26 June 2020. FARA Technical Seminar Series: Transformation of the Africa Smallholder Farmer – An imperative for Agricultural Growth in Africa.

2. 2
Transformation of the Smallholder
Farming System: an Imperative for
Africa Agricultural Growth
‘Wole Fatunbi PhD
FARA Technical Seminar 2020
26th June 2020 @ FARA secretariat Conference Room,
Accra Ghana

3. 3
Citation: Fatunbi A.O.(2020). Transformation of the Smallholder Farming System: an
Imperative for Africa Agricultural Growth. A Technical Seminar Series Presentation.
Forum for Agricultural Research in Africa (FARA). Accra Ghana. 26th June 2020
Edition.
FARA encourages fair use of this presentation. Proper citation is requested.
Forum for Agricultural Research in Africa (FARA)
12 Anmeda Street, Roman Ridge PMB CT 173, Accra, Ghana Tel: +233 302 772823 / 302 779421 Fax:
+233 302 773676 Email: publications@faraafrica.org. Websites: www.faraafrica.org.
www.faradatainforms.faraafrica.org. Join our Network via https://dgroups.org/fara-net/join
For further enquiries, please Contact: Benjamin Abugri (babugri@faraafrica.org)

4. The state of Africa Agriculture
• Total human population in sub-Sahara Africa (SSA) is
expected to grow to 2 billion by 2050 - a 100% increase
from its current status.
• Nearly 80% of farmers in SSA are classified as smallholders.
• Nearly 70% of farm work is performed manually, about
20% by draft animals and 10% by mechanical means.
• Farm productivity is lowest in Africa system; for some
commodities, it is less than 50% of the global average.
..the Popular Data

5. Seeing the picture….

6. Desired Future of Africa Agriculture

7. Expectation from the Agricultural Sector & Its Challenges
Youth Population & Agriculture

8. Expectation from the Africa Agricultural sector in Africa
Youth engagement issues in Agriculture

9. Farm system
typology
The Farm
Primary
production
Post
harvest
handling
Aggregation/
produce
merchant
Trans &
Logistics
Industrial
processing
Product
marketing
ICT /
Current
smallholder
System
60 6 10 4 4 15 1
Youths in
Smallholders
System
9 5 9 12 15 30 20
Ideal
system 14 10 6 18 28 22 2
Proportion of Youth in Segments of Agriculture Value Chain
Table 2. Percentage Labor Distribution Along Agricultural Value Chain

11. There is no universally-accepted
definition of ‘smallholder farming’
What is the Smallholder Farming ?
References
J.F. Morton. The impact of climate change on
smallholder and subsistence agriculture.
Proc. Natl. Acad. Sci. U. S. A., 104 (2007),
pp. 19680-19685.
G. Cornish. Modern Irrigation Technologies for
Smallholders in Developing Countries.
Intermediate Technology Publications Ltd.
(ITP), Wallingford, UK (1998)
But
• They cultivate small areas of
land (usually less than 10 ha,
often less than 2 ha),
• They use family labor.
• Depend on their farms as their
main source of both food
security and income generation
Land Productivity - Low
Labor Productivity- Low
Capital Productivity - High

12. Typology of Smallholder Farming in Africa
Type of farm Characteristics
Subsistence
farm
With profit
potential
• Soft constraints to land size and agricultural production
• Limited access to markets and information
• Limited financial capital
• Limited access to infrastructure
• Limited access to smallholder friendly technologies
Without profit
potential
• Soft & hard constraints to land size
• High population density
• Low quality soil
• Low rainfall and high temperatures
• Remote location
Commercial
smallholder
farms
• Soft-constraints
• Limited access to capital, insurance, and other risk reduction tools
• progressive striving towards growth and long-term, livelihood gains
Source: Shenggen Fan et al. (2013).

