Private Sector Forum on African Agricultural Development

During the High-Level Conference on World Food Security, held 3-5 June 2008, Mr. Kofi A. Annan, chaired a Private Sector Forum that sought concrete action from industry to help ensure food security and spur African agricultural development. The United Nation’s Food and Agriculture Organization convened the Forum, which included leaders of the seed, feed and fertilizer industries and the Alliance for a Green Revolution in Africa (AGRA), along with Bill & Melinda Gates Foundation. The private Forum was followed by a public Press Briefing. 

In his opening remarks to the Private Sector Forum, Mr. Annan noted that, “The opportunities for public-private partnerships to advance African food security have never been stronger…. When the private sector allies with governments and civil society and focuses on solutions to the long-term causes of hunger and malnutrition, today’s emergency will be tomorrow’s triumph.”

The senior industry executives recognized that agriculture is back on national and global development agendas, and that increasing agricultural productivity in Africa, where cereal yields are one-quarter the global average, is key to ensuring global food security.

Dr. Akin Adesina, Vice President of Policy and Partnerships for AGRA noted that the Private Sector Forum “generated a full realization among participants that we must quickly put in place medium- and long-term measures needed to raise agricultural productivity… . We all agree on the need for public-private partnerships. Governments can’t do it alone. Industry can’t do it alone. Every effort should be made to encourage productive collaboration.”

An important part of this equation, Adesina stressed, is the adoption of pro-poor, pro-agriculture policies. AGRA, for example, is supporting policies that give smallholder farmers the support they need – including access to affordable financing and “smart subsidies,” vouchers distributed by the government through the private sector to get improved seeds and fertilizers into farmers’ hands.

Longer-term policy issues discussed included national and global trade regulations, national seed regulation, and increased support for agricultural research and development (R&D).

Representatives from each of the three industries outlined what they could do to improve food security, both now and over the long-run.

Following are a number of the key points made panellists at the forum and briefing.

Mr. Marcel Burins, Secretary-General, International Seed Federation “Seed is the start of everything,” said Burins. He noted that it takes seeds to produce food for humans, feed for animals, and fiber. A good seed industry is needed in countries with high levels of malnutrition. Comparing world maps of ISF membership and of global malnutrition, he showed that countries with the highest malnutrition lack seed industries and strong seed regulatory systems. “For a good continuous flow of high quality varieties, you need good seed industry.”

Burins urged that opportunities be created for young people to study plant sciences and that public-private partnerships develop “cooperatative seed action plans” in developing countries. He urged that seed donations be done in ways that do not harm the local seed industry, and noted the need for policies that facilitate, rather than block, the privatization of the seed industry. He urged the establishment of regulatory structures to evaluate and approve new seed technologies.

To address the current food crisis, Bruins said that the ISF is engaged in ongoing public-private partnerships, including with the US Agency for International Development and the Bill & Melinda Gates Foundation. He noted that the seed sector will continue to do what it does best: focus on making better adapted varieties, including disease- and drought-resistant crop varieties.

Thorleif Enger, CEO of YARA and President of the International Fertilizer Industry Association (IFA).

Enger said that the fertilizer industry stands ready to contribute to an immediate response to the food crisis, whether that is in food aid or financial donations. “If it is a question of farmers needing fertilizer, fertilizer can be donated. But that’s one-off situation,” Enger said. “In the long-term…we need agricultural research, we need to reinstate extension services so that farmers learn how to better use inputs.”

Enger said that the IFIA is now concentrating on what can be done in the medium-term, over the next five years.

Pointing out the huge variation in the farm-gate cost of fertilizer, Enger noted that there is ample opportunity to reduce the cost of fertilizer by reducing its transaction costs, such as the cost of transport. In Thailand, transaction costs accounted for 19 percent of the price of fertilizer; in Tanzania they were 50 percent, and in land-locked Mali they were 85 percent. 

To reduce such transaction costs the IFA proposes to develop “agricultural supply corridors,” including one which it is spearheading in Dar Es Salam. The corridors will promote efficient use of ports, and coordinate regional development of railroads, roads and storage facilities, as well as developing supplies of affordable credit. “This is where we see the potential for public-private partnerships, so that together we can slash that tremendous cost to the farmer,” said Enger, adding that the IFA will work to develop one such corridor in Dar es Salaam.

