Agriculture is the largest economic growth sector for Africa, New Partnership for Africa's Development business foundation CEO Lynette Chen said at the Southern African Development Community (SADC) Industrialisation Week on Monday.
She pointed out that less than 10% of arable land in Africa was farmed commercially because smallholder farmers, which made up between 70% and 80% of farmers on the continent, were not using their land as a business opportunity.
She stated that one of the biggest challenges around African agricultural production was showing subsistence farmers how to become more commercially minded.
“We need to support smallholder farmers by getting them into cooperatives and associations. Turning a smallholder farm into a business can contribute to food security throughout the continent, as well as support families and direct communities through agribusiness,” she said.
Chen pointed out that there were good examples in the SADC region of effective and efficient farmers associations that were well organised.
“In Mozambique, for example, they use two different cooperative models. One is where they form associations whereby each farmer sells produce to that association, which markets it for them.”
She added that, alternatively, the farmers are all shareholders of a specific cooperative, where they work and produce under a single label.
“The challenge is promoting agricultural investment in Africa, especially through the Beira corridors, which include Mozambique, Zambia and Malawi,” she said.
She noted that smallholder farmers had major challenges to access land rights, which they needed to secure loans from banks.
Chen said access to finance was also challenge, as agriculture was seen as a risky investment area, particularly at the microfinance level.
Agriculture contributes 15% to Africa’s gross domestic product, which Chen said was nowhere near what it should be.
“It needs investment by large agribusiness, which is starting to happen. A lot of Saudi and Asian companies are starting to invest in agricultural production on the continent,” she said.
She stressed, however, that to ensure food security, value-added production processing has to be done in Africa, which is why the SADC industrialisation strategy is important in creating value chains.
“Most of the agriculture produced on the continent is exported, and that needs to change,” she added.
Chen, meanwhile, pointed to last year’s drought and its severe impact on the agricultural sector in the region.
“There needs to be some sort of ‘guarantee instrument’ that will support farmers during bleak times. Climate change has had a significant impact on the agricultural sector in the SADC region and we need to work with farmers to understand climate change patterns and train them to adjust their farming regimes and plans to be integrated with the changes and seasons,” she said.
She added that climate change adaptation was critical and that more grassroots interaction needed to take place for a mindset change to occur.
At a policy level, Chen said government had a significant role to play in understanding the challenges of climate change and putting policies in place that would support farmers financially.
“The SADC has the SADC Regional Agriculture Investment Plan, which is a very comprehensive strategy. It focuses on eight key areas that need to be addressed, and is one of the most comprehensive policies on climate change I have seen,” she said.