Africa’s vacant croplands a challenge

The experts say we're heading in the right direction

Smallholder farmers in Africa can make a huge contribution to agriculture on the continent
African Farmer
It’s a fact – Africa’s agricultural sector faces various challenges – from insufficient irrigation systems and use of fertilisers, to poor storage and transport facilities leading to post-harvest losses.
The vast majority of African farmers are smallholders. However, recent years have seen increased investment in large-scale commercial projects. But should Africa’s agricultural development be driven by commercial farmers or smallholders?
Mohit Arora, head of agriculture at Standard Bank Africa, believes that with the right support, smallholder farmers could transform Africa’s agricultural output if they are integrated into a free market and financial system supported by appropriate legal frameworks that address land rights and contractual rights.
Arora told the website How we made it in Africa that, besides government intervention, smallholders can also be supported through microfinance – and said Africa’s smallholder farmers should be assisted through extension services and improved technology.
“Attention to extension services is not quite up to the level that it should be. Meaningful contributions from the government is to get extension services going, basic extension services – help the farmers get their financial planning right, what commodities are they going to plant. African agriculture doesn’t really need high-tech technology – it needs basic technology at this stage,” explains Arora.
“If you look at the south of Brazil, tobacco farmers don’t have more than 10 or 20 hectare - and Brazil is a tobacco powerhouse. In India, 80% to 90% of the farmers are smallholder – and India is one of the world’s top producers in many commodities. Take for instance the production of milk in India. The majority of the farmers do not have even more than a few cows, [yet] India produces the world’s largest amount of milk,” he says.
 Arora said Africa is turning out to be a gold mine of opportunities and that all the categories of the value chain are growing. However, Standard Bank faces various challenges in servicing the continent’s agriculture sector. One of the key challenges include financial and market risk management by the bank’s agriculture clients.
“As banks get involved, they expect the financial management to be of a certain level to be able to get comfortable and lend. A lot of lending is happening, but banks can do much more if clients organise themselves in a manner that is more conducive to financing by major banks. We often aim to not just lend but to advise clients on enhancing their financial and risk management practices so that they effectively access wider financial markets as they grow,” says Arora.
Grooming talent, particularly by providing staff with continent-wide exposure, is also not easy as moving people across Africa can be a challenge. “As Africa is moving towards trade integration it needs to look at easing the flow of people to support trade (in line with people policies within the trading blocs of the EU, Latin America and the Middle East). We can actually do a lot more if we can rapidly develop talent. It is not easy to move people across countries. Even within the trading blocs, it is not that easy to move,” notes Arora.
Africa has got its work cut out when it comes to agriculture, but Arora believes that governments are generally steering the sector in the right direction.
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