Agrocorridors key to unleashing Africa's agribusiness potential

By Jean Kaahwa Rwamukaga

As Africa embraces agribusiness, economic agrocorridors can be a strategic tool to draw private capital and large-scale investment to projects that benefit smallholder farmers and boost food security in lower-income countries, according to a new FAO report.

These corridors, according to the report, are development programs that foster promising agricultural economic sectors in areas connected by lines of transportation like highways, railroads, port or canals. Agrocorridors integrate agribusiness  investments, infrastructure, policy frameworks and local institutions to create a streamlined economic structure to boost agribusiness in a particular area.

Agrocorridors do not just make infrastructure improvements such as roads, railways to link farmers to markets or irrigation infrastructure improvements but also provide a platform that enables and empowers authorities at local, national and regional levels to make more informed decisions about what they want to achieve.

The idea is to identify agricultural activities of economic significance in a particular area or zone and build infrastructure, policies and institutions to create an economically empowering environment to the large populations of small holder farmers to ensure sustainable and economically viable agribusiness for the region.

The potential of agricorridors as engines of broad-based sustainable development has been largely untapped and introducing these structured systems into Africa’s agribusiness sector would result a major step forward in combating food insecurity as well as economically empowering farmers.

Traditionally, economic corridors have been used for connectivity to improve the functioning of markets, or with a narrow focus, such as linking mines to ports. But corridors can be applied to agribusiness initiatives aimed at enhancing agricultural opportunities, achieving demographic targets such as creating rural jobs, environmental goals and catalyzing improved governance along value chains, all of which are needed to spur inclusive and sustainable growth in the Africa.

They also offer an important opportunity to engage the private sector's capital and trading skills to foster adequate investment in agriculture and respond to the challenge of hunger as they create a structured viable opportunity for the private players.

Effective corridors need to be geared to the competitive advantages of a territory rather than conceived as a miracle method to make a desert bloom. Economic zoning of areas to clearly identify the agribusiness activity of competitive advantage should set the stage for implementation of agriccoridors in particular areas. They should be developed in areas where there is already economic density and untapped growth potential that can be maximized.

One of the world’s successful agrocorridor projects was the Poverty Reduction and Alleviation Project in Peru, which began in 1998 and focused on using agribusiness enterprises that adopted the network farmer inclusive business model to reach small holder farmers in the Peruvian jungle and highlands. This led to the flowering of overlooked market opportunities and  Peru is now the world's third-largest exporter of artichokes, which are produced through outgrower contracts with previously unreachable smallholder farmers and processed in several agrocorridors.

Agrocorridor schemes can have even stronger impacts when they cross national borders, especially if developed under the regional trade agreements. That widens the potential market opportunities, making it possible to forge multi-stakeholder alliances and keep private-sector players engaged in the development process.

One such corridor is known as the Greater Mekong Subregion corridor programme, spanning Cambodia, Viet Nam, Thailand, Lao People's Democratic Republic, Myanmar and some Chinese provinces. There are improved bridges and customs procedures at border towns and contract farming engagements that span national frontiers.

Africa is comprised of a number of regional economic blocks with the East African community being the most homogenous.

The potential of agrocorridors to unleash the agribusiness potential of key production regions of various agriculture produce is largely untapped and could be greatly fostered by creation of structured agro corridors especially for key agriculture products  like Coffee, maize, sorghum, cotton, tea, beef.

The region has undertaken important infrastructure projects such as the railway that could lay the foundations to have functional agrocorridors linking a number of countries to foster agribusiness development.

The writer works with Allis- Gleaner Corporation

AGCO Africa Ambassador 2015