The Brussels Development Briefing n. 58 on “Africa’s Agriculture Trade in a changing environment” organised by CTA, the European Commission/EuropeAid, the ACP Secretariat, IFPRI, Concord and BMZ/GIZ was held on Wednesday 23 October 2019 (9h00-13h00) at Hotel Sofitel Brussels Europe, Place Jourdan 1, 1040 Brussels.
The briefing brought various perspectives and experiences around the new trends and opportunities in intra-Africa trade in the context of free trade agreements and regional integration. It also showed Africa trade within the broader global trade picture and with the EU as one of the main trade partners.
Experts presented trends and prospects of regional trade in Africa in the light of new policy developments as well as Africa’s recent performance in different markets. It also featured successes and innovative models in regional trade across regions in Africa and lessons learned for upscaling and expanding regional trade.
Briefing 58; Hanna Saarinen:- Investing in inclusive agricultural trade that benefits farmers
1. INVESTING IN INCLUSIVE
AGRICULTURAL TRADE AND VALUE
CHAINS THAT BENEFIT
SMALLHOLDERS
CTA Brussels Briefing, 23th Oct 2019
Hanna Saarinen, Oxfam International
2. Context & Issues
• Smallholders do not receive adequate recognition or
support (cf. unmet Malabo commitments, insufficient
ODA)
• Public policy often biased towards large scale
agriculture
• Smallholders often do not receive fair prices for the
goods they produce; incomes are insufficient for a
decent standard of living (‘living income’)
• Their market opportunities are curtailed and they face
systemic marginalization in accessing (fair) markets
• Smallholders face an imbalance between the risks
that they shoulder in agriculture and their power to
shape their own market participation
Smallholders – the most
important investors/private sector
actors operating in agriculture:
• Produce an estimated 70 % of the
world’s food supply
• Key role in rural poverty reduction
• Protection and reproduction of
biodiversity
3. Declining bargaining power of
smallholders
From 1980s global promotion of neoliberal
ideology:
• Many govts and donors pursue trade
liberalization
• Deregulation of agriculture and labour
markets
• Insufficient public investment in agriculture
• Decreasing domestic support programs;
leading to reduced income or price
support for SSH (dismantling marketing
boards, overhauling price floors, ….)
• Cutting export subsidies and opening
markets for food imports
Ill-designed trade and
investment liberalisation puts
small-scale producers in
competition with cheap
imports and multinational
companies.
4. Women smallholders
face particularly high
exposure to risks and
lack of opportunities,
which further reduce
their access to and
control over means of
production and market
opportunities.
5. Farmer incomes in food supply chains:
Oxfam case studies
Product Country Average income as %
of living income
Cocoa Cote d’Ivoire 81%
Bananas Ecuador 77%
Coffee Colombia 71%
Orange juice Brazil 58%
Rice Thailand 56%
Green beans Kenya 53%
Kenyan green beans producers are
market leaders in exports to the EU.
2000-2015 consumer prices tripled
1997-2015 export prices halved
1997-2015 price paid for SSF
dropped by a third
The SSF share of the end
consumer price is 2,2%
6. Stabilize
risks
Price volatility and
unpredictability
Production input costs,
availability, sustainability
Climate risks
Insecure land tenure
Increase
market power
Income diversification
activities
Bargaining power (collective
action)
Access to (fair) markets
Upgrading into higher value-
added activities
How to raise smallholder incomes
7. Private Sector
Engagement
Scorecard based on
supermarkets’ public reported
policies and actions in their food
supply chains
Striking gap between
current supermarket
policies/practice and
international standards
8. Entry points for
change
Tackling the underlying imbalances
in risk and market power requires a
change in the “rules of the game”
that govern agricultural production
and trade (incl. the operation of
value chains, commodity sectors and
public policy).
9. Entry points for change (ACP govts/EU)
Bargaining power and Living income
• Revisit agricultural & rural policies to enable smallholder access to productive assets, local,
national & regional markets, training, research, technology and services
• Invest in public goods that support smallholders to increase their income (rural roads,
electrification, market spaces, extension services, …)
• Enhance organization of smallholders to better enable them to integrate into the food value
chains (co-operatives, FO)
• Instead of only tackling productivity constraints (yield), adopt a holistic approach to address
producer income (cf. production costs, other sources of income)
• Introduce minimum producer prices & other support mechanisms (e.g. direct subsidies)
targeted at smallholders to ensure prices cover cost of production
• Support affordable mechanisms to access market & price info through ICT/market info
systems, to enable informed decision making on what, when and where to produce and sell
• Promote short food supply chains that enable smallholders to obtain a better income from
their production
10. Entry points for change (ACP govts/EU)
Gender
• Repeal laws that discriminate against women’s economic equality and implement
legislation to support women’s rights, incl. land
• Increase public investment focused on needs of women (incl. extension services, access to
finance, specific measure to support women-owned enterprises in the agri-food sector…)
Finance
• Strengthen smallholder access to a full range of financial services adapted to their needs
(microfinance, start-up capital, insurance, ..)
• Ensure that private sector cooperation, PPPs and blended finance do not undermine the
use of public funding in support of inclusive agricultural transformation
11. Entry points for change (ACP govts/EU)
Food systems and territorial markets
• Support transition to sustainable food systems and alternative agri-food networks (AAFN)
such as producer–consumer networks; collective producer shops; farmers’ markets and
school/institutional feeding programmes
• Recognize the importance of non-monetary exchanges of products and services, and the
importance of local food systems for smallholders (cf. territorial markets)
12. Sources
• Oxfam (2018):
Ripe for Change. Ending human suffering in supermarket supply chains
• Oxfam (2018):
A living income for small-scale farmers
• UN Committee on World Food Security (2016):
Connecting Smallholders to Markets
• UN Committee on World Food Security (2013):
Investing in Smallholder Agriculture for Food Security and Nutrition