Policy advice on intra-African agricultural trade and promoting agricultural innovation

Project description

Title: Global Project Agripolicy Advisory and Innovation Fund
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Germany and transnational, country packages to date in Benin, Namibia, East African Community
Lead executing agency: Varies according to country
Term: 2018 to 2023

Context

Agriculture is a key economic sector for partner countries. Trade in agricultural products in particular has great potential for driving the countries’ social and economic growth. 

However, the volume of trade between African nations in the agricultural sector currently accounts for less than 20 per cent of their foreign trade. The lack of networking leads to greater dependence on the global market for food. Agricultural production is therefore lower, and the potential available for increasing income and employment is not capitalised upon sufficiently. 

Increasing intra-African agricultural trade is an objective for many African governments. In particular, the establishment of the African Continental Free Trade Area (AfCFTA) is designed to help in achieving this goal. Nevertheless, political decisions are primarily responsible for the current low level of trade. These are frequently based on  insufficient information and little coordination between ministries, interest groups and countries, and therefore often lack coherence.

In addition, partner countries often use outdated technologies or production systems that lead to lower productivity and quality. Innovations are seldom available or are not sufficiently tailored because no flexible, practice-oriented support mechanism is available. Research, associations, advisory structures and the private sector are mostly isolated from one another and lack coordination.

Objective

Partner countries use improved instruments to shape and coordinate their agricultural trade policies. Appropriate innovations for rural areas are available and applied in the partner countries.

Approach

The project comprises two components. One is the Agricultural Policy Advisory Fund, which has helped shape African agricultural trade policies with strategic recommendations since 2018. These are based on political and economic analyses and involve actors from various ministries and the private sector. The fund identifies relevant information, draws up scenarios and uses them to develop strategic policy options.

The agricultural policy advisory component impacts the political framework conditions for marketing agricultural products. This means it can complement work in value chains and help sustainably shape sales markets. The component is mainly based on existing projects. Political decisions require a factual basis so they can generate improved long-term results. 

Since 2019, the Agricultural Innovation Fund has been expanding the project as an additional component. This component systematically identifies, promotes and spreads agricultural innovations. The focus is on mechanisation, digitalisation, renewable energies and private sector cooperation. At the same time, an innovative funding system is being set up via German universities to integrate doctoral students more closely into the international agricultural research of the Consultative Group on International Agricultural Research (CGIAR).

The innovation component of the project complements the existing innovation funding of the One World – No Hunger Initiative (SEWOH). In the long term, the work contributes to efficiency and resource conservation in agriculture and improves the situation of users in terms of income and employment. 

The target group of the project are small family farms in rural regions that benefit from agricultural and trade policy measures or are assisted by innovations, in addition to employees of upstream and downstream enterprises in the agricultural and food industry (e.g. in processing, marketing and trade).