EGM Report

UNITED NATIONS FOOD AND AGRICULTURE ORGANIZATIO N INDUSTRIAL DEVELOPMENT ORGANIZATION OF THE UNITED NATIONS

Final Report of the

UNIDO/FAO Expert Group Meeting

on the preparation of the

High-Level Conference on Development of Agribusiness and Agro-Industries in Africa (HLCD-3A)

held at the

Vienna International Centre UNIDO

Vienna, Austria

from 27 to 29 April 2009

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This document has not been formally edited.

© UNIDO/FAO 2009 Designations employed and the presentation of material in the publication do not imply the expression of any opinion whatsoever on the part of the Secretariats of the United Nations Industrial Development Organization and the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or bounderies. The opinions, figures and estimates set forth are the responsibilities of the authors and should not necessarily be considered as reflecting the views or carrying the endorsement of UNIDO or FAO. The mention of firm names or commercial products does not imply endorsement by UNIDO or FAO.

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Table of Contents List of Abbreviations and Acronyms................................................................................. iv 1. Introduction..........................................................................................................1 2. Introductory Statements by the Co-organizers ...................................................2 2.1. Welcome address by the Director General of UNIDO.............................................2 2.2. Welcome address by FAO ......................................................................................2 2.3. Introductory remarks by the Director, Agri-business Development Branch of UNIDO......2 2.4. Opening comments by the AUC .............................................................................3 2.5. Presentation on UNIDO’s work in agribusiness and agro- industry development.......3 2.6. Overview of the EGM objectives, expected outcomes and programme ...................4 3. Plenary Sessions on the EGM Background Paper ..............................................5 3.1. Introduction to the background paper......................................................................5 3.2. Policy and development contexts in agribusiness and agro-industries in Africa .........6 3.3. Factors shaping the growth and developments of agribusiness and agro-industries

in Africa.................................................................................................................7 3.4. Initiatives for the development of agribusiness and agro-industries in Africa ..........7 4. A Shared Vision for Agribusiness and Agro-industries Development .............10 5. Thematic and Regional Working Groups..........................................................11 5.1. Thematic working groups......................................................................................11 5.1.1. Public goods and facilitative policies.....................................................................11 5.1.2. Innovative institutions...........................................................................................11 5.1.3. Financial capital and risk mitigation......................................................................12 5.1.4. Conclusions from the thematic working group discussions....................................12 5.2. Regional Working Groups.....................................................................................12 5.2.1. East and Southern Africa.......................................................................................12 5.2.2. North Africa..........................................................................................................13 5.2.3. Western and Central Africa ...................................................................................15 6. On-going initiatives related to financing agribusiness and agro-industries in Africa 17 6.1. Kreditanstalt für Wiederaufbau (KfW)..................................................................17 6.2. Agence Française de Développement (AFD).........................................................17 6.3. Kilimo Trust .........................................................................................................18 6.4. Zambia Agribusiness Technical Assistance Centre (ZATAC)................................18 6.5. African Development Bank (AfDB)......................................................................18 6.6. Plenary discussion.................................................................................................19 Annex I. Thematic Priorities and Maintained Hypotheses .........................................20 Annex II . List of Participants........................................................................................21

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List of Abbreviations and Acronyms AAC Africa Agricultural Capital AFD Agence Française de Développement AfDB African Development Bank AFFM African Fertilizer Financing Mechanism AGOA The African Growth and Opportunity Act AGRA Alliance for a Green Revolution in Africa AGS Rural Infrastructure and Agro-industries Division of FAO AUC African Union Commission CAADP Comprehensive Africa Agriculture Development Programme CEMAC Communauté Economique et Monétaire de l'Afrique Centrale CFA Comprehensive Framework for Action CIRAD Centre de coopération internationale en recherche agronomique pour le

développement ECOWAS Economic Community of West African States EGM Expert Group Meeting FAO Food and Agriculture Organization of the United Nations FDI Foreign Direct Investment GAIF Global Agro-Industries Forum HLCD-3A High-Level Conference on Development of Agribusiness and Agro-Industries in

Africa IFAD International Fund for Agricultural Development KfW Kreditanstalt für Wiederaufbau NEPAD New Partnership for Africa’s Development OECD Organization for Economic Co-operation and Development SME Small and Medium Enterprise SOM Senior Officials Meeting SPS Sanitary and Phytosanitary UEMOA Union Economique et Monétaire Ouest Africaine UNIDO United Nations Industrial Development Organization USAID United States Agency for International Development ZATAC Zambia Agribusiness Technical Assistance Center

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1. Introduction In April 2008 the United Nations Industrial Development Organization (UNIDO), the

Food and Agriculture Organization (FAO) and the International Fund for Agricultural Development (IFAD) organized the Global Agro-Industries Forum (GAIF) in partnership with the Government of India. The objectives of the GAIF were: To learn from key lessons and success stories on promoting competitive agro-industries in the developing world; to foster collaboration and joint activities among multilateral organizations working on agro-industrialization; and to clarify the roles of the public sector, multilateral organizations and the private sector in agro-industrial development. Over 500 senior level policy-makers, food industry leaders, UN agencies, civil society organizations and agro-industry specialists attended the Forum.

In the joint declaration of the GAIF, the UN co-organizing agencies agreed to hold

regional forums to deliberate on concrete actions to promote agribusiness and agro-industries development at the regional and sub-regional level. As a follow-up to this commitment, UNIDO, FAO and IFAD, in collaboration with the African Development Bank (AfDB), the African Union Commission (AUC) and the Government of the Federal Republic of Nigeria, plan to organize a High Level Conference on Development of Agribusiness and Agro-Industries in Africa (HLCD-3A) in Abuja, Nigeria in November 2009. The HLCD-3A will convene African Heads of State and Government, ministers, senior policy-makers and senior representatives of financial institutions to consider and endorse specific commitments to enhance the role of agribusiness and agro-industries in the continent.

As a preparatory step to the HLCD-3A, an Expert Group Meeting (EGM) was held in

Vienna, Austria from 27-29 April 2009. The EGM brought together experts in agribusiness and agro-industries development from 19 countries of Africa, as well as resource persons from development agencies, research and academic institutions, bi- and multi-lateral agencies and finance institutions working on agribusiness and agro-industries development in African countries. The EGM’s objectives were to discuss the key constraints impeding the development of agribusiness and agro-industries in Africa and to deliberate upon a programme framework for agribusiness and agro-industries development in Africa. Both the framework and an associated financial facility will be considered for endorsement during the HLCD-3A.

The present document is a report of the deliberations at the EGM. It is divided into five

major sections. Introductory statements made by co-organizing agencies are presented in the first section. The second section presents plenary discussions of a background paper which was commissioned to provide a backdrop for the deliberations, while the third section presents discussions on the vision of the initiative. Thematic and regional working group discussions are presented in the penultimate section. The last section presents deliberations during a session dedicated to initiatives of organizations providing financial services for agribusiness and agro-industries development projects in Africa.

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2. Introductory Statements by the Co-organizers

2.1. Welcome address by the Director General of UNIDO

The welcome address of Mr. Kandeh K. Yumkella, Director General of UNIDO, was presented on his behalf by Mr. Dmitri Piskounov, Managing Director of the Programme Development and Technical Cooperation Division of UNIDO. Mr. Piskounov informed the experts that the event was a follow-up to the GAIF. He indicated that they were convened to discuss the programme framework and financial facility for agribusiness and agro-industries development in Africa which will be tabled to Heads of State and Government during the HLCD-3A.

Mr. Piskounov informed the audience that the meeting was in line with UNIDO’s

interest to develop medium- and long-term solutions which would allow developing countries to cope with the challenges imposed by rising food and fuel prices and the volatile global financial system. He welcomed participants and wished them very fruitful, innovative and creative discussions.

