An Analysis of Africa’s Agricultural Value Chain and Lessons from Korea’s Agricultural Development Policies

Abstract

Agriculture is an integral part of the African economy as it accounts for 60‒70% of the continent's labor and 15% of its total GDP on average. The development of the agricultural sector is linked to Africa’s economic and social development as 90% of those in absolute poverty levels reside in farming areas. Despite efforts by various governments and organizations to uplift the agricultural sector, Africa’s annual food import value stands at 50 billion USD and is expected to more than double by 2025, highlighting the limits of Africa’s agricultural development so far. Much of Africa’s policy efforts has been to increase production levels, such as through higher applications of fertilizers and pesticides, expansion of irrigation systems, application of improved seeds and so on. As a result, some African countries have been able to increase production and produce surplus food. However, the lack of attention on building a market for trading agricultural goods has caused other problems; some farmers may have surplus production to sell, but do not have access to market price information, or may not have the room to wait till the price of crops rises because they need instant cash. They are not able to identify markets where they profit from selling the surplus production. At the same time, with the expansion of cities and the increasing demand for processed foods, opportunities to create and foster agricultural value chains are emerging. For example, the grounds for trading agricultural products are shifting from informal markets and street vendors to supermarkets and retail stores where urban consumers are able to purchase packaged and frozen products, creating a larger demand for better packaged and safety regulated products.