Africa's Agricultural Renaissance: From Paradox to Powerhouse 3030657477, 9783030657475

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Africa’s Agricultural Renaissance From Paradox to Powerhouse Ayodele Odusola

Africa’s Agricultural Renaissance “Through his fascinating and must-read book for policy makers and development practitioners, Ayodele Odusola has given us the golden alchemy to propel Africa into emergence and sustainable development: the main pressure point is agriculture; a green and digital agriculture; with a perfect philharmonic between the agricultural ecosystem’s agents, institutions, markets, and networks. When that symphony is played right, through a system of good governance, the road of prosperity is wide open.” —Abdoulaye Mar Dieye, United Nations Under Secretary General for the Sahel, and former UNDP Regional Director for Africa; and former Director, UNDP Bureau of Development Policy Support “Dr. Odusola’s Africa’s Agricultural Renaissance: From Paradox to Powerhouse is a well-researched and well-written book on how Africa can effectively harness its incredible natural and environmental resources to reverse its present vicious cycle of malnutrition, poverty and underdevelopment. Dr Odusola brilliantly shows how and where Africa made the wrong turns, squandered opportunities and staggered into the present paradox. The book examines how to unleash the trillion dollar capacity of the sector in a more inclusive, innovation-driven approach and environmentally sensitive manner. I highly recommend this book as a useful companion for practitioners, academics and policymakers to start a transition to an agricultural and food system that meets the demands of our time without jeopardizing opportunities of the future generations.” —Fr. Godfrey Nzamujo O.P. (Prof of Engineering), Songhai Regional Center “Through solid analysis, the book provides sound, targeted policy recommendations for African countries to utilize their abundant endowment of fertile land to develop agriculture for ending poverty and hunger and facilitating export, industrialization and sustainable structural transformation. A timely publication for Africa’s realization of SDGs.” —Professor Justin Yifu Lin, Dean, Institute of New Structural Economics, Peking University; Former Chief Economist, the World Bank “This book should be carefully read and its recommendations pondered and implemented by all policy makers in Africa. It makes a compelling case for the use of agriculture for development in the face of massive under-investment in agriculture and enormous unrealized potential in using it to achieve growth, poverty

reduction, social inclusion, and sustainability in the face of climate change. For this, it provides an up to date diagnostic of the state of agriculture in Africa, reviews modern theories of how agriculture can be used for development, and gives a comprehensive agenda of interventions to make success possible. It anchors its recommendations on a set of detailed country case studies of successful practice in the use of agriculture for development in Asia, Latin America, and leading African nations. Recommendations go beyond how to achieve a Green Revolution for Africa to detailing how to implement an agricultural transformation toward high value activities and a rural transformation with value added in rural non-farm activities linked to agriculture. This book should be broadly advertised and used in teaching the African youth how to build a new future for the continent.” —Professor Alain de Janvry, University of California at Berkeley “The book Africa’s Agricultural Renaissance: From Paradox to Powerhouse is a passionate and in-depth analysis of the power of agricultural investment to eradicate poverty and inequality in Africa. Dr Odusola clearly shows how to promote agricultural-led industrialization in Africa, drawing easy-to-understand and best practices from Africa, Asia and Latin America. The book is a must-read for policy makers, entrepreneurs, researchers, academia and other stakeholders working tirelessly to see a better Africa.” —Prof Joshua Olusegun Ajetomobi, Department of Agricultural Economics & Management, University of Eswatini, Eswatini “The work that Ayodele Odusola presents us is fundamental in the times we live in. Africa will be one of the vital hubs in a transformation aimed at solving the main problems of humanity: food security, rural poverty and climate change. Everything has in common the sustainable agribusiness that is part of the solution. Many of the efforts made to date have not been able to carry out the necessary transformations as they require a systematic vision of the problems, a knowledge of the territories and their different cultures, and a commitment that comes from the soul and head of each person. Ayodele integrates these forces into her work and proposes a work agenda that excites and mobilizes.” —Gustavo Grobocopatel, CEO, Grupo Los Grobo; A leading agribusiness and investment company operating in Argentina, Uruguay, and Brazil “I am excited at the depth of the intellectual capital, and the spatial and temporal dimensions that this great book Africa’s Agricultural Renaissance: From Paradox to Powerhouse, presents. In a dispensation that is laden with ripples of crisis with severe implications on the continent’s ability to stay its course towards a food and nutrition secure Africa, Dr Odusola has enigmatically unveiled in this 12-chapter treatise, empirical arguments of the ‘paradox to powerhouse’ spectrum. I com-

mend the book in its entirety as a solid reference not only for Africa’s agrifood systems economics but also as a strong resource book on the contemporary evolutions of the Agricultural Innovations Systems (AIS) and processes that continue to drive Africa’s Agricultural Transformation Agenda, the Agenda 2063 and the Malabo Declaration.” —Yemi Akinbamijo, PhD, Executive Director, Forum for Agricultural Research in Africa (FARA), Accra, Ghana “Those interested in Africa’s agricultural development and the enormous potential of that continent must read this book by Dr. Ayodele Odusola. As the title indicates, the author provides a clear analysis for Africa’s agricultural renaissance, in its way to becoming a powerhouse.” —Dr Eugenio Díaz-Bonilla, Director, Latin America and the Caribbean, IFPRI “Africa’s Agricultural Renaissance: From Paradox to Powerhouse is a timely masterpiece that weaves the latest analytical frameworks, empirical evidence and a clear vision in addressing a topic of paramount importance to the continent. Odusola unpacks Africa’s development paradox of ‘poverty and hunger amidst plenty’ and makes a clear case of why agriculture is a sine qua non for inclusive development. Using a political economy framework to evaluate the current state of Africa’s agriculture, the book shows how increased productivity, supported by a dynamic agribusiness sector, can turn Africa into a net food exporter. Carefully curated regional case studies from Asia, Latin America and Africa are used to demonstrate how contextualized strategies and consistent policies can achieve sustainable agricultural transformation. This seminal work distills lessons and keen observations from a renowned author with a distinguished career in Africa’s economic development. Odusola’s refreshing vision of a ‘doubly green’ African agricultural revolution is a ‘must read’ for both scholars and development practitioners with an interest on agriculture-led development for Africa.” —Dr. Edward Mabaya, University of Connell “Dr. Odusola provides a compelling pathway for Africa to finally achieve its own food security and become an exporter of food to the rest of the world—completely reversing today’s reality—improving lives and livelihoods through transforming agriculture as a rural way of life into a source of true prosperity, especially for Africa’s rural poor. Beyond his own unique analytical findings, Odusola collects lessons learned—across Asia, Latin America, and Africa, itself—to provide an