2.2. Welcome address by FAO

Mr. Geoffrey Mrema, Director of the Rural Infrastructure and Agro-industries Division of FAO, welcomed participants to the EGM on behalf of FAO. He informed the audience that Africa was chosen as the first region for which to hold a regional forum because of the continent’s daunting developmental challenges and the potential role that agribusiness and agro-industries could play in fostering its social and economic development. He noted that agribusiness and agro-industries have strong forward and backward linkages which promote demand for and add value to agricultural production, thereby creating employment and income along the processing-distribution chains. The HLCD-3A is intended to raise awareness in Africa about the pivotal role that agribusiness and agro-industries can play in the socio-economic development of the continent.

Mr. Mrema noted the increasing realization in Africa that special attention needs to be

paid to the food and agricultural sector, as evidenced by the decision of the AUC to dedicate its 13th Summit of Heads of State and Government, scheduled to be held in July 2009, to the theme of investing in agriculture. Substantial resources exist within the local financial system in African countries that are not being invested in the agricultural sector in general, and in agribusiness and agro-industries in particular, largely because of the relatively high risk of these ventures vis-à-vis investments in alternatives in other economic sectors. Ways have to be found, therefore, to increase the flow of private sector resources to the agricultural sector in addition to increased public spending for the sector as had been agreed at the Maputo Summit of 2003.

Mr. Mrema indicated that the EGM has special significance, as the experts convened

would provide guidance on a programme framework and associated financial facility in support of agribusiness and agro-industry development in Africa. The vision is that the facility to be created will provide resources to the public sector of African countries for creating an enabling environment that can facilitate and catalyze investments of local capital into the following: development of commercial small-scale farming; medium- and large-scale farming (where conditions allow); and agribusinesses and agro-industries.

2.3. Introductory remarks by the Director, Agri-business Development Branch of UNIDO

In his introductory remarks, Mr. Sergio Miranda-da-Cruz, Director of the Agri-business Development Branch of UNIDO, thanked the experts for accepting to participate in the EGM. He

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mentioned that for UNIDO the agro-industry sector is very important, not only because of its potential for promoting economic growth, but also because it provides a model for development of other industrial sectors. UNIDO’s experience had revealed clear trends and patterns which call for attention. These include the rapid rate of urbanisation in the developing countries and the growth of South-South trade. Noting that none of the seven countries which account for the major share of this trade are located in Africa, he mentioned that a key challenge was finding ways through which African countries could exploit these trends to foster their economic growth. He stated that the EGM provided a forum for validating the perception of the co-organizing agencies with regard to these trends and the opportunities they provide for economic and social development of African countries.

Mr. Miranda-da-Cruz noted the diverse backgrounds of the participants who comprised

experts from the private sector, public agencies, academic and research institutions, development agencies and finance institutions of 19 African countries, as well as resource persons drawn from world-renowned research and academic institutions, development agencies and finance institutions. He informed the audience that inputs provided by the experts will be used to refine the programme framework which will form the basis of a financial facility to support agribusiness and agro-industry development in Africa.

2.4. Opening comments by the AUC

Ms. Sarah Olembo, Senior Policy Officer and Acting Head of the Food Security Division, Department for Rural Economy and Agriculture of the African Union Commission (AUC), presented a welcome statement on behalf of the AUC. Noting the growing focus and interest in agriculture within Africa, the threat posed by climate change, the recent sharp rise in food prices and the need for concerted action to ensure food security in Africa, she mentioned that the EGM and the HLCD-3A are very timely as their goal is to promote agribusiness and agro-industries development in the continent. The two events are in line with the vision of the AUC as evidenced by the theme ‘Investing in Agriculture for Economic Growth and Food Security’ chosen for the 13th AU Summit of Heads of State and Government which is scheduled to take place in July 2009. The concept note of the Ministerial meeting points to the need for attention to the farmer and requests UN organizations, bilateral and other agencies to support CAADP programmes which aim to increase investment in rural farming.

Ms. Olembo thanked FAO, UNIDO and the EGM Secretariat for their visit of April 2009

to the AUC in Addis Ababa, which raised awareness within the AUC of the initiative and led to the proposal to hold a Senior Officials Meeting (SOM) on agribusiness and agro-industries development as a side-event during the Summit. Three alternatives - Mauritius, Libyan Arab Jamahiriya and Ethiopia - were being considered as venues for the 13th Summit. Ms. Olembo mentioned that the initiative was important in ensuring that African countries are more able to exploit market opportunities such as those created by the African Growth and Opportunity Act (AGOA). She advocated that the initiative should take into account the role of women in the agribusiness and agro-industries sector.

2.5. Presentation on UNIDO’s work in agribusiness and agro- industry development

Mr. Sergio Miranda-da-Cruz, Director of the Agri-business Development Branch of UNIDO, made a presentation on UNIDO’s work in agro-industry development. He identified the Organization’s area of work along the value chain linking the farm to the consumer and its links to the work of FAO and other UN partners as well as non-UN partner agencies. Appropriate mechanisms which ensure the flow of funds have been found crucial in broadening the scope and sustainability of UNIDO’s interventions; the Organization, therefore, works in partnership with International Finance Institutions (IFIs), such as the AfDB, as well as with financial institutions in beneficiary countries.

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Noting the low level of value-added in developing countries and its decreasing level in Africa, Mr. Miranda-da-Cruz indicated that agro-industries are an important sector with a high potential to increase value added, wages and economic growth in Africa. Foreign Direct Investment (FDI) is a very important aspect of the global food industry, and the potential for market growth provides a tremendous opportunity to develop agribusiness and agro-industries in Africa. Urbanisation has transformed the domestic market and particularly South-South trade into the main source of expansion of the industry. An analysis of the seven countries that dominate South-South trade reveals that the following factors were important in the development of their food industries: Organization of producers (particularly small holders); the use of the latest knowledge available; policies creating a favourable environment; being open to negotiation in the international arena (trade standards) and competitive enterprises.

Mr. Miranda-da-Cruz mentioned that the ideal situation from UNIDO’s point of view

can be summarized as follows: Public policies creating the motivating and enabling environment to encourage, catalyse and stimulate entrepreneurial development; entrepreneurs integrate into the global market and access and utilise technology which builds their capacity to meet customer and consumer needs.

2.6. Overview of the EGM objectives, expected outcomes and programme

Mr. Doyle Baker, Chief in the Rural Infrastructure and Agro-industries Division of FAO, presented the structure and objectives of the EGM, clarifying the envisaged contribution of each session to the expected outcomes. Mr. Baker said the EGM was of critical importance in the process leading up to the HLCD-3A. This was because the reflections and deliberations which UNIDO and FAO had had on the issue of agribusiness and agro-industries development were at a general level. The EGM provided a forum to put the ideas so developed for dialogue and debate in order to: Clarify their scope; set priorities; analyse the added value to existing initiatives such as the UN Comprehensive Framework for Action (CFA) and the Comprehensive Africa Agriculture Development Programme (CAADP); and provide guidance on the process to be adopted moving forward in the initiative. In addition, as UN agencies, UNIDO and FAO can only play a facilitative and supporting role. It was, therefore, envisaged that the EGM participants would take ownership of the initiative and embark on the advocacy and communication required for its acceptance and endorsement by policy-makers.

In their comments participants remarked that in order to promote buy-in by policy

makers, it is crucial to indicate how the initiative would be carried out. Regarding raw material provision to agro-industries, subsistence farmers should not be classified as a mutually exclusive group from commercial farmers because the two are linked and complement one another. The classification into formal and informal sectors was considered unnecessary, as the goal of the initiative should be to improve agriculture in all its forms. Participants also felt that there is wide diversity within the group referred to as ‘small farmers’. Mr. Baker clarified that the initiative was striving at developing agribusinesses and agro-industries that are competitive, viable and value-adding, while at the same time remaining inclusive (i.e. with minimal marginalisation of small farmers).

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3. Plenary sessions on the EGM Background Paper

3.1. Introduction to the background paper

Mr. Ralph Christy, Professor at Cornell University and CEO of Market Matters Inc., discussed the background paper entitled ‘Accelerating Africa’s Agro-industries to Sustain Economic Growth’. Mr. Christy stressed that the document did not intend to present or set priorities, but rather to outline a set of ideas which constitute a broad agenda for fostering competitive growth with poverty reduction. This broad agenda provided a set of options from which priority actions could be selected on the basis of a specific budget and decision-making context.

