In 1962, Nigeria’s food exports as a percentage of merchandise exports was 64.52 percent but by 2018 had dropped to 1.95 percent, yet, global trade in food continues to boom with more opportunities to cash in on account of the growing world population and industrial needs.
In fact, the global agri-food trade has more than doubled since 1995, amounting to $1.5 trillion in 2018, with emerging and developing countries’ exports on the rise and accounting for over one-third of the world’s total, according to a new report by the Food and Agriculture Organization of the United Nations (FAO).
Described as the FAO’s flagship publication, the State of Agricultural Commodity Markets, 2020 (SOCO 2020) argues that global trade and well-functioning markets lie at the heart of the development process as they can spur inclusive economic growth and sustainable development, and strengthen resilience to shocks.
“We need to rely on markets as an integral part of the global food system. This is all the more important in the face of major disruptions, whether they come from COVID-19, locust outbreaks or climate change,” wrote Qu Dongyu, FAO Director-General in the report’s foreword.
The report estimates that about one-third of global agricultural and food exports are traded within a global value chain and cross borders at least twice.
The rise of global value chains is driven by income growth, lower trade barriers and technological advancements, which have transformed markets and trade processes, linking farmers to traders and consumers across regions and countries.
“Global value chains can make it easier for developing countries to integrate into global markets. As they link our food markets closely, they also provide a mechanism to diffuse best practices to promote sustainable development,” said the FAO Director-General.
In turn, by participating in global value chains, smallholder farmers can boost their food production and income. On average and in the short term, a 10 percent increase in agriculture’s global value chain participation can result in an increase of around 1.2 percent in labour productivity, finds the report.
Smallholder farmers, according to the report are often missing out on the benefits of global value chains. Furthermore, the emergence of global value chains with the stringent food quality and safety requirements could further marginalize smallholders.
“We need to redouble efforts to include smallholder farmers in modern food value chains, thus securing rural incomes and food security in both rural and urban areas,” said Dongyu.
To achieve this, there is a need for broad policies to create an environment that enables markets to flourish and bolsters smallholders’ participation in global value chains – for example, better rural infrastructure and services, education and productive technology, the report finds.
Making required policy and infrastructural commitments could help Nigeria bolster its productivity in not only meeting local food needs, but also getting a bigger portion of the export pie.
