In West Africa, the food economy has changed significantly in the past two decades and more and more local and regional markets are meeting local food needs. In fact, only6.5% of the total food demand was met by imports in 2015. This local trade is replacing the export of raw agricultural commodities. This shift has also seen an increased demand for local food processing and distribution enterprises, contributing to job creation in urban and rural areas. Instead of food production being the main source of incomes and trade for people, marketing and processing of agricultural products now make up 40% of the value of the total food economy in the region.
The West African agro-processing sector primarily consists of micro and small enterprises which are often family operated and informal. These enterprises are involved in the production of agricultural inputs, small-scale commercial farming, agro-processing including wood and textiles, manufacturing or trading machinery, and provision of support services such as packaging, transport and finance. Their production processes are frequently artisanal, involving limited mechanisation and standardisation.
The above example is drawn from our recent policy paper which considers the role that agricultural transformation could have in catalysing broader economic transformation and poverty alleviation.
One of 4 key findings in this paper is that for agriculture transformation programmes to be socially inclusive and environmentally sustainable, they need to focus on local, national and regional supply chains in the agri-food system instead of global supply chains. These have, by far, the greatest potential to create decent work and entrepreneurial opportunities for Africa’s growing rural and youth population.
Importantly, these have much higher potential than production for global export where the primary focus is on integrating local producers and industries into global value chains. It is, however, the latter which is often the focus of most government, donor and NGO initiatives. Focusing on global value chains can work in some areas for certain cash crops, but by and large, this isn’t the best option and often opens people to significant risk, such as food price volatility.
Africa’s growing urban and regional markets offer greater opportunities for both people and for broader national economic development. World Bank research shows that linking producers to small and medium urban centres leads to faster poverty reduction and more inclusive and sustainable growth than an exclusive focus on mega-cities and export markets.
Most excitingly, this focus on agricultural transformation will allow us to build a web of interconnected agricultural businesses at the local level. Here we would see local small and medium enterprises processing, transporting, distributing and selling these products in local urban centres and rural areas, creating work and entrepreneurial opportunities, as well as thriving rural economies. This is one way to start to build resilient local economies.
So what lessons can we draw from this for our agricultural livelihoods programmes?
1. Analyse the opportunities in the local market: Market analysis needs to be a key component when designing a livelihoods strategy – but importantly look at the local economy and the opportunities here. Research shows that there are increasing demands for dairy, meat, fruit, vegetables and processed foods from many urban and regional centres. There is enormous potential for production, value-addition and processing to meet this local demand.
2. Think beyond Global Value Chains: Think very carefully before designing livelihoods programmes which rely on one buyer or on global exports and global value chains. By and large, the risks outweigh the benefits and a focus on local and domestic value chains could, in fact, offer far greater livelihood opportunities, and more broadly, opportunities to build resilience and tackle poverty.
3. Choose food crops instead of cash crops for greater resilience: Given the growing demand in these local and national value chains for food (raw produce and processed) the research shows that food crops could hold important resilient livelihoods potential. Especially if these are connected to local and regional markets. If you chose to do cash crops they should not come at the expense of food crops and should also be done using a sustainable model of production (see below) and should not compromise household food security.
4. Focus on sustainable models of production: we’ll touch on this more in our 4th blog that’s coming up soon, but to flag here: sustainable production, such as agroecology or climate resilient agriculture which have low use of external inputs such as chemicals and better use of soil and water management is key to creating more resilient local economies.
5. Build resilient local economies: Thinking beyond single livelihoods programmes and ‘beneficiaries’ towards the development of resilient local economies helps our programming to think about long-term impact and the multiplier effects that they could have. This means thinking about the forward (distributors, retail etc) and backward (farming inputs) linkages that can be made with other local and small-scale enterprises (see pg 12 of our background research paper for some further discussion on this).
What are your thoughts and experiences from the field? We’d love to learn from you. Please comment in the section below and follow this blog to stay involved in the conversation…
In the next blog, we’ll be looking more closely at our second finding for how to ensure that agricultural transformation is equitable and environmentally sustainable: land rights.