Mr. Christy gave a broad overview of the paper’s three sections. The first section ‘Policy

and Development Contexts in Agribusiness and Agro-industries in Africa’ presented the rationale for focusing on agro-industry development, noting some of the major initiatives that address issues related to agribusiness and agro-industries development. These include the comprehensive plans called for by several governments, multi-lateral organizations and private foundations to re-invigorate African agriculture. The section also discussed the economic development context for agribusiness and agro-industries. The second section ‘Factors Shaping the Growth and Developments of Agribusiness and Agro-industries in Africa’ used a PEST – policy and legal forces, economic, social, technology – analytical framework to identify the main opportunities and threats shaping African agribusiness and agro-industries. In the third section ‘Initiatives for the Development of Agribusiness and Agro-industries in Africa’, suggested interventions were presented in three main categories: Public goods and facilitative policies; innovative institutions; and financial capital and risk mitigation.

In the ensuing discussion the following points were made by the experts. The initiative

should focus on issues that it can address, with emphasis on the short- to medium-term time frame. On domestic investment, for example, one of the features that has undergone a clear change in most African countries, especially in East and Southern Africa, has been the growth of domestic capital markets. More emphasis should be placed on the issue of domestic capital markets and their potential role in capitalising agribusiness and agro-industries. Ongoing initiatives at the country level should be identified, especially with regard to institutional reforms, and reasons for failure taken into consideration in designing new initiatives. With regard to demographic changes, in addition to the rapid growth of urban population, which is taken into consideration in the background document, the initiative should also take into account projected increases in the rural population.

Regarding FDI, participants recommended that it is important to be selective in the

investments attracted, prioritizing those that foster technological capacity and diversification. It is also important to be innovative, e.g. through structuring the investment in such a way that it addresses risk and the perception of risk. An example given in this regard is to attract sinking funds and help them reduce their risk through joint ventures and partnering with funds from domestic capital markets. This produces a win-win situation which results in increased investment in the agribusiness and agro-industries sector. Approaches should be conceived to exploit the growth trend of FDI related to renewable energy systems because these are envisaged to play an increasingly dominant role in the future. Another innovative way of fostering FDI is through trading in carbon credits.

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3.2. Policy and development contexts in agribusiness and agro-industries in Africa In introducing this session, the chairperson Mr. Geoffrey Mrema mentioned that over the

last eight years there had been many initiatives in the agricultural development scene in Africa, the principal one being NEPAD’s CAADP. The four CAADP pillars are: (1) Land and water management; (2) improving rural infrastructure and trade-related capacities for market access; (3) food supply and hunger; and (4) agricultural research. He clarified that the envisaged initiative on developing agribusiness and agro-industries builds on and is envisaged to expand upon pillar (2).

There were two discussants in the session: Mr. John Lamb, Agribusiness Team Leader,

Agriculture and Rural Development Department of the World Bank and Mr. Anthony Ikpi, Professor of Agricultural Economics, University of Ibadan, Nigeria. Mr. Lamb drew attention to the Emergency Response Fund created by the World Bank to mitigate the effects of the recent increases in food prices. He said that the World Bank is moving towards recommending a code of practise and standards under the aegis of the Global Donor Platform for Rural Development. Its objective would be to exploit the resurgence in private-sector interest in the agriculture sector in developing countries which resulted from the price increases, while at the same time mitigating the negative effects such as opportunistic land acquisition.

Mr. Ikpi felt that the key issue is not a lack of agricultural policies in Africa, but rather

the need for policies which specifically address agribusiness and agro-industries. In addition, even where they exist, better implementation is required. Countries differ and this should be taken into account in the formulation of policies which fit the particular context. Policies should be designed so that holistic approaches can be used that address the chain from agricultural inputs to the consumer. This would avoid disconnection between agricultural production and agro-industry development. Emphasis should be put on regional and pan-African trade over international trade, while regional and inter-regional trade should be fostered. A strict time frame should be set and a rationale given for achieving each of the outcomes of the initiatives at specified points within the time frame. Given the private sector’s lack of funds, the public sector should set up projects which should then be handed over to the private sector.

In the ensuing discussions participants noted that projections show better potential for

agro-industrial products in the national and regional markets than in export markets for traditional commodities and high value products. They mentioned the importance of understanding forces driving food industries worldwide and their impact within Africa. These forces include supply chain integration to reduce transaction costs, increased concentration and the shift towards value addition through intangible attributes. It was suggested that lessons be drawn from successful cases of strengthening linkages for interregional trade while remaining internationally competitive, as exemplified by Kenya (high value horticultural products), Botswana (meat) and Mauritius (sugar). Regional projects should be promoted for products that can be processed at the regional level, e.g. cassava and cashew nut in West Africa. This could involve the private sector with the support of regional institutions. Regional sourcing has implications not only for trade, but also for extension and research. They also indicated that human and institutional capacity be developed in relation to sanitary and phytosanitary (SPS) issues. In addition, point-of-use energy technologies were considered of high importance for the development of rural areas. Where applicable the wastes from the agribusiness and agro-industries could provide feedstock for such energy generation. Attention was drawn to the CAADP national and regional meetings, which are scheduled in June and November, respectively.

Participants felt that buy-in of policy-makers into the initiative could be fostered by

identifying the outcomes that would result from investing in agro-industries. Investments should

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be prioritized, needed resources quantified and sources of funds identified. It is important to distinguish between derivatives of strategies applied (e.g. generating more income and more employment) from the purpose of the initiatives (e.g. increased volume of a particular commodity, increased value, diversification of markets, increase in sector value added, increase in foreign exchange). For better application of policy there is need for better coordination of institutions. Implementation of the initiative would require creation of a national steering committee to ensure coordination between the public and private sectors.

Mr. Lamb proposed that the background document should mention that initiatives to foster economic growth and reduce poverty should be implemented in a manner that respects rights (customary land rights, protecting the right of future generations, etc.) and resources (environmental, etc.). He also indicated that although it is not an official position of the World Bank, the word ‘agro-enterprise’ is considered more neutral and having less negative connotations than ‘agribusiness’. It also applies to value-addition to primary products which is not limited to processing (as implied by ‘agro-industry’), e.g. through identity preservation, credence attributes to trace the value, differentiation by source, innovation in products and processing.

3.3. Factors shaping the growth and developments of agribusiness and agro-industries in Africa

The first discussant, Mr. Likando Mukumbuta, CEO of Zambia Agribusiness Technical Assistance Centre (ZATAC), discussed the constraints faced by participants along the value chain. He suggested that the discussion of forces shaping agribusiness and agro-industry development in Africa should address forces on both the supply and demand sides. He felt that what seemed to be lacking is a delivery mechanism for the initiatives proposed as well as a business model and political message for the mechanism. He presented ZATAC’s area of work, highlighting its approach of integrating technical assistance with financial service provision.

The second discussant, Mr. Frédéric Lançon, Economist at Centre de coopération

internationale en recherche agronomique pour le développement (CIRAD), mentioned that as far as the global market is concerned, it is important to look at changes in demand and select an entry point. He felt that it is important to understand that the rural market and the urban market in Africa now form part of the global market. Agribusiness and agro-industries should be developed in such a way that they address the changes in demand and consumer requirements in both markets. Better understanding is required of local market segmentation. Mr. Lançon emphasised that the informal sector should not be construed as disorganized, because it is organized in its own way (with rules, codes, quality, etc.). It results from the constraints in the agribusiness and agro-industries sector and could serve as a strategic entry point in poverty reduction initiatives. It is important to link the informal and formal sectors and to take measures that give a voice to the informal sector in the policy dialogue/debate.

3.4. Initiatives for the development of agribusiness and agro-industries in Africa

The first discussant was Mr. John Staatz, Professor of Agricultural, Food and Resource Economics and of African Studies at Michigan State University. He mentioned that it is important to outline priorities and to distinguish constraints that are fundamental from those that are derivatives of the other constraints. He suggested that interventions could be prioritised by matching the constraints in the logical framework outlined in the background document to the country typologies presented in the document’s appendices.

