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IFC Support for Country Bird’s Expansion Encourages Agribusiness, Employment in Southern Africa

Posted on 03 May 2013 by Africa Business

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit http://www.ifc.org.

 

WASHINGTON, May 3, 2013/African Press Organization (APO)/ IFC, a member of the World Bank Group, today announced a convertible loan of $25 million to support poultry producer Country Bird’s expansion in Africa. IFC’s investment will allow Country Bird to increase production and operations; encouraging a thriving agribusiness enterprise and creating employment opportunities in Southern Africa and beyond.

 

With operations including South Africa, Botswana, Namibia and Zambia, Country Bird’s business comprises poultry breeding, broiler production, stock feed, and processing. IFC funding will support Country Bird increase chick production over the next three years in Zambia and Botswana, expand feed mill capacity in Zambia, and add poultry processing facilities and two soybean plants in South Africa.

 

Country Bird’s expansion will provide more affordable proteins in Southern Africa, create jobs in the rural areas where the company operates, and increase revenues for its 21,500 maize farmers and 112,000 workers employed through the company’s supply chain.

 

Kevin James, Founder of Country Bird, said “In just a decade since we started operations, Country Bird has become the third largest integrated poultry producer in South Africa. We are seeking to expand our production, so we can meet increasing consumer demand in the region. IFC’s investment supports Country Bird’s growth and our goal to provide more affordable proteins in Southern Africa.”

 

With increasing urbanization and disposable incomes, per capita meat consumption is expected to double in Africa by 2030, particularly that of poultry, which is cheaper relative to other meats.

 

Saleem Karimjee, IFC Senior Country Manager for Southern Africa, said, “IFC is committed to investing in companies like Country Bird that catalyze growth in this important sector. Africa needs dynamic regional agribusiness companies that help encourage competitiveness and can expand successful models outside their home markets.”

 

 

Agriculture accounts for one third to one half of GDP in most African countries, and 80 percent of the poor in Africa live in rural areas.

Promoting agribusiness in Africa is a key priority for IFC as is food security, given that the sector employs a large percentage of Africa’s labor force, and has a strong impact on micro, small and medium-sized enterprises.

 

 

SOURCE

International Finance Corporation (IFC) – The World Bank

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Rabobank Report: Structural Changes In Global Urea Market

Posted on 25 March 2013 by Africa Business

Capacity Expansions Drive Shift to Buyer’s Market

 

Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries.  In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry.  Rabobank’s Food & Agribusiness Research and Advisory team  is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture.   www.rabobank.com/f&a


NEW YORK /PRNewswire/ — Rabobank has published a new research report on the global urea industry, forecasting structural change in the global urea market due to capacity expansion by key importers and low-cost players in the Middle East and Africa regions.

“Bursting the Urea Bubble,” the report authored by Rabobank’s global Food & Agribusiness Research and Advisory, predicts that global urea market is set to enter an era of oversupply post 2015, according to Rabobank. Unprecedented acceleration in urea capacity expansion by key importers (the U.S., Brazil and India) and low-cost producers in the Middle East and Africa (MEA) will drive structural changes. This capacity expansion is expected to improve the self-sufficiency of the top three importers and ensure that supply growth significantly outpaces demand growth, shifting the market into a buyers’ market towards 2020. The competition among traditional exporters in the MEA, China and the former Soviet Union (FSU) will intensify, resulting in price pressure and capacity rationalisation in high-cost regions.

“Attractive returns in urea production have resulted in a spurt in capacity expansion projects since 2007,” Rakhi Sehrawat , Rabobank analyst, commented. “The expansion is driven mainly by the exploitation of shale gas in the United States, new gas fields in Brazil, political incentives in India, and low-cost natural gas in the MEA. Over 65 new projects have been announced that will expand global urea capacity by 30 percent between now and 2020. This rush of activity on the supply side will have a strong influence on the urea demand/supply picture in the coming five to ten years.”

The urea production boom will impact players across its value chain, especially high-cost producers and traders. As the import reliance of the main urea destination markets declines and low-cost export-oriented capacity grows, competition among the traditional players/exporters will intensify, resulting in price pressure and capacity rationalisation in high-cost regions. In this market, strategic routes of the urea value chain partners (i.e. producers and traders) would need to change to adapt to this new reality in the urea industry.

For high-cost producers it means they would need to strengthen their market position through cross industry partnerships and downstream integration closer to farmers. The winners will be those who can achieve low costs of production and/or are placed close to a demand market,  enabling them to quickly respond to demand dynamics by altering production cycles. Market intelligence and access to growers will be key success factors in this case.

Lower volumes destined for key urea importers and a diminished role of high-cost exporters in the oversupplied market will have implications for traders. They will need to make the important decision of whether to expand their overall role in the supply chain through upstream or downstream integration or by maintaining focus on trading fertilisers but increasing sourcing of urea from the emerging competitive capacities.

