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tralac’s Daily News Selection

tralac’s Daily News Selection
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22 Oct 2019

Enabling the Business of Agriculture 2019 (World Bank)

Four countries in Sub-Saharan Africa are among the top ten reformers worldwide promoting favorable regulations for farmers in the areas measured, a report issued by the World Bank finds. According to Enabling the Business of Agriculture 2019, the business climate for agriculture worldwide is improving. 47 out of 101 countries measured implemented 67 regulatory reforms over two years making it easier for farmers to manage pest outbreaks, get quality seeds and access credit to invest in production. The report assesses whether government regulations support farmers’ activities in these eight areas: supplying seed, registering fertilizer, securing water, registering machinery, sustaining livestock, protecting plant health, trading food and accessing finance. Based on data collected between July 2016 and June 2018, more than half of reforms affecting farmers were enacted in the areas of protecting plant health, supplying seed and accessing finance, says the report. Across regions, farmers in Sub-Saharan Africa face the toughest regulatory challenges. But many countries are striving to improve the business climate, including through regional agreements facilitated by their membership to regional political and economic unions such as ECOWAS. Sierra Leone, Burundi, Mozambique and Malawi are among the ten countries that improved the most globally, although they have a long way to go. Extract (pdf):

Farmers in Sub-Saharan Africa face the toughest bureaucratic challenges (figure 2.4). The largest regulatory and efficiency gaps are observed on the registering fertilizer (73 percentage points), protecting plant health (64 percentage points) and sustaining livestock (59 percentage points) indicators when compared with OECD high-income countries. In Sub-Saharan Africa, fertilizer application rates are low compared to other developing regions. This is detrimental since sustained agricultural growth as well as soil fertility depend on efficient usage of high-quality fertilizer. Facilitating access to high-quality fertilizer that provides balanced nutrition to crops is essential to overcome barriers in doing business in agriculture. In contrast, the lowest regulatory gaps for Sub-Saharan African countries are on the accessing finance (27 percentage points), securing water (28 percentage points) and trading food (32 percentage points) indicators.

Promotion of fertilizer production, cross-border trade and consumption in Africa (AfDB)

This study, initiated by the AUC, the UNECA and the Africa Fertilizer Financing Mechanism, is part of the efforts undertaken by African leaders to foster access to affordable and quality fertilizers. Its overall objective was to provide a solid background document reviewing the state of selected Africa’s fertilizer clusters and related emerging value chains as well as provide strategic policy options and best practices. All these potential solutions will provide effective and accessible funding mechanisms that support national and regional priorities in the context of ending hunger by 2025, African Union Agenda 2063, and more specifically accelerating the 2006 Abuja Declaration through the Africa Fertilizer Financing Mechanism. The study builds upon agro-industrial clusters and value chain studies that development actors worked on to update key issues affecting fertilizer production, distribution and consumption in Africa. It draws heavily on desk review as well as work previously conducted by targeted development partners on the development of sustainable global supply chains, regional value chains and agro-industrial clusters. Descriptive statistics have also been used to understand current use rates.

The study proposes some key policy recommendations the Africa Fertilizer Financing Mechanism should focus on: Deepen regional integration efforts with a focus on regional infrastructure, trade corridors, and harmonization of fertilizer standards and regulations; Encourage transport policies that increase competition in the trucking industry; Encourage procurement policies that enhance bulk buying of fertilizers if an assessment shows it is effective; Encourage countries to address NTBs both at the regional level such as weighbridges, police road blocks/checks, cross-border procedures, etc.; Supporting some form of guaranteed output markets, complementary measures such as seeds, extension, and research to improve fertilizer use efficiency and effectiveness; and Support improvements of rural/feeder roads that reach agricultural production zones.

Recommendations on fertilizer financing. Set up investor consortia and public-private partnerships for new blending plants, smaller new fertilizer manufacturing plants serving particular markets and expansion/modernization; Implement credit guarantees for fertilizer importers, distributors, and agro-dealers; Assist/facilitate the provision of finance for storage facilities/warehousing space especially at inland transportation hubs; Assist private traders in obtaining lines of credit, hedging, and equity investments from local banks; Develop and promote innovative public-private fertilizer financing schemes as well as credit products.

Africa Fertilizer Financing Mechanism: executive summary of baseline study (AfDB)

The main objective of the baseline study was to collect real data in order to track progress made at the country level regarding actions undertaken in the fertilizer value chain. This study provides an analysis describing the situation prior to AFFM interventions against which progress will be assessed. A number of performance indicators and targets have been defined. Some of these are quantitative while others are related to the qualitative objectives of AFFM with respect to fertilizer use and value chain development. Starting in December 2018, the survey collected data in Cameroon, Chad, Cote d’Ivoire, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, Tanzania and Zambia. These countries were selected based on four main criteria: contribution to AFFM seed capital, geographical location, language, and the fertilizer market. Recommendations:

Create profitable demand for fertilizer via subsidies and vouchers: Provide local food farmers with the ability to purchase fertilizer within a transparent system and create a beneficial cycle of growth, while incorporating private sector participation to ensure long-term participation once subsidies end.

