Sub-Saharan Africa has significant agricultural potential but faces challenges around market access and high business risks for smallholder farmers due to poor infrastructure and isolation. While investments have been made to support smallholders, returns have been lower than other regions due to issues with the timing and location of interventions. The document recommends using value chain analysis to identify cost and timing implications and include specific indicators for transport costs and timing in project monitoring to help investments better address the "right place, right time" for smallholders and reduce business risks.
By Hans P. Binswanger-Mkhize, Derek Byerlee, Alex McCalla, Michael Morris and John Staatz. Presented at the ASTI-FARA conference Agricultural R&D: Investing in Africa's Future: Analyzing Trends, Challenges, and Opportunities - Accra, Ghana, December 5-7, 2011. http://www.asti.cgiar.org/2011conf
Sub-Saharan Africa: The State of Smallholders in AgricultureDr Lendy Spires
The purpose of this paper is to provide a regional canvas for the broader discussion of the future directions on smallholders in agriculture. We do not attempt to provide a comprehensive overview of sub-Saharan Africa (SSA), its agricultural sector or even all of the challenges and opportunities associated with smallholder farming.
Rather, the intention is to communicate our appreciation of the richness and complexity of the continent in comparison with other developing regions, and through discussion of the role of smallholder farmers in agricultural growth, focus the broader discussions of the conference on some of the key issues which, from our experience and that of IFAD projects working in SSA, are particularly relevant in our efforts to assist smallholder families definitively escape poverty through the transition towards ‘farming as a business’.
We begin in Section One with a brief overview of the land, geography, people, economy and of course, smallholder agriculture in SSA. Following this, in Section Two, we look more closely at the opportunities for SSA’s smallholders, adapting the perspective of IFAD’s recently released Rural Poverty Report to our regional context, and use a risk management lens to connect overall ecological and market contexts to the specific endeavours of smallholder farmers.
In Section Three, we move rapidly from the general to a specific focus on an issue which we feel merits much greater consideration – the importance of spatial and temporal coordination in reducing risk, increasing returns and allowing for project success. Finally, we conclude with some key recommendations on how these ideas can be transformed into an operational approach.
Hurdles of Emerging Economies - South AfricaShreyas Kamath
Presented for the Economics Association Seminar (Intracollegiate) held on 28th November 2015 at Jai Hind College, Churchgate.
In Collaboration with: Akshat Upadhyay, Zarna Shah, Keegan Rebello
We won first place!
ABSTRACT
The economy of South Africa is the second-largest in Africa, behind Nigeria. It is ranked as an upper-middle-income economy by the World Bank.
South Africa’s growth experience provides an example of how contrasting growth trends - long-term decline followed by improved growth - pivot around political change, in this case a transition to democracy. In the decade prior to 1994, South Africa experienced the worst period of economic growth since the end of the Second World War, with growth variable and declining. The proximate causes of slowing growth were trade and financial sanctions in opposition to the Apartheid government, political instability and macroeconomic policy decisions that resulted in higher inflation, increased uncertainty and declining investment.
In the post-apartheid period, political and economic leadership have been essential to improving the country’s growth performance, because of the effect on policy formulation, institutional development, regulatory design, and economic vision.
This research project provides some insight into the challenges faced by the South African Economy such as high levels of unemployment, income inequality, growing public debt, political mismanagement, low levels of education, reliable access to amenities, and crime.
By Hans P. Binswanger-Mkhize, Derek Byerlee, Alex McCalla, Michael Morris and John Staatz. Presented at the ASTI-FARA conference Agricultural R&D: Investing in Africa's Future: Analyzing Trends, Challenges, and Opportunities - Accra, Ghana, December 5-7, 2011. http://www.asti.cgiar.org/2011conf
Sub-Saharan Africa: The State of Smallholders in AgricultureDr Lendy Spires
The purpose of this paper is to provide a regional canvas for the broader discussion of the future directions on smallholders in agriculture. We do not attempt to provide a comprehensive overview of sub-Saharan Africa (SSA), its agricultural sector or even all of the challenges and opportunities associated with smallholder farming.
