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6 - How multinational investments in grain trading are reshaping Zambia's market

from Part Three - Competition and regulation in reshaping African markets

Published online by Cambridge University Press:  23 March 2018

Nicholas J. Sitko
Affiliation:
assistant professor of International Development in the Department of Agriculture
Brian Chisanga
Affiliation:
research associate at the Indaba Agricultural Policy Research Institute (IAPRI) in Lusaka, Zambia
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Summary

INTRODUCTION

Multinational capital is flowing into African agrifood systems in ways that are dramatically altering how food is produced and consumed in the region. While multinational investments in African food systems are not new, shifts in the political, economic and demographic landscape of the region have expanded the scope and scale of these investments. Over the last decade or so, much of sub-Saharan Africa has witnessed rapid urbanisation, sustained GDP growth, single-digit inflation and the emergence of an African middle class (Chikweche and Fletcher, 2014; Fine et al., 2012; Losch, 2012; Ncube, Lufumpa and Vencatachellum, 2011). These domestic transformations are taking place within a global context of increasing uncertainty over global grain supplies and prices (Dewbre, Giner, Thompson and Von Lampe, 2008). The interactions between these domestic, regional and global factors have created incentives for multinational investment throughout African agrifood systems, from food production to retailing.

To date, research on the transformation of African agrifood systems has focused most intently on the rise of supermarkets (Neven, Odera, Reardon and Wang, 2009; Reardon, Timmer, Barrett and Berdegué, 2003; Weatherspoon and Reardon, 2003) and the growth in demand for African land for commercial agricultural purposes (Cotula, Vermeulen, Leonard and Keeley, 2009; Deininger and Byerlee, 2011; Hall, 2011). This research has highlighted important system-wide benefits of the corporatisation of African agrifood systems, including improved capacity to manage environmental and financial risk, the increased pace of technology adoption, and supply chain modernisation (Collier and Dercon, 2014; Minten, Randrianarison and Swinnen, 2009; Reardon and Berdegué, 2006).

However, there is considerable concern over the potential ramifications of the transformation of African agrifood systems for small-scale producers, who continue to make up the majority of the population in sub-Saharan Africa and among whom poverty levels remain unacceptably high (Haggblade et al., 2012; Weatherspoon and Reardon, 2003). This includes the displacement of traditional food markets by supermarkets, which may weaken the capacity of smallholders to tap into expanding urban-demand opportunities (Reardon et al., 2003; Tschirley, Reardon, Dolislager and Snyder, 2014; Weatherspoon and Reardon, 2003), and the enclosure of smallholder farming areas by commercial agriculture investments (Cotula et al., 2009; Hall, 2011; Jayne et al., 2014).

Type
Chapter
Information
Competition Law and Economic Regulation in Southern Africa
Addressing Market Power in Southern Africa
, pp. 151 - 171
Publisher: Wits University Press
Print publication year: 2017

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