West Africa’s diet transformation: Will the region capitalise on its changing food demand?

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Ready-to-eat baby food and other processed food products. Ouagadougou, Burkina Faso

John Staatz, Professor Emeritus in the Department of Agricultural, Food and Resource Economics at Michigan State University, and Frank Hollinger, Economist at the Investment Centre Division (TCIA) of the Food and Agriculture Organization of the United Nations (FAO).

Demand for food in West Africa is changing dramatically, opening great opportunities to create new wealth and jobs. But will most of the wealth and jobs be created in West Africa or in the countries that export food to the region? The decisions made over the next few years by West Africans and their development partners will largely determine who benefits from this massive opportunity and its attendant challenges.

Rapidly evolving demand

Driven by strong population growth, urbanisation, rising incomes and changing consumer preferences, West Africans are not only eating more food each year but are also changing what they eat. As incomes rise and most consumers — including the nearly half of West Africans who now live in cities — become increasingly time-poor, people are demanding a more diverse diet that is easier to prepare and consume. Amongst the rising middle class — now a quarter of West Africa’s population — demand for perishable foods, such as fruits, vegetables, and animal-based products, is rising quickly. Safely and efficiently producing and delivering these to consumers entails tight co-ordination along all stages of the food system — from seed to the consumer’s table — requiring upgraded “hard” and “soft” infrastructure, such as reliable cold chains and improved product grades and standards. The good news is that if such improvements can be made, the production, processing and marketing of these products are much more labour-intensive than those of cereals, offering the opportunity to create many new jobs for West Africa’s burgeoning labour market.

Diet diversification is not just limited to perishables and the middle class, however. Across all income classes and geographic areas, West Africans are consuming a wider range of starchy staples (cereals, roots and tubers) than in the past, including more convenient “fast foods” derived from them, such as garb and attack. Demand for convenience – foods that are quick and easy to prepare and consume – is an overarching trend cutting across all countries and income groups. Increasingly pressed for time, consumers are willing to pay for others in the food system (processors, street-food vendors) to carry out some or all of the food processing and preparation for them, leading to rapidly growing demand for post-harvest activities.

The food system’s response

The response from the different levels of West Africa’s food system – farm-level production, food processing, retailing and policy – to these changes in demand has been mixed. Since 2008, when world prices of cereals spiked to record levels and most West African governments launched special food production initiatives, the ECOWAS region’s output of rice, maize and cassava has increased at between 6.5% and 7.9% per year — a remarkable achievement.  But production of perishables, particularly animal-based products like meat and milk, either stagnated or fell. Public-sector expenditures on agriculture have grown rapidly, but most of the increased spending has focused on farm-level production, with a heavy emphasis on fertiliser and seed subsidies. Relatively few funds have gone to the R&D and extension needed to boost long-term farm productivity, or to improving critical post-harvest activities such as product aggregation, wholesaling, processing, packaging and retailing. As a result, many larger-scale food processors in West Africa face difficulties obtaining locally the raw agricultural products in the quantities and qualities they need to operate their plants near capacity; hence, they often turn to imports. At the same time, small and medium-scale processors frequently have problems meeting the quality and packaging demands of the growing middle class, who then also turn to imports.

What’s needed to capture the new opportunities?

Much of the recent agricultural policy focus has been on understanding farmers’ constraints and helping overcome them. Yet in increasingly buyer-driven agricultural value chains, consumers are the ultimate financiers of the food system. Therefore, an improved understanding of their evolving preferences in terms of quality, convenience, safety and other food attributes is a prerequisite for producers to respond better to demand trends and successfully compete with imports.

At the same time, price still matters a lot to the three-fourths of West African consumers who subsist on less than USD 2 per day. Raising the price of food through higher import barriers designed to protect local farmers undermines these consumers’ real incomes and is probably a political non-starter. The only sustainable way to strengthen their food security while maintaining production incentives is to improve efficiency throughout the food system by improving “hard” and “soft” infrastructure.

