SACAU Newsletter, September 2017

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The Spanish experience of farmers’ cooperatives


Cooperatives, if well-run are an important vehicle to provide meaningful and critical services to farmers. During a recent visit to Spain, SACAU visited three cooperatives in the Island of Majorca. Two of these were primary cooperatives that provide services directly to farmers, and the third was a secondary cooperative involved in the processing and marketing of almonds. In all instances, the value that the cooperatives offer to members was clear.

One of the two primary cooperatives alluded to the importance of cooperatives in the vibrancy of their community. This particular cooperative, which processes olives and citrus, shared that it lost members a few years ago but stated that they are now re-joining after realising/recognising the value of belonging to such a structure. A notable observation in this cooperative was the degree of professionalism that goes towards its operations and management, and innovation to their products and services. Working with the local university, they are conducting studies to determine and con rm unique features of their citrus which they can use to differentiate the produce from the rest for marketing purposes amongst other issues. They also run a tourist information centre which facilitates tours of farms in the area and offers cooking lessons using local produce.

The second primary cooperative, whose annual turnover is Euro 2m does not pay dividends to members. Instead, the funds go into an internal fund to nance investments of the cooperative. However, their members get discounts on their purchases in the cooperative store and fuel station which are then paid out at the end of the year.

From this, it is obvious that to be relevant, cooperatives need to constantly look for opportunities to innovate and cultivate their ability to turn challenges into opportunities.


Farmers must harness strategic role in PPPs


Farmers should ensure they are well positioned to play a pivotal role in Public Private Partnerships (PPPs) which will drive the agro-based Fourth Industrial Revolution, said SACAU CEO Ishmael Sunga.

Mr Sunga was addressing the 47th Brussels Briefing in February on the issue of “Involvement of farmers in PPPs: a practical example and perspectives.” He noted that the sector needed to develop a strategy which would maximise the “great potential for PPPs, including the involvement of local companies. We need practical mechanisms to ensure fairness and equity in the sharing of risk and return in PPPs.”

Mr Sunga said farmers needed to be supported to initiate PPPs on their own terms while farmer organisations (FOs), in turn, needed support to develop commercially and trade related capabilities. “We should establish a development facility for farmers’ engagement in PPPs, including investment in the higher value low risk segments of the value chain,” said Mr Sunga.

“We must use PPPs to drive the development of a younger generation of farmers,” he said.

The multi-dimensional nature of agricultural development positioned it for PPPs. “Commercialisation is a key driver of agricultural transformation. However, fragmentation and broken value chains are key impediments to the commercialisation of smallholder farmers,” said Mr Sunga.

He added that “PPPs might offer a solution to smallholder commercialisation.” SACAU has been involved in both the concept, design and implementation of PPP configurations. One example is the Value Chain Initiative (VCI). The VCI, a value chain-based cooperation to unlock value for all actors with financing based on the strength of the chain, was hosted and facilitated by SACAU.  The guiding principle was that risk was shared by all and profit was to be taken by everyone after marketing. “No one should walk away and leave farmers on their own,” said Mr Sunga.

Detailed implementation arrangements were important in the VCI programme. The roles and responsibilities of each partner were agreed in advance and an MOU was signed. About 67 farmers participated in the programme which secured a US$1.4m production loan with pre-financing of US$423,000 for inputs and services prior to the loan approval.

The programme saw productivity over the estimated 2000 hectares increase by more than 200% and gave the participating farmers enhanced access to finance. Other results included increased access to expert technical advice, services and extension as well as access to structured markets. The gross value created was in excess of US$3million.

Mr Sunga said PPPs could be an effective vehicle for smallholder development which is currently underutilised. “PPPs are effective in de-risking production, marketing and of financing smallholder agriculture,” said Mr Sunga. “The current narrative of such programmes are currently focused on global companies and the involvement of local agribusiness is overlooked. Because of this, farmers are missing out on the value they can derive from such partnerships,” he said.

Mr Sunga said trade benefits were not flowing back to farmers due to the imbalances in the governance of value chains.  “Farmers are rarely the initiators of PPP arrangements. The lack of commercial development capabilities is hampering the participation of farmers’ organisations in PPPs,” he said.



