Sustainable financing of ag research asti - iaae

444 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
444
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Sustainable financing of ag research asti - iaae

  1. 1. Theme 1: Sustainable Financing of AfricanAgricultural R&DGert-Jan StadsASTI program | International Food Policy Research InstituteKeith FuglieEconomic Research Service | United States Department of Agriculture- the views expressed are the authors’ own and not necessarily those of ERS or the USDA.IAAE Symposium on Improving Returns to AgriculturalResearch in Sub-Saharan AfricaFoz do Iguaçu | 20 August 2012
  2. 2. Outline presentation• How much and how well do African governments and donors invest in agricultural R&D? - Options for improving efficiency of R&D investment• Is agricultural R&D in Africa paying off? - R&D, technological change, and productivity growth - Productivity growth and poverty reduction• Future prospects for agricultural growth
  3. 3. Africa’s investment challenge: Uneven growth 20% growth in SSA public agricultural R&D spending, 2000-08 2.0 • Growth driven by only a few countriesSSA Agricultural R&D spending 1.5 • Growth not always sustainable (biilion 2005 PPP $) 1.0 • Region-wide growth masks severe declines in many other (mainly 0.5 francophone West African) countries 0.0 1971 1979 1983 1987 1991 1995 1999 2003 1975 2007
  4. 4. Africa’s investment challenge: Fragmentation
  5. 5. Africa’s investment challenge: Underinvestment• Common target: Allocation of at least 1 % of GDP to R&D• In 2008, Africa spent $0.61 for every $100 of AgGDP on agricultural R&D• Despite an overall increase in recent years, Africa is widely underinvesting in agricultural R&D
  6. 6. Africa’s investment challenge: Volatility 40 Burkina Faso • Agricultural R&D spending in 30 20 Africa has been more volatile Agricultural R&D spending (miilion 2005 PPP $) 10 0 than in other regions 1981 1985 1989 1993 1997 2001 2005 440 330 Nigeria • Volatility more pronounced in 220 110 donor-dependent low-income 0 1981 1985 1989 1993 1997 2001 2005 countries 4 3 Gabon • Stable and sustainable 2 1 government funding is key, 0 1991 1994 1997 2000 2003 2006 not just towards salaries but 40 30 Niger also to enable necessary 20 10 nonsalary expenditures 0 1981 1985 1989 1993 1997 2001 2005
  7. 7. Africa’s investment challenge: Donor dependency 100 • Many countries are Share in total funding, 2001-08 (%) extremely dependent 80 on donor funding and Spread of 60 donor share development bank loans 40 • Donor funding is 20 Average donor share generally short-term and ad-hoc, adding to 0 the volatility Madagascar Togo Mauritania Eritrea Benin Tanzania Zambia Mauritius Namibia Senegal Gambia Mali Kenya Niger Côte dIvoire Burundi Uganda Botswana Burkina Faso South Africa Ghana Guinea • Increased funding from World Bank (loans) in recent years
  8. 8. Funding Agricultural R&D throughCommodity Levies Current: $127 million; Potential: $500 million Country Product R&D Industry Product R&D All Public R&D spending value intensity intensity Million $PPP Million $PPP % % Ghana Cocoa 33.25 757 4.4 0.9 Côte d’Ivoire Multiple 42.60 7,847 na 0.5 South Africa Sugar 18.59 673 2.8 2.0 Kenya Tea 3.10 369 0.8 1.3 Kenya Coffee 5.78 45 12.8 1.3 Malawi/Zimbabwe Tea 2.42 65 3.7 0.7 Mauritius Sugar 9.89 149 6.6 3.9 Tanzania Coffee 3.43 46 7.4 0.5 Tanzania Tobacco 0.06 81 0.1 0.5 Tanzania Tea 4.10 37 11.1 0.5 Uganda Coffee 4.75 228 2.1 1.2 Source: Byerlee 2011 and ASTI
  9. 9. Agricultural total factor productivity (TFP)has picked up, but still lags
  10. 10. Increase in output growth has been primarily resource-ledwith some rise in TFP growth Data & Statistics Source: Fuglie and Rada (forthcoming)
  11. 11. Diffusion of new agricultural technologies in SSApicked up after 1980 Source: Fuglie and Rada (forthcoming)
  12. 12. Policy reforms since mid-1980s improved incentivesfor agriculture Source: Kym & Anderson (2008), World Bank
  13. 13. Drivers of agricultural TFP growth in SSA(from regression analysis) • Technology policy – R&D investment main driver of TFP growth • Economic reforms – Raised TFP by 5% (out of 35% growth since mid-1980s) • Low returns to schooling – Reflect countries still in ‘traditional agriculture’ • Armed conflict stops growth • HIV/AIDS suppresses TFP growth – 5% of population infected reduces TFP by >2% • Road data too limited to draw inference Source: Fuglie and Rada (forthcoming)
  14. 14. Returns to Agricultural R&D in SSA• Returns higher for larger countries• CGIAR complements national agricultural research investments• Aggregate impact limited by low investment Research System Returns to Research B/C ratio IRR (%) IRR (%) w/ CGIAR w/ CGIAR w/o CGIAR Nigeria, Sudan, Ethiopia, Large Kenya, Côte d’Ivoire, Ghana 4.4 43 36 Uganda, Senegal, Mali Mid-size Mozambique, Madagascar 2.6 29 23 Gabon, Burundi, Gambia, Small Botswana, Swaziland 1.6 17 13 CGIAR In SSA only 6.2 58 -- Source: Fuglie and Rada (forthcoming)
  15. 15. How does Agricultural R&D Affect Poverty?• Poverty head count impact lower in SSA compared with other developing regions• Poverty gap impact likely to be much larger Relation Elasticity Poverty head count and output -0.220 Output and R&D +0.049 Poverty head count and R&D -0.011 Source: Nin-Pratt and Fan (2010)
  16. 16. New Directions and Prospects for FutureReasons for optimism Reasons for pessimism• Better macroeconomic • Private sector technology management transfer still low• Strong demand growth • “Small country” problem• Renewed interest by and inefficient R&D governments & donors in • African farmers still face agriculture very low incentives• Policy reform Source: Binswanger (2011)
  17. 17. Ways of Moving Forward • Mobilize greater government support for agricultural R&D • Better coordinate donor support with national priorities • Promote regional cooperation • Reform policy to facilitate private-sector participation
  18. 18. THANK YOU

×