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African agricultural development:
lessons and challenges
SteveWiggins
Overseas Development Institute
Outline
͙3͙years History͙…͙optimism & pessimism
Performance since 1990: what do we
know?
Policy: less discord, but a big c...
HISTORY
FLUCTUATING PERCEPTIONSOF AFRICAN
AGRICULTURE
Optimism: vent for surplus
1880s - 1930
Ecological pessimism:
Machakos, Kenya 1930s
Machakos redeemed, 1991
Sahel
1968-73
• Desertification???
Africa’s dreadful ͙97͙s
80
90
100
110
120
130
140 1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
GrossProdnFo...
Explaining failure of 70s & 80s
• Variable rainfall, Infertile
soil
• Disease
• Distance
• Neo-Malthusianism & Eco-
Doom
G...
'Only to feed her growing population at
the present level of per capita food
consumption, Africa would thus need to
increa...
Explaining failure of 70s & 80s
• Land tenure
• Institutions: finance, risk
Geography (2):
exceptionalism
• Dependency
• S...
Explaining failure of 70s & 80s
•Public marketing
boards
•Negative protection
•Urban bias
Policy
failings
Exportables
-60%
-50%
0%
-10%
-20%
-30%
-40%
10%
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
198...
1990s
Agriculture lost to sight!
Ideas & lessons → ag lost to sight
• Poverty traps?
• Owing to:
• HighT costs?
• Governme...
BUTTIMESCHANGE …
…OPTIMISM RETURNS
Africa, SS, economic growth 1996 to 2008
79 to 95:
0% per cap growth
96 to 08:
3.2% per cap.
-0.50
-0.40
0.00
-0.10
-0.20
-0.30
0.10
Average NRA for 1970/85 compared to 2000s
1970 to 85 200 to 2010
60
85
2000Jan
2001Jan
2002Jan
2003Jan
2004Jan
2005Jan
2006Jan
2007Jan
2008Jan
2009Jan
2010Jan
2011Jan
2012Jan
2013Jan
2014...
Abundant land!
Agriculture back on agenda
Maputo Declaration 2003
CAADP ex 2003
AGRA
Regional Economic Integration
RECENT PERFORMANCE
(A) REGIONAL & COUNTRY STATS
1.0
0.5
0.0
-0.5
1.5
4.0
3.5
3.0
2.5
2.0
AFRICA
EAST
MIDDLE
NORTH
SOUTH
WEST
AverageAnnualGrowthRate,%
Africa, Growth Agri...
60
50
40
30
20
10
70
600
400
200
800
1,000
1,200
Increase,%
AvValueProdnCultivatedLand,US$/ha,
constant04/06value
1990/92
...
70
60
50
40
30
20
10
4,000
3,000
2,000
1,000
5,000
6,000
7,000
Increaseseen1990/92to2009/11,%
ValueperEAPAg,Int$cont04/06 ...
MICRO STUDIES
Returns good, Incomes rising͙…
2,500
2,000
1,500
1,000
500
0
3,000
3,500
Tef Wheat Chickpeas Lentils Onion Tomato Green
pe...
Drivers of change often
private & internal
Often initiative from SF & traders
Public —Gov’t & NGO — can help, but not
alwa...
Cautious
Commercialisation
• Small areas switched to crops for
market
• SF rarely sacrifice food crops
• SF intensify
•  ...
Active Labour, Land
markets …
•2010: 82 days
•2012: 138 days
2010 2012
Lume: > 90%
households
hired labour:
days annual
ho...
But stickyCapital Mkts
• NOT: credit from Banks,
advances from input dealers,
traders or processors
Working K
from SF
savi...
In sum:
Progress, if not dramatic
transformation
POLICY: WHATTO DO?
No secrets: consensus
Rural Investment Climate
• Doesn’t have to be perfect! [Rodrik]
Ghana ex 1983:
Fast agri growth
Fast falling poverty
0
1
2
3
5
4
-3 .1% year
1961/62
1962/64
1964/66
1966/68
1968/70
1970/...
Consensus
• Bullet slide 22RputrVaelrPduabnlaicGoods
• Roads, power, irrigation, etc.
• Education, Health,Water
• Research...
Big Challenge
Failings in rural markets: solutions?
State intervention?
e.g. Fert Sub
Institutional
Innovation e.g.
Contra...
Public direction: Malawi’s fert.subs
-
0.50
1.5
1.00
1.0
1.50
2.00
2.50
3.00
3.5
0.0
0.5
2.0
2.5
3.0
2001/2002
2002/2003
2...