The second discussant was Mr. Timothy Williams, Adviser and Head, Enterprise &

Agriculture Section of the Commonwealth Secretariat. He cautioned that because of the political nature of the process being initiated, cognisance should be taken of the constituency interested in the plight of rural farm producers. A value chain approach should be used to address challenges at

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all levels of the chain. It provides an appropriate platform to address the multifaceted issues that need to be addressed for agribusiness and agro-industry development. It provides a tool for prioritization at the country level, e.g. a country may want inclusive value chains.

Mr. Williams noted that challenges exist at all levels, i.e. at the micro (farm operational

level), the macro (national) and the global levels. Overcoming the formidable challenges at the micro and macro levels is crucial in unlocking the potential of agribusiness and agro-industries development in Africa. There are also challenges imposed by the situation at the global level (e.g. the high farm subsidies in OECD countries, tariff escalation for processed products, carbon labelling, global economic volatility, etc.). He outlined the main trends that create opportunities in many African countries: continuing policy reforms, emergence of new markets for high value products, increase in urban incomes, emergence of global value chains and the opportunity for technology transfer and technology sharing and development of local skills should not be ignored. He also identified the following priority areas: Access of private financial services to SMEs in the financial facility to be created; capacity building and business development services tailored to needs of various participants in the value chain; and development of appropriate incentives for start-up agribusinesses.

The experts concurred that the value chain approach provides an appropriate platform to

tackle the multifaceted issues that need to be tackled for agribusiness and agro-industry development. Supply Chain Management (SCM) was considered very important for building coordinated value chains. Platforms are needed for the private sector to dialogue with the public sector. Availability of information on what is going on is important to facilitate this dialogue. In addition to facilitating dialogue, platforms also serve for monitoring the development of agribusiness, setting priorities and identifying opportunities. The value chain and platform approaches can be combined through building task forces around specific value chains. Such task forces should have members from the public sector.

The following actions to improve agro-industries were recommended: Improving the

investment climate through creating a sound macroeconomic environment and by providing public goods (infrastructure) and capital; developing appropriate incentive schemes, e.g. matching grants; and capacity building. Approaches that can be used for setting priorities include: Linking to other initiatives in order to identify gaps and factor in what is actionable; and implementing those initiatives, that, if started, would galvanise others. Post-harvest loss reduction should be addressed on a short-term basis. As entrepreneurs are the target actors and the agro-industries within which they operate simply the ‘playing field’, the entrepreneur’s role in the initiative should be clearly stated.

Participants felt that institutional reform was required in most situations to create

institutions that promote agro-industries. It was proposed that the approach should prioritize identifying ways of operating within the existing context, rather than identifying the degree of deviation of the existing context from an ideal situation. Where it is possible, existing institutions (e.g. chambers of commerce and manufacturers’ associations) should be used rather than creating new ones. It was mentioned that care should be taken in proposing institutions if they have not evolved through necessity. The programmes proposed should be kept out of public sector control and should function in the market with support going to the enterprises. Participants indicated that there are many success stories within Africa (technologies, business incubators, training centres such as the Songhai Center in Benin, etc.), which should be highlighted, given increased visibility, supported and scaled up for wide application. Lessons should also be harnessed from success cases outside the continent.

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An innovation proposed is the integration of financial services with technical assistance. This coming together is necessary in a scale slightly bigger than micro-finance in order to fill the ‘missing middle’ in agribusiness and agro-industries financing discussed in the background paper. Participants concurred that there are substantial financial resources within the continent which could be invested in agribusiness and agro-industries development if appropriate incentives are put in place.

The experts felt that agricultural machinery and appropriate technology could be

addressed using a value chain approach. Available technology should be rendered more visible and opportunities to scale up created. Low capacity to fabricate agricultural machinery is a key issue. UNIDO’s experience in this regard was mentioned. It compared Indonesia, whose agro-industry depends on locally manufactured machinery, with Nigeria, which relies on imported machinery. The latter experiences long lead times for imported machinery and spare parts, longer downtime and much higher maintenance costs.

There were questions regarding the reference to infrastructure as public goods. It was

also proposed that infrastructure is not the beginning but the second step that should come after creating a critical mass in production.

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4. A Shared Vision for Agribusiness and Agro-industries Development Mr. Baker, Chief in the Rural Infrastructure Division of FAO, made a presentation on

the vision for agribusiness and agro-industries development. He indicated that for transparency reasons UNIDO and FAO wanted to present their own thinking of the issues crucial in agribusiness and agro-industries development, as well as the process which culminated in the recommended action areas. Mr. Baker explained that a shared vision was required to lay the basis for making choices and setting priorities for intervention. He presented the main issues identified through broader diagnostic analysis by the two organizations, as well as a list of 10 maintained hypotheses resulting from the brainstorming sessions held (Annex I).

The vision statement ‘Agribusiness and agro-industries, with their strong forward and

backward linkages, are engendering socio-economic development, increasing food availability, quality and safety, and reducing food prices’ was discussed. Participants felt the phrases ‘increasing food availability’ and ‘reducing food prices’ should be revised and that the strategy for reaching the goals be indicated. The phrase ‘agribusiness and agro-industries’ is broad and therefore more specificity is required as to what measurable aspects are of interest, e.g. level of value added, efficiency in the value chain, etc.

The experts recommended that the vision statement should be simple, focused, and have

a time frame as well as tangible and measurable outcomes at the local, country and regional levels. It was considered important to use outcomes which can be quantified because this makes it easier to ascertain the added value of the initiative. An example given in this regard is the Africa Fertilizer Financing Mechanism (AFFM), which was endorsed by Heads of State because it is focused, specifies a time frame and outlines clear, measurable indicators (e.g. kg of fertilizer per hectare). It was mentioned that the message should not sound like a developmental fad, but should capture the fact that much can be accomplished through a holistic system transformation to a business approach to agriculture (i.e. taking into consideration assured markets to producers, improved access of producers to technologies and financial services, tackling logistics constraints to reduce transaction costs, etc.). The following outcomes were given as examples which policy makers and senior officials would consider practical and in line with their national goals and objectives:

� Increasing value addition to agricultural products � Adaptation to changing food demand � Employment creation � Increasing incomes and, � Competitiveness.

Another aspect that was pointed out is that the initiative would involve different levels of

actions. Some issues would be addressed by actors, while others would be addressed at the policy level. The experts also recommended that in order to foster buy-in, the proposal should indicate that there will be trade-offs as well as short-term unintended negative consequences. It should specify how these will be mitigated.

It was also observed that the analysis had considered most actors, but had not addressed

issues related to the consumer. In this regard the issue of emergence of consumer associations in Africa was broached.

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5. Thematic and Regional Working Groups

5.1. Thematic working groups

Working group discussions were held on the three programme components and action areas proposed in the background document. These are: Public goods and facilitative policies; innovative institutions; and financial capital and risk mitigation.

5.1.1. Public goods and facilitative policies

The working group recommended that the vision for the initiative should remain broad, while highlighting the positive contributions that investing in agribusiness and agro-industries could have on economic development, especially with regard to income and employment generation. The vision should mention the environmental sustainability dimension of agribusiness and agro-industries development.

Regarding the maintained hypotheses on principles to guide the initiative, the working

group underscored the importance of policy and institutional reforms related to intellectual property rights. It noted that while the initiative should take measures for meeting the needs of the rapidly growing urban populations, it should also take into account that an increasing share of the food market is located in rural areas. The group noted that in setting a vision account should be taken of the positive effects of exporting outside the regional market. Furthermore, the vision should underline the fact that agro-industries have a critical role in the industrialization process, diversification of sources of currency earnings and promotion of a more balanced integration into the global economy.

The group underscored the importance in highlighting the catalytic role of governments

in stimulating investment in goods such as research and development and infrastructure from both the public and private sector. It considered that investment in infrastructure and research and development were the two most important public goods to be prioritized, followed by the business climate, market information systems and grades and standards.

