A Reflection on The Challenges And Opportunities In Agro-Logistics
Agro-Logistics include the resources, knowledge, expertise and infrastructure required for the movement or transportation of agro products from place to place – whether in-country or across international boundaries by sea, land or air. It requires technical and resource capacities such as Temperature controlled storage or preservative capacity, expertise in export/import documentation, pest control capabilities, export financing capacity, effective transportation and information sharing facilities, handling and packaging expertise etc.
The World Bank states that agro-logistics will be largely responsible for food supply to an estimated 9 billion people by 2050 globally. Like the infrastructurally advanced nations, many developing countries are beginning to put measures in place to improve the general standard of agro-logistics in their countries – especially for perishables and other goods that require some level of preservation during the transition period. Kenya, for instance, is a leading exporter of perishables and about the largest exporter of Green Peas from Africa to Europe. However, in many developing and under-developed economies, the agro-logistics industry is largely under-developed, expensive to manage and carries huge logistics cost burdens due to the high infrastructural deficit.
Though there has been a remarkable improvement in agro-logistics in some of these countries, a survey has shown that up to 50% of agro products are damaged between the farms and places of consumption due to limited or near absence of logistics infrastructure. However, the economic potentials of agro logistics in under-developed countries.
Though no single article can proffer all the solutions to the problems associated with agro-logistics, the following recommendation can serve as the one big solution:
Mergers and strategic partnerships: In the face of the huge infrastructural deficit in many developing countries, Mergers and strategic partnerships among key stakeholders in the agro-logistics sector appears to be the one big solution to the challenges of agro-logistics in many under-developed economies. I say this because there is hardly any player that possesses all the resources or capacity required to conquer the limitations occasioned by poor logistics infrastructure in developing countries and therefore stakeholders must come together and pool resources for the common good. These resources range from human (people with technical/specialized skills and expertise), material (storage and transportation capacity), financial to technological resources. Again, these merging parties or strategic partners can leverage several global networks to improve their technical capacities and find viable markets across the globe.
In conclusion, agro-logistics in developing economies may be characterized by low margins, poor infrastructure and limited access to capital, these challenges no longer require rhetoric and unending conferences to solve them. What is required is a strategy (one of which is suggested above), action and definite timelines to get the industry out of the woods and strengthen it to achieve its full potential.