Forum pushes for funds to bolster food security

The African Green Revolution Forum meeting in Accra, Ghana opened on Thursday with focus on agriculture financing to improve the lot of small-scale farmers.

Participants urged Africa to seize the opportunity to become the bread basket of the world by increasing yields per hectare to first feed her people and export surplus.

Africa’s food yield per hectare is 1.7 tonnes compared to Europe’s five tonnes per hectare.

“Time for action is now. It is time to invest in Africa agriculture,” said Kofi Annan, the chairman of Alliance for a Green Revolution in Africa, a body that is working to help commercialise small- scale agriculture.

One of the major targets is to help African farmers get access to better seeds and fertilisers because the inputs, in addition to adequate water and infrastructure, are key ingredients to higher yields.

“ I have seen how the use of fertilisers has boosted yields by up to 130 per cent in Mali and East Africa,” said Mr Annan.

One of the key pledges of financing agriculture was made here by South Africa-based Standard Bank.

The bank announced it will roll out agriculture financing products for small- scale and large scale farmers across all African countries that it operates in as part of efforts to help the continent become the global food supplier.

“The intention is to tackle food security and sub-Saharan Africa can provide the solution ,” Standard Bank CEO for Africa Clive Tasker said.

It is estimated that Africa has about 12 per cent of the world’s arable land but 80 per cent of it is uncultivated.

Only seven per cent is irrigated compared to 40 per cent in Asia, indicating the huge opportunity for investments in agriculture in the continent.

The bank sees Africa food demand also rising because of the growing economic activities in the continent, providing expanded markets for farmers.

The bank announced earlier this week that it will provide $100 million to farmers in Uganda, Ghana, Mozambique and Tanzania to enable some African farmers to grow export crops in the next three years.

The scheme will benefit an estimated 750,000 small-scale farmers.

The finance institution said it plans a major agriculture product launch in Kenya in October although it did not disclose details.

Financing agriculture in Africa has been dismally low because of the risk factors banks see in the sector.

For example, banks find it difficult to predict the lending risks to agriculture because production may be affected by a myriad of issues yet penetration of agriculture insurance that can offset that risk is low.

The situation has not been helped by governments’ failure to increase their funding for agriculture.

In Africa, only Mali, among few other countries, has increased its agriculture budget to over 10 per cent of the national allocation.

This low lending is despite the fact that agriculture contributes an average of 25 per cent of the countries’ annual wealth every year in most of the sub-Saharan Africa.

The bank announced that it will also be helping African countries to set up commodity exchanges that will help farmers get good prices for their produce.

An agriculture finance expert said setting commodity exchanges in Africa will help to cushion small- scale farmers from losses that happen when they compete to sell all their produce at once, oversupplying the market that reacts with rock-bottom prices, especially during the harvesting season.

“There is a definite and urgent need to have transparency around pricing commodities in Africa and commodities exchanges can help to achieve this,” said Jacques Taylor, head of agriculture financing at Standard Bank in Africa.

Commodities exchanges in Africa will help end the farm-to-market type of agriculture business practised by small scale farmers where they assume that as long as they take the produce to the market, it will find buyers.

“Instead, farmers should be guided on managing how they supply the market,” said Mr Taylor.

Farmers for example should be able to supply their produce when the demand is high and this will mean they fetch higher prices.

But farmers must have proper storage facilities and skills to identify when the demand is low and high.

Farmers must also be provided with good infrastructure to enable them deliver on time as per the sale contracts.