Smallholder farmers in Isiolo, Kenya sorting beans before sending them to the market in Nairobi. the latest Africa Agriculture Status Report (AASR) shows that small- and medium-sized enterprises (SMEs) are the main drivers of food economy on the African continent. Credit: Isaiah Esipisu/IPS

By Isaiah Esipisu
ACCRA, Ghana/ELDORET TOWN, Kenya, Sep 4 2019 (IPS)

Viola Kiptanui, a resident of Langas estate in the outskirts of Kenya’s Eldoret town, has discovered a new way of life – eating only what she knows the source – thanks to a new smallholder entrepreneurship venture.

“Given the many health problems that have emerged, there is need for one to know exactly what they are feeding their families,” said Kiptanui a mother of three children.

Within the Langas shopping centre, residents stream to a newly-established grocery called ‘iAgribizAfrica’ to buy fresh green vegetables and fruits that are grown by Uasin Gishu County’s smallholder farmers and sold directly to the grocery.

“Such entrepreneurships represent a profound turnaround from mere decades ago,” said Dr. Thomas Reardon of Michigan State University, a lead author of the latest Africa Agriculture Status Report (AASR).

The report, released on Sept. 3 on the sidelines of the Africa Green Revolution Forum (AGRF) in Accra, Ghana shows that entrepreneurs from small- and medium-sized enterprises (SMEs) are the main drivers of the food economy on the African continent.

According to the 220-page document compiled by the Alliance for a Green Revolution in Africa (AGRA), 64 percent of total food consumed on the continent is sourced from SMEs, with only 16 percent coming from larger enterprises, and the remaining 20 percent being grown and eaten by farming households.

“There has been a ‘Quiet Revolution’ in agrifood private sector value chains linking small farmers to burgeoning urban markets and growing towns in Africa. This has spurred farmers’ participation in food and farm input markets,” said Reardon during a media briefing prior to the launch of the report.

These SMEs, often women-led, include food processors, wholesalers, and retailers, and they provide a range of services, from transport and logistics to the sale of inputs such as fertilisers and seed to farmers – says the report.

According to Rodgers Kirwa, a 27-year-old farmer and founder of iAgribizAfrica, there is a growing demand for food whose origin can be traced. 

“I started this business in 2018 and so far, I have 40 smallholder farmers within my network,” he told IPS at the AGRF in Ghana.

The 40 farmers were all recruited and registered by the young entrepreneur, and at some point supported for farm inputs on credit in case of a pressing need.

“The idea is to have farmers we know very well, so that we can monitor what they are growing, advice them on farm inputs, and monitor how they are using them for the safety of our customers,” said Kirwa.

Besides the entrepreneurship, Kirwa is a member of another online platform known as ‘Mkulima Young’ (young farmer) which was started with 10 partners, among them three young agronomists, two marketers, and social media enthusiasts. The platform now has 30,000 subscribers from Kenya and Uganda, mostly seeking information about farming enterprises. It is from this platform that farmers get answers to all their questions.   

“SMEs are the biggest investors in building markets for farmers in Africa today, and will likely remain so for the next 10 to 20 years,” said Dr. Agnes Kalibata, President of AGRA in a statement. “They are not a ‘missing middle,’ as is thought, but the ‘hidden middle,’ ready for support and investment to thrive further. Today, we bring them out into the light.”

Contrary to common belief, the report shows that large enterprises play a relatively minor role in directly supporting small-scale farmers, and the food value chain in Africa.

“We live in a global market,” Kalibata said. “Our job today is to ensure that these SMEs are grounded enough to provide the right kind of support to family farms; and to be competitive so that they can survive and thrive in an increasingly interconnected and global market,” she said noting that the smallholder entrepreneurs’ success will determine the future of agriculture and food security on the African continent.

However, according to Reardon, there are challenges. “The journey has taken off, but not flying in its full potential,” said the lead researcher. “We need sound policies that will support these SMEs, good infrastructure and capacity building for them,” he said.

So far, governments that have invested in this have already registered a positive impact.

In Ghana, for example, the government has subsidised the cost of fertilisers by 50 percent, an intervention programme that has been in place since 2008 when the country ran into a food crisis due to poor yields, according to Dr. Owusu Afriyie Akoto, the country’s Minister of Food and Agriculture. “This has been a huge success, and farmers have more than enough produce from their farms at the moment,” he told journalists at the AGRF.

According to Vanessa Adams, Vice President of Country Support and Delivery at AGRA, there is need to use appropriate technologies and available food systems to ensure that what is produced is sold at the right time.

“Bumper harvests are fantastic, but not after market crushes,” she said.

While lauding South Africa for impressive social progress over the past two decades, a new study has asked the country to build on the successes achieved and reduce inequality further.

The latest OECD Economic Survey of South Africa by the 34-nation Organisation for Economic Cooperation and Development (OECD) says: “South Africa has made impressive social progress over the past two decades, lifting millions of people out of poverty and broadening access to essential services like water, electricity and sanitation. Now is the time to build on these successes to reduce inequality further, create badly needed jobs and ensure stronger, sustainable and more inclusive growth for all.”

The survey, released in Pretoria, the capital of South Africa, by OECD Secretary-General Angel Gurría and South African Finance Minister Nhlanhla Nene, notes that prudent macroeconomic policies have secured the confidence of financial markets.

However, economic growth has been too slow and further measures are needed to overcome infrastructure bottlenecks, strengthen the business environment, improve labour markets and ensure future spending needs can be financed.

“The National Development Plan sets the direction for reforms needed for a strong and inclusive country. Our survey provides targeted recommendations to reach these objectives,” said Gurría.

“Millions of young South Africans are eager to work, and their potential must not be wasted. Their future is precious enough to justify tough reforms and hard spending choices,” he added.

According to the survey, improving infrastructure will be essential for boosting future growth and living standards while, given the large needs, prioritisation and cost effectiveness will be crucial.

The OECD noted out that the most immediate priority is to secure additional electricity generation capacity by opening the market to independent producers. Opening electricity and transport will require strong and independent regulators to protect households and firms.

The organisation pointed out that improving the regulatory environment would promote entrepreneurship and growth opportunities for small and medium enterprises (SMEs), which offer the greatest potential for creating jobs and future growth. Reducing barriers to entry, cutting red tape and promoting competition, will be essential.

According to the survey, labour market reforms can raise employment and incomes. Establishing a public employment service as a one-stop shop for job seekers would make it easier for people to find jobs, and for employers to find the right workers.

Costly industrial actions have held back the economy without delivering major gains to workers. The OECD suggests an increased role for mediation and arbitration in order to reduce conflict and provide better outcomes for workers and employers.

The survey pleads for “a high degree of public sector efficiency, prioritisation of spending and a strong revenue base” with a view to meeting public spending needs for infrastructure and the social safety net.

It argues that the South African tax system “is well designed and well administered, but there is scope to broaden key tax bases by reducing deductions, credits and exemptions.  Such tax reform would solidify public finances and make the tax system fairer.”

Edited by Phil Harris