by Wandile Sihlobo | May 27, 2023 | Africa Focus
It is disappointing to see that in Kenya, President William Ruto’s government lost a case seeking the Court of Appeal’s nod to import Genetically Modified Organisms (GMO) maize into the country.
President Ruto wanted to lift the ban on cultivating and importing GMO white maize in Kenya in response to growing food insecurity in Kenya. The country has struggled with drought in the recent past and remains a net importer of maize.
The liberalization of the Kenyan maize seed market would have benefited farmers in the same way as in South Africa, Brazil and the US. In fact, the sentiment towards the cultivation and importation of GMO crops is changing worldwide, partly because of the global food crisis and countries’ efforts to boost domestic production.
For example, at the beginning of June 2022, the Chinese National Crop Variety Approval Committee released two standards that clear the path for cultivating GMO crops. Now that this hurdle has been cleared, the commercialization of GMO crops in China is a real possibility.
South Africa was an early adopter of GMO technologies. We began planting GMO maize seeds in the 2001/2002 season. Before their introduction, average maize yields in South Africa were about 2.4 tonnes per hectare. This has increased to an average of 6.3 tonnes per hectare in the 2022/23 production season. Meanwhile, the sub-Saharan African maize yields remain low, averaging below 2 tonnes per hectare.
While yields are also influenced by improved germplasm (enabled by non-GM biotechnology) and improved low and no-till production methods (facilitated through herbicide-tolerant GM technology), other benefits include labour savings, reduced insecticide use and enhanced weed and pest control.
With Kenya struggling to meet its annual maize needs and importing over half a million tonnes yearly, using new technologies, GMO seeds, and other means should be an avenue to boost production in future.
Significantly, allowing for imports of GMO maize from origins such as South Africa, the US, and South America would have helped soften Kenya’s domestic maize prices, which are currently double what we see in South Africa, trading around US$500 per tonne.
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by Wandile Sihlobo | Apr 27, 2023 | Africa Focus
Africa’s Agricultural Paradox
Wandile Sihlobo[i]
Remarks at the Africa-Israel Agriculture Dialogue
Stellenbosch, South Africa
24 April 2023
Good morning colleagues,
Thank you to The Brenthurst Foundation and the American Jewish Committee for organizing this gathering at a crucial juncture in our economic development journey. The theme “Africa’s Agricultural Paradox” is befitting given the vision, desire and intention of our country, and the continent, to chart an inclusive and sustainable development path.
I want to make a few remarks on Africa’s agriculture before we move into what promises to be a fruitful discussion.
We all know that agriculture is an essential driver of employment and economic activity in most African countries. For example, roughly 60% of the population of sub-Saharan Africa is engaged in smallholder farming. About 23% of sub-Saharan Africa’s GDP comes from agriculture.
However, the strategic role of the sector as a driver to advance economic development has been hampered by a number of exogenous factors. The Russia-Ukraine war and Covid 19 continue to compromise the resilience of its agricultural sector. These major challenges come against the backdrop of existing problems that have already been affecting the agricultural sector in the past.
These include,
- Climate change with its associated shocks, such as frequent droughts, flooding, famine, etc.
- Biosecurity, primarily the weaknesses in managing animal diseases, e.g., highly pathogenic avian influenza (HPAI), foot and mouth disease (FMD), and African swine fever.
- We see pest infestations, such as the fall armyworm (FAW), and locusts, regularly in the East Africa region – whose frequency and intensity is also emerging as a consequence of changing weather patterns.
- Low farm and off-farm productivity remains a major challenge and will continue to be a constraint even in this environment where most people are excited about the promise of the African Continental Free Trade Area.
- Lack of adequate infrastructure, which increases transaction costs for farmers and agribusinesses operating in the continent of Africa.
- Conflicts or wars, like what we are witnessing in East Africa, Mozambique in Southern Africa, and most recently in West Africa.
- Fragmented food value chains
- More recently, the rising input costs, partly because of the Russia-Ukraine war
Therefore, we need to tackle these challenges collectively and holistically in order to maximize the value of the agricultural sector in Africa.
