What happens when there is no longer arable land to plant on or livestock to rear because of all the harmful agricultural practices that have been practiced over the years? We experience pollution, land degradation, food shortages, and devastating climate change.
Sadly, that’s where we are headed if we don’t nip some of those practices in the bud.
Presently, earth has lost about ⅓ of its arable land in the last 40 years. Erosion is one of the leading causes of this and there are some harmful farm practices which result in erosion. As global food demand soars, we need to make sure some of those practices are minimized, if not eradicated completely.
1. Use of Harmful Pesticides:
In agriculture, farmers use pesticides to control pest and disease carriers which could be harmful to crop and animal production. The pesticides come in forms of herbicides, insecticides, or fungicides. However, pesticides are usually poisonous and sometimes, they end up being harmful to unintended targets.
For instance, neonicotinoids are agricultural insecticides which affect the central nervous system of insects. While they’re efficient in wiping out unwanted insects, they’re considered a huge threat to honey bees.
Keith Delaplane, a professor of entomology and director of the Honey Bee Program at the University of Georgia says that neonicotinoids are one of the most serious causes of negative pressure on pollinators.
There are also other harmful pesticides such as Metam Sodium and Telone II. Although these are some of the most widely used compounds in America, they are considered dangerous to not just animals, but to humans.
Metam Sodium is an organosulfur compound which is used as a pesticide, herbicide, and fungicide, while Telone II is a liquid soil fumigant, used to control plant parasitic nematodes in the soil.
Metam Sodium can be toxic to fish and other aquatic organisms while the U.S. Environmental Protection Agency says that the fumes released from Telone II can cause cancer when inhaled over long periods.
There are some organic alternatives to using pesticides to control pests on the farm. Some of the good farming practices to replace the harmful ones are; interplanting, strip cutting, reproductive controls, and quarantines. Studies also suggest that botanic soil amendments with weeds could help fight against nematodes.
2. Slash and Burn Agriculture:
Sometimes, when farmers have to clear farmland in preparation for planting, they do so by setting fire to the forests, weeds, and grasses. Slash and burn agriculture, also called fire-fallow cultivation, involves cutting and burning plants in a forest to pave way for farming.
Aside from the obvious environmental pollution and potential health hazards of this method of farm clearing, there are many other adverse effects. It alters the soil nutrient cycle and sometimes irreversibly breaks down some mineral constituents by excessive drying after burning. This greatly affects the quality of the soil.
It also exposes the top soil to one of the leading causes of arable land destruction; erosion. Slash and burn agriculture also produces harmful gases such as carbon monoxide, hydrocarbons, hydrogen sulphide, nitrogen oxides, and other oxidants.
It could also lead to loss of reserves. FAO warns that indiscriminate bush burning and cutting of trees could lead to loss of forest reserves in communities.
One of the common alternatives to slash and burn agriculture is Inga Alley Cropping. This involves planting agricultural crops between rows of Inga trees. Inga is a nitrogen-fixing plant. When the trees develop, they are pruned at chest height and their branches are stripped of leaves and used as mulch.
The mulch fertilizes the soil, thus removing the need for chemical fertilizers and they use the larger branches for firewood, creating an alternative to cutting down trees. Inga trees regrow quickly to repeat the cycle of pruning and planting crops.
Overgrazing is eating up soil fertility – literally. It occurs when livestock continuously grazes on a particular land area for a long period of time, without giving the area enough recovery time. Some of the reasons for this are improper land use, poor livestock management, and many others.
As you can imagine, exposing a specific land area to intensive grazing will reduce fertility, soil organic matter, and productivity of that land. Erosion can also take place as a result of it. Overgrazing creates loss of habitat for wildlife or other livestock which feeds on grass.
One of the long term effects of overgrazing is food shortage. It destroys land fertility, which makes it difficult for planting to take place. It also makes it difficult for grazing livestock to feed and thus, we could lose both land and livestock to overgrazing.
Nonetheless, we can put certain practices in place to avoid overgrazing. Proper land assessment, maintaining proper pasture residuals, monitoring grass growth and creating a balance between livestock feeding habits and pasture could go a long way to control overgrazing.
Are we missing any harmful agricultural practices? Spread the word by letting us know in the comments section below.
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.
SunCulture secures $11m debt facility from SunFunder syndicate to expand solar irrigation in Africa
SunCulture CEO and co-Founder, Samir Ibrahim (Source: YouTube)
SunCulture, a solar irrigation company headquartered in Nairobi, Kenya, today received the first disbursement from a new $11m syndicated debt facility to expand its operations in sub-Saharan Africa.
The new loan is groundbreaking for the “productive use” solar sector due to its size and its innovative combination of working capital and end-user financing.
Arranged by SunFunder, the co-investors in the facility are Nordic Development Fund; Triodos Investment Management, through its Hivos-Triodos Fund; SunFunder through its Solar Energy Transformation Fund; AlphaMundi through both its SocialAlpha and AlphaJiri Investment Funds; and the AfDB’s FEI OGEF managed by Lion’s Head.
This will enable SunCulture to scale up renewable energy installations at smallholder farms and households that will mitigate over 20,000 tons of CO2 annually – as farmers replace diesel pumps with solar ones – whilst facilitating income growth and job opportunities in rural communities.
SunCulture has pioneered a “Pay-As-You-Grow” business model to make solar-powered irrigation affordable for smallholder farmers in sub-Saharan Africa, combining end-user finance, value-added services, modern climate technology, and access to improve productivity. A recent report developed by Dalberg Research shows that irrigation systems and solar-powered water pumps can increase farmers’ production between 2 and 4 times, and their income between 2 and 6 times.