Policy needs to focus on six areas to help West Africans capture the opportunities offered by the region’s evolving food demand:

  1. Improve the quality of public investment. More attention should focus on improving the performance of the off-farm elements of the food system (such as marketing, processing, packaging and logistics), which are increasingly under stress. At the farm level, public expenditures need to emphasise investments in infrastructure, technology development and farmer support services, rather than just input subsidies, to boost long-term productivity.
  2. Improve rural-urban linkages and intraregional trade. The strongest growth in demand for food will continue to come from urban areas, especially in coastal countries. Investments in transport, marketing infrastructure and regulatory reforms to improve market access, reduce post-harvest losses and expand input markets and support services in the rural hinterland will be critical in allowing West African farmers to capture a large share of this growing demand.
  3. Deepen regional integration. Free movement of goods and services reduces price volatility and allows the development of cross-border value chains. Moreover, to be competitive in a wide range of products with large global actors such as Brazil, China and India, West African agriculture needs to capture some of the scale economies those countries enjoy in agricultural research, input markets and technology development, among others.
  4. Build the skills base for West Africa’s food system in the 21st century. Transforming West Africa’s food system into a modern driver of economic growth will require a profoundly different set of skills than currently exist in most ECOWAS countries. Needed actions include strengthening basic literacy; linking curricula in primary and secondary schools to applications in farming and agro-industry; expanding vocational education programmes in the large range of technical skills needed by workers in a modern food system; attracting more girls to the sciences, given the important role that women play in West African agriculture; and broadening undergraduate university education in agricultural faculties to include fields such as food science, packaging and logistics.
  5. Improve policy co-ordination. Due to the growing importance of the off-farm segments of the food system and the environmental, nutritional and health implications of agricultural growth, food system policy-making needs to move beyond the traditional confines of agricultural ministries. Addressing many of the key constraints to more rapid and inclusive food system growth requires improved policy co-ordination and harmonisation between sectors, actors and along different levels of government, from supra-national to local levels.
  6. Improve policy implementation. Improving policy implementation means producing better data and a stronger evidence base for policies, investing in the capacities of key agencies and organisations charged with implementation, as well as ensuring the overall coherence of policies and programmes. The existence of robust national and regional private sector and civil-society stakeholder groups and a free press act as counterweights to inefficient policy implementation and rent seeking.

Useful links

Staatz, J. and F. Hollinger (2016), “West African Food Systems and Changing Consumer Demands”, West African Papers, No. 04, OECD Publishing, Paris

Agricultural growth in West Africa: Market and policy drivers. Rome: Food and Agriculture Organization of the United Nations and African Development Bank. French version: Croissance agricole en Afrique de l’Ouest: Facteurs déterminants de marché et de politique

The main sector of economic activity in West Africa consists of feeding its population  Laurent Bossard, Director, OECD Sahel and West Africa Club (SWAC) Secretariat

 

 

Moving beyond agriculture: It’s food that matters!

marketThomas Allen, Sahel and West Africa Club (SWAC)/OECD Secretariat

We have to face facts: agriculture’s role in the food economy of West Africa isn’t as important as it used to be. Today, 40% of the agro-food sector’s value added is no longer produced by agriculture. Agriculture remains a pillar of economies in the region, but the food chain’s downstream segments are evolving in line with changes in society. West African politicians need to take note of these evolutions and act accordingly if the region is to take full advantage of its domestic market growth potential. Food and nutrition issues are no longer solely agricultural in nature, and agricultural policy no longer addresses them all.

In West Africa today, as many people depend on non-agricultural activities for their livelihoods as are engaged in agriculture. This is the major transformation of the past 60 years. It is inextricably linked to the explosion in towns and cities that one can see just by looking at a map of the region. Never in the history of humanity have as many people moved and have as many cities emerged in such a short time. Today there are 2000 towns with over 10,000 inhabitants; in 1950, there were 150.

There are now 150 million urban dwellers, 30 times more than in 1950. Between 2000 and 2015 alone, the West African urban population grew by over 60 million people. That’s like adding a country the size of France to the region. And this growth is no longer only fueled by rural migration: most of these people were born in cities.