 

SOURCE Rabobank

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Standard Bank Group increases investment in agricultural leadership and business development

Posted on 18 March 2013 by Africa Business

Standard Bank Group will increase its investment in the Standard Bank Centre for AgriLeadership and Business Development at Stellenbosch University to R5.13-million over the next three years. This is up on the R3.45-million support Standard Bank Group provided over the past three years.

Willie du Plessis, head of Agribusiness at Standard Bank South Africa, says, “It is important that we maintain the momentum of the centre’s success since its launch three years ago. The centre has driven crucial engagement and thought leadership in theSouth African agricultural sector. It has established itself as a credible and independent source of insight, both for government and the agri value chain as a whole.”

The centre has initiated a number of ‘imbizos’ or leadership laboratories in which industry leaders contribute information and ideas to address sector concerns such astransformation, land reform, employment and unity. It is part of Stellenbosch University’s Hope Project initiative.

Input from the imbizos was incorporated into the National Planning Commission’s chapter on agriculture.

“We were fortunate to have Professor Mohammad Karaan, dean of Agrisciences at Stellenbosch University and a commissioner on the National Planning Commission, contribute as an imbizo facilitator,” says Professor Johan van Rooyen, director of the Standard Bank Centre for AgriLeadership and Business Development. “He was able to interpret the outcomes of the imbizos for the National Planning Commission.”

Prof van Rooyen says that because the centre is recognised as independent and neutral within the agro-industry, opinions and ideas are freely expressed. The imbizos therefore allow some of the best minds in the industry to collectively deliver constructive outcomes for agriculture and the broader economy.

“The centre also played a pivotal role in establishing the Agri Sector Unity Forum (ASUF) last year. This body aims to drive a unified approach to the sector’s challenges, which will be the fastest way to resolve industry issues as they arise,” he says.

The centre will continue to host imbizos throughout the next three years, extending discussions to issues such as the future of agriculture, training and skills development, water governance and renewable energy, the continued focus on productivity and competitiveness, and reinvestment to grow the sector.

“Future imbizos need to continue contributing new information to hotly debated topics in agriculture,” Professor van Rooyen says. “The centre will also commission research into these topics, providing fresh views and triggering new thinking. A number of case studies have already been published.”

Apart from industry engagements, the centre will also be refining its approach toward mentoring new and small-holder farmers and providing leadership and business management skills.

“Standard Bank’s Enterprise Development division and PriceWaterhouseCoopers have developed ashort course for the centre through which Business Development Support (BDS) providers in the agricultural sector can gain accreditation,” Mr du Plessis says.

“The accreditation of BDS providers will ensure that small holder and medium scale commercial black farmers get structured support to access markets, finance and other players in the value chain.”

The centre has attracted international attention, engaging with Britain’s Royal Agricultural College and the African Fellowship Trust on the African Leadership Programme, an exchange programme in which South African agribusinesses offer internships to students from the rest of Africa who are engaged in various agribusinesses, for the purposes of knowledge and skills transfer.

“We are pleased with the contribution the centre is making to the long term sustainability and productivity of the agricultural sector in South Africa,” Mr du Plessis says. “Our objective for the next three years is to broaden and deepen its impact.”

For more on Stellenbosch University, visit http://www.sun.ac.za.

For more on Standard Bank South Africa’s specialised agricultural service visit www.standardbank.co.za/businessbanking.

Source: StandardBank.com

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Standard Bank South Africa’s agri conferences bring provincial role players together

Posted on 18 March 2013 by Africa Business

Standard Bank South Africa’s agricultural division is hosting a series of provincial roadshows in South Africa aimed at engaging major role players and sector leaders in discussions about generating growth in their region.

“Prospects for South African agriculture are positive,” says Willie du Plessis, head of Agribusiness at Standard Bank South Africa. “However, the potential won’t be converted into reality unless everyone involved acts collectively to remove obstacles to sustainability and create fresh revenue streams for primary and secondary operations.

“South African agriculture is perfectly positioned to implement the vision of the National Planning Commission and we see the roadshows as a way of cascading that very positive information all the way through the agricultural value chain.”

Mr Du Plessis says agriculture has now entered a bullish longer term growth phase. He points out that commodity prices have been good and will remain firm going forward. Interest rates have alsobeen favourable, with the dollar exchange rate supporting export initiatives.

Farmers are encouraged to invest in assets, whether in the form of equipment or property, and to expand their range of crops and livestock.

“This sets the scene for growth, not only for individual farmers, but right across the value chain. It is also an opportunity to make cutting edge changes that will move a farming operationinto a new league.

“Primary and secondary operations need to do things differently and better. Technology, mechanisation, precision farming, and better integration up and downstream will go a long way towards making agriculture more efficient and more profitable. This will keep farmers on the land and ensure that farming becomes an attractive proposition. In turn, this will provide South Africa’s growing population with food security.”
He says that a profitable agricultural sector will create not just more jobs, but also better paying jobs, noting that government too has a role to play in ensuring the profitability of farming.Innovation focused on productivity can also transform the sector from a labour perspective and provide farm workers and their communities with a better living.