Rather, the intention is to communicate our appreciation of the richness and complexity of the continent in comparison with other developing regions, and through discussion of the role of smallholder farmers in agricultural growth, focus the broader discussions of the conference on some of the key issues which, from our experience and that of IFAD projects working in SSA, are particularly relevant in our efforts to assist smallholder families definitively escape poverty through the transition towards ‘farming as a business’.
We begin in Section One with a brief overview of the land, geography, people, economy and of course, smallholder agriculture in SSA. Following this, in Section Two, we look more closely at the opportunities for SSA’s smallholders, adapting the perspective of IFAD’s recently released Rural Poverty Report to our regional context, and use a risk management lens to connect overall ecological and market contexts to the specific endeavours of smallholder farmers.
In Section Three, we move rapidly from the general to a specific focus on an issue which we feel merits much greater consideration – the importance of spatial and temporal coordination in reducing risk, increasing returns and allowing for project success. Finally, we conclude with some key recommendations on how these ideas can be transformed into an operational approach.
Hurdles of Emerging Economies - South AfricaShreyas Kamath
Presented for the Economics Association Seminar (Intracollegiate) held on 28th November 2015 at Jai Hind College, Churchgate.
In Collaboration with: Akshat Upadhyay, Zarna Shah, Keegan Rebello
We won first place!
ABSTRACT
The economy of South Africa is the second-largest in Africa, behind Nigeria. It is ranked as an upper-middle-income economy by the World Bank.
South Africa’s growth experience provides an example of how contrasting growth trends - long-term decline followed by improved growth - pivot around political change, in this case a transition to democracy. In the decade prior to 1994, South Africa experienced the worst period of economic growth since the end of the Second World War, with growth variable and declining. The proximate causes of slowing growth were trade and financial sanctions in opposition to the Apartheid government, political instability and macroeconomic policy decisions that resulted in higher inflation, increased uncertainty and declining investment.
In the post-apartheid period, political and economic leadership have been essential to improving the country’s growth performance, because of the effect on policy formulation, institutional development, regulatory design, and economic vision.
This research project provides some insight into the challenges faced by the South African Economy such as high levels of unemployment, income inequality, growing public debt, political mismanagement, low levels of education, reliable access to amenities, and crime.
To maintain its share of the continent’s agriculture GDP by 2030, Nigeria will need to grow its agriculture sector revenues by a compounded annual growth rate (CAGR) of 4.7% annually. To ensure this is achieved, agriculture budget to GDP will have to be sustained by at least 7% annually. It is estimated that agriculture is Africa’s largest economic sector, representing 15% of the continent’s total GDP. Nigeria contributes 14% of Africa’s agriculture GDP. The World Bank forecasts that by 2030, the food market in Africa will grow to be a US$1 trillion industry. Nigeria will need to intensify its investments in improving agriculture yield and integrating the value-chain over the next decade to effectively capture a significant share of the US$1 trillion market.
It is generally accepted that investment in agriculture is an important tool to improve farm productivity, food security & thereby bring about overall economic growth.
Despite this, the Indian government’s focus is misplaced.
The government has actively increased funds meant for this sector, however, they have mostly pertained to subsidies.subsidies - which do not directly contribute to capital formation or asset creation. This renders the government’s efforts as ineffective.
ToR for the policy dialogue relative to the IYFFFatimata Kone
TERMS OF REFERENCE FOR THE POLICY DIALOGUE RELATED TO THE INTERNATIONAL YEAR OF FAMILY FARMING (IYFF) IN BAMAKO
THEME : BUILDING RESILIENCE TO FEED WEST AFRICA: PROPOSALS FROM FAMILY FARMERS
Prof. V. Okoruwa's presentation given the the Africa Agriculture Week.
