Article
African farming must plot its own course
Published: 01/02/2018
Last week, I came across an interesting article by the U.S. agricultural economist, Jason Lusk, highlighting the disruptive trends in food and agriculture. Lusk identified six key trends on the horizon. However, the two most notable ones were: (1) Blockchain – an underlying technology that facilitates bitcoin trades and could be applied to many other industries; and (2) Online food buying – Amazon might do to food what they have done in other industries - Wandile Sihlobo, Agbiz economist.
*This article first appeared on Business Day on 01 February 2018.
Last week, I came across an interesting article by the U.S. agricultural economist, Jason Lusk, highlighting the disruptive trends in food and agriculture. Lusk identified six key trends on the horizon. However, the two most notable ones were: (1) Blockchain – an underlying technology that facilitates bitcoin trades and could be applied to many other industries; and (2) Online food buying – Amazon might do to food what they have done in other industries.
While I agree with Lusk’s sentiments, Africa’s food and agricultural sector is still developing, and it might follow a slightly different trajectory to that of developed economies in the near-to-medium term. Some of the more pertinent near-term megatrends were identified in a research paper by agricultural economists, Lulama Ndibongo Traub, Felix Yeboah, Ferdinand Meyer and Thomas Jayne.
The most notable ones were:
(1) The youth bulge – which speaks to the fact that 45% of sub-Saharan Africa’s population is below the age of fifteen and over the next two decades will be looking for employment, which will potentially be in the agricultural sector.
(2) Climate change and the management of environmental risks – the exact impacts of climate change are still highly uncertain and are likely to vary significantly across various regions, but two general predictions are that much of Africa will experience greater variability in rainfall and a rise in temperatures. This, naturally, would have an effect on agricultural production, and possibly a decline in crop production. This would inevitably alter the geographical spread of crops, have an effect on horticulture and affect animal production. Whilst other sectors of the economy may see a greater focus on climate change mitigation, agriculture will need to focus on climate change adaptability.
(3) Telecommunications revolution – there is likely to be continued growth in Africans’ use of mobile banking, and software-based provision of information and services.
I concur with all the aforementioned mega-trends, and in addition, I would add a few more mega-trends that I believe will also underpin the food and agricultural sector in the medium to long-term, particularly for the African continent, namely:
(1) Infrastructure – although the South African agricultural sector is arguably one of the most advanced on the African continent, there is still room for improvement; this is particularly evident in communal areas. Therefore, the subject of infrastructure and technological advancement will remain a key focus in the near future for both commercial and smallholder farmers, not only in South Africa, but more so across the rest of the continent.
(2) Technology – There are already clear examples of this through precision farming, big data, drones, satellites and other methods currently in use in the industry. Moreover, the climate change challenge could also lead to further developments in seed breeding in an effort to find seeds that would adapt best to erratic rainfall. The Water Efficient Maize for Africa (WEMA) by Monsanto is a clear example of such efforts as it is designed to tolerate dry weather conditions.
(3) Demographics – Africans are urbanising which means more people will be getting their daily foods from retailers instead of producing for themselves. This is an opportunity for agribusiness to expand their share in the retail space in order to meet the needs of the urban consumers.
Overall, the agricultural sector will need to adapt to the challenges posed by climate change, technology, infrastructure, and proactive social and environmental sustainability initiatives. The sectors will need to become more agile and innovative, to take advantage of the opportunities provided by the urbanising demographic of the African continent and labour supply. Going forward, the need for innovation and agility will only become more imperative for the continent, as its tracts of land will be expected to not only feed Africa, but also to increasingly contribute to the food security of the growing global population.
ENQUIRIES:
Wandile Sihlobo (wandile@agbiz.co.za)
Agbiz Economist