By Dumi Jere
Agriculture is a significant economic activity for most Southern African Development Community (SADC) member countries.
It provides employment, trade opportunities, food, and income to around 70% of the region’s population, and the sector’s performance is closely linked to economic development, food security, and stability.
Closely linked to agriculture’s importance to the region is agro-processing. By definition, agro-processing refers to the manufacturing sub-sector that beneficiates primary materials and intermediate goods from agricultural, fisheries, and forestry-based sectors.
The trade-in agro-processing offers numerous opportunities for our country and the rest of the southern African countries. It is a potential area of business to reduce poverty in the region. Currently, this potential is largely unrealized. For this reason, the theme for the just-ended SADC 42nd Ordinary Summit of Heads of State and governments in the Democratic Republic of Congo was fitting.
The theme for the summit was: “Promoting industrialization through agro-processing, mineral beneficiation, and regional value chains for inclusive and resilient economic growth.”
Regional integration in Africa can potentially increase regional trade and contribute toward industrialization and economic development. Unfortunately, in 2018, the region was severely affected by the El Niño-induced drought. Intense tropical cyclones after that added woes to an already battered sector.
This hampered the recovery efforts. Against the backdrop of the revised SADC Industrialization Strategy and Roadmap 2015–2063, the time is now to forge ahead in realizing the potential of agro-processing. What are some ways different players can realize the benefits of agro-processing? Let us look at three.
Farmers Association and Contract Farming
Farmer’s associations and cooperatives can promote the agro-processing industry in other ways. They can assist farmers through knowledge sharing around improving the raw materials. Improving the raw materials stage of the crops is essential to improving the processing stage.
An added advantage of farmer-based organizations is that they can overcome challenges that farmers may not be able to individually. Moreover, oriented production, contract farming, and greater access to technology are a few advantages farmers can achieve through grouping.
Staying on contract farming, private players can also boost agro-processing by collaborating with farmers directly. For example, a company in Bulawayo, Zimbabwe, managed to do this successfully. The company realized the critical need to ensure local production of soya beans for crushing and manufacturing cooking oil, thus prompting them to establish this initiative to grow soya beans through direct contracting.
In the initiative, the firm works with multi-sectoral partners to boost soya bean production in Zimbabwe. In turn, the soya bean growers supply directly to the company, and the company produces cooking oil. This is an excellent example of how private-sector players and farmers can collaborate.
Greater Market Access
Another way to bolster agro-processors is by ensuring greater market access. Certification scheme implementation will boost opportunities to compete in modern markets. Farmers and processors can compete and profit in more opportune markets by complying with up-to-date standards.
Likewise, adopting technology is critical to moving the agro-processing industry forward. Creating free trade areas at a regional level can increase processors’ access to and affordability of local technology. The Africant Continental Free Trade Area (AfCFTA) will also bring immense benefits to the ecosystem.
It can be a catalyst for augmented agricultural production across the continent and allow small farmers to play a meaningful role in Africa’s agricultural development. Taking advantage of this and other regional free trade areas will help all players as these could circumvent the high imported costs of agro-industry equipment and support local technology development while adding value to the farmers’ goods.
The role of digital technologies.
I have always been a massive promoter of embracing technology and its benefits. Digital technologies developed by the private sector can be deployed to support agro-industry growth. Granted, the existence of these technologies does not always ensure farmer or processor uptake and use.
Therefore, there is a need for private players’ solutions to create value for agro-industry participants to incentivize use and provide in-person support. Governments, too, can invest in farmer registries (which are foundational data used in many digital applications) and design policies to increase digital access and literacy to support digital technology adoption.
Certain digital technologies, like digital food balance sheets (FBS), can also help private sector investment. Recorded yields, commodity prices, and trade levels from FBSs can better inform private-sector players when investing in agro-processing.
These are just three of the many ways agro-processing can be bolstered to impact eSwatini and, by extension, SADC positively. These ways certainly play an essential role in resolving issues and generating opportunities in the agro-processing sector. Furthermore, they can serve social and political functions by easing chronic poverty and food security issues. These and other potential solutions should be further explored to build valuable and resilient agro-processing sectors and African economies.
Dumi Jere is the Managing Partner at Talanta.co Consultancy Services, a management consultancy that partners with leaders in business and government to achieve meaningful, sustainable transformation.