Côte D'Ivoire's Green Revolution

To Go W/ Afp Story In French By David Yo

In spite of its huge agricultural potential, sub-Saharan Africa is a net food importer. But now, thanks to investment and training, farmers are starting to increase their yields.

You don’t often hear ‘Africa rising’ (that increasingly hackneyed phrase beloved of development conferences) in the same breath as agriculture. Urbanisation, manufacturing, mobiles are the buzzwords more likely to be bandied around in debates about the continent’s future (at least in the west, where farming doesn’t have quite the same ring as fibre broadband).

Yet the potential of agriculture is enormous. Africa has almost half the world’s uncultivated arable land suitable for growing crops, while yields from land already in use are nowhere near their potential. Urban food markets in sub-Saharan Africa (excluding South Africa) are forecast to quadruple in value to more than $400bn (£273bn) over the next 15 years. If the region gets its ‘green revolution’, almost half a century after farm productivity exploded in India and Latin America, the World Bank thinks agriculture could more than treble in value to become a $1trn industry by 2030.

But there is a huge gap – at the moment agriculture contributes only 24% of sub-Saharan African GDP, but employs around 60% of the workforce and indirectly supports many more. The continent became a net food importer in 1981 and the balance is currently an eye-watering $36bn annually in favour of imports. The question, then, is how to get that revolution started.

Hidden from the road by lush green tropical tangle, about an hour outside Yamoussoukro, the political capital of Cote d’Ivoire, 20 or so farmers pack onto wooden benches in the shade of cocoa trees to learn about the safe, effective use of fertiliser. Standing beside his brightly coloured flipchart, the trainer, sporting green wellies and an ear-to-ear grin, fires questions at the assembled men (they are all men), members of a 530-strong cooperative. Correct answers are greeted with an enthusiastic chorus of ‘un, deux, trois – CLAP’ and at the end palm wine, milky and slightly acidic with a strangely smoky aftertaste, is poured out of a plastic canister and passed around in a wooden bowl.

The attendees, who had travelled between two and 15 kilometres in the midday heat and humidity for the lesson, say the ‘farmer field school’, funded by Singapore-listed food trader Olam, has made ‘une grande difference’. Their cocoa pods have increased in quality and weight and are fetching a correspondingly higher price (like many a businessperson, they all demur when asked exactly how much higher).

It’s just one of a panoply of initiatives in Cote d’Ivoire that’s trying to solve a problem mirrored in many of the 48 countries in sub-Saharan Africa: how to increase yields. In North America and south-east Asia the ratio of crop yields to their potential output is more than 65%, rising to 90% in east Asia, according to the UN. In sub-Saharan Africa that figure is just 25%.

Training, improved seed varieties and more and better use of agro-chemicals could all boost production. Technoserve, an NGO, estimates less than 10% of cocoa farmers in Cote d’Ivoire, Ghana and Nigeria use fertiliser and most that do, do so incorrectly. But they need loans to buy those commodities. As Jane Karuku, a former Cadbury executive who now sits on the Global Panel on agriculture and food systems for nutrition, puts it: ‘If you don’t have access to finance you will not break that cycle.’

Technoserve (which is so corporate-friendly it even talks the management talk – describing itself as a ‘catalyst for market systems’) has been working with companies including the world’s three biggest cocoa processors, Cargill, Barry Callebaut and Olam, to provide 18,000 smallholder farmers in Ghana, Cote d’Ivoire and Nigeria with a package of training, chemicals and credit. In Cote d’Ivoire, which produces 40% of the world’s cocoa, more than 8,000 farmers have received around $2m of credit in the past five years via cooperatives. That’s made them an average $389 return on investment – not a princely sum, but not to be sniffed at in a country where annual GDP per capita is only $1,500. And the exporters win too, making $3.5m extra profit between them from the scheme, according to Technoserve’s calculations.

This is just one project, in one country, in one crop – and a cash crop at that – so it’s not addressing the vexed question of the region’s food imports. But it indicates that institutions of all stripes have realised that the secret to unlocking African agriculture lies with the roughly 50 million smallholder farmers, whose one to 1.5 hectare plots account for 80% of sub-Saharan African farms, according to Deutsche Bank.