Support food processing units to increase fertilizer use and market access: Financially assist food processors, which would provide fertilizer to farmers in order to meet necessary raw good volumes for processing; improved processing reaches more markets, increases revenues, and creates a cycle of increasing fertilizer use, food security, and income growth.

Storage and transport capacity investment: Support the development of both large- and small-scale storage facilities along the fertilizer value chain, as well as finance the upgrade and expansion of fertilizer trucking fleets among relevant operators to meet seasonal demand.

Agro-tech offers answers for African farmers at Iowa meet (Inter Press Service)

Experts vaunted new strains of seeds, drone aircraft and other technological breakthroughs as solutions-in-the-making for farmers in Africa, where hunger, drought and food price hikes are continent-wide problems. At the gathering of nutritionists in the 2019 Borlaug Dialogue International Symposium, held annually in Des Moines, hopes were pinned on a new generation of so-called ‘agro-entrepreneurs’ in Africa. The three-day gathering, which ended on Friday, saw some 1,200 experts, policy chiefs, executives and farmers from more than 65 countries tackle food scarcity and price hikes — blights that disproportionately hurt sub-Saharan Africa. Jennifer Blanke, vice president for agriculture human and social development at the AfDB said Africa “missed out” on the green revolution that bumped up harvests across Asia and Latin America in the 1950s and 1960s. But with new technologies — from unmanned “drone” aircraft to new strains of more resilient crop seeds — coming online, African farmers and policymakers have an opportunity to get agriculture back on track and boost harvests. “You can do so many things with technology,” said Blanke. In the coming months, Blanke aims to bring together researchers, policymakers and investors to foster helpful policies and roll out schemes to buy and spread technology as well as training farmers and officials how to use it.

AI for development: facts and figures (SciDev.Net)

While many countries in the Global North have adopted national strategies for AI in recent years, Global South countries have been slower off the mark. India, Kenya and Mexico are the only ones which have put such frameworks in place, according to an overview of national AI strategies published in Politics+AI. The Kenyan government created a taskforce in 2018 to focus on AI and distributed ledger technology such as blockchain, and set out a roadmap for promoting these technologies in the next five years. India’s AI strategy focuses on social growth and inclusion, and was launched with the hashtag #AIforall in June 2018. It aims to equip Indians with skills to work in the sector, as well as invest in AI research, and export Indian-made AI solutions to other developing countries. However, despite a lack of national impetus in many nations, AI applications already abound which have the potential to improve lives and livelihoods in the Global South.

OCP Africa signs agreement to support Africa’s smallholders, increase yields (Morocco World News)

The International Islamic Trade Finance Corporation, a member of the Islamic Development Bank Group signed a MoU with Morocco’s OCP Africa to increase agricultural production yields and income levels for Africa’s smallholder farmers through strategic funding, innovation, and capacity-building measures. The two parties will strengthen their collaboration in various areas including training for smallholding farmers on sound agricultural practices, soil testing, and fertility management to support better yields. ITFC has been providing significant support to ensure food security in Sub-Saharan Africa. In 2018, ITFC allocated $749.6m to finance the food & agriculture sector, representing 14.4% of the total trade finance portfolio, a 71% increase compared to the previous year. Sub-Saharan Africa accounts for 50% of ITFC’s food & agriculture sector financing in 2018.

Wandile Sihlobo, Tinashe Kapuya: Brexit risks to SA agriculture are now minimal, but not eliminated. As Brexit unfolds without a clear and predictable outcome, the question is, what are the implications of various possible outcomes for South Africa and the region’s agriculture sector?

How SMEs can turn around food production in Africa. The third question is the most interesting one. Contrary to popular belief, African governments should not focus on large companies and corporations that will lead the agriculture and food sectors. The reason is simple: despite their extensive activities, they are not the real growth engine of the field. The real leading growth engine are SMEs, already directly responsible for 64% of the continent’s production chain, according to the latest Africa Agriculture Status Report. Another 20% is produced by farmers who grow for their family’s personal use, while the large companies and corporations are responsible for no more than the remaining 16%, and their scope for growth is limited. Although various governments across the continent have already seen the light, there is a long way to go. [Note: The writer, Yariv Cohen, is the founder of Ignite Power, a solar power firm in Rwanda]

Making agri-food systems work for the rural poor in Eastern and Southern Africa. The IDRC project aimed at achieving four specific objectives: to identify and promote local innovations and adaptation strategies that work for the poor rural men and women to cope with food security vulnerabilities; to adapt and scale up technologies and market innovations for promoting orphan crops that enhance food security, increase incomes and ecosystem integrity in selected areas of Malawi, Kenya and Uganda; to analyze and promote specific policies and governance mechanisms for sustainable agri-food systems; and to determine mechanisms for scaling up agri-food systems and sustainable agriculture. The project was implemented in Kenya, Malawi and Uganda with the participation of five partner institutions.

Today’s Quick Links:

Ethiopia, Kenya explore grain trade opportunities

GDO Analytical Report: Drought in southern Angola - October 2019

The New Humanitarian: Indian Ocean Dipole spells flood danger for East Africa

Science Daily: Large-scale afforestation of African savannas will destroy valuable ecosystems

Ghana expects to end importation of rice by 2022

Nigeria’s 2019 Farmers Field Day: FG to boost research institution

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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