We are a continent that struggles with high unemployment, poverty and low economic growth. We know from the literature that growth in agriculture is two to three times more effective at reducing poverty than an equivalent amount of growth generated outside agriculture.
Moreover, the advantage of agriculture over non-agriculture in reducing poverty is largest for the poorest individuals in society and extends to other welfare outcomes, including food insecurity and malnutrition.
So, what to do with all these challenges?
There are some policy considerations that I believe the African Agricultural Ministers here in the room with us can reflect on during the sessions.
In my view, four overarching issues should remain critical priorities for African governments:
First, the African governments must improve land governance, which is fundamental for long-term investments. We know that roughly 86% of all the continent’s rural land plots are still unregistered. We cannot expect any meaningful levels of investment, infrastructure development and farm productivity improvements in an environment in which land ownership and use rights are inadequate.
Suppose I may use my home country, South Africa, as an example, in areas with strong property rights. In that case, we continue to see secure use and ownership rights that provide incentives to engage in robust agricultural activity, which essentially sustains our food security and exports.
Meanwhile, in the former homelands regions of South Africa, with weak land governance, such robust agriculture is non-existent to a large extent. Of course, I am simplifying a more complicated argument because these rights need to be couched in other important variables and factors such as infrastructure, institutions, skills, and agricultural finance. But you get the main point.
Second, African governments must create an enabling policy environment. This includes clear competition and merger regulations, tax incentives for SMEs, a regulatory environment that promotes quality standards in input and output markets, predictable trade policies, digitalization of customs procedures, and harmonization of border regulations.
Third, once we have the above matters adequately addressed, we could focus on attracting long-term investment in Africa’s agriculture. Here, I am not only talking about the private sector investments by local (MSMEs) and global investors but also public sector investments, i.e., public infrastructure expansion of border infrastructure, roads and connectivity (IT).
Fourth, we must also address the issue of informality in Africa’s agriculture and food industry. In an article I co-authored with agricultural economists Edward Mabaya of Cornell University and Lulama Ndibongo Traub of Stellenbosch University, we noted that “across all of the continent’s regions, except southern Africa, informal employment as a percentage of total employment in the agricultural and non-agricultural sector is above the global average of 64% for emerging and developing markets economies.
More than 80% of the continent’s population relies on open-air, largely informal markets for their food. Poor sanitary conditions in many of these markets raise concerns about food safety for households that depend on them.
Suppose African countries are to ensure resilient and sustainable agrifood systems. In that case, they must upgrade food value chains by shifting production and employment from informal micro-enterprises to formal firms offering wage employment with income security and health benefits for employees. This will also ensure improvements in food safety within the system.”
In essence, colleagues, my message this morning is that we need Policy Reform and Implementation, Investments, and Technical Innovation, which leads to Competition and Efficiency gains in Africa’s agriculture.
Notably, the African government, this time around, should increase the pace of policy reform to continue stimulating private sector investments. They must also ramp up public investments to strengthen regional food value chains, AfCFTA implementation, etc.
Thank you for listening; I look forward to our discussion.
[i] Senior Fellow, Department of Agricultural Economics, Stellenbosch University.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Apr 10, 2023 | Africa Focus
Although I continue to argue that South Africa should expand its agricultural export markets to new frontiers such as India, China, Bangladesh, Saudi Arabia, and South Korea, amongst others, the export drive should not be at the expense of the existing markets.
We should actively engage with existing markets to promote further growth of exports of South African agricultural products. The engagement needs not only to focus on the EU and Asia, both crucial regions for our export growth, but also on the rest of the African continent.
The African continent remains the largest export market for South Africa’s agriculture. In the record agricultural exports of US$12,8 billion in 2022, the African continent accounted for 37%. Importantly, this was not an anomaly. The continent has accounted, on average, for 38% of South Africa’s agricultural exports by value per annum over the past five years.
Unlike the other regions South Africa exports to, where the composition of products is predominantly fruits, beef, wool and wine, maize is the leading export product in the African continent. Other products exported to the rest of the African continent include apples, wheat, animal feed, prepared foods, wine, fruit juices, soybean oil, sunflower oil, alcoholic beverages, and soybean oilcake.
