Bringing small-scale farmers into supply chains … and getting a slice of a $1 trillion market

1 January 2021 saw trade commencing in the African Continental Free Trade Area (AfCFTA). This opens up a trillion-dollar agri-food sector in Africa. This is new territory for investors and governments. CASA has been exploring how investors and governments can prepare a long-term investment strategy that works for everyone.

What investors can do?

The first step is to be aware of the CASA resources that are available.

For more detail watch the CASA webinar Delivering on Regional Agricultural Trade: Considerations for Investors on Inclusive Supply Chains. You can read the briefing of the same name or the One-page, the summary of the webinar discussions.

There are steps that investors can take in relation to technology, better evaluation and through changes to the provision of technical assistance and contracting.  

Technology

• Prioritize investment in the technologies that improve the productivity and competitiveness of the agri-food sector especially technologies that improve the quantity and quality of food traded.

Technical assistance

• Provide systematic technical assistance to ensure enterprises deliver both return on investment and a positive impact at the producer level. Based on an understanding of how agricultural trade affects small-scale producers.
• Evaluate the impact of technical assistance highlighting the factors that support sustainable, inclusive sourcing models, to focus future investment. This requires consistent measurement of impact at the farmer, portfolio company and investment fund levels to be developed and implemented^. Consider the needs of different group of farmers and their value chain partners but also within the farming family (considering gender, age and other factors) and how it affects them in relation to contracts in commercial agriculture.

Contracting

• Develop and implement sustainability standards in ways that empower producer in supply chains to participate in the design and governance of standards and verification systems.
• Enable producers to negotiate from a position of greater strength, for example through investments in post-harvest infrastructure or organisational capacity.
• Explore contractual terms that favour incentives over sanctions.
• Offer producers support in weighing the costs and benefits of different market options.
• Understand the importance of contracts in promoting inclusive regional supply chains ensuring that they comply with public regulation (including national legislation and international treaties for cross-border trade)
• Promote transparency for example through systematically disclosing contract templates.

Evaluation

• Invest in improving data and information collection to measure and improve impact.

Other resources

The CASA webinar Making Inclusivity Work: A role for legal empowerment

Read the One-pager, a summary of all the key points from the webinar [March 2021]

There are a series of reports which informed the webinar these include:

Read: Delivering on Regional Agricultural Trade in Africa: Considerations for Investors on Inclusive Supply Chains A research brief published jointly by CASA, EPIC and Malabo Montpellier Panel [February 2021, 8 pages]

Read: Contracts in commercial agriculture: enhancing rural producer agency [IIED 2021,54 pages]

Read: Socio-legal empowerment and agency of small-scale farmers in informal markets [IIED, December 2020, 58-pages]