Event transcript

RAMA YADE: So welcome to this important conversation panel about “The Agribusiness Revolution.” Agriculture should be at the heart of any development policy. When it comes to feeding people on the continent, the continent of food insecurity, this is not an outdated sector. Agriculture is an—the economic sector of the future.

Like I said this morning, 65 percent of the world’s untapped arable lands are on the continent. [The] agriculture sector is 35 percent of the [continent’s] GDP. It’s also 60 percent of the active population. Yet, food insecurity has increased. As a result of the war in Ukraine, prices of food, of production, of gasoline, of fertilizers, all the prices have surged, not to mention the extreme weather conditions combined with the weak local infrastructure—not to mention, as well, the levels of productivity, among the lowest.

On a continent where the population will double by 2050, you can imagine how the stakes are high here. And consequently, we are here today to discuss—not to discuss humanitarian assistance or short-view solutions. We are not here to debate about food security, but about food sovereignty—how Africa can feed itself and feed the world.

So I’m happy to welcome our three panelists today.

Our first panelist is virtual, Professor Lilac Nachum. She’s a professor of international business at City University New York. She’s also a visiting professor at Strathmore Business School in Kenya. Welcome, Professor Nachum.

We have also virtually Jehiel Oliver, who is the founder and CEO of Hello Tractor, an agricultural technology company that connects tractor owners with smallholder farmers. Welcome, Jehiel.

And on the stage with me, Ousman Gajigo, who is director of Seeds for Prosperity. You are a former African Development Bank manager and now at the head of this new nonprofit foundation with the goal of sustainability, improving food security in the—in the Gambia, right? And you focus on—your work focuses on vegetable gardens in rural areas in a country—a coastal country already impacted by climate change.

So we are going to discuss the extraordinary potential of the African agricultural sector, as well as the innovation being pursued in agribusiness and agritech on the continent first. And I would like to ask Professor Nachum the first question.

Professor Nachum, you published—and that’s how we met—a few months ago, earlier this year, a remarkable piece called “Africa’s Agribusiness Sector Should Drive The Continent Economic Development: Five Reasons Why.” Can you share with the audience those five reasons why Africa’s agribusiness sector should drive the continent’s development?

LILAC NACHUM: Thank you, Ambassador. It’s really a pleasure and an honor to be here.

You’ve set up the stage so beautifully by suggesting that such a large part of Africa’s population makes a living out of agribusiness and such a large share of African economies are derived from agribusiness. In parallel, the agribusiness sector of Africa is extremely underdeveloped. By all measures that we could think of it lags behind the rest of the world.

One issue that Mr. Oliver seemed to try to address, the use of machines, is just the lowest in Africa than in the world. The size of farms [is] the smallest in Africa than the rest of the world. The labor productivity in agribusiness is the lowest in Africa that—compared to the rest of the world.

So there is really—the need for food security the ambassador mentioned… I cannot agree more to this, and I’m very glad that she brings this up and places it at the center of our discussion. But simply for Africa to develop we must address the issues related to agribusiness and must upgrade and upscale the agribusiness sector.

So I think the major reason for this is that I don’t think that Africa will follow the standard process of industrialization and economic development that we have seen have worked quite effectively in other parts of the world, most lately in Asia but also previously in other parts of the world, because whereby countries move for agribusiness—low-productivity agribusiness into manufacturing and from there to services, well, this is not happening in Africa so far. And we are seeing that to the extent that people move away from agribusiness, and we have seen some movement away from agribusiness, they shift—they jump over manufacturing and are all over to—and this is not a healthy path to economic development because services do not have the ability to raise millions of people out of poverty as we’ve seen in manufacturing.

But I think—beyond that I don’t think that the manufacturing-based industrialization model is suitable for Africa and is aligned with Africa’s comparative advantages and disadvantages. I think we do need a distinctive path for Africa. There’s so much that is distinctive about Africa and it calls for a distinctive path for economic development.

And then this should be based on agribusiness and should start from agribusiness and lift agribusiness up and develop the agribusiness sector.

Now, there are three key aspects that need to happen in order for—that need to take place in order for this to happen. The first is consolidation and scaling up. As I mentioned, the size of African farms is by far the smallest in the world.

