Africa’s agricultural transformation will require more than companies willing to buy farm produce.
Without roads, electricity, water, irrigation, storage, extension services, affordable finance, efficient logistics and predictable government policies, farmers will struggle to build businesses capable of attracting and retaining investment.
This was one of the key messages from agriculture, business, government, development finance and philanthropy leaders who called for a shift from short-term, grant-dependent agricultural projects towards commercially sustainable food value chains.
The discussions, convened by PepsiCo and RTI International on the sidelines of the Africa Food Systems Forum in Kigali, Rwanda, examined how public and private investment can work together to create stronger markets for farmers while making agriculture more attractive to commercial investors.
Participants argued that governments and development institutions have an important role to play, but not necessarily by financing every part of the agricultural value chain.
Instead, they can provide the infrastructure, policy environment and early support needed to enable farmers and private investors to build viable businesses.
This includes creating access to land and water infrastructure, improving transport and logistics, strengthening extension services and helping farmers access technology and finance.
In Rwanda, participants explored possible models combining government-supported land and water infrastructure with private-sector anchor farms, farmer training and patient financing for women and young farmers.
One model under discussion would allow farmers to repay the cost of greenhouse infrastructure from their harvest revenues rather than servicing conventional loans before their crops begin generating income.
No formal investment decision or Rwanda project commitment was made at the Kigali meeting, but participants said lessons from other markets could inform future agricultural investment opportunities in Rwanda and elsewhere on the continent.
The commercial approach is already being tested in Ethiopia, where more than 2,800 farmers are growing potatoes under contracts to supply PepsiCo.
The initiative was launched in 2024 through the US Government-funded Ethiopia Transforming Agriculture activity, implemented by RTI International, in partnership with PepsiCo Foods Ethiopia and EUCORD.
It was designed to address some of the longstanding weaknesses in Ethiopia’s potato value chain, including limited access to quality seed, fragmented supply systems and weak links between farmers and commercial buyers.
The result is a model built around an identifiable market.
Contract arrangements give farmers clearer demand, quality requirements and pricing arrangements, while seed multiplication is helping address one of the major bottlenecks to expanding production.
PepsiCo’s potato sourcing in Ethiopia is now fully local, with 84 per cent of its supply sourced through the initiative.
For farmers, the model offers something that has often been missing from agricultural development projects: greater certainty that there will be a buyer for their produce after they have invested in inputs, labour and land.
For the company, stronger local production provides a more reliable supply chain and reduces exposure to supply disruptions.
“The real test of an agricultural partnership is not how many organisations sit around the table, but whether the farmer has a stronger business at the end of it,” said Meghna Laxman, Corporate Affairs Director, PepsiCo Africa Franchise + Ethiopia/Nigeria Foods.
“If farmers can produce more efficiently, earn more predictably and reach a dependable market, while businesses build a more resilient local supply base, then the partnership is creating value on both sides. That is the kind of model that has a chance to scale.”
The Ethiopian experience also illustrates the changing role proposed for development and philanthropic finance.
Participants said public and philanthropic capital can be most effective when it is used to reduce risks that commercial investors are initially unable or unwilling to carry.
Such financing can help address infrastructure gaps, develop farmer capacity, introduce technology, establish new markets and absorb some of the risks associated with early-stage investment, currency and political uncertainty.
But the objective is for that support to decline as the business becomes commercially established.
Representatives from the Gates Foundation, African Development Bank, Food and Agriculture Organisation of the United Nations and World Bank discussed how catalytic finance can help agricultural ventures move from promising projects to bankable businesses.
“Successful public-private partnerships create the greatest value when they are tied to a real market opportunity and when incentives are aligned across the value chain,” said Meghan Anson, RTI’s Senior Advisor for Food Security and Nutrition.
“When this alignment exists, investment is more likely to strengthen markets, improve resilience, and create value that extends well beyond any individual partnership.”
Another Ethiopian initiative discussed in Kigali demonstrates the potential scale of the approach.
RTI is working with PepsiCo and partners including John Deere, Corteva Agriscience, Dimagi, Hello Tractor and Samanu to develop a domestic sunflower value chain.
The initiative aims to reach 72,000 farmers cultivating 43,000 hectares and is expected to generate an estimated $300 million in annual sunflower oil sales.
It also seeks to expand trade between the United States and Ethiopia by combining technology, agricultural production, machinery, market access and private-sector investment.
The projects demonstrate the central proposition emerging from the Kigali discussions: agricultural development becomes more sustainable when production is connected to a viable market from the outset.
Rather than starting with the question of how much funding a project requires, the market-led approach starts with demand—what product is needed, who will buy it, what farmers can earn and what is required to make production profitable.
Development funding can then be deployed strategically to address the barriers preventing that opportunity from becoming commercially viable.
The challenge is particularly important in Africa, where farmers often face high production costs, limited access to finance and inputs, weak infrastructure and unpredictable markets.
A farmer may have land and the ability to produce, but without reliable buyers, affordable finance, storage, roads and appropriate technology, production alone does not necessarily translate into a sustainable business.
This is why participants stressed that the farmer must remain at the centre of the investment equation.
A value chain cannot be considered successful simply because it increases production, attracts investment or creates a new commercial relationship.
Farmers must be able to earn sufficient returns, access productive inputs and technology, manage risks and have predictable markets that make continued production worthwhile.
The wider challenge, therefore, is not simply to replicate individual projects but to create conditions in which successful agricultural models can grow without remaining dependent on grants.
Africa has no shortage of farmers, agricultural land or potential markets.
What remains critical is building the infrastructure, financing systems, policies and commercial relationships that connect those resources to profitable opportunities.
The future of African agriculture could ultimately depend on turning farmers from beneficiaries of development projects into participants in functioning food businesses.
