The country can significantly maximise benefits under the African Continental Free Trade Area (AfCFTA) by promoting activities of agricultural aggregators – Professor Felix Asante, Pro-Vice Chancellor for Research, Innovation and Development-University of Ghana, has advocated.
The country’s agriculture is predominantly small-scale in nature, with more than 60 percent of local food production coming from smallholder farmers. Despite this, farmers continue to face daunting challenges – ranging from lack of standards; lack of access to credit, machinery, among others, due to their smallholder nature.
However, to enable farmers overcome these challenges and take advantage of the AfCFTA arrangement, Prof. Asante is calling for efforts to promote aggregators – agricultural businesses or cooperatives of growers who consolidate and distribute agricultural products.
Prof. Asante, an agriculture economist, said because aggregators are typically proper businesspersons, they can considerably correct some of these weaknesses in the sector. If done properly, he said, the aggregator approach could set agriculture on the way to becoming one of the country’s strategic sectors under AfCFTA.
“An aggregator sets the standards for what the export market demands, the time for when the produce should be ready, and is responsible for tackling the bureaucracy in export. Till we do that, it will be very difficult to take advantage of the AfCFTA because of the type of agriculture and businesses we have here,” Prof. Asante explained.
He spoke to B&FT in Accra during an event organised by the Private Enterprise Federation (PEF) to sensitise the private sector on AfCFTA, where he said aggregation will also help ease the difficulties faced by smallholder farmers in accessing local and international markets and inputs.
“I expect that the aggregator will be more of the businessman, take on those responsibilities and try and link whoever is producing to a credit facility. Certainly, PEF can help with that by creating the environment for aggregators to secure funds, because the smallholder farmer or business owner cannot do so by themselves; he or she needs somebody to get to the bank, and this is where the aggregator steps in,” he further noted.
Need for agriculture support systems
For his part, PEF’s Chief Executive Officer, Dr. Nana Osei Bonsu, emphasised the need for support systems to boost agricultural production and value addition.
“If Africa, which possesses 60 percent of the world’s uncultivated arable land, intensified its agricultural productivity, it could produce two to three times more cereals and grains – with similar increases in horticulture crops and livestock.
“However, the region has been a net importer of basic food products for over two decades, which is likely to worsen in the short-term due to the COVID-19 crisis. It is here that the AfCFTA becomes crucial,” he stated.
Dr. Bonsu meanwhile advised that AfCFTA members must prioritise areas where they have competitive and comparative advantage in order to create healthy trade practices.
“Agriculture is a major economic sector for Africa, and generates around US$100 billion or 15 percent of the continental GDP annually. Although its contribution to GDP tends to vary widely from one country to another, ranging from just over 2 percent in South Africa to 35 percent in Mali, agriculture remains a critical sector for the continent in terms of employment, food security and to some extent, exports,” he further said.