“As with many other service sectors, financial institutions also need to develop cutting edge funding solutions that will pro-actively help the sector grow,” Mr du Plessis says. “We need to stay abreast of the obstacles and issues confronting the full spectrum of role players in agriculture, including government.

“Our provincial conferences are geared to enable us to gain the insight to do that.”

Each day-long conference includes a morning briefing session during which industry influencers including John Purchase, CEO of the Agricultural Business Chamber, and Professor Mohammad Karaan, a member of the National Planning Commission and Dean of the faculty of Agrisciences at the University of Stellenbosch, brief the 100 invited attendees on opportunities and challenges confronting agriculture from a national perspective.

Provincial agricultural role players also provide information on their respective areas of influence.

Each afternoon session is interactive, with panellists taking questions from the floor and members of the audiencetalking about their successes.

“Certainly, we need to identify challenges,” Mr Du Plessis says. “But the theme of the conferences is ‘cutting edge’. Each session is growth orientated, focused on helping agri stakeholders become more efficient by capitalising on the many factors in the industry’s favour.”

In addition, input from attendees that has the potential to impact the future of agriculture will also be communicated to decision and policy makers.

“The conferences serve to supplement the solution-seeking imbizos that Standard Bank hosts through the Standard Bank Centre for AgriLeadership and Business Development. These imbizos have provided valuable feedback to the National Planning Commission,” says Mr Du Plessis.

“As a bank, we see ourselves as not just as a financier, but also as an integral contributor to the development and transformation of the sector. Our commercial insight and capabilities can be game changers. We believe it is important to bring together people and organisations that don’t often have a chance to engage with one another and have them work together. It calls for teamwork to enable a cutting edge sector.”

For more on Standard Bank South Africa’s specialised agricultural service visit www.standardbank.co.za/businessbanking.

Source: StandardBank.com

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AGRIBUSINESS’ POTENTIAL IS CENTRAL ROLE TO AFRICA’S ECONOMIC DEVELOPMENT

Posted on 18 March 2013 by Africa Business

About Agri-Vie

Agri-Vie is a private equity investment fund focused on agribusiness in Sub-Saharan Africa with a mission to generate an above average investment return, as well as demonstrable socio-economic development impacts through its equity investments. The fund was initiated by SP-aktif and Sanlam Private Equity with the cooperation of South African and international investors as well as the Makotulo BEE Consortium. The fund’s vision is to be a catalyst for sustainable growth through investing in one of the foundation sectors of Africa’s economies. Agri-Vie seeks to realise this vision through deploying development capital and management know-how according to sound investment and business principles. Agri-Vie Investment Advisors is a financial services provider authorized by the Financial Services Board, Registration number 33826. Visit www.agrivie.com for more information.

 

March 2013: The potential of agriculture and agribusiness in Africa is immense and is a central to Africa’s economic development, but only if properly and effectively harnessed.

This is according to Ernest Tettey, Chief Portfolio Officer at the African Development Bank (AFD), who says that within the Sub-Sahara African (SSA) economy, agribusiness forms a significant and growing sector. “For several SSA countries, the share of agribusiness services and manufacturing are expected to account for at least a third of GDP growth rate.”

The AFD has a mandate to contribute to the sustainable economic development and social progress of its regional members by mobilizing and allocating resources for investment in its regional member countries.

Herman Marais, managing partner at Agri-Vie, the Sub-Saharan private equity fund investing in food and agribusiness, agrees stating that investing in emerging farmers without them having ready access to markets can be counter-productive. “Africa has more than 60% of unutilised arable land globally. Investing in vertically integrated food and agribusinesses that offers off-take opportunities to contract farmers and outgrowers goes hand in hand with technical assistance that empowers emerging farmers with know-how on good agronomic and business practices.”

 

Herman Marais

The AFD is a key investor in Agri-Vie, who provides an appropriate vehicle to channel funds for meeting Africa’s growing investment needs in agriculture. “The AFD holds a seat in the private equity’s advisory board, which ensures that other important crosscutting objectives are mainstreamed into investee companies.

“The Bank’s presence further seeks to align Agri-Vie’s fund structure and terms with international best corporate practice. It also seeks to ensure compliance with international E&S standards,” Tettey says.

Several countries in SSA have comparative advantages in agriculture in terms of land availability, soil fertility, good climatic conditions and water availability. “However, with the challenges in the global food situation, the need to invest in the region’s agriculture sector has become more imperative than ever. These investments will contribute to job creation, enhancement of food security, income generation, poverty reduction, and skills transfer,” Tettey states.

