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1Current and Future Trends of China-Africa Agricultural Trade and Cooperation Presentation prepared for theAMT Agric Outlook ConferenceCSIR International Convention CentrePretoria, 21st - 22nd September 2010By Hannah EdingerHead of Research, Frontier Advisory22nd September 2010
2Overview 1. Introduction 2. Background to Research Study 3. The Agricultural Sector: SSA vs China4. Sino-African Commercial Relations5. Sino-African Agricultural CooperationWhere to from here?
4Introduction Increasing Sino-African relationship Commercial relations between China & Africa have gained significant momentum in the last decadeSince turn of the century there has been a shift in China’s policy towards AfricaAs “China Inc.” started to internationalise, Africa became a strategic focus for Chinese outward-bound companies, especially in the extractive industriesBeijing accorded Africa renewed political importance, based on geo-strategic and commercial interests, rather than ideological onesResulted in FOCAC vehicle to coordinate China’s foreign policy objectives in AfricaChina still small but growing partner in AfricaCore sector of future cooperation: agriculture
5Introduction China in Africa As Africans, how do we perceive Chinese inroads into the African continent?
6Introduction Asia in Africa What do we see the role of Asia to be in Africa?
7Background to StudyStudy on the Relevance of Chinese Agricultural Technologies to African Smallholder FarmersRockefeller China-Africa Project around FOCAC (AATF, ACET, AERC, CCS)This project AATF; CCS; Consulting teamsStudy Objectives:1)To assess the constraints of smallholder agriculture in SSA.2) To assess the level of Chinese involvement under FOCAC, in supporting smallholder farmers in SSA.3) To assess agricultural technologies that are available to Chinese smallholder farmers that can be used within the African smallholder farming community to address productivity constraints.4) To come up with selection criteria for selecting Chinese agricultural technologies that are suitable for smallholder farmers in SSA.5) To come up with strategies for access and transfer of Chinese technologies to smallholder farmers in SSA.
8Background to Study Production of Cereals, yields per ha (2003) Source: AATF, 2009
9Background to Study Point of departure… Comparison of average regional cereal yieldsComparison of fertilizer use (2002)SSA1t/haMENA2.3t/haChina4.5t/haEast Asia & PacificSource: AATF, 2009SSA13kg/haMENA73kg/haEast Asia & Pacific190kg/haSource: AATF, 2009
11Is there a role to play for China in Africa’s agric sector? SSA vs ChinaSSA agriculture vs Chinese agricultureOnly region on the globe where poverty & malnutrition continue to increase in percentage & absolute numberOver half of the malnourished people are subsistence farmers whose productivity is too low to feed their families and escape povertyWhile productivity in other developing regions has improved, agricultural productivity in SSA has stagnated or declined (eg. cereal yields)Implementation of agricultural technology in SSA has been slowAgric in China is characterised by smallholder producersThese producers have been able to record great improvements in productivity & become food self-sufficientThrough CAAS, etc. China has been able to develop technologies to increase smallholder productivitySmallholder agric productivity in China driven by productivity enhancing agric technologies & supporting policy package by governmentIs there a role to play for China in Africa’s agric sector?
