Stimulating Agricultural Entrepreneurship in Namibia [opinion]

THE CREATION of agricultural enterprises represents one of the most effective ways to stimulate rural development in Africa. Africa spends about US$40bn annually importing food, whereas 60% of its land is unused arable land.

At the African Union Summit in July 2014, African leaders will have the chance to review and revitalise the Maputo Declaration and to make new commitments in order to implement an enhanced Comprehensive Africa Agriculture Development Programme (CAADP). The commitment by African governments to spend 10% of their budget allocation on agriculture has only been achieved by seven countries thus far. Namibia allocates 4,3% of the overall budget to the ministry of agriculture. From that a lion’s share is consumed by operational costs and does not trickle down to actual food production and food security.

In Namibia, smallholder farmers are not sufficiently supported by the ministry of agriculture. Green Scheme does business only with the recognised entities under them. Even in the cases of the small scale grape farmers in the south of the country, at Orange River Irrigation Project, they are forced to sell their produce to already identified buyers via private marketing agencies. The concept of demand and supply at the right price at the market place has been thrown out of the window. If these producers could sell to the highest bidder, they would be able to make good earning, but this is not the case. At Naute dam, private international capital is drawn in at the expense of the locals, who are reduced to mere low-paid workers.

The obscure state-owned Agricultural Business Development Agency must broaden its scope and mandate beyond Green Scheme. The agency should not narrowly focus on government-identified green scheme farmers only. To assist the smallholder farmers, there is a need to establish an agricultural investment fund, modelled in a similar manner as the environmental investment fund. Agricultural investment fund, hosted by Agricultural Business Development Agency, could offer grants and soft loans to support SME farmers to expand their enterprises. These are small entrepreneurs, who may not necessarily qualify for ordinary AgriBank loans.

As a country, we need to offer increasing agricultural entrepreneurial support to smallholder farmers, in terms of improved seeds, fertilisers, logistics, water availability, training and appropriate implements. The goal should be to have deliberate policies to support transition processes, graduating subsistence farmers into smallholder farmers and ultimately into commercial farmers.

Currently, there is also little synergy between the ministries of lands and resettlement and agriculture. After the ministry of lands resettles farmers, the ministry of agriculture should take over the mandate to offer financing, implements, extension services and other vital assistance. Diversification of the farming entity to secure food production en masse should be encouraged and funded.

Taking cue from best practices, the Chinese economic miracle is partly as a consequence of the rural entrepreneurship that started in the 1980s. The creation of millions of township and village enterprises in provinces such as Zheijiang, Anhui, and Hunan played a key role in stimulating rural industrialisation. Over the past 60 years, China has experimented extensively with policies and programmes to encourage the growth of rural enterprises that provide isolated agricultural areas with key producer inputs and access post-harvest, value added food processing. Professor Calestous Juma, Director at the Practice of International Development at Harvard University in the United States, underlines that “despite the troubled early history, by 1995 China’s township and village enterprises had helped bring about a revolution in Chinese agriculture and had evolved to account for approximately 25% of China’s GDP, 66% of all rural economic output, and more than 33% of China’s total export earnings.”

Government should provide timely and relevant research information and technological support to small scale farmers for better planning and monitoring. Currently, agriculture contributes N$4.2bn to the overall GDP. Agricultural output could be increased massively with better planning and improved extension services. Namibia should support aances in research on science and technology for agriculture, create regional markets and invest immensely in the emergence of a new crop of agricultural entrepreneurial leaders dedicated to the growth of the agriculture sector. Climate change poses a serious challenge to the food industry and only innovative and creative interface between science and policy makers would avert food insecurity and encourage investment in agricultural enterprises.

Agricultural enterprises must be prioritised in Namibia, as more people are facing hunger, malnutrition and abject poverty.

* Bernadus Swartbooi and Henny Seibeb are co-founders of The Ideas Centre (which includes the Africa-Asia Strategic Studies Institute).

Source : The Namibian