The Think20 and Cooperation with Africa

28th May 2019
by secretary

Paepard

26-27 May 2019. Tokyo. The Think20 (T20), the research and policy advice network of the Group 20 (G20), convened at the of T20 Summit in Tokyo and issued the T20 Japan Communique detailing innovative policy recommendations for consideration during the G20 Leaders’ summit in Osaka.

Task Force 5: Cooperation with Africa
6 policy briefs were released.

Two policy briefs related to agriculture in Africa were discussed:

Kenya Minister Amina Mohamed,
discusses Multilateralism and Trade

Linking Smallholder Production with Value-Added Food Markets (10 pages)
Sustainable Prevention of Food Crises in Sub-Saharan Africa (10 pages)

Lead Co-Chairs

Ryosuke Nakata, JICA Research Institute
Kapil Kapoor, African Development Bank (AfDB)

Co-Chairs

Elizabeth Sidiropoulos, South African Institute of International Affairs (SAIIA)
Rob Floyd, African Center for Economic Transformation (ACET)
Witness Simbanegavi, AERC
William Davis, ECA
Gamal Ibrahim, ECA
Belay Begashaw, SDGs Center for Africa (SDGCA)
Yamauchi Futoshi, IFPRI
Julia Leininger, German Development Institute (DIE)
Nara Monkam, African Tax Administration Forum (ATAF)

Ryosuke Nakata, Lead Co-Chair of the T20 Task Force on Cooperation with Africa, describes how the G20 can help to take African development to the next level in the changing global environment.

Africa can take advantage of new trends such as the development of value chains in agriculture and industry, and the leapfrogging impact of innovative technologies.
The private sector’s role is undoubtedly essential in many areas.
The Africa Task Force promotes the African Union’s Agenda 2063 and sustainable development across the African continent by tackling the various policy issues including fiscal and debt sustainability, the G20 Compact with Africa (CwA), industrial development, agricultural development, food security, governance, and taxation.

Linking Smallholder Production with Value-Added Food Markets

Belay Begashaw presenting TF5
policy briefs on Agriculture.

Demographic pressures and climate change in Africa are rendering subsistence farming an unviable livelihood strategy for smallholder farmers. However, urbanization and economic growth are creating new markets for fresh and processed foods in the region.

To enter this market, African smallholders need to adopt new production strategies that will increase income and make farming more appealing to the next generation. The G20 can encourage this transition by supporting the growth of a rural-based food processing sector, the reorientation of smallholder agriculture to commercialization, and the development of infrastructure to link farmers to markets.

“Interventions should prioritize SMEs over large agroprocessors, since SMEs have greater potential to become an important source of off-farm employment to rural inhabitants”. (page 5)

“With the expertise and experience amassed in the food processing industry of some of its members, the G20 can support the integration of the Africa’s agricultural production into global and domestic agro-food value chains by actively promoting the rural-based private food processing sector.” (page 5)

“The G20 can encourage partnerships between African agroprocessors and buyers in the G20 to develop regulatory institutions that ensure the safety and quality of food without being a prohibitive barrier to entry for SMEs”.

“G20 member nations must look closely at their own trade practices, especially subsidies and non-tariff barriers that are inconsistent with WTO regulations, and re-evaluate them in light of stated intentions to promote smallholder farmers’ participation in global value chains.” (page 6)

“Since the cost of establishing infrastructure for food processing is prohibitive in some instances, especially in low-income settings, one strategy that has been developed to reduce the user costs of infrastructure is the development of agroprocessing industrial parks. This strategy is currently in development in Ethiopia, and is being scaled up to service 17 regions throughout the country.” (page 8)

Highlight: Smallholder Horticulture Empowerment and Promotion (SHEP) This approach was born through the technical cooperation project between Kenya and Japan. This approach addresses the motivation of farmers, and ensures their success in farming as a business. JICA is now promoting SHEP Approach all over Africa and in other areas.

