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African agriculture in the face of climate change

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The United Nations 2016 climate change conference (COP22), meeting in Marrakech, Morocco, presented an historic opportunity to refocus the global community’s attention on the need to help developing nations adapt to climate change. In no area could this be more pressing than Africa, where protecting food security and ending hunger is an urgent necessity.

During the COP21 last year in Paris, the world’s developed nations reaffirmed their commitment to provide at least $100 billion per year, beginning in 2020, to help developing nations combat climate change.

In the past, most funds have been used on mitigation projects – those intended to curtail greenhouse gas emissions. But there is a growing consensus that work focused on adapting to climate change is of equal importance and more funding needs to be devoted to it.

This is a step in the right direction. With 28 African countries expected to more than double in population by 2050, and 10 African countries – Angola, Burundi, Democratic Republic of Congo, Malawi, Mali, Niger, Somalia, Uganda, Tanzania and Zambia – expected to grow “by at least a factor of five” by 2100, according to the UN Department of Economic and Social Affairs, Africa will be hard pressed to feed itself as temperature increases drive farm production down.

Higher temperatures leads to weak output in Africa

 

The scientific consensus is that a temperature increase of 2°Celsius would result in an average reduction of 15% to 20% in agricultural yields on the continent.

While increases in temperature and carbon dioxide “can increase some crop yields in some places,” experts at the US Environmental Protection Agency have noted Africa isn’t among them. In fact, the opposite is true: The scientific consensus is that a temperature increase of 2°Celsius would result in an average reduction of 15% to 20% in agricultural yields on the continent.

The Center for Global Development’s 2011 report, Quantifying Vulnerability to Climate Change Implications for Adaptation Assistance, forecasts median agricultural productivity losses due to climate change ranging from 18% in North Africa to 19.8% in Central Africa through 2050.

The weak output in Africa, reinforced by a spike in temperatures and exacerbated by extreme climate events, could create a vicious loop of food insecurity, impoverishment, mass migration and, finally, armed conflict. Climate-related migration and conflict already are a reality on the continent, and more often than not they are related to agriculture and food.

The feedback loop

In addition to the moral imperative of feeding people, there is also an essentially practical argument to be made in favour of significantly increasing support for agricultural adaptation in Africa – the so-called feedback loop. By helping Africa boost agricultural production through improved soil management and irrigation techniques, as well as increased research on other farming techniques that respect the integrity of land, the global community also would be helping reduce greenhouse gas concentrations in the atmosphere. That’s because the improved agricultural practices, in a virtuous circle, would increase yields on poor farmland, reduce deforestation and improve the carbon sequestration capacity of cultivated soil.

Adapting African Agriculture

Currently, agriculture and Africa are the poor relations of climate finance. Adaptation, agriculture and Africa have been understudied and underfunded and their importance underestimated. In the area of agriculture, all geographic regions combined account for only 4% of public funds linked to climate change. The African continent, home to nearly 25% of the developing world’s population, receives just 5% of public and private climate funds. This is difficult to swallow when you consider that Africa is among the most vulnerable to the impacts of climate change, while only marginally contributing to greenhouse gas emissions.

By maintaining African agriculture and reinforcing its capacity for adapting to climate change, the international community can show its responsiveness to the life-and-death issue of African food security, while addressing the global imperative to reduce temperature increases.

Marrakech COP22 is a unique opportunity to finally position the adaptation of African agriculture as one of the highest priority subjects. Delegates to the Marrakech climate conference can help solve this problem by reallocating available climate change resources from mitigation efforts to adaptation projects in general, and to the African agriculture in particular.

For Africa and the world, it is time to consider these realities.

Source: bizcommunity.com

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Agriculture

Climate change report shines spotlight on Africa’s agriculture potential

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It seems almost incongruous to talk about the opportunity that exists in ensuring the world’s food security by bolstering Africa’s agricultural output when the very pressing and public crisis of climate change could be its undoing.