Most African farmers are substantive level. They’re not—they’re producing in ancient technologies because the size does not justify investment in more advanced technology. So upscaling is one.

The second is upgrading, which means to raise the level of productivity and move up along the supply chain from the providers of the lowest value-added activities in supply chain—basically the raw material and the fresh produce—and engage in some processing of these raw [materials] in order to upscale and move up the supply chain.

And the third and last one is export, and we have now the Africa that really signified enormous breakthrough to Africa and the opportunities that it [offers]. But Africa is a continent of fifty-five countries. Most of them are very small, fewer than ten million people. So that could not support large-scale development of the agribusiness.

There is a need, an urgent need, to export, export in Africa and export to the rest of the world.

RAMA YADE: Thank you, Professor.

LILAC NACHUM: Thank you. Over to you.

RAMA YADE: Yeah. One, you mentioned this, I mean, merging between agriculture and business. You can understand that many people may be worried, especially the smallholder farmers in Africa who don’t maybe have the means to follow this strategy you just described.

How—and I would like here to ask the next question to—on the stage here to Ousman Gajigo, director of Seeds for Prosperity.

My first question is how can you make compatible this agribusiness strategy with development needs when it comes to the smallholder farmers?

OUSMAN GAJIGO: Thank you. Actually, I think there is no tension or contradiction here. There’s actually a lot of—I mean, development and what the professor is expressing, there’s a lot of, you know, compatibility here. She’s absolutely correct that in—you know, you have many small farms in Africa. I come from a small country that is densely[populated]. So that’s high population density, land is at a premium, so land size is the limiting resource. So if every farm is working in a fragmented piece of land, you know, it’s difficult how certain kinds of technology can be used. But that, you know—you know, it—one would have to really—you know, we’ll have to fail to use our imaginations if we actually think that as a failure, because you could have cooperatives. These are—there are successful models where you can—even small-scale farmers can get together and still take advantage of technology.

And also, these are opportunities that present themself. When you have a small—you know, small farmlands, fragmented piece of, you know, farmlands, you don’t have to give up—you know, drop your hands; you could actually say, OK, instead of focusing on, you know, traditional food crops or cereals that require a large amount of land, how about high-value crops that can be grown on even small quantities of land? So these are opportunities where even small-scale farmers, those that are living in very remote areas, could be supported.

And when you—she’s also absolutely correct in saying that, you know, the situation we see right now where you have a lot of people leaving agriculture, skipping—economy skipping manufacturing and industrialization, going straight to services, it’s not really a recipe for sustainable development. And I think here you have a situation where investing in agriculture and having industrialization are actually compatible, because in order to have processing or manufacturing you need to have high productivity in agriculture to ensure that there is surplus, a reliable supply, and at, you know, high acceptable quality. And that can only happen when you have, you know, investments in agriculture, because you cannot have a viable industrial sector where inputs that are required are, you know—are not in high supply—I mean are not in, you know, sufficient supply and at high cost. Because when you have high-cost manufacturing, you will not be competitive. So having development and also having investment in agriculture, these are actually very compatible.

RAMA YADE: Mmm hmm. Speaking of which, you mentioned restoration of lost crops like one of the tools that could be used. And a few days ago in Dubai, far from here at the COP28, the Africa Center welcomed Chef Pierre Thiam, who is working to restore these lost crops. And you mentioned also cooperatives that can play a role for the small farmers. There’s also digital. And here I would like to ask Jehiel Oliver here, who is the founder and CEO of Hello Tractor, about agritech. I said earlier that your company is a technology company that connects tractor owners with small farmers. So how can—

JEHIEL OLIVER: Correct.

RAMA YADE: How can—tell us—tell us more about your work and how these two worlds can work together.

JEHIEL OLIVER: Well, I think Hello Tractor as a business cuts across many of the themes that were already mentioned by the other panelists. Our business is enabled by last-mile coordination of smallholders’ demand for equipment to increase productivity of labor, to increase profitability, to ensure smallholder farmers plant on time, intensify land under cultivation to grow their profitability. And that’s enabled through technology.

