The ability to consistently access nutritious food is a fundamental human right, yet millions around the world struggle with hunger and malnutrition. The 2023 State of Food Security and Nutrition in the UN World report revealed a concerning rise in global hunger. An estimated 122 million more people faced hunger in 2022 compared to 2019, bringing the total number to between 691 and 783 million. In 2022, 148 million children had stunted growth, and 45 million children under 5 were affected by wasting.
For Africa, despite being home to some of the world’s most fertile lands, a significant portion of the population faces food insecurity. In Africa, food security is a fundamental challenge, with over 20 percent of the population (approximately 257 million people) undernourished. The persistent surge in hunger and food insecurity, fueled by a complex interplay of factors, including climate change, the COVID-19 pandemic, and wars, demands immediate attention. It’s clear that achieving Zero Hunger by 2030 is not a task for one nation or organization but a goal that requires a coordinated global effort that must include Micro and Small Enterprises (MSEs).
The complex challenge of food security encompasses four key dimensions:
- Availability – ensuring enough food is produced.
- Accessibility – guaranteeing people have the means to acquire food.
- Utilization – promoting the knowledge and resources to utilize food effectively.
- Stability – mitigating disruptions that could threaten food access.
Achieving food security requires a multifaceted approach, and Micro and Small Enterprises can play a crucial role in strengthening food systems. These dynamic businesses, often locally owned and operated, are deeply embedded within every stage of the food chain – from agricultural production to processing, distribution, and retail. Their widespread presence allows them to cater to specific local needs with flexibility and innovation. MSEs are engines of rural development and job creation and hold immense potential to address global food security challenges.
Despite their potential, Micro & Small enterprises face significant obstacles. Limited access to finance and resources can hinder their growth and adoption of modern technologies. Inadequate rural infrastructure and a lack of technological access can also constrain their efficiency. Food safety concerns and post-harvest spoilage threaten product quality and lead to economic losses for farmers and those along the value chain. Additionally, difficulty accessing new markets and complex regulations can be significant hurdles for MSEs, especially for women and youth-led enterprises.
Micro & small enterprises can contribute to ensuring food security by promoting food safety practices and boosting agricultural production. This article explores the crucial role of MSEs in enhancing food security and ending hunger. We explore how micro and small businesses contribute to each dimension of food security, analyze their challenges, and explore strategies to empower them.
Micro & Small-sized firms’ contribution to Food security:
Boosting Food Production and Minimizing Waste – Ensuring sufficient food production is the cornerstone of food security. Small enterprises play a vital role in increasing agricultural productivity through various means. They can promote vertical farming and aquaponics techniques in urban areas, maximizing production in limited spaces. By supplying essential inputs like high-quality seeds and fertilizers, agric-businesses can empower farmers to enhance yields. Additionally, they play a crucial role in supporting the formation and growth of farmer cooperatives. These cooperatives allow small-scale producers to consolidate their resources, negotiate better prices for inputs, and improve their bargaining power in the market, contributing significantly to food security.
Minimizing Waste – Food loss and waste significantly threaten food availability. MSEs can play a role in reducing these losses through various approaches. Through their enterprises, micro and small entrepreneurs can promote improved post-harvest handling practices and storage technologies, minimize spoilage, and extend the shelf life of produce by providing solutions for farmers and other actors along the supply chain. Also, small businesses can help build efficient distribution networks that connect producers directly with consumers, reduce transit time, and lower spoilage risk. Furthermore, micro and small business owners can work with farmers to promote food processing and preservation techniques such as drying, fermentation, and pickling, allowing for increased shelf life and year-round availability of essential food items.
Bridging the Gap Between Food and People – Even with adequate food production, physical and economic access remain critical challenges. Micro & small businesses are vital in expanding market access for small-scale producers. Using E-commerce platforms, small business owners can connect rural farmers directly with consumers in urban areas, bypassing traditional intermediaries and increasing profit margins for producers. Small business owners can also work with farmers to set prices that lead to profit for the farmers and affordability for consumers. Additionally, they can act as vital linkages between producers and supermarkets or institutional buyers, providing small-scale farmers access to larger markets and stable income streams. Micro and small business owners can establish local farmers’ markets and food hubs, creating accessible and convenient avenues for consumers to purchase fresh, locally-produced food and closing the gap between food and people.
Another crucial aspect of accessibility is making nutritious food affordable. MSEs can contribute by promoting locally adapted and sustainable food production practices that reduce reliance on expensive imported inputs. Diversifying food production beyond staple crops and promoting a wider variety of fruits, vegetables, and protein sources can improve dietary diversity and address micronutrient deficiencies.
Promoting Safe and Nutritious Food Consumption – Food security goes beyond availability and accessibility. It also encompasses the utilization of food for optimal nutrition and health. Micro businesses can contribute by enhancing food safety and quality standards. They can do this by [promoting food safety and improving quality standards through skills-building programs for producers and processors on food safety protocols and proper hygiene practices. Supporting investments in small businesses will enhance quality control measures like refrigeration and hygienic processing facilities to ensure the safety of food products. By working closely with their customers, micro and small business owners can promote education on safe food handling practices, empowering individuals and families to make informed choices and minimizing the risk of foodborne illnesses.