The group stressed the importance of the following: Agribusiness platforms; recognition

of the role of agribusinesses in creating value; and promoting association of entrepreneurs.

5.1.2. Innovative institutions

The working group felt that the creation of inclusive value chains and business models was the top thematic priority, and that adopting a value chain approach for agribusiness and agro-industries development would engender the other thematic priorities presented for consideration. The group believed that all options proposed should be considered as part of a ‘tool box’ and a flexible approach should be adopted that allows the selection of those tools that better suit the specific settings and conditions.

The group recommended that in considering innovative institutions the policies and

financial mechanisms should be factored in so as to develop dynamic, non-isolated, tangible solutions. The following were also considered important: the governance of the innovative institutions to avoid dormant and biased entities that do not deliver, and the establishment of a pro-poor platform that engages the private sector at all levels.

It was recommended that the initiative should not focus on food systems to the detriment

of non-food systems which may be viable and suitable. While the importance of domestic markets was acknowledged, this should not limit considering other export related issues/markets. The group underlined the important role of the Government as a facilitator in the proper functioning of

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the financial facilities and mechanisms needed. It also concurred that financial resources exist within Africa which could be invested in agribusiness and agro-industries development.

5.1.3. Financial capital and risk mitigation

The group indicated that the set of activities earmarked were good, but that the question of how to implement them had not been dealt with. The modalities of implementing should be clarified in a manner that new, more accessible financial mechanisms could be developed to address the failures of many funds. Regarding technologies, it was noted that it is not only the hardware (i.e. the technologies themselves) that are of importance in reducing costs, but also the approaches used. The group considered the following thematic areas as important, in order of priority: Financing mechanisms; increasing value addition; market-orientated agricultural infrastructure; enabling polices; food quality; inclusive value chains; regional trade; increasing efficiency through supply chain management, commercial services and input supply systems, public-private partnerships, contract farming. Regarding the maintained hypothesis on policy and institutional reforms, policy formulation should involve affected private sector players and other stakeholders ab initio, while institutional arrangements should include inter-ministerial coordinating units to take into account the multi-disciplinary nature of agribusiness and agro-industries. The group indicated that in Africa the population is projected to grow in both urban and rural areas and this should be taken into consideration. Furthermore, the focus should not be restricted to the domestic markets, but regional markets should be targeted as well.

5.1.4. Conclusions from the thematic working group discussions

� Consultative mechanisms and platforms are required to promote dialogue between the private sector and the public sector, between private sector parties and between public sector ministries.

� The initiative should not focus only on urban markets, but should also take rural markets into consideration because projections show that rural consumers will continue to be important even though the urban markets will exhibit rapid growth.

� A focused, coherent message is required. It should have measurable targets and be flexible to allow adaptation to the local contexts. It should be explicit on how the initiative will be implemented. It should also indicate how it will be positioned vis-à-vis other initiatives already existing (CAADP, etc.).

5.2. Regional Working Groups

5.2.1. East and Southern Africa

The working group noted the following positive trends and opportunities in this region:

� Growing number of supermarkets in the region; � Increased focus on food crops in regional initiatives, e.g. initiatives of CAADP and

AGRA which are involved in improving the production base in agriculture, including small farmers;

� Rise in horticultural exports, especially from East Africa; � Increase in the use of smart subsidies for agricultural inputs, as evidenced by Malawi and

being copied by other countries in the region; � Rise in export of niche crops such as organic products, which is an area with potential for

small farmers; � Increasing number of institutional innovations at the decentralised level which are helping

to create an enabling environment; � Stronger commitment by governments to invest in agribusiness and agro-industries; � Significant investments by governments in road and other infrastructure and by the private

sector in telecommunications infrastructure;

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� Increased awareness about products of the region in export markets; � Investment in youth programmes in the agribusiness and agro-industries sector (business

training); and � Increased mechanization of agriculture.

On what has been working well in the region the working group noted the following:

� Smart subsidies and voucher systems applied in Malawi. Zambia and Mozambique are copying this;

� The rise in business incubators and technology parks (examples in Botswana and South Africa);

� Rise in contract farming; � A market-driven as opposed to a production-driven approach, as seen in initiatives of

governments, civic groups and NGOs in the region; � The one-village specialization model has been applied with relative success in Malawi and

Mozambique, although less successfully in Zambia.

The working group identified the following negative trends and missed opportunities:

� Growing trend of land purchases by companies from the developing countries which exacerbates local land tenure problems;

� Missed opportunity of using backhauling capacity of trucks returning to South Africa after delivering various manufactured products to other countries in the region;

� Missed opportunity to exploit carbon credit trading due to lack of awareness.

On the sectors to prioritize, the group noted that the initiative should be market-driven and flexible to capitalize on any emerging market opportunities. The group provided the following guidance for moving on:

� Policy reform and institutional building:

o Focus should be on areas impeding private investment; o Focus should not be put on building public sector capacity, except in cases where

public-private partnerships are involved or where the initiatives are market-driven; o Resources should be put in mechanisms designed to reduce risks facing

agribusiness and agro-industries; o Support to public goods should be targeted and packaged, and the basis for

prioritization should be how well they meet the needs of the private sector; and, o Large investments should not be ruled out and each project should be evaluated on

its own merit.

� Links to ongoing initiatives: o The current initiative should focus on market opportunities as opposed to

broad-based development efforts that many other initiatives seem to be focusing on; and,

o Benchmarking needs to be undertaken to ascertain what ongoing initiatives are achieving and identify how they can best be leveraged.

5.2.2. North Africa

The group identified the following opportunities:

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� Growing contribution of agribusiness and agro-industries to the individual GDP of the countries of the region;

� The large population, as the region has almost 200 million consumers; and, � Logistical and financial complementarities among the countries of the region.

Forces driving the opportunities in agribusiness and agro-industries development in the

region include:

� Political pressure in response to the food crisis which elevated food security on the national and regional agendas;

� Growing FDI in the region; � Domestic niches with lucrative return on investment and growing sophistication; � Increasing demand for high quality and safe products by tourists, especially those from

Europe, the United States and Japan; and, � A new mind-set, with a value chain coupled with sub-sector and regional (within the

country) approach.

The working group felt that sustained growth of agribusiness and agro-industries in the region could be achieved through the following:

� Strong business organizations which advocate for their small-scale members and offer

them the voice and solidarity; � Value chain actors engaged in dialogue with the private sector, with the government

providing incentives to promote such dialogue; � Attracting FDI, especially through using domestic enterprises to hub them; � Effective targeting of weaknesses along the agribusiness and agro-industries value chain;

and, � Support to regional trade agreements e.g. the Agadir Agreement.

The group proposed the following overarching vision for the region: ‘Enhanced, equitable

and integrated agribusiness and agro-industry value chain solutions’. It recommended that the following factors be taken into consideration in the agribusiness and agro-industries development of the region: Property rights, especially in relation to land ownership and new agricultural varieties; the impact of integrating into global value chains; and the spill-over effects from connecting to regional value chains. The group felt that the choice of sub-sectors for interventions under the initiative should be made at the national level after which negotiations could be held on which sub-sectors should be integrated at the regional level. The group recommended that interventions should respect the following criteria: Inclusiveness; equitability; financial viability; replicability across the region; value addition; nationally strategic crops.

The following recommendations were made regarding the delivery mechanism for the

value chain:

� Intra-government (e.g. inter-ministerial) team with provision made for consulting and communicating with the broad spectrum of private sector parties (small- and large-scale). The structure should be conceived in such a way that it does not add extra layers of bureaucracy and be results-oriented. While the group noted the importance of the private sector, it observed the importance of capable government bodies with a high level of communication;

� A platform created (preferably outside of the governments) to support soliciting solutions. Such solicitation will use funds to finance programmes and projects that are financially

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viable. Linked to that fund a small grant to be focused on benchmarked capacity building activities;

� A fund targeting the ‘missing middle’. The fund should be appropriately designed in order not to have a restrictively high minimum project size and short-term span of investment. The group mentioned that Tunisia provides a good example of an independent agency for financing activities related to agriculture;

� Using young people; � Social marketing of the initiative; � A continuous monitoring and evaluation system.