informed pathway to achieve Africa’s long-awaited inclusive and sustainable green revolution. Through a fair balance of theory and practice, this book makes for constructive and instructive reading for any person interested and invested in achieving the brightest possible future for the African continent.” —Dr Agnes Kalibata, President of the Alliance for a Green Revolution in Africa, and UN Secretary General’s Special Envoy for 2021 Food Systems Summit United Nations “Dr. Odusola’s arguments for what Africa can undertake to achieve food security in an environmentally sustainable and inclusive manner is a timely clarion call for African policy makers, development partners, the private sector and all actors interested in the development of the continent. Drawing on specific examples from Africa herself, Odusola illustrates how smallholder farmers can serve as a catalyst for agricultural transformation, rural development and overall economic growth. Odusola’s exploration of lessons from Asia and Latin America as well as discussion of issues related to digital agriculture, entrepreneurship and regional trade provides a window into a complex and multi-dimensional situation with various pathways to success. Ultimately, this book provides the reader with renewed sense of optimism of what is possible in Africa and some specific ideas of how we can get there.” —Mr Khalid Bomba, CEO, Ethiopian Agricultural Transformation Agency “This book is a masterpiece, coming at a time when the economies of most African countries—in particular Nigeria—are under serious global pressure with attendant increases in poverty rates. To address this urgent challenge, Africa should explore its natural landmass endowment to use agriculture to boost the continent’s human and economic development. It is therefore imperative for African leaders, policy makers, and citizens to follow the guidance of this important book.” —Professor Anthony E. Akinlo, Vice-Chancellor, Redeemer’s University, Ede, Osun State, Nigeria “Dr Ayodele Odusola has written a much needed, timely, compelling, evidencebased book on how comprehensive, sustainable transformation of Africa’s agricultural systems can provide multiple pathways to the elusive goal of prosperity. It is a must-read resource for policy makers at the local, national, continental, and global levels—illuminating the conversation while providing solutions.” —Professor Tawana Kupe, Vice Chancellor, University of Pretoria, Pretoria, South Africa

Ayodele Odusola

Africa’s Agricultural Renaissance From Paradox to Powerhouse

Ayodele Odusola Level 8, Metropark Building 351 Francis Baard Street CBD, Pretoria, South Africa

Disclaimer: The views expressed herein are those of the author and do not necessarily reflect the views of the United Nations Development Programme (UNDP). ISBN 978-3-030-65747-5    ISBN 978-3-030-65748-2 (eBook) https://doi.org/10.1007/978-3-030-65748-2 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of ­ illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and ­transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the ­publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and ­institutional affiliations. Cover illustration: Gettyimages/Abstract Aerial Art This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Dedicated to my family—Kemi Odusola (wife), Seun, Tobi, Toyosi and Sewa Odusola (children).

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Foreword

Dr. Odusola presents the anathema of Africa’s development paradox, ‘poverty and hunger amidst plenty,’ as a reality that must be reversed to transform Africa into a global powerhouse of food security, agriculture-led industrialization, and shared prosperity. Anchored on enhancing productivity and ecological accountability, agricultural transformation is the most potent strategy to achieve development outcomes for more than 60 percent of Africans—through reducing poverty and income inequality, while creating countless decent and sustainable jobs. This book presents the rare kind of dream that can become a reality within our lifetimes—and the steps that must be taken for this development achievement to come true. Today, seeing people die of hunger while agriculture retrogresses in African economies—which are enmeshed in crises due to commodity busts—all demonstrate tragic institutional underinvestment, decapitalization, and structural weakness when managing agricultural development. These weaknesses expose avoidable policy failures and managerial recklessness—which are reversible through the corrective actions articulated in this book, as long as they are implemented with a sense of seriousness and true dedication. This book adopts an uncommon approach: combining theoretical, academic, and analytical rigor with practical, empirical, and experimental actions—supporting widely assessed and acclaimed transformative agricultural pilots in Malawi (the Inputs Subsidy Programme) and Benin (the Songhai Centre), as well as additional initiatives that promise to reverse Africa’s agricultural paradox within a very short timeframe. Viewing agriculture through a development lens—as opposed to relegating it to a ix

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siloed, sectoral approach—shapes the trajectory of Africa’s future, as opposed to the common entanglements, failures, and challenges of the past. Dr Odusola’s systemic, pragmatic approach provides a pathway to achieving Africa’s agricultural Eldorado—where Africa’s innate inventiveness turns our paradoxical potentiality, where our dreams have outsized our current capacity, into powerful prowess and opulence. How is this book different from others? First, in its dexterity in balancing theory, practice, and case studies to develop an agriculture-development agenda. Based on country typologies—including product diversification in Least Developed Countries and agro-processing in middle and upper income countries— this book uniquely instructs how structural economic transformation can be achieved across countries. Second, Dr. Odusola adroitly and sequentially illustrates how and where Africa made wrong turns, squandered opportunities, misinterpreted premature successes, and staggered into its present paradox—and how these realities collectively present opportunities to shift frontiers towards future development. Third, this book examines how Africa’s untapped comparative advantages and idle agricultural assets can become instruments to bring development to the doorstep of a majority of Africans—and a veritable tool to achieve the African Union’s Agenda 2063 and the United Nations Sustainable Development Goals by fostering African linkages between people, prosperity, and planet. Fourth, the book presents how agricultural productivity and transformation can nurture the seeds of food security—and how to tap agribusiness’ massive potential to turn Africa into a powerful global net food exporter and a powerhouse of agriculture-led industrialization. Fifth, based on cross-regional (Africa-Asia-Latin America) comparative analyses, case studies, and sharing of experiences, this book reveals the imperatives of history, narratives, and contexts to conclude that Africa’s inclusive and sustainable green revolution is eminently within our reach. It also explains why different approaches adopted in Asia and Latin America yielded differing impacts on poverty, exclusion, and environmental quality—and how these lessons offer unique opportunities for Africa’s agricultural transformation. Sixth, drawing on additional lessons from implementing on-going agricultural policies in African countries such as Ethiopia, Ghana, Malawi,

