A whopping +600 billion (USD) worth of food is lost yearly during and/or post harvest accordingto Mckinsey and Company. As alarming as this number sounds, it will keep trending upward ifnothing is done immediately, factoring recent global misfortunes like the covid19 pandemic, thewar in Ukraine and adverse effects of climate change. Most of this loss occurs upstream of thevalue chain – between the farm and point of food processing.
It is a more sobering read whenwe focus on developing countries, especially countries in Africa. With focus on Africa as regards threat to food security, it is only rational to bring to the fore itsmost populous country – Nigeria.
Nigeria has challenges peculiar to its agricultural sectorfurther limiting its peoples’ access to food. These challenges range from transient ones like insecurity in some northern parts of the country to more existential ones like enormouspopulation growth but there are three challenges in particular that if tackled, can significantly change the food supply situation:
1. Procurement: Willingness to pay (WTP) in behavioral economics is the maximum pricea consumer will pay for a product or service. Have in mind that the consumer ideallywould rather pay less than high for a product but this notion gets misplaced when itcomes to purchase of agricultural produce because not enough consumers are involvedin the process of agricultural produce purchase at harvest, therefore creating aprocurement deficit in the sector. This deficit not only causes food loss, resulting inscarcity and leading to high cost of food but also serves as a disincentive to engageactively in farming for the farmers. Capital for food is relatively available and affordablefrom financial institutions in developed countries but the opposite is the case indeveloping countries so an alternative means of capital for food must be devised totackle the problem of procurement deficit at harvest in the agricultural sector. One hopeful silver bullet to this problem is democratising food in Africa by encouragingeveryone to participate in the procurement of produce at farm gates to help maximise farmer’s yield thereby increasing the volume of food released into the open market andalso serve as a financial incentive to the farmers to want to farm more. The way Africansbuy food needs to change completely. The consumer now needs to think like the producer by embedding themselves in the earlier part of the value chain – upstream -between the farm and processing.
2. Storage: Whenever storage is mentioned in Africa, it immediately sounds like animpossible achievement and this is because the thought process has always beenaround capital intensive massive underutilized warehouses located on the outskirts ofcities, or in coastal cities for the purpose of export.Adequate storage is out of reach for domestic agro players. The thinking around storagein Africa needs to change, consideration needs to be given to varied storage unitsincluding compact storage, mobile storage and most importantly neighborhood storageunits – using existing shops and supermarkets as proof of concept because by definition,shops and supermarkets already serve the purpose of storage. So instead of constantly trying to build new 1,500 square meter warehouses, we can utilize 10 already existing150 square meter houses that will be affordable, fully utilized and located within denselypopulated areas giving consumers quicker access to food.
3. Demand and supply forecast: finally, big data using basic key metrics like near futuredemand for agricultural produce and projected future yield at harvest on the supply endwill change the game tremendously in how Africa plans for food security. This will involveactive engagement of supply (farmers) and demand (consumers) on what their capacityand needs are respectively. With this done over a few years, Africa will confidently beable to tell what output of particular crops for the next year will be and what the demandwill be and quickly ascertain whether there will be a surplus or deficit, then planaccordingly.We have seen significant movement in Africa around agriculture with some agritech firms likeAfex, Babban Gona and ThriveAgric doing some interesting work. However one exciting and innovative agritech company – AGRIHOLDERS (www.agriholders.com) powered by Crowdpinch Storage (crowdpinch) currently checks two out of the three points discussed above, with emphasis on distributed storage as a dark store for agri produce.
Agriholders is an agritech company disrupting the paradigm of agricultural practice in Africa bydemocratizing food. Their goal as they say is to give everyone an opportunity to play in the upstream value chain of agriculture by letting people BUY.STORE.SELL. It is such a holistic approach that speaks to the problem of procurement by connecting people to farmers to buydirectly at farmgate prices and provide storage for both the farmers and the primary buyers ofthe produce if need be to avoid food loss on both ends.
Speaking with one of the company’s representatives, Mr. Idoko said the short and mid term goals are to solve the problems ofprocurement at harvest and storage in the agricultural sector then take on the demand/supplydata challenge long term.
Currently he said the company has a network of over 300,000 farmers across Nigeria alone who are now being connected to the world by creating a marketplace forthem where corporates, manufacturers, SMEs and individuals can buy directly from them andtake delivery like a typical e-commerce purchase thereby closing the procurement deficit atharvest for farmers.
On storage, he said they treat every storage unit as a “Dark Store” – a shop that can sell toconsumers without interfacing with them physically. He believes the future of food in Africarequires innovative initiatives that do not conform to the norm.
The company currently has+20,000 square meter storage space aggregated across Nigeria dedicated to food security. We must admit that Agriholders is taking some bold steps in proffering solutions to food insecurity in Africa and we look forward to seeing their future achievements in the sector. You can keep tabson their project on food security in Africa at agriholders.