SACAU’s progress in making climate resilience a reality for farmers


The ACP-EU Technical Centre for Agricultural and Rural Cooperation (CTA) in partnership with SACAU hosted a meeting in September 2016 in Johannesburg to launch a flagship project that seeks to promote climate-resilient cereal and livestock farming in southern Africa.

The meeting was also aimed to build partnerships and synergies with stakeholders in the implementation of the flagship project and for technical validation of the proposed scaling up-strategy. The project will provide support towards the adoption of four solutions by cereal and livestock farmers in order to build climate resilient systems in selected countries in the region.

These solutions are around stress-tolerant germplasms, ICT-enabled climate information services, diversified livestock-based livelihoods and weather-based insurance. In line with the outcomes of the meeting, SACAU has since prepared a project proposal which is currently under consideration by CTA.

The project focuses on ICT enabled climate information services and weather based-insurance, and implementation is expected to start in the first half of 2017. It will be implemented in three countries, namely Malawi, Swaziland and Zimbabwe in partnership with members and an insurance company.

The project’s specific objectives are to increase the uptake of weather based insurance by farmers, to support a regional approach for the development of whether based insurance and to improve access to weather information by farmers through ICTs.


CEO’s letter


                    SACAU CEO, Ishmael Sunga

By Ishmael Sunga

One of the key highlights of February is the good rains that fell in most of the southern African region.

All indications are that this season will not be a drought year. Apart from adequate food supplies, good rains always bring with them a feeling of optimism in overall economic performance, given the intricate connection that farming has, directly or indirectly, with the economies of most countries in the region. However, the optimism of a good season was almost wiped out by the invasion of the Fall Armyworm which affected some countries in the region to a lessor or greater extent.

Current indications however suggests that the Armyworm menace did not cause as much damaged as originally feared. The region does not have to worry much about feeding its people, and there will be enough throughput to keep the wheels of industry turning, and all the commerce that goes with it.

However, unlike in the last season in which the region had a “dry” problem, the rains that fell in February were so incessant that some parts of the region are now experiencing a wet problem, so to speak.

In some cases, the rains left a trail of destruction, including waterlogging and washing away of crops, and livestock, roads, bridges and dam walls. Other critical infrastructure such as schools and clinics were not spared.

The two calamities in the form of incessant rains and the army worm go a long way to show how risky the business of farming can be. Even with all the advancement in science, technology and other capabilities for prediction, many were caught unaware, and there may be many more in this regard.

The point is, farmers, being at the frontline of production, always bear the brunt of such misfortunes. Unfortunately, when farmers are not able to produce, whole nations suffer. Yet quite often farmers have to shoulder the risk or burden alone.

We argue that such problems should not be for farmers alone to face. Everyone in the value chain should take some responsibility. Increased public sector investment in climate infrastructure including early warning systems targeted specifically on farming and weather based insurance would be a good starting point.

usewebsiteDr Theo de Jager

Time for a farmers’ convention on climate change


usewebsiteDr Theo de Jager

Dr Theo da Jager, SACAU President

Farmers are, in every sense, the main characters in the story of climate change. No one is more vulnerable than farmers to the effects of climate change. And no sector can do as much as agriculture, in as short a time, to address the causes, to mitigate the effects and to adapt to the change.

During the first week of negotiations at COP22 in Marrakech, there was raised excitement and new hope that agriculture would be allowed to take up its rightful place in the global climate debate. These hopes were crushed before the start of the second week.

The time has now come for farmers to plan a reduction of emissions in agriculture, to make the adaptations are relevant to a changing climate, and to present their proposals to the UNFCCC, and to COP 23 in Bonn in 2017.  

Farmers as change architects

For far too long farmers have pleaded for the inclusion of agriculture in a global agreement to replace the Kyoto Protocol, and to allow for a SBSTA on agriculture.  For far too long the farmers’ constituency has relied on parties and governments to come up with, and agree on, a climate change plan that fits agriculture.

After 22 years, nothing has happened. So, it’s time to put our heads, our experience and our expertise together, and design an agricultural plan by farmers for farmers, that allows us to take control of our own destiny.

