BY ANIL NAIR
Africa’s food trade deficit is concerning. Having lived in Nigeria for 25 years, I have seen the amazing possibilities in the agriculture value chain. The vast arable land on the continent. The ingenuity of the people. The sheer commitment to work. The desire for a better life. The growing population of active men and women. The willing consumer base. For whatever it is worth, Africa has no reason to be a net importer of food. The reality should be otherwise.
Without mincing words, Africa can transform from a food-importing continent to a major food exporter.
Africa Has a Significant Portion of Global Arable Land
Let’s dive straight into statistics. Africa has 18% of the world’s arable land and 18% of the world’s population. Africa has a total land mass of 3 billion Ha out of which 253 million Ha are arable lands. Out of these 253 million Ha 203 million is used for crop production and the remaining 50 Mn is available for cultivation, these are temporary fallow lands and temporary meadows and pastures.
On this 203 million Ha of cropped land, Africa grows approximately 250 million tons of cereals and coarse grains! Some of these are Maize (92 mn tons), Sorghum (29 mn tons) Millet (15 mn tons), Rice (39 mn tons), Wheat (27 mn tons), Barley (6 mn tons), and Teff (6 mn tons).
Apart from cereals, Africa grows a substantial quantity of Tubers such as Cassava (208 mn tons), Yam (86 mn tons), Potato (27 mn tons), and Sweet Potato (29 mn tons).
With such big production numbers, Africa shouldn’t be a net food importer. However, the question now is, how do we position Africa as a net food exporter?
Top-of-the-mind answers to the question would probably include expanding into the available land, improving seed varieties, and improving mechanisation rates to mention a few.
The Continent’s Crop Yield Level Must Improve
But let’s analyse the solutions a bit differently. I start by looking at the continent’s crop Yields. Africa’s crop yields are way lower than the world averages.The average cereal yield in Africa is just 1.6 T/Ha versus the world average of 4 T/Ha. That is a whopping 60% less than the world’s average.
Specifically, Africa’s rice yield stands at 2.35 T/Ha, 50% of the world average. Africa consumes approximately 38 million tons of rice, 15 million of which is imported. Africa cultivates approximately 16.5 million Ha of land for paddy, which gives us almost 39 million tons of paddy or 22-23million tons of finished rice.
Africa needs an additional 25 million tons of paddy to offset the imported 15 million tons of rice. Increasing the paddy yields by 1.5 T/Ha can solve this 25 MMT of paddy. Even after increasing the yield by 1.5 T/Ha, we will remain below the world average at 82%. To be candid, the target should be scaling the yield further. If the yields reach the world average of 4.6 T/Ha, we can export 8 million tons of rice annually.
Narrow down to Nigeria. Nigeria’s rice yields are around the same as that of Africa. The rice yield of the Olam Agri Rice Farm in Nigeria, which I used to head, is 4.6 T/Ha – a staggering yield level that surpasses the continent’s average despite using the same seeds. The farm has the potential to take these yields further up.
Similarly, Africa’s maize Yields are just 36 % of the world average at 2.2 T/Ha versus 6.1 T/Ha. Due to the low yield, Africa imports 8 million tons of Maize. Meanwhile,an improvement of just 10% yield can offset this import quantity.
The average Cassava yield is around 8.2 T/Ha.This crop caters to almost 20% of the calory needs of the continent. In India, Cassava yields are as highas 36 T/Ha. Meanwhile, in Africa, the highest yield level recorded is around 28 T/Ha,in Zambia.
Precisely, to pivot Africa as a net food exporter, the focus should be on improving Africa’s crop Yields. The varieties we currently use have higher yield potential than what is being delivered.
Reasons for Africa’sLow Crop Yields
Low Relative Use of Fertiliser
The most obvious reason for the lower relative yields is the low relative use of fertilizer on the continent. Nitrogen usage in Africa is only 24% of the world average (65/16 kgs/Ha). Phosphate usage is only 21% (29/6 kgs/ Ha) and Potassium is only 14%. (24.47/3.4 kgs/ Ha). Overall NPK usage is only 22% of the world average at 119 kgs vs 26 kgs per Ha. This is the single largest contributing factor to low crop yields in Africa.
Low Adoption of Mechanised Farming
Another factor impeding productivity in the chain is the low adoption of mechanised farming. Currently, the average global farming mechanisation rate is 0.67 HP/Ha while that of Africa is just 0.01 HP/Ha.The extremely low mechanisation rates lead to high harvest losses.