Marais says that Agri-Vie’s fund is on track to delivering its targeted, risk adjusted return in excess of major stock market indices. “Agri-Vie multi-disciplinary investment team has established strategic relationships in its target sectors and countries, giving the fund access to an ongoing flow of often exclusive investment opportunities. With sustainability as a key investment criterion and its cross continent investing, investors benefit from specialist sector knowledge and a risk-diversified portfolio of direct investments.”

“Being only the first private equity fund of scale US$ 110 million focusing on the food and agri-sector, and launched from South Africa in 2008, Agri-Vie has completed more than half of its capital deployment and envisages to complete its current investment programme over the next two years,” say Marais.

“Private equity investments of this nature also aim to support infrastructure development. Under its mid-term strategy, the Bank seeks to increase selectivity and develop a more robust private sector,” concludes Tettey.

 

 

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VOLATILTY TO CONTINUE IN 2013 BUT AFRICAN AGRIBUSINESS SET TO TAKE THE STAGE

Posted on 12 March 2013 by Africa Business

March 2013: Volatility in the agricultural sector is expected to continue, but despite the challenges ahead, Agribusiness experts are optimistic that 2013 will prove to be a hurdle that can be overcome.

This is according to Professor Mohammad Karaan, Dean of the AgriSciences faculty at Stellenbosch University, that despite recent volatility in the commodities arena the outlook is more positive than before as agriculture in Africa will surge to take advantage of market opportunities.

“Volatility in certain commodities and a relatively short supply of basic commodities can be expected, along with labour unrests and demands, but lower yet above long-term average prices will be driven by more favourable markets and supply expansion.

“Big food producers are being encouraged to produce more so supply will be up and stock levels will be sustained. However, the trick is for states and markets to synergise efforts for greater impact and prosperity.”

Karaan says that the challenges remain in investment, developing infrastructure, advancing ecological sustainability practices while increasing production, stabilising transaction costs and recovering farm profitability, improving labour relations and overcoming political and policy difficulties.

Herman Marais, managing partner at Agri-Vie, the Sub-Saharan private equity fund investing in food and agribusiness, agrees, stating that the key lies in investor confidence based on a positive investor climate. “Investments into food and agribusiness prove that disciplines of private equity investments address rural development challenges and food security.

Herman Marais

“With the challenges in the global food situation, the need to invest in Africa’s agriculture sector has become more imperative than ever as it contributes to creating jobs, improving the state of food security, reducing poverty, improving skills and generating income. Private equity investments in agribusiness also support infrastructure developments,” Marias adds.

Karaan says that governments must take the lead with policy transparency and consistency as well as effective incentives. “A more favourable trade regime that supports growing industries coupled with various other support mechanisms that promote labour intensive industrialisation, tax relief and lower costs for doing business are needed to help overcome the challenges.”

He continues that agribusiness leaders also need to play a more prominent role in fostering Africa’s agricultural potential. This includes positively engaging with government, being more vigilant and aware of commodity price fluctuations and global supply conditions.

“Additionally, they also need to employ smarter use of risk mitigation measures in agriculture while exercising greater influence over the value chain, which focus on value propositions in more developed markets, like South Africa, while consolidating more industrialised African locations with meaningful markets. This will lead to greater improvements in infrastructure and develop a sustainable agricultural sector.”

Karaan says that Africa can rise to the challenge. “The production potential is undoubted and expansions are already evident. The growth may be slower than expected, however, given the steep learning curve, political and infrastructure challenges.”

“Africa has more than 60% of unutilised arable land globally. Investing in vertically integrated food and sustainable agribusinesses that offers off-take opportunities to contract farmers and outgrowers goes hand in hand with technical assistance that empowers emerging farmers with know-how on good agronomic and business practices,” Marais concludes.

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China Oilseed Processing Report Provides Exclusive Insight Into Growth and Investment Potential in the Sector Over Next Decade; Report Now Available

Posted on 10 March 2013 by Africa Business

Complete in-depth report on China oilseed processing sector now available for purchase.

 

Danvers, MA, March, 2013 –(PR.com)– The just-released, in-depth report entitled Bringing Transparency to the Chinese Oilseed Processing Sector is now available for sale through Global AgInvestingSM Research & Insight (http://www.globalaginvesting.com/ResearchInsights/detail?contentid=2517). 

The in-depth insider report provides a comprehensive analysis of the market dynamics driving growth in the Chinese oilseed processing industry over the next decade including:

· The migration of oilseed processing capacity from the interior of the country to the coast and its impact on domestic production and imports of oilseeds;
· Rationalization of less competitive facilities in the Chinese interior in an effort to modernize the industry and increase capacity utilization;
· The impact of government policies, price controls and modernization efforts on China’s oilseed processing sector;
· Growing consumer demand for protein meals and vegetable oils driven by GDP per capita, urbanization and population growth which have led to a shift from grain-based to animal protein-based diets; and
· Industry structure and market shares of the major oilseed processors.