This plan could be a real gamechanger if it were mandated by the world’s largest representative farmers’ organisations like the WFO, the Pan African Farmers’ Organisation (PAFO), the International Federation of Organic Agriculture Movements (IFOAM) and the Asian Farmers Association (AFA). It is the only logical vehicle for a broad-based solution, unless there is someone out there with the capacity to travel the world from farmgate to farmgate.

Let global organised agriculture secure the sustainability and profitability of the sector, and establish a reliable food supply in the face of rapidly changing climatic conditions, through a farmer-to-farmer planning session.

Here, we could tackle the most urgent questions about sectoral emissions, and engage on issues like strengthening the resilience and adaptability of farmers, from the giant industrial producers to the smallholder farmers in the world’s forgotten rural corners. 

Farmers, more than anyone else, bear the brunt of climate change and very few farmers will question its existence, impact or urgency. Some may question agriculture’s role in mitigation and adaptation, but never before have primary producers worldwide convened for an open debate on climate change.

But this is not enough. We need action

Agriculture is, after the energy sector, the second biggest source of greenhouse gas emissions and responsible for 24% of all emissions. 

Farmers cannot shy away from their responsibility and accountability with regards to emissions. And they don’t need to. Climate-smart agriculture does not have to be a burden to the sector; on the contrary, it can increase the profitability and sustainability of farming operations across the board from grass roots level to large swathes of corporate precision-farmed land.

High tech innovations, no-till cropping, nature friendly and awareness-driven agricultural practices all have the potential to produce more, on less, with less.

Wiser ways

For farmers in Africa and Asia, climate-smart farming brings with it a whole new paradigm.  For the poorest in our sector, those farming on less than a hectare, planting unimproved seed, using a hand hoe to cultivate, and driving annual expansion through deforestation, ‘climate-smart’ can mean mechanisation, modernisation and commercialisation.

Poverty is a major driver of climate change. If climate-smart agriculture does not offer a real and concrete prospect of slaying the dragon of poverty and hunger, it has no chance of winning the battle for the hearts and minds of the vast majority of the world’s farmers, for whom household food security is a daily issue. 

There is no silver bullet for emissions in agriculture, and no one-size-fits-all solution that is sustainable. However, different targets for different places on the earth, pursued differently, could help reduce emissions, and encourage commitment to nature-friendly practices.

For the highly industrialised North it would mostly revolve around high tech innovation.

In the smallholder environment, the first fruits to be plucked could be a step as simple as stopping the fires that burn down more than half of the area of Central-, West- and East Africa every dry season. These fires put the worst kind of black carbon into the atmosphere and strip the soil of vital nutrients.

Since they make a living from the land, farmers are the primary custodians of nature’s resources in the modern world. But farmers do not make their living from nature. 

On the contrary; they manipulate nature to earn a living from her. Nature has no surpluses, but surplus production is the very essence of commercial farming. Efficient farmers must eliminate competition, predators and diversity, and constrain the very elements through which nature restores balance to the system. 

This is the complex, imperative tension between farming and nature.  Because of this, farmers owe nature their best, and their most diligent efforts to ensure the continued health of the natural system. More than anyone, farmers realise and appreciate this.

Experts inform, farmers implement

It makes absolute sense then, that there is no multi-national institution, government, NGO or random interest group, that could dish up a plan on how to deal with climate change, and serve it to the global agricultural sector. Were any such groups to try this, it would probably not raise broad-based buy-in or committed execution by the farming fraternity.

No circle of experts, or exclusive group of influential farmers, can design a road map for climate wise agriculture either; the sector’s diversity would never allow for that. We need an intense workshop; informed by experts, populated by farmer leaders, to map out a strategy. A process of internalisation, in which farmers have the opportunity to contribute, question principles and endorse or reject the strategy, should follow. 

Without going through this process, farmers will never take ownership or give that firm mandate, reach consensus and commit to change.

We need it, though it may be cumbersome and consume time and resources, because the alternative is too ghastly to contemplate.

There is no reassuring signal that the petty politics, which have kept agriculture out of its rightful place in the climate debates, and at COP agreements for the last 22 years, will disappear in the next 22 years.

