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Key drivers of agricultural transformation in Africa: what role for farmers?

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No country has been able to sustain a rapid transition out of poverty without raising agricultural productivity …

No country has been able to sustain a rapid transition out of poverty without raising agricultural productivity


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  • Peter Timmer and Selvin Akkus, The Structural Transformation as a Pathway out of Poverty: Analytics, Empirics and Politics,
    Centre for Global Development, Working Paper Number 150, July 2008
  • Source Henley and Van Donge 2012
    S. Wiggins : to stimulate agriculture: create an enabling environment for investment and innovation; and invest in rural public goods.
  • CAADP fertilizer consumption target of 50kg/ha by 2015
    Many challenges for African agriculture
    African Agriculture is challenged by a number of threats such as food price spikes, land and water not adequately exploited, rising energy and fertilizer prices and the impact of climate change on agriculture production and livelihoods. Feeding more than 9 billion people by 2050 will require doubling food
    production on a sustainable basis. Therefore, agriculture should be resilient - able to withstand or recover from stresses and shocks. Developing resilient agriculture will require technologies and practices that build on agro-ecological knowledge and enable smallholder farmers to counter environmental degradation and climate change in ways that maintain sustainable agricultural growth.
    Financial markets and rural finance institutions are weak. Development of competitive output and input markets has lagged, and
    services for smallholders remain poor. Progress in science and technology is inadequate and agricultural
    research, agricultural extension, and agriculture education remain persistently underfunded. These
    factors threaten to condemn African agriculture to slow and inadequate technical change, contributing to
    a growing technology divide. Africa will have to address these issues if it is to capitalize on today’s better
    agricultural opportunities
  • Because most African economies are open, international price increases are largely transmitted to the domestic economy. Food-importing countries were hardest hit, as they have few ways to prevent international prices from being passed on to consumers. Within these countries, urban populations and those rural poor who are net buyers of food were most affected. Food import bills rose for all net food importing countries in Africa. Many of these countries were at the same time even harder hit by the rise in global energy prices.
  • Potential of youth employment in the agricultural sector: Inclusive, remunerative, passing the knowledge
  • Fortunately the reforms undertaken — often painfully — in many African countries in the 1980s and 1990s have reduced some obstacles from what they were. While in the 1970s agriculture in Africa was on balance taxed by 15% or more — and for particular commodities in some countries by a great deal more than this, by 2005 the explicit and implicit taxation of agriculture had been reduced to less than 5%.
  • The growing opportunities for African Agricultural Development. Hans P. Binswanger-Mkhize, Derek Byerlee, Alex McCalla,
    Michael Morris, and John Staatz. ASTI. 2011.
    farm-level unit production costs in Mozambique, Nigeria, and Zambia are comparable to or lower than those in the Brazilian Cerrado and in Northeast Thailand, due to very low labor costs and limited use of purchased inputs
    The competitiveness of Africa’s producers at the farm level makes
    them generally competitive in domestic markets relative to imports. Since domestic and regional markets
    for many of the targeted commodities are large and rapidly growing, and since significant imports are already taking place, prospects for import substitution are bright, especially for rice, soybeans, sugar, and maize
    (iii) For the six commodities under consideration, African producers are more favorably positioned to serve regional markets than the countries that currently dominate international trade. Logistical costs are less when serving regional markets than when exporting overseas; moreover, as a result of population growth, income gains, and urbanization demand in regional markets is expected to grow.
  • Steven Haggblade and Peter Hazell. Successes in African Agriculture. Lessons for the future. IFPRI. 2010
  • The right-hand map shows countries in Africa where official development aid flows are smaller and larger than 50%. Basically, in half of African countries aid represents at least as much as half of collected taxes.
    Indeed, mobilising Africa’s public resources is important because:
     
    External dependence: The recent economic crisis has shown the dangers of the continent’s over-exposure to external resources. With their own budgets coming under heavy pressure, foreign donors looking for an exit strategy and the global recession are intensifying the debate over the legitimacy and effectiveness of aid. Domestic resource mobilization is a central part of the solution to closing the gap between the pressing investment needs of African states and the scarce levels of available domestic savings. (Monterrey consensus)
     
    State building: There cannot be viable independent States without robust taxation systems. PRM is important to shift accountability away from donors and towards the country’s population. PRM is a way to ensure that states need to address the needs the needs of their population to function.
     
    Aid effectiveness: PRM has the benefit of putting countries on the course to graduation from external aid. However, aid has and should retain a very important role to play during the medium-term. The key is that aid should be designed with an “exit strategy” at its core. When used to stimulate PRM, aid can have a high (up to x10) multiplier effect on States’ resources.
    Ownership and governance: The advantage of aid spent on PRM is that as it is local governments who decide what to do with collected taxes. Hence, complete ownership of development priorities and strategies is assured by design. Whatmore, taxation tightens the social contract binding citizens with their States, and vice-versa, providing a natural platform to stimulate good governance.
  • Wallmart: Sourcing from women farmers groups
    Cargill: training programmes in various commodities (Cocoa…) and women’s clubs (cotton made in Africa). 800 of these clubs reaching about 32,000 women
    farmers.
    DSM: Fortified crops and products to support nutrition security
  • (i.e. in Ghana since economic reforms in 1983, agriculture grown for the next 25 years at rates of more than 5% a year and is one of the six fastest growing agricultures in the world, ahead of Brazil and China). S. Wiggins. What prompted this? The reforms of the early 1980s that began with currency devaluation, control of rampant inflation and reform of the cocoa marketing board, seem to have led to the turn-round in Ghana’s agriculture and indeed the economy as a whole.
  • Transcript