12Characteristics of agriculture in SSA SSA AgricSubsistence FarmingLow Input & OutputLow Modern Technology AdoptionPoor Infra-structureStrong Linkage btw Stock & Livestock SystemsDecreasing Donor AssistanceImpact of Resource Booms
13Constraints to agricultural productivity in SSA Poor soil & soil mngt: - poor soil mngt; low fertiliser application; high acidity of soil; key constraint to crop productivityClimatic variability: - rainfall variability; droughts & flooding; arid/semi-arid; outdated weather forecasting systemsWater dev & mngt: - about 5% irrigated in SSA; vs 55% in China; 65% in Japan; 60% of irrigated land in SSA in Sudan & Madagascar; better irrigation could up productivityBiotic constraints: - pests, weeds & diseases decrease crop yields by up to %; inadequate knowledge & control; shortage of extension servicesPost-harvest handling: - lack of skills, technologies & facilities for harvesting, processing & storageLack of crop varieties: - lack of access to improved varieties; lack of public funding for breeding programmes; improved hybrid varieties not available to smallholder farmersL shortage &inefft draught power: -SSA least mechanised region; human L high; lack ofmechanised technology
14Constraints to agricultural productivity in SSA Inadequate energy sources: - lack of power infrastructure; impacts irrigation & cold storageLand availability & tenure: - lack of individual ownership; limits access to credit; no incentives to invest in land qualityInappropriate infrastructure: - lack of transport, ICT, HR, research stations, etc.Inefficient markets: - lack of access to markets & market info; lack of & processing facilities; lack of K; lack of knowledge; all results in no cash cropsPoor government policies: - lack of direction re policy; inadequate subsidies; no creation of enabling environmentPoor rural finance: - struggle to raise working K; unmet demand for credit & finance; no financing for inputsInefficient research& extension services: - lack of R&D; fragmented research systems; weak research centre linkages; waste of resources & duplication; no extension systemsLack of capacity
15Characteristics of agriculture in China China Agric400m People Lifted from Poverty4th Largest Country by AreaEndowed with Variety of Natural ResourcesLand & Water ConstraintsDeclining Farmland & Increasing PopulationGreat Variety of Climate1978 Reforms’ Impact on AgricFeeding 20% of world pop off 9% arable landUrbanisation & changing diets
16Characteristics of agriculture in China Major progress in agriculture since 1978Greater agricultural productivity -> greater yieldsFrom subsistence farming to relatively well-off communities -> by all measures, farmers have become much better off since 1978Limited arable land, but large labour forceComparative advantage in L intensive crops (fruit & veg)Agric as share of GDP has declined (10%), but still employs about 65% of labour forceCrop production (56%), animal husbandry (27%), fisheries (10%) & forestryChina has become the largestProducer and consumer of cereals, potatoes, garlic, onions, apples, pears, duck & goose meat, eggs, honey, pig, sheep and goat meatProducer of fishKey exporter: Prepared fruit & veg (apple juice); chicken meat; teaKey importer: Soybeans; cotton lint; palm oil; wheat…
17Characteristics of agriculture in China How was this progress made?Major economic reforms in China since 1978 which also had impact on agric sectorGradual privatisation and opening up; eg. SEZsGreater reliance on market forces; eg. PricesHuge infrastructure spend to unlock economic potentialCreation of conducive policy environmentGreat focus on investment into agric sectorGreater application of science and technologyGreater focus on international trade in agricultural products and technologySurplus agric L used for urban development of industry but some light manufacturing and secondary industry was also moved to the countryside -> increased number of people engaged in off-farm activitiesGreater production due to higher yields (rice, wheat, apples)
18Characteristics of agriculture in China Greater production due to higher yields (Chinese rice)Source: AATF, 2009
19Characteristics of agriculture in China Land reforms & property rightsSince 1970s -> household responsibility system replaced the system where land was owned by collectives (where production was sold through govt monopolies)New system meant that surplus could be sold on open markets; that HHs could use, sub-lease and transfer land; and gave them land use rights and decision making freedomBut not fully privatisedLand use rights granted for 30 yearsUrban land is state-owned and traded for longer leasesStronger rights to land and productionstimulated growth in agric and rural incomesinsured a minimum of food security at the HH levelStill greater need for further clarification on property rights
20Characteristics of agriculture in China Role & success of agric technology in China (I):Application of technologies drove the increases in greater yields and thus greater production despite decreasing harvest areasLargely due to:Increasing fertilizer useIncreasing pesticide useIncreasing use of agricultural machinery (8x more tractors; 12x more trucks)Expanding irrigation (45m ha to 51m ha from 1978 to 1997)Increasing rural electricity use (more than 6x that in 1978)Reduction in post-harvest losses given application of food industry technologies includingStorage; Processing; Preservation; DistributionAdvanced research was also prioritised by the Chinese Govt inMolecular biology; Plant genetics; Biotechnology, etc.