In the long term, global food security is threatened. In the much shorter term, farmers’ livelihoods are. There is too much at stake to risk taking shortcuts or going for discounts.

And we can do it

I am calling for a comprehensive workshop of farmers’ leaders, world-wide, to develop a plan for agriculture; a plan as practical and sensible as only farmers can make it.

And I am calling for the global sector to change tack in its approach to the UNFCCC and COP.

A united sector, ready to engage COP with a tailor-made plan, mandated by the most representative farmer’s organisations on earth, would be difficult to refuse.

Of course, we can always wait and see what outcomes the current process generates. But, it has been said, that bad things happen because good people do nothing.

This article first appeared in the WFO newsletter for COP22

Livestock stakeholders grill livestock issues in the region_resized

Livestock stakeholders grill livestock issues in the region

The significant role played by livestock farming in rural poverty reduction cannot be overemphasised, particularly the opportunity which exists for demand-led development interventions that have the potential to benefit the people whose livelihoods directly or indirectly depend on livestock globally, but more especially in sub-Saharan Africa. This opportunity, however; demands a sustained increase in healthy livestock production as an essential tool for poverty alleviation and enhancing food security in the region and more importantly- to enable livestock trade to take place. Furthermore, livestock value chain stakeholders need to be aware of the trends prevailing in the trade of livestock and livestock products to inform their decision making.

It is in this light that SACAU commissioned a discussion paper to enhance the Southern Africa Livestock Value Chain Forum’s (SALVCF) understanding of the state of livestock and livestock product trade through expanding on the numerous contentious issues characterising the livestock sector in the region. The findings were presented in a dissemination meeting from 2-3 November 2016 in Johannesburg.

The paper, titled “An Analysis of the Trade of Livestock and- Livestock Products: Issues, Prospects and the Status of Trade-Related Livestock Infrastructure” shed light on the current trading environment on the African continent, covering members of the tripartite free trade area (TFTA); consisting of three regional economic communities – the Common Market for East and Southern Africa (COMESA); the East African Community (EAC) and the Southern Africa Development Community (SADC). Livestock trade accounts for only 1% of global trade within the COMESA-EAC-SADC region and the region is a net importer of livestock products with dairy and poultry products amongst the main imports. Intra-regional trade remains low and declining, currently estimated at 17% of total trade. Constraints to production and trade are prevalent at each stage of the value chain and these were identified in the paper, as they relate to the growing complexities facing producers, adding to these; the standardisation and food safety requirements make it increasingly difficult for poor livestock producers to participate in livestock markets.

In a fast-changing sector, many other factors limit smallholder participation including low market prices, inadequate infrastructure, financial constraints, difficulties in accessing assets and a general lack of knowledge.

The paper paid special attention to the state of trade-related livestock infrastructure which is necessary to enable cross-border regional and global trade. The extent to which hard and soft infrastructure is impeding trade in the region and how improved infrastructure would support trade, relative to what the current situation is was examined.

Transport, for instance, poses one of the biggest challenges to accessing markets in Africa; with USD 172 billion lost in transport inefficiencies. These include inappropriate transport, limited access to remote areas due to poor road infrastructure and bridges, high toll fees, etc. Land-locked countries are particularly worse off, with transport costs representing on average 45 percent of the value of imports and 35 percent of exports.

The paper’s analysis on issues relating to the trade of livestock and livestock products along the value chain emphasised the importance of trade-related infrastructure, as an enabler for producers to access global value chains in the livestock sector and in so doing, gain an understanding of markets, their relationships, the participation of different actors, and the critical constraints that limit the growth of livestock production and consequently the competitiveness of smallholder farmers.

The meeting concluded that achieving competitiveness within each value chain will require a great deal of innovation, entrepreneurship and learning by actors throughout the value chains. Attention should be focused not just on increasing productivity and improving animal health services, but also on increasing advocacy efforts through improved farmers’ organisations, and building the capacity of local institutions to deal with the standards and regulations of regional and international markets.

