news - Climate Smart Agriculture Tops the Agenda at African Supply Chain Roundtable

Global climate change is hitting African smallholder farmers hard and driving demand for the affordable  technical and financial support provided by FMO and its partners to protect and grow their output and supply chains in the face of the rising vagaries of the continent’s weather systems, a roundtable conference organised by FMO and Rabobank in Nairobi in early June heard.

 “You need to start with the community and partnerships are crucial. That is why we are here together: to create partnerships. Ten years ago the story was not so different, but now we have climate change on top of it and we need new ideas,” Hans Bogaard, acting director, FMO Agribusiness, Food & Water, said at the ‘Creating Shared Value Along the Food Value Chain in Africa’ roundtable.

The two-day event discussed the challenges and opportunities in supply chain development and smallholder farmer financing and was held together with Arise, the investment company that manages the pooled stakes in several financial service providers in Sub-Saharan Africa of FMO, Rabobank and Norfund. African partner banks, a selected group of innovative agribusinesses and large corporations, also participated in the roundtable.

Agriculture has to become more ‘climate smart’ to help smallholders build resilience in the face of shifting weather patterns

Agriculture has to become more ‘climate smart’ to help smallholders build resilience in the face of shifting weather patterns that have previously prevailed for generations. The concept is an integrated approach to managing cropland, livestock, forests and fisheries that aims to achieve increased productivity to improve food security and boost farmers’ incomes, enhance resilience to drought, pests, disease and other shocks, and reduce greenhouse gas emissions.

The climate smart approach of Africa Improved Foods (Rwanda)

An example of the climate smart approach can be seen in Rwanda, where despite its four growing seasons and fertile soil, the East African country’s major agro-processing companies have in recent years had to resort to importing maize, one of its main staple crops. A prime cause of the shortfall in domestic supply has been a deterioration in the quality of the maize due to contamination with poisonous and carcinogenic aflatoxins produced by certain molds that often develop in poor storage conditions, causing the crop to be rejected by processors.

This situation has been linked to farmers adjusting to volatile price spikes in the maize market, as more irregular rainfall hits yields, and trying to profit from periods of scarcity by hoarding supplies. But the lack of proper storage facilities creates the aflatoxin problem.

In 2017, Africa Improved Foods (AIF), a local producer of nutritious complementary foods to combat malnutrition, moved to tackle the aflatoxin issue by starting to set up rural collection centres to ensure proper storage of maize supplies from smallholders. AIF is a joint-venture between the Government of Rwanda and a consortium of Royal DSM, FMO, DFID and IFC, the private sector arm of the World Bank Group.

“Local sourcing is important to us. By setting up these collection points we have been able to reduce our field rejections for aflatoxin-contaminated maize substantially. This was by more than 52 percent in the second harvest of 2017, compared with the first, and to zero in the third season,” Amar Ali, AIF’s CEO said.

Following the promising results, AIF has been rapidly scaling up its post-harvest services this year thanks to a partnership with several international NGOs and a logistics company. Next to the rural collection centres, it is also supporting farmers with free transport, guaranteed fair prices and shelling services.

Aflatoxin, together with other crop diseases and pest infestations, are projected to become even more prevalent in Africa and other developing countries, threatening food security if average global temperatures continue on their trend to rise by more than two degrees Celsius – the consensus threshold adopted by scientists  for possible catastrophic environmental and social outcomes from climate change.  An estimated 30% to 40% of the food produced globally is already lost post-harvest, or wasted because it is never consumed.

Simple climate smart solutions can make a big impact on the ground

But the example of AIF demonstrates that relatively simple climate smart solutions can make a big impact on the ground. Esther Muiruri, General Manager Agribusiness of Equity Group, listed the factors that are crucial to the success of these initiatives: Partnerships, community engagement, capacity development within the banks and for the farmers, and leadership.