This report analyzes capacity, production, utilization and consumption in what has until now been an opaque industry, and focuses on what China will need to do to ensure a more robust and modern oilseed processing industry over the next decade, including addressing overcapacity and modernization issues. It also answers the question of how the industry has continued to grow despite volatile margins and government intervention.

According to Bill Devens, lead contributor to the report and Managing Director at HighQuest Partners, LLC., a leading global food and agribusiness consultancy, limited land availability, a lack of modern oilseed processing technologies, and collection and transportation issues in the Chinese interior have made it very difficult for interior processors to compete with processors located on the coast.

At the same time, limited land and production capabilities for oilseeds in China and government policies favoring food grain over oilseed production, coupled with increasing demand and other variables, can only lead to investment opportunities for expanded agriculture in Argentina, Brazil, the U.S. and Africa over the next decade.

“China’s demand for agricultural products is likely to remain strong in the future,” said Devens. “Yet, for various reasons its domestic agricultural sector cannot meet the growing demand for oilseeds which means that China will have to increasingly rely on imports for its oilseed supply.”

Purchasers of this report will secure actionable industry data on the market shifts in the Chinese oilseed processing industry such as:

· Current and projected GDP per capita, urbanization and population trends;
· Aggregated charts, tables and maps of current Chinese oilseed processing capacity and compound feed production, and utilization rates (currently 51.9%) nationwide and by province;
· Chinese government policies affecting production, oilseed processing margins and imports;
· Trade flow maps of Chinese imports of oilseeds and vegetable oils by country of origin;
· Market shares and facility maps of the leading oilseed processors; and
· Current Chinese investments in farmland and agricultural assets overseas in an effort to manage its food security challenges.

To learn more about the report or to purchase a copy, please visit: https://custom.cvent.com/A142D44019DC43CEAA5CA51E3CB3E22A/files/5a9c48a7859242cea75430934740a22d.pdf or contact Bill Devens at wdevens@highquestpartners.com. Follow us at Twitter@GlobalAgInvest # ChinaCrush.

Contact Information
HighQuest Partners
Michelle Marshall
978.887.8800 x117 

www.highquestpartners.com
mmarshall@highquestpartners.com

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Africa’s Agriculture and Agribusiness Markets Set to Top US$ One Trillion in 2030

Posted on 06 March 2013 by Africa Business

STORY HIGHLIGHTS
  • Africa has the potential to create a trillion-dollar food market
  • But farmers need better access to help them grow and trade their products
  • A new report outlines challenges and solutions to Africa’s Agriculture and Agribusiness sectors

WASHINGTON –A new World Bank report “Growing Africa: Unlocking the Potential of Agribusiness,” says that Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 if they can expand their access to more capital, electricity, better technology and irrigated land to grow high-value nutritious foods.  The report calls on governments to work side-by-side with agribusinesses, to link farmers with consumers in an increasingly urbanized Africa.

“The time has come for making African agriculture and agribusiness a catalyst for ending poverty,” says Makhtar Diop, World Bank Vice President for Africa Region. “We cannot overstate the importance of agriculture to Africa’s determination to maintain and boost its high growth rates, create more jobs, significantly reduce poverty, and grow enough cheap, nutritious food to feed its families, export its surplus crops, while safeguarding the continent’s environment.”

New Findings

Good prospects: Africa’s food and beverage markets are projected to reach $1 trillion by 2030. By way of comparison, the current size of the market is $313 billion, offering the prospect of a three-fold increase, bringing more jobs, greater prosperity, less hunger, and significantly more opportunity enabling African farmers to compete globally.

Performance boost needed: Africa’s agriculture and agribusinesses are underperforming.  Many developing countries such as Brazil, Indonesia, and Thailand now export more food products than all of Sub-Saharan Africa combined.  Even as export shares are falling, import of food products is rising.  The report argues that these adverse trends can be reversed through good policies, sustained public-private investment, and strong public-private partnerships backed by open, transparent procedures and processes along the entire value chain.

Untapped land and water: Africa has more than half of the world’s fertile yet unused land.  Africa uses only two percent of its renewable water resources compared to the global average of five percent.  Post-harvest losses run 15 to 20 percent for cereals and are higher for perishable products due to poor storage and other farm infrastructure.

While pointing to the need for significant investment in infrastructure the report carries an unequivocal warning: in the rush to allocate land for agribusiness, care needs to be taken so that acquisitions do not threaten people’s livelihoods and land purchases or leases are conducted according to ethical and socially responsible standards, including recognizing local users’ rights, holding consultations with local communities, and paying fair market-rate compensation for land acquired.

Adding Value

The report took an in-depth look at entire value chains – the process for taking products from farms to markets – for five commodities, rice, maize, cocoa, dairy and green beans.  Africa is the world’s leading importer and consumer of rice, paying US$3.5 billion for import bills. By increasing rice production, Senegal can help meet local demand but more capital is needed together with greater investment in irrigation and easing restrictions on access to land. Ghana, another top importer, produces more varieties of rice but at significantly higher cost.