As a result of urbanization and income growth, the West African diet is changing. This is in turn impacting food security and nutrition. Diets are diversifying, especially in urban areas. More fruits and vegetables and more processed foods are being consumed, with the latter now representing at least 39% of urban households’ food budgets. Even more surprisingly, the poorest rural households devote 35% of their budget to processed foods, showing that these are not limited to the urban middle class.

These figures remind us of a simple truth: Almost all foods are processed in some way. We do not eat wheat or maize, but rather bread and a multitude of other products from their flour. Millet is crushed, cassava is soaked, shredded, crushed, dried, roasted, fermented, etc. Millions of women have participated in these sometimes laborious tasks, and today some devote all their energy to them. This is, for example, the case of Georgette* in Cotonou, who specializes in the preparation and sale of mawé or “dried aklui“, granules of maize flour that can easily and quickly be used to make a kind of porridge. The form that this market development takes can come as a surprise to those who automatically associate processed foods with supermarkets or frozen foods; do not expect the streets of Bamako or Niamey to be covered overnight by the franchises of a famous fast food chain!

More and more men and women work in the logistics and marketing of food products. Quantities exchanged on the agricultural and food markets have exploded: households now turn to markets as their main source of food supply, providing at least two-thirds of their food consumption. Total transactions amounted to $120 billion in 2010. It is by far the largest West African market. If you add the fact that urban populations consume 50% more than rural populations and that there is no sign of urbanisation slowing over the next two decades, it is easy to understand investor interest. Helping to co-ordinate these various actors is more important than ever before.

However, there is an additional difficulty: the largest share of this economy is informal. And it would be unrealistic to seek to formalise it today. We need to be more creative than simply suggesting investment frameworks. Experiences elsewhere can inspire ways forward, such as the Qali Warma programme in Peru that revised public procurement procedures so that local food producers could supply school meals for children between the ages of 3 and 6. This initiative is a good illustration of the challenges to public action today, namely how to simultaneously release people’s energies and devise institutional mechanisms that ensure the coherence of an increasingly complex agro-food system.

*Names have been changed

Useful links

ECOWAP+10: ten years of the ECOWAS Common Agricultural Policy

Changes in the agro-food economy and their implications OECD/SWAC and ECOWAP+10

Settlement, Market and Food Security, West African Studies, OECD/SWAC

2015 Sahel and West Africa Club Forum

Please visit the SWAC blog for more views on regional issues in West Africa.

The Ripple Effect: Water-Energy-Food Nexus

Click to find out more about the Global Forum on Environment
Click to find out more about the Global Forum on Environment

Today’s post is by Naazia Ebrahim of the OECD Environment Directorate

In Rule of Experts: Egypt, Techno-Politics, Modernity, Timothy Mitchell tells how in 1942, an epidemic of gambiae malaria in Egypt was caused by a perfect storm of interactions between rivers, dams, fertilisers, food webs, and the influences of World War II. It began with the building of the Aswan Dam and its storage reservoirs around the Nile, which provided the anopheles mosquito with new breeding spots. Thanks to the dams, basin irrigation was replaced by perennial irrigation, encouraging a denser population of humans who no longer needed to disperse to avoid flooding. Government protectionism on behalf of the sugarcane industry then helped it expand at the expense of food-growing lands, while new irrigation techniques led to reduced soil fertility. When ammonia was diverted from fertilizer to explosives manufacturing for World War II, the resulting malnourishment and closely populated settlements created an easy target for this particularly social mosquito.

Splitting technological, agricultural, epidemiological, and geopolitical considerations into separate boxes led at least in part to the epidemic. The engineers building the dam could never have imagined the ripple effects their work created. But today, we know better (well, somewhat at least: it’s worth noting that deforestation has been strongly linked to the Ebola epidemic). And, with studies estimating that the global demand for water, energy, and food will increase by 55%, 80%, and 60% respectively by 2050, those ripple effects are going to be all the more critical – especially between these three areas .

