David affirms that “in the next 50 years, the African continent will see its population increase by another 1 billion people; meanwhile, Asia’s growth rate is expected to slow down and will peak at about 5.2 billion people. If you put Asia and Africa together, we become 81% of the world’s population.”
According to David, the opportunity that Africa has is “that it is geographically closer to Asia than South America, which is the only land in the world with the capacity to increase its agricultural production. With that advantage of closeness, you have the market of Africa, but also that of Asia.”
It is worth noting that Africa has about 60% of the world’s arable land left; consequently, it is in the unique position of having both the ability to grow and to supply the necessary natural resources. In commercial terms, “such a growth would entail a move from staple foods to more diversified, higher caloric diets. For its part, South Africa expects an 86% increase in the number of middle class households and a 58% increase in food demand over the next 10 years,” states David.
Meanwhile, statistics show that the number of farmers exporting horticulture to Europe is declining dramatically since 2005. The high risk of supplying to a highly demanding retail sector is to keep up with its demands, so if anyone is to benefit from the situation outlined it will be the commercial farmers who understand the global food chain and its complexities.
“If we start looking at trends in the fresh produce market specifically, the first one, in 1994, is that more than 90% of the fresh produce in South Africa was sold through fresh produce markets; today, this is only 30%, with the rest being either exported or sold directly to retailers,” says David. “Basically, there is going to be a need for digital platforms to ensure transparency.”
Consumers are basically driving the industry to a greater emphasis on food safety and environmental issues, as well as for year-round availability of products. “Agriculture remains one of the largest impact industries in terms of the carbon footprint and natural resource consumption, and thus traceability is certainly a trend that will keep moving forward,” assures David.
Climate change is another important factor, according to Mr Hodnett, “as it will have a significant impact on both the way and the location of where fresh produce is growing. This will entail that fewer growers will be able to diversify, but it should also create opportunities for large scale operations that can diversify.”
Overall, what these trends highlight is the need for partnerships between public and private institutions, as well as between large scale operators and the people and communities that actually subsist from the land.
“There are two major approaches; the aid-based approach which the western countries have followed, and the trade-based approach of the Brazilian and the Chinese. What we are starting to see in Africa is a shift from the western approach to that of Brazil and China.”
In conclusion, African farmers must aim to diversify and to capture the opportunities before someone else does; they should strive to prevent the risk of being excluded from future trade agreements. “The keys to successful growth in Africa lie in being able to tie the local and multinational. Success across a continent must be based on a clear, well-defined and established commodity chain, and we believe Africa has the ability to unlock this potential with both small and large clients throughout the continent,” concludes David Hodnett.