SACAU kicks off the process of establishing an agri-agency unit

From 19th to 23rd September, a team from Agriterra comprising of Dr Kees Blokland and Mr Jan Breambroek and Mr Benito Eliasi of SACAU secretariat held consultations with the Zimbabwe Farmers’ Union (ZFU) and Commercial Farmers’ Union (CFU) of Zimbabwe. The consultations were conducted as part of SACAU’s assessment as it prepares to establish an agri-agency unit as mandated by the 2016 Annual General Meeting (AGM) that was held in Swaziland earlier this year. The consultations focused on management and operations of the two organisations and their perception regarding different roles of SACAU as a regional apex body of farmers’ organisations (FOs). In addition, the mission investigated the capacity needs of the two organisations as well as their interest to receive or render advisory services to other SACAU members.

The two organisations pledged their support to SACAU as it is going through this process. They were also in support of skills exchange programmes among SACAU members and indicated that to a lesser extent the concept is being applied in Zimbabwe. It was also interesting to note that efforts of uniting the advocacy activities of the two organisations are at an advanced stage and so far three FOs in the country have signed a Memorandum of Understanding (MoU) to start working together on common issues affecting farmers in the country. They both foresee possibilities of merging into a single union in the future though currently each will maintain its autonomy while modalities of merging are being discussed. The mission commended both organisations for taking such a bold decision which in the long run will benefit all farmers in the country.

One of the topics that was discussed at length with each FO was resource mobilisation. This was identified as a very critical issue by the two organisations and they both are working hard to devise mechanisms of increasing their financial resources base. They both consider the idea of an agri-agency coordinating and linking provision of services among national FOs in the region to be one of the mechanisms that will assist organisations to raise funds through offering services to other organisations. ZFU and CFU also indicated that they would want SACAU to continue playing a greater role of lobbying and advocacy on regional matters. In addition, ZFU appreciated the training its members and management team receive from SACAU on various issues.

Similar assessments are scheduled in November and December 2016  in Malawi and Namibia respectively.

Grain stakeholders talk structured trade

Over the course of history, world grain trade has developed from the stage where grain was only shipped as incidental cargo to its grand status today; an industry in which thousands of tons of grain are moved daily, across the world. Interestingly, as a share of total consumption, traded grain has risen from less than 0.03% in the eighteenth century to more than 10% today, making the sector highly profitable for those who are involved and have the capacity to adapt to changes and shocks which global trade contends with. Structured trading is how most grain is traded in the developed world, and is now expanding in Africa. With sophisticated trading systems already in existence for niche export commodities such as coffee and cut-flowers on the continent, it is ironic that given the growing challenge of feeding a population which is growing exponentially, such systems are still in their infancy for staple commodities in most African countries.

With the highest per capita consumption of grains on the continent reported to be in the north Africa region; Rabobank predicts that Sub-Saharan Africa will eclipse North Africa’s grain demand by 2025 and this presents a significant opportunity for grain suppliers as well as producers in the region.

It is against this backdrop of a high growth potential in our region that SACAU, through support provided by the Technical Centre for Agricultural and Rural Cooperation (CTA), organised training for members of the Southern African Grain Network (SAGNET) on Structured Commodity Trade Finance Training. SAGNET is a regional network of grain value chain stakeholders from Malawi, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. The three-day flagship training was facilitated by the Eastern Africa Grain Council’s (EAGC) specialised training and capacity building division, the Eastern Africa Grain Institute (EAGI).

The training provided participants with a unique opportunity to understand the prospects and risks under regional and international export/ import financing, with special attention paid to warehouse receipt financing. Furthermore, participants learnt how market information systems work to support the growth of the commodity trading environment. Through the use of case studies depicting real life experiences on the success of structured trade finance, the diverse group of individuals contributed to vibrant discussions, further expanded upon by their personal work experiences.

The area of international and regional trade policy was well enjoyed by participants, some of whom expressed the expectation of being in an improved position to influence policy and effect change upon their return to their respective countries. A session on trade contracts and dispute resolution was covered on the last day, with trainers and legal experts challenging opinions and sharing detailed experiences; a session which was truly insightful for all.

The course not only covered theoretical elements, it also encompassed a practical component for which a field visit to AFGRI’s silo in Bronkhorstspruit was organised.