13. Typology of smallholder farmers in Africa
Inspired by HLPE (2013).

14. Intervention Style to Smallholder Farming in Africa
Obi, A. and Tebogo Seleka (2011) “Investigating Institutional Constraints to Smallholder Development: the Issues and
Antecedents”, in Obi, A (ed) Institutional Constraints to Small farmer development in Southern Africa, Wageningen Academic
Publishers: The Netherlands.
Natural
resource
management
constraints.
low and
declining
productivity
Rural poverty
Environmental
degradation
Poor access
to land and
production
resources
Poor physical
and institutional
infrastructure
Poor
policy
support
lack of access
to finance
Poor access to
input & output
market
Climate
change

15. Current Challenges of Smallholder Farming in Africa
Question
Critical
1. Will the current approach
to the development of
agriculture truly lead to
measurable positive
sectorial change in the short
to medium term ?
2. Can the
desired future of
Africa agriculture
truly happen if
the smallholders
system can not
sustain a
reasonable
livelihood ?

16. Interventions in Smallholders Transformation Patterns
Efforts in Sustaining CAADP Momentum : Result framework 2015-2025

17. Interventions in Smallholders Transformation Patterns
AfDB Feed Africa Program : Goals and Targets

18. Interventions in Smallholders Transformation Patterns

19. Smallholders Transformation Patterns
AGRA : Livelihood Issues With the Smallholders

20. Interventions in Smallholders Transformation Patterns
FARA Initiative in
Recent Years
SSA CP
DONATAInnovation Platforms

21. A livelihood is sustainable when
the component capabilities,
assets and activities required for
a means of living is worked out in
a way that it can cope with
stresses and shocks and
continuously maintain or enhance
its capabilities to yield returns
without undermining the natural
resource base
Big challenge of the Smallholder Farming in Africa
Sustaining
Livelihood

22. Percentage profit over
investment is very low
from typical arable crop or
livestock enterprise..
Big Challenges of Smallholder Farming in Africa
Basic Profit Analysis
Cost of production 2,624
Grain yield(25 bags) @ C 120/bag 3,000
Margin(Business mode) 376
Smallholders unquantified labor 1,200
Smallholder perceived cost 1,424
Smallholder “Profit” . 1,574
This is 39% above the minimum wage of 11.82 Cedis per day

23. Thoughts on Removing the Key constraints to Smallholders Profitability

24. Key Issues for Attention

25. Philosophy of Change for the transformation of the smallholder farmer
1 4
32

26. Philosophy of Change for the transformation of the smallholder farmer
Increasing the value of output per
unit input (Tiffen et al. 1994).
1. Increases farm level productivity,
taking advantage of..
1. Chemical
2. Biological
3. Mechanical
2. It is technology savvy.
3. Labor productivity is higher.
3. Essential for farming as a business
+ve
1. Access to external inputs
2. Prone to improper use of agrochemicals.
3. Does not guarantee total productivity
and sustainable income.
-ve

27. Philosophy of Change for the transformation of the smallholder farmer
Increased agricultural productivity is only achieved
through the dissemination of improved technologies to
farmers. Asfaw et al. (2012)
1. Capitalize on gains from knowledge
2. Ensure effective extension services.
3. Increased investment in the sector.
4. Foster the organization of farmers into
effective platform for outreaches and
business management.
5. Ensure institutionalization of the
Innovation platforms for smart sectoral
coordination
+ve
1. Challenge of accountability. key to success.
2. Constraints of managing platforms.
3. Require attention to guarantee total
productivity and sustainable income.-ve

28. Philosophy of Change for the transformation of the smallholder farmer
There is strong evidence that in poor countries, small farm development
cannot provide a commercially viable option. It will also increase the
need for poverty reduction and environmental protection actions
because of its more labor-intensive methods (wiggins et al 2000)
1. It maximize economies of scale and generate
good income.
2. It is technology savvy. Ensure intensification &
competitiveness
3. Land, Labor and capital productivity is higher.
4. Essential for farming as a business.
5. Provides employment for rural dweller.
+ve
1. Lack of off-farm livelihood opportunities to absorb
rural labor, can impoverish those who lose land to
plantation agriculture.
2. It functions with centralized management; aborigine
land owners often feel disenfranchised.
3. It is capital intensive
-ve
Fostering Large
Scale Agriculture
(through Farm
Estates and
Incentives).