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Mauritius, and Morocco, this book shows how fostering learning-by-­ doing, promoting climate-smart agricultural practices, increasing productivity of small and family farmers, and accelerating farmers’ integration into national, regional, and global markets can shape Africa’s success in achieving an inclusive and sustainable green revolution—learning from the lessons and mistakes of Asian and Latin American countries (e.g. Argentina, Brazil, Costa Rica, China, India, South Korea, and Taiwan). Finally, Dr. Odusola’s analysis illuminates how ‘poverty and hunger amid plenty’ is incongruent to a sustainable agricultural revolution in Africa and how the continent could annually save, on average, a massive $78 billion on importing food. He articulates how transforming 60 percent of Africa’s small-scale farmers into commercialized, market-oriented individual businesses by 2040 could be the game changer that creates a powerhouse of food security, net food exports, and promoter of quality environmental services. Together, we use the opportunity this book provides as a clarion call to African and world leaders to pay strategic attention to Africa’s agricultural transformation. Now is the right time for African leaders—across political, technocratic, traditional, and youth—to see modernised agriculture as a propellant for inclusive economic transformation. An integrated approach, linking agriculture to agrobusinesses—making use of cash and staple crops; equally involving men and women; and connecting small farm holders to aggregators, big farms, and companies—is key to achieving this revolutionary transformation. This book’s analytics, cases, and examples advocate that investment in agriculture should not focus on one side of the agricultural development equation but on a holistic, supply chain approach that focuses on Africa’s agricultural ecosystem, empowering stakeholders, and enhancing capacities on seed production, crop diversification, and agro-processing. This book provides a new, practical pathway to achieve these goals in Africa. Based on our long-standing and varied experiences on this subject matter, the approach this book adopts is genuine and sanguine. It suggests ‘there is no silver bullet in Africa’s agricultural transformation,’ urging readers to consider varied, context-specific issues when designing customized agricultural plans, policies, and programmes, therefore providing answers to the following questions: What should Africa do differently to transform and modernize agriculture? How can Africa use agriculture, in an innovative manner, to drive sustainable economic growth, economic efficiency, and human progress and to avoid Malthusian traps? And what

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specific actions should be taken at the national, regional, and global levels to ensure a successful agriculture-for-development agenda? Genuine African agricultural development hinges on efforts to galvanize collaborative alliances towards transforming agriculture from being only a source of food security to becoming a business enterprise to generate wealth, enhance livelihoods, and transform economies through strategic partnerships among governments, the private sector, research institutions, and the farming community. The taste of any food is in the eating. We recommend this book as a must-read to people who are genuinely committed to Africa’s agricultural transformation and development—and to friends of the African continent. It calls on policymakers, development practitioners, researchers and students to note that an agricultural system that systemically disempowers small farm holders cannot lead to a breakthrough, but instead to a breakdown. Together, our experiences as decision makers, practitioners, technocrats, academics, analysts and observers of Africa’s agricultural development over the past six decades provide a unique opportunity to recommend this book to politicians, policymakers, academics, researchers, analysts, and students as a must-read towards achieving Africa’s agricultural renaissance—which remains within reach, within our lifetimes. Lilongwe, Malawi Porto-Novo, Republic of Benin

Joyce Banda Godfrey Nzamujo

Preface

Africa must transform its agriculture to avoid being transformed by the rest of the world. To this end, this book presents agriculture as a potent tool to create wealth, generate jobs, and purify the planet. If, in Africa, such an agricultural transformation is well-managed, the African Continent would achieve its rightful status as a global powerhouse of food security, a dominant net exporter of food, an engine of shared prosperity, and an accelerator for reducing poverty and exclusion—unleashing Africa’s long-awaited structural economic transformation through an unfathomable agriculture-led industrialization and transformative reallocation of sectoral resources. Africa’s story of ‘poverty amid plenty,’ experiencing recurring hunger and malnutrition on a continent blessed with unparalleled agricultural opulence and world-class comparative advantages, is an anathema to human decency, well-being, and development. This continent, with the largest amount of uncultivated arable land, vast and rich waterbodies, diverse ecological zones, a youthful population, and massive yield gaps, has no business spending over 62 percent of its scarce foreign exchange earnings—an annual average of $78 billion—on importing food. This financial recklessness beats any sense of managerial responsibility, leadership sagacity, let alone basic stewardship and common sense. Regarding myself, I am a son of a farmer: born and bred into farming— farming even as a hobby—who, as a profession and a passion, enmeshed myself, over the years, in development advisory services. Like many others, I have travelled the length and breadth of the African continent, as well as five other continents of the world. When at home, I witness xiii

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Africans—who have become prisoners of intellectual and pragmatic agricultural paradoxes—dying needlessly of hunger. This story, which I have witnessed over five decades, is one of limited progress, often disappointing and exasperating outcomes, and yet all too familiar to the African continent and to the world at-large. The fact that, over the past two decades, Africa’s agricultural growth was driven neither by productivity nor by farm intensification—and further complicated by recurring deindustrialization and premature structural economic transformation—is foundational to this story. If Argentina, Brazil, China, and India—that were at the same level as most African countries in the 1960s—could become powerhouses of food security, enviable net food exporters, and pace-setters for modern industrialization, why is Africa’s case different? And what must Africa do to reverse these decades of disappointing agricultural performance, propel a pro-poor development agenda, become a powerhouse of food security, as well as a powerful net food exporter? Breaking this shackle of penury and starvation amid potentially gigantic agricultural opulence with an energetic population is the main motivation for this book. This call for Africa’s agricultural renaissance is now more opportune than ever. Leveraging comparative advantages, the book argues that agriculture is the most viable strategy to bring development to nearly 60 percent of Africans by 2040. This achievement, however, relies on proposals such as shifting agriculture away from a way of life towards becoming a business enterprise—through market-driven and value-added orientations. Further, this book is evidence-based, anchored on a hexagon of comparative advantages, in the context of a second hexagon of complex problems that impede Africa’s agricultural development—premised on a third hexagon of agricultural productivity’s transformative power. These triple hexagons provide this book’s analytical rigor and empirical foundation. This evidence, anchored on theory, practice, and case studies, has been distilled across quantitative, qualitative, and political economy approaches—building a case for agriculture as a powerhouse of food security and inclusive development. Achieving this development feat is not automatic, but complex and multi-dimensional with productivity as the transmission mechanism—centred on the transformation of small-scale farmers and tapping the massive potential of agribusiness, an enterprise projected to exceed the continent’s current GDP by 2030.

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Several resounding lessons emerge from this book. First, policies that help reduce poverty are not necessarily the same as those that reduce income inequality. Second, the future of Africa’s agriculture lies in digitalized farming and effectively integrating small farm holders, youth, and women into robust and informed agricultural policies—using ecosystem approaches such as extension services; technological research and innovation; agricultural financing systems; and integrated one-stop-shop agricultural centres. Third, no silver bullet solution exists; instead, success lies in a strong policy mix of state-market-farming community coordination and partnerships. Fourth, adopting an agricultural ecosystem approach to achieving agricultural transformation and a sustainable green revolution is advantageous. Finally, implementing policy and programmatic actions that leverage the power of political economy in the agricultural sector, incentivise productivity of small scale farmers, promote special agricultural zones, deepen climate-smart agriculture, stimulate agricultural entrepreneurship for youth, and accelerate integrated partnerships across national, regional, and global actors are key to achieving an inclusive and sustainable green revolution in Africa. The time is now for Africa to use agriculture to shape its future and change its development narrative forever. The key to this inclusive agricultural transformation lies in transforming 60 percent of Africa’s micro- and small-scale farmers into commercialized and market-oriented businesses, whose outputs are directed towards value-added enterprises by 2040. The time is now for Africa to transform its agricultural potential into agriculture-driven inclusive and sustainable development. The views expressed herein are those of the author and do not necessarily reflect the views of the United Nations Development Programme (UNDP). Pretoria, South Africa January 2021

