The Rise of Africa’s Processing Sector and Commercialization of Smallholder Agriculture

1. Executive Chairperson, AKADEMIYA2063
EMERGING PROCESSING SECTOR
AND SMALLHOLDER COMMERCIALIZATION
Ousmane Badiane
Based on Badiane, Glatzel, Collins and Tefera (2022)

2. #2022ReSAKSS #2022ATOR
Demand constraints in traditional simple supply chains
Commercialization policies for complex supply chains
Demand constraints in modern complex supply chains
Key Message
EMERGING PROCESSING SECTOR
AND SMALLHOLDER COMMERCIALIZATION
OUTLINE
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Commercialization policies for simple supply chains

3. #2022ReSAKSS #2022ATOR
Key Message
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4. #2022ReSAKSS #2022ATOR
Key Message
Changing urban demand patterns and supply chain (SC) complexity call for
rethinking of commercialization strategies in Africa’s staple food sectors
Distance separating smallholders from new markets is no longer primarily
physical but, and increasingly so, one of degree of product sophistication
EMERGING PROCESSING SECTOR
AND SMALLHOLDER COMMERCIALIZATION

5. #2022ReSAKSS #2022ATOR
Demand constraints
in traditional SC
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Minimum product alteration
Chain boundary: catchment area
Market barrier: physical distance
Critical SC functions:
Demand constraints in traditional SC
• Collection
• Assembly
• Cleaning
• Sorting
• Storage
• Transport

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oFarmers cooperatives
oMarket infrastructure
oTransport infrastructure
oStorage infrastructure
oAccess to financing
oMarketing policies
oPrice information
Commercialization policies for simple SC
Focus areas
Ease movement of product
across space and over time
Demand constraints overcome
through catchment area expansion

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Demand constraints
in modern SC
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9. #2022ReSAKSS #2022ATOR
Demand constraints in modern SC
• Sustained economic growth
• Continued population growth
• Rising middle class
• Rapid urbanization
• Demand for processed staples
• Emerging processing sector
Drivers of changes in urban
food demand patterns
Changing dietary patterns

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Demand constraints in modern SC
Changing dietary patterns
% processed products
in intra-African Trade
72% Africa-wide
77% West Africa

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Demand constraints in modern SC
Incremental value addition
Chain boundary: Degree of sophistication
Market barrier: Product Innovation
Critical SC functions:
• Cleaning - grading
• Processing
• 1st stage: pre-processed / intermediate input
• 2nd stage: ready to cook / prepare
• 3rd stage: ready to eat / consume / use
• Packaging
• Branding
• Distribution
• Safety

12. #2022ReSAKSS #2022ATOR
Commercialization policies for complex SC
Firm level capacities
o Enterprise creation
oTechnology acquisition
o Access to capital
o Skills development:
Technical
Managerial
Focus areas
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In complement to traditional policies
Increased capabilities for
product and process innovation
Demand constraints overcome
through increased raw material use

13. #2022ReSAKSS #2022ATOR
Commercialization policies for complex SC
Firm growth and performance
o Transport technology
oConservation technology
o Energy supply
o Digital infrastructure
o Norms and standards
o Intellectual property
oCompetition policies
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Focus areas
In complement to traditional policies
Increased competitiveness in
domestic urban markets
Demand constraints overcome
through capture of growing market

14. THANK YOU