Unlocking agriculture’s potential

Recently, Radobank brought together 50 farmers from 18 different countries and six continents in the Netherlands to discuss the future of farming. The participants identified the ‘6-S future of farming framework for food security’ – succession; sustainability; social enabling factors; supply chain; science; social media.

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Here we look at Social Enabling factors…

In general, the places with the highest yields in the world are not those with the best climate and soil quality, but the places with the best social enabling environment.

Examples of social enabling factors that determine if a farmer can achieve full potential of soil, skills and climate are: government policies, the functioning of and access to agricultural markets, access to finance, access to knowledge and public expenditure on agricultural research and development.

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Social enabling is the key to unlock agriculture’s potential to deliver economic growth.

Vital for prosperity
Agriculture is vital to economic prosperity. According to a World Bank report, almost no country has managed a rise from poverty without increasing agricultural productivity. However, there’s no single approach, as we have to consider, besides others, cultural differences as well as the stage of the development of a country.

A process of more than 100 years of development of agriculture in the developed world is not something you can implement overnight in developing countries. There are success stories, though, such as Brazil, which developed thanks to strong investments in research and an enabling environment in the past few decades, from a net importer of food to one of the world’s largest exporters.

By contrast, in the same period, Africa turned from a net exporter to an importer of food. But there is also good news. The Economist reports that six of the world’s 10 fastest growing economies, last decade, were in sub-Saharan Africa.

Need & potential
Africa combines the greatest need with the greatest potential. But in capturing this potential, many linked issues need to be addressed, including: knowledge-sharing
to improve productivity, scale, fair prices, social aspects, infrastructure, access to markets and last, but not least, access to finance. Or in the words of the farmer: “No cash, no crop.”

Social enabling factors help achieve yield potential. Consider the following:

  • Enable access to finance: Globally, four billion people lack access to financial services including most African small-holder farmers. Micro-finance is a direct way to connect the developed and developing world through the Internet.

Another way is replicating the co-operative banking and farming models in developing countries by investing in knowledge and (financial) resources and infrastructure.

  • Long-term vision and reforms: Exchange best practices by involving local and foreign farmers at the kitchen table with government officials.
  • Learn from each other: Invest in financial literacy. Pool resources to create a knowledge centre or virtual farm for knowledge exchange.
  • Build a solid agricultural infrastructure: Starting at the farm, with silos to reduce waste and improve income due to less price-taking dependency. Building roads, post-harvest handling, access to domestic markets and, in case of oversupply, access to foreign markets for the produce.
  • Communication between all stakeholders: Co-operation within the value chain is key. Create a transparent communication platform.

While 75% of the world’s poor live in rural areas in developing countries, a mere 4% of official development assistance goes to agriculture. Agriculture truly can make a difference for the poorest people in the world – if we get the balance right and invest in the future of our food.

From The Future Of Farming, produced by Radobank Group, a Netherlands-based international financial services provider with a focus on food and agriculture.