About PPAI

1) How do you see the agriculture production and more importantly agribusiness industries underpinning economic growth in Africa?

Statistics indicate that 80% of Africans are involved in agriculture. Smallholder farmers, principally in rural areas, make up a large portion of the often noted “80%.”  The CAADP shifts efforts from a singular focus on production agriculture to investment, infrastructure, and building institutions that are critical in enabling markets to coordinate supply and demand.  Application of the value-chain framework, and the focus on Regional Economic Communities (RECs) are instrumental to harnessing the additional economic bounce from economies of scale and size.

The value-chain strategy offers the opportunity for farmers and other food value-chain stakeholders to apply knowledge and pool risk, to improve product quality consistency, and to reduce volatility in the food supply for unmet consumer demand.

2) Considering the subsidies that are given for agricultural production in many G8 countries, how can African farmers compete in globalized markets?

Subsidies in G8 countries are components of an integrated agriculture commodity, commerce, international trade, and domestic regulatory strategy that historically was centered on domestic food security.  This is very different from the segmented framework between agricultural production, marketing, and trade that development agents have advocated.

The best chance for African farmers to compete in a commoditized, global economy, is to become integrated in the CAADP strategy and the underpinning value-chain and intra-Africa regional trade focuses.  Finance products that pool risk and rely on the reinforcing nature of value-chains are pivotal—especially in rural areas.  Farm level competitiveness in Africa needs to be enhanced by simultaneous investments in infrastructure and other mechanisms to link demand to production.

3) What are the investment opportunities available to U.S. businesses in African agribusiness?

Historically, the link between U.S. and African agribusiness has been disaster relief.  The ability of the U.S. agricultural system to fill grain gaps at times of acute human need is important.  However, today the U.S. opportunity in Africa’s agribusiness lies in investment in agricultural transforming technology, financing, and consumer marketing.  Investing know-how embedded in the U.S. agriculture value-chain and financial capital in Africa, brings commercial and social returns into reach.

4) Is there a market for African agricultural-based products in the U.S.?

The markets in the U.S. where Africa’s agriculture-based products can compete are in niche areas, such as organic foods, where U.S. consumers are willing to pay for the transportation costs for certified products, especially for highly perishable vegetable products.  Another niche market in the U.S. for Africa’s natural resources is the high margin and growing cosmetics industry. The highly competitive U.S. alcoholic beverage market continues to appreciate uniquely African wines, such as Pinotage, and ‘old world’ wines from Africa.  Note that hides, a by-product of organized beef cattle value-chains in Africa, are raw material of the leather goods industry.

U.S. niche markets are important, but principally as a component of a portfolio of markets for Africa’s agriculture-based products. Niche markets offer opportunities for initially low volumes and high margins, that will decline unexpectedly with shifts in U.S. consumer preferences, their willingness to pay, and/or changes in U.S. importing policy. Local/regional markets in Africa, and the closer proximity to consumers, offers opportunities for higher volumes and lower margins. A key advantage of local/regional markets is reduced vulnerability to dramatic shifts in consumer tastes and preferences. Coherent, complementing marketing, investment, and trade policies are required for either the niche export, or the regional demand strategies to deliver economic growth in Africa.

5) How can CCA members and other private sector companies get involved in the new Agribusiness Initiatives Program?

CCA member involvement in the Agribusiness Initiatives Program is pivotal to implementing tactics for partnering with Africa’s private sector for investment in new projects, as well as scaling-up/scaling-out pilot projects that are typically funded by the CGIAR3 and G8-headquartered philanthropic organizations. As such, CCA members are invited to join any of the committees of the CCA Agribusiness Task Force. (The committees are: Branding, Membership Recruitment, Agriculture and Business Policy & Industry Development, and Conferences & Summit.)

6) Any other thoughts/remarks?

CCA’s Agribusiness Initiatives Program can partner in catalyzing Africa’s economic growth by working with Africa’s private sector and Regional Economic Communities (RECs), on sound implementation of the CAADP. It is an opportunity that is timely for U.S. and other G8 headquartered companies because of almost stagnant growth in their mature, home markets. Africa’s emerging markets are gearing-up for increasing investment in existing food industries, where a beehive of innovation activity by African entrepreneurs is on-going, and financial capital markets that are increasingly accessible to more Africans through public offerings associated with privatization programs. It is this combination of diverse markets that makes CCA’s Agribusiness Initiatives Program the conduit for positive change in the U.S. and in Africa.