Particularly in the run up to COP26 and the “reality check” that came with this week’s release of the Intergovernmental Panel on Climate Change (IPCC) Six Assessment Report, it is clear the entire African continent is “highly exposed” to climate extremes, at a relatively “high level of vulnerability”.

With over two thirds of Africans deriving their livelihood off agriculture, climate change-led crises like droughts, floods and cyclones continue to threaten the continent’s economic growth, employment, and food security. And yet, ensuring Africa’s agricultural resilience would not just help Africa. It’s essential for ensuring global food security. 

What’s more, these climate-led natural disasters have the greatest and most disproportionate impact on small- to medium-scale farmers, comprising as much as 80% of Africa’s agricultural output, from maize and wheat to rice, cassava, and sorghum. 

“The UN Report confirmed that climate change is intensifying the water cycle and affecting rainfall patterns, bringing more intense rainfall and associated flooding, as well as more intense drought in many regions,” says Malvern Chirume, African Risk Capacity Limited Chief Underwriting Officer.

“These African farmers are the heart of the continent’s agriculture and are at the mercy of climate change events completely out of their control,” Chirume adds.

Established in 2014, ARC Limited provides natural disaster insurance relief to African countries which have joined the sovereign risk pool.

Along with its partners, which provide premium support, the insurer has already paid over US$65m to seven African countries to provide drought relief and address the economic concerns these countries’ most vulnerable citizens face.

Responding to the climate crisis

Traditionally, countries have responded to climate change-led disasters such as droughts or floods by raising funds for emergency relief. This approach is time-consuming and inefficient.

“It takes far too long for African countries to mobilise the immediate resources they need for relief efforts, to save lives and livelihoods. Our role at ARC Limited is to work with countries to prepare them for the risk exposure they have and how to respond swiftly to climate-related food security emergencies. This includes helping them to establish a rainy-day fund which pays out swiftly, before the problem has become worse, and more funding is needed.”

The ARC Limited model, built on parametric insurance (pre-specified pay-outs based upon a trigger event), has been highly successful, says Chirume.

“We have to date paid out close to $65 million dollars in claims. When one considers that every dollar in insurance pay-outs saves US$4 dollars, this makes the cumulative economic impact around US$240 million. With those funds, we’ve helped more than 5.9 million people whose livelihoods have been affected by climate change impacts,” Chirume explains.

While parametric insurance against natural disasters has enormous potential for the agricultural sector, it has a further economic impact. Because agriculture makes up such a significant portion of the continent’s economy, a downturn caused by a climate shock will echo through the broader economy of any nation affected.

This can bring an economic downturn, a lack of funding for key infrastructure and services at government level, and a loss of jobs as farmers struggle to recover. There is also evidence of migration away from areas experiencing drought, which can have a long-term impact on the regional economy.

Organisations such as ARC Limited have an essential role to play in this way in protecting agricultural value chains and the economies of and employment in Africa. “Our role is to help mitigate and manage the risk, building resilience and ensuring the African country is able to bounce back sooner after a natural disaster,” says Chirume.

With the negative impacts of climate change increasing and their potential to devastate the agricultural sectors and food security of African countries, it has become more important than ever to put sustainability at the heart of interventions.

“Creating an environment that limits the impact of climate shocks on the agricultural sector is about more than just securing economic transformation. At the heart of this investment is the need to ensure basic food security for the continent and the world,” says Chirume.

In its Sustainable Development Series, the World Bank says the African continent could play a leading role in ensuring food security for the earth’s estimated 9 billion people by 2050.

According to McKinsey, Africa’s full agricultural potential remains untapped. It determines that Africa could produce two to three times more cereals and grains, which would add 20% more cereals and grains to the world’s current output of 2.6 billion tons.

Given Africa’s productive potential, the continent could be a key contributor to feeding the world in the future. But to fully realise that potential will require overcoming many obstacles, including how it deals with the impact of climate change on agriculture and food security.

“We need broader collaboration between private and public sector to solve the climate change disaster response problem our continent faces. The problem is so big, that all of us have a role to play,” says Lesley Ndlovu, ARC Limited CEO.

