Africa’s agricultural sector faces up to Covid-19 crisis
Along the tarmacked border separating Kenya and Tanzania, hundreds of trucks filled with perishable food sit in the heat. At the roadside, drivers lounge on cardboard mats in patches of shade for up to a week as swabs are sent to Nairobi for coronavirus testing. By the time drivers complete their journeys, much of their cargo is putrid, and with many planes grounded, Kenyans are seeing price hikes on supermarket shelves.
That is just one of Africa’s 110 borders. The blockage offers a glimpse into the devastation the Covid-19 pandemic is beginning to wreak on the continent’s agricultural sector, which provides a livelihood to 60% of the continent’s workers.
The virus and its lockdowns affect African farmers, agribusinesses and SMEs, as well as consumers and government departments involved in the sector, which together comprise 23% of continental GDP. In various countries, however, the picture was already less than rosy before the pandemic hit, with 650m people facing food insecurity.
For the optimist, the question arises: could the coronavirus turmoil present an opportunity to reimagine food security and build resilience for the future?
Ever adaptable, African farmers have begun to experiment with apps and new technologies. Meanwhile, policymakers and relief organisations are refocusing on food production and provision. Pioneering policymakers are prioritising food security and shifting to clean energy sources, such as hydroelectric and solar.
When it comes to agriculture, “Covid-19 appears not to have caused, so far, as terrible a collapse as it might have done,” says Christopher Cramer, a professor at SOAS, University of London. “Some parts of East Africa, West Africa and very much of South Africa went into the pandemic on the back of harvests that were much better than in the past few years.”
Strong agricultural output in many major growing regions followed years of drought. In South Africa, for instance, maize production in 2020 is expected to be more than 30% higher than in previous years. All across the continent, many planting seasons were drawing to a close when the pandemic escalated in March, sparing farmers from the coming price fluctuations in agricultural inputs.
Experts are quick to point out that African food production and supply have risen steadily since the 1960s, despite doom and gloom predictions, particularly in countries such as Malawi, Ethiopia and Ghana. And yet the industry has struggled in Zimbabwe and grown sluggishly in the likes of Senegal and Côte d’Ivoire.
Meanwhile, certain agricultural regions were already in trouble when pandemic fears locked them down, principally East Africa, which is facing floods and a locust infestation of proportions not seen in 70 years. In Zimbabwe and Mozambique, rainfall in late 2019 was uncharacteristically light, while conflict in Nigeria, South Sudan and the arid Sahel have compounded food insecurity. And with commodity prices falling earlier this year, growers of vital crops such as cocoa and coffee are edging towards disaster.
Still, in many regions, the pre-existing agricultural tailwinds have been just enough to sustain agriculture sectors in the face of these challenges and the coronavirus.
On 28 February, an Italian man who works in Nigeria became sub-Saharan Africa’s first official Covid-19 case. Since then, Africa as a whole has recorded more than 860,000 cases, while many more will go unreported. While numbers are mounting, this is not yet the devastating outbreak many feared.
And yet an upsurge would lay bare the continent’s weak healthcare systems – Nigeria, Africa’s largest economy, has just 450 ventilators for a population of 200m – and direct attention away from security challenges in conflict-prone areas. The prospect of a food crisis, however, has garnered less attention. And yet, Africa is a net food importer to the tune of around $47bn annually and is now facing border closures worldwide.
Supply chain issues
“The first impact was on flower farmers in East Africa, who saw demand from European markets essentially collapse,” says François Conradie, senior political economist at NKC African Economics. “Supply chain issues have also been relevant as imported inputs have become harder to come by.”
For smallholder farmers across the region, seeds, fertiliser, animal feed and crop protection instruments upon which they rely to maximise yields have become scarce, or substantially more expensive, hindering production of widely-consumed crops such as rice and maize, as well as Ethiopian coffee, Kenyan horticulture and Ghanaian pineapples.