(Private) Subs
• OneAcre Fund
 130k SF
 Kenya, Rwanda
 Seed, Fert, Insurance,
Mktg
 Lean admin
 US$50 per SF?
Institutional innovation …
… levering in private capital
• ContractingLowerT-costs
• Underwriting rural
banking
Reduce ris...
Conclusions (1)
Reality & perceptions on
the move … sense of
proportion:
Asia’s great lesson for Africa
not always appreci...
Conclusions (2)
• Africa diverse: much to
learn from
• Initiatives …͙not͙
documented, still less
evaluated
• Need library ...
Conclusions (3)
• Progress being made
• Elephant traps avoided?
• Demand surging
• Factor market initiatives
• SF enterpri...
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Transcript of "African agricultural development: lessons and challenges"

  1. 1. African agricultural development: lessons and challenges SteveWiggins Overseas Development Institute
  2. 2. Outline ͙3͙years History͙…͙optimism & pessimism Performance since 1990: what do we know? Policy: less discord, but a big challenge
  3. 3. HISTORY FLUCTUATING PERCEPTIONSOF AFRICAN AGRICULTURE
  4. 4. Optimism: vent for surplus 1880s - 1930
  5. 5. Ecological pessimism: Machakos, Kenya 1930s
  6. 6. Machakos redeemed, 1991
  7. 7. Sahel 1968-73 • Desertification???
  8. 8. Africa’s dreadful ͙97͙s 80 90 100 110 120 130 140 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 GrossProdnFoodPerCapIndex1961/63= 100,3yearmovingav. Africa South America Asia
  9. 9. Explaining failure of 70s & 80s • Variable rainfall, Infertile soil • Disease • Distance • Neo-Malthusianism & Eco- Doom Geography & environment
  10. 10. 'Only to feed her growing population at the present level of per capita food consumption, Africa would thus need to increase her food production at a rate of, say, 3.2 per cent per year for several decades in succession. This is of course an impossible challenge for her to meet.' • (Platteau 1990: 290-1) Hostage to fortune
  11. 11. Explaining failure of 70s & 80s • Land tenure • Institutions: finance, risk Geography (2): exceptionalism • Dependency • Squeeze on peasants • [Cash crops vs food crops] External conditions, internal structures
  12. 12. Explaining failure of 70s & 80s •Public marketing boards •Negative protection •Urban bias Policy failings
  13. 13. Exportables -60% -50% 0% -10% -20% -30% -40% 10% 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 NetRateofAssistancetoAgriculture Africa: net rate of assistance to agriculture All agriculture
  14. 14. 1990s Agriculture lost to sight! Ideas & lessons → ag lost to sight • Poverty traps? • Owing to: • HighT costs? • Government failure? • Real costs? (Factor) Market failings
  15. 15. BUTTIMESCHANGE … …OPTIMISM RETURNS
  16. 16. Africa, SS, economic growth 1996 to 2008 79 to 95: 0% per cap growth 96 to 08: 3.2% per cap.
  17. 17. -0.50 -0.40 0.00 -0.10 -0.20 -0.30 0.10 Average NRA for 1970/85 compared to 2000s 1970 to 85 200 to 2010
  18. 18. 60 85 2000Jan 2001Jan 2002Jan 2003Jan 2004Jan 2005Jan 2006Jan 2007Jan 2008Jan 2009Jan 2010Jan 2011Jan 2012Jan 2013Jan 2014Jan IndexdeflatedbyUSGDPdeflator 160 Commodity Food and Beverage Price Index, 2005 = 100, includes Food and Beverage Price Indices 135 Commodity Agricultural Raw Materials Index, 2005 = 100, includes Timber, Cotton, Wool, Rubber, and Hides Price Indices 110
  19. 19. Abundant land!