Samir Ibrahim, Chief Executive Officer at SunCulture, said, “The past year was devastating for the millions of smallholder farmers in Kenya; 87% are in a worse financial position due to the pandemic. 81% of SunCulture farmers, however, were able to increase their revenue from farming in 2020. Solar irrigation helps create food security and sovereignty, and it also helps lift people out of poverty. This facility further enables our efforts to support farmers by
providing them with more of our solar solutions, and faster.”
Jemimah Kwakye-Fosu, Investment Officer, who led the transaction for SunFunder, said: “We are delighted to have led this syndicate of proactive lenders who worked well together for a common goal: to help SunCulture reach many more farmers. It shows how working capital can be combined with end user financing, which is essential for making productive use technologies affordable.”
Surabhi Mathur Visser, Head of Investments at SunFunder, said: “This is a pioneering transaction that demonstrates how productive use technologies like solar irrigation can be scaled up. SunFunder arranged this facility with a similar-minded group of lenders to support an innovative product and business model. We look forward to seeing SunCulture grow in Kenya and new markets.”
Karin Isaksson, Managing Director at NDF, said: “This loan to SunCulture is the second e[tended to a company graduating from the EEP Trust Fund managed by NDF. It is a clear demonstration that we can deliver on the new NDF Strategy and its commitment to provide flexible and scalable financing as well as catalytic impact. It has all the ingredients that define NDF’s added value in the climate financing landscape. It demonstrates our capability to convene and mobilise additional financing, as well as our unique mix of financing instruments to match the needs of our partners, public or private. We are proud to be standing with our partners and supporting the emergence of a greener economy, precisely at this time of COVID-19.”
“Since our first investment in 2019, SunCulture has made huge strides to unlock the potential of smallholder agriculture through innovative products and consumer credit. FEI-OGEF is happy to be able to refinance our inventory loan into this new working capital facility and continue that growth alongside a committed and constructive group of lenders,´ noted Harry Guinness from Lion’s Head.
Judith Santbergen, Senior Investment Manager at AlphaMundi, said: “Since 2018, AlphaMundi has successively provided support to SunCulture through a combination of technical assistance and debt investment. We are e[cited to continue and increase our investment in the company via this new, innovative working capital facility.”
Sjoerd Melsert, Senior Investment Manager at Triodos Investment Management, said: “SunCulture is a great e[ample of an innovative company that is active on the nexus of renewable energy and agriculture, using solar energy to increase farmers’ incomes. Our facility supports the further growth of SunCulture’s pay-as-you-go solar portfolio, leading to a more sustainable and higher production for smallholder farmers, which is fully aligned with the
mission, ambition and activities of Hivos-Triodos Fund.”
Cocoa Pricing: Why Public-Private Sector Partnerships are Key to Sustaining the Livelihood of Smallholders Farmers in Africa
Pricing is a debating point in the cocoa sector, dominating contemporary stakeholder conversations; especially African cocoa producers. This is a result of the historically low cocoa prices that do not provide a fair income to farmers involved in cocoa production. Despite the announcement of the Living Income Differential (LID) by both Cote d’Ivoire and the Ghana Cocoa Boards, there still exist questions on the sustainability of this intervention – to take farmers out of poverty. Stakeholders in the African Cocoa industry need to rethink its strategy to improving farmers’ livelihood, by increasing their earning potential through value chain efficiency, facilitated by public-private sector partnership.
Interventions aimed at income enhancement and lifting farmers out of poverty are often based on the assumption that the said interventions, alone, are enough for the solution being pursued. On the surface, the decision to increase the farmgate price of cocoa and LID by an additional $400 a tonne on all cocoa contracts, appear to be a solution to lifting farmers out of poverty. However, even if farmers’ incomes were to increase – through increased farm gate prices – other structural issues like small farm sizes and low productivity levels will still keep these farmers below the poverty line.
For Cocoa farmers to earn a fair wage from their input, issues like ageing plantations, lack of adequate training and financing as well as direct access to the market, need to be addressed. These structural issues pose a more significant threat on the livelihood of cocoa producers in Africa. Price increases on their own are not enough to lift the poorest farmers out of poverty. Price interventions like the LID must go hand in hand with other policies and programme, implemented to increase the volume and quality of beans produced. Achieving this will require a multi-stakeholder collaboration involving both the private and public sector aimed at not only improving the quality of lives of farmers but ensuring that the cocoa value chain is optimized.
To enable smallholder farmers benefit in an egalitarian way from the cocoa industry, the focus should be towards improving value chain efficiency while addressing structural challenges in the sector. This is achievable through a public-private collaboration that will drive private sector operations to deepen financial markets, scale-up infrastructure investments and enhance productivity and quality through training and input supply.
Through collaborating with Cocoa Cooperative Societies –providing training, input financing and market access, AFEX has enabled smallholder farmers to increase their productivity, while producing to international standards. With technology like AFEX Workbench – a value chain management platform which facilitates input sourcing, loan administration, sales, a transparent and efficiently executed cocoa process is achieved.
A public-private sector-driven model will create a sustainable approach which will revitalize and boost cocoa production in Africa – creating jobs and improving the living standard of the farmers. While the government takes the driver seat to develop policies and the infrastructure to catalyze this growth across the cocoa ecosystem, private sector organizations will ensure value chain efficiency – increasing the benefits stakeholders gain from the industry.
AFEX is committed to providing the support and technology to improve the quality of life for African cocoa farmers and their communities.