The role of agriculture in an economy is a major factor in determining the economy‟s state of development (Hazell and Diano, 2005). Most African countries are mainly agrarian since agriculture contributes immensely to their economies. Agriculture‟s contribution to GDP in the Africa is between 30% and 40% on the average. The sector accounts for almost 60% of total export earnings in the continent, provides the dominant occupation for about 65% of Africa‟s population and has been growing on the average at about 3.3% each year since 2000 (IFPRI, 2009). Despite this impressive contribution of agriculture to Africa‟s economy, the sector remains largely under-developed. Most farmers are still at the subsistence level and small scale, having less than 2ha of land. The level of technology is also low, production remains weather-dependent and consequently, farmers‟ incomes are low. Poor market access, weak infrastructure and limited ability to influence government policy also characterize the sector (Quartey et al, 2012). Majority of Africa's agricultural population live in rural areas and the rural population comprises over 60% of the entire population. Further, over 600 million people in sub-Saharan Africa are youths under the age of 30 years and about 65% of this number, work in subsistence agriculture. Rural agricultural workers are among the poorest in Africa with poverty rate averaged at about 50% (UN/ECA, 2010).
Agriculture has the potential to serve as a strong
"Sustaining CAADP Momentum: Growth and Investment Analysis" presented by Godfrey Bahiigwa at 10th CAADP PP Meeting Durban, South Africa March 19-21, 2014
Prof. Charles Soludo, the lead presenter at the 4th Progressive Governance Lecture Series on A FRAGILE STATE WITH A FAILING ECONOMY: MAKING PROGRESSIVE CHANGE WORK FOR NIGERIA
The four Asian Tigers, Asian Dragons and Asian Miracles are various terms used to refer to the highly developed economies of
Hong Kong
South Korea
Singapore
Taiwan
The economic success of the Asian Tigers resulted from their own efforts. Each country largely followed the Japanese model of export-led development: they began with exports of the cheapest products, educated their citizens so that they would be knowledgeable workers, and then increased the value of the products that were being exported. Today, South Korea, for instance, is the home of technology giants Samsung and LG, both of which have benefited immensely from government policies that promoted education. Singapore, meanwhile, has become a global trading and banking hub-another example of expertise in a high-value industry.
as part of the IFPRI-Egypt Seminar Series- funded by the United States Agency for International Development (USAID) project called “Evaluating Impact and Building Capacity” (EIBC) that is implemented by IFPRI.
To maintain its share of the continent’s agriculture GDP by 2030, Nigeria will need to grow its agriculture sector revenues by a compounded annual growth rate (CAGR) of 4.7% annually. To ensure this is achieved, agriculture budget to GDP will have to be sustained by at least 7% annually. It is estimated that agriculture is Africa’s largest economic sector, representing 15% of the continent’s total GDP. Nigeria contributes 14% of Africa’s agriculture GDP. The World Bank forecasts that by 2030, the food market in Africa will grow to be a US$1 trillion industry. Nigeria will need to intensify its investments in improving agriculture yield and integrating the value-chain over the next decade to effectively capture a significant share of the US$1 trillion market.
It is generally accepted that investment in agriculture is an important tool to improve farm productivity, food security & thereby bring about overall economic growth.
Despite this, the Indian government’s focus is misplaced.
The government has actively increased funds meant for this sector, however, they have mostly pertained to subsidies.subsidies - which do not directly contribute to capital formation or asset creation. This renders the government’s efforts as ineffective.
ToR for the policy dialogue relative to the IYFFFatimata Kone
TERMS OF REFERENCE FOR THE POLICY DIALOGUE RELATED TO THE INTERNATIONAL YEAR OF FAMILY FARMING (IYFF) IN BAMAKO
THEME : BUILDING RESILIENCE TO FEED WEST AFRICA: PROPOSALS FROM FAMILY FARMERS
Prof. V. Okoruwa's presentation given the the Africa Agriculture Week.