21Characteristics of agriculture in China Cumulative Changes in Agric Inputs (% change, )InputChangePeriod (if different)Agric employment (primary industry)17%to 2006Cultivated land area23%Irrigated areaIrrigated area by mech/elec pump42%Fertilizers:Compound fertilizer4691%Nitrogenous fertilizer139%Phosphate fertilizer172%Potash fertilizer1315%Total fertilizer consumption275%Pesticide use91%1994 to 2005Rural electricity consumption1264%Total power of ag machinery364%Source: Sandrey & Edinger, 2009
22Characteristics of agriculture in China Role & success of agric technology in China (II):Achievements in technology part of greater package deal and integrated approach:Setting the correct policy and enabling environment (prices; markets; incentives)Investing in supporting infrastructureAgricultural technology developmentDistribution of this through extension systems (leave no farmer behind)Huge regional differences though still exist (crop yields, post harvesting processing and logistics)And now greater move towards greater quality of produce and more responsible approaches rather than just yieldsLimited increase in agric production due to limited land; water scarcity; growing environmental issues
23Agriculture & technology in China Summary of key technologies applied in driving Chinese agriculture over last 3 decades1) new seed varieties;2) fertilization technology;3) irrigation technology;4) insect control through plant breeding, new insecticides and integrated pest management (IPM);5) planting technologies in the field;6) soil improvements such as mulching and desalination;7) mechanisation;8) tissue culture technologies;9) animal grazing and management technologies;10) feed and nutrition changes for animals;11) animal disease controls; and12) aquaculture technologies.
24Agriculture & technology in China Other technologies available in ChinaComputer based agriculture and precision agricultureEdible fungi research selection and efficient cultivation technologyGreenhouse technologyAnimal breeding technologyAnimal feed and nutrition technologiesAnimal health technologiesFish farming technologies
26China & Africa – the new growth coupling Beginnings of a growth correlation199619992007Almost an absolute correlation after 1999 – Coincided with China’s New Africa PolicyAfrica’s growth is tracking the V-shaped recovery of China since mid-2008: Growth correlation of !Source: IMF, EIU, Frontier Advisory analysis
27China-Africa Cooperation: Commercial Trends Key trade trendsAfrica’s exports to China much more concentrated than importsExports in 2008: oil (70%), iron ore (4%), manganese (3%), as well as chromium, cobalt, platinum, wood, copper and diamondsExport relationship reflects Africa’s relative comparative advantage in natural resource base but lack of value-addLast decade, declining share in agric exportsResource-rich African countries serve as NB trade partners for China to meet fast-growing resource requirements of Asian powerhouseOn import side, top imports are machinery and electrical equipment (31.8%), textiles and articles (17.5%), base metals (13.9%), transport machinery (11%) and chemicals (4.6%)Issue of trade imbalance: value of goods exported vs importedNo FTAs but preferential tariffs on resource imports into China and preferential trade access of 440 products (zero-tariff) for LDCsIssue of non-tariff barriers to trade
28China-Africa Cooperation: Commercial Trends Lower commodity prices informed lower trade values in ‘09Total trade declined by 15.7% to $90.01bn in 2009China’s trade deficit in 2008 changed to a trade surplus of $5.4bn in 2009Chinese imports from Africa down 24.34% mainly due to lower commodity pricesChinese exports to Africa down only 6.18%Main imports into China continue to be oil (about 66%)Source: World Trade Atlas
29China-Africa Cooperation: Commercial Trends Trading profileAfrica’s trading profile dominated by resource exportsIn 2007, about 70% of exports made up of crude oilIn 2007, about 80% of all exports constituted crude oil, iron ore, wood, diamondsOn imports side, key imports include: machinery and capital goods, consumer goods including clothing & textiles, electronics, etc.Source: World Trade Atlas
