OPPORTUNITIES AND CONSTRAINTS TO INCREASED FRESH PRODUCE TRADE IN EAST AND SOUTHERN AFRICA Paper prepared for 4 Video Conference under AAACP-funded series of high value agriculture seminars

For ten to fifteen years through the mid-2000s, the literature on " horticulture " in Africa was largely synonymous with horticultural exports to developed countries. Yet rising food safety and environmental standards in developed countries have made it more difficult for new countries to enter the market and for smallholder farmers in established countries to remain in the market. At the same time, various reports starting in the mid-2000s began to note the large size and strong growth prospects for domestic and regional horticultural trade. The importance and prospects of local and regional horticultural systems are now well established in the literature. Yet the empirical knowledge base is still thin in many respects, especially as pertains to regional trade in fresh produce. The purpose of this paper is to summarize current knowledge regarding the level and constraints to further expansion of regional trade in fresh produce in East and Southern Africa (ESA), and to suggest key investments needed to stimulate such trade. Key findings from this report include: • It is impossible to develop a comprehensive picture of the volume and directions of regional trade in fresh produce due to data limitations. Existing data, however, suggests that regional trade can be substantial in crops like onions, cabbage, oranges, and Irish potato, which are less perishable and transport relatively easily. • Rapid urbanization and per capita income growth are driving strong growth in demand for marketed fresh produce in the region, with growth in demand for fruit outstripping that for vegetables (though current consumer budget shares are substantially higher for vegetables than for fruit). • The regional system must be assessed in conjunction with local systems, since the two are so integrated. • The local/regional system is much larger than the modern export system and will contribute far more to absolute growth in demand over the next 20 years. • Farm level marketing is highly concentrated, with 3%-5% of farmers in most countries providing at least 80% o the marketed surplus. • Current supermarket shares of the fresh produce market are low and growing more slowly than once anticipated. The 20/20/20 challenge obtains across nearly the entire continent: the real value of supermarket sales will have to grow 20% per year for 20 years to reach a 20% market share. Open air markets, kiosks, and other informal outlets will dominate the local/regional system for many years. • Wholesaling is the necessary …