5.2.3. Western and Central Africa

With respect to strategies to pursue for the region, the group suggested that lessons from trade relations that have been established over time in the region and which seem to be working fairly well should guide the development of new strategies. However, efforts should be made to remove the barriers (high taxes, absence of a regional investment code, poor transport and infrastructure, difficulties related to funds transfer) that have hindered these trade relations.

The group noted the following factors which create opportunities for agribusiness and

agro-industrial development in the region:

� High imports of processed agrifood products into the region provides an opportunity for import substitution;

� Unexploited potential for agricultural production and value addition through agro-processing;

� Existence of bilateral agreements and preferential access to external markets; � Commitment of political leaders to improving national and regional agriculture and

agro-industries; � A large potential market. It can be linked through improving infrastructure and if an

enabling environment and regulatory framework are established.

To exploit these opportunities in the regional market, efforts should be made to improve market information gathering and dissemination in order to increase access to adequate market information. The group noted that lack of market information is akin to a non-tariff trade barrier.

Specific sub-sectors that might be important to address include: Edible oils (from oil plants

– groundnut, soybean, oil palm); tomato processing in West Africa; meat processing; fish farming and processing; sugar processing in Central Africa; animal feeds processing using tubers and soybean to replace corn; processing of traditional cereals and root and tuber staples. In addressing these sub-sectors, the possibility of establishing regional agro-industrial plants (involving cooperation between countries), which are jointly owned by investors from different countries, should be explored. For example, a tomato processing plant could be established in Ghana, but jointly owned by investors from across the region. For these regional agro-industrial plants to be successful there is need for a regional investment code backed up with appropriate incentives. Although national investment codes exist, there is no investment code at the regional level, and the absence of such a code hinders regional investment and trade.

The group felt that the initiative should build on what has been working well. These include

the following: Processing by women’s associations at the small scale; and emerging small-scale processing of roots and tubers (e.g. cassava and yam into gari and yam flour, respectively, in Ghana and Nigeria) and cashew nuts (in Senegal) for export to European markets. There is an opportunity to scale up these activities in order to meet the projected increase in domestic

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demand, which will result from population growth and rapid rate of urbanisation. High-producing genetic material developed at the laboratory level that should be linked to practical implementation in the field. Farmer organizations have made progress in concerting and communicating with the public sector.

The different sub-groupings in the region such as UEMOA, ECOWAS and CEMAC

constitute an important source of diversity that needs to be taken into account (the different currencies, quality standards, protocols on movement of people and goods and trade tariff regimes). The different protocols need to be streamlined and harmonised in order to promote agribusiness and agro-industry development, while an enabling environment with the right regulatory framework needs to be created. Capacity building for public sector officials who interpret and implement the stipulations of these protocols is also important.

With regard to guidance on the strategic nature of the initiative, they made the following

recommendations:

� Policy reform and institution building targeted towards agribusiness and agro-industry should be supported;

� Private sector investment should be supported. The public sector should provide support to facilitate private sector access to finance as well as direct financial assistance to start-ups in the form of equity capital, matching grants, etc. Past mistakes in the way that the public sector engaged with the private sector to provide financial support to the private sector should provide a lesson. Most especially, constant dialogue and consultation between the two parties is required to ensure that the public sector is guided by the needs of the private sector. Appropriate platforms (e.g. committees that include representatives of public and private sectors) should be formed to encourage such consultations;

� Support for big investments should not be ruled out. While there are opportunities for small investment, the initiative should look at those kinds of big projects involving collaboration across countries in the region; and,

� The initiative should remain linked with CAADP and should develop a mechanism to allow for exchange of information with the CAADP national and regional roundtables currently underway. In addition, there are other continent-wide initiatives that have a bearing on this initiative. Contacts should be established with such initiatives in order to forge collaborative links. An example is the African Fertilizer Financing Mechanism (AFFM) The AFFM has aspects such as capacity strengthening in input supply systems which are also targeted by the current initiative.

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6. On-going Initiatives Related to Financing Agribusiness and Agro-industries in Africa

A session of the EGM was dedicated to ongoing work related to financial mechanisms that support agribusiness and agro-industries development in Africa. Five institutions made presentations: Kreditanstalt für Wiederaufbau (KfW), the German government-owned development bank; Agence Française de Développement (AFD); the African Development Bank (AfDB); Kilimo Trust; and the Zambia Agribusiness Technical Assistance Center (ZATAC).

6.1. Kreditanstalt für Wiederaufbau (KfW)

The presentation was made by Mr. Christoph Kessler, Head of Agriculture and Natural Resources Division, Sub-Saharan Africa, of KfW - Entwicklungsbank. Motivated by the rush of the large private-sector entities from the developed countries to acquire land for agriculture in Africa and the need to protect the interest of small-scale farmers in the continent, KfW is in the last stages of preparing an initiative called the ‘African Outgrower Development Fund’ which will then be submitted to the German Government for final approval. With capital of €100 million, 25 percent of the fund would be grant money from the German Government, while the rest will be raised from commercial sources. The fund will target funding of 10 to 12 initiatives (i.e. roughly €10 million per initiative), thus targeting the upper layer of the ‘missing middle’ mentioned in the EGM background paper.

The funds sourced from the public sector will be used for risk mitigation, guarantees,

cascade structures for risk management, etc., to make commercial investments possible, given the highly risky investment environment in Africa. The fund targets agribusiness companies interested in setting up or expanding out-grower schemes, but will make sure that the final beneficiaries are small-scale outgrowers. The scheme will entail a triangular model involving an association of the small-scale outgrowers, an agribusiness company and a local bank in the target region. Consultants are currently in the field fine tuning the concept and identifying candidate organizations for inception. Their report will be ready in July 2009 and will be considered in a workshop involving other partners who have shown interest, notably the AfDB and AFD.

6.2. Agence Française de Développement (AFD)

Mr. Bruno Vindel, Food Policies Analyst, Department of Strategic Planning at Agence Française de Développement (AFD), presented a new initiative called ‘African Agricultural Fund’, which is being implemented by four institutions: AFD, AfDB, IFAD and AGRA. The fund was launched in response to the food crises which flared up in 2008. The objective is to support private enterprises and cooperatives in the agribusiness sector to modernise, increase production and diversify. The fund will also support rural domestic credit institutions and agricultural insurance companies. It will involve institutional and private investors with the objective of raising €200 million to start operations in 2009. This amount is expected to eventually rise to €500 million. The fund will not provide loans, but be dedicated to equity and quasi-equity financing to support businesses requiring funds midway between micro-finance and the more traditional funding sources available to larger enterprises. It will be used for supporting enterprises and cooperatives that have sustainable objectives, have designed plans to diversify their business and are respectful of the environment. Linkages between these enterprises and farmer cooperatives and farmer organizations will be promoted. Target sectors include the following: Cereals, livestock farming, dairy production, fruit and vegetable, fertilizers, seeds and oils. The fund also targets micro-finance and insurance related to agriculture.

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6.3. Kilimo Trust

Mr. Nuhu Hatibu, CEO of the Kilimo Trust, indicated that the Kilimo Trust focuses on the five countries that are members of the East African community. The Kilimo Trust was started with a grant from the Rockefeller Foundation and the Gatsby Charitable Foundation (GCF). GCF has continued to be the main supporter of the core budget of the Trust. The main thrust is to form a bridge between private foundations and private sector financing using the following three instruments:

� Grant funding for promoting commercialisation of innovations and capacity building. The

Kilimo Trust provides up to US$ 2 million of grants per year to solve specific bottlenecks in promising value chains targeting local and export markets. As an example, the Kilimo Trust is working with investors in East Africa to promote production of fruit juice concentrate both for export and for use by local juice manufacturing industries. Another example is a project in Tanzania, where grant funds are being provided for a project involving Tanzania Breweries Ltd which has a huge market in the region for beer, but now imports 70 percent of barley required from outside of East Africa. The Kilimo Trust is providing a grant to build the capacity of small-scale barley farmers.