Ayodele Odusola

Acknowledgements

The book benefitted immensely from weekends and holidays sacrificed by my family members during the preparation of the manuscript. Their endurance provided quality time for the completion of this book. Sincere thanks to Achim Steiner (the UNDP Administrator) and Ahunna Eziakonwa (Assistant Secretary General and the UNDP Regional Director for Africa) for providing opportunity for thought leadership to thrive in the organization. The endorsement of Abdoulaye Mar Dieye (Under Secretary General of the United Nations, a former Assistant Secretary General, and Regional Director for the United Nations Development Programme for Africa) provides inspiration and energy to focus on thought leadership that galvanizes development solutions to perennial and emerging development challenges facing Africa. Special thank goes to James Neuhaus for his regular encouragement and nudging. I want to acknowledge the invaluable contributions of people who reviewed the original manuscripts. These are Drs. Eugenio Díaz-Bonilla and Sivan Yosef of the International Food Policy Research Institute (IFPRI), Drs. Abdulrazak Ibrahim and Augustin Kouvi of The Forum for Agricultural Research in Africa (FARA), Drs. Babatunde Abidoye and Rogers Dhliwayo of the United Nations Development Programme (UNDP) and Dr. Alejandro Rausch—an independent consultant. They contribute to the robustness and depth of the final output. Sincere thanks to the blind review comments from Steve Catalano of the Stanford University Press and the positive feedback from Rachel Sangster, Wyndham Hacket Pain, and Lavanya Devgun from Palgrave, as well as Helamatha Aruguma and Antony Sami from Springer Nature, who added substantial value to the entire process. xvii

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ACKNOWLEDGEMENTS

The endorsements from agriculture and development experts and leaders bring out the intrinsic and extrinsic value of this book in an incalculable manner. I am deeply grateful to Professor (Fr.) Godfrey Nzamujo (founder of the Songhai Centre), Professor Justin Yifu Lin (Peking University; Former Chief Economist, the World Bank), Professor Anthony E. Akinlo (Vice Chancellor, Reedemer’s University, Ede, Nigeria), Professor Tawana Kupe (Vice Chancellor, University of Pretoria, Pretoria, South Africa), Professor Alain de Janvry (University of California, Berkeley), Professor Edward Mabaya (Cornell University), and Professor Joshua Olusegun Ajetomobi (University of Eswatini). The insightful endorsement from Dr. Gustavo Grobocopatel (the CEO of Grupo Los Grobo—a leading agribusiness and investment company operating in Argentina, Uruguay, and Brazil) and Dr. Eugenio Díaz-Bonilla (Director, Latin America and the Caribbean, IFPRI) provided cross-continental, private sector, and development institution’s perspectives on this book. The practical and professional perspectives from Dr. Yemi Akinbamijo (Executive Director, Forum for Agricultural Research in Africa, FARA), Dr. Agnes Kalibata (President of the Alliance for a Green Revolution in Africa, and UN Secretary General’s Special Envoy for 2021 Food Systems Summit United Nations), and Mr. Khalid Bomba (CEO, Ethiopian Agricultural Transformation Agency) contributed immensely to this book. The foreword from H.E. President Joyce Banda (former President of Malawi and the Founder of Joyce Banda Foundation) and Professor (Father) Godfrey Nzamujo (Founder of the Songhai Regional Centre) enhances the book’s robustness and practicality. The multi-institutional and multi-dimensional approaches of the review and endorsements confirm this book’s pragmatic and applied orientation. My sincere gratitude and appreciation to all.

Contents

Part I African Agriculture’s Potential, Performance, Lessons, and Challenges   1 1 Introduction  3 References 13 2 Agriculture as the Fulcrum of Inclusive Development in Africa 15 2.1 Africa’s Comparative Advantages in Agriculture 18 2.2 Agriculture and National Development 21 2.3 Why Invest in Agriculture for Africa? 34 2.4 Agriculture and the SDGs 44 2.5 Conclusions 51 References 52 3 Africa’s Agriculture Today: Performance, Challenges, and Its Political Economy 55 3.1 The Agricultural Sector Performance 58 3.2 Challenges Facing the Agricultural Sector 79 3.3 What Are the Impediments to Agricultural Transformation That Require Urgent Priority Actions? 79 3.4 Political Economy Mechanisms of Agricultural Reforms120 3.5 Conclusions127 References129 xix

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Part II Agriculture as the Engine of Economic Transformation and Inclusive Development: Theory, Practice, and Empirical Evidence 137 4 Agriculture as a Strategy to Operationalize GrowthPoverty-Inequality Nexus: Theory and Evidence139 4.1 Introduction141 4.2 Theoretical Perspectives141 4.3 Evidence from Existing Studies152 4.4 Conclusions157 References157 5 Agriculture as a Powerhouse of Food Security and Economic Transformation in Africa163 5.1 Context166 5.2 Food Security in Africa167 5.3 Drivers of Food Security in Africa172 5.4 Tapping Agribusiness for Economic Transformation181 5.5 Conclusions188 References190 6 Agriculture as a Powerhouse of Inclusive Development in Africa193 6.1 Introduction196 6.2 Emerging Evidence on Agriculture as a Potential Powerhouse in Africa196 6.3 Conclusions215 References216 Part III Case Studies on Agricultural Transformation from Africa, Asia, and Latin America 219 7 Introduction to Regional Case Studies221 7.1 The Context224 7.2 Regional Drivers of Agricultural Transformation227 7.3 Conclusions235 References236

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8 Case Studies from Africa237 8.1 Case of Ethiopia240 8.2 The Case of Ghana257 8.3 The Case of Mauritius276 8.4 The Case of Morocco285 References301 9 Case Studies from Asia305 9.1 The Case of China310 9.2 The Case of India317 9.3 The Case of the Republic of China (Taiwan)325 9.4 The Case of South Korea329 References335 10 Case Studies from Latin America339 10.1 The Case of Argentina343 10.2 The Case of Brazil356 10.3 The Case of Costa Rica377 References390 Part IV Towards an Agricultural Powerhouse in Africa 393 11 Policies and Programmes for an Agricultural Powerhouse in Africa395 11.1 Introduction397 11.2 Leveraging the Power of Political Economy of the Agricultural Sector398 11.3 Prioritizing Transformation of Small-Scale Farmers400 11.4 Accelerating Agricultural Productivity as the Game Changer405 11.5 Strengthening Special Agricultural Zones or Corridors411 11.6 Making Agricultural Transformation Mutually Reinforcing to Environmental Sustainability413 11.7 Making Agriculture a Strategy for Entrepreneurial Transformation for Youth415 11.8 Taking Agriculture to the Next Level Through Digitalization in Africa420

