The BRICS Summit is currently taking place in Durban, South Africa. It has been said that South Africa’s membership in the grouping could strengthen economic ties between the entire continent and the BRICS nations.
One area where the BRICS can assist Africa is in agriculture. Although agriculture employs the majority of Africans, the sector has severely underperformed over the past decades. According to Mohit Arora, Standard Bank Africa’s head of agriculture, the continent can learn a lot from some of the BRICS countries on how to kick-start its agricultural sector.
In an interview with How we made it in Africa, Arora said that BRICS countries like Brazil and India are well on their way to master the growth of agriculture, and that they have some key learnings for Africa.
Lessons from Brazil’s agricultural miracle
In the early 1960s, Brazil’s cerrado (the country’s savannah region) had limited agricultural potential. Fertility was low, the soil was highly acidic, and infrastructure was inadequate. The Brazilian Agricultural Research Corporation, known as Embrapa and established in 1973, played a significant role in the transformation of the cerrado and developing Brazil into the agricultural powerhouse that it is today.
Embrapa employed an integrated strategy to raise agricultural productivity. For example, to provide pasture for livestock, Embrapa went to Africa, brought back a grass called brachiaria, and crossbred it with a local variety. It also brought in cattle from India. Today Brazil is the world’s largest exporter of beef. In addition, the organisation was responsible for introducing high-yielding soya bean varieties. Soya beans grow best in temperate climates, but Embrapa developed varieties that could thrive in tropical climates.
Arora notes that an organisation such as Embrapa could provide a wealth of knowledge to African countries.
According to Arora, Africa can also learn from how Brazil finances its farmers. Besides banks, corporates such as fertiliser or sugar companies play an important role in financing farmers. He believes this model is very relevant for Africa where large farming ventures co-exist with smallholders.
Leveraging India’s existing ties with the continent
“India is already one of the biggest foreign players in Africa’s agricultural sector. Billions of dollars of agricultural investment have already come in from India or companies from Indian origin,” says Arora.
He says that Indians are involved in a variety of agricultural activities in Africa – from farming to agri-processing to trading.
According to Arora, there is a high confidence about Africa in India, and that the current linkages between the two regions provide a solid platform for further growth.
Improving rural infrastructure
Both India and Brazil had relative success in pulling millions of rural small-scale farmers out of poverty. Arora says the way to boost the prosperity of smallholders is to decrease the high transaction costs they incur because of inadequate infrastructure such as roads and storage facilities.
He notes that giving farmers access to technology and financial services is also vital.
“So the learning is: invest properly in public infrastructure, and invest properly in creating a financial system, so that the poor has access to financial services.”
Benefiting from South Africa’s BRICS membership
Arora said the fact that South Africa is now part of the BRICS grouping could be beneficial for Southern African nations such as Zambia, Botswana and Namibia, especially in promoting trade between these countries and the other BRICS members.
He said South Africa should, however, align its investment infrastructure to other key financial centers such as Mauritius. Africa’s largest economy should also improve the competitiveness of its ports to facilitate trade flows from other Southern African countries.