    • 1. Key drivers of agricultural transformation in Africa: what role for farmers? http://brusselsbriefings.net
    • 2. • Mots de bienvenue Elisabeth Atangana, Présidente, PROPAC Ouverture/opening • CTA • PAFO • AUC • Minader
    • 3. Envisioning the future of African agriculture and the renewed role of farmer’s organizations 3-5 December 2013, Yaoundé, Cameroun http://acpbriefings.net
    • 4. • No country has been able to sustain a rapid transition out of poverty without raising agricultural productivity • Where agricultural productivity has grown slowly, as in many parts of SSA, non-farm activities have also tended to grow slowly • Agricultural growth has been the precursor to industrial growth in Europe and Asia
    • 5. In Asia 3 preconditions for increased growth and reduced poverty: • Macroeconomic stability: low inflation, currency overvaluation • Economic freedom for farmers and entrepreneurs • Pro-poor public spending on agriculture, public services, rural infrastructure
    • 6. • Agricultural transformation taking place in a challenging context: CC, impact of the food, energy, and financial crises, unsustainable use of natural resources • Net food importer: 10% in 1994, 30% now • 6% arable land irrigated against 22% in the world on average (2009); 17 kg fertilizer unit per ha (222 kg in Asia and 120 Kg in world average) CAADP • Agriculture isolated from other sectors
    • 7. Much higher real prices are also expected to prevail for the two key inputs to agriculture mentioned earlier, namely energy and fertilizers. Energy prices are now 250 % higher than in 2000, though by 2020 they are expected to drop back to levels about 175 % higher than in 2000. Fertilizer prices, now 170 % higher than in 1990 and 2000, are expected to drop to a level about 80 % higher than in 2000.
    • 8. • The double challenge: – Raising productivity and positioning ‘wealth creation’ with inclusiveness – Diversifying into higher value goods within and outside agriculture • Determining factors: – Policies – Markets (Domestic & regional) – Finance – Human assets and knowledge
    • 9. Agriculture key in SSA economies • ... Yet new opportunities: renewable energy, provision of environmental services, renewed focus on food production, new non-farm rural jobs, more opportunities offered by ICT’s ... • Agriculture continues to be the main source of employment (63 % of rural household income in Africa, 62 % in Asia, 50 % in Europe and 56 % in LA)- Aging
    • 10. • Coherent vision & agenda on Agriculture (CAADP); last decade : rapid economic & agricultural growth; improved governance and pubic financing ( 6%) • Macroeconomic stability, improved investment climates, and agricultural incentives • Decrease in taxation of agriculture • Largest share of arable land in the world(16%) .... and largest share of uncultivated arable land (79%) is in Africa
    • 11. Research competitiveness of African selected countries highlights the following: • Farm-level production costs in Africa are competitive • Africa’s producers are generally competitive in domestic and regional markets • In the short- to medium-term, regional markets offer the most promising opportunities
    • 12. • Malian cotton production has grown at 9%/year for the past 40 years; Kenyan horticultural exports have increased fivefold since 1975. • Farmers and researchers have launched hundreds of innovative soil and waterconservation initiatives to contend with declining soil fertility and declining fertilizer subsidies.
    • 13. • Work by cassava scientists across Africa has countered deadly disease and pests attacks and new opportunities benefiting tens of millions of small farmers and making it one of the continent’s most powerful poverty fighters to date
    • 14. 1. WHY PUBLIC RESOURCE MOBILIZATION The cornerstone of broad-based development Public Resource Mobilisation ODA < 50% tax revenue ODA > 50% tax revenue No available data Source: Development Centre, based on AEO country survey’s, 2010.
    • 15. 2. SOME STYLISED FACTS Mobilising Africa’s public resources: can and must be achieved Average Median Source: Development Centre, based on AEO country survey’s, 2010.
    • 16. Demonstrate the economic value of agriculture to the policy makers – also critical to attract youth employment in farming Farmers to generate and co-generate data in support of this value Need to target the African consumer in a more efficient way and allocate sensitisation budgets within FOs. Scope for PPPs alliances
    • 17. Analysing the drivers of successes Changing food demand and supply patterns are expected to lead to more South–South trade, boosting opportunities in domestic and regional markets. Further exchange on best practices (study tours…). 2014 Year of family farming could be an opportunity
    • 18. The potential of domestic and regional markets is demonstrated and can allow import substitution & re-conquer markets Managing duality in agriculture as a strength (small-scale and agribusiness) and leveraging the strengths of both – More agribusiness and financing fora needed Stimulating the growth of rural towns and intermediate cities and opportunities to feed growing urban centres
    • 19. • Formal education in agriculture is still low and knowledge transfer is a problem • Farmer’s driven research and increased access to quality data (indigenous scientific capacity to generate new technology) • Closing the gender gap in agriculture – Demonstrating the gains – Strengthening women farmer groups
    • 20. Building knowledge base and knowledge management skills Developing formal learning and evaluation mechanisms at FOs level Increase productivity through availability & use of high-tech research (high-yielding seeds, fertilisers…) to achieve the CAADP target fertilizer consumption of 50kg/ha by 2015
    • 21. • Leveraging agribusiness potential and demonstrating better value for money • Links to innovative and inclusive agricultural value chain • Address post-harvest losses (training in better harvesting methods, transport, storage and processing)