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11.9 Strong Stakeholders Partnership and Collaboration425 11.10 Integrated Partnerships Across National, Regional, and Global Actors427 11.11 Conclusions434 References434 12 Conclusions437 12.1 Using Africa’s Agricultural Renaissance to Turn Paradox to Powerhouse440 12.2 Key Findings and Policy Messages441 12.3 A Home-Grown Paradigm Shift to Propel Agricultural Powerhouse444 12.4 Conclusions452 References453 Annexes455 Annex A: Bilateral Relationships between Sustainable Agriculture and the Sustainable Development Goals (SDGs)455 Index473

About the Author

Ayodele  Odusola  is the Resident Representative for the United Nations Development Programme (UNDP) in South Africa and Director of the UNDP Africa Finance Sector Hub. Prior, he was Chief Economist and Head of the Strategy and Analysis Team for United Nations Development Programme’s Regional Bureau for Africa (RBA), where he coordinated economic, social and environmental dimensions of development in Africa. Dr. Odusola provided intellectual leadership to SDG acceleration frameworks in sub-Saharan Africa, managing the network of Senior Economists in UNDP Africa Country Offices and providing strategic advice on policy matters to the RBA Director. Mr. Odusola is a Nigerian national and holds a PhD in Economics from the University of Ibadan, Nigeria. While Dr. Odusola serves as the Resident Representative for UNDP in South Africa, the views expressed herein are those of the author and do not necessarily reflect the views of UNDP. Resident Representative United Nations Development Programme South Africa

Ayodele Odusola, PhD

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List of Figures

Fig. 2.1 Fig. 2.2 Fig. 2.3

Fig. 2.4 Fig. 2.5 Fig. 2.6 Fig. 2.7 Fig. 2.8

Fig. 2.9 Fig. 2.10 Fig. 2.11

Percentage points change in rural population, 1970–2015. (Source: Author’s computation from the World Development Indicators (WDI) [accessed December 2016]) 22 Share of rural population, 1970–2015 (%). (Source: Author’s computation from the World Development Indicator (WDI) [accessed December 2016]) 23 Share of agriculture in men’s and women’s employment, latest value (%). (Note: STP = Sao Tome and Principe. Source: Author’s computation from the World Development Indicators [accessed December 2016]) 28 Share of agriculture raw materials in merchandise exports, 2005–201531 Rural poverty in Africa. (Source: Author’s computation from the World Development Indicators [accessed December 2016]) 32 Population and agriculture growths in Africa by regions, 2000–2015. (Source: Author’s compilation from WDI 2018) 36 Africa and the Malthusian trap in the twenty-first century. (Source: Author’s compilation from WDI 2018) 37 Wasting and stunting prevalence by regions, 2016. (Note: LAC = Latin America and the Caribbean. Source: Author’s compilation and computation from https://data.unicef.org/ resources/joint-­child-­malnutrition-­estimates-­2017-­edition/) 39 Food as share of merchandise imports (%), 2010–2015 41 Economic, social, and environmental impact of agriculture 45 Agriculture for the Sustainable Development Goals (SDGs) 47

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List of Figures

Fig. 3.1 Fig. 3.2 Fig. 3.3 Fig. 3.4 Fig. 3.5 Fig. 3.6 Fig. 3.7 Fig. 3.8

Fig. 3.9 Fig. 3.10 Fig. 3.11 Fig. 3.12 Fig. 3.13 Fig. 5.1 Fig. 5.2 Fig. 5.3 Fig. 5.4

Agriculture’s value added as a share of GDP by regions (average 2010–2016). (Source: Author’s computation from the World Development Indicators [accessed December 2017]) 59 Africa’s value added of agriculture, manufacturing, and services in GDP, 1980–2016 (%). (Source: Author’s computation from WDI [accessed June 2018]) 60 Growth rates of agriculture (%) by regions. (Source: Author’s computation from the WDI [accessed December 2016]) 61 Agricultural productivity and value added in GDP. (Source: Author’s computation) 62 Agricultural productivity per worker, 1980–2015 (2010 constant prices $). (Source: Author’s computation from the World Development Indicators [accessed December 2016]) 65 Fertilizer consumption per hectare of arable land, 2002–2013, by regions. (Source: Author’s compilation from the WDI [Accessed, December 2016]) 66 Cereals yields, average 2010–2015, by regions (kilogram per hectare). (Source: Author’s compilation from the World Development Indicators [Accessed, December 2016]) 72 ODA to agriculture in Africa as a share of total ODA (%). (Source: Author’s computation and compilation from OECD (2016) for Africa, and One Campaign (2010) for SubSaharan Africa) 81 Labour productivity and lending rates in Africa 86 Fertilizer consumption (kilograms per hectare of arable land) (average, 2010–2013). (Source: Author’s computation from WDI) 93 Africa is the most vulnerable to climate change risks (risk score, 2017). (Source: Computed from Climate Change Vulnerability Index 2017) 107 Precipitation index for the Sahel, 1901–2016. (Source: Author’s computation from JISAO data: http://research. jisao.washington.edu/data_sets/sahel/#values)108 A systemic approach to drivers of agricultural underperformance128 Level and changes in undernourishment between 1991 and 2015. (Source: Author’s computation) 169 Percentage changes in prevalence of stunting and underweight, 1991–2016 170 Undernourishment and global hunger index, 2000–2015 173 Hunger index, undernutrition, and their determinants. (Source: Author’s computation) 174

  List of Figures 

Fig. 5.5 Fig. 6.1 Fig. 6.2 Fig. 6.3 Fig. 6.4 Fig. 7.1 Fig. 7.2 Fig. 8.1 Fig. 8.2 Fig. 8.3 Fig. 8.4 Fig. 8.5 Fig. 8.6 Fig. 8.7 Fig. 8.8 Fig. 8.9 Fig. 8.10

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Food security (hunger and undernourishment) and per capita income relationship in selected countries, 2000–2015 178 Poverty and labour productivity. (Source: Author’s computation)211 Relationship between Gini and land productivity. (Source: Author’s computation) 212 Correlation between Gini and multifactor productivity. (Source: Author’s computation) 213 Correlation between poverty and multifactor productivity. (Note: DRC is Democratic Republic of the Congo. Source: Author’s computation) 214 Agriculture total factor productivity index. (Source: Author’s computation from USDA agricultural database) 227 Total factor productivity growth in case study countries. (Source: Author’s computation from USDA agricultural database)228 Structural economic transformation in Ethiopia. (Source: Author’s computation from WDI Database) 241 Agricultural extension service worker-farmers ratio in selected countries, 2010. (Source: Author’s computation from IFPRI 2018) 245 Ghana’s unchartered structural economic transformation. (Source: Author’s computation from WDI database) 258 Ghana’s cocoa growers by land size. (Source: Author’s computation from Vigneri and Kolavalli 2018) 260 Government agriculture expenditure as a share of total expenditure (%). (Source: Author’s computation from RESAKSS Database http://www.resakss.org/)266 Mauritius cereals yields per hectare in multiples of SubSaharan African average. (Source: Author’s computation from WDI Database) 277 Mauritius’ structural economic transformation. (Source: Author’s computation from WDI Database) 278 Mauritius’ share of agricultural employment in industry, services and total employment. (Source: Author’s computation from WDI database) 281 Morocco’s share agriculture, manufacturing, and services value added in GDP (%). (Source: Author’s computation from WDI Database) 286 Morocco’s employment in agriculture, manufacturing, and services sectors. (Source: Author’s computation from WDI Database)287