29. Philosophy of Change for the transformation of the smallholder farmer
Countries that pulled out of poverty, first generated
agricultural surpluses and use it as the basis for
diversifying their economies (Mulangu, 2016).
1. It built large scale intensive farms using best
bet technologies. Fewer labor is on the farm
2. Develop strong agro-industries to provide
employment & income opportunities.
3. It leverage agro-industries for stronger
contributions to national economies.
4. Ensure best practice in production and
management.
+ve
1. It takes time to get established and
functional.
2. It is knowledge intensive and its intention is
to reduce the population on the farm.
3. It guarantees the achievement of total
productivity and sustainable income.
-ve
Redirecting Labor out
of the (Smallholder)
Farming into Agro-
Industrial Processing
and Services.

30. Required Strategy connections for smallholders for transformation
The Need to Change
Smallholder Farming
Structure to Real
Business Commercial
/Industrial Farming
Strategies to
leveraged
agricultural land
for smallholder
transformation
Development and
Scaling of
Technologies for
Transforming
Smallholder Farming
Linking Smallholder
Farmers to Markets
and Industries
Developing
Business
Pathways for
Smallholder
Farming
Capacity Building
and Extension
Services for
Transforming
Smallholder Farming
Sustainable
livelihood
for the
smallholder
Creation of
Value Chains for
Transforming
Smallholder
Farming

31. Workable Innovation systems intervention to Improve Smallholder Farmers Livelihood

32. 3
2
Pricing of Agricultural commodities
Should the price of agricultural
commodities from the
“Smallholder System” be
subjected to the market forces
We maintain the
statuesque
We trigger the change
to sustainable
livelihood

33. 3
3
Estimating Commodity Fair Price
Livelihood Compliant Agricultural Commodity Pricing (LCACP)
Cost Components
Land rent
Land preparation
Seeds
Agrochemicals
Fertilizer
Tools & consumables
Labor (Planting, weeding, fertilizer,
agrochemical application, harvesting etc.)
Transportation
Tax etc.
LCACP =
Total Cost + Fair margin
Total Output
Fair Margin
• Expected Profit (10% of total cost /
month)
• Discounted down with Minimum wage
for the period of cultivation
• Further discounted up by national
Inflation rate at the close of season
Total Output
Average yield/ha
Estimated from
national data
LCACP often correlates with commodity price at the lean period of
the year
My
Observation

34. Estimating Commodity Fair Price
1. The “Strategic IP” at the national level should
define the LCACP for all commodities in the year.
2. LCACP price is the minimum price a specific
agricultural commodity can be purchased.
3. Expand the functionality of the strategic food
reserve to moderate the price of commodities at
lean period.
4. Activate the commodity price monitoring
instrument.
Policy Implication of LCACP

35. 3
5
Consideration of fair pricing of agricultural commodity
1. The implication on the final cost of food
items at the larger society.
2. Price competitiveness of commodities at the
international market & phobia of loosing
out at the export market.
3. Experience for past attempt especially with
tree crops and export commodities.
4. Spill-over effect on public expenditure.
Why the Policy Reluctance ?

36. Opportunities in COVID-19
Lessons & Opportunities
1. The need to structure agriculture at the country
level for production at scale.
2. Boost sectoral resilience with needed
infrastructures for storage services.
3. Prepare resources to respond to shocks.
4. Strengthen the strategic Grain (food) reserve for
multiple uses.
5. We need data to inform strategic action

37. 3
7
Conclusion
1. Sustaining the agrarian livelihood is key to national
agricultural development.
2. The Tipping-Point for the transformation of the
smallholder systems is the regulation of “commodity
price” .
3. A workable model for adaptation is “Livelihood
Compliant Agricultural Commodity Pricing” (LCACP).
4. Smart strategy for the smallholder transformation
needs to give cognizance to the scale of production
and factors that makes it possible.
5. Functional farming must be structured by
supportive but balanced policies.
6. The button-line in the smallholder transformation
discuss is to turn it to a profitable business.

38. Watch out !

39. Acknowledgements
Prof. Tunde Ajayi
FUNAAB, Nigeria
Richard Kombat
FARA
Prof. Wale Adekunle
GFAR, Rome
Ansumana Jarju
NARI Gambia
Prof. Obi Ajuruchukwu
UFH, South Africa
Rex Chapota
Farm Radio International,
Zambia
Prof Kefasi Nyikahadzoi
University of Zimbabwe
Dr. K. Balasubramanian
CoL

40. Please join the Discussion via: https://dgroups.org/fara-net/join