  20. 20. Agriculture back on agenda Maputo Declaration 2003 CAADP ex 2003 AGRA Regional Economic Integration
  21. 21. RECENT PERFORMANCE (A) REGIONAL & COUNTRY STATS
  22. 22. 1.0 0.5 0.0 -0.5 1.5 4.0 3.5 3.0 2.5 2.0 AFRICA EAST MIDDLE NORTH SOUTH WEST AverageAnnualGrowthRate,% Africa, Growth Agricultural Production, 1990/11 Ag PIN Ag PIN per cap
  23. 23. 60 50 40 30 20 10 70 600 400 200 800 1,000 1,200 Increase,% AvValueProdnCultivatedLand,US$/ha, constant04/06value 1990/92 2009/11 Increase, % - - Africa Eastern Middle Northern Southern Western
  24. 24. 70 60 50 40 30 20 10 4,000 3,000 2,000 1,000 5,000 6,000 7,000 Increaseseen1990/92to2009/11,% ValueperEAPAg,Int$cont04/06 Growth of agricultural labour productivity,Africa, 1990/92 to 2009/11 1990/92 2009/11 Change - - Africa Eastern Middle Northern Southern Western
  25. 25. MICRO STUDIES
  26. 26. Returns good, Incomes rising͙… 2,500 2,000 1,500 1,000 500 0 3,000 3,500 Tef Wheat Chickpeas Lentils Onion Tomato Green pepper Lume,Gross Margin, US$/ha
  27. 27. Drivers of change often private & internal Often initiative from SF & traders Public —Gov’t & NGO — can help, but not always necessary Stimulus often from domestic markets, not exports Domestic marketing demands less stringent
  28. 28. Cautious Commercialisation • Small areas switched to crops for market • SF rarely sacrifice food crops • SF intensify •  fertiliser,  (sometimes) improved seed & agro- chemicals •  hired labour • Biggest Step? Irrigation Gradual, marginal changes
  29. 29. Active Labour, Land markets … •2010: 82 days •2012: 138 days 2010 2012 Lume: > 90% households hired labour: days annual household: % households renting in land 13% 45% 200 340US$ per hectare
  30. 30. But stickyCapital Mkts • NOT: credit from Banks, advances from input dealers, traders or processors Working K from SF savings • BUT may • slow process • limit degree • restrict which households participate Lack of credit not a barrier
  31. 31. In sum: Progress, if not dramatic transformation
  32. 32. POLICY: WHATTO DO?
  33. 33. No secrets: consensus Rural Investment Climate • Doesn’t have to be perfect! [Rodrik]
  34. 34. Ghana ex 1983: Fast agri growth Fast falling poverty 0 1 2 3 5 4 -3 .1% year 1961/62 1962/64 1964/66 1966/68 1968/70 1970/72 1972/74 1974/76 1976/78 1978/80 1980/82 1982/84 1984/86 1986/88 1988/90 1990/92 1992/94 1994/96 1996/98 1998/00 2000/02 2002/04 2004/06 2006/08 Agriculturegrossprod:BillUS$2000 2.6 % year 5.1 % year 1974 1982 20 30 40 50 60 70 1991/1992 1998/1999 2006 PovertyIncidence(%) Poverty,rural Poverty,cocoa producers 30.3 17.3 3000 2500 2000 1500 1000 500 0 35 30 25 20 15 10 5 0 Kcal/day/cap MalnutritionPrevalence(%) U5 Underweight (DHS) Food supply (kcal/capita/day) (kcal)
  35. 35. Consensus • Bullet slide 22RputrVaelrPduabnlaicGoods • Roads, power, irrigation, etc. • Education, Health,Water • Research & Extension 36
  36. 36. Big Challenge Failings in rural markets: solutions? State intervention? e.g. Fert Sub Institutional Innovation e.g. Contracts,Co-ops, etc. 37
  37. 37. Public direction: Malawi’s fert.subs - 0.50 1.5 1.00 1.0 1.50 2.00 2.50 3.00 3.5 0.0 0.5 2.0 2.5 3.0 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 2011/2012 2012/2013 Yield,tonne/ha Production,Mtonnes Marketing Years, May to April Production Yield t/ha
  38. 38. (Private) Subs • OneAcre Fund  130k SF  Kenya, Rwanda  Seed, Fert, Insurance, Mktg  Lean admin  US$50 per SF?
  39. 39. Institutional innovation … … levering in private capital • ContractingLowerT-costs • Underwriting rural banking Reduce risk • Patient capital, challenge funds Initial learning, high K costs
  40. 40. Conclusions (1) Reality & perceptions on the move … sense of proportion: Asia’s great lesson for Africa not always appreciated
  41. 41. Conclusions (2) • Africa diverse: much to learn from • Initiatives …͙not͙ documented, still less evaluated • Need library of working models Learning!
  42. 42. Conclusions (3) • Progress being made • Elephant traps avoided? • Demand surging • Factor market initiatives • SF enterprise Reasons for cautious optimism Africa’s greater challenge? manufacturing & the urban economy
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