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Fig. 8.11 Fig. 8.12 Fig. 9.1

Fig. 10.1 Fig. 10.2 Fig. 10.3 Fig. 10.4 Fig. 10.5 Fig. 10.6 Fig. 10.7 Fig. 10.8 Fig. 10.9 Fig. 10.10 Fig. 10.11

Morocco’s projected value of overall agribusiness by 2030 ($’ billion). (Source: Author’s estimation) 293 Share of agriculture budget in total budget. (Source: Author’s computation from ReSAKSS Database) 296 Land holding statistics in India, 2011. (Note: The average size of landholding is defined as: large = 42.95 acres; Medium = 14.23 acres; Semi-­medium = 6.7 acres; Small = 3.51 acres and Marginal = 0.96 acres. Source: Author’s computation based on data from Chaturvedi 2016) 318 Argentina’s sectoral share of GDP (%). (Source: Author’s computation from WDI database) 344 Argentina’s employment in agriculture, industry, and services. (Source: Author’s computation from WDI database) 345 Brazil’s sectoral share of GDP (%). (Source: Author’s computation from WDI database) 358 Brazil’s employment in agriculture, industry, and services (%). (Source: Author’s computation from WDI database) 359 Brazil’s TFP index and labour growth (%). (Source: Author’s computation from WDI database) 360 Brazil’s percentage change in crop yields, 1978–2008. (Source: Author’s computations from FAO 2012) 369 Brazil’s share of global production and exports of agricultural commodities in 2017. (Source: Author’s computation and adaptation from Clements et al. 2019) 370 Costa Rica’s agriculture, industry, and service value added. (Source: Author’s computation from WDI Database) 378 Costa Rica’s employment in agriculture, industry, and services. (Source: Author’s computation from WDI database) 379 Costa Rica’s agriculture TFP growth. (Source: Author’s computation based on data from https://www.fas.usda.gov/ data)380 Sub-sectors’ percentage share of exports in Costa Rica. (Source: Computed from Gustavo et al. 2018) 384

List of Tables

Table 2.1 Table 2.2 Table 2.3 Table 3.1 Table 3.2 Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 6.1 Table 6.2 Table 6.3 Table 6.4 Table 6.5 Table 6.6 Table 6.7 Table 6.8

Urban bias in the provision of electricity (%), 2016 24 Share of economically active population in agriculture in African countries and other regions (%) 26 Value of food imports ($ billion) and their share of total imports and reserves, average 2010–2016 42 Share of agricultural irrigated land in total agricultural land (%) 71 Magnitude of post-harvest losses (PHLs) (%) 91 Prevalence of undernourishment in Africa and other regions 168 Correlation between food security indices and their determinants172 Multiple regression results on determinants of food security in Africa 175 Africa’s agriculture and agribusiness potential for 2030 (US$’ billion) 184 Correlation index between agriculture, manufacturing, and services sectors 197 Impact of agriculture on the manufacturing value added 198 Correlation index among variables of interest 199 Impact of agricultural productivity on total employment 200 Impact on inequality and rural inequality 203 Agriculture’s elasticity of national poverty, rural poverty, and income inequality in Africa 206 Correlation index between productivity index and rural poverty210 Impact of agricultural productivity on poverty and income inequality211 xxix

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List of Tables

Table 8.1 Table 10.1 Table 10.2 Table 10.3 Table 10.4

Land tenure system R&D expenditure as a share (%) of GDP, 1996–2017 Growth of agricultural total factor productivity and inputs Agriculture-environment indicators Impact of agricultural productivity in sectoral value added and employment

269 350 368 371 380

List of Boxes

Box 3.1

Mauritius: An Example of High-Quality Agribusiness Specialization and Sustainable Agriculture 63 Box 3.2 Overview of the Programme for Africa’s Seed Systems Achievement69 Box 3.3 Impact of Egypt’s Integrated Irrigation Infrastructure Management Project 73 Box 3.4 Nigeria Offers a Good Example of Private Sector Involvement in Extension Services 75 Box 3.5 Nigeria’s Anchor Borrower’s Programme Facilitates Access to Single-Digit Interest Rates 84 Box 3.6 Malawi’s Fertilizer Subsidy Programme 93 Box 3.7 E-Wallet Fertilizer Subsidy Programme in Nigeria 96 Box 3.8 Agricultural Subsidies from the Top 21 Food-Producing Countries Control About 80 Percent of Agricultural Value Added Globally 104 Box 3.9 Extreme Weather Events in Africa 108 Box 3.10 Initiatives Helping to Address Impediments to Youth Participation in Agribusinesses 112 Box 3.11 Vietnam’s Land Tenure System Experienced One of the Most Comprehensive Reforms with the Largest Landholding in Asia 119 Box 6.1 Burkina Faso’s Efforts Towards Agriculture That Promote Inclusive Development 208 Box 8.1 Ethiopia Agricultural Extension Services Remain a Global Trailblazer246 Box 8.2 The Ethiopia Commodity Exchange Is Changing Agricultural Landscape248

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Box 8.3

Ethiopia Agricultural Transformation Agency is Revolutionizing the Country’s Agriculture 252 Box 8.4 Ecosystem Coordination and Division of Labour 256 Box 8.5 Cocoa and the Ghanaian Economy: Progress, Challenges, and Prospects 262 Box 8.6 Some Strategic Policy Actions 273 Box 8.7 Implementation of Green Morocco Plan (GMP) 294 Box 9.1 Selected Institutional and Strategic Agricultural Reforms in China311 Box 9.2 West Bengal State Land Reform 319 Box 9.3 The South Korean Rural Development Programme 332 Box 10.1 No-till Farming is Revolutionizing Agriculture in Argentina 351 Box 10.2 Sowing Pool is Changing Agricultural Production Landscape 352 Box 10.3 Rural Credit Scheme 365 Box 11.1 Emerging Trends in Special Agricultural Zones or Growth Poles in Africa 412 Box 11.2 Emerging Internship and Mentorship Programmes for Youth in Agribusiness 418 Box 11.3 Digital Green Initiative 424

PART I

African Agriculture’s Potential, Performance, Lessons, and Challenges

CHAPTER 1

Introduction

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 A. Odusola, Africa’s Agricultural Renaissance, https://doi.org/10.1007/978-3-030-65748-2_1

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Poverty and hunger amid plenty represent the African development paradox. The African continent is replete with vast fertile and uncultivated