As per FAO data, harvest and post-harvest losses alone contribute to 30% to 50% loss. Just to cite an example, at Olam Agri in Nigeria, we work directly with 35,000 outgrower farmers. In 2022 along with IFAD, we distributed rice paddy to small-scale harvesters. Although the farmers saw an increase in yields ranging from 35 to 46%, we noticed that the farmers were not harvesting enough yields. Some yields were lost during harvest.
Lack of Storage Facilities
Lack of storage and drying facilities leads to post-harvest losses. It is observed that in some cases the losses due to lack of drying and storage facilities can range from 50 to 100%. Cassava, for example, needs to be stored or processed within 48 hours, tomatoes are another example.
Other Factors
The other areas that need attention are agronomic training, better seeds, access to capital and improved technologies. But the most obvious places to focus investment in to improve the yield gap we observe in African Agriculture through inputs are mechanization, dryers, storage, and water management.
Africa’s Increasing Population Requires Scaled Investment
Africa is growing rapidly. Competition for FX is mounting as well. By improving its agriculture value chain productivity, Africa can feed its growing population and export food to attract FX. Take for instance, improved crop yields would see Africa increase its exports of cocoa, cashews, sesame, coffee, cotton, tea, and horticulture products, as well as Maze, Rice, Yam and cassava.
However, the priorities have not changed much since the 2003 Comprehensive Africa Agriculture Development Programme (CAADP) was agreed to in Maputo and reaffirmed in the Malabo declaration from 2014 and finalized in 2016. The declaration focused on driving investment in land and water improvement, infrastructure to help buyers gain better access to the rural communities that can benefit from the investments in land and water, connecting input providers to farmers, and ensuring a balanced investment landscape – raising FX via exportable commodities and earnings re-invested into local food security.
A Need for Effective Regulatory Regime
Of course, all the above requires a regulatory environment with a keen eye on the quality of inputs and exports.
The government has faced impossible choices over the last half-decade with COVID-19, the Ukraine War, Fed Policy, and increasing tensions impacting shipping routes. These have stimulated inflation and a call for immediate policies to address the crises.
Although resolving critical issues like the ones in the agriculture value chain requires long-term investment efforts, it is important to note that an investment in food security is an investment in curing tomorrow’s crises.
The Conclusion
Achieving significant growth in Africa’s food production value chain will require an investment in crop yield improvement. Olam Agri, which was founded on the continent, precisely in Nigeria over 34 years ago, continues to deploy its global expertise and strong investment focus to drive the needed growth in the food value chain.This is because we believe in the continent and its people. The potential of the market is also enormous. By working together, we can achieve a well-fed, high-earning, and entrepreneurial Africa supported by policies that align.
- Nair is the Country Head, Olam Agri in Nigeria
About Olam Agri
OlamAgriisamarketleading,differentiatedfood,feedandfibreagri-businesswithaglobaloriginationfootprint, processing capabilities and deep understanding of market needs built over 33 years. With a strong presence in high-growth emerging markets and products across grains & oilseeds, integrated feed & protein, rice, edible oils, specialty grains & seeds, cotton, wood products, rubber and commodity financial services, Olam Agri is at the heart of global food and agri-trade flows with 38.3 million MT in volume traded in 2022. Focused on transforming food, feed, and fibre for a more sustainable future, it aims at creating value for customers, enable farming communities to prosper sustainably and strive for a food-secure future. Olam Agri is a fully owned subsidiary of Olam Group.Formoreinformationandtosubscribetoournewsalerts,pleasevisit https://www.olamagri.com/.
About Olam Group
Olam Group is a leading food and agri-business supplying food, ingredients, feed, and fibre to 20,200customers worldwide. Our value chain spans over 60 countries and includes farming, processing, and distribution operations, as well as a global network of farmers. Through our purpose to ‘Re-imagine Global Agriculture and Food Systems’, Olam Group aims to address the many challenges involved in meeting the needs of a growing global population, while achieving positive impact for farming communities, our planet and all our stakeholders. Headquartered and listed in Singapore, Olam Group currently ranks among the top 30 largest primary listed companies in terms of market capitalization on SGX-ST.
Since June 2020, Olam Group has been included in the FTSE4Good Index Series, a global sustainable investment index series developed by FTSE Russell, following a rigorous assessment of Olam’s supply chain activities, impact on the environment and governance transparency. TheFTSE4Good Index Series identifies companies that demonstrate strong Environmental, Social and Governance (ESG) practices and is used by a variety of market participants to create and assess responsible investment funds. More information on Olam can be found at www.olamgroup.com.
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