But at the very core of our business model is a very simple concept, which is, you know, the most important factor of production in agriculture is fertile land, water, sun, right? And in our business, we have across these smallholder farming systems an abundance of all three, but they need to be organized. You cannot have a small one-acre farmer owning a tractor, and you certainly can’t expect a small one-acre farmer to book tractor services even through technology like what we offer at Hello Tractor and expect the tractor owner to drive that machinery a hundred kilometers to service that one plot. But through organization, sometimes through co-ops, or sometimes organic formation of demand clusters, you can reach economies of scale so that a group of farmers—maybe a hundred farmers booking for 150, 200 acres of land—is very attractive to a machine owner.

And we use a variety of technologies to enable that transaction. We have a tractor fleet owner application that we built natively so farm equipment owners… feel comfortable sending it to far-off places, and knowing exactly what it’s doing, and making sure the operator is not defrauding them or stealing fuel or underreporting work. And you know, we have a booking application that community-based agents can use to organize those demand clusters, transparently book that demand with satellite images of the farmers’ fields to see exactly the condition of the fields, location… All of the information that you need to de-risk that decision to send your tractor to that far-off place, that is made available in the application.

But what’s enabling this entire business is the coordination of that last mile, aggregating these small acres to be large acres, and to look as closely as broad acre-growers as possible to enable to economies of scale to make the market work. That’s true for tractors. It’s true for seed [systems]. It’s true for fertilizer. It’s true for storage and market linkages. But we start with tractors, but we believe that the coordination can be leveraged across the entire agricultural industry.

RAMA YADE: Jehiel, thank you. Can you tell us more about the track record of Hello Tractor? How many countries in Africa—

JEHIEL OLIVER: Yeah, sure.

RAMA YADE: I mean, in how many countries are you operating? And how many farmers have you—have you targeted?

JEHIEL OLIVER: So we’re Africa-focused. We have over a million. We’re at about 1.1 million farmers being serviced on our platform growing on 2.6 million acres of land. We’re focusin… You talk about indigenous crops, millets and—as well. And African maize, Kenyan maize. I’m in Kenya right now…

And, yeah, we’ve recently launched a tractor finance product as well. That’s operational in three countries. But the broader business and the core kind of fleet management and marketplace, we’re in three countries across the continent.

RAMA YADE: Thank you very much.

Professor Nachum, I’m back to you. You are talking about what could be a good agribusiness strategy for Africa, but at the same time important parts of the continent from the Horn to the [Democratic Republic of the Congo] is facing a food crisis, you know, because of, like I earlier said, the war in Ukraine, et cetera. How do you—how do you appreciate the most pressing needs of the sector today? And has the sector recovered from COVID-19? We know that the impact was important. How can we ensure full restoration before deploying the strategy you just described?

LILAC NACHUM: Yeah. You know, those kind of crises… are inevitable and political crisis, that will influence the region. And the more integrated the world is, the more dependent we are on other countries for the supply of our needs, the more exposed we are to those risks. These are inevitable.

I continue to—I have always believed and I continue to believe that globalization should march ahead in spite of those terrible crises. You know, a global pandemic happened for the last time a hundred years ago before COVID-19, so—and I think that the benefits that—during the—during the hundred years that passed between the last global pandemic and COVID-19, the benefits of globalization have changed the world in such a significant way. I wouldn’t want to see us reverting from these into an ocean of self-sufficiency and not being dependent on others for the supply of anything and everything.

So we need to find ways to make ourselves more resilient to such shocks. Political shocks, well, unfortunately we’re seeing many more of them in recent—in recent years, which is unfortunate. But they are also an inevitable part of our world, and I think that they should—they, too, should not be an excuse for closing up and protection—introducing protectionist policies that will undermine all the enormous benefit that the global world provide us, including in terms of—even in terms of food supply.

What I think that we do need to do is to—in order to protect ourself against those kinds of events, to become more resilient in the sense that not being reliant on one source of supply. Like, you know, the war—the war in Ukraine became so devastating because a large part of Africa were dependent on it as their source also for supply of grain. So diversified sources of supply and be ready to—to be prepared to the opportunity that something might go wrong, you know, in one part of the world that would jeopardize the ability—its ability to supply our needs.

