Greener production, reduced food waste, and transparent value chains for sustainability

Future-proofing Africa’s food supply

  • Blog
  • 3 minute read
  • March 27, 2024

The food economy needs to be rebuilt. 

Africa – and the rest of the world – is facing a food crisis. Shortages caused by supply chain disruptions emanating from the COVID-19 pandemic and Ukraine-Russia conflict have amplified long-term challenges to the sustainability of global food production, including: population growth, climate change, and increased reliance on resource-intensive farming.

Chickens on a farm.

It is not mere ideology to assert that the nature of global food production and distribution must change. It is a simple matter of facts and figures, inputs and outputs, as well as supply and demand. Our Megatends research has underscored the long-term impact of climate change and demographic shifts on global food security and, linked to this, cost of living, poverty and social (in)stability. 

“Today, the world needs to treat food security and affordability as critical issues for global prosperity and well-being. Just as agriculture was a key building block in the post-Second World War era of reconstruction, our food economy needs to be rebuilt again. This time it should be done sustainably.”

Frans Weilbach, PwC Africa Agribusiness Industry Leader

Thankfully, change is happening across the food production value chain.

The good news is that sustainability concerns are increasingly understood and recognised across the African continent. Food producers and their partners are beginning to look at new sustainable agricultural practices, regulators are beginning to shape new requirements, and consumers are calling for change. 

Our report ‘The sustainable food revolution: Future-proofing the world’s food supply’ considers several levers that the food industry can pull to meet the expected future demand for nutrition in a sustainable way without significantly increasing food prices. These include 1) avoidance of food losses in the supply chain, 2) cleaner/greener methods of food production, and 3) food substitutions at consumption level. 

In this blog, we highlight five points associated with the first two categories: avoidance of food losses and greener production methods. To add regional context, we also include some relevant African examples. 

Moving towards more diverse and less intensive forms of food production comes with profit potential. A recent academic study on the performance of 55 crops grown on five continents showed that, despite higher labour costs and lower yields, organic farming is up to 35% more profitable than conventional high-intensity farming due to the premium price organic products command.

 

Senegalese Minister of Agriculture Moussa Balde said in 2020 that the country aims to transition toward eco-farming on a national scale to protect its food supply from the effects of climate change. The French agricultural research centre CIRAD commented at the time that farmers are interested in agroecology as a solution to improve their livelihoods. The country had experienced land degradation in the preceding decades due to the widespread use of subsidised chemical fertilisers.1

1. https://www.reuters.com/article/senegal-agriculture-climatechange-idUKL8N29Z6YP/

Agricultural production will increasingly be supported by technology like artificial intelligence (AI) and big data, allowing farmers more focused and precise application of inputs such as water, light, fertiliser, pesticides and other soil treatments. These inputs increase productivity and, if used correctly, reduce the environmental footprint. AgTech, like imagery tools and AI, provide farm monitoring and pest management solutions, helping farmers see above their crops and below the ground where the naked eye cannot.

 

In recent years, Rwanda has undergone a remarkable agricultural transformation marked by innovative practices, strategic public sector policies, and technological advancements. This has led to sustainable growth, improved food security, and the country positioning itself as a regional agricultural powerhouse. Technology integration, including mobile applications for real-time updates and precision agriculture techniques such as remote sensing and drones, has played a crucial role in addressing challenges faced by farmers, enhancing crop monitoring, disease detection, and yield estimation.2

2. https://www.linkedin.com/pulse/revolutionizing-agriculture-rwanda-pathway-growth-deepak-pareek/

While there are multiple causes of food loss in production and waste in retail and consumption, the chief causes lie within the distribution and retail process. To fix this, supply chains will become more transparent as societies are increasingly demanding reliable information on where their food comes from. Transparency is also driven by the prospect of a better harvest and fewer losses across the food supply chain, while the costs of sensors, remote devices, and supply chain tracking is dropping as well.

 

The Government of Tanzania and the European Union (EU) jointly launched the AGRI-CONNECT program in 2021 to develop the horticulture, coffee and tea value chains. The program will reduce post-harvest losses – and thereby improve farmer incomes through improved export volumes – by upgrading rural roads in targeted districts. This aligns with the EU “Farm to Fork” strategy, with 46% of the AGRI-CONNECT budget allocated to road upgrades.3

3. https://www.eeas.europa.eu/delegations/tanzania/eu-launches-sustainable-agriculture-programme-set-improve-livelihoods-rural-tanzania-agri-connect_en

Regulation and standard setting will alter the structure and cost base of food production. This is already happening: sustainability reporting cutting across the entire food supply chain is seen as increasingly important by consumers and investors; animal welfare standards will become a more significant driver of consumer choices; the use of water and fertilisers will also become a more important metric of corporate sustainability performance.

 

In 2023, the Economic Community of West African States (ECOWAS) launched the West African Committee for Fertiliser Control (WACoFeC) to support the joint implementation of the region’s harmonised regulations relating to fertiliser quality control. The committee seeks to address regional challenges related to fertiliser quality, access and use. Ultimately, WACoFeC will work to establish or strengthen national fertiliser regulatory bodies and testing laboratories across West Africa in a bid to improve the quality of fertiliser produced and consumed in the region.4

4. https://pdf.usaid.gov/pdf_docs/PBAAK644.pdf

The intensification of environmental regulation will impact food companies directly in at least two ways: 

  • Mandated reporting on ESG performance will become an increasingly important factor in investor allocations, lowering the cost of capital for ESG-compliant businesses. 

  • The emergence of hard targets for greenhouse gas (GHG) emission reductions by 2050 (or earlier) will increase the cost of carbon intensive agriculture.

The Johannesburg Stock Exchange (JSE) released guidance on sustainability and climate change disclosure in 2022 to help listed South African companies with sustainability thinking and disclosure. The JSE joined 60 other bourses globally in issuing these documents that provide a starting point for report preparers that want to integrate climate-related information in their reporting for the first time.5

5. https://www.jse.co.za/our-business/sustainability/jses-sustainability-and-climate-disclosure-guidance

PwC is well positioned to help you take action

Revising the status quo of food production not only helps reduce risks related to climate change or supply chain disruptions. Adapting now helps food players prepare for a world where food production and supply evolve very rapidly, including new production models and viable new markets.

The current crisis is so profound that change is inevitable. Yet food industry stakeholders still have a choice: it is the choice of making changes now on their own initiative, or merely waiting until they have to react to external pressures.

The food industry needs to optimise across a complex landscape covering procurement, production, storage, transportation, and consumption, as well as shifting expectations on environmental and social justice. Each stakeholder needs to think about their part in this change and how to maximise impact. 

PwC is well positioned – and has the required capabilities and expertise - to lead the farm-to-fork transformation of the food industry in Africa.

Africa's food supply infographic

Contact us

Frans  Weilbach

Frans Weilbach

Partner | Assurance and outgoing Africa Agribusiness Leader, PwC South Africa

Tel: +27 (0) 82 571 3227

Andrew Dale

Andrew Dale

Partner | Assurance and incoming Africa Agribusiness Leader, PwC South Africa

Tel: +27 (0) 82 325 3932

Christie Viljoen

Christie Viljoen

Senior Manager, PwC South Africa

Tel: +27 (0) 82 472 8621

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