The role of agriculture in an economy is a major factor in determining the economy‟s state of development (Hazell and Diano, 2005). Most African countries are mainly agrarian since agriculture contributes immensely to their economies. Agriculture‟s contribution to GDP in the Africa is between 30% and 40% on the average. The sector accounts for almost 60% of total export earnings in the continent, provides the dominant occupation for about 65% of Africa‟s population and has been growing on the average at about 3.3% each year since 2000 (IFPRI, 2009). Despite this impressive contribution of agriculture to Africa‟s economy, the sector remains largely under-developed. Most farmers are still at the subsistence level and small scale, having less than 2ha of land. The level of technology is also low, production remains weather-dependent and consequently, farmers‟ incomes are low. Poor market access, weak infrastructure and limited ability to influence government policy also characterize the sector (Quartey et al, 2012). Majority of Africa's agricultural population live in rural areas and the rural population comprises over 60% of the entire population. Further, over 600 million people in sub-Saharan Africa are youths under the age of 30 years and about 65% of this number, work in subsistence agriculture. Rural agricultural workers are among the poorest in Africa with poverty rate averaged at about 50% (UN/ECA, 2010).
Agriculture has the potential to serve as a strong
"Sustaining CAADP Momentum: Growth and Investment Analysis" presented by Godfrey Bahiigwa at 10th CAADP PP Meeting Durban, South Africa March 19-21, 2014
Prof. Charles Soludo, the lead presenter at the 4th Progressive Governance Lecture Series on A FRAGILE STATE WITH A FAILING ECONOMY: MAKING PROGRESSIVE CHANGE WORK FOR NIGERIA
The four Asian Tigers, Asian Dragons and Asian Miracles are various terms used to refer to the highly developed economies of
Hong Kong
South Korea
Singapore
Taiwan
The economic success of the Asian Tigers resulted from their own efforts. Each country largely followed the Japanese model of export-led development: they began with exports of the cheapest products, educated their citizens so that they would be knowledgeable workers, and then increased the value of the products that were being exported. Today, South Korea, for instance, is the home of technology giants Samsung and LG, both of which have benefited immensely from government policies that promoted education. Singapore, meanwhile, has become a global trading and banking hub-another example of expertise in a high-value industry.
as part of the IFPRI-Egypt Seminar Series- funded by the United States Agency for International Development (USAID) project called “Evaluating Impact and Building Capacity” (EIBC) that is implemented by IFPRI.
This presentation is attempting to:
disclose the status of agriculture and poverty in Afghanistan
Link agriculture with poverty in the country
It will also answer the two key questions:
Will agriculture and natural resources be adequate to drive growth and job creation in Afghanistan?
What are the most important policy and investment priorities to support agricultural growth and job creation?
Envisioning the future of African agriculture and the renewed role of farmer’s organizations
Organized by the Panafrican Farmer’s Organisations (PAFO), the ACP-EU Technical Center for Agricultural and Rural Cooperation (CTA), African Union Commission (AUC)
This Briefing is linked to the Brussels Briefings organized by the CTA, EC/DGDEVCO, ACP Group and Concord every two months on key issues related to agriculture in ACP countries.
More information: http://brusselsbriefings.net
Investments in small scale sustainable agricultureGian Paolo Pezzi
More and Better -Nov 10, 2017
This 32 page report gives an overview of the global situation of investments in agriculture. It provides examples from several countries and present recommendations for future investments in small-scale sustainable agriculture.
The aim of the report is to: Increase knowledge, awareness and discussions about investments in small-scale sustainable agriculture among farmers’ organizations, NGOs, institutions and investors working in agriculture, especially in developing countries, as well as decision-makers and institutions in OECD-countries dealing with official development assistance (ODA).
Contribute to increased public and private investments in small-scale sustainable agriculture.
Sub-Saharan Africa: The state of smallholder in agriculture
1. Right Place, Right Time: Sub-Saharan Africa: the state of smallholders in agriculture Geoffrey Livingston, Steven Schonberger and Sara Delaney IFAD January 24, 2011
15. Average inflation from 2007-2010 was 9.1%, compared to 6.4% in LAC, 5.5% in developing Asia and 1.5% in the advanced economies.