Risks in one sector often correlate with risks in the others – but equally often, decreasing the risk in one sector causes it to increase dramatically in others. Figuring out how to provide enough water for wheat farming, hydropower generation, and maintaining local ecosystems, while still decreasing carbon emissions, is not an easy task.

The world is facing unprecedented stresses, and we are going to need an unprecedented response. We’re doing our best to help create that response at the OECD. Next week we’re hosting a forum on the nexus between water, energy and food. We’re looking forward to discussing (with senior private sector leaders, policy experts and government officials) ways to manage these trade-offs, co-ordinate planning across sectors, anticipate unexpected developments, engage business, and minimise risks across all three sectors. If we get it right, there’s potential for huge collaborative gains.

During all this work, it’s worth remembering that the malaria epidemic was often framed as one of intelligence versus nature. But intelligence and technological advancement were not created through externally imposed “solutions”. Rather, they were developed iteratively by engaging and interacting with the challenges. We have no doubt that the same will be true here.

Useful links

OECD work on Biodiversity, water and natural resource management

Cashing in on cows

cow picture
“Cows are amongst the gentlest of breathing creatures; none show more passionate tenderness to their young when deprived of them; and, in short, I am not ashamed to profess a deep love for these quiet creatures.” Thomas de Quincey

“Nowhere is the cow so feeble, and her yield so little as in India. Nowhere is she so badly treated as she is today in India by the Hindus.” So said Mahatma Gandhi in 1925, in a speech to the All-India Cow-Protection Conference.

Being holy comes with more duties than privileges. Hindus don’t kill or eat their cows, but Gandhi’s speech underlines the fact that apart from milk, a live cow can provide fertilizer, fuel and building material from its dung, as well as traction power and maybe even another cow. And it can do this by eating grass and parts of plants that are of no use to humans.

It also provides an ultimate safety net when times are really hard, but killing a cow provides only a one-off benefit that may prove disastrous to a poor family in the long run. As Marvin Harris points out in Cows, pigs, wars and witches,  a taboo against killing cows can have practical benefits beyond its religious and moral meanings.

Today, there are more cows in the world than Indians, and the livestock sector is one of the fastest growing parts of the agricultural economy. According to the FAO’s latest State of Food and Agriculture report,  livestock accounts for 40% of the global value of agricultural production and supports the livelihoods and food security of almost a billion people. Worldwide, livestock contributes 15% of total food energy and 25% of dietary protein. Products from livestock provide essential micronutrients that are not easily obtained from other plant food products.

Rising incomes, population growth and urbanisation are pushing up demand for meat products in developing countries. Global annual meat production is expected to expand from 228 million tonnes at present to 463 million tonnes by 2050, with the cattle population estimated to grow from 1.5 billion to 2.6 billion and that of goats and sheep from 1.7 billion to 2.7 billion.

All these animals need food and drink too. To produce a kilo of boneless beef takes about 6.5 kg of grain, 36 kg of roughages, and 155 litres of water for drinking and servicing. Producing the feed requires about 15300 litres of water on average.

We look at the “water footprint” of everyday products in the Insights on Sustainable Development, while food production and environmental questions are among the issues discussed in the forthcoming Insights on food and agriculture.

Useful links

Agriculture ministers from OECD and non-OECD countries will be meeting at the OECD on 25-26 February. On this page you’ll find information about the meeting as well as a series of background notes covering the issues ministers will be discussing.

We’ll also be discussing some of these issues in a series of posts next week.

Little to worry about? The nanotech in your food

They say that what you don’t know can’t hurt you. What about what you can’t see? Nanotechnology is the science of manipulating particles smaller than a billionth of a metre. At these sizes, materials can be used in new ways and some of them even change properties – silver becomes antimicrobial for instance and can be used to treat wounds.

Additives containing nanoparticles have been used for years, for example silica as an anti-caking agent to keep powders flowing freely, or even in a milkshake to enhance the taste.

The food industry’s current and potential uses of nanotech are discussed in a new report from the Science and Technology Committee of the House of Lords, the upper chamber of the UK parliament. (more…)