Africa's food market could be worth US$1trn in 15 years, this is how... - CNBC Africa

Africa's food market could be worth US$1trn in 15 years, this is how...

Financial

by Paul Polman and Sunny Verghese* 0

Coffee outgrower farmer in Tanzania: Photo: Supplied

Around the world, farmers can attest to the devastating impact that climate change is having on agriculture. Whether they’re in the US, Vietnam or South Africa, heat waves, droughts or heavy rains are disrupting water supplies, ruining harvests and affecting food availability and prices.

We can only imagine what will happen to our agriculture and food systems if the earth’s temperature increases by 2-4°C. The prospect threatens to reverse gains in food security and economic growth. It threatens our ability to feed 9 billion people by 2050. And it will remove all chance of achieving the Sustainable Development Goal of eradicating poverty.

Addressing this challenge is a priority for world leaders meeting this week in Marrakech for the United Nations climate change conference. We therefore welcome the Moroccan Government’s Adaption of African Agriculture initiative (AAA) to help build the resilience of the continent’s agriculture.

It is particularly pertinent that this conference is on African soil. While all countries will feel the impact of climate change, Africa will perhaps feel it most. The continent’s agricultural productivity has long lagged behind the rest of the world. Crop yields grew across Asia from 1960 onwards, lifting hundreds of millions out of poverty, but stagnated in Africa where cereal yields stayed largely unchanged for the 30 years of the green revolution.

As a consequence, many African countries have met increased demand for food through overseas food imports, a wasted opportunity given that the continent boasts 60% of the world’s available arable land. This over-reliance on imports is also a risk, as trade restrictions and price hikes in volatile times leave populations at risk of food insecurity.

If climate change isn’t tackled, Africa will simply never begin to fulfil its potential. It will only make things harder for the continent’s millions of smallholder farmers who rely on farming for their income or livelihood. According to the AAA initiative, the slump in crop yields could reach 20% in 2050, even if global warming is contained under 2°C.

The good news is that we know investment in agriculture works and we have seen encouraging progress. Research from the Alliance for a Green Revolution in Africa (AGRA) shows how governments that invested 10% of spending in agriculture and supported the sector, have seen productivity and GDP rise, and poverty rates decline since 2005.

So we have an opportunity and a duty to act - to create a resilient and sustainable agriculture system that supports smallholders and builds the continent’s food security. Reforming African agriculture will not only mean it can finally feed more people and contribute to growth but also that it does not itself exacerbate climate change – since we know agriculture sectors account for one-fifth of global greenhouse gas emissions.

Momentum has been building for several years now with promising public and private sector initiatives such as Grow Africa, AGRA, the Malabo Declaration, the New Alliance, and now the triple AAA initiative. African governments have committed to allocate at least 10% of public expenditure to agriculture.

Agriculture is also increasingly seen as an engine of economic growth and a source of jobs for the continent’s large youth population. The Zimbabwean businessman Strive Masiyiwa has noted that the continent’s food market could be worth US$1 trillion in just 15 years.

Businesses such as Olam are supporting farmers directly - last year, 140,000 farmers and 300,000 hectares benefited from training on sustainable soil management. Unilever, through its relationship with Olam and other suppliers, is committed to sourcing raw materials sustainably, improving the lives of millions of family and smallholder farmers in its supply chains worldwide.

Despite these initiatives, agriculture continues to receive insufficient support to face climate change. Africa receives under 5% of funds available to tackle climate change. On top of that, adaptation measures receive less than 20% of public funds, as the majority of funding goes to emission-cutting measures. We have a situation where the sector that will be hit worst by climate change is the least well-resourced to manage its effects.

To help catalyse these initiatives and mobilise the funding and wider support to make African agriculture a success story, the private sector needs to play a central role. We know that businesses’ long-term performance depends on having a reliable supply of high-quality, safe and affordable food.

It is also a great opportunity – the Business and Sustainable Development Commission estimates that companies could unlock US$2.3 trillion a year in the food and agriculture sectors, securing a seven-fold return if they invest US$320 billion in sustainable business models each year.

Agriculture is a complex activity, bringing together smallholders, business and the public sector - so we must work together.  An opportunity like COP22 is one of the few chances to stand together and set a new direction. If we act now, we won’t just protect agriculture from climate change, we’ll feed the continent, create jobs and help realise the Sustainable Development Goals. We’ll leave nobody behind.

Sunny Verghese is co-founder and Group CEO of Olam International.

Paul Polman is CEO of Unilever and Chairman of the World Business Council for Sustainable Development. 

 

 

Comments