� An investment fund of US$ 7 million which operates as an independent company called Africa Agricultural Capital (AAC). This is invested in small and medium companies dealing with value addition and linkages of smallholders to markets in East Africa and beyond. AAC works very closely with AGRA and signed an agreement with the latter to manage a new investment fund, Africa Seed Investment Fund. The Africa Seed Investment Fund is being capitalised by AGRA to the tune of about US$ 12 million.

� A loan guarantee scheme. This is under discussion. The Kilimo Trust will partner with AGRA to leverage US$ 50 million from the Standard Bank for investment in two countries: Uganda and Tanzania (the overall programme of US$ 100 million also covers Ghana and Mozambique). Initiatives in Tanzania and Uganda will be launched before July 2009. The aim is to use value chain alliances anchored by agro-industries as an entry point to finance agricultural productivity, rural agro-processing and market linkages.

6.4. Zambia Agribusiness Technical Assistance Centre (ZATAC)

Mr. Likando Mukumbuta, CEO of Zambia Agribusiness Technical Assistance Centre (ZATAC) presented the company. The ZATAC investment fund has its origins in 1999 when the United States Agency for International Development (USAID) launched the first smallholder commercial project in Zambia. Capitalised at US$ 4 million, ZATAC has been able to package programmes for SME development which will grow at US$ 2 million per year for the next five years. ZATAC is also starting a young entrepreneurs’ fund which started this year with an initial capital of US$ 2 million capitalization and will grow at US$ 2 million a year for the next six years. Instruments include debt financing, equity financing, as well as guarantees. ZATAC’s strength has been its ability to combine technical assistance with investment finance.

6.5. African Development Bank (AfDB)

Mr. Leon Sanchez Blanco, Principal Agro-Industry Expert of the Agriculture and Agro-Industry Department of AfDB made the presentation. He informed the audience that AfDB has two lending windows: A public sector window for government projects and a private sector window. The AfDB’s private sector window typically focuses on large-scale project investments of more than US$ 10 million (e.g. loans), with agribusiness and agro-industries projects representing around five percent of its portfolio. The Bank is interested in increasing its portfolio in agribusiness and agro-industries in both lending windows, including also the medium-sized investments needed by the sector. In this regard, the AfDB is envisaged to participate with KfW

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and AFD in the two initiatives mentioned above: ‘The African Outgrower Development Fund’ and ‘The African Agricultural Fund’.

6.6. Plenary discussion

Mr. Miranda-da-Cruz of UNIDO mentioned that when the initiative was conceived the thinking of FAO and UNIDO was that there would be a single facility, but increasingly, and as corroborated by the presentations made, the thinking is evolving to a combination of facilities or a facility having a combination of instruments. Mr. Geoffrey Mrema of FAO noted that, as UN agencies, UNIDO and FAO have a mandate to introduce good practices to their member countries. He also noted that there is richness in the diversity of options that exist and that an important criterion to be adopted is to reduce the risk of marginalising the small farmer. He pointed out that various institutions such as IFAD and the regional banks in Africa were also setting up funds targeting the agricultural sector and one role that the UN agencies might have to play is to harmonise the different approaches being taken. Ms. Olembo of the AUC cautioned that the financial facility should be designed in a way that takes women into consideration, as they are most often marginalised as far as access to financial services is concerned.

Participants observed that the various initiatives seem to have a bias in favour of small

producers at the detriment of the other players in the chain, such as small processors and traders. They commented that it is important to find ways of making these initiatives inclusive. In addition, they felt that consideration should be given as well to other financial services such as insurance. It was pointed out that despite the multiplicity of funds, the reality is that agribusiness and agro-industries is a high-risk sector. It was highlighted that a typical SME is not able to prepare proposals to request funding and capacity building is required in this respect. Collateral was also mentioned as an important constraint, as access to land is an issue in many parts of Africa.

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Annex I

Thematic priorities and Maintained Hypotheses

Below are thematic priorities identified from brainstorming sessions and deliberations held by UNIDO and FAO in preparation for the EGM. Also presented are the topic headings of the ten maintained hypotheses emerging from these deliberations. Further details can be obtained from the EGM organizing committee. Thematic priorities:

1. Enabling policies and institutions 2. Inclusive value chains and business models 3. Increasing value addition through storage, processing and innovation 4. Increasing efficiency through supply chain management 5. Commercial services and input supply systems 6. Agribusiness and agro-industries financing mechanisms 7. Market oriented agricultural infrastructure 8. Regional trade in agricultural inputs and products 9. Food quality and safety; food standards 10. Contract farming 11. Public-private partnerships.

Maintained hypotheses on principles to guide initiative:

1. Policy and institutional reforms 2. Food systems priority 3. Regional trade orientation 4. Cannot be everything, everywhere for everybody 5. Transformation and modernization strategy 6. Ministry (of Agriculture) reorientation and broadening 7. Farm commercialization and opportunities 8. More needed than commercialization of small-scale farming 9. Financial facilities and mechanisms needed 10. Focus needed when addressing general constraints.

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Annex II

List of Participants

Name Title/Organization Contact address Prof. Ernest ARYEETEY Professor of Economics and Director

of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Legon

E-mail: [email protected]

Mr. Doyle BAKER Chief, Rural Infrastructure and Agro-industries Division, FAO

Viale delle Terma di Caracalla, 00153 Rome, Italy E-mail: [email protected]

Prof. Rafik BOUKLIA- HASSANE

Professor in Economics and Advisor to the Minister of Industry, Algeria

Tel: +213(0)70882190 E-mail:[email protected]

Mr. Mansour CAMA

Chairman and CEO of Senegalese Investment Company and Chairman of the National Confederation of Employers. UNIDO Goodwill Ambassador for Africa

Office: Tel: +221 33 8 21 54 54 / +221 33 8 23 09 7 Fax: +221 33 8 22 32 19 Mobile: +221 77 6 38 56 70 E-mail: [email protected] [email protected]

Prof. Ralph CHRISTY

Professor of Emerging Markets at Cornell University in Ithaca and CEO Market Matters Emerging Markets Program

Cornell University Ithaca, NY 14853 Tel: +1 607-255-2194 E-mail: [email protected]

Mr. Giorgio Rosso CICOGNA

Managing Director, International Centre for Science and High Technology, ICS, UNIDO, Italy

AREA Science Park, Padriciano 99 34012 Trieste, Italy Tel: +39 040 922 8125/0068 E-mail: [email protected]

Mr. Carlos Arthur DA SILVA Agribusiness Economist, Rural Infrastructure and Agro-industries Division, FAO

FAO Headquarters Viale delle Terma di Caracalla, 00153 Rome, Italy Tel: +39 06 57055378 Fax: +39 06 57056850 E-mail: [email protected]

Mr. Hassan DEBBARH

CEO of CARTIER SAADA Plc and President of FICOPAM (Moroccan Canned Food Producers Federation)

Mobile: +212 661 135 605 Office: +212 524 33 68 68 E-mail: [email protected]

Dr. Kassiap DEEPCHAND

Technical Advisor, Mauritius Sugar Authority

Edith Cavell St Port Louis, Mauritius Tel: +230 212 5281- Office +230 752 1254 - Mobile E-mail: [email protected]; [email protected]

Mr. Tarek Hussein I. EL-BAZ

Consultant, Ministry of Trade and Industry of Egypt

Maadi, Cairo, Egypt Tel: + 2 010 3400-299 E-mail: [email protected]

Mr. Elias GENETI Managing Director of Agro Prom International PLC. Board of Pulses, Oilseeds and Spices Processors and Exporters Association (EPOSPEA)

Tel: +251 11 663 1836/43 Mobile: +251 91 122 3619 Fax: +251 11 663 1824 E-mail: [email protected], [email protected]

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Mr. Nuhu HATIBU

CEO of Kilimo Trust

Plot 2, Serunkuma Road, Mbuya Hill P.O. Box 71782, Kampala, Uganda Tel: +256 (0) 31 226 4 980/1 Fax: +256 (0) 31 226 4 985 E-mail: [email protected]

