Farmers Review Africa Sept/Oct 2019 Farmers Review Africa September - October 2019 dig | Page 16

REPORT
Small Businesses Soaring, Driving
Growth Across African Agriculture
New report finds 64% of food consumed in Africa is handled by millions of
small- and medium-sized enterprises (SMEs), creating vast opportunities
for family and women farmers.
A
report published recently reveals that
millions of small- and medium-sized
enterprises (SMEs) source directly from
millions more smallholder farmers across Sub-
Saharan Africa. These SMEs, often women-
led, include food processors, wholesalers, and
retailers. SMEs provide a range of services, from
transport and logistics to the sale of inputs such
as fertilizer and seed to farmers. Their activity
is driving a “Quiet Revolution” across African
agriculture, connecting smallholder farmers to
commercial markets at an unprecedented rate.
The report finds that, overall, only about 20
percent of the volume of food consumed in
Africa fits the conventional notion of subsistence
agriculture—food consumed directly by the
farming households that grow it. The majority of
what Africans eat flows through what are known
as privates sector “value chains” managed by
SME businesses that purchase commodities
14 | September - October 2019
directly from smallholder farmers and then
process, package, transport and sell food
products to the urban and rural consumer. SMEs
also play a large, growing and vital role in markets
for inputs like fertilizer and seed, as well as farm
machines and pesticides.
“All this represents a profound turnaround from
mere decades ago, ” said Dr. Thomas Reardon
of Michigan State University, a lead author of
the report. “There has been a ‘Quiet Revolution’
in agrifood private sector value chains linking
small farmers to burgeoning urban markets and
growing towns in Africa. This has spurred farmers’
participation in food and farm input markets.”
The 2019 Africa Agricultural Status Report
(AASR) from the Alliance for a Green Revolution
in Africa (AGRA) highlights how the private
sector-led “hidden middle” of the agri-food supply
chains has undergone a Quiet Revolution. Its rise
has been largely unrecognized by policymakers
(hence “hidden middle”), even as it has bridged
gaps that previously separated most small-scale
farmers from commercial markets.
“SMEs are the biggest investors in building
markets for farmers in Africa today, and will likely
remain so for the next 10-to-20 years,” said Dr.
Agnes Kalibata, President of AGRA. “They are not
a ‘missing middle,’ as is thought, but the ‘hidden
middle,’ ready for support and investment to thrive
further. Today, we bring them out into the light.”
In terms of the actual value, AASR finds that
traders, truckers and processors constitute about
40 percent of the total gross value of the agri-
food system in the region – this is the same as
the share coming from farms. Retailers constitute
the remaining 20 percent. Changing conditions
have set the stage for the growth of these
SMEs. Among these changes are: increases in