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arable land, enormous rich river basins1 that could be used for irrigation, and an abundantly favourable climate; it is one of the world’s most richly endowed regions in agricultural and natural resources. Africa could be the powerhouse of the world’s food security, adding handsomely to the value chain—if only these natural resources were productively, efficiently, and sustainably used. However, Africa remains the global epicentre of low agricultural productivity, de-industrialization, hunger, malnutrition, and poverty. Yet with the right institutions, leadership, public commitment, and the unalloyed support of the international community—all taking advantage of today’s emerging opportunities2—Africa can transform from this paradox to a powerhouse of food security, economic diversification and transformation, and a pivot of achievement of the 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs), endorsed by world leaders. Agriculture can uniquely be used to realize this vision: spurring inclusive and sustainable development in Africa, if only the right policies and programmes are effectively implemented and strong political will and public support galvanized. Creating and nurturing agribusinesses is a potent strategy to create jobs and achieve rural transformation and national development in agrarian economies—which characterizes most African countries. Agriculture has long been recognized as an important strategy for accelerating national development. The process of using agriculture to transform the national economy is beyond the simple approach suggested by Arthur Lewis and other scholars, which is through effective resource allocation from the labour abundant sector to labour scarce sector; and using agriculture as the lynchpin of industrialization. The role of agriculture and agribusiness3 is multidimensional and mutually reinforcing with national economic transformation and development. If accelerated agricultural productivity is prioritized, it could serve as the springboard of economic 1  It has about 60 percent of the world uncultivated arable land (Odusola 2014) and hosts the longest river (River Nile) and the largest and deepest river (Congo River) globally, and River Niger, the third longest in Africa (https://list25.com/25-longest-rivers-in-the-world/). 2  These are advancement in science and technology; rising regional integration in Africa including the African Continental Free Trade Area; and focusing on emerging African entrepreneurs and leadership for structural economic transformation. 3  Agribusiness refers to firms—from micro, small, and medium enterprises to multinational corporations—involved in agricultural-related upstream (input supplies), downstream (processing), and tertiary activities (logistics and retail).

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diversification, entrepreneurship development, and growth of small-scale agrobusinesses and agriculture-based industrialization. However, for agriculture to play such a broad-based development role, it must first be able to achieve a level of productivity that creates the necessary backward-forward linkages with the economy at-large through genuine structural economic transformation.4 It is only when agriculture is accorded this high priority that it plays this catalytic role by: serving as a major source of product, factor, and foreign exchanges; contributing to industrial growth; supporting development of value chains; fomenting industrial development and structural economic transformation; ensuring food security; protecting the environment; and facilitating accelerated reductions in poverty and income disparities. Agriculture remains the mainstay of most of Africa’s rural economies and rural dwellers’ livelihoods despite its neglect by African governments and the donor community over the past four decades. Agriculture employs as much as 54.2 percent of the economically active population in Africa, 74.4 percent in Eastern Africa, and as much as 80.0 percent in Burundi and Mozambique. Agriculture contributes 22.7 percent of GDP in Africa and more than 50.0 percent in countries like Chad and Sierra Leone, as well as more than 50.0 percent of merchandise exports in Mali and Burkina Faso in 2015. This mismatch between employment rate in agriculture and its contribution to GDP demonstrates agriculture’s low level of productivity due to its rudimentary nature. An agricultural renaissance is yet to take place in Africa: its potential has not been fully explored as the engine of inclusive economic growth, a powerhouse of food security, a springboard of industrialization, a catalyst of income generation, and a propellant of wealth creation. Neglecting agriculture, manifested in low funding and institutional inertia, not only slows down its growth, but also slows down development outcomes on the continent. Because a substantial proportion of Africa’s rural population—and most of its poor—depend on agriculture, which is non-modernized and untransformed, rural poverty remains a serious development concern. Poverty is higher than 60.0 percent of the

4  Land productivity in Sub-Saharan Africa (SSA), despite the accelerated progress in science and technology in agriculture, rose marginally from 104 metric tonnes (mt) per hectare in 1961–1970 to 328 mt in 2000–2012 (Benin et al. 2016).

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population in 17 African countries.5 This reality is further compounded by widening sectoral income disparities, the rising food insecurity, and worsening environmental degradation. When African governments neglect their agricultural sectors, as reflected in low resource allocations, such neglect leads to undercapitalization, non-­ strategic management of globalization,6 low adoption of technology, weak institutional innovations, and high environmental degradation—explaining the imperatives of agriculture-driven rural transformation and overall development in Africa. Maximizing these multidimensional functions requires a new paradigm shift: a renaissance that focuses on overcoming anti-agriculture biases, strengthening agriculture sector governance, and prioritizing the function of agriculture in each African country’s context. Promoting an agriculture-for-development agenda calls for accelerating improvements in the educational system (especially secondary education) through which labour reallocation, technological adoption, and workers’ productivity can take place. Moreover, agriculture’s strong backward and forward linkages with the rest of African economies call for an economy-­ wide approach as opposed to today’s sectoral approach which, to some extent, explains the low levels of industrialization and sometimes de-­ industrialization, on the continent. The role of agriculture in accelerating development, which the Comprehensive African Agriculture Development Programme (CAADP) encapsulates, should be seen in a more heterogeneous manner, taking into consideration different typologies of countries and their varying development contexts. For instance, low-income countries could focus on re-­ engaging agriculture’s potential as the driver of their national development; emerging countries could use small farm holders to drive agricultural commercialization, promote food and nutrition security, bridge rural-urban income gaps, and rapidly reduce rural poverty. Adopting a homogeneous approach across countries, as was done during the first generation of the green revolution7 in Africa, can be misleading and counterproductive. 5  For detailed information of the intensity of poverty across African countries and regions, see Odusola et al. (2017). 6  For instance, African governments liberalized their imports even to agricultural products that are heavily subsidized in other countries, thereby making their farmers non-competitive. This is what many scholars called unguarded deregulation. 7  Green revolution refers to transformation in agricultural research, technology (e.g. fertilizers, pesticides, and irrigation), high-yielding varieties of seeds, and capital that led to rising agricultural productivity.

