Forum warns of severe finance gap in African agriculture

The African Green Revolution Forum (AGRF) has warned that a Green Revolution cannot materialise in Africa without a major concerted effort to secure financing for agricultural production.

The Forum, which brought together over 200 delegates from across Africa and internationally, focused on the critical role to be played by public-private partnerships and inclusive business models in the development of Africa’s agriculture.

The Forum heard that the global gap in finance for agriculture stands at $450 billion, an issue that is more acute in Africa than anywhere else. Evidence shows that only 10 percent of African smallholder farmers have access to the financing they need to expand their production and raise their income.

Irungu Houghton, convenor of the AGRF, said: “Throughout the African continent, we are witnessing successful partnerships between the private and public sectors and smallholder farmers. But these partnerships are still too rare. We will only be able to transform Africa’s agriculture, and alleviate food insecurity and poverty, if smallholders have the funds to boost their crop yields and expand their business.”

Dyborn Chibonga, CEO, National Association of Smallholder Farmers of Malawi, said: “Some African governments have gone some way towards addressing affordability and accessibility of production inputs, but challenges still persist. Each and every year smallholder farmers are pulled into a downward spiral of taking out high-interest loans in order to buy farming inputs for the following season. Without access to credit, smallholders cannot raise productivity.”

The AGRF committed to focus over the next year on a number of priority actions, including:

•Ensuring that rising revenues from extractives industries are invested into the development of agriculture

•Reducing corruption in public-private partnerships and designing business ventures that are transparent, environmentally and socially responsible

•Building the capacity of farmers’ associations, finance institutions and agribusiness agencies to work together

•Encouraging governments to offer tax incentives and make preferential procurement choices for companies that source from smallholder farmers

•Developing inclusive financial models that combine incentives, reduce debt risk and promote longer-term agribusiness models

•Combining incentives, reducing debt risk and promoting longer-term agribusiness models

Antonio Limbau, deputy minister of agriculture for Mozambique, who formally closed the AGRF, said: “We are honoured and pleased to have hosted this important forum in Mozambique 10 years after the Maputo Declaration. This forum was a valuable opportunity to discuss practical steps to strengthen capacity and extend the use of modern technology to increase productivity.”

Jane Karuku, president, Alliance for a Green Revolution in Africa (AGRA), a partner in the AGRF, said: “2014 is a critical year for agriculture, when African governments will be setting investment targets and plans to develop agriculture over the coming decade. The African Union has recognised this crucial moment and designated 2014 as the Year for Food Security and Agriculture. We are delighted to announce that next year’s AGRF will be co-hosted with the African Union in Addis Ababa in September 2014.”

By: OLUYINKA ALAWODE