With the support of the United Kingdom and German Government, ARC Limited has been equipped to help the member states of the African Union reduce the risk of loss and damage caused by extreme weather events affecting African populations.

“But there’s so much more work that still needs to go into reaching as many people as possible to help build the resilience of local communities and ensure they have the means to bounce back whenever they are impacted by a natural disaster,” concludes Ndlovu. 

 

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Agriculture

World Poultry Foundation (WPF) launches video series to help Africa’s farmers improve poultry production

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With poultry increasingly a focus for emerging farmers across Africa, the US-based World Poultry Foundation (WPF) has released a series of training videos to help farmers reduce waste and optimise profits.

Feed accounts for up to 70% of the costs of raising poultry, so proper feeding techniques enable farmers to reduce waste, cut production costs and raise healthier birds, says WPF. Water is equally important in poultry farming, with proper water management crucial for healthy birds.

WPF’s training series, with four videos dedicated to production, explains how farmers should store feed, proper feeding of poultry and how to prepare and manage zones of comfort to encourage proper brooding for chicks. The videos also explain the importance of litter in helping to prevent common diseases to improve production and returns.

World Poultry Foundation CEO Randall Ennis says the video series has been developed to address the most common challenges faced by emerging poultry farmers across Africa. “By applying best practice poultry farming methods, farmers can significantly increase their production, their incomes, and the nutrition available to their families and communities,” he says.

The training videos, as well as free checklists and worksheets, are available here

 

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Agriculture

AFEX Raises $50Million for Agri-SMEs, Africa’s First Warehouse Receipt Backed Commercial Paper

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AFEX CEO, Ayodeji Balogun (Source: AFEX)

AFEX Commodities Exchange Limited (AFEX), Nigeria’s leading private commodities exchange company, has announced the first Warehouse Receipt Backed Commercial Paper in Africa, with tech-enabled operations and a 24-hour fast cash turnaround for borrowers. With over $50 million raised for Agri-SMEs, this bridges the funding gap between lenders and borrowers in the Nigerian agricultural sector with a commodity-backed instrument – for the first time.

The AFEX financing deal will help eradicate the high cost of procurement incurred by processors by deploying a discounted value of a warehouse receipt distributed among five leading players in the Food and Beverage, Trading Poultry and Animal Feed segments in Nigeria. The receiving companies are top 10 players in their respective segments. They have now been enabled access to a tool for managing price volatility, enabling up to 30% direct savings on prices.

“With our vision to reach a cumulative total of over $5 Billion in investment to the agriculture sector over the next five years, this financing deal is right on track to achieve this goal’’ – said Ayodeji Balogun, CEO, AFEX Commodities Exchange. “As we move towards building a derivatives market in Africa, we want to be able to reduce exposure to price risk for stakeholders, by enabling them to hedge their positions and trade in commodity derivatives.”

The warehouse receipts, which can then be transferred from commodities to a financial asset and listed under the borrower’s portfolio on the AFEX trading platform, will create a sustainable funding structure and address underfunding in the Nigerian agricultural sector. With the warehouse receipt system linked to financiers, the system allows financiers value and marks the commodities’ price to market on a real-time basis.

“Our mission is to provide low-risk working capital facility for stakeholders in the Agro sector, in a way that is transparent and has a very high viable investment return’’ – said Akinyinka Akintunde, VP Financial Markets at AFEX. “As a licensed commodities exchange and warehouse receipt system operator, we deploy a warehouse receipt system and collateral management infrastructure to increase market confidence for both lenders and borrower.”With AFEX’s goal to support Africa’s food security while promoting a fair exchange of value among players in commodity value chains, this deal’s social impact is delivered through market access for farmers and reduced post-harvest losses. AFEX continues to contribute to the United Nations Sustainable Development Goals 1, 2, 5 and 8; no
poverty, zero hunger, gender equality, decent work, and economic growth.

Also Read Cocoa Pricing: Why Public-Private Sector Partnerships are Key to Sustaining the Livelihood of Smallholders Farmers in Africa

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