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PRIORITY INDUSTRY SECTOR ON Agribusiness

AGRIBUSINESS 

The patterns of global trade in food are changing fast. In recent years even China, long admired for its determined pursuit of self-sufficiency in food, has become a net importer of maize. For better and for worse, globalized commercial agriculture is coming to Africa. The reflex response has often been to bemoan the ‘land grab’ by multinational food groups and investors from Asian and Arab states, when a more practical reaction would be to devise strategies for more African participation in a burgeoning international food trade.

External demand brings the prospect of economic growth and improved rural incomes. Agriculture must be Africa’s answer to globalization – for large industrial farms and smallholders alike.

Whether or not this can be achieved is, above all, a matter of making the right decisions in government and for business. First, policymakers must separate agricultural ambitions and investment – cleanly and unambiguously – from other measures to reduce poverty among rural populations in Africa. Both are absolutely necessary, but the rhetoric of agricultural self-sufficiency is a recipe for confusion.

Food security is not the same as self-sufficiency among smallholders. These are distinct ideas, but routinely conflated. For example, although Dubai is a desert, its wealth ensures a stable supply of imported food.

In Africa, food security is contingent on greater economic efficiency, especially in agriculture. Africa needs food security, not self-sufficiency in food. Global demand for food is a strategic opportunity to re-balance the iniquities of world trade in Africa’s favor.

While policymakers are surely correct to expect that rural populations should benefit from agricultural growth, the pursuit of self-sufficiency is not an effective tool to reduce poverty. Until agriculture is commercially viable, there will always be hunger in Africa.

The global trade in agriculture is both an opportunity and a threat. For Africa to maximize the benefits and minimize the risks, the overriding priority is to improve skills and know-how. The prospects for African agriculture hinge on producing crops which others want to buy.

The most productive investment will be in locations where farmers, large and small, are able to integrate their systems in response to market demand. Where the efficiency and low costs of smallholders can be combined with the market access and quality controls of large holders and exporters, Africa’s farmers can create a dynamic and market-led industry. For policymakers, the key working principle is to remember that the root of poverty is lack of money– not a lack of food.

As one of its core mandate, AI-Group Inc. commits to scale up, facilitate Agribusinesses and improve encourage investors to stake or bet their resources in promoting this field.

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