuru district in the northern part of Uganda, 47 Kilometres out of Gulu town, swathes of land under upland rice, pearl millet and the flowery sunn hemp in a place where maize has always been the traditional crop attracts the attention of any visitor in this area.

“This is our new cash cow,” says Dominic Kimara, the farm Manager of Omer Farming Company, which has been growing maize on 5,000 hectares of land but has now turned to 100 percent rice production.

“Until 2016, we were growing maize on this farm,” says the manager. “But we discovered that rainfall patterns were changing, and so we had to look for an alternative crop that would suit the ever changing climatic conditions.” Below: Farmers examine the upland rice crop.

FEATURE: How are Ugandan farmers adapting to climate change? [Translate] How are Ugandan farmers adapting to climate change? By abandonning maize for new varieties of rice in response to changing weather patterns – found Isaiah Esipisu in this investigative report from Amuru district in the country’s north.

In Amuru district in the northern part of Uganda, 47 Kilometres out of Gulu town, swathes of land under upland rice, pearl millet and the flowery sunn hemp in a place where maize has always been the traditional crop attracts the attention of any visitor in this area.

“This is our new cash cow,” says Dominic Kimara, the farm Manager of Omer Farming Company, which has been growing maize on 5,000 hectares of land but has now turned to 100 percent rice production.

“Until 2016, we were growing maize on this farm,” says the manager. “But we discovered that rainfall patterns were changing, and so we had to look for an alternative crop that would suit the ever changing climatic conditions.” Below: Farmers examine the upland rice crop.

A larger trend of crop-switching

Experts from the National Agriculture Organisation (NARO) have reported that in the past three years, many farmers in Uganda have abandoned maize to concentrate on rice with most of them opting for upland rice instead of irrigated paddy rice.

The latest agriculture survey report by NARO, the Ugandan government-owned research organisation, indicates that more than 50 percent of rice grown in the country is now coming from the uplands. Rice consumption – especially in urban areas – has increased considerably.

“When I was growing up, rice used to be a Christmas meal because it was a rare one,” notes Robert Kawuki as he enjoyed a rice meal for lunch at the NARO canteen in Namulonge area. “But today, farmers have embraced it, and so people can enjoy it any time, both in the upcountry and in urban areas,” he says.

Although upland rice is more sensitive to climate stress than irrigated paddy rice, farmers in Northern Uganda say that latest varieties grown in the area have proven to be more profitable than the maize crop.

“Most of the varieties grown by these farmers are the ones we released in 2015, and were bred mainly for drought tolerance, fast maturation and pest and disease resistance, but most importantly, because they are high yielding,” says Dr Jimmy Lamo, the Principal Research Officer working with NARO as the Head of Rice and Maize Research Programme.

“According to our latest survey, out of a total of 150,000 hectares under rice production in the country, 90,000 hectares is grown in the uplands without any form of irrigation,” says Dr Lamo.

Dr Lamo earned his PhD from the University of KwaZulu-Natal for breeding some of the varieties under support from the Alliance for a Green Revolution in Africa (AGRA).

He notes that crop-switching, mainly from maize to upland rice, is a way of responding to the new trends of rainfall patterns in some parts of the country. Below: Dominic Kimara (left) with James Ekebu of NARO in a rice field, northern Uganda.

New farming practices aim to reduce fertiliser use

In Amuru, Omer Company has adopted climate smart farming techniques, and local farmers are following suit.

“We grow pearl millet, but it is not for human food. It is for soil health,” he says.

When the millet starts flowering, the crop is rolled flat on the ground and left to decompose. The same is done for sunn hemp, which is a leguminous plant with rich soil nutrients. “When they decompose, these two crops fix a lot of nitrogen into the soil. So when we finally plant rice, there is absolutely no need of applying fertilisers,” said Mr Kimara.

The company practices shifting cultivation, whereby when rice is growing on one part of the farm, there is either pearl millet or sunn hemp growing in the other half, waiting to be rolled down for the next season planting.

About 1,700 farmers in the neighbouring villages have also started growing rice instead of maize and some of them have adopted the no till system.

“Upland rice farming is much better for most of us because the company buys most of it from us at a good price, and as well, we use it to feed our children,” says Regina Kisembo from Luwila village in Amuru. She is one of the farmers who have been contracted by Omer Company as out growers. “The company loans us seed to be paid upon harvest, and they keep training us on upland rice production. They also advise us on which varieties to plant in a given season depending on the weather forecast,” she says. Below: Rice drying at the homestead, northern Ugandan village.

New rice varieties are a game-changer

According to Dr Lamo, NARO released six upland rice varieties known as NamChe (Namulonge Mchele), which have since become a game-changer. “We have some varieties that mature in just 90 days, and farmers prefer those during short rainy seasons, then they can plant other varieties that mature in four to five months during the long rainy season,” he says.

Many upland rice varieties, earlier introduced in the country, were late maturing and did not have preferred cooking qualities. Later, more newly introduced lines were evaluated and released. These varieties had been generated through inter-specific crossing involving Oryza glaberrima and Oryza sativa. The new genotypes were called the ‘New Rice for Africa’ (Nerica).

Nerica was actually a cross between locally adopted African rice with high yielding Asian rice varieties and was introduced on the African continent in 1996.

Nerica varieties were resistant to many diseases but still sensitive to drought stress and new diseases, especially brown spot disease and narrow leaf spot disease. Besides, these varieties were not aromatic, which is a major concern for Ugandan farmers and rice consumers in the country.

To develop NamChe, a total of 191 different rice varieties from major rice breeding centers were evaluated. Of the 191 materials, 77 were O. sativa indica comprising 45 from African Rice Centre (ARC), 15 lines from International Rice Research Institute (IRRI), 13 from Mali, three from Uganda, and one from China.

The varieties were then crossed with Nerica, where the results were evaluated based on yields, tolerance to climatic stress, tolerance or resistance to emerging diseases, cooking qualities among other desirable traits. Out of the crosses, scientists ended up with only six varieties that had most of the desired traits and they were named NamChe 1, 2, 3, 4, 5, and 6.

According to Kimara, the fast maturing NamChe varieties (90 days) yield up to two tons per acre, while the late maturing (120 days) can yield up to 3.5 tonnes per acre.

“We are happy with this crop. The only challenge is the poor road infrastructure, which makes it difficult for trucks to come over for the crop to be transported to Kampala and elsewhere,” says the farm manager.

Originally published