Sustainable Prevention of Food Crises in Sub-Saharan Africa

Food crises and distress migration will continue to plague the African continent in the decades ahead unless massive investments are made to make the region’s agriculture and food systems more resilient. The G20 should support and invigorate region-wide efforts to:

massively expand irrigation systems for smallholder farms to boost agricultural productivity and enhance resilience against the impacts of climate change,
achieve a “big push” in infrastructure, technology and finance to develop robust agri-food systems, and
enact concerted reforms of agricultural price and trade policies to strengthen trade integration, diversify domestic food supplies, and enhance country-level capacity to adjust to food shortages.

This policy brief for the G20’s think tank platform, the T20, suggests that massive investments in expanding irrigation in Africa’s arid and semi-arid areas, and in improving weak and missing links in food systems, could provide the key to building resilience to future food crises. Such investments would provide Africa’s poor and agrarian populations with opportunities to break away from poverty and tap the economic potential of the world’s growing demand for food.

The brief was prepared by experts from IFPRI, FAO, and the Japan International Cooperation Agency (JICA). They provided three concrete recommendations for the G20 in three priority areas of action:

Investing in irrigation. Studies by IFPRI have shown the enormous potential of small-scale schemes to increase irrigation in Africa South of the Sahara by up to 30 million hectares. This would extend the growing season and provide year-round incomes for poor farming households and smallholders. The surplus production would result in rapid growth of the agriculture sector and help transform African economies. The brief proposes that the G20 and the African Union call on multilateral financial institutions, such as the World Bank and the African Development Bank, to set up financing schemes to help governments, farmers, and farmer organizations with the necessary funding.
Investing in strengthened agro-food value chain links. The policy brief encourages the G20 to foster international collaboration and strengthen financing mechanisms to facilitate a “big investment push” in Africa’s food value chains. To reap the benefits of agricultural productivity growth from irrigation investments, better supply chains will be needed for farmers to bring their increased production to market. This will require investments to improve market infrastructure and other innovations such as temperature-controlled storage and transportation and food processing capacity. Longer growing seasons and more surplus production would enable a growing number of small firms to produce processed versions of local staples. Such growth would in turn promote increasing demand, driven by income growth and urbanization, for processed, perishable, and higher value foods—transforming African food systems. Such investments could also leverage large-scale job creation along food supply chains and reduce the pressures that lead to migration.
Realigning agricultural incentives and trade policies. Producer prices are set below the world average in many African countries, depressing farmers’ incomes. Some African countries also prioritize domestic food self-sufficiency and government-managed trade, both of which can result in domestic price instability in the event of weather shocks and related climate impacts. When such disasters strike, increasing imports will not be enough to offset reduced food supply. The policy brief recommends that the G20 should collaborate with the African Union to coordinate reforms of domestic agricultural support measures and limit existing food trade restrictions. The Continental Free Trade Area in Africa could also help countries diversify their food supplies, ensuring that neighboring countries make food supplies available when needed to decrease Africa’s exposure to shocks to its largely rain-fed agriculture.

Related:

The Rise of a Middle Class in East and Southern Africa: Implications for Food System Transformationhttps://onlinelibrary.wiley.com/doi/full/10.1002/jid.3107

“High processed perishable shows the greatest change, rising from 14 to 18 per cent even in the low‐growth scenario and up to 29 per cent in the high‐growth scenario. Overall, high processed rises in every scenario, while low processed changes little”.

“Import shares in urban areas do not rise with income, meaning that the urban middle class imports no more, as a share of their consumption, than the urban poor. This pattern of steady net import shares across income classes among urban consumers is driven by substitution away from (imported) wheat and rice towards meat and other products (as predicted by Bennett’s law) that have lower import shares.”

“In light of slow agricultural productivity growth on the continent. Productivity at farm and post‐farm levels will have to increase dramatically to avoid an import surge. (…) Any surge would not be the ‘fault’ of the African middle class but of general factors shared by all the consumer classes.”

“The continuing rise of the urban middle class will not bias the growth path toward more imports. Part of the reason for this is that the middle class’s penchant for perishables is met in its great majority by local supply.”

Source: PAEPARD FEED

The Think20 and Cooperation with Africa

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