“Improving Africa’s agriculture and agribusiness sectors means higher incomes and more jobs. It also allows Africa to compete globally. Today, Brazil, Indonesia and Thailand each export more food products than all of sub-Saharan Africa combined.  This must change,” says Jamal Saghir, World Bank Director for Sustainable Development in the Africa Region.

Success Story

Although much of Eastern and Southern Africa is well suited to dairy production, only Kenya has established a competitive dairy industry. Kenya’s industry is based partly on a formal sector for processed milk and other dairy products, but its dynamic informal sector (based mostly on raw milk) is even more important, supplying over 80 percent of the market. Kenya’s success largely comes from the entrepreneurship of smallholders’ who choose high milk-yielding cross-bred cattle, improved feeds and paid better attention to animal health.  Also, Kenya success points to the importance of improving linkages to the formal sector through cooperative milk collection and milk cooling centers. Even though challenges remain government policy, especially flexibility in setting quality and safety standards for the informal chain were vital.

Looking Ahead

The report says agriculture and agribusiness should be at the top of the development and business agenda in Sub-Saharan Africa. Strong leadership and commitment from both public and private sectors is needed.  For success, engaging with strategic “good practice” investors is critical, as is the need for strengthening of safeguards, land administration systems, and screening investments for sustainable growth.  Concluding on an upbeat note, the report says Africa can draw on many local successes to guide governments and investors toward positive economic, social and environmental outcomes.

“African farmers and businesses must be empowered through good policies, increased public and private investments and strong public-private partnerships,” says Gaiv Tata, World Bank Director for Financial and Private Sector Development in Africa.  “A strong agribusiness sector is vital for Africa’s economic future.”

 

Source: WorldBank.org

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Les marchés alimentaires d’Afrique pourraient générer une opportunité de 1 000 milliards de dollars à l’horizon 2030

Posted on 06 March 2013 by Africa Business

Selon un nouveau rapport publié aujourd’hui par la Banque mondiale, les agriculteurs et le secteur agroalimentaire africains pourraient générer un marché de 1 000 milliards de dollars à l’horizon 2030, s’ils parvenaient à élargir leur accès à des fonds supplémentaires, à l’électricité, à une meilleure technologie et à des terres irriguées en vue d’y cultiver des aliments à haute valeur nutritionnelle et sous réserve que les gouvernements africains puissent travailler plus étroitement avec les exploitations agricoles afin de nourrir la population urbaine croissante de la région.

Selon le nouveau rapport – « Growing Africa: Unlocking the Potential of Agribusiness » (Croissance de l’Afrique : libérer le potentiel du secteur agroalimentaire), les systèmes alimentaires de l’Afrique, actuellement évalués à 313 milliards de dollars annuels à partir de l’agriculture, pourraient tripler si les gouvernements et les chefs d’entreprise procédaient à une refonte radicale de leurs politiques et de leur soutien au secteur, aux agriculteurs et aux exploitations agricoles, qui représentent ensemble près de 50 % de l’activité économique africaine.

« Le moment est venu de faire de l’agriculture et du secteur agro-alimentaire africains un catalyseur pour mettre fin à la pauvreté » déclare Makhtar Diop, vice-président de la Région Afrique de la Banque mondiale. « Nous ne pouvons pas exagérer l’importance revêtue par l’agriculture dans la détermination de l’Afrique à maintenir et à stimuler ses taux élevés de croissance, à créer plus d’emplois, à réduire de façon significative la pauvreté et à cultiver suffisamment de denrées alimentaires nutritives à bas prix pour nourrir ses familles et exporter ses récoltes excédentaires, tout en préservant l’environnement du continent ».

L’industrie agro-alimentaire offre de solides opportunités de croissance

Sous l’effet conjugué de la croissance démographique, de la hausse des revenus et de l’urbanisation, une forte demande oriente à la hausse les prix mondiaux des aliments et des produits agricoles. Les problèmes liés à l’approvisionnement ralentissant la progression du rendement des principales cultures vivrières, le fléchissement des dépenses de recherches, les défis posés par la dégradation des terres et la rareté de l’eau ainsi que le changement climatique, signifient tous que les prix se maintiendront à des niveaux élevés. Dans un tel contexte, l’Afrique dispose d’un potentiel considérable pour développer ses exportations alimentaires et agricoles.

L’Afrique détient pratiquement 50 % des terres mondiales non cultivées qui conviennent aux cultures vivrières, recensant jusqu’à 450 millions d’hectares non boisés, ni protégés, ni surpeuplés. L’Afrique utilise moins de 2 % de ses ressources renouvelables en eau, par rapport à une moyenne mondiale s’élevant à 5 %. Ses récoltes produisent systématiquement un volume nettement inférieur à leur potentiel  et l’importance des écarts de rendement peut atteindre de 60 à 80 % s’agissant des cultures de soutien, comme le maïs.  Les pertes après récoltes atteignent de 15 à 20 % pour les céréales et sont supérieures pour les produits périssables, en raison des mauvaises conditions de stockage et du manque d’infrastructures agricoles.

