Abu Dhabi, UAEMonday 17 June 2019

Lessons from McDonald’s that can help to solve Africa’s food crisis

The continent has the potential to feed itself yet spends billions on food imports. Now, a tech incubator is using a model akin to McDonald’s to draw young people back to the farm.
Africa holds about half of the world’s fertile unused land – yet spends $25 billion annually on food imports. Siphiwe Sibeko / Reuters
Africa holds about half of the world’s fertile unused land – yet spends $25 billion annually on food imports. Siphiwe Sibeko / Reuters

The fast-food chain McDonald’s, it seems, does have wisdom to share when it comes to food.

The lessons are not necessarily nutrition related though; they are more about management – and some in Africa are paying attention.

The picture of a starving child has become a globally recognised image regarding Africa, but it need not be that way; the continent has enough arable land to feed much of the planet and, more importantly, itself.

The World Bank says Africa holds about half of the world’s fertile unused land – and yet it spends US$25 billion annually importing food. It also uses only a tiny percentage of its renewable water resources.

This is not lost on Arabian Gulf countries that lack water but need food security.

Just this month Sudan’s minister of investment, Mudather Abdel-Ghani, announced that three Saudi Arabian companies – Almarai, Tabuk and Alsafi – have been granted 100 acres of agricultural land each along the River Nile west of the town of Al Golid.

Tanzania, meanwhile, is pursuing Omani farming investments and the UAE’s Al Ghurair Foods, one of the largest food producers and traders in the country, says it is looking at expanding production in Egypt.

For African countries wanting to take advantage of such investments, the need is to find a model that will attract local farmers and turn them into modern agricultural entrepreneurs. This is where the fast food model comes in.

“If you look at the success of McDonald’s in exporting its brand around the world, across cultures and languages, it’s obvious they are getting something right,” says Louise de Klerk, the chief executive of the Timbali Technology Incubator in South Africa’s Mpumalanga province.

Timbali trains young farmers and puts them to work in what it calls agri-parks – formalised farming zones where they are assisted through training, technology and the marketing of their produce. The system is loosely inspired by the strip-mall fast-food model, where franchisees are given everything they need to run a business, within the overarching security of a management system.

“McDonald’s system works even though most of their employees have minimal skills or education. There’s no reason why the management lessons of the franchise system can’t be applied to agriculture,” Ms de Klerk says.

One important obstacle to increased agricultural productivity has been the steady deterioration of Africa’s soils, notes Amit Roy, the head of the International Fertilizer Development Centre (IFDC), a US institute that promotes agricultural advancement in developing countries. “Today three-quarters of Africa’s farmlands – some 170 million hectares, is degraded,” he says. “As a result, grain yield has stagnated at 1 tonne per hectare, compared to the world average of about 3 tonnes.” Crops consume upwards of 45 kilogrammes of nutrients and minerals from each hectare of land every season, he notes, a process known as nutrient mining. “When farmers plant the same fields season after season and cannot afford to replace the soil nutrients taken up by their crops, the soil is literally mined of life.”

An estimated 8 million tonnes of nutrients are depleted annually in Africa. Replenishing the nitrogen, potassium, phosphorus and other minerals absorbed by plants is therefore vital to keep crop yields from declining.

Part of the answer lies in better farming methods, including expanding the range of crops grown, improving soil conservation practices and utilising improved seeds and technology. But Mr Roy says the key to launching a “revolution” in African agriculture is much greater use of fertilizer.

African agriculture has long been a go-to project for charities, international agencies and do-gooders of every stripe. Yet decades of programmes and billions of dollars of investment have yielded little. If anything, agriculture on the continent has regressed. South Africa has gone from about 80,000 commercial farmers in 1990 to less than 30,000 today.

Elsewhere across Africa farmers are also laying down their ploughs. Two factors seem to drive this dismal trend: fewer young people are taking up farming, abandoning ancestral land for the lure of the cities; and murky property rights that make it difficult – and in some places impossible – to obtain security of tenure.

Ms De Klerk says in South Africa the average age of a farmer now is 62. And from what her colleagues on the rest of the continent are saying, the picture elsewhere is not much different. “It’s the gogos [grandparents] who are carrying the industry.”

Farming now has the stigma of being viewed as a peasant industry, dirty, inefficient and a band-aid to poverty. For many young people, taking their chances in the swelling cities where they can earn a few dollars of hard cash is a more attractive option.

Controversially, some analysts have gone so far as to suggest that a growing access to education has speeded up urbanisation as young men and women, armed with degrees and certificates, seek professional managerial employment.

The one area where farming is thriving is in the form of agri-business, where the landowner is likely to be an accountant with manicured fingernails rather than a rough-hewn son – or daughter – of the soil. Examples include the vast flower plantations of Kenya and the maize fields of South Africa’s Free State that stretch for miles which are swallowing up smaller operators.