The participants were received and welcomed by the silo manager, Mr Willie Pieters and his colleagues who took the participants through various operations at the very well-equipped and technologically enhanced silo. Only nine individuals run the plant visited and the company’s 84 silos and bunkers in southern Africa are all housed under the AFGRI Grain Management business which is a grain storage facility and handler. They however do not own or trade any of the products they handle.

The specific operations which were seen at the silo included grain receiving and sampling, which was noted as the single most important step in the process. Samples from every load of grain which is stored by the silo is tested thoroughly upon arrival and following departure. Offloading and stacking was also illustrated and participants were taken through the intricate process of caring for the grain during storage. AFGRI has perfected their grain storage operations and the handling thereof is a seamless process which is optimised by technology which provides on-the-minute reporting and risk management, backed by decades of experience and a staff complement which has truly earned their proverbial stripes in the industry.

The global explosion in trade volumes has been supported heavily by communication and technology, which has made it possible to share information from virtually anywhere globally on which grain is available to buyers and sellers alike. Africa currently accounts for nearly 30% of world-wide grain imports and the demand is still growing, with grain imports in sub-Saharan Africa expected to increase by 50% in the next ten years, also according to Rabobank.

The training on Structured Commodity Trade Finance has equipped recipients with information and a new-found understanding of the subject area which will assist them to steer through the highly specialised and complex transactions involved in commodity trade, amidst the disruptions which food production systems are facing which have unfortunately undermined confidence in global trade as a reliable mechanism for the delivery of food security.

Young agripreneurs extend networks, sharpen skills at conference

October 2016 will be a memorable month for three young agri-preneurs from SACAU who participated in the Pan African Agribusiness Incubators Conference and Expo that was held in the capital city of Ghana, Accra, from 4th to 6th October. The conference whose theme was “turning science into business – inclusive agribusiness incubation for vibrant economies in Africa”, exposed young farmers to different technologies and innovations that are likely going to change the landscape of agriculture in Africa. Delegates extensively discussed the future of African farming and agribusiness and considered emerging opportunities for youth in the development of the sector. The three young agri-entrepreneurs from SACAU who participated are Ms. Manes Nkhata from Malawi, Mr. Sibusiso Gule from Swaziland and Ms Magdalene Shirima from Tanzania. They were accompanied by Mr. Benito Eliasi from the SACAU secretariat.

The three-day conference involved plenary and group discussion as well as well as displays of various new innovations, technologies, services and products that are developed through the incubation programs. The event brought together more than 700 delegates from around the world from various segments of the economy including academia, policy makers, researchers, investors, development partners and incubators and incubatees in the continent. One of the youth, Mr Gule said that “what interested me most were the discussions around commitments of stakeholders to engage the young generation in promoting “value chain transformation’. This is a way to go if the sector is to attract the youth. “Looking at the enthusiasm of participants, especially the youth in this conference, I think Africa has a bright future in agriculture” added Ms. Shirima.

Also commenting on the conference, Ms. Nkhata said, “this conference has extended my horizon in business and has created greater awareness on agribusiness incubation, trade and investment options in Africa and I will definitely utilise the knowledge gained at this conference when I go back home to Malawi”. “The conference offered me opportunities to exchange information on best practices and lessons in managing agribusiness, establishing agribusiness and incubators, development and commercialisation of agro-technologies and innovations and improving agribusiness education”, said Ms. Nkhata.

On her part, Ms. Magdalene Shirima indicated that the conference has enabled her to link with partners for business opportunities. “Young agri-preneurs should love reading business books and I was impressed when one of the panellists encouraged us young people to read”, said Ms. Shirima. “I will definitely come back to Ghana for business linkages,” she continued.

Overall the conference was worthwhile and the African Agribusiness Incubation Network (AAIN) was commended for the effort they are making in Africa in incubation though some incubatees that drop out of the program. Delegates advised AAIN to consider different options of funding streams for the sustenance of the program. “AAIN should strengthen their coordination mechanisms with partners in implementing the incubation programs”, commented one participant from east Africa. Another delegate emphasised that agriculture cannot survive from lending opportunities only, thus there is need for strategic partnerships for funding the entire value chains, and in the process enable stakeholders to identify missing gaps especially for youth inclusiveness. The SACAU delegates attended the conference with support from the Technical Center for Agriculture and Rural Cooperation (CTA).