In addition, the association is committed to working with farmers to make sure they get the information they need to make better use of fertilizers, so that they can increase yields and increase fertilizer-use efficiency in ways that are environmentally sound.

Fred Stephens, President, International Feed Industry Federation (IFIF) Global grain production for animal feed is estimated to be 900 million tonnes. Meat demand is increasing, and the key drivers of this increase are the growth of the global population and of per capita income, particularly in the emerging economies of China and India, Stephens said. He noted that in the last 15 years, the demand for meat in China has tripled, and that emerging market food demand has increased nearly 45 percent since 2001.

Stephens also noted that “index commodity speculation” is an important contributor to rising prices. The investment value in commodity futures has risen from US$25 billion to US$260 billion in the past five years contributing to rising commodity prices.

Stephens said that the feed industry is focusing on three primary areas to help resolve the global food crisis, which he summarized as PET: Policy, Education and Technology.

Regarding the first, “To continue to provide abundant and efficient wholesome meat protein, we need to review… government policy as it relates to trade barriers that can put up impediments against the transfer of ingredients and of finished food,” Stephens said.

He noted that the Feed industry is collaborating with the FAO to provide educational expertise from developed country feed industry members to those in emerging countries. Stephens emphasized the importance of increased investments in agricultural R&D, especially in genetics and nutrition, not excluding GMO-technology. He said that the resolution of the current global food crisis requires a decisive technological “jump.”

Prabhu Pingali, Deputy Director, Agricultural Development, The Bill & Melinda Gates Foundation.

Pingali summarized both the short-term and the longer-term work of the foundation in agricultural development. Regarding the global food crisis, “If immediate action is not taken, progress toward achieving the Millennium Development Goals for hunger and poverty reduction will be delayed,” Pingali said.

He noted that in the short-term, the foundation is finding ways to infuse food aid into areas with significant food insecurity and is encouraging communities to take the steps needed to immediately increase poor farmers’ access to fertilizer. Pingali noted that the price of fertilizer has increased even faster than that of food. “Unless we address the fertilizer problem, we will not see the rapid increase in productivity that is needed in the next 12-15 months,” he said.

“To increase fertilizer availability and significantly lower cost, the foundation is encouraging countries to band together to purchase fertilizer in bulk,” Pingali said. Once fertilizer is more available, the next issue is improving access at the farm level, including through the targeted use of subsidized input voucher schemes.

“Our partners, particularly AGRA, are very involved in looking at ways to improve access to fertilizer at the farm level and to improve overall procurement efficiency for fertilizer,” he said.

Gates Foundation investments aim to significantly enhance agricultural productivity in Africa and use this as an engine for poverty reduction and economic growth.

“Our overall agricultural grant portfolio for the last two years is in the order of US$800 million, much of it in Sub-Saharan Africa, in the areas of crop improvement, livestock systems, better market systems, connecting farmers to markets through value chain improvements,” as well as on better policies and data systems. “Our objective is to help our partners in Sub-Saharan Africa achieve enhanced productivity growth,” Pingali said.

He emphasized that while the foundation is providing support for agricultural development, “We need substantial complimentary investments in terms of infrastructure, roads and transport, and irrigation systems. Looking ahead, a lot needs to be done through multilateral and bilateral partnerships.”

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About the Alliance for a Green Revolution in Africa (AGRA)
AGRA is a dynamic partnership working across the African continent to help millions of small-scale farmers and their families lift themselves out of poverty and hunger. AGRA programmes develop practical solutions to significantly boost farm productivity and incomes for the poor while safeguarding the environment. AGRA advocates for policies that support its work across all key aspects of the African agricultural value chain ­from seeds, soil health and water to markets and agricultural education.

AGRA's Board of Directors is chaired by Kofi A Annan, former Secretary-General of the United Nations. Dr Namanga Ngongi, former Deputy Executive Director of the World Food Programme, is AGRA's president. With support from The Rockefeller Foundation, the Bill & Melinda Gates Foundation, the UK's Department for International Development and other donors, AGRA works across sub-Saharan Africa and maintains offices in Nairobi, Kenya, and Accra, Ghana.