30China-Africa Cooperation: Commercial Trends Investment: Chinese companies’ inroads into the continentSino-African trade spurred by inroads of Chinese companies2006: 800 companies (est)2009: 2,000 companies, mainly smaller private business (est)Investments of these companies in extractive industry, agriculture and agri-business, manufacturing (including CTF), services (ICT), etc.Chinese investments on the continent up significantly but data understates Chinese companies’ footprints on the continent financing agreementsBy 2002: $982.7m cumulative Chinese FDI in Africa (2.6% of Chinese global cumulative outward FDI)By 2007: $13.5bn cumulative Chinese FDI in Africa (14%) [Sources: Gu (2009), UNCTAD (2009)]Disaggregated data not readily available & Chinese stats on FDI questionableInvestment however concentrated in resource-rich countries and around oilFinancing/development assistance/loans in infrastructure & construction
31China-Africa Cooperation: Commercial Trends Key sector activity: Infrastructure & constructionMost visible and significant involvement of Chinese companies in construction & infrastructure sectorIncreasing bidding and tendering for projects across continentChinese infrastructure focus has prompted resurgence of Western interest in the sector, eg. North-South Corridor (Cook & Lam, 2009)Vital infrastructure packages and rollouts linked to mining rights and access to key resources (Angola Model) largely supported by Chinese government and financial institutionsChina EXIM Bank: By June 2007, more than 300 projects in AfricaLending policies closely linked to China’s FPSupports Chinese SOEs in “going global”Supports resource- and market-seeking initiativesCDB: By March 2007, more than 30 projects across Africa Capitalisation of $5bn CADFund; JVs in key sectors
32China-Africa Cooperation: Commercial Trends Chinese financing activity in AfricaBetween : $44bn in aid from China to Africa in more than 900 projectsIn early 2000s: less than 10 infrastructure projects per annum financed by the Chinese (World Bank, 2008)Spike in projects and value in 2006 “Year of Africa”More than 35 African countries benefitting from Chinese financing with key source of financing being China EXIM Bank (92%)Majority of deals in Angola, Nigeria, Sudan and EthiopiaChinese financing cumulative commitments concentrated in power & transportPeriodFinancing# of projects$500m per annum>24$ bn per annum432006$7bn292007$4.5bn28Source: World Bank, 2008Source: World Bank, 2008
33Chinese Outward FDI Chinese Outward FDI (2003-2008) Chinese overseas investment especially encouraged since 1985SOEs designated and supported by state to ‘go global’More than 5,000 domestic Chinese investment entities had by end 2006 established over 10,000 overseas enterprises in 170 countriesMore than 8,500 domestic Chinese investment entities had by end 2008 established over 12,000 overseas invested enterprises in 174 countriesSource: Ministry of Commerce of PRC, National Bureau of Statistics of PRC, State Administration of Foreign Exchange, 2009
34Chinese Outward FDI Chinese Outbound FDI flows by region (2008) Asia continues to be destination of choice for Chinese outward FDIUsed to be followed by Latin America but was displaced by Africa in 2008 (due to large inflows into South Africa that year)But offshore financial hubs skew distribution of Chinese FDI by regionSource: Ministry of Commerce of PRC, National Bureau of Statistics of PRC, State Administration of Foreign Exchange, 2009
35Chinese Outward FDI Chinese Outbound FDI flows to Africa (2003-2008) Previous years, SANE economies used to be top recipients of Chinese FDIFDI flows are resource-biased looking at FDI recipients in last few yearsTop African recipients in 2008 were South Africa, Nigeria, Zambia, AlgeriaBut FDI figures perhaps understate China’s activity on the African continentSource: Ministry of Commerce of PRC, National Bureau of Statistics of PRC, State Administration of Foreign Exchange, 2009
36Chinese Outward FDI Change in China’s Outbound FDI Flows (2003-2008) FDI to Africa has been increasing rapidly but from a very low baseBy 2006, 800 Chinese companies in Africa, dominated by activity of SOEsBy 2008, 2,000 Chinese companies in Africa including also more small private businessesSource: Ministry of Commerce of PRC, National Bureau of Statistics of PRC, State Administration of Foreign Exchange, 2009
37China-Africa Cooperation: Commercial Trends Africa’s role in China’s economic expansionIf urbanisation drive in China is irreversible, then Chinese commodity demand is a long-term trendGiven Africa’s comparative advantage, its growth is largely underpinned by Chinese demand for resourcesThus, China’s growth prospects and changing consumption patterns increasingly dependent on Africa’s ability to supply these resources“New Coupling” China and Africa’s growth trajectories become intertwinedAfrica a source of both hard and soft commodities given developments in ChinaAfrica also plays role in China’s “going global” policy practising groundChinese initiated SEZs in Africa as potential safe-haven investment zones
