Plunging cocoa prices in the past few
months have been a major worry for more than 700,000 farmers located in
the lush green forests of Ghana who depend on this cash crop to feed
themselves and provide education and health to their families. But the
inadequate capacity of Ghana to add more value to a large quantity of
its cocoa is even more a bigger issue.
Global demand for chocolate is expected to
grow 25 percent by 2020, so cocoa prices will eventually recover. But
cocoa farms must increase Ghana’s share of the final retail price of
chocolate, which is only 5% at present. By increasing the country’s
processing capacity, farmers in these countries can increase their
incomes and create more critical jobs in the process.
Ghana’s cocoa example mirrors the overall
condition of Africa’s export commodities. Africa still exports more raw
agricultural produce with little or no value addition.
It has become increasingly obvious that
while Africa is growing, it is not transforming. One well-known policy
solution that has been offered to create more jobs is to scale up the
manufacturing sector. And this includes making agricultural processing
active.
To do this, Ghana like any other African
nation will need the roads, energy, transport and markets to power the
factories that process agricultural produce. With lower labour costs and
easy access to raw materials, agro-industries in Africa offer an
excellent opportunity for private investors too. It has the right
markets for agro-industries to thrive and its regional market remains
hugely untapped.
But there are several opportunities. Global
food demand, for example, is set to double by 2050. Africa’s
agriculture and agribusiness markets could reach US$1 trillion in 2030.
For any economic transformation to happen, agriculture and agribusiness
must grow and rightly combine to make value addition possible.
Africa loses billions of dollars for due to its inability to produce enough and process its agricultural commodities. The Africa Progress Panel chaired by Kofi Annan, in its 2014 report ‘Grain, Fish, Money’,
estimates that Africa spends US$35 billion per year in food imports.
Indeed, connecting farm production, processing and distribution could
create numerous jobs and lift millions of Africans out of poverty.
We must think of linking farmers to the
market through mobile technologies and give accurate and timely
information to smallholder farmers to enable them reduce the threats
weather extremes pose. While we have witnessed mobile technology revolutions across Africa,
we need to reinvent our meteorological institutions to enable them
predict the weather and disseminate accurate and relevant data to
farmers in the village. Here, forging a good partnership with the
private sector initiatives like Esoko – an agricultural information
service operating in 10 African countries – is key.
Agribusiness must center on smallholder
farmers. Agribusiness investments must not, therefore, ignore
“land-grabbing”. Smallholders need the land and infrastructure to help
feed themselves and others. Agriculture and agribusiness pursued in this
manner could be the next frontier to change Africa’s growth and
transformation story.
"the Best Culture is Agriculture"
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