But I continue to subscribe heartily to the principles of comparative advantage which underline the benefits of globalization. And they apply to food as well, and maybe to food to a greater extent because of the advantages of weather—weather, land, and type of land that may some parts of the world—inherently, most of the world for the production of certain foods than others. The benefits of trading with each other, even in those things, are enormous, and you should not let them go just because of the political risk or natural disaster risks.

RAMA YADE: Mmm hmm. Thank you very much.

LILAC NACHUM: Thank you. Thank you.

RAMA YADE: Ousman Gajigo, I have—I am intrigued by—very curious of your experience as ADB manager. And if—when we compare with your current activities at the head of a nonprofit foundation, how do you perceive the support by the African development organizations on the agriculture sector? Because we know—you know, today we are here to celebrate African innovation and creativity, and we know that the African civil society is really a vibrant civil society that tries to do the job the states sometimes cannot deliver. How do you—how do you work and—how do you appreciate and how do you work with the development organizations at the state level and at the continental level?

OUSMAN GAJIGO: Yeah, no, I mean, when you look at the challenges in agribusiness, there is definitely an important role for all of these entities you’ve mentioned. Most of the time, we do focus on issues at—you know, policymakers at international level. This foundation that I work for and helped create, you know, we work with smallholders that are engaged in high-value horticulture. So mostly we’re talking about farmers that have very small land size in highly remote areas. So you think about how do we make these farmers realize high growth, eventually become commercially viable, and are connected to the markets so that the work of foundations like mine become less needed over time.

So when you look at these, I mean, you—issues like access to finance and market, access to technology become important, and these smallholders can’t make all of these investments on their own. So the role of public sector, whether national or international, become quite important.

So, for instance, at the level of the—at the level of the organization that I work in, we—of course, we help with inputs, being—make things. We help these farmers with information that, you know—because a lot of the solutions are out there. It’s a matter of sensitizing, making it available to these farmers there. But also there are investments where it is beyond the means of an individual farmer, no matter how well-connected and how well-resourced they are. So those—there are some things that have public-good aspects.

Of course, I think Oliver’s activities, like what Oliver is also doing, you know, these are examples of where things that used to be the—used to be activities on the—you know, that governments used to do exclusively, what we see that, you know, there are even now private initiatives that are addressing that.

At a continental level, you have these roles that development organizations can play that even national governments have challenges in addressing. For instance, I know both the World Bank and African Development Bank, you know, have programs like global supply finance—I mean, global supply chain finance programs, where they link global buyers of agribusiness goods with aggregators at national level, provide financing… services. And these aggregators, they’re not able to link up with small-scale farmers to make so they have access to finance and access to market. So you have, again, roles for national governments here where they can assist in making so that you have cooperatives at a level of smallholders that can make it possible for these smallholders to actually interface with these international buyers, because it’s impossible for—to have an international buyer outside working with a farmer that has less than half an acre.

So at every level you have—there is considerable scope for these entities—national level, subnational level, and international level—you know, to address the constraints that there are. Of course, I’ve only mentioned a few, but it extends beyond your finance, but you know, technical service—I mean, technical assistance, advisory services, information. So these roles are there. And you know, my work both at the World Bank and at the African Development Bank before I started this foundation informed a great deal for, you know, roles that we can play at the national level and also at even subnational level to ensure that the smallholders, we start to think about them less as, you know, humanitarian cases than as potential business opportunities.

RAMA YADE: Up to—yeah.

Jehiel, I have a question for you about the underrepresented populations and development goals, especially women and young populations. How can they be—first, in your activities, do you have—do you target them specifically to be more inclusive? And how you work and support the development goals on the continent in terms of job creation, for example, in the urban but also in the rural areas.