‘We have a reality we can’t wish away in 24 hours or even a year: we still have a lot of smallholders and that is not going to change,’ says Karuku. ‘A cooperative is a very good platform, because you are scaling (smallholders) up. It’s easy for them to access inputs.’

But only 20% of Ivorian cocoa farmers are organised and the figure is even lower in countries such as Nigeria and Ghana. ‘People have to come together genuinely,’ says Divine Chocolate managing director Sophi Tranchell, who has pioneered the model for 16 years – so much so that the Fair Trade company is actually 45% owned by Ghanaian farmers. ‘A combination of business and government could offer more incentives (to form cooperatives) – access to finance for organisations, access to agricultural inputs at a discount.’

Cooperatives are especially suited to cocoa, which Tranchell points out ‘thrives in the shade of the rainforest in a mixed environment’ and so ‘hasn’t leant itself to mechanisation’. But while there is also evidence from as far back as 1962 from Nobel Prize-winning economist Amartya Sen that the smallest farms can actually be the most productive, there are still roles for big commercial farms.

‘Something that’s quite capital intensive like irrigation – that’s where commercial farmers can play a role in pulling small farmers up with them,’ Jessica Antista, who manages Technoserve’s cocoa credit programme, explains. That can include being a hub for a satellite system of small outgrowers.

Water-guzzling rice is certainly a case in point – Africa imports $5.7bn worth and exports just $150m. ‘There’s large, untapped potential to grow rice in Cote d’Ivoire,’ Antista says. ‘Ivorian consumers are actually willing to pay a premium for local rice.’

And despite the practical and environmental challenges of growing it in Africa, it’s not just Cote d’Ivoire that’s hungry for rice. Olam owns a 6,000-hectare plantation in Nigeria, the world’s second largest importer of the grain. It also buys rice from 3,000 surrounding farmers, a number it wants to up to 16,000 by 2018. The rice is then milled on site and sold to the local market. Last July, Olam announced plans to expand the farm to 10,000 hectares taking its total investment there to 18bn Nigerian naira (£60m).

Thousands of miles west in Senegal, the government has pledged to make the country self-sufficient in rice by 2017. Though with imports currently at 700,000 tonnes a year, Dean Jobling, whose 3,500 hectare farm is irrigated partially thanks to a $540m US government investment in the country, thinks that’s unlikely.

‘It will require commercial farming, not only to provide the country in situ but also to be able to export, so they can get the foreign earnings that they so desperately need,’ says Jobling, whose current career is the result of meeting someone who was an expert in biofuels in Senegal at a Sunderland football match in 2008. ‘That land is available to be used,’ he adds, referring to Africa’s uncultivated stock. ‘And with the best will in the world the land needs investment.’

Climate change is making that investment increasingly urgent across much of the region. ‘About 60% of southern Africa is affected by drought every year and 30% very, very severely,’ says Dr Augustine Langyintuo, the president of the African Association of Agricultural Economists. ‘Within sub-Saharan Africa, only about 3% of the cultivated area is irrigated.’

But it’s not just a lack of canals that is letting agriculture down – all infrastructure, from roads to warehousing, is notoriously patchy. ‘Africans easily grow enough food to feed themselves,’ argues Edward George, the head of research at Ecobank. ‘They can’t get it to market – 40% of the crop, sometimes 50%, is wasted. Nigeria produces two million tons of tomatoes, but one million tons rot every year. And it’s the biggest importer in the world of tomato paste.’

From long-term climatic shifts to the short-term practicalities of moving crops from A to B, there are plenty of risks for investors (although, of course, it varies hugely from country to country). For all the pieces of the jigsaw to fall into place, ‘there has to be coordination between the government, the private sector and development funding,’ says George.

Companies without a history on the continent may well be wary about its reputation for instability. But this, again, varies hugely across the region. ‘There is no doubt there are social challenges, there is no doubt that corruption is a problem. There is no doubt actually, bigger than all of this, that capacity building is a big issue,’ says M D Ramesh, Olam’s head in southern and eastern Africa. ‘Most governments in Africa are willing to talk business. And when they don’t know what to do I believe they’ll listen to you and make a framework that supports investment – they just need to be sure that the operator is serious.’