Many agricultural SMEs have been forced to downsize or fold as food has rotted on farms or in trucks, causing job losses, food insecurity and poverty. Meanwhile, lockdowns have sucked the life out of the informal sector, the primary source of employment in sub-Saharan Africa.
According to World Bank data, 70% of Nigerian households have seen their income fall, with volatility highest in rural areas where farming usually pays the bills.
Between late April and early June, Precision Agriculture for Development (PAD), a Boston-based non-profit, surveyed nearly 1,500 Kenyan farmers and agri-dealers. Eight in 10 agri-dealers reported a decrease in farmer footfall, and 76% reported lower sales compared to a month earlier.
Farmers, meanwhile, said the price of inputs had risen, and 55% said they had been forced to borrow money in the preceding month to cover living expenses. That stops them making important investments for the next harvest.
But the impact on farmers and pastoralists, who cannot move freely under lockdown rules, is only half the story. Export cuts – due to reduced global airfreight, collapsed demand from European, Asian and US markets and smaller agricultural outputs – could cause inflation, which in turn could depreciate African currencies. And most African nations have considerable external debt stocks, paid in US dollars.
“Governments find themselves having to spend more to cope with the pandemic at the same time as these economic problems result in lower tax revenues, so they borrow more,” says Conradie. “In the long term this is going to crowd out productive investment spending and even some crucial spending on social safety nets.”
The implication of a farming crisis is a long-term hit to already vulnerable African economies and less food for a continent whose population is set to double in the next 30 years. That is why governments and institutions across the continent must act now.
“States cannot rely easily on foreign investment or aid – they need to build resilient export sectors and to take a national role in promoting change,” says Professor Cramer. “Spending on public agricultural R&D needs to rise, investment in irrigation needs to rise.”
The African Development Bank has launched the Feed Africa Response to Covid-19 (Farec), which has earmarked $10bn to support governments, smallholders and the private sector. Importantly, it emphasises sustainable growth in food production and distribution, and has already supported around two dozen countries, creating “green corridors” to move agricultural products and handing out loans.
Meanwhile, agribusinesses themselves have pleaded with governments to encourage cargo flights, through tax incentives, fuel subsidies and landing charge waivers. In Kenya, international cargo flights have slowly picked up, albeit at twice the price per kilo compared to the start of the year.
Farmers, too, continue to employ novel solutions, many of them digital, to safeguard their agricultural incomes. PAD produces digital tools to advise farmers on what to plant and when, as well as what equipment to use to safeguard their crops. “Overall, 98% of agro-dealers reported communicating with suppliers via mobile phone, and 70% reported receiving messages from farmers about inputs at least once a day,” says Sam Strimling, a research associate at PAD. Meanwhile, a collaboration between the UN’s Food and Agriculture Organisation and Penn State University is allowing East African farmers to pinpoint locust swarm locations for pesticide spraying.
“Financial challenges experienced and anticipated by farmers as a result of the pandemic were somewhat mitigated by optimism about forthcoming harvests,” says Emmanuel Bakirdjian, Africa regional manager at PAD, “with 52% of farmers expecting a more bountiful harvest than the previous year.”
The depreciation of African currencies, while a challenge at a governmental level, could actually make life easier for farmers once freight picks up again, by making local currency incomes higher for exporters and putting more money in their pockets to purchase inputs domestically.
“To make the most of the opportunity, we would need to see more willingness from protectionist governments to tolerate currency weakness, and from governments generally to focus on the improvements in the business and investment environments,” says Conradie. In the past, countries such as Nigeria have been reluctant to float their currencies, instead opting for dollar pegs.
Still, there is plenty more to be done and the lower-than-expected spread of Covid-19 in Africa should not breed complacency.
Hopes for the continent’s vaunted green revolution, built on rising agricultural production over the past half-century, are not dead. But governments must invest in irrigation, encourage a shift towards digitisation, support smallholder farmers with loans and act now to limit the long-term economic consequences of the coronavirus pandemic, before it is too late.
Source: African Business Magazine