JEHIEL OLIVER: It is—I mean, it’s central to our work. And it’s—you know, we talk a lot about internally going beyond the rhetoric and incorporating inclusion and equity… So we talked about, for example—I’ll use a real example—our booking algorithm that connects farmers to tractor owners. Logically, you would think the bigger the field, the more attractive the booking, right, because you get more work done and you have the tractor owner more—and you’re paid by the acres. But we don’t look at that at the individual farmer level; we look at the number of acres in a specific geographic catchment area. And we built that algorithmically to ensure that we were not—we were not disqualifying smallholder farmers from accessing tractor services. That’s the bulk of the market, and so that’s a market that we need to service, and we need to be thoughtful about how we crowd them into the marketplace without putting our tractor owners at a disadvantage, right? But it’s codified in the code, right?

The same thing with our tractor finance product, right? We’ve observed—obviously, I mean, we’ve all heard of the World Bank statistics around how women are represented in agriculture but are often last in line to access resources. They’re asset-poor. They don’t have the same level of access to financing. And so we thought there is an opportunity for us to design a product that targeted specifically young people and women. How do we do that?… We were underwriting the book of business of booking agents. As they engage more and more farmers, that’s what we underwrite to qualify them for a loan. Once you reach a certain number of acres booked in the application, you qualify to become a tractor owner through Hello Tractor in our pay-as-you-go tractor finance program. Now, we hold you accountable. Once you get the tractor, we track your performance to plan. If you’re not servicing bookings, if you’re not remitting a small feedback to—by form to make sure that money is recycling, we take the tractor away. But we prioritize young people. We prioritize women. We reduce the downpayment requirements. And we do a lot of analysis to make sure that, on a risk-adjusted basis, we can scale our business.

So we got—you know, in our—in our credit team, they’re constantly updating regression models to see what is a real indicator of creditworthiness, right? If that’s what we care about—because we need to repay our investors. Our investors are commercial players, like John Deere is our largest investor. They care about things like inclusion, but they also want to make sure they get their money back. And so—but we design for the kind of inclusion that I think is going to be important not just at a social level, but realistically that’s the market. So it’s kind of weird to not design for that because the businesses that don’t are really skimming off the top, and it’s really competitive at the top. There’s not that many bankable agricultural enterprises across Africa and there’s not that many, you know, broad-acre farms across Africa. There’s not that many dudes that are creditworthy running around trying to find loans from big commercial banks. It just don’t work that way. The bulk of the market is young people who are unbanked. It’s women who are unbanked. It’s smallholder farmers who are unbanked. And if you’re not reaching it, I would question the viability and scalability of your business.

So it’s imperative, both for the social commitment but I also really believe that commercially you’re irrelevant if you can’t crack that nut. And so that’s where we focus.

RAMA YADE: Thank you, Jehiel.

And we have only eight minutes, and I would like to dedicate this remaining time to a third topic after agribusiness and development: the impact of climate change on the agricultural sector. And I’m going back to you, Professor Nachum, to ask you my first question on that.

Combating climate change in the—in the sector of agriculture is critically important. At the very moment when, like I said, in Dubai we are attending the COP28, thirty years of COP, what are the best options for the sector in Africa? What are the best practices, the inspiring models in Africa? And beyond—Aubrey Hruby, our Africa Center senior fellow, a few months ago just released a report on agritech and advanced a few recommendations about that. But on the continent of land, of water in danger and threatened by the global warming and all the extreme weather conditions, what are the best options to—in combating the climate change in the sector as of now?

LILAC NACHUM: Well, the problem of climate change, unfortunately, goes way beyond the sector, but obviously the sector will be among the—will experience the consequences of climate change probably more than any other—any other because it depends directly on the state—the state of the environment.

So I think if anything these issues call for greater specialization and more agribusiness activity that is really derived on the—that is based on the principles of comparative advantages and more efficient use of water, for example. So crop that requires more water should be grown in areas where there is just more natural water, and same on irrigation in other area where in order to address issues like water shortages crops that we—or crops or other agribusiness items that need more sun should be grown in areas where—more sunny areas, and so on and so forth. So greater sense of specialization in order to be able to provide the food security that we started the panel with, and at the same time also protect ourselves from shortages that will be caused by the—by environmental challenges. In general, I think that Africa will play a major role in the Green Revolution and the agribusiness is inevitably a part of that. So many of the resources that are needed in order to make that transformation to green energy are in Africa.

