Development

Obama Wants Africa's Farmers to Be Better Entrepreneurs


Obama speaking at the University of Johannesburg, Soweto

Photograph by Denvor de Wee/City Press/Gallo Images/Getty Images

Obama speaking at the University of Johannesburg, Soweto

At a town hall-style meeting in Johannesburg over the weekend, President Obama took a question about how the U.S. would help African economies become less dependent on aid from abroad and “own our own markets.” Here’s part of what he said in response:

“… We’ve already helped 7 million small farmers in Africa to pool their resources, access lower credit, link themselves together as one producer group so that they can market and sell more effectively. And we’ve seen those farmers increase their yields and their sales by 10, 20, 30, in some cases, 50 or 100 percent.

“I met with a young woman farmer who had started off with one hectare, now has 16. She has been able to achieve enough growth that she has now bought a tractor. She’s hired eight people. Now, that’s not what we ordinarily think of as business or entrepreneurship, but if you think about the number of Africans who are involved in agriculture and giving them the tools where suddenly they’re getting better prices for their crops, they’ve got access to a marketplace, they now are getting enough credit to be able to mechanize their operations, and now suddenly they’re able to hire some people in their surrounding villages, you’ve just suddenly seen a small business grow. And the next step may be then they start doing some small food processing. And next thing you know, now they’re suddenly supplying these processed foods to a school. And next thing you know, they’re supplying those processed foods to the whole country.”

The U.S. Agency for International Development’s Feed the Future aims to boost agricultural productivity. Contrast that to the traditional approach of shipping food grown by U.S. farmers to hungry people abroad, which does nothing to develop local markets and can undermine them.

A World Bank report this year estimated that agriculture and related businesses—such as supplying fertilizer and processing food—could be a $1 trillion market in sub-Saharan Africa by 2030, up from $313 billion in 2010. The development community sees a lot of potential in making small farmers more efficient and competitive and connecting them with global markets. That’s what fair trade coffee co-operatives do.

Connecting farmers to one another is a particular focus for the Aspen Network of Development Entrepreneurs. The group noted in its most recent report that small farmers supply 80 percent of food in Africa and Asia. “Most of those are not put together into co-operatives or producer organizations, so it’s an incredibly disorganized system where a lot of value for those farmers is left on the ground,” ANDE executive director Randall Kempner told me in an interview last month.

Africa’s farmers face plenty of challenges. They need irrigation to consistently water crops and good rural roads to get their supplies to market. They need financing to grow and buy equipment such as tractors. And they need the rule of law to enforce contracts and protect property rights. A lack of business knowledge also holds back commercial agriculture, the World Bank report says, though it notes that training programs “show promise in helping to create a new generation of entrepreneurial farmers and businesspeople.”

Farmers in sub-Saharan Africa also face some of the greatest risks from climate change (PDF), according to the U.N.’s Food and Agriculture Organization. Rising temperatures are likely to make fields less productive and bring more extreme weather such as droughts. Farmers with better techniques, equipment, and access to markets may be more resilient amid those shifts. But the future for farmers in Africa isn’t likely to be as easy as the president makes it sound.

John_tozzi
Tozzi is a reporter for Bloomberg Businessweek in New York.

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