Over the last couple of decades, Africa has experienced a rapid transformation of traditional staples value chains fueled by fast-paced urbanization and rising incomes.
The urbanization level in Africa has reached that of other regions and has continued to grow at a comparatively faster rate of nearly 4 percent.
Sustaining recent growth in African agriculture is essential for the continent’s ability to achieve food security and maintain broader economic growth in the future. Fast-rising food demand from growing and urbanizing populations present an opportunity for African farmers if they can ensure the required productivity and production increases.
However, the effects of climate change threaten farmers’ ability to maintain and accelerate agricultural growth.
According to a report by Alliance for a Green Revolution in Africa (AGRA), promoting growth in smallholder agriculture in Africa through increased participation in growing world markets for high-value commodities is expected to require significant vertical integration of smallholders into the value chain.
A key area of challenge related to efforts to deepen and broaden the integration of smallholder farmers trying to integrate into agribusiness value chains includes a rapidly changing and increasingly complex market environment.
The increasing globalization of agricultural markets presents African smallholders with considerably more complex challenges than those faced by Asian producers during the Green Revolution era. African smallholders today need not only to produce more efficiently but also to contend with far more logistically complex and competitive markets.
Growing specialization in distribution channels and logistics; rapidly changing and differentiated consumer preferences; and increasingly complex norms, standards, and other technical specifications place increasing demands on the production and management skills of the average smallholder.
With respect to value chain participation, the distinction between cash and staple crops is irrelevant as the return on investment is the key factor. Indeed, smallholder farmers will engage in commercial agriculture if the returns to investment are superior to those available from alternative activities. Hence, a vibrant staples processing sector tapping into the growing urban market could create business opportunities for millions of smallholder households across Africa.
Supermarkets, fast food chains, and processing companies represent additional business opportunities for smallholders in rural Africa. As a result, smallholders who already sell a share of their production to the market will increase their market participation and new groups of smallholders are likely to enter the market
While analyzing business pathways to the future of smallholder farming in the context of transforming value chains, it is important to consider changes in strategies over time.
These political constraints on state support to agriculture explain some of the challenges faced in Africa today, including institutional and governance deficit; lack of infrastructure to support production, processing, and commercialization; weak integration of value chain components; and absence of opportunities for uptake of innovations.
These challenges need to be overcome to allow smallholder farmers to benefit fully from rapidly expanding demand in domestic and global markets and to contribute to meeting the future food needs across the continent.
In addition to dealing with the perennial constraints around technology and innovations, the future of smallholder farming will be determined by farmers’ ability to successfully integrate into the rapidly transforming value chains across the continent.
Article originally published on Soko Directory