Making policies work

GREAT insights Magazine

How private sector can aid agricultural trade

the case of Yara

August 2013

Federighi de Cuello, N. 2013. How private sector can aid agricultural trade: The case of Yara. GREAT Insights, Volume 2, Issue 5. July-August 2013. Maastricht: ECDPM

Agricultural productivity & environmental responsibility

Improved agricultural productivity is vital to meet an anticipated 70 percent increase in food demand by 2050. As the increased output has to be obtained with less input, resource efficiency is imperative. Simultaneously, global warming is already thought to affect world food production negatively, making reduced emissions another key objective.

Therefore, improved productivity and environmental responsibility must go hand in hand. Increased agricultural efficiency on existing arable land can mitigate emissions and make farming a profitable business including for the world´s smallholders. The combination of quality inputs, including fertilizers, and good agricultural practices can increase yields substantially. That is what Yara aims to do, thereby creating value for its shareholders and customers, but also for society at large. Yara responds to the human challenges of food, resources and the environment with agronomic solutions to increase yields, to improve resource use efficiency, to reduce the need for land use change, driving technological innovation and putting smallholder farmers at the center market development activities.

Fighting hunger and extreme poverty is an obligation of the state requiring good public policies, funding and the implementation of aid programs. But we have to acknowledge that the private sector has an extremely important role to sustainably make available nutritious food to the growing population. If we want to eradicate hunger within a decade as it was agreed in Madrid during the High Level Consultation on Hunger, Food Security and Nutrition last April, public funds are not sufficient to eliminate hunger, and there is a need to leverage private sector investments that are environmentally sound and socially responsible.

Public-private partnerships and food value chains

We are facing common, global challenges. Yara is contributing to the dialogue and the policy agenda, sharing expertise and vision about the future: urging for political commitment to prioritize agriculture; making African agriculture more productive and Africa a destination for investments instead of aid; targeting smallholder farmers, also by encouraging cooperatives or associations to ease access to inputs, storage facilities, technologies and markets.

We believe in multi-stakeholder partnerships to address these formidable challenges. The private sector is a key and committed partner for scaling up food security and nutrition. At the World Economic Forum 2013, the New Vision for Agriculture Initiative presented new models for action. The initiative has catalyzed a number of multi-stakeholder partnerships in Africa, Asia and Latin America, including the regional partnership Grow Africa.

Yara has engaged in several food value chains, helping to increase food security and economic development, as well as providing business opportunities. In 2012 Yara reaffirmed its engagement in food value chain developments by continuing its participation in existing initiatives in Ghana, Tanzania, and Vietnam. Yara also aim to expand its collaboration with Nestlé to look into new coffee value chain opportunities, potentially in Africa and Latin America.

Agricultural Growth Corridors

After launching the Agricultural Growth Corridors concept at the UN in 2008, Yara has been a catalyst in the establishment of two corridors in East Africa: The Beira Agricultural Growth Corridor (BAGC) in Mozambique and the Southern Agriculture Growth Corridor of Tanzania (SAGCOT); both are inclusive public private partnerships for agricultural transformation.

In SAGCOT a Green-print was developed in 2012 as a green growth investment framework to ensure that the corridor development is environmentally sustainable, socially equitable and economically feasible. The strategy aims to help large numbers of farmers move from being subsistence producers to generating marketable surpluses.

The New Alliance for Food and Nutrition Security has triggered various global businesses to commit investing in Africa. Such agricultural sector investments are mainly driven through the African-led Grow Africa partnership, aiming at leveraging local and international private sector finance and investment to support country-wide policies in support of the CAADP (Comprehensive African Agriculture Development Program.)

Yara signed Letters of Intent with the governments of Ethiopia, Ghana, Burkina Faso and Tanzania respectively, with the intention of continuing ongoing initiatives as well as establishing new ones.

The Ghana Grains Partnership is a concrete example of a proven model for value chain cooperation

Masara N’Arziki is the farmers’ association set up in 2009 by the Ghana Grains Partnership. The GGP reaches about 8,300 smallholders growing maize. Through Masara N’Arziki the farmer can get access to all the things he needs for a productive and high-yielding farm: credit, quality inputs, know-how and ready markets.

The remote and poor Northern Ghana is the home of Masara N’Arziki, and the Ghana Grains Partnership operates two warehouses for storing maize from its members there. The association guarantees to buy and pay for the members’ crop, finding a ready market at the end of the season. In addition, the safe storage also reduces post-harvest losses.

The knowledge-based approach is essential to improve farmers yields: making sure that the farmers prepare their land at the right time, with the right inputs and that they use the right technology. By providing the right inputs to the farmer, the yields can triple.

Several companies have joined forces to provide vital inputs and financial services, while food companies guarantee a market for the extra yield – with Masara buying the crops and paying the farmers. All the partners involved, suppliers and farmers alike, are equal in this model because they know the success of one is success for everyone.

Yara firmly believes that its business conduct and development can deliver strong results both financially, environmentally and in terms of social value. By delivering and developing solutions addressing global challenges Yara grows its business and finds new opportunities while at the same time transforming society.

Natalia Federighi de Cuello is Director Public Affairs and Institutional Relations at YARA.

 This article was published in Great Insights Volume 2, Issue 5 (July-August 2013)

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Economic Transformation and TradeFood SecurityAid for TradeBusiness and DevelopmentAgricultureAfricaGhana

External authors

Natalia Federighi de Cuello