The rise of “superfarms” explains to some extent the drop in numbers of smallholder landowners, but only partly. Another reason is that property tends to be communally owned, which makes it difficult to raise loans on it, especially for young farmers starting out. According to the Alliance for a Green Revolution in Africa’s (Agra) just-released 2015 African Agriculture Status Report, this is a leading cause of Africa’s lagging food growing status.

Agra was founded in 2006 through a partnership between the Rockefeller Foundation and the Bill & Melinda Gates Foundation. Today it also receives funding from other governments, agencies and international institutions.

“Africa has the highest area of arable land in the world but because of the limitation of our land-tenure systems and land policies, it is very difficult for the youth to access land,” says the Agra head of strategy, monitoring and evaluation, David Sarfo Ameyaw. “Africa, unlike other continents, does not have a viable land market. They are either traditionally or culturally owned.”

This is where the McDonald’s model can help. “Young people want to escape the chaos of their daily lives and find it in the certainty of a shopping mall, or franchise business,” Ms de Klerk says. “By offering them a way to become farmers that fits in with their need for security, support and comfort, we can draw people back to the land.”

The Timbali project has secured land from local chiefs as well as district authorities. Recruits are given a full package – training, quality control and, crucially, access to markets. About a third of Timbali’s produce is sold on to exporters. Another third goes to retail chains and most of the rest to local markets.

Timbali is not alone. The movement towards franchising farming is taking root around the continent, and is so far present in five African countries. The movement, organised under the banner of the Forum for Agricultural Research in Africa – itself part of the African Union – held its first conference this year on the topic in Kenya.

Thus far, more than 10,000 jobs have been created and 23,500 households supported. By training new farmers to see their activities as a franchise business, issues such as land rights become less important; McDonald’s after all, is essentially a global retail company that ‘rents’ its properties to its restaurant franchisees.

“What we want to convey is that success as an entrepreneur is not about having a certificate on the wall; it’s getting your customers to trust you”, Ms de Klerk concludes.

“A business is only as good as its last deal and by living up to the ideals of the franchise, young farmers can develop good management habits that will carry them and their activities into the future,” she says.

“And feed Africa along the way.”

Investor role to play in gaining social licence in Africa

Non-African countries, including from the Middle East, have sought land in Africa to help to ensure food security at home, but ensuring local people will benefit as well is equally ­important.

“Social licence” has become a buzzphrase for mining companies wanting to exploit mineral deposits on lands often already sprinkled with villages.

Tribal pastoralists or nomads seldom have title deeds to the ground where they graze their cattle or farm crops. This often results in governments and local authorities selling it off to corporations.

Even where local deals are struck with overseas companies, there is no guarantee that everyone is happy with the outcome; the Canadian gold producer Barrick’s Africa unit in Tanzania suffered several deadly confrontations with locals who tried to access company property amid claims of human rights abuses. Last year it renamed the unit Acacia.

In Zimbabwe, farmers of European origin with title deeds going back a century have been forced off the land in a politically charged process that also cost numerous lives.

No matter how benign the intention of outside investors, conflict with local people is a high possibility. Social licence means including locals, not merely as labourers, but also as partners.

“People need to see they are benefiting from the arrangement – it’s not only about an income, it’s also about hope for a better future,” says Louise de Klerk, the chief executive of the Timbali Technology Incubator in South Africa’s Mpumalanga province.

In this regard, agriculture as an investment has a distinct advantage over mining which, in pursuit of a finite resource, means a limited lifespan for a project.

A frequent criticism of the resource industry is that as soon as a deposit is worked out, mines close and whatever social responsibility project they were supporting folds due to lack of funding.

Farming, though, has a potentially infinite lifespan.

For this reason some mines are now turning to it as a way to leave a legacy that lasts.

Another Canadian gold producer, Teranga, which began operating in the remote north of Senegal about five years ago, has invested heavily in okra plantations, a spicy green pod that is a staple of west African cuisine.

The company hired an agronomist to advise on various soil and plant sciences such as soil management and crop production, provided seeds, fencing and water access year-round. Two years ago the first garden was planted.

Ninety-nine women from the area were commissioned to manage the plantation; in the first three months, the women harvested 19 tonnes of okra, taking a profit from the sales.

Should the mine close down for whatever reason, the project will stand on its own.

Gulf investors may be pursuing food rather than mineral resources, but the obstacles they encounter will be little different than those confronting mining ­companies.

Farming has the potential to suit the needs of both investors and local people.

It will take deft management and careful planning for it to do so.

“Whether you are a company executive, an independent director, a corporate financier, a fund manager, investment advisor or private investor you should be asking the question: ‘has the company done their social due diligence and do they have their social licence to operate?,’” says the Australia-Africa Mining Industry Group.

business@thenational.ae

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Updated: October 15, 2015 04:00 AM

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