The leading markets were Botswana, Namibia, Mozambique, Zimbabwe, Lesotho, Eswatini, Zambia, Angola, Nigeria, and Mauritius. Except for Nigeria, these markets are within the Southern African Development Community’s Free Trade Area, which has benefited South Africa greatly. Moreover, these markets’ infrastructure and proximity advantage contributes to the concentration of South African agricultural exports to this region.
As we advance this trade relationship with the Southern African Development Community and the rest of the African continent, there will need to be various industry and government engagements to keep warm relations.
Such an approach would help to avoid erroneous policy decisions, such as what Namibia and Botswana did in 2022 by blocking vegetable imports from South Africa. This policy action negatively affected the South African farmers that had increased production in anticipation of the regional demand.
Simultaneously, the consumers in Botswana and Namibia were also left with little choice as their typical supplies were suddenly out of the shelf. Through close collaboration with the regional business community and government, we would address trade concerns without drastic steps by the neighbouring countries, which understandably want to prioritise the interests of local producers and consumers.
Aside from the long-term trade policy direction, the demand for South African agricultural products will likely increase in the 2023/24 marketing year within the African continent. The 2023/24 marketing year corresponds with the 2022/23 production season. In the previous season, countries such as Zimbabwe, Zambia, and Tanzania had decent supplies of grains and other foodstuffs on the back of a reasonably good harvest (although lower than the bumper crops of the previous season).
Reports from FEWS NET suggest that dry and hot weather conditions in the earlier part of the 2022/23 production season negatively impacted crops in southern Angola, Zimbabwe, Mozambique, and northern and eastern Madagascar. Moreover, there are growing concerns that the higher fertilizer prices have led to lower usage by farmers in these countries, which would ultimately undermine the yields.
The first glimpse of these countries’ crop conditions and import needs will be through maize production data from the USDA in the coming months. For Zimbabwe, production forecasts are yet to be made available. Still, Zimbabwe would require sizeable imports if the crop drops below the previous season’s harvest of 1,6 million tonnes, given its annual maize needs of 2,1 million tonnes. The possible suppliers to Zimbabwe will be Zambia and South Africa. Zambia’s maize production forecasts are yet to be released. Still, there is an expected 15,6 million tonnes for South Africa, up 1% y/y, which should enable South Africa to export at least 3 million tonnes of maize in the 2023/24 marketing year.
Another country that is worth keeping an eye on is Kenya. The latest estimates from the United States Department of Agriculture place Kenya’s 2023/24 marketing year maize imports at 750 000 tonnes. This is up mildly from the previous season’s maize imports of 700 000 tonnes. The primary hope for Kenya is to import maize from Tanzania and Zambia, which collectively accounted for 98% of Kenya’s maize imports in the 2021/22 marketing year. South Africa has minimal participation in the Kenyan maize market because of the prohibitive anti-genetically modified crop regulations.
I have used maize as an example, but if maize crops faced production challenges, then one can assume that there are similar challenges in other crops and vegetables. This means South African producers should closely monitor the African market and increase supplies where market conditions allow. Beyond these near-term seasonal matters, the South African agribusiness community, as the major exporters of the produce from South African farms, along with the government officials, should maintain close engagement with counterparts across the rest of the African continent as this is not only a diplomatic consideration but also a commercial matter.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Oct 23, 2022 | Africa Focus
I don’t know much about Kenya’s new president, William Ruto, but I already like his approach to agriculture. In the first week of October Ruto’s administration lifted the country’s ban on the cultivation and importing of genetically modified (GM) white maize.
Ruto, a scientist with a PhD, made this change in response to growing food insecurity in Kenya. The country has struggled with drought in the recent past and remains a net importer of maize.
There will be an assessment of each GM trait by the Kenyan Biosafety Authority before actual imports and cultivation can occur. Assuming some of this scientific legwork has already been done, we could see imports start in the next few months.