Les pays africains peuvent exploiter les marchés en plein essor du riz, du maïs, du soja, de l’huile de palme, des biocarburants ainsi que des matières biologiques et s’imposer parmi les principaux exportateurs de ces marchandises sur les marchés mondiaux, à l’instar des réussites de l’Amérique latine et de l’Asie du Sud-est. Concernant l’Afrique subsaharienne, les secteurs les plus dynamiques sont probablement le riz, les céréales fourragères, les volailles, les produits laitiers, les huiles végétales, l’horticulture et les aliments transformés pour approvisionner les marchés nationaux.

Le rapport met en garde sur les acquisitions de terres qui, bien que nécessaires pour les investissements du secteur agro-alimentaire, peuvent constituer une menace pour les moyens de subsistance des personnes et engendrer une opposition locale, à moins que les acquisitions ou fermages ne soient effectués selon des normes responsables sur les plans éthique et social, reconnaissant notamment les droits des utilisateurs locaux, résultant de consultations approfondies avec les communautés locales et incluant un dédommagement équitable respectant le prix du marché pour les terres acquises.

« L’amélioration de l’agriculture et du secteur de l’agroalimentaire africain signifie des recettes plus élevées et des emplois supplémentaires. Cela permet également à l’Afrique de se mesurer à la concurrence internationale. À ce jour, le Brésil, l’Indonésie et la Thaïlande exportent chacun plus de produits alimentaires que tous les pays de l’Afrique subsaharienne réunis. Cela doit changer », indique Jamal Saghir, Directeur du développement durable de la Banque mondiale pour la région de l’Afrique.

Les chaînes de valeurs sont fondamentales

Riz : l’Afrique est devenue un grand consommateur et importateur de riz. Les Africains importent la moitié du riz qu’ils consomment et le paient au prix fort, soit 3,5 milliards de dollars par an, voire plus. Le Ghana et le Sénégal sont deux importateurs de premier plan. Le Sénégal se montre compétitif parmi ses voisins, mais le pays souffre de  la difficulté qu’éprouvent les agriculteurs à accéder aux terres, aux capitaux et aux financements pour accroître l’irrigation et les variétés de cultures appropriées. Le Ghana produit moins de variétés de riz que le Sénégal, mais à un coût nettement plus élevé et prélève des droits de douane de 40 % ainsi que d’autres frais sur les importations. Le grain, la propreté et le conditionnement, étant tous de médiocre qualité, il s’agit de facteurs considérablement dissuasifs pour les consommateurs, ce qui freine le rendement du secteur.

Maïs : Il s’agit du produit alimentaire de base de nombreux Africains, et il est cultivé sur 25 millions d’hectares, soit 14 % des terres cultivées. En Zambie, dont la population consomme en moyenne 133 kilogrammes de céréales par an, le maïs fournit la moitié des calories de leur régime alimentaire. La Zambie se montre compétitive dans ses importations de maïs, mais ses exportations sont un échec. Des frais de transport élevés, des coûts de main-d’œuvre supérieurs et des rendements plus faibles s’associent pour accroître les coûts d’un tiers par rapport à la Thaïlande, gros producteur international de maïs pluvial. Le rapport fait valoir que la compétitivité à venir de la Zambie dépend de l’augmentation de ses rendements, de la réduction de ses coûts et de la suppression des mesures tendant à décourager le secteur privé sur les marchés et dans le commerce.

En outre, l’étude examine les chaînes de valeur du cacao au Ghana et celles des produits laitiers et des haricots verts au Kenya.

« Les entreprises et les agriculteurs africains doivent disposer de moyens pour agir, par le biais de bonnes politiques, d’investissements publics et privés accrus, et de solides partenariats publics-privés », affirme Gaiv Tata, directeur du Développement des secteurs privé et financier de la Banque mondiale en Afrique. « Disposer d’un solide secteur agro-alimentaire est vital pour l’avenir économique de l’Afrique. »

Solutions

L’agriculture et l’industrie agroalimentaire doivent figurer en tête du programme de développement économique de l’Afrique subsaharienne. Le rapport préconise une direction ferme et un engagement du   secteur public comme du secteur  privé. À titre de comparaison, le rapport cite l’exemple de l’Uruguay, de l’Indonésie et de la Malaisie. Pour réussir, l’engagement auprès d’investisseurs stratégiques respectant de « bonnes pratiques »  et mettant l’accent sur la croissance durable  est essentiel, de même que le renforcement des mesures de protection et des systèmes d’administration foncière.

Le rapport note que l’Afrique peut également s’appuyer sur les nombreuses réussites locales pour orienter les gouvernements et les investisseurs vers des résultats positifs sur les plans économique, social et environnemental.

