Creating decent employment opportunities for youth in Africa’s agriculture sector can significantly reduce youth migration from the continent, Food and Agriculture Organisation (FAO) Director-General José Graziano da Silva, has said.
According to him, the FAO firmly believes that if youths are provided these opportunities, they will not leave the continent to look for opportunities elsewhere.
The latest Africa Agriculture Status Report (AASR), had indicated that agriculture will be Africa’s quiet revolution.According to the report commissioned by Alliance for a Green Revolution in Africa (AGRA), smart investments in the food system can aid the revolution if planned correctly.
Despite 37 percent of the population now living in urban centres, the report showed that most jobs have been created in lower paid, less productive services rather than in industry, with this service sector accounting for more than half of the continent’s GDP.“We have the means to provide those opportunities right here where you can see and participate in the future of your countries and the continent”, Graziano da Silva said.
FAO requested for the establishment of a youth facility, which would assist young people in addressing some of the challenges they face when setting up and expanding agricultural businesses. The facility would be piloted in Rwanda and later rolled out to the rest of Africa.
Approximately 65 to 75 percent of the people migrating from Africa are youth, many in search of employment opportunities. Tens of millions of jobs will have to be created each year in the Africa as the continent’s population continues to grow steadily. The agricultural sector including the related food systems and value chains can offer substantial entrepreneurial opportunities for the youth.
In his remarks at this week’s international youth conference held in Rwanda, the FAO Director-General stressed the need to continue working closely with a wide range of actors to support the youth.
“We have started with the first step and I hope that we will be together throughout the journey. When you are in a hurry, you go alone, but if you want to go further, you need to go together. We want to go further and we want to go with you,” Graziano da Silva said.
Among several challenges, conference participants highlighted factors of production such as land as one of the most significant barriers for young people wanting to start or expand agricultural enterprises. This was further compounded by limited access to credit facilities for young people across the continent.
Through an 8-point communiqué, the youth outlined their recommended actions for immediate focus; youth-led policy action, institutionalizing the youth conference (biennial), capacity development, reinforcing enabling and institutional environments, equipping rural areas with critical services essential for modern agriculture, agribusiness and value chain support, changing negative image of agriculture and supporting national youth platforms to share knowledge and best practices.
Urging the youth to reverse the often-negative perceptions associated with agriculture and take pride in being farmers requires the need to change the image and conversation around agriculture and shift the focus to the opportunities and profits to be made across the agri-food chain.
Climate change report shines spotlight on Africa’s agriculture potential
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.
World Poultry Foundation (WPF) launches video series to help Africa’s farmers improve poultry production
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
AFEX Raises $50Million for Agri-SMEs, Africa’s First Warehouse Receipt Backed Commercial Paper
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.
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