Africa provides—Africa will become a major provider of this and stand to benefit enormously from this transformation simply by being the provider, by being a source of the resources to the rest of the world. So—

RAMA YADE: Yeah. Yeah. Speaking of Africa, there’s fifty-five countries so a variety of countries. Among them those coastal states are at the forefront of the climate issues, which is the case of your country, Gambia, right?

So can you tell us more about the concrete effects of the climate change in the sector of agriculture in your country?

OUSMAN GAJIGO: Yeah. No, it’s significant. I mean, Gambia is a small country, coastal and very flat, low lying. So climate change beyond the issue of just increased, you know, variability in weather and, you know, more variations in rainfall or higher temperatures you have, like, more direct effects.

For instance, there are parts of the country where now you have saltwater intrusion where it wasn’t before and this makes groundwater irrigation, you know, increasingly threatened. So I think when it comes to agriculture and climate change it’s obviously very relevant so the issue then becomes mainly adaptation as opposed to mitigation, and for smallholder farming this is—there’s a lot that can be done. Irrigation there—this is where you also can leverage technological advances that allow you to better weather the climate effects.

So when you have small farms you have climate effect in terms of rainfall and you have—this is traditional agriculture that is rainfall dependent. It becomes more important to have, let’s say, irrigation technologies that can be right sized for small sized—for small farms.

So you have now, you know, solar-based irrigation designs that are—you know, that you can have—that are modular in design. It means can be right sized for small farms and as the farms increases they can be increased without huge increase in cost.

It means the investment costs for initial setup also can be a lot more affordable and it means in general you have sustainable use of this water that is becoming increasingly threatened.

So, yeah, so for a small country here the effects are, you know, tremendous, are real and, you know, action is needed in terms of adaptation.

RAMA YADE: Thank you very much.

My last question, and we have to wrap up because we have—this conversation should be over already—but you had Olivier—Oliver, my last question is for you.

I just mentioned the Atlantic Council and Policy Center for the New South report on agritech, and one of the recommendations of the authors was to advocate for more investments in the technology of—in the sector.

What could you say to close this discussion on your recommendations? What would you say to push the international—offering investors or American investors to invest more in a technology company in the agricultural sector?

JEHIEL OLIVER: Well, I mean, I will start with some of the statistics that you laid out eloquently at the top of the panel discussion.

We have the arable land. We have great water resources across the continent. I think for any investor investing in ag tech in Africa and really globally, I think there’s often this urgency in the venture to exit a fund. A typical fund life in venture capital is ten years. The gestation period in agriculture is much longer. Innovation cycles are longer.

So you need to select the right capital for this asset class and I’m not convinced entirely that venture capital is the right type of investment for this and I think globally ag tech has struggled a bit because of that.

So, certainly, there’s massive opportunities. You know, it took a hundred years to build Cargill, a hundred years, you know, to build John Deere, our biggest investor, and all of these same companies exist in Africa. You’re not going to get—you’re not going to get paid overnight. You have to be patient. You have to have resilience.

You have to have the qualities and the characteristics that we see in our farmers. And if—and if you bring those to bear, you will succeed because our farmers, season in, season out, they still have successful years without crop insurance, without all of the inputs, without all of these things, against climate change. They still have successful years and they largely feed and they—and if investors have those same characteristics, I would welcome them to participate in this amazing upside on this continent. If they don’t have those characteristics they should stay where they are.

RAMA YADE: … Africa cannot afford—according to what you said cannot afford to remain a promise or only a potential. It’s very important to become a reality and an achievement, especially in this sector where so urgent needs—we find so many urgent needs…

Q: Thank you so much. I really appreciate it. Moussa Kondo. I work for Sahel Institute from Mali. Thank you so much, Honorable Ambassador Yade, for moderating this session.

So I’m from a country where the climate crisis and the farmers and also talking about food is some of the most important conversation. And I’ve heard a lot of innovation around the content. When I say content, is what we produce and how we produce it. It’s good to have a lot of side innovation around it but when you—the national politics or policies or international institutions encourage a country to produce things they cannot eat directly this is a problem.

And also the product they don’t control the market. I’m talking about cotton. The past few years the countries in Sahel—Mali and Burkina Faso—have been competing being the first cotton producer, and after the prediction they don’t control the price in the international market. So that means the cotton is not transformed right and then they may lose everything in one click but for international industries where they don’t produce. One point.