 

Source: WorldBank.org

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Africa’s Food Markets Could Create One Trillion Dollar Opportunity by 2030

Posted on 06 March 2013 by Africa Business

WASHINGTON, March, 2013 – Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 if they can expand their access to more capital, electricity, better technology and irrigated land to grow high-value nutritious foods, and if African governments can work more closely with agribusinesses to feed the region’s fast-growing urban population, according to a new World Bank report launched today.

According to the Growing Africa: Unlocking the Potential of Agribusiness report, Africa’s food systems, currently valued at US$313 billion a year from agriculture, could triple if governments and business leaders radically rethink their policies and support to agriculture, farmers, and agribusinesses, which together account for nearly 50 percent of Africa’s economic activity.

The time has come for making African agriculture and agribusiness a catalyst for ending poverty,” says Makhtar Diop, World Bank Vice President for Africa Region. “We cannot overstate the importance of agriculture to Africa’s determination to maintain and boost its high growth rates, create more jobs, significantly reduce poverty, and grow enough cheap, nutritious food to feed its families, export its surplus crops, while safeguarding the continent’s environment.”

Agribusiness: strong growth opportunities

Due to a combination of population growth, rising incomes and urbanization, strong demand is driving global food and agricultural prices higher.  Supply issues – slowing yield growth of major food crops, slowdown in research spending, land degradation and water scarcity issues, and a changing climate all mean that prices will remain high.  In this new market climate, Africa has great potential for expanding its food and agricultural exports.

Africa holds almost 50 percent of the world’s uncultivated land which is suited for growing food crops, comprising as many as 450 million hectares that are not forested, protected, or densely populated. Africa uses less than 2 percent of its renewable water sources, compared to a world average of five percent. Its harvests routinely yield far less than their potential and, for mainstay food crops such as maize the yield gap is as wide as 60 to 80 percent. Post-harvest losses run 15 to 20 percent for cereals and are higher for perishable products due to poor storage and other farm infrastructure.

African countries can tap into booming markets in rice, maize, soybeans, sugar, palm oil, biofuel and feedstock and emerge as major exporters of these commodities on world markets similar to the successes scored by Latin America and Southeast Asia.  For Sub-Saharan Africa, the most dynamic sectors are likely to be rice, feed grains, poultry, dairy, vegetable oils, horticulture and processed foods to supply domestic markets.

The report cautions that even as land will be needed for some agribusiness investments, such acquisitions can threaten people’s livelihoods and create local opposition unless land purchases or leases are conducted according to ethical and socially responsible standards, including recognizing local users’ rights, thorough consultations with local communities, and fair market-rate compensation for land acquired.

Improving Africa’s agriculture and agribusiness sectors means higher incomes and more jobs. It also allows Africa to compete globally. Today, Brazil, Indonesia and Thailand each export more food products than all of sub-Saharan Africa combined.  This must change,” says Jamal Saghir, World Bank Director for Sustainable Development in the Africa Region.

Value Chains are essential

Rice: Africa has become a major consumer and importer of rice, and Africans import half the rice they eat and pay top dollar for it, $3.5 billion per year and more.  Ghana and Senegal are significant importers.  Senegal is competitive among its neighbors, but it is held back by the difficulty farmers have in accessing land, capital, finance for irrigation expansion and appropriate crop varieties.  Ghana produces fewer varieties of rice than Senegal, but at significantly higher cost, and levies 40 percent tariffs and other charges on imports. Poor grain quality, cleanliness and packaging are major deterrents for consumers constraining the sector’s performance.

Maize: A food staple for many Africans, maize is grown on 25 million hectares or 14 percent of cropped land. In Zambia where people eat on average 133 kilograms of cereals a year, maize provides half the calories in their diets.  Zambia is competitive when importing maize but fails on exports.  High transport costs, higher labor costs and lower yields combine to increase costs by one-third compared to Thailand, a major international producer of rain-fed maize.  The report argues that Zambia’s future competitiveness depends on raising yields, reducing costs, and removing disincentives for the private sector in markets and trade.

In addition, the study reviewed value chains for cocoa in Ghana and dairy and green beans in Kenya.

African farmers and businesses must be empowered through good policies, increased public and private investments and strong public-private partnerships,” says Gaiv Tata, World Bank Director for Financial and Private Sector Development in Africa.  “A strong agribusiness sector is vital for Africa’s economic future.”

Solutions

Agriculture and agribusiness should be at the top of the development and business agenda in Sub-Saharan Africa. The report calls for strong leadership and commitment for both public and private sectors.  As comparators, the report cites case studies from Uruguay, Indonesia and Malaysia. For success, engaging with strategic “good practice” investors is critical, as is the strengthening of safeguards, land administration systems, and screening investments for sustainable growth.

The report notes that Africa can also draw on many local successes to guide governments and investors toward positive economic, social and environmental outcomes.

 

Source: WorldBank.org

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