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Current and Future Trends of China-Africa Agricultural Trade and Cooperation Presentation prepared for the AMT Agric Outlook Conference CSIR International.

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Presentation on theme: "Current and Future Trends of China-Africa Agricultural Trade and Cooperation Presentation prepared for the AMT Agric Outlook Conference CSIR International."— Presentation transcript:

1 Current and Future Trends of China-Africa Agricultural Trade and Cooperation Presentation prepared for the AMT Agric Outlook Conference CSIR International Convention Centre Pretoria, 21 st - 22 nd September 2010 By Hannah Edinger Head of Research, Frontier Advisory 22 nd September 2010

2 1.Introduction 2.Background to Research Study 3.The Agricultural Sector: SSA vs China 4.Sino-African Commercial Relations 5. Sino-African Agricultural Cooperation 6.Where to from here? Overview

3 Introduction

4 Increasing Sino-African relationship Commercial relations between China & Africa have gained significant momentum in the last decade Since turn of the century there has been a shift in China’s policy towards Africa As “China Inc.” started to internationalise, Africa became a strategic focus for Chinese outward-bound companies, especially in the extractive industries Beijing accorded Africa renewed political importance, based on geo-strategic and commercial interests, rather than ideological ones Resulted in FOCAC  vehicle to coordinate China’s foreign policy objectives in Africa China still small but growing partner in Africa Core sector of future cooperation: agriculture Introduction

5 China in Africa As Africans, how do we perceive Chinese inroads into the African continent?

6 Introduction Asia in Africa What do we see the role of Asia to be in Africa?

7 Background to Study Study on the Relevance of Chinese Agricultural Technologies to African Smallholder Farmers Rockefeller China-Africa Project around FOCAC (AATF, ACET, AERC, CCS) This project AATF; CCS; Consulting teams Study 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.

8 Production of Cereals, yields per ha (2003) Background to Study Source: AATF, 2009

9 Point of departure… Comparison of average regional cereal yields Comparison of fertilizer use (2002) Background to Study SSA1t/ha MENA2.3t/ha China4.5t/ha East Asia & Pacific4.5t/ha SSA13kg/ha MENA73kg/ha East Asia & Pacific190kg/ha Source: AATF, 2009

10 The Agricultural Sector: SSA vs China

11 SSA agriculture vs Chinese agriculture SSA vs China Only region on the globe where poverty & malnutrition continue to increase in percentage & absolute number Over half of the malnourished people are subsistence farmers whose productivity is too low to feed their families and escape poverty While 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 slow Agric in China is characterised by smallholder producers These producers have been able to record great improvements in productivity & become food self-sufficient Through CAAS, etc. China has been able to develop technologies to increase smallholder productivity Smallholder agric productivity in China driven by productivity enhancing agric technologies & supporting policy package by government Is there a role to play for China in Africa’s agric sector?

12 Characteristics of agriculture in SSA SSA Agric Subsistence Farming Low Input & Output Low Modern Technology Adoption Poor Infra- structure Strong Linkage btw Stock & Livestock Systems Decreasing Donor Assistance Impact of Resource Booms

13 Constraints to agricultural productivity in SSA Poor soil & soil mngt: - poor soil mngt; low fertiliser application; high acidity of soil; key constraint to crop productivity Climatic variability:- rainfall variability; droughts & flooding; arid/semi-arid; outdated weather forecasting systems Water 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 productivity Biotic constraints: - pests, weeds & diseases decrease crop yields by up to 70%; inadequate knowledge & control; shortage of extension services Post-harvest handling: - lack of skills, technologies & facilities for harvesting, processing & storage Lack of crop varieties:- lack of access to improved varieties; lack of public funding for breeding programmes; improved hybrid varieties not available to smallholder farmers L shortage & inefft draught power: -SSA least mechanised region; human L high; lack of mechanised technology

14 Constraints to agricultural productivity in SSA Inadequate energy sources: - lack of power infrastructure; impacts irrigation & cold storage Land availability & tenure: - lack of individual ownership; limits access to credit; no incentives to invest in land quality Inappropriate 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 crops Poor government policies: - lack of direction re policy; inadequate subsidies; no creation of enabling environment Poor rural finance: - struggle to raise working K; unmet demand for credit & finance; no financing for inputs Inefficient research & extension services:- lack of R&D; fragmented research systems; weak research centre linkages; waste of resources & duplication; no extension systems Lack of capacity