Prof. Anthony IKPI

Professor of Agricultural Economics, University of Ibadan, Nigeria

Tel: +234-803 326-4643 & +234-805 506-6828 E-mail: [email protected]

Mr. Chakib JENANE

Unit Chief, Agro-industries Support Unit, Agribusiness Development Branch, PTC/AGR/AIS, UNIDO

Vienna International Centre P.O.Box 300 1400 Vienna, Austria Tel: +43 1 26026 3876 E-mail: [email protected]

Prof. François KAMAJOU

Professor of Economics, University of Dschang, BP. 96 Dschang, Cameroon

Tél.: +237 77 72 07 45 ; E-mail: [email protected]

Prof. Mohammad KARAAN

Dean of the Faculty of Agri-Sciences at Stellenbosch University, South Africa

Tel: +27-21 808 4792 Fax: +27 21 808 2001 E-mail: [email protected]

Mr. Edward KEMSLEY

Consultant

Box 405226 Gaborone – Botswana Tel: +267 71304304 E-mail: [email protected]

Mr. Christoph KESSLER

Head of Agriculture and Natural Resources Division, Sub-Saharan Africa, KfW – Entwicklungsbank

Palmengartenstr. 5-9 60325 Frankfurt – Germany Tel: +49 69 7431-2895 Fax: +49 69 7431-3559 E-mail: [email protected]

Mr. Patrick KORMAWA

Adviser to the Director-General of UNIDO and Coordinator, International Financial Institutions (IFI) Partnership Unit


Mr. John LAMB Agribusiness Team Leader, Agriculture and Rural Development Department - World Bank

1818 H Street NW, MC 5-776 World Bank Office: + 1 202-458-5792 Fax: + 1 202-522-3308 E-mail: [email protected]

Dr. Frédéric LANÇON

Economist - CIRAD Unité de Recherche Politiques et Marchés TA

C88/15, Ave Agropolis 34398 Montpellier Cedex 5, France Tel: +33 (0)4 67 61 59 60 Fax: +33 (0)4 67 61 44 15 E-mail: [email protected]

Dr. Edward MABAYA

Research Associate in the Department of Applied Economics and Management at Cornell University. Dept. of Applied Economics and Management Emerging Markets Program

204 Warren Hall Ithaca, NY 14850, USA Tel: +1 607 255-7531 Fax: +1 607 255-9984 E-mail: [email protected]

Mr. Edward MAKUNGU

Director General - Centre for Agricultural Mechanization and Rural Technology (CAMARTEC)

P.O. Box 764, Arusha, Tanzania, Tel: +255 27 2549292, E-mail: [email protected]; [email protected]

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Prof. Stanislav MIERTUS

Chief, Area of Pure and Applied Chemistry, International Centre for Science and High Technology, ICS, UNIDO Italy

AREA Science Park, Padriciano 99 34012 Trieste, Italy Tel: +39 040 922 8114/8115 E-mail: [email protected]

Mr. Sergio MIRANDA-DA-CRUZ

Director, Agri-business Development Branch, PTC/AGR, UNIDO


Mr. Jaime MOLL DE ALBA

Industrial Development Officer, Agro – industries Support Unit, Agri-business Development Branch, PTC/AGR/AIS, UNIDO

Vienna International Centre P.O.Box 300 1400 Vienna Tel: +43 1 26026 3571 E-mail: [email protected]

Mr. Geoffrey C. MREMA

Director, Rural Infrastructure and Agroindustries Division (AGS), FAO

FAO Headquarters Viale delle Terma di Caracalla, 00153 Rome, Italy Tel: +39 06 57051 Fax: +39 06 5705315 E-mail: [email protected]

Mr. Likando MUKUMBUTA

CEO, Zambia Agribusiness Technical Assistance Centre (ZATAC)

35258 Kasalu Road Kabulonga, Lusaka - Zambia P/Bag 207 Woodlands Lusaka, Zambia Tel: + 260 211 263512 Fax: + 260 211 263502 E-mail: [email protected] [email protected]

Ms. Mbita Mary NANDAZI

Secretary General, African Rural and Agricultural Credit Association (AFRACA)

P O Box 41378, 00100 Nairobi - Kenya Tel: (254 20) 2717911 Mobile: (+254 724 402870) Fax: (254 20) 2710082 Email: [email protected] [email protected]

Mr. Samuel NGOMA

Regional Commercial Delegate of the Sugar Professional Group (GPS) of CEMAC.

P.O. Box. 857 Yaoundé- Cameroon Tel: +237 22 22 08 42 / + 237 99 80 14 29 E-mail: [email protected] [email protected]

Mr. Divine NJIE Agro-industries Officer, Rural Infrastructure and Agro-industries Division, FAO

FAO Headquarters Viale delle Terma di Caracalla, 00153 Rome, Italy Tel: +39 06 57054613 Fax: +39 06 57056798 Mobile: +39 348 8703144 E-mail: [email protected]

Mr. Godfrey NZAMUJO

Director of Songhai Centre, Benin. Quando Porto-Novo Queme – Benin

Bp: 597 Tel: +22920246881 Fax: + 22920247250 [email protected]

24

Dr. Sarah OLEMBO

Senior Policy Officer and Acting Head of the Food Security Division, Department for Rural Economy and Agriculture - African Union Commission (AUC)

Box 3243, Addis Ababa, Ethiopia Tel: +251 –911-541-57 Fax: +251 11-552-5835 E-mail: [email protected]

Mr. Ahmidou OUAOUICH

Chief, Food Processing Unit, Agri-business Development Branch, PTC/AGR/FPU, UNIDO


Mr. Pradip PATEL

Managing Director, Export Trading Company Limited Woodlands Road, Opp. Army HQ's

P. O. Box 57661 - 00200 City Square Nairobi - Kenya Tel: +254 20 2722626 - 8 /2721889 Fax: +254 20 2726943 / 2710785 E-mail: [email protected]

Prof. Louis Augusto PELEMBE

Professor, University of Eduardo Mondane (UEM), Mozambique

C. Postal 257, Maputo, Mozambique Tel: +258-82-4864210 & +258-84-4864210; Fax: +258-21-475318 E-mail alternative: [email protected]

Mr. Mohamed Chokri REJEB

Director General, Centre Technique de l’Agroalimentaire

Tel: +216 98268121 E-mail: [email protected] [email protected]

Mr. Leon SANCHEZ BLANCO

Principal Agro-Industry Expert of the Agriculture & Agro-Industry Department (OSAN) of the African Development Bank (AfDB),

B.P. 323 - 1002 Tunis Belvédère, Tunisia Tel: +216 7110 2319 Fax: +216 7125 3167 E-mail: [email protected]

Prof. John STAATZ

Professor of Agricultural, Food and Resource Economics and of African Studies at Michigan State University (MSU).

Department of Agricultural, Food and Resource Economics 205 Agriculture Hall Michigan State University East Lansing, MI 48824-1039 USA Tel. +1-517-355-1519 Fax: +1-517-432-1800 E-mail: [email protected]

Mr. Bruno VINDEL

Food Policies Analyst, Department of Strategic Planning, Agence Française de Développement

5 rue Roland Barthes 75598 Paris Cedex 12 Tél: +33 1 53 44 45 58 Fax: +33 1 53 44 38 26 E-mail: [email protected]

Mr. Timothy WILLIAMS

Adviser & Head, Enterprise & Agriculture Section, Commonwealth Secretariat

Tel: +44 (0) 20 7747 6374 Fax: +44 (0) 20 7747 6307 E-mail: [email protected]

25

Agri-business Development Branch Programme Development and Technical Cooperation Division UNIDO Vienna International Centre Wagramerstr. 5 P.O. Box 300 A-1400 Vienna, Austria http://www.unido.org e-mail: [email protected]

Rural Infrastructure and Agro-industries Division FAO

Viale delle Terme di Caracalla 00153 Rome, Italy

http://www.fao.org/ag/ags/index_en.html e-mail: [email protected]

EGM Report

Documents

development of agribusiness

agroindustries development

agro industry development

development contexts

developments of agribusiness

endorsement of unido

united nations food

director general of