The development of agri-food value chains in emerging economies is challenged by restricted energy access and use for the production, processing or trading of food.
These steps often rely upon energy-intensive supplies for production, processing, transportation and distribution. Often, there are also constraints regarding energy availability, reliability, and cost, which all have a negative impact on the competitiveness of the end products.
The production of food is further constrained by huge inefficiencies. As a result, an estimated one-third of the food we produce is not consumed. This equates to an equivalent and avoidable loss of the energy resources used along the food value chain. For the processing and preparation of food, huge amounts of traditional biomass are burned in open fires or inefficient stoves in enterprises and households.
The future global demand for meat, dairy produce, and vegetables will increase rapidly. To be competitive, mitigate carbon emissions, and adapt to the risks associated with climate change, future agricultural/food systems must be accompanied by better, cleaner and more sustainable energy processes. Examples include reducing food losses, improved management of resource-intensive inputs (such as fertilisers, or feeds for fish and livestock), and the supply of clean energy for food production, processing, transport, preparation and related processes. Renewable energy solutions can be utilised in different forms in agricultural value chains for irrigation, cooling, drying and milling, amongst others, and contribute to increased productivity and competitiveness of farmers and agribusinesses.
At SNV we target integrated business models for clean energy generation and agri-food value chains. This requires in-depth support to farmers, enterprises and public stakeholders. It enables the end-users of energy in the food economy to be more competitively positioned in the market, to become more resilient to the effects of climate change, and creates employment opportunities in and around agri-food chains that stimulate local economies. Investment in such integrated business models maximises value to the host country, brings the know-how to reduce carbon emissions, unsustainable land use and future water consumption, and contributes to food quality and food security.
Sustainable integration of renewable energy technologies into agricultural value chains requires a market-based approach, in which demand, supply, and enabling environment conditions are addressed in parallel. To come up with viable business cases, a solid understanding is needed of local market dynamics and the challenges faced by both agribusinesses and companies offering renewable energy solutions. For these companies to operate successfully, government support and a conducive enabling environment are critical, through appropriate policies and regulatory frameworks for decentralised renewable energy solutions.
More info on SNV’s approach to integrating renewable energy solutions in agricultural value chains
Some examples include:
- Energy-agriculture nexus projects integrating productive use of energy (PUE) solutions into agricultural value chains to increase climate resilience; e.g. CRAFT, INCREASE, DFCD.
- Results Based Financing (RBF) mechanisms to stimulate PUE adoption; e.g. BRILHO Mozambique, EnDev Tanzania, EnDev Kenya.
- Improving the viability of mini-grids through productive uses; e.g. Mashaba mini-gid, Zimbabwe.
- Promoting farmer-led and market-based smart water products and services; e.g. SWA, Kenya.
- Leading Energising Development EnDev’s Learning & Innovation group on PUE; see also here.