15 Characteristics of agriculture in China China Agric 400m People Lifted from Poverty 4 th Largest Country by Area Endowed with Variety of Natural Resources Land & Water Constraints Declining Farmland & Increasing Population Great Variety of Climate 1978 Reforms’ Impact on Agric Feeding 20% of world pop off 9% arable land Urbanisation & changing diets

16 Major progress in agriculture since 1978 Greater agricultural productivity -> greater yields From subsistence farming to relatively well-off communities -> by all measures, farmers have become much better off since 1978 Limited arable land, but large labour force Comparative advantage in L intensive crops (fruit & veg) Agric as share of GDP has declined (10%), but still employs about 65% of labour force Crop production (56%), animal husbandry (27%), fisheries (10%) & forestry China has become the largest Producer and consumer of cereals, potatoes, garlic, onions, apples, pears, duck & goose meat, eggs, honey, pig, sheep and goat meat Producer of fish Key exporter: Prepared fruit & veg (apple juice); chicken meat; tea Key importer: Soybeans; cotton lint; palm oil; wheat… Characteristics of agriculture in China

17 How was this progress made? Major economic reforms in China since 1978 which also had impact on agric sector Gradual privatisation and opening up; eg. SEZs Greater reliance on market forces; eg. Prices Huge infrastructure spend to unlock economic potential Creation of conducive policy environment Great focus on investment into agric sector Greater application of science and technology Greater focus on international trade in agricultural products and technology Surplus 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 activities Greater production due to higher yields (rice, wheat, apples) Characteristics of agriculture in China

18 Greater production due to higher yields (Chinese rice) Characteristics of agriculture in China Source: AATF, 2009

19 Land reforms & property rights Since 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 freedom But not fully privatised Land use rights granted for 30 years Urban land is state-owned and traded for longer leases Stronger rights to land and production stimulated growth in agric and rural incomes insured a minimum of food security at the HH level Still greater need for further clarification on property rights Characteristics of agriculture in China

20 Role & success of agric technology in China (I): Application of technologies drove the increases in greater yields and thus greater production despite decreasing harvest areas Largely due to: Increasing fertilizer use Increasing pesticide use Increasing 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 including Storage; Processing; Preservation; Distribution Advanced research was also prioritised by the Chinese Govt in Molecular biology; Plant genetics; Biotechnology, etc. Characteristics of agriculture in China

21 Cumulative Changes in Agric Inputs (% change, ) Characteristics of agriculture in China InputChangePeriod (if different) Agric employment (primary industry)17%to 2006 Cultivated land area23%to 2006 Irrigated area23% Irrigated area by mech/elec pump42% Fertilizers: Compound fertilizer4691% Nitrogenous fertilizer139% Phosphate fertilizer172% Potash fertilizer1315% Total fertilizer consumption275% Pesticide use91%1994 to 2005 Rural electricity consumption1264% Total power of ag machinery364% Source: Sandrey & Edinger, 2009

22 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 infrastructure Agricultural technology development Distribution 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 yields Limited increase in agric production due to limited land; water scarcity; growing environmental issues Characteristics of agriculture in China

23 Summary of key technologies applied in driving Chinese agriculture over last 3 decades 1)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; and 12)aquaculture technologies. Agriculture & technology in China

24 Other technologies available in China Computer based agriculture and precision agriculture Edible fungi research selection and efficient cultivation technology Greenhouse technology Animal breeding technology Animal feed and nutrition technologies Animal health technologies Fish farming technologies Agriculture & technology in China

25 Sino-African Commercial Relations

26 Source: IMF, EIU, Frontier Advisory analysis Almost an absolute correlation after 1999 – Coincided with China’s New Africa Policy Beginnings of a growth correlation Africa’s growth is tracking the V-shaped recovery of China since mid : Growth correlation of ! China & Africa – the new growth coupling

