EABC roots for contract farming for food security

Move expected to help reduce dependency on imports.

In Summary

•There is potential for wheat grain, edible oil , leguminous plants , root tubers and fertilizer.

•The regional performance of the above value chains is however hindered by the lack of access to improved and genuine seed varieties,high cost of seeds among others.

East African Business Council (EABC) CEO John Bosco Kalisa
East African Business Council (EABC) CEO John Bosco Kalisa
Image: Handout

The East African Business Council now wants the private sector in Kenya and the wider East African Community to embrace contract farming to improve food security.

This, it says will also ensure the region remains with surplus for value addition and exports, further increasing the agriculture sector’s contribution to the economies.

Contract farming is an agreement between farmers and processing or marketing firms for the production and supply of agricultural products under forward agreements, frequently at predetermined prices.

The synthesis of the value chains shows that the region is a key importer of food products.

However, there is agricultural potential for wheat grain (Kenya,Tanzania, and Uganda), edible oil (Tanzania and Uganda), leguminous plants (Tanzania, Kenya, and Uganda), root tubers (Tanzania and DRC), and fertilizer (Tanzania, Kenya, and Uganda).

According to EABC, the regional performance of the above value chains is however hindered by the lack of access to improved and genuine seed varieties, the high cost of seeds, limited adoption of improved seeds, low soil fertility, limited fertiliser use and low yields.

“Due to these challenges, the performance of the sector is prone to intermittent and unsustained production, insects, pests, diseases, and notorious weeds,” EABC board member Jas Bedi said.

 In addition, rampant climate change phenomena, and persistent drought episodes, further undermine the productivity of the region.

Regional performance was also adversely impacted by low economies of scale related to fragmented small-holder farms, limited use of fertilisers and irrigation, and low use mechanisation, low and fluctuating market prices.

The lack of an encouraging production environment, lack of effective farmers groups for collective marketing and poor post-harvest practices have also impacted the region.

There is also inadequate labour skills hence low productivity, inadequate extension systems, poor market linkages, limited and unreliable market information, inadequate access to financial resources, weak enforcement of regulations and inadequate use of digital technologies.

According to the Global Security Index Report 2022, only Kenya had a score above average on food security in East Africa prior to the Covid-19 pandemic, then at 53.

It was closely followed by Rwanda and Uganda with scores of 50.6 and 47.4.

To improve the landscape, EABC and German Development Cooperation (GIZ)-Business Scouts Fund have identified EAC export procedures and contract farming as key areas for capacity building, as they move to sensitise agri-actors.

“ Enhanced capacity in these key areas will be critical for agri-actors in selected value chains to be able to mitigate the impact of global crises on food security in the region,” EABC said.

This is under the  "Enhancing Competitiveness of Agri-food Industry and Mitigating the Impact of Global Crises to Improve Food Security in the EAC Region” project.

The project also involves the East African Grain Council (EAGC), East African Farmers Federation (EAFF) and National Apex Private Sector Associations.

Hunger Index projects that the EAC has been prone to hunger.

On average 30 per cent of Sub-Saharan African people face hunger compared to less than 25 per cent in the EAC region.

In Africa, 35 million more people were affected by hunger in 2020 compared with 2019, prior to the outbreak of the pandemic.

The main type of staples in the region is cereals (maize,rice, wheat, rye, barley, oats, millet, sorghum), roots and tubers (potatoes, cassava, yams), and legumes (beans, lentils, soybean).

There has been increased foreign direct investments in the EAC region aimed toward the manufacturing, construction, and services sector, and not agriculture.

Largely the FDI to EAC was contributed by China and India and is aimed at DRC, Kenya, and Uganda.

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