By Wandile Sihlobo, 01 FEBRUARY 2018. This aritcle was orignally posted on BusinessDay.
Last week, I came across an interesting article by US agricultural economist Jayson Lusk, highlighting the disruptive trends in food and agriculture.
Lusk identified six key trends on the horizon, the two most notable being blockchain the technology that facilitates bitcoin trades and could be applied to other industries and online food buying (Amazon might do to food what it has done in other industries).
While I agree with Lusk’s sentiments, Africa’s food and agricultural sectoris still developing and might follow a slightly different trajectory to that of developed economies in the near to medium term. Some of the more pertinent near-term megatrends were identified in a research paper by agricultural economists Lulama Ndibongo-Traub, Felix Yeboah, Ferdinand Meyer and Thomas Jayne.
- The youth bulge, which speaks to the fact that 45% of sub-Saharan Africa’s population is below the age of 15 and over the next two decades will be looking for employment, which will potentially be in the agricultural sector.
- Climate change and the management of environmental risks. The exact effects of climate change are still uncertain and are likely to vary across various regions, but two general predictions are that much of Africa will experience greater variability in rainfall and a rise in temperatures. This, naturally, would have an effect on agricultural production and possibly cause a drop in crop production. This would inevitably alter the geographical spread of crops, and affect horticulture and animal production. While other sectors of the economy may experience a greater focus on climate change mitigation, agriculture will need to focus on climate change adaptability.
- Telecommunications revolution. There is likely to be continued growth in Africans use of mobile banking and software-based provision of information and services.
I concur with all the aforementioned trends, and would add a few others I believe will also underpin the food andagricultural sector in the medium to long term, particularly for Africa:
- Infrastructure. Although the South African agricultural sector is arguably one of the most advanced on the continent, there is still room for improvement. This is particularly evident in communal areas. Therefore, the subject of infrastructure and technological advancement will remain a key focus for commercial and smallholder farmers across the continent.
- Technology. There are already clear examples of this through precision farming, big data, drones, satellites and other methods. Moreover, the climate change challenge could lead to further developments in seed breeding in an effort to find seeds that would adapt best to erratic rainfall.
- Demographics. Africans are urbanising, which means more people will be getting their daily foods from retailers instead of producing it themselves. This is an opportunity for agribusinesses to expand their share in the retail space to meet the needs of urban consumers.
Overall, the agricultural sector will need to adapt to the challenges posed by climate change, technology, infrastructure and proactive social and environmental sustainability initiatives.
The sectors will need to become more agile and innovative to take advantage of the opportunities provided by the urbanising demographic of the African continent and labour supply.
The need for innovation and agility will only become more imperative for the continent, as its tracts of land will be expected to not only feed Africa but also to contribute more to the food security of the growing global population.
Wandile Sihlobo (@WandileSihlobo) is the Head of Economic and Agribusiness Research at the Agricultural Business Chamber.