Cooperatives can bolster inclusive growth in Africa

ROME, Italy, June 1, 2018/ — Africa boasts huge potential for social and economic development, with agribusiness poised to play a major role.

Without policies and partnerships that enable smallholder farmers – including subsistence farmers and pastoralists – to participate in and benefit from the growth, that opportunity will turn into risk, FAO Director-General José Graziano da Silva said today.

“Inclusiveness is key to promote sustainable development in the African continent,” he said at the Third International foodFirst Conference, which this year focuses on how to team up with African “agripreneurs”.

Noting that African agribusinesses are expected to create a $1 trillion market by 2030, Graziano da Silva hailed the opportunities but emphasized the risks such rapid growth pose, especially if large-scale food processers and retailers manage to dominate the process.

While poor rural family farmers rarely do not participate in the agri-food value chain, they play a fundamental role in local markets and in mitigating food insecurity in areas where it tends already to be high. “These people should be taken into account when we talk about creating conditions for agricultural entrepreneurs to grow and thrive in Africa,” he said.

Effectively achieving that is particularly challenging in Africa because smallholders there tend not to be organized into cooperatives or other forms of association that have helped their peers elsewhere integrate into modern agri-food chains, FAO’s Director-General said in a keynote speech at the foodFirst conference.

“Cooperatives and other associations are the only way for providing family farmers with technical assistance, capacity building, financial resources and access to modern technologies,” he said. “They are also important to promote closer cooperation between farmers and research institutions, to help smaller farmers gain a voice in policy-making and to provide extension and advisory services to their members.”

Graziano da Silva also called for an “urbanization of rural areas” to better provide education, health, electricity, and internet access. Infrastructure investments, especially in roads and storage capacity would help to connect producers, agro-industrial processors and other segments of the value chains.

This would help to strengthen the links between small urban centers and their surrounding rural areas. And it would help to create jobs for an estimated 10 million young Africans that enter the labour market every year, not only in the traditional agricultural sectors, but in various non-farm activities.

Partnership with Rabobank Foundation

FAO has been working on boosting smallholder integration into modern value chains around Africa, notably in several benchmark projects done in partnership with the Rabobank Foundation, an independent organization funded by Rabobank to help small-scale farmers and cooperatives in developing countries become economically independent.

In Tanzania, the two partners helped rice and cassava producer groups to scale up innovation in water, labor, storage and credit practices and achieve a more than eightfold productivity increase. Another joint project involves working with local microfinance lenders in Ethiopia with an eye to generating youth employment, while another cited project is bolstering local cooperatives with the aim of promoting Conservation Agriculture in Kenya.

Graziano da Silva met with Rabobank’s board of directors and, with Berry Martin, Vice President of the board, and signed a Memorandum of Understanding to renew and strengthen a partnership that began in 2013.

The agreement maps out several new projects. One hinges on using microfinance to foster youth entrepreneurship in horticulture, beekeeping and raising small livestock in Tanzania. Another seeks to scale up successful pilot programs linking smallholder producer organizations in Ethiopia’s Oromia region with credit providers. A third project is to leverage Rabobank’s expertise to roll out a range of financial products tailored to the needs of rural young entrepreneur in Uganda.

The two partners will also join forces to develop a learning platform to support using data for inclusive finance and food and ways to make information technology more useful to both smallholders and the institutions that lend to them.
Other possible areas of collaboration between FAO and Rabobank include work on reducing post-harvest losses in Africa’s grain supply chains, supporting investments in energy-smart foods, cocoa-based sustainable agroforestry in West Africa and expanding Africa’s “Great Green Wall”.

Africa’s urbanization makes an integrated approach with a strong focus on rural development even more critical, as there will be increased need to manage natural resources sustainably and to promote healthy diets even as people move to cities, where fast and processed foods tend to be more prevalent, Graziano da Silva said.

Governing Africa’s development “is not only about material things but also immaterial aspects of a food system,” he added.