Just as well. In the 2022/2023 season, Kenya needs to import a substantial volume of maize, estimated at about 700,000 tonnes. This is roughly unchanged from the previous season, which also posted poor domestic production.
In the 2021/2022 season several sub-Saharan African countries, including Zambia, Tanzania, Zimbabwe, and SA, had ample maize harvests. This made it easy for them to meet Kenya’s import needs, with Tanzania and Zambia leading the way.
However, this year things are different. Tanzania’s maize harvest is down roughly 16% year on year to 5.9-million tonnes due to sparse rainfall at the start of the season combined with armyworm infestations and reduced fertilizer usage in some regions because of prohibitively high prices.
The fall in production and firmer domestic consumption means Tanzania will have less maize to export. The numbers I have seen thus far point to available maize for export of just 100,000 tonnes. This is well below the previous season’s exports of 800,000 tonnes, which saved Kenya when the country was most in need of maize.
The country in the region with the most abundant supply of maize at present is SA, whose maize exports for the 2022/2023 season are forecast at 3.5-million tonnes. SA struggled to access the Kenyan market for many years because of its ban on imports of GM products. But Ruto’s move has changed all that, offering a new opportunity for SA exporters (provided the Kenyan Biosafety Authority gets its ducks in a row).
In the future, the liberalization of the Kenyan seed market should benefit its farmers in the same way as in SA, Brazil, and the US. In fact, the sentiment towards the cultivation and importation of GM crops is changing worldwide, partly because of the global food crisis and countries’ efforts to boost domestic production.
For example, at the beginning of June, the Chinese National Crop Variety Approval Committee released two standards that clear the path for cultivating GM crops. Now that this hurdle has been cleared, the commercialization of GM crops in China is a real possibility. The EU is also reviewing its regulations on cultivating and importing GM crops, an essential step in a region that has long had an anti-GM stance.
As I have pointed out in these pages before, SA was an early adopter of GM technologies. We began planting GM maize seeds in the 2001/2002 season. Before their introduction, average maize yields in SA were about 2.4 tonnes per hectare. This has increased to an average of 5.6 tonnes per hectare in the 2020/2021 production season.
Meanwhile, the sub-Saharan African maize yields remain low, averaging below 2 tonnes per hectare. While yields are also influenced by improved germplasm (enabled by non-GM biotechnology) and improved low and no-till production methods (facilitated through herbicide-tolerant GM technology), other benefits include labor savings and reduced insecticide use, as well as enhanced weed and pest control.
With Kenya struggling to meet its annual maize needs, using new technologies, GM seeds and other means should be an avenue to boost production in the future.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Apr 26, 2022 | Africa Focus
Written for and first appeared on The Conversation.
Maize production in some of the sub-Saharan African countries that dominated maize supplies during the 2021/22 marketing year is expected to be lower this coming season. This will bring about some changes in the sub continent’s maize trade in the 2022/23 marketing year, in particular creating complications for Kenya. In the 2021/22 season, Kenya was the largest maize importer in the region.
But Kenya has a longstanding policy against genetically engineered maize. This limits the role of South Africa, the sub-continent’s biggest maize producer and exporter, in meeting Kenya’s needs.
The expected lower production comes in a season when demand for maize from countries in sub-Saharan Africa that rely heavily on imports is expected to remain strong. It’s estimated that Kenya, for example, will need to import 700,000 tonnes of maize for 2022/23. Kenya’s maize production is expected to be marginally higher, but not enough to meet the country’s needs.
Kenya is typically one of the major maize importing countries in sub-Saharan Africa. The country’s expected 700,000 tonnes of maize imports account for 21% of the region’s expected maize imports of 3.4 million tonnes in 2021/22 season, according to data from the International Grains Council. Other typical maize importing countries include Zimbabwe, Botswana, Mozambique and Namibia.
However, in the 2021/22 marketing year, several sub-Saharan African countries such as Zambia, Tanzania, Zimbabwe (an exceptional year from the usual importing position) and South Africa had ample maize harvest. This made it easy for them to meet Kenya’s import needs. Tanzania and Zambia were the leading maize suppliers to Kenya.