27 Key trade trends Africa’s exports to China much more concentrated than imports Exports in 2008: oil (70%), iron ore (4%), manganese (3%), as well as chromium, cobalt, platinum, wood, copper and diamonds Export relationship reflects Africa’s relative comparative advantage in natural resource base but lack of value-add Last decade, declining share in agric exports Resource-rich African countries serve as NB trade partners for China to meet fast-growing resource requirements of Asian powerhouse On 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 imported No FTAs but preferential tariffs on resource imports into China and preferential trade access of 440 products (zero-tariff) for LDCs Issue of non-tariff barriers to trade China-Africa Cooperation: Commercial Trends

28 Lower commodity prices informed lower trade values in ‘09 China-Africa Cooperation: Commercial Trends Source: World Trade Atlas Total trade declined by 15.7% to $90.01bn in 2009 China’s trade deficit in 2008 changed to a trade surplus of $5.4bn in 2009 Chinese imports from Africa down 24.34% mainly due to lower commodity prices Chinese exports to Africa down only 6.18% Main imports into China continue to be oil (about 66%)

29 Trading profile Africa’s trading profile dominated by resource exports In 2007, about 70% of exports made up of crude oil In 2007, about 80% of all exports constituted crude oil, iron ore, wood, diamonds On imports side, key imports include: machinery and capital goods, consumer goods including clothing & textiles, electronics, etc. China-Africa Cooperation: Commercial Trends Source: World Trade Atlas

30 Investment: Chinese companies’ inroads into the continent Sino-African trade spurred by inroads of Chinese companies 2006: 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 agreements By 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 questionable Investment however concentrated in resource-rich countries and around oil Financing/development assistance/loans in infrastructure & construction China-Africa Cooperation: Commercial Trends

31 Key sector activity: Infrastructure & construction Most visible and significant involvement of Chinese companies in construction & infrastructure sector Increasing bidding and tendering for projects across continent Chinese 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 institutions China EXIM Bank:By June 2007, more than 300 projects in Africa Lending policies closely linked to China’s FP Supports Chinese SOEs in “going global” Supports resource- and market-seeking initiatives CDB:By March 2007, more than 30 projects across Africa Capitalisation of $5bn CADFund; JVs in key sectors China-Africa Cooperation: Commercial Trends

32 Chinese financing activity in Africa Between : $44bn in aid from China to Africa in more than 900 projects In 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 Ethiopia Chinese financing cumulative commitments concentrated in power & transport PeriodFinancing# of projects $500m per annum> $ bn per annum $7bn $4.5bn28 Source: World Bank, 2008 China-Africa Cooperation: Commercial Trends

33 Chinese overseas investment especially encouraged since 1985 SOEs 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 countries More than 8,500 domestic Chinese investment entities had by end 2008 established over 12,000 overseas invested enterprises in 174 countries Chinese Outward FDI Chinese Outward FDI ( ) Source: Ministry of Commerce of PRC, National Bureau of Statistics of PRC, State Administration of Foreign Exchange, 2009

34 Asia continues to be destination of choice for Chinese outward FDI Used 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 region Chinese Outward FDI Chinese Outbound FDI flows by region (2008) Source: Ministry of Commerce of PRC, National Bureau of Statistics of PRC, State Administration of Foreign Exchange, 2009

35 Previous years, SANE economies used to be top recipients of Chinese FDI FDI flows are resource-biased looking at FDI recipients in last few years Top African recipients in 2008 were South Africa, Nigeria, Zambia, Algeria But FDI figures perhaps understate China’s activity on the African continent Chinese Outward FDI Chinese Outbound FDI flows to Africa ( ) Source: Ministry of Commerce of PRC, National Bureau of Statistics of PRC, State Administration of Foreign Exchange, 2009

36 FDI to Africa has been increasing rapidly but from a very low base By 2006, 800 Chinese companies in Africa, dominated by activity of SOEs By 2008, 2,000 Chinese companies in Africa including also more small private businesses Chinese Outward FDI Change in China’s Outbound FDI Flows ( ) Source: Ministry of Commerce of PRC, National Bureau of Statistics of PRC, State Administration of Foreign Exchange, 2009

