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3 Value Chains

In Africa there has been increased attention to – and political support for – developing food value chains. Notably, the AU and the Economic Commission for Africa (ECA) devoted their joint, influential publication on African economic development, the Economic Report on Africa 2009, to value chains.[1]

Pointing to the dominant role of agriculture in African economies, one of the report's main conclusions is the need for “innovative programs for strengthening the linkages between agriculture and other sectors and for promoting agricultural value chains and markets and national and regional levels.” African countries, the two key institutions argue, need to form strategic partnerships through regional value chains that enhance investment, trade, marketing, and food security. They add that, in particular, such value chains could promote public-private partnerships

– nationally and regionally – to capture the economies of scale and complementarities of diverse resource endowments.

Partnerships are also seen as key to strengthening value chains. In his keynote speech to the African Green Revolution Forum (AGRF)[2] in Accra in September 2010,[3] Kofi Annan, in his capacity as Chairman of the Alliance for a Green Revolution in Africa (AGRA), stressed that “African agriculture must take a quantum leap forward,” and that financing – and access to finances for the smallholder farmer – is needed. This, Annan argued, “all amounts to change across the value chain,” emphasizing that, “partnerships are crucial to success”. Underlining the key role of Mr. Annan in the development of the African continent, he also chairs the Africa Progress Panel,[4] which has devoted attention to how business can contribute to development. He argues that the agricultural value chain is key to the development of Africa, citing the agricultural growth corridor concept as a leading example. He argues that greater African participation across the value chain must be secured if sustained economic growth is to be achieved. Following up on its World Development Report 2008 on agriculture, the World Bank in its 2011 strategy document entitled Africa's Future emphasizes the role of agriculture, and that strategic implementation rests on leveraging partnerships, promoting catalytic mechanisms and supporting PPPs.[5]

Concerns have been raised about the possible exclusion of smallholders. Studies of value chains from several continents, including Africa, show that this does not need to be the case, and is not a general feature.[6] Not only are smallholders included in value chains, they are increasingly a part of food retail markets, supplying supermarkets, directly or indirectly. With growing urbanization and affluence, this is a largely untapped potential in Africa. Within the context of the agricultural growth corridors in Africa, the role of smallholders has been given particular attention. Forging greater linkages between modern agribusinesses and smallholder farmers and their communities is considered one of the best ways of contributing to inclusive economic growth on the continent.

The report from the AU and the ECA points out that regional value chains and markets for strategic commodities would not only increase competitiveness of agriculture at the farm level, but also trigger the development of agro-processing and agribusiness ventures at the regional level. This is part of the approach of the agricultural growth corridors, which focus on the local level with an emphasis on smallholders – within a broader, national and regional, framework including a number of sectors, not least the financial.

  • [1] AU/ECA, “Developing African Agriculture Through Regional Value Chains”, 2009.
  • [2] The AGRF was the successor to the Oslo series of African Green Revolution conferences, 2006–2008, a private sector-led initiative drawing participants from key stakeholders under the theme “Investing in African Agriculture”.
  • [3] Kofi Annan, Africa's Green Revolution Forum: Initiating a Quantum Leap Forward, Accra, 2010.
  • [4] The APP was originally formed as a group of eminent persons following up on the commitments made at and after the G8 summit at Gleneagles and the UNK Commission for Africa in 2007.
  • [5] World Bank, “Africa's Future and the World Bank's Support to It”, (2011) is the bank's new strategy for supporting Africa's development.
  • [6] Swinnen and Maertens, “Finance Through Food and Commodity Value Chains in a Globalized Economy”, in this volume, 2013.
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