39China-Africa Cooperation: Agriculture Africa-China Agric TradeChina’s agric imports:In 2008, 1.7% of China’s agric imports were from Africa = US$906mFrom % of China’s agric imports were from AfricaIn 1995, 14.4% of China’s agric imports from AfricaCotton is more than 33% of these imports, followed by tobacco, sesame seeds, cocoa beans, woolAfrican agric exports highly concentrated – top 5 HS6 lines represent 82.8%SA main source; top products: wool and hidesChina’s agric exports:In 2008, 4.8% of China’s agric exports were from Africa = US$1.446bnThis is about 2.8% of Chinese exports to AfricaAgric exports to Africa grown 13.5% pa, below exports to Africa overall (22.5%)Green tea (18.6%), tomato paste, rice, kidney and animal gutsTop destination is SA, Nigeria, Morocco, Algeria & Egypt
40China-Africa Cooperation: Agriculture Chinese cooperation in SSA agricultureChinese cooperation in SSA agric spans over 5 decadesHighly uncoordinated in the pastMore than 200 agric cooperation programmes since 1960 in 40 states, including agri-technology programmesMore than 10,000 Chinese agric experts dispatched in Africa during this periodAbout 300 Africans study agric courses in China every yearSince 2000 also shorter agric training programmes for Africans in ChinaIncreasing dispatching of Chinese agric experts & technicians in AfricaIncreasing FOCAC commitments re agricultural sector development in Africa (both directly and indirectly)
41China-Africa Cooperation: Agriculture FOCAC II – Addis AbabaInfrastructure development and logistics supportMainly transportation; telecoms; energy; water; electricityPrevention and treatment of infectious diseasesHuman resources developmentDevelopment Fund training up to 10,000 African personnelAgricultural cooperationAgro-infrastructure developmentFarming & breeding & aquacultureFood securityExchange and transfer of applied agric technologySkills transfer & technical assistanceManufacturing of farm machineryProcessing of farm produce
42China-Africa Cooperation: Agriculture FOCAC III – BeijingDouble annual development assistance by 2009Send 100 senior Chinese agricultural experts to AfricaSet up 10 agricultural demonstration sites in AfricaSet up 100 rural schools & double scholarshipsBuild 10 hospitals; build 30 anti-malaria clinicsSend 300 young volunteers to support education, agriculture, sports & health-related projectsCancel interest-free loans maturing in 2005 of LDCs$3bn in preferential loans & $2bn in export buyer’s creditsEstablish 3-5 SEZs in AfricaSet up the China-Africa Development Fund
43China-Africa Cooperation: Agriculture FOCAC IV – Sharm el-SheikhBuilding 10 clean energy projects in Africa to address climate changeBuilding 100 joint demonstration projects as part of the establishment of the China-Africa science and technology partnershipProvision of $10bn in concessional loans to build up financing capacityIncluding $1bn for SME businessesFurther opening of Chinese market to African products - 95% of products duty freeGreater agric cooperation by building another 10 agricultural technology demonstration centres & sending agricultural teamsDeepening medical care and health cooperation through building 30 hospitals, 30 malaria prevention centres, training of 3,000 doctors & nursesIncreasing people-to-people and cultural exchangesProposal to launch China-Africa joint research and exchange programmeCooperation in human resources development and education by building further 50 schools, training 1,500 principals and teachers, more Chinese scholarships
44China-Africa Agric & Rural Dev Cooperation Recent activities (I)Angola: Sinohydro contracted in 2007 to set up irrigation systems in four regions, and to construct a dam. Dam and related irrigation infrastructure have been common areas where Chinese companies have been active in, in Africa. In 2009, China also extended a $1bn loan towards ag sector development in Angola; and more than 60 ag technicians were to be trained by 2010 in Angola.DRC and Congo B: Two farming projects have received years of support from an agricultural institute in Hebei province in China. Chinese ag cooperation with the DRC dates back to 1973, in terms of planting of rice and vegetables; more recently, given the $6bn resource for infrastructure deal in the DRC, positive spillovers for the ag sector are expected, given the massive infrastructure rehabilitation plan.Ethiopia: China as cooperated in ag sector over the last three decades.