37 Africa’s role in China’s economic expansion If urbanisation drive in China is irreversible, then Chinese commodity demand is a long-term trend Given Africa’s comparative advantage, its growth is largely underpinned by Chinese demand for resources Thus, 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 intertwined Africa a source of both hard and soft commodities given developments in China Africa also plays role in China’s “going global” policy  practising ground Chinese initiated SEZs in Africa as potential safe-haven investment zones China-Africa Cooperation: Commercial Trends

38 Sino-African Agricultural Cooperation

39 Africa-China Agric Trade China’s agric imports: In 2008, 1.7% of China’s agric imports were from Africa = US$906m From % of China’s agric imports were from Africa In 1995, 14.4% of China’s agric imports from Africa Cotton is more than 33% of these imports, followed by tobacco, sesame seeds, cocoa beans, wool African agric exports highly concentrated – top 5 HS6 lines represent 82.8% SA main source; top products: wool and hides China’s agric exports: In 2008, 4.8% of China’s agric exports were from Africa = US$1.446bn This is about 2.8% of Chinese exports to Africa Agric exports to Africa grown 13.5% pa, below exports to Africa overall (22.5%) Green tea (18.6%), tomato paste, rice, kidney and animal guts Top destination is SA, Nigeria, Morocco, Algeria & Egypt China-Africa Cooperation: Agriculture

40 Chinese cooperation in SSA agriculture Chinese cooperation in SSA agric spans over 5 decades Highly uncoordinated in the past More than 200 agric cooperation programmes since 1960 in 40 states, including agri-technology programmes More than 10,000 Chinese agric experts dispatched in Africa during this period About 300 Africans study agric courses in China every year Since 2000 also shorter agric training programmes for Africans in China Increasing dispatching of Chinese agric experts & technicians in Africa Increasing FOCAC commitments re agricultural sector development in Africa (both directly and indirectly) China-Africa Cooperation: Agriculture

41 FOCAC II – Addis Ababa Infrastructure development and logistics support Mainly transportation; telecoms; energy; water; electricity Prevention and treatment of infectious diseases Human resources development Development Fund training up to 10,000 African personnel Agricultural cooperation Agro-infrastructure development Farming & breeding & aquaculture Food security Exchange and transfer of applied agric technology Skills transfer & technical assistance Manufacturing of farm machinery Processing of farm produce China-Africa Cooperation: Agriculture

42 FOCAC III – Beijing Double annual development assistance by 2009 Send 100 senior Chinese agricultural experts to Africa Set up 10 agricultural demonstration sites in Africa Set up 100 rural schools & double scholarships Build 10 hospitals; build 30 anti-malaria clinics Send 300 young volunteers to support education, agriculture, sports & health- related projects Cancel interest-free loans maturing in 2005 of LDCs $3bn in preferential loans & $2bn in export buyer’s credits Establish 3-5 SEZs in Africa Set up the China-Africa Development Fund China-Africa Cooperation: Agriculture

43 FOCAC IV – Sharm el-Sheikh Building 10 clean energy projects in Africa to address climate change Building 100 joint demonstration projects as part of the establishment of the China-Africa science and technology partnership Provision of $10bn in concessional loans to build up financing capacity Including $1bn for SME businesses Further opening of Chinese market to African products - 95% of products duty free Greater agric cooperation by building another 10 agricultural technology demonstration centres & sending agricultural teams Deepening medical care and health cooperation through building 30 hospitals, 30 malaria prevention centres, training of 3,000 doctors & nurses Increasing people-to-people and cultural exchanges Proposal to launch China-Africa joint research and exchange programme Cooperation in human resources development and education by building further 50 schools, training 1,500 principals and teachers, more Chinese scholarships China-Africa Cooperation: Agriculture

44 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. China-Africa Agric & Rural Dev Cooperation

45 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. China-Africa Agric & Rural Dev Cooperation

46 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”). China-Africa Agric & Rural Dev Cooperation

47 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 construction Nanjing Agricultural University offers classes to African agric officials on rural and development reform of agriculture; trained many agricultural experts in Africa Visits to provinces, Gansu province, for African officials to draw on experiences of poverty reduction programmes coordinated by China International Poverty Alleviation Center China-Africa Agric & Rural Dev Cooperation

