SOUTHERN AFRICA—BACKGROUND

Transformation of Southern Africa's Food Retailing and Supply Chains. In the wake of rapidly changing markets resulting from trade liberalization and political change, the rural and urban poor are faced with an uncertain and bleak environment. Without strategic interventions, the legacy of these rapid and dramatic changes in markets and national economies will be restricted to food supply insecurity and too few agricultural income–generating opportunities in the region to support local producers. This project is designed to address food supply insecurity issues and improve rural livelihoods in Southern Africa.

Ironically, in the midst of these catastrophic environmental and human health conditions in Southern Africa, four fundamental transformations in food retailing and the dynamics of associated supply chains are underway. Major market changes are creating new opportunities for Southern Africans who can adjust to alternative markets, new marketplace requirements, and demanding product standards. Retail outlets for food products, especially supermarkets and other food service chains, are rapidly proliferating and offer significant opportunities and challenges to local small and medium–scale producers.

The first change is the increase in the number and size of supermarkets and other major retail chains in Africa began in the mid–1990s, and accelerated in the past three years. The most dramatic change in food production and distribution has thus far occurred in the supermarket sector. Supermarkets are now an estimated average of 50–60% of the retail food sold in Southern Africa urban centers with 1,700 supermarkets in South Africa alone. This explosive spread of supermarkets has spread far beyond primary cities with sizeable middle class areas to secondary cities, small towns, rural areas, and lower income areas.

The second change is the migration of large scale commercial Zimbabwean and South African farmers to Zambia, Angola, Mozambique, and Madagascar. Known for their first world approach to farm management, access to technologies and meeting global quality and sanitation standards, these farmers, at least some of them, are poised to work with their small–scale farmer counterparts to gain access to additional marketing channels.

The third change involves the globalization of regional markets. With the U.S. African Growth and Opportunities Act (AGOA), and the EU African Caribbean and Pacific quota system that most Southern African producers may access, there are several donor programs to facilitate trade in horticultural and meat products to global markets. USDA/Animal Plant Health Inspection Service initiated, two years ago, the Pest Risk Assessment project to permit trade of African horticultural products to U.S. markets. Southern African farmers have 15 fruits and vegetables under consideration by USDA for access to U.S. markets.

Finally, the potential impact of Black Empowerment and debundling of conglomerates in South Africa may provide a big boost to agricultural trade in Southern Africa. Trade associations and gigantic companies like CROP Life, Monsanto, Crown Spice and Continental Foods (BIDVEST) and Anglo–American have percentages of their companies sold to Black Empowerment groups. And, now each of these Black Empowerment groups is searching for approaches and opportunities to include non–white producers in the commodity supply chain.