Tanzania, the biggest exporter in the region in the 2020/2021 season and Kenya’s traditional major maize supplier, is unlikely to play that role this season because its maize production is forecast to fall by 16% year-on-year to 5.9 million tonnes. This is due to drought at the start of the season, combined with armyworm infestations and reduced fertiliser usage in some regions because of prohibitively higher prices. The consequence of the fall in production and firmer domestic consumption means that the country could have less maize for export markets.
Preliminary estimates by the United States Department of Agriculture are that Tanzania’s maize exports could decline from 800,000 tonnes in the 2021/22 marketing year to 100,000 tonnes in the 2022/23 marketing year.
Such a drop would leave very little for Kenya’s maize needs, leaving Zambia and South Africa as major suppliers in the region.
Zambia’s expected maize production in the current season is still tentative, and it is unclear how much maize the country could have for exports. Zimbabwe, which had a large harvest in 2020/21 season, is also in an uncertain position about its 2021/22 maize harvest and ability to export. The incoming evidence suggest that some regions in the country have suffered crop failures.
South Africa could help and has the maize production capacity to do so. Given current output projections of 14.7 million tonnes, South Africa could have 3.2 million tons of maize for exports in the 2022/23 season – about 78% being yellow maize, and 22% white maize. But it plays a limited role in the Kenyan maize market.
The barriers
South Africa’s limited participation in the Kenyan maize market is arguably affected by regulations rather than just price and consumer preferences. Kenya continues to maintain an import ban on genetically engineered products.. This limits imports from South Africa where over 80% of maize production is genetically engineered.
There are indications that Kenya is changing its longstanding policy. Regulatory agencies have recently completed all trials for the approval of biotechnology maize. But any decision would still have to be approved by Kenya’s cabinet.
Even if Kenya were to adjust its policy, South Africa would not necessarily be the only maize supplier looking at expanding its market share in the country. The likes of the US and Brazil would also be at Kenya’s doorstep. The advantage of South Africa would be its substantial white maize production, which is the preferred staple grain of Kenyan consumers.
Outside the African continent, Mexico, the US and Argentina could be among the potential maize suppliers, as there are generally few white maize producing countries in the world.
Imbalances
The sub-Saharan African maize trade generally has some imbalances. South Africa, Tanzania and Zambia are the major maize producers and exporters in the region. For their part Kenya, Zimbabwe, Botswana, and Mozambique are often the importers.
At the regional level, sub-Saharan Africa’s aggregate maize imports amount to an average of 3.4 million tonnes a year, according to data from the International Grains Council. This is both white and yellow maize, with most being white maize for human consumption.
Although intra-regional trade accounts for most of the consumption needs of import-reliant countries in the region, this is also supplemented by imports from countries outside of the continent such as Argentina, Canada and Mexico.
Overall, these maize market dynamics are worth monitoring, specifically from South Africa’s perspective, as they signal that the sub-Saharan maize demand in the 2022/23 marketing year could be much larger than the previous season. This could be the case, especially if Zambia’s maize production comes out lower than the 2021/22 season, which is likely if we use the South African maize production conditions as a barometer for the region. Such a potential increase in the region’s maize imports would have implications for prices.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Jan 11, 2022 | Africa Focus
I’ve co-authored a piece with agricultural economists Professor Edward Mabaya of Cornell University and Lulama Ndibongo Traub of Stellenbosch University on what it will take for Africa’s agrifood systems to thrive. It is published in The Conversation (no paywall).
You can read it by clicking here.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Sep 7, 2021 | Africa Focus
It’s a great honour to be part of the team of researchers that contributed to the 2021 Africa Agriculture Status Report – “A Decade of Action: Building Sustainable and Resilient Food Systems in Africa.”
The full report is available here.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Aug 1, 2021 | Africa Focus
I’ve co-authored a piece on this subject with my old teacher and friend, Lulama Ndibongo Traub of Stellenbosch University and Thom Jayne of Michigan State University. It is published in The Conversation, and you can read it by clicking here (no paywall).
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