45China-Africa Agric & Rural Dev Cooperation Recent activities (II)Ghana: the Bui dam that is financed and constructed by China EXIM Bank and Sinohydro respectively looks to have irrigation potential of about 30,000 ha. Nigeria: There has been assistance with development of commercial livestock production; as well as construction of more than 600 boreholes to boost water supply across various states.Mozambique: A $18m loan was extended in 2008 from China to fund a number of smaller agric projects in the Zambezi valley. It is also reported that multiple Chinese companies are focusing on agro-industry and aquaculture in the country.Sierra Leone: Chinese agric teams have assisted to cultivate rice technologies.Tanzania: Signed agreement with China in 2009 worth $17.5m for agricultural cooperation activities.
46China-Africa Agric & Rural Dev Cooperation Recent activities (III)Uganda: The Industrial and Commercial Bank of China (ICBC) in mid-2009 expressed interest to invest in Uganda’s ag sector. Also, in 2007/2008 more than 200 Ugandans (mainly officials and professionals) received training in ag, fishing, bamboo cultivation, urban health, education, etc in China. Further 100 or so were said to be trained in 2009 particularly in fisheries as part of a quota extended by the Chinese Govt to Uganda.Zambia: Chinese investment in Zambia dam projects will also have downstream irrigation benefits. There are also smaller private investments in farms including vegetable farming, maize and pork in Zambia (“friendship farms”).
47China-Africa Agric & Rural Dev Cooperation Recent activities (IV)Construction of hospitals, rural schools, malaria clinics, etc.Poverty reduction experience shared at workshops such as the The Experience Sharing Programme on Development between China and Africa in Beijing; draws on success and progress of Chinese economy and poverty reduction, reforms and development in rural areas, infrastructure constructionNanjing Agricultural University offers classes to African agric officials on rural and development reform of agriculture; trained many agricultural experts in AfricaVisits to provinces, Gansu province, for African officials to draw on experiences of poverty reduction programmes coordinated by China International Poverty Alleviation Center
48China-Africa Agric & Rural Dev Cooperation Agricultural demonstration centres & EXIM BankPrevious assistance in agric sector has been uncoordinated and effectiveness thereof questionedMore recent FOCAC commitments – boost agri programmes and cooperation further in AfricaAt FOCAC III and IVMultibillion dollar packages for development initiatedKey focus on sectors of agric and infrastructureTotal of more than two dozen agric demo centres announced at summitsProjects/agric demo centres being erected in more than a dozen African states to dateCurrently largely focusing on seed technologiesWith numerous failed aid projects in Africa, coordinated efforts need to be made that these research centres do not make the list of failed projects
49China-Africa Agric & Rural Dev Cooperation Agric demo centresBenin: contract signed in March 2008• Cameroon: contract signed in November 2008; working committee set up early ;• Congo: contract signed in March 2008;• Ethiopia: contract signed in April 2008;• Liberia: construction not yet commenced;• Mozambique: contract signed in November 2008• Rwanda: construction commenced on 4 April 2009• South Africa: contract signed in 2008;• Sudan: field visit by Chinese company in October 2007;• Tanzania: field visit by Chinese experts in 2007;• Togo: construction commenced on 22 October 2008;• Uganda: contract signed in June 2008; and• Zambia: visit by Chinese experts in December 2008;• Zimbabwe: contract signed in 2008.