16.
17.
18. SSA countries, on average, currently devote 5-7% of their public expenditures to agriculture, as compared to 8-10% in Asia.
19.
20.
21.
22. Traditionally low relative cost of land to capital resulted in expansion for increased production.
23.
24. 2. Opportunity: Smallholder risks Risk management is critical for smallholders to intensify “farming as a business”… IFAD Rural Poverty Report highlights impact of risk on willingness of smallholders to undertake on-farm investments of labour and cash for intensification IFAD experience - while social risks are fairly consistent across agro-ecological zones and production systems, business risks vary considerably. Business risks are reduced for those able to participate in more integrated supply chains.
25. (Authors based on Pingali and Rosengrant 1995, Swinnen, et al 2007, USAID 2009)
26. Opportunity: External Support Smallholders supported by increased investments to reduce risks but limited impact… Eleven of fifteen CAADP Investment Plans prioritize improving value chains. ROPPA focus on rice, dairy, meat, vegetables, fish. Innovative PPPs such as corridors, breadbaskets, etc. Increased donor support to inputs, irrigation, rural finance, marketing, research. Returns to these investments in SSA are lower than other regions – irrigation efficiencies and seed adaptation rates. Why?
35. 3. Right Place, Right Time Are trucking costs in SSA really so high?
36.
37.
38.
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41. 3. Right Place, Right Time Average costs per kilometre Central Africa USD 1.87 East Africa USD 1.33 Germany USD 1.52 Poland USD 2.18
42. Estimated profit margins along major corridors Ngaounderé-N’Djamena = 118% Mombassa-Kampala = 86% Tema-Bamako = 80% Lusaka-Joburg = 18%
43. 3. Right Place, Right Time Only one instance of deregulation: Rwanda Nominal prices decreased by 30% Real prices decreased by 75% Size of the truck fleet increased fourfold between 1995-2007
44. Right Time Observe due measure, for right timing is in all things the most important factor. (Heriod, Greek Poet, circa 800 b.c.) 3. Right Place, Right Time
45. Cases of “wrong time” implementation Fertilizer subsidy programmes Marketing loans to cooperatives Organization of export campaigns 3. Right Place, Right Time
46. 3. Right Place, Right Time Donor Institutions are not setting the example Lag time between donor project approval and project start-up commonly exceed 12 months. Processing of requests for disbursements at IFAD have come down but still average 28 days.
47. 3. Right Place, Right Time Conclusions Evidence of stronger economic & agricultural growth. Growing demand for agricultural products provides improved production incentives. Capitalizing on these opportunities requires intensification. Intensification requires risk reduction. And risk reduction requires getting the place and timing right. But focus on spatial & temporal aspects has been noticeably lacking and resulted in underperformance.
48. 4. Key Recommendations Greater use of value chain analysis to highlight and benchmark cost and time implications in terms of both inputs and outputs. Ensure that critical timing aspects are identified and agreed with and understood by project stakeholders. Include specific indicators for transport costs and critical timing aspects into monitoring framework. Ensure that annual work plans and budgets define and respects spatial and temporal coordination requirements.
Editor's Notes
There is a pronounced tendency to search for new technical solutions to rural poverty while often ignoring the potential to strengthen existing investments. Improved technology packages, better crop husbandry, innovative financial services all have a role to play in improving the lives of rural Africans. However, there are potentially enormous gains that can be achieved through improving the spatial and temporal coordination of existing development interventions by simply responding to the two, proverbial “elephants in the room”:
More than one third of all sub-Saharan rural Africans are so geographically and economically isolated from market towns that, at present, they are virtually condemned to a life of subsistence agriculture, regardless of their access to modern inputs, irrigation infrastructure or financial services. The majority of development programmes and projects do not deliver goods, services and works in a timely manner and this has had an extremely negative impact on productivity and increased revenues of project clients. Successful agricultural campaigns are all about planning and timing. Without rigorous project management, farmers will not gain the full benefits of new technological solutions.