The second thing, countries… they don’t have land to produce even they don’t want. So they need production from elsewhere. And Mali has, like, millions of hectares to produce. So why we don’t encourage countries lever what we have learned to produce what we can eat?

For me, this is a thing—the one thing. When you take countries like—in Asia like Thailand or Vietnam, when they’re feeding almost Africa in terms of rice, where 80 percent of consumption of rice are off the continent, many countries in the continent are based on rice. So why we don’t focus on this and how we can implement, like, fertilizing chemical product also to make this meet the need of what we want.

Thank you.

Q: I shall make it quick. My name is Simba Rasha.

And my question is, do you really think smallholder farmers are going to take us to the promised land in terms of food production in Africa? You know, it’s a fundamental question that we all have to consider and answer and digest.

Millions—billions of dollars have gone into smallholder farmers in the last twenty years in the continent. We have seen negative growth in yield and overall output on the whole. So what alternative strategies exist in order to get the yield or the dividend yield or however the production that we need for the continent? Thank you.

RAMA YADE: So maybe we can take these two questions. Yeah, OK. So the first question, how could Africans consume what they eat, what they produce, right? Maybe Professor Nachum can take that question. And the two others about the small farmers for Jehiel and Ousman.

LILAC NACHUM: I would actually like to say something to the—in regard to the second question, because if I—

RAMA YADE: Feel free. Of course.

LILAC NACHUM: I agree—I agree with the speaker that we have—we have not seen improvement in the current model has not yielded the anticipated results. There is obviously something here that needs basic repair, for the lack of a better word.

And you know, in the United States, 2.5 percent of the population engage in farming, and the US is one of the world’s largest exporter of food. So the amount of product that they produce is sufficient to feed the country and more—and more; they need to export the—they’re exporting what is left. In Africa, we have seen the situation that more than 50 percent of the population is engaged in agribusiness and Africa cannot feed itself. So there is obviously something fundamentally wrong with this model.

And I think—and I agree with the speaker that it has not—it has not changed over decades. It has remained the situation. Africa is unable to provide its own supply of food. It’s among the—the size-adjusted figures are—according to the size-adjusted figure, it’s among the continents in the world that depend most heavily on import for the supply of its own food. This is an absurd, absurd situation. There is really something fundamentally wrong here.

Now, it’s easy to identify that. And what needs to be done in order to change the situation, that’s a big challenge. But I think we need to start by identifying where are the bottleneck. What is preventing the sector from growing—from growing? What is preventing of the sector from the three—the three issues that I mentioned in the beginning, from upscaling—from scaling, from upgrading, and from exporting so they can—they can get larger markets? Where the—where the bottleneck are? What is—what are the barriers…?

We have seen similar developments happening naturally by market—in the market in other places of the world. There have been natural causes of consolidation, and then larger farmers are better able to upgrade, driving a next-step process of consolidation, and then this size enables, of course, exporting… whereby it increases itself over time. This, for some reason, is not happening in Africa.

Why this is the case is a question that I struggle a lot with and I don’t have answers. But I think that this is the question to which we need to direct our attention. So I very much—

RAMA YADE: You know—yeah, please.

LILAC NACHUM: I sympathize very much with this question, and I salute the speaker for bringing this up.

RAMA YADE: Yeah, we advanced a few answers in our recent Africa Center report on the topic, making comparisons with other countries like Cambodia, Indonesia, Colombia, or India, you know, where facing—in the past they—and even today—facing the same challenges and bottlenecks. And I think this is important to—I mean, to—you know, to take these examples, the best practices elsewhere in the world.

And the second thing is maybe take advantage of the larger regional organizations, such as the Africa Free Trade Area that has been launched in January 2021, and that will help to move to the next step when it comes to having more impact; and maybe, with the—with the partners from the European Union to the US with the Africa Free Trade Area, for example, work on the commercial needs, too, you know? So that is—that is the—a few ways that could be or tools that could be mobilized, maybe, to get—to reach the next level when it comes to the impacts of small farmers.

