It will not be all doom and gloom in key sector after pandemic
With the coronavirus ravaging every aspect of the economy, many are faced with an uncertain future. In the agricultural sector, farmers and stakeholders across the value chains are reeling from the impact of restricted movements, curfews, shutdowns, reduced purchases and purchasing power, and social distancing.
However, according to an organisation, Selina Wamuci, a platform for food and agricultural produce from Africa’s cooperatives, farmers’ groups, agro-processors and other organisations, though things will never be the same again after the Covid-19 pandemic, it will not be all doom and gloom.
In a new report, “Impact of Covid–19 on Africa’s Agriculture: What the Coronavirus (Covid–19) Means for African Family Farmers and Fishermen”, the organisation, which works directly with family farmers across the 54 African countries, notes that the changes taking place will endure for a long time.
Processing and Value Addition
With the grave interruptions of the food supply chain due to transport restrictions and airfreight constraints, including rising cost, Wamucii feels that countries will seek to have control food production and reduce reliance on cross-border imports.
“As more countries focus on ensuring critical supply chains are never interrupted again, a likely outcome is that they will seek to control their own food production, and reduce reliance on cross-border imports,” says the report released mid-April.
“This is because when food supply chains are broken by closed borders, countries will seriously weigh the risks in relying on others to feed themselves,” it adds.
This may not augur well for African countries, as it will affect the export of raw and unprocessed fresh produce to the EU and other markets. However, it could lead to the countries focusing more on developing their value chains, including processing and value addition, to ensure the survival of the agricultural sector, the report says.
For industries that import agricultural raw and semi-processed materials, it will be important to assess the impact of supply chains being broken by closed borders, Wamucii advises.
“To reduce the supply chain risks, more processors might consider moving closer to the production areas.”
Rebirth of the cooperative movement
The report also predicts a rebirth of the cooperative movement and cottage processors among African families.
The pandemic has exposed lack of reliable channels to deliver the much- needed support during such crises; from cash transfers, to inputs and market access for produce during logistical nightmares, Wamucii says.
“Before the Covid–19 pandemic, African smallholder farmers were already a severely vulnerable population, exposed to extreme poverty, hunger and the effects of climate change. Given their already vulnerable position, these farmers will suffer more from the immediate, short- and long-term effects of the pandemic, compared to any other group,” the organisation says.
According to the report, the smallholders who will fare better are those organised into cooperatives or groups.
“Cooperatives are an extremely effective vehicle through which governments and other partners can provide support to farmers.”
They will be key to supporting enhanced production and productivity, value-addition, and market-access, while providing a safety net.
“Cooperatives offer the only true and tested way out of poverty for smallholder farmers – through commercialisation of rural agriculture, value-addition and market access. They offer a strong avenue to mobilise and empower farmers through training, access to inputs, credit, and the benefits of economies of scale,” Wamucii says.
Growth of e-commerce for smallholders
E-commerce is going to be an important channel for market access.
“With social distancing measures coming into play, e-commerce is a reliable additional channel for market access for farmers,” the ecommerce platform states.
While agri-food e-commerce has shown substantial success in China, it shows how African farmers will access markets in the future.
Agri-food e-commerce is also going to be fuelled by the shift to cashless transactions, including mobile money.
The African Continental Free Trade Area (AfCFTA) and family farmers
On July 1, 2020, trading within the AfCFTA will start, creating a single continental market of more than 1.3 billion people, with a combined annual output of $2.2 trillion.
This could not have come at a better time for a continent reeling under export access market nightmares due to the coronavirus pandemic.
According to the United Nations Conference on Trade and Development, intra-African trade was at 2% in 2015 to 2017. Comparative figures for America, Asia, Europe and Oceania were 47%, 61%, 67% and 7%. Exports from Africa to the rest of the world ranged from 80% to 90% in 2000 –2017.
Says Ms Wamucii: “The high rate of African export dependence, in the time of Covid–19, when many countries are implementing border closures and restrictions, is one that calls for the continent to rely less on external commerce. It is clear now that African countries must trade with themselves more.”
The AfCFTA’s success will be directly linked to securing the livelihoods of African farmers. The transition phase alone is expected to boost intra-African trade by 33 per cent.
Concentration and optimisation of value chains
In the wake of additional logistical hurdles due to the pandemic, agricultural value chains will have to eradicate inefficiencies caused their high fragmentation.