PARTNERSHIPS IN SUPPORT OF CAADP Exploring new opportunities and strategic alternatives to inform African Agriculture development, Planning and Policy Pillar II CAADP Pillar II and Promotion of Smallholder market access and the modernisation of regional marketing systems By Baba Dioum, CMA/AOC

PARTNERSHIPS IN SUPPORT OF CAADP CAADP Pillar II objective  The ultimate objective of Pillar II is to accelerate growth in the agricultural sector  by raising the capacities of private entrepreneurs, including commercial and smallholder farmers, to meet the increasingly complex quality and logistics requirements of domestic, regional, and international markets,  focusing on strategic value chains with the greatest potential to generate broad-based income growth and create wealth in rural areas and the rest of the economy.  the implementation of Pillar II seek to achieve at least a 4% annual growth rate for agricultural output. Pillar II

PARTNERSHIPS IN SUPPORT OF CAADP  The demand within Africa on regional markets for food products is projected to triple in 30 years form its level of US$ 50 billion in 2000 to US$ 150 billion in 2030; A huge opportunity in regional market development  During the same period the demand on international markets for commodities and export products will only grow by an additional 10 billion US$;  By 2030, smallholder farmers will potentially derive US$ 30 billion from regional markets and only US$ 4.5 billion from foreign export markets.

PARTNERSHIPS IN SUPPORT OF CAADP To have its full impact, regional market growth should be supported through market modernisation  The development of output growth rely on additional investment in rural areas for: Direct productive assets to increase output Post harvest equipment to significantly reduce post harvest losses that can amount up to 40% of the total output Infrastructure to ease access to markets Training and capacity building Supportive legislative and institutional environment Pillar II

PARTNERSHIPS IN SUPPORT OF CAADP Pillar II

PARTNERSHIPS IN SUPPORT OF CAADP Smallholder farmers have been progressively excluded from the main value chains  The smallholder sector dominates much of Africa’s productive activity and its labour market, and will continue to do so for the foreseeable future.  The structural adjustment programs of the 1980s and 1990s led to the reduction of government involvement in the agricultural sector, including the provision of essential support functions such as extension, market access, and input finance,  As governments step out from important marketing and support service activities and accelerate privatization, they left behind significant gaps along the value chains, which the private sector was not prepared to fill. Pillar II

PARTNERSHIPS IN SUPPORT OF CAADP Smallholder farmer could have their share of regional market growth  Trade multiplier effects suggest that a successful Pillar II agenda could not only allow African smallholders to capture the estimated US$30 billion in potential additional income in regional markets but also raise rural incomes by up to another US$60 billion.  However, this entails that smallholder farmers are more fully integrated in regional value chains and markets.  Thus, CAADP Pillar II has designed some specific activities to this purpose, in respect to trainings, financial services provisions. Pillar II

PARTNERSHIPS IN SUPPORT OF CAADP Smallholder farmer integration pathways  Development into “chain actors” as product specialist, which is often the first step in the case of FO/TAs with smallholders members that are predominantly outside of the value chains;  Intensification of chain integration along the following 5 axes: Specialisation for a given client (contract farming and alliances) horizontal integration: partnership with other operators through FO/TAs to group some activities (like marketing) and ease interactions with other chain partners; value addition through vertical integration, with FO/TAs evolving into “chain integrators”; like processing cooperatives expansion into other activities along the value chain, leading to FO/TAs becoming “chain owners”. Professionalised intermediaries Pillar II

PARTNERSHIPS IN SUPPORT OF CAADP Supporting increased linkages within value chains Pillar II

PARTNERSHIPS IN SUPPORT OF CAADP A key role for farmer organisations and trade associations  Institutional maturation of leading local FO/TAs through the adoption of more effective governance and management practices, which is required for them to serve as vehicles for the integration of smallholders into the emerging and dynamic value chains;  Operational diversification of leading local FO/TAs through the acquisition of the necessary technical, commercial, and financial resources such as to enable them to: Service providers: efficiently and effectively fulfil all major technology, market, and finance related needs of their membership; and Business partners: Develop into business oriented entities that can serve as credible business partners to other actors along the value chain  Pillar II

PARTNERSHIPS IN SUPPORT OF CAADP What does Pillar II provide on these subjects?  A review of existing and innovative integration models within Africa  Training and formation for Farmer associations  A review of innovative financial service provision models  Models and guides for the management of platform for participatory policy processes  Support investment development in strategic Agrifood Value chains ( Launch of a specific windows with AECF)  Model tool for the development of bourse in Africa Pillar II

PARTNERSHIPS IN SUPPORT OF CAADP Thank You