Opinion

Is it the end of agrifood market globalisation?

Gian Nicola Francesconi

Rural professionalisation: The solution to globalisation

For some, market globalisation is an unstoppable progression. For others, it just needs to be stopped, or at least slowed down and made more inclusive and sustainable. A good example of market globalisation associated with societal discontent is the EU. Arguably, academic exchanges across the borders of member states played a key role in the cultural and professional integration of the EU. Progress in ICT also played a big role. But the segment of the population who did not go to university and/or is not connected through the internet in a functional and professional way are failing to benefit from globalisation. And the most marginalised and vulnerable people are not even in the EU, but in rural Africa. Here electricity, mobile-internet networks and ICT are least available. Rural professionalisation is much needed to integrate millions of African farmers into the global market. The EU has a good reason to help Africa in this. The majority of economic immigrants to the EU are the rural youth of Africa. European support to agribusiness development and rural employment in Africa has the potential to take out economic incentives to migration.   

Globalisation brought foreign manufacturers, exporters and supermarkets to African capitals. Although these multinationals have added competitive pressure on local retailers, industry and traders, they also created new value chains for African agriculture. But value chains often fail to go the last mile, all the way to the farm gate. Mostly because of too many small or micro farms and generally poor communication and transportation infrastructure. The gap between value chains and farmers is filled by rural entrepreneurs and agribusinesses, who procure and aggregate agro-commodities from all rural corners and then sell them to local and multinational buyers. Value chains are driving the rise of rural middlemen and agricultural cooperatives. Integration into value chains means access to information, finance and technology for middlemen and cooperatives. These are nowadays competing to procure agro-commodities at the farm gate and sell to multinational companies. Competition is inevitably driving down the price for both middlemen and cooperatives. More collaboration has instead the potential to help both retain additional value. Middlemen could procure agro-commodities from cooperatives and offer brokering and management services in return. While cooperatives have the potential to keep middlemen straight and honest.  

Hybrid business models, like cooperatives with subsidiary companies, cooperatives hiring professional managers, and different forms of social enterprises –such as agro-enterprises with sustainability certifications – already market more than 50% of the agricultural product of the EU. Similar cooperative agribusiness and social entrepreneurship can be developed in Africa with the financial and technical support of the EU and the rest of the global community.

The Technical Centre for Agricultural and Rural Cooperation (CTA) is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). CTA operates under the framework of the Cotonou Agreement and is funded by the EU.