50China-Africa Agric & Rural Dev Cooperation Role of agric demo centresExperimental researchProduction demonstrationShowcasing modern irrigation and farming implementsBreeding improved strains to boost agric productionTo help improve food security, alleviate poverty, fight unemploymentIntroduction of modern farming technologiesAquaculture development (SA and Uganda)Rice research, including irrigation schemes and integrated production (Tanzania)Bridge gap between researcher and end userTechnical training of farmers, extension workers and agric studentsOutgrower schemes – eg. DRC & Malawi
51China-Africa Agric & Rural Dev Cooperation Role of CADFund1 of 8 measures at FOCAC IIIIndependent commercial equity fund to facilitate Chinese companies investing in AfricaCapitalised by CDB; initial $1bn; total $5bn$540m dispatched across about 20 projectsKey focus sectors of agriculture, manufacturing, infrastructure (especially power infrastructure), extractive industries and special economic zonesBy March 2009, more than $20m committed across 10 agric projectsIncludes projects in forestry, animal husbandry, fishery, planting, processing, agricultural machinery, and agricultural trade promotion, among other things, to improve the livelihood of African people and to “bring in practical Chinese technology and skills” to African farmersExamples of these projects include cotton planting and processing projects in Malawi, Mozambique and Zambia and Ethiopian leather processing project.Greater proposed inv in agric machinery in Africa
52Key Lessons Chinese agricultural technologies Could address constraints of:Lack of high quality seed and plant breeding resourcesDrought and poor water managementProblems of low labour productivity or mechanisationLow soil fertility and lack of fertilisersBiotic stresses pest and disease control and forecasting technologiesAgro-meteorology and climate changeLack of affordable energy to support agriculturePost-harvest losses of agricultural produce
54Where to from here? Renewed emphasis on agric in Africa Traditional donor support in African agric has waned over the last 3 decadesBut renewed focus on the primary sector from govt’s, donors & private sectorRecognition that agric can play important contribution to growth and development of African economiesMounting interest in the continent’s agric sector has emerging also from China & other “non-traditional partners”, due to:Higher global food pricesHigh rates of urbanisation in emerging markets (greater purchasing power)Changing dietary patterns (greater meat intake)Decreasing arable land in major agric producing economiesWater shortages in othersCleaner energy targets, etc.
55Where to from here? China as a partner in Africa’s agric development China acknowledges developmental constraints in Africa & lack of progress in agric sectorBut China also sees commercial opportunity in agric (and other sectors)And need to feed population that will peak at 1.6bn with declining resourcesCooperation & relations in agric sector will be on various levels / various actorsPolicy focus as part of FOCAC commitmentsIncreasing focus by Chinese financial institutions (EXIM Bank, CADFund, etc) on agric sector opportunitiesSupporting investments and focus into complementary sectors such as infrastructure (transport, storage & handling), ICT, power sectorEstablishment of commercially run agric demo centres & outgrower schemesOpportunities for smaller farming operationsGreater X of agric products, greater M of agric machinery & capital goods
56Where to from here? China as a partner in Africa’s agric development The transfer and accessibility of technologies, research & developmentCooperation programmes and agricultural research & expert exchangesThe best agricultural technologies for transfer from China to Africa are waterand soil related technologiesInvestment into the agricultural and related sectors, rather than perhaps “traditional aid” and handouts, are essential to further progress in the sectorAfrica has developmental challenges that only Africa can solveLooking to success stories such as China’s agricultural development could be a part of that solutionChina has indicated a willingness to assist with the continent’s developmental challenges, which perhaps is more closely aligned to Africa’s needs than previous assistance from traditional donors
57Overview of Discussion Thank YouHannah EdingerSenior Manager & Head of ResearchFrontier AdvisoryTFEW
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