Beyond safety, small businesses can play a vital role in promoting dietary diversity and nutrition awareness. Collaboration with health experts and nutritionists can help MSEs develop products and educational campaigns that address specific nutritional needs within their communities.
Strategies to Empower Micro & Small Enterprises to Enhance Food Security:
According to MasterCard Foundation research, sub-Saharan Africa alone has 44 million Micro, Small and Medium-sized Enterprises. These enterprises hold immense potential for enhancing food security, but they require support through enabling policies and regulations, infrastructure development, capacity building, access to financial services, and trade facilitation. A multi-pronged approach involving governments, international organizations, the private sector, and civil society is essential to enhance these enterprises’ impact in enhancing food security.
1. Enabling Policies and Regulations: Complex and bureaucratic regulations can stifle small businesses’ growth and the movement of goods across borders. Governments can simplify permit procedures, reduce administrative burdens, and streamline cross-border procedures to encourage smooth operation and movement of food products. Stringent policies can promote unfair trade practices and allow only large businesses to dominate the markets. By implementing trade policies and business-enabling regulations that promote fair competition and encourage the development of local markets, governments can create a more level playing field that will allow small businesses to innovate and compete.
2. Investing in rural infrastructure: Poor infrastructure in rural areas, such as inadequate transportation networks, lack of electricity, and limited storage facilities, can lead to significant post-harvest losses and hinder farmers’ market access. Rural infrastructure development, including roads, power supply, storage facilities, and irrigation systems, can significantly improve agricultural efficiency and reduce costs and losses for farmers and micro and small firms in rural areas.
3. Skills Development Training: Agri-business skills development owners: Many micro and small business owners need training to improve their management skills. Capacity-building programs can equip them with critical skills in value addition, marketing, trade promotion, and finance, enabling them to run their businesses more effectively and achieve sustainable growth. Additionally, training on food safety, processing techniques, and proper handling practices, including proper planting, can enhance the quality and shelf life of products offered by small businesses in the agriculture sector.
Capacity-building sessions can help small producers and traders learn sanitary and phytosanitary (SPS) measures. These safety measures are critical to protecting public health and enabling safe and efficient food movement throughout Africa.
4. Access to Financial Services: Facilitating access to credit and financial services can improve micro and small enterprises’ operations, making them more efficient and innovative. For example, access to funding can allow these small firms to create and implement ideas to improve food availability. Limited access to finance hinders micro and small firms’ ability to invest in technology, infrastructure, and expansion. Governments and financial institutions can develop microfinance schemes and loan programs with simplified application processes and interest rates tailored to these firms’ needs.
Since banks and other financial institutions are concerned about the risks associated with lending to micro and small firms, they can implement risk-sharing mechanisms to strengthen the financial position of micro and small firms and enhance their access to finance. By developing such mechanisms, like loan guarantees or insurance schemes, financial institutions can extend credit to small firms while mitigating the risks of lending to smaller businesses. Mechanisms to reduce risks benefit financial institutions by expanding their client base and empowering small businesses with the necessary financial support. It’s a win-win situation for both parties.
5. Promoting Trade: AfCFTA—The African Continental Free Trade Agreement is expected to bring smallholder farmers and those operating along the agriculture value chain into wider supply chains. For Agricultural micro and small firms, the AfCFTA provides countless opportunities for new investment. If implemented adequately, many of the AfCFTA provisions can turn Africa into a powerhouse of world food production, creating opportunities for growth for micro and small firms.
The above strategies can create a more enabling environment for entrepreneurs and small businesses to operate and enhance food security in Africa. Shorter food supply chains reduce reliance on long-distance transportation and make food systems less vulnerable to disruptions in regional markets. Additionally, supporting these firms can help develop a more resilient food system, from the farm to the table, and ensure consistent access to food for all.
The Food and Agriculture Organization (FAO) estimated that in 2022, the food crisis affected 346 million people in Africa. Micro & Small-sized Enterprises can contribute to a more stable food supply by supporting local farmers, facilitating direct producer-consumer linkages, and promoting community-supported agriculture initiatives.
Conclusion
In this article, we looked at how micro and small firms, including those in the informal sector, can contribute to food security when supported. From promoting sustainable farming practices to tackling food waste and ensuring market access, micro and small businesses can drive positive change in food security. Unlocking the full potential of small firms requires a multi-stakeholder approach. Governments must create enabling policies, invest in rural infrastructure, facilitate finance access, and promote market policy access through AfCFTA. In addition, business support organizations can provide technical assistance and knowledge-sharing platforms, while the private sector can collaborate in technology transfer and innovation. Finally, civil society can raise awareness in the community and promote support for small business-driven food security initiatives.
Empowering micro and small enterprises will enable them to become effective change agents who promote food security and accelerate the achievement of Zero Hunger and other Sustainable Development Goals in Africa. Let us embrace the power of micro and small enterprises and ensure a future where everyone can access nutritious food.