48 Agricultural demonstration centres & EXIM Bank Previous assistance in agric sector has been uncoordinated and effectiveness thereof questioned More recent FOCAC commitments – boost agri programmes and cooperation further in Africa At FOCAC III and IV Multibillion dollar packages for development initiated Key focus on sectors of agric and infrastructure Total of more than two dozen agric demo centres announced at summits Projects/agric demo centres being erected in more than a dozen African states to date Currently largely focusing on seed technologies With numerous failed aid projects in Africa, coordinated efforts need to be made that these research centres do not make the list of failed projects China-Africa Agric & Rural Dev Cooperation

49 Agric demo centres Benin: contract signed in March 2008 Cameroon: contract signed in November 2008; working committee set up early 2009; 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 China-Africa Agric & Rural Dev Cooperation

50 Role of agric demo centres Experimental research Production demonstration Showcasing modern irrigation and farming implements Breeding improved strains to boost agric production To help improve food security, alleviate poverty, fight unemployment Introduction of modern farming technologies Aquaculture development (SA and Uganda) Rice research, including irrigation schemes and integrated production (Tanzania) Bridge gap between researcher and end user Technical training of farmers, extension workers and agric students Outgrower schemes – eg. DRC & Malawi China-Africa Agric & Rural Dev Cooperation

51 Role of CADFund 1 of 8 measures at FOCAC III Independent commercial equity fund to facilitate Chinese companies investing in Africa Capitalised by CDB; initial $1bn; total $5bn $540m dispatched across about 20 projects Key focus sectors of agriculture, manufacturing, infrastructure (especially power infrastructure), extractive industries and special economic zones By March 2009, more than $20m committed across 10 agric projects Includes 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 farmers Examples 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

52 Chinese agricultural technologies Could address constraints of: Lack of high quality seed and plant breeding resources Drought and poor water management Problems of low labour productivity or mechanisation Low soil fertility and lack of fertilisers Biotic stresses pest and disease control and forecasting technologies Agro-meteorology and climate change Lack of affordable energy to support agriculture Post-harvest losses of agricultural produce Key Lessons

53 Where to from here?

54 Renewed emphasis on agric in Africa Traditional donor support in African agric has waned over the last 3 decades But renewed focus on the primary sector from govt’s, donors & private sector Recognition that agric can play important contribution to growth and development of African economies Mounting interest in the continent’s agric sector has emerging also from China & other “non-traditional partners”, due to: Higher global food prices High rates of urbanisation in emerging markets (greater purchasing power) Changing dietary patterns (greater meat intake) Decreasing arable land in major agric producing economies Water shortages in others Cleaner energy targets, etc. Where to from here?

55 China as a partner in Africa’s agric development China acknowledges developmental constraints in Africa & lack of progress in agric sector But China also sees commercial opportunity in agric (and other sectors) And need to feed population that will peak at 1.6bn with declining resources Cooperation & relations in agric sector will be on various levels / various actors Policy focus as part of FOCAC commitments Increasing focus by Chinese financial institutions (EXIM Bank, CADFund, etc) on agric sector opportunities Supporting investments and focus into complementary sectors such as infrastructure (transport, storage & handling), ICT, power sector Establishment of commercially run agric demo centres & outgrower schemes Opportunities for smaller farming operations Greater X of agric products, greater M of agric machinery & capital goods Where to from here?

56 China as a partner in Africa’s agric development The transfer and accessibility of technologies, research & development Cooperation programmes and agricultural research & expert exchanges The best agricultural technologies for transfer from China to Africa are water and soil related technologies Investment into the agricultural and related sectors, rather than perhaps “traditional aid” and handouts, are essential to further progress in the sector Africa has developmental challenges that only Africa can solve Looking to success stories such as China’s agricultural development could be a part of that solution China 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 Where to from here?

57 Overview of Discussion Thank You Hannah Edinger Senior Manager & Head of Research Frontier Advisory T F E W

58 Overview of Discussion CONFIDENTIALITY and DISCLAIMER: This document and its contents are strictly private and confidential, privileged and for the information of the intended recipient only. Frontier Advisory (Pty) Ltd. makes no representations or warranties in respect of the content of this document, and will not be liable for any loss or damage of any nature that may arise from this document, the content thereof or your reliance thereon. Should you have received this document in error please contact the sender immediately and destroy this document.


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