Agrifood provide chain resilience is a rising enterprise danger; the variety of days with average or excessive meals worth volatility for rice and wheat has doubled or tripled between 2020 and 2024. Local weather dangers may lower world crop manufacturing by as much as 35% by 2050, with staples vital for Africa’s meals safety like rice, maize, and wheat significantly susceptible.
A brand new evaluation by Boston Consulting Group (BCG) and Quantis, Constructing Resilience in Agrifood Provide Chains,explores how rising local weather dangers, shifting commerce dynamics, and evolving geopolitical circumstances are colliding to make meals provide disruptions extra frequent, extreme, and sophisticated.
World manufacturing worth
Meals methods are already struggling: one-third of all meals produced globally is misplaced or wasted, whereas the World Well being Group estimates that one in eleven folks globally face meals insecurity. Disruptions in agricultural manufacturing intensify this example, rippling throughout communities, economies, and commerce exercise and lowering entry to important meals provides.
As geopolitical instability intensifies, provides of staple crops akin to wheat will be disrupted; the struggle in Ukraine is a living proof. In the meantime, as local weather change exacerbates each rising temperatures and the frequency of maximum climate occasions, unpredictable rising seasons might trigger additional disruption in current agrifood manufacturing areas.
Farmer profitability for rice manufacturing in $ hectare
Africa stands at a vital crossroads
For Africa—the place agriculture helps over half of the inhabitants’s livelihoods—this isn’t only a world concern, however an pressing native one.
BCG’s evaluation signifies that as a result of climate-related yield losses, farmer profitability may drop by as a lot as 46%. This threatens the monetary stability of African smallholders, who make up about 70% of the agricultural manufacturing on the continent and are sometimes with out entry to credit score, insurance coverage, or trendy farming inputs.
Rice, a staple in lots of African nations, is predicted to see world manufacturing declines of 9% by 2050, with prime producers like India seeing as much as 18% discount. Export bans—like these India carried out in 2022 and 2023—may cut back world rice exports by 54% by 2050, posing a critical danger to African meals imports.
“Rice manufacturing accounts for 22% of worldwide caloric consumption and manufacturing declines jeopardize meals safety for a number of importing nations in Africa,” says Hamid Maher, Managing Director and Senior Companion at BCG, Casablanca. “Motion from private and non-private sector stakeholders is vital to hurry up farmer adaptation and promote funding in innovation.”
Variety of days with average or excessive worth variability
The West African cocoa disaster
In West Africa, local weather disruptions like erratic rainfall and illnesses like swollen shoot and brown rot have severely impacted cocoa yields, pushing costs to just about $13,000 per ton in December 2024—a staggering 400% improve over the 10-year common.
Though greater cocoa costs can doubtlessly profit African farmers as they could obtain more cash for his or her crop, presumably growing their general earnings, the advantages of upper costs don’t at all times absolutely attain farmers as a result of complicated provide chains and intermediaries. Moreover, cocoa costs will be unstable, making it troublesome for farmers to plan long-term.
One of many predominant challenges confronted by producers is that world markets are more and more exploring alternate options to Africa’s cocoa provide as a result of varied elements. Markets wish to Southeast Asian nations like Indonesia and Vietnam to extend cocoa manufacturing, whereas Latin American nations akin to Ecuador and Brazil are additionally being thought-about for increasing cocoa cultivation with Brazil indicating formidable plans to double home cocoa manufacturing by 2030.
The continent, which provides over 60% of the world’s cocoa, is prone to each financial and meals safety shocks, impacting hundreds of thousands of African farmers.
Pathways to resilience
As world provide chain volatility will increase, firms can not afford to take a reactive method to managing dangers and addressing disruptions solely as they emerge. For agrifood resolution makers, constructing capabilities that may strengthen provide chain resilience is a precedence.
“We imagine this can be a pivotal second for agrifood resolution makers to reimagine their approaches to create resilience, worth and sustainability for his or her companies and communities,” says Zoë Karl-Waithaka, Managing Director and Companion at BCG, Nairobi.
The report emphasises a number of key resilience levers for African agrifood methods:
Funding in resilient seed varieties: Heavy reliance on a single crop variant exposes agriculture to pests, illnesses, and local weather challenges. For instance, the Cavendish banana, which is the dominant selection cultivated and commercially grown in a number of African nations, together with South Africa, Kenya, Tanzania, Uganda, Cameroon, and Ghana and accounts for 95% of business bananas offered globally, is extraordinarily susceptible to illness due to its lack of genetic variety. To offset this, guarantee extra variety by commercialising variants which were developed by analysis establishments and as wanted, promote and fund additional analysis and growth on current variants to assist them adapt to illnesses and local weather challenges, enhancing resilience and financial safety for farmers. Use of predictive applied sciences akin to AI and satellite tv for pc imaging: The mixture of in-soil sensors, satellite tv for pc imaging, AI, and machine studying permits farm-to-fork traceability and on-farm monitoring. These applied sciences additionally help predictive analytics and advisory akin to early warning methods which will be vital for planning and danger mitigation given altering climate patterns in addition to precision agriculture, which cuts prices by a extra focused utility of inputs akin to soil vitamins and different agrichemicals. Crop and provide chain diversification: Crop sourcing usually depends on dominant areas, making diversification troublesome. Increasing sourcing and adjusting methods by new suppliers and various crops requires vital investments and time for maturity. One answer is to determine various or underrepresented crops akin to sorghum and millet. Others embody increasing provider bases, figuring out crops that may adapt to the climatic and soil circumstances of different rising areas, and harnessing world commerce networks to make sure provide continuity. Entry to local weather finance for smallholder farmers: Unlocking transition financing and different types of capital is important to allow farmers and suppliers to undertake new applied sciences and farming practices and risk-mitigation methods.
By investing in climate-smart agriculture, resilient seed varieties, and predictive applied sciences, Africa can construct agrifood methods that aren’t solely safer, but in addition globally aggressive and future-ready.
Obtain the publication right here.
