POLICY BRIEF - Rising prices and geopolitical crises: how resilient is African agriculture in the face of shocks?

Since mid-2020, the prices of agricultural commodities and certain agricultural inputs have been rising on global markets. These price shocks are increasing pressure on agricultural producers, who are developing adaptation and resilience strategies. Discover our summary and our complete study carried out with Afdi.

The FARM Foundation, in partnership with Afdi, is taking stock of the impact of these price increases on producers in sub-Saharan Africa. The two institutions intend to promote exchanges between public and private actors in France, Europe, and Africa to promote sustainable development and the resilience of agricultural and agrifood sectors.

The analysis uses data collected from African farmers' organizations as part of a survey on their perceptions of the consequences of rising prices. These testimonies were cross-referenced with a literature review and expert interviews.

We share in this policy brief 5 major observations and recommendations for French and European stakeholders around:

• the need to act to scale up and make economically sustainable the solutions developed by farmers;
• supporting the dynamics of the local private sector through responsible co-investments;
• increasing funding for sustainable and competitive agriculture that meets the continent's food sovereignty challenges.

Global markets: rising agricultural and energy prices since 2020

For three years now, international agricultural prices have been experiencing sharp increases driven by multiple factors. At the same time, global energy prices are experiencing similar increases, which are having a significant impact on fertilizer prices and food systems. Furthermore, the Russo-Ukrainian conflict is not the trigger for these increases, although it is contributing to their amplification, particularly in the long term.

Transmission of price increases through different channels in sub-Saharan African markets

The transmission of rising international prices to sub-Saharan African markets has been gradual since 2020, and on two fronts. On the one hand, the rise in African food prices has been driven by imported raw materials (vegetable oils, wheat), where these represent significant volumes in a given region's food consumption. On the other hand, the surge in fertilizer prices has quickly led to their inaccessibility in terms of volume and price, while the continent is almost entirely dependent on imports.

Farmers: producers and consumers impacted by rising prices

At their level, sub-Saharan agricultural producers are doubly impacted by the crisis. First, the surge in fertilizer prices has made them inaccessible for many producers. In the long term, yields, and thus producers' incomes, are likely to be significantly affected, in the case of crops that channel the use of inputs. Second, producers are impacted by food inflation as consumers. Food accounts for a significant portion of the budget of farming families. Also, rising food prices imply a direct loss of purchasing power, particularly for the poorest families.

An accumulation of cyclical and structural vulnerabilities that trap producers in the cycle of poverty

At the same time, African agriculture is facing a series of vulnerabilities that are compounding the cyclical crisis with a structural crisis. Imported inflation is compounded by the significant endogenous volatility of local food markets, which are highly sensitive to fluctuations in harvest levels. In addition, armed conflicts and recurring climate-related accidents are putting significant pressure on people's food security and affecting the resilience and adaptability of agriculture. Finally, these inflationary factors are affecting economies already weakened by the pandemic, which have little room for maneuver to develop emergency responses while anticipating long-term investments.

Faced with these multiple crises, African producers, accompanied by their organizations, are putting in place adaptation strategies, in the absence of safety nets against rising food prices. These strategies are notably embodied in the reduction of production costs and investment risks. They take advantage of the great diversity of production systems that make up African family farming, taking into account the pre-existing soil, climate and socio-economic conditions. They respond to a need for adaptation as well as to a search for resilience which must be supported and accompanied in order to enable their scaling up.

Discover our full analysis and recommendations in this policy brief, which you can download here.