Distance to market is first and foremost about marketing costs, getting inputs in and getting outputs out.
Not only are rural SS Africans the most geographically isolated, the cost of truck transport in SSA is multiple times higher than in any other developing region. From a cost perspective, a Pakistani farmer living five hours from a market town, pays the same amount to transport his milled rice as a Chadian living one hour from a market town.
So the SSA farmer needs proportionally a much higher crop response rate to fertilizer to make adoption a viable proposition. She will also be paid a lower farm gate price because the consolidator has to pay the high cost of transport to the market centre.
If a farmer cannot profitably market her surplus, then there is no logical reason to produce more than her family can store and/or consume. There is thus no motivation to adopt productivity enhancing technologies, particularly those external inputs which are costly and, in any event, are not likely to be available. There are numerous, well documented studies which underline the very strong correlation between proximity to market and agricultural productivity. This stands to reason.So about 130 m Africans, talk of new technological solutions is largely irrelevant. They are sitting on the side lines and will remain subsistence farmers unless the
Conventional wisdom says that they are because of this
And this
And this
And border crossings like this
And of course thisBut in actual fact,
Transport costs in SSA are only slightly higher than in Germany and less than in Poland.But transport prices are a whole different story. Pakistan exampleWhy is that?
In West and Central Africa the trucking industry is highly regulated. Freight allocation is controlled by trucking cartels which erect barriers to entry, promulgate and enforce regulations which limit competition, and create conditions which favour bribery to increase market share under the “tour de role” freight allocation system. There is far greater competition in Southern Africa and, to a lesser extent, East Africa. This increased competition is reflected in significantly lower estimated profit margins.
So, for much of Africa, revising the policy environment for the trucking industry to make it more competitive would effectively shorten the “economic distance” from farm to market, decrease the cost of purchased inputs, improve profit margins for smallholder marketable surpluses and level the playing field for millions of SSA smallholders so that they may better seize opportunities and start farming as a business.
Development stakeholders pay insufficient attention to the critical importance of project planning and management as a factor in rural poverty reduction. Discussions concerning improved productivity, greater food security and increased revenues centre on the new silver bullet, the breakthrough technology, the new “it”. Talking about the impact of improved planning, prompt disbursements and timely delivery of goods, works and services on poverty reduction and economic growth is not very exciting. It does not generate research grants or fellowships nor provide the raw material for refereed papers in prestigious journals. Perhaps this is why there is so little data on the impact of poor management and late delivery of inputs on economic growth. But anyone with even a passing knowledge of hands-on development practice knows that SSA agriculture, as the engine of economic growth, is running on perhaps four of its six cylinders and this is because inputs, be they financial, agronomic or technical, are, all too often, not being delivered in a timely manner, be it at a donor institution, ministry of agriculture, the project implementation unit, the bank or MFI or the agricultural cooperative. Of course, no one knows the exact impact of untimely delivery of goods, services, and funding but there is widespread recognition that the problem is pervasive. It is also correctable.
The impact of frequent (some would say systematic) slow response time on the part of donors is far reaching. Not only does it retard programme implementation but, perhaps more importantly, sends the exact wrong message to client governments, agricultural cooperatives, private sector partners and smallholders that timing is not important. It also undermines donor credibility. How can donors credibly advocate for more expedient government procurement processes when their own administrative processes exhibit the same weaknesses?
Intro:Operationalizing “right place” essentially means making more informed choices regarding project implementation zones, distinguishing clearly between objectives of enhanced commercial access and food securityGreater attention needs to be paid to assessing the real costs of transport. This should be a standard element in vc analysis but, at least in IFAD projects, it is rarely carried out.Harmonized strategies under CAADP presents new opportunities to provide more holistic responses to interlinking challenges of ag prod, transport infrastructure, mkt access and increased returns.We need to be more realistic in assessing mkting opps. Operationalizing right time means paying much greater attention to providing inputs in a timely manner. The issue of timing needs to be at the forefront of planning and be a key driver of mgmt. oversight.