Africa is still the only continent not producing enough food to feed its population. So how can SAP help the continent improve its agricultural potential?
Thomas Odenwald, chief strategist for SAP sustainability solutions, recently went on a “Learning Journey” to sub-Saharan Africa. He was invited by Cargill, a global trader, purchaser, and distributer of grain and other agricultural commodities, and the largest privately held corporation in the United States in terms of revenue.
For Odenwald, the experience was a great example of co-innovating on making the world run better and improving people’s lives.
SAP News: Thomas, what is a “Learning Journey” and what was the goal?
Odenwald: A Learning Journey begins with the process and practice of exploring new market opportunities. It requires a group of people to immerse themselves in an unfamiliar context, engage with people from diverse backgrounds and explore new perspectives.
The goal is not to find all the answers, but instead to gain insights, challenge assumptions, and forge a broader understanding.
In our case, Cargill partnered with Leaders’ Quest, bringing together 25 thought leaders from business, academia, government agencies, the non-profit sector, and media to South Africa and Zambia.
The group was confronted with questions like
- How to produce enough food for a growing, more affluent and increasingly urbanized world in the years ahead by looking at Africa’s food systems?
- What infrastructure is needed, especially across borders, to connect the points along supply chains?
- Which foods will a rapidly growing urban population need and want?
- And how will climate change affect production in different regions?
Africa is fascinating. It’s got the youngest population on earth (about 200 million people between the ages of 15 and 24 live here), and will double in size by 2045. It is home to some of the world’s fastest-growing economies, has as much as 60 percent of the world’s arable land. Yet a fifth of the population remains undernourished, while 50% of the population live on less than $2 per day. It’s the only country other than India where the working population is growing. Africas agricultural systems have long suffered from underinvestment, and as a result, its countries have struggled to keep up with the productivity growth that many other parts of the developing world have experienced since the 1960s and 1970s.
Africa is also pretty diverse. If you want to study how the world will feed itself in the near future, this is the place to do it.
What were some of your highlights?
We had a very diverse program. Before two days had passed, we had already visited a pig farm, a commercial-scale grain and oilseed processing facility, a smallholder who produces fresh vegetables for an urban market, and the distribution and retail operations of Pick’n Pay, South Africa’s second largest retailer, where we learned what it meant to build a consumer-oriented, sustainable business in very difficult environments during the apartheid regime. Their flagship retail stores and distribution centers can hold their own with the rest of the world.
And in contrast we visited community centers in the poorest townships of Johannesburg and we met with amazing entrepreneurs like Anna and Bertha. Anna Phosa bought four piglets to diversify production on her small cabbage farm. Three years later, she was named “Female Farmer of the Year.” Today, she manages a 315 hectare farm including 2,000 pigs and a breeding stock of 250 sows. Bertha showed us how taking a loan to purchase a simple water pump from NGO Kickstart increased her cabbage harvest 5 – 10 fold.
Poaching is a huge challenge in Africa. Tell us about this initiative that turns elephant and other wildlife poachers into organic farmers.
Sure. We are currently losing four elephants per hour and three rhinos per day through poaching – it’s a huge tragedy out there.That’s why I’m involved in www.groupelephant.com and hope more colleagues will join the fight. Comaco (short for community markets for conservation) is the showcase example of a business-oriented approach which uses economic incentives to encourage environmentally-friendly conservation farming practices for rural small-scale farmers and poachers. It encourages poachers to trade their guns for tools and training in sustainable farming practices and pays above market prices for their produce based on a scorecard system – while mitigating deforestation and promoting organic farming in the process. Today their “ITS WILD” brand products (peanut butter, rice, honey, soy beans, nuts) already exceed $3 million in annual sales. I was truly intrigued by Dale Lewis and his work. The Comaco concept is a win for the community, the wildlife, and the climate. As of today they helped 30,000 farmers turn their lives around. More than 2,200 guns and 80,000 snares have been surrendered, and they planted 10 million trees and 10,000 beehives in the process.
Which role do local subsistence farmers play?
I had the opportunity to stay in the home of a local subsistence farmer in Zambia. These families are struggling for survival by farming small plots of land – but at the same time they are the backbone of the rural economy, responsible for 80% of the food production. Staying with Kalimba’s family in their home, sitting and singing around their campfire, had a lasting impression on me. It’s one thing to talk about people earning less than one dollar a day (with no electricity, no beds, no light, no access to clean water – water has to be carried in from half a mile away), but it’s a different experience to receive their warmth and hospitality. Here, growing enough food for the family always comes before cash crops, and a farmer with a metal roof (rather than thatch) is the envy of his or her neighbors.
Kalimba gave me his rooster as a good-bye gift, according to the tradition the highest gift you can receive from an African family.
SAP has the goal to establish the African region as one of the company’s top-five growth markets globally. How do your learnings help?
SAP has the vision to help Africa run better and improve the lives of its people. That’s why we are making big investments in the coming years.
Corruption, climate change, HIV/AIDS, lack of education, and lack of innovation and entrepreneurship makes food security in this part of the world a daily struggle.
But there is the prospect of giving these farmers better education, better market access and include innovation in local extension services. And that includes IT. Providing market information, providing education and access to financial services can uplift farmers and therefore the economy.
Statistics show that Africa has already the highest return on foreign investment compared with other regions in the developing world. But Africa is still the only continent not producing enough food to feed itself. It’s a volatile, uncertain, complex, and ambiguous market space; but if we look at these people as leaders and entrepreneurs, not just farmers, if we provide these people with supply chain support, if we strengthen their networks and develop the linkage with buyers, I truly believe we can make a difference.
Or as one of the attending Cargill executives put it: “Making sure Africa can realize its agricultural potential will not only enable it to feed its own people, it will help lift its citizens out of poverty and serve as a cornerstone for broader economic growth.”
I see our experiences and dialogues as part of this journey, as the starting point for future collaborations, and a source of inspiration for each of us as we return to our various careers and organizations with the shared goal of building a more food-secure world. Our role as trusted innovator starts by stepping out of our comfort zones into unfamiliar territory and engaging with people who challenge our assumptions – and building from there.
More Facts and Figures:
- 80% of Africans work in the agriculture and food sectors. (Chicago Council 2015)
- Agriculture accounts for 32% of Africa’s GDP. (World Bank 2014)
- One quarter of the continent’s population is chronically undernourished.
- African agriculture and food sectors are expected to reach $1 trillion by 2030.
- Africa is currently on course to produce just 15% of its estimated food demand in 2030. (Global Harvest Initiative 2014)
- Africa is home to 8 of the 15 fastest growing economies.
- 80% of the farmers in Africa are smallholders (cultivating less than two hectares/five acres).
- Ownership of more than 90% of Africa’s rural land is undocumented.
- Africa now has more mobile phone users than the U.S. or the EU: 650 million. (World Bank 2012)
About SAP Customer & Partner Cargill
Cargill is an international provider of food, agricultural, and risk management products and services and has more than 100,000 employees in 60 countries. As one Cargill executive put it: “Cargill and SAP are joined at the hip.” With technology from SAP, Cargill gained a solid, scalable platform to support growth and managed to reduce IT operating costs from $42 million to $13 million. SAP helps Cargill to manage everything from contracts with farmers to inventory tracking, and to support commodity futures trading.
Pictures courtesy of Cargill