But, equally, investors need to be sure that governments are serious – especially when it comes to the still highly sensitive issue of land ownership. ‘Many countries do not have appropriate policies or laws in place to ensure that these acquisitions take place without taking the rights of the poor farmers or poor people who already own the land,’ says Dr Evelyn Namubiru-Mwaura, a policy officer specialising in land and property rights at the Alliance for a Green Revolution in Africa. For those looking to buy tracts, she advises: ‘You need to be very careful how you structure that agreement – the compensation has to be appropriately calculated, there has to be prior consent.’

Multinationals like to show they take their corporate social responsibility (CSR) seriously these days. American food giant Cargill trumpets its work training 115,000 cocoa farmers in 2,550 farmer field schools in six countries. Olam says it gives some form of direct support to one million of the 3.9 million farmers in its global supply chain, while 350,000 (100,000 in Africa) get a ‘gold package’ covering everything from quality premiums to new schools.

Further up the supply chain, consumer goods conglomerate Unilever has been particularly forthright about its desire to ‘have a positive impact on livelihoods’ and claims to have helped 800,000 smallholder farmers in one way or another (although much of that will be in tandem with the Cargills and Olams of this world).

The obvious riposte is that these projects just scratch the surface of the problem of raising productivity and reducing poverty. Cocoa, for example, is still a touchstone crop, 15 years after the revelation of horrific child labour abuse on farms suddenly made western consumers care about the origin of what they were eating. NGOs including Oxfam and Solidaridad said the estimated 6.6% of a bar’s sale price that reaches a farmer is not enough to live on, in their annual Cocoa Barometer in March. Meanwhile, a recent WWF report claimed the bottom 25% of farmers produce just 10% of cocoa, but could be responsible for up to half of ‘negative impacts’ – deforestation, child labour and the like. CSR initiatives, it argued, go after the most efficient, easiest-to-reach farmers – the ‘low-hanging fruit’.

For ‘your average Ivorian farmer, right now cocoa is not sustainable,’ Antista admits. ‘From the analysis that we’ve done, it’s because the yields are so low.’ The challenge, then, is reaching the innumerable smallholder farmers who aren’t in cooperatives.

But that shouldn’t necessarily detract from what private companies and their partners are already doing. ‘An infrastructure project is not going to be done within six months. In six months I can change the life of a farmer,’ says Karuku. ‘It’s doing all these things in tandem.’

And, as Antista said, there is a corporate rationale pushing to solve these problems, however slowly. Food companies have been spreading up and down the supply chain for a number of years now, much like energy companies that both generate and sell electricity. ‘There are very few companies nowadays that only trade, because the margins are so small,’ says George. ‘If it runs properly a value chain is very virtuous … you don’t have lots of middlemen in the way, who can often unscrupulously bump up the prices.’

Bringing processing into source countries also part of the answer. Raw cashew, for example, is 75% waste, yet in Cote d’Ivoire, the world’s second-largest producer, it has traditionally been shipped to India or Vietnam and then onwards (hence the price of cashews when they get to the west). Olam is the main multinational working in cashew in the country and already has two factories employing 4,500 workers, 90% of whom are women. The country’s Cotton and Cashew Council said last October it wants to increase the proportion processed in country from 5% to 35% by 2019.

It helps that things are quiet on other fronts – Ebola thankfully passed Cote d’Ivoire by, while the scars of its 2000s civil war seem to be fading: no one blinked an eyelid when former first lady Simone Gbago was jailed while I was there for her role in 2010 post-election violence. So if all goes to plan, employment will rise as companies like Olam cut costs by bringing their operations closer together.

The danger is that by continuing to integrate and consolidate, the commodity houses will get too big and become overbearing, but for now at least the trend seems to be a ‘virtuous’ one. Private companies can’t start a green revolution and wipe out rural poverty in sub-Saharan Africa by themselves, but as part of a growing industry that is yet to reach its potential they are increasingly in the vanguard.


This article was originally published in Management Today.