Low farm productivity and non-cultivation of half of arable land in Africa coupled with the pressure of increasing population and urbanization on farm land in Asia provides a great opportunity for responsible investment by Asian countries in Africa to promote agricultural growth, diversification and employment without comprising on domestic food security, Mr. Sharad Pawar, India's Minister for Agriculture and Food Processing said here today.
In his keynote address at the Asia-Africa Agribusiness Forum, organized by FICCI and the Ministry of Agriculture, Mr. Pawar said, "The great competitive advantage for Africa is its 733 million hectares of arable land, which accounts for 27.4% of the total arable land in the world. Currently, only 183 million hectares of land is under cultivation in Sub-Saharan Africa and approximately 452 million still remain uncultivated. On the other hand, agricultural land in Asia is under pressure from increasing population and urbanization." This gives rise to opportunities for investment by Asian countries in the African region, he said.
Minister Pawar said that in Asia, more than 2.2 billion people directly or indirectly depends on agriculture for their livelihood. The Asian countries together constitute more than 60% of the world's population and heavily depend on agriculture to meet an ever–increasing food demand. The continent has made remarkable progress in agricultural production while dealing with an increasing population and a resultant increase in the food demand. Food production has increased at a rate higher than the growth in population, largely on account of introduction of HYVs for cereals, better irrigation facilities and fertilizers, besides support for credit and an assured support price. "These learnings can be, and have to be replicated in Africa, and this is the right forum for the exchange of ideas at the highest levels," Mr. Pawar pointed out.
Dwelling in India's experiences with farmers and agribusiness enterprises, Mr. Pawar said the farmer is an entrepreneur and a risk taker. He has also been a great innovator and adaptor but has often lost out in terms of trade and in transactions on account of several factors, most of which are related to size, scale and access to technologies, inputs and markets. But when he has worked together as in the milk, sugarcane and fertilizer sector, farmers have created some of the finest organizations. Amul and IFFCO which are global brands and leaders in their respective domains. "In addition to co-operatives, we have also started promoting Farmer Producer organizations by providing equity and credit guarantee support. We have declared 2014 as the Year of the FPOs and strengthened the Small Farmers Agribusiness Consortium, a specialized body that provides professional, financial and technical assistance to small farmers and their organizations, besides encouraging agri entrepreneurship," the Minister said.
According to a FICCI-PwC discussion paper on 'Unlocking the Food Belts of Asia and Africa', there is huge potential for agri-business in the both the Africa and Asia, but growth of the sector depends upon policy environments, capacity and resources. The opportunities in the agribusiness sector have the potential to address various social and economic issues but there remain substantial barriers for growth of the sector. The paper states that in Sub-Saharan Africa and most of Asian countries, agro-based industry needs a major transformation in order to generate more job opportunities, revenues and food for the growing population. Apart from the industrial transformation, farming techniques need improvement in order to offer good opportunities to a large number of small holder farmers who in turn could pave their way out of poverty.
Mr. Sidharth Birla, President of FICCI, in his address, suggested the adoption of new practices and partnerships to multiply agriculture growth and make it sustainable. Greater technical partnerships, he said would help in overcoming low farm yields in Africa. Based on rich agriculture resources in Africa, there is need to examine how Indian and Asian companies can form joint ventures for producing food grains, pulses and oil seeds for domestic use in Africa, and export, he said. Mr. Birla said that farm mechanization is an area for partnerships. India has achieved success here and can be a source of agricultural machinery like harvesting, earth moving, tractors and sowing machinery. Indian companies are keen to partner with Asian neighbors and countries in Africa for manufacturing such equipment and other inputs.
Another opportunity is finance for developing agribusinesses. Various factors limit formal lending to such businesses in Asia and Africa. Lenders, investors and banks can be creative in forming strategic partnerships. In India credit supply has increased greatly through regional rural banks and rural credit cooperatives. He said that upgrading infrastructure is a high priority for jump-starting agribusiness. Major investment areas are irrigation, water conservation and roads. Public-private partnerships can be one interesting way to address this.
Post-harvest management facilities, distribution frameworks and other facilities like packaging remain a bottleneck. Sharing of Best Practices can provide lessons. India's InfoTech sector can support communities through information hubs and knowledge dissemination at the grassroots, the FICCI Chief pointed out.
Mr. Kenmore, Country Director, FAO and Mr. Sanjeev Chopra, Joint Secretary, Ministry of Agriculture gave a thematic presentation on the Forum.
Dr. Vidya Bhushan Soni, Chairman & Wholetime Director, Overseas Infrastructure Alliance, informed the delegates that the Indian Council of Agriculture Research, International Agriculture Consulting Group and ICRISAT have constituted a platform for India-Africa Partnership in Agriculture to transform Africa by providing Indian expertise and experiences to finance solutions to their food and agriculture development challenges. ICRISAT, he said would use its Agribusiness and Innovative Platform initiatives to help set up agribusiness incubators for farmers across Africa, along the lines of network incubators in India.