And the second question, Ousman, would you like to take it, about consuming what farmers produce in Africa?

OUSMAN GAJIGO: Yeah. I think the two questions are actually quite related.

I mean, they’re absolutely right. If you look at productivity, you know, feeding—you know, countries feeding themselves is quite linked with the low yield. Let’s take one example here, Mali. You know, the staple is rice. They produce a lot of rice. The global average yield for rice is about four tons per hectare. In West Africa, the average yield is about two tons per hectare. In the country where I come from, the yield is one ton per hectare; it’s actually declining over time, you know. In that situation, you can have the largest amount of arable land, I mean, you just are not—cannot keep up with population growth. I mean, the per capita cost on rice is about 115 kilograms per person per year. Given the high population growth, you know, the productivity is just not—it’s not sufficient to keep up with the demand.

Compare, let’s say, Mali with Vietnam. There you have average yield of about six tons per hectare, very productive, and a lot of them are smallholders. So the issue here is not about whether we have smallholders or not, and it’s also not to romanticize smallholders. I mean, of course you need to talk about them because the vast majority of the farmers we are talking about, the ones who is in the constraints are smallholders. But the point is, you know, not to romanticize them and to say that, you know, you need to go with that model of smallholder-centered farming to have productivity growth. No. The idea is, as the professor said, identify what the constraints are, the constraint to productivity growth. This is the key. Why the yields?

I mean, we do talk about productivity per farmer, but the key here is really productivity per land, the yield. Yeah, where you are actually talking about, you know—you know, in the context of climate change, where we don’t want to have just bigger and bigger farms that is knocking down forest, you have to have intensification. And therefore, land—even in large countries like Mali, you know, land yield—I mean, land productivity or yield is essentially the key. And things like having agribusiness as opposed to just traditional form of development-assistance agriculture, this is where we need a culture change. Governments kind of move away from just saying, OK, we have—we give imports of seeds at the beginning of the year to farmers and, you know, help them improve their productivity, but we should focus more on thinking of agriculture as a business where even, you know, small, rural, remote farmers can be linked to the market. Because governments, let’s face it, I mean, our governments are not really in a position to address a lot of the challenges. So to the extent that that is called for, you know, private businesses, you know, to the extent that that is called for organizations that are formed by, you know, non-public sector, I think this is the way to go.

RAMA YADE: OK. Thank you so much.

MODERATOR: Wonderful.

RAMA YADE: Well, but I did promise this gentleman. Can you do yours in thirty seconds? Because we have our other colleagues here. Thirty seconds, sir.

Q: Yeah, yeah. My name is John Manyerakesa. I am a farmer here in the US.

I grow African food to decolonize the African diet, and that is something that we don’t talk a lot about. Chef Pierre Thiam talked about how we can actually use our indigenous food to substitute for all these imports, $65 billion. And so my question to you, twenty years ago we had the Comprehensive African Agriculture Development Program. All African countries signed that they’re going to do 10 percent of their budget to agriculture. Can you tell me if you follow? What is the status of that? Because it was an African program that Africans have to have their own African agriculture program based on the African realities. What is the status of that?

OUSMAN GAJIGO: Yeah. Yeah, no, I remember looking into this and a large number of countries are very far from actually meeting their commitments. I actually had a look at the budget of my country, and I believe the share of the budget that was allocated to agriculture was way lower than 10 percent. I forgot the exact percentage.

I think—I mean, the way I look at those agreements is not so much to follow religiously the specific percentages that are—that have been agreed upon, but the concept that it is important that you focus on agricultural sector, that it’s not neglected. But you know, you could have 10 percent of the budget allocated agriculture and all of it is to recurring expenditure and almost nothing is to capital expenditure, which is what is needed in some countries—investment in irrigation, things like that. So sometimes these dollar targets, I think, can obscure rather than illuminate what the issues are.

Speakers

Ousman Gajigo
Director, Seeds for Prosperity

Lilac Nachum
Professor, the Zicklin School of Business at Baruch College and Strathmore University Business School

Jehiel Oliver
Chief Executive Officer, Hello Tractor

Moderator

Rama Yade
Senior Director, Africa Center, Atlantic Council