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Agribusiness and Development

Agribusiness and Development. How investment in the African agro-food sector can help support development. Africa and the world. Africa is changing, including agriculture Stable macro-economy (exchange rate, inflation), economic freedom.

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Agribusiness and Development

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  1. Agribusiness and Development How investment in the African agro-food sector can help support development

  2. Africa and the world • Africa is changing, including agriculture • Stable macro-economy (exchange rate, inflation), economic freedom. • Africa as (last?) frontier market. Interest financial markets. • Food and nutrition insecurity; poverty.

  3. Global context • Food crisis of 2007-2008. High demand; high prices • Lasting competition for resources (land, water) • Global demand for food: 9 billion by 2050 • Question: who will produce our food in 2050? • 95% of all agricultural holdings are small farmers.

  4. Development policy • Current growth in Africa: capital intensive; insufficiently addressing poverty • Agriculture is labour intensive; reaches remote rural areas; 65% of people are working in agriculture • Investment in agricultural smallholders: greatest return in terms of poverty reduction and growth.

  5. Global movements • Consensus: Private enterprises are engine of growth. • G8 New Alliance 2012 /WEF-AU Grow Africa 2011 • CAADP – Comprehensive Africa Agriculture Development Programme/Grow Africa • New EU development policy: Agenda for Change.

  6. Global movements – companies • Corporate sustainability • UN Global Compact on ESG sustainability reporting • Voluntary commitments from private sector.

  7. Agenda for Change • Support development of competitive private sector • Increased investment in agriculture • New ways of engaging with the private sector; PPPs, risk-sharing, blending of grants and loans • Focus on sustainability, inclusiveness, smallholders, producer groups, rural livelihoods, value chains, food and nutrition security

  8. Lessons from the past • Too much focus on farmers/producers in isolation. • Now: value chain approach (downstream supply; upstream transport, processing, marketing) • Good experiences: contract farming; out growers. • Finding market based solutions; demand driven; bringing the market to the farmers.

  9. EU objectives • Structural transformation, integration into the market economy. • Developing a competitive and sustainable agribusiness, with focus on agri-food chain • Sustainable and inclusive growth. Food and nutrition security

  10. EU Investment in agriculture • Approximately € 6.8 billion (2007-2012) Different instruments: • National, Regional, Intra-ACP (2008-2013), part of € 23 billion EDF • Food Security Thematic Programme (2007-2013) € 185 million, DCI • Food Facility(2009-2011) 1 billion, EDF • Banana and SugarAccompanyingmeasures(2006-2013 € 1.4 billion), DCI • Specific Initiatives on Horn of Africa (SHARE) and Sahel (AGIR)

  11. Some actions • increasing productivity at farm level; • empowering farmers' organisations and involving them in strategic partnerships; • research, technology, innovation; • access to credit; reduction of risk; • public investments in rural infrastructure; access to energy and water; • market information systems • Land tenure

  12. Some actions • Land governance: VGGT, responsible agriculture investment • Risk reduction: insurance • Investment/blending: African Agriculture Fund, equity funds • Direct support: PIP, BTSF, STDF

  13. Regional integration • To increase trade and investment; foster peace and stability. • Low intra-regional trade in Africa. • Facilitation of cross-border trade. • Big impact on food security and agriculture development

  14. Thank you!

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