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This realization calls for each country to develop an individualized political economy of national agricultural management. A new paradigm shift, a renaissance that emphasizes overcoming domestic and foreign anti-­ agriculture biases in national development strategies, should be considered an urgent priority. In addition, enhancing the productivity of small- and medium-scale farmers through better access to agricultural land, improved access to water and irrigational management towards promoting sustainable agriculture, as well as assistance with standardization, storage, and thus access to global markets should be a policy priority. Agriculture must be knowledge-based and business entrepreneurial-­ focused instead of a way of life, as is the case today. Smart investment in agriculture can generate unfathomable multipliers on all sectors of the economy and the SDGs to enhance shared prosperity, promote human dignity, protect the planet, and sustain peace. Agriculture is key to achieving inclusive growth, a phenomenon that is central to accelerating rapid reductions in poverty and decreasing income disparities. To ensure agriculture meets the short-, medium-, and long-­ term objectives of expanding growth, transforming economic structures, and reducing poverty and inequality, agricultural policies should focus on enhancing the productivity of small and medium farm holders.8 Adopting technologies that meet the needs of excluded or marginalized farmers— and promoting farm management practices—are key to achieving these objectives. Such agricultural productivity-induced strategies have transformative impacts on rural areas by strengthening off-farm activities, raising rural employment, and improving rural wages. Adopting an agriculture-­ for-­development approach is an important strategy for integrating rural populations into the SDGs by ensuring that rural dwellers become important drivers of economic transformation and national development. This also fosters rural-urban productivity distribution and linkages. This book uses a combination of analytic approaches—qualitative and quantitative. In addition to using a descriptive and political economy approach, it adopts bivariate and multivariate regressions to determine the role of agriculture—and other variables—in influencing the dynamics of resource allocation within sectors, economic transformation, poverty, and inequality in Africa, including agriculture elasticity of national poverty, rural poverty, and income inequality. 8  Targeting farmers who farm less than two acres of farmland to drive agricultural productivity is commonplace in North Africa and Asia.

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This book builds a case for an agricultural renaissance—a movement towards deeper understanding of the future of agriculture and renewed commitment to the fundamental role of agriculture in Africa’s development processes. It, therefore, argues that to ensure rural dwellers are not left behind in the growth and development processes by 2030, using agriculture as a strategy of national development is critical to most African countries. This renaissance will shift the agricultural frontier from a state of paradox to a powerhouse. It shows the compelling reasons why Africa must invest in agriculture, including taking benefits of growth and development to the marginalized rural dwellers and saving the continent from the Malthusian trap of catastrophic famine.9 It also argues that neglecting agriculture, manifested in low funding and institutional inertia, not only slows down Africa’s growth, but also slows down development outcomes on the continent. It argues that agriculture is a potent strategy to bring development to the doorstep of majority of Africa’s population. It therefore explains why agriculture has not been able to serve as the engine of inclusive economic growth, the powerhouse of food security, the springboard of industrialization, the driver of income generation, and the propellant of wealth creation. In addition to providing the macroeconomic and sectoral contexts of Africa’s agriculture, this book also examines the political economy shaping the sector’s development, including why Africa has not invested commensurately in agriculture. However, the current reality shows that poverty, hunger, and malnourishment are endemic among agrarian populations. Africa is a huge and very diverse continent with instances of average performance eclipsing pockets of outstanding performance. On average, the empirical findings from this book confirm the existence of a Malthusian trap in Africa. It takes note of some countries that have transformed more than others, but on average, the performance on agricultural yields relative to population growth has fallen short of other regions of the world. For instance, while the North African countries have managed to avoid a Malthusian trap (with agriculture yields growing faster than population), most other 9  Thomas Malthus postulates that when population growth is ahead of agricultural growth, at a point in time food supply will be inadequate to feed the population, leading to starvation and famine. The Malthusian doomsday was negated (in Europe and Asia, for instance) by changes in agriculture technology such as fertilizers, improved seedlings, and mechanization.

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African countries, especially those whose population grows by 3 percent and above, are experiencing such a Malthusian trap. Moreover, a few countries spent less than 10 percent of the foreign exchange reserves on food imports (e.g. Algeria, Libya, and Botswana); at least 12 countries spent more than 50 percent on food imports (with Zimbabwe, Guinea, and Sudan spending between 130 and 624 percent)—compared to an African average of 62 percent—translating to about $78 billion in 2017. Despite this reality, countries like Ethiopia, Kenya, and Zambia have been using fresh vegetables and cut flowers, among other such items, to boost their exports in recent times. In fact, Ethiopia adopted agriculture-­ led industrialization, which has helped to diversify its exports in recent times. Conversely, countries experiencing armed conflicts have not been able to improve their agricultural performance to boost exports of agricultural products (e.g. Sudan and Zimbabwe); meanwhile, change in urban food demand is a major driver of rising food imports in non-conflict countries. Yet, it is also important to acknowledge the rise of medium-scale farms in several parts of Africa as a reaction to the increased food demand from newly urbanized populations, as well as to meet the need of agroprocessing. These realities notwithstanding, Africa is yet to use agriculture to drive its economic transformation and address poverty, hunger, and malnutrition—a clear indication of a paradox. When agriculture grows, citizens, economies, and societies benefit significantly. Agricultural transformation holds the key to rapid growth in agroprocessing, logistics, and trading—an important driver of structural economic transformation. This book proposes shifting agriculture from a traditional way of life to a more entrepreneurial, market-driven farming practice combined with a proactive model of developing agricultural value chains. This proposal presents a rapid inclusive growth opportunity that could be rich in jobs and help tackle poverty and inequality for the continent. It also disentangles policies and programmatic interventions that could be implemented at the national and continental levels. Even so, achieving the goal of an agricultural powerhouse is beyond the sole, or even collective, capacity of African governments, the private sector, and the farming community, but requires the commitment of international community as well. A clear understanding of the political economy of Africa’s agricultural transformation among the domestic political actors, the private sector (farmers and business community), donors, and other international actors remains critical to success. This renaissance shifts the agricultural frontier from a state of paradox to a powerhouse of economic

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transformation and national development. This book articulates the imperatives of investing in Africa’s agriculture and how agriculture could bring development to the doorstep of about 60 percent of Africans, particularly if African leaders are committed to transforming 60 percent of subsistent farmers to commercially driven agricultural entrepreneurs by 2030. The rising trend of improved seedlings utilization, the success of bottom-up approach to managing irrigation in Egypt and Mali, the rising wave of youth integration into agriculture, the use of multiple actors in extension services (e.g. Ethiopia and Nigeria), the success of Songhai agriculture-­based circular economy, and the innovative interventions of the Ethiopian Agricultural Transformation Agency in soil fertility mapping and extension services show this is possible. The book also unveils the long list of analytical unknowns, grey areas of agriculture-led development industrialization, mutely discussed political economy of agricultural policies, uncharted waters of productivity-­ poverty-­inequality nexus, and the vaguely understood linkages between productivity, structural transformation, and global competitiveness. A deeper reflection on these unknowns presents some answers to what Africa must do differently in charting the path of Africa’s future in agriculture. One of the things African policymakers and stakeholders must do differently is to no longer limit productivity promotion to only one crop. Productivity must be widespread, reflecting Africa’s crops diversity, for agriculture to be a rising tide that raises all boats towards decreasing food insecurity, poverty, and income inequality in Africa. In this regard, focusing subsidies to a mono-crop is anathema to Africa’s crop diversity—a phenomenon that discriminates against farmers producing non-­ subsidized crops. Moreover, agricultural productivity must be promoted not for its own sake, but as a tool for promoting food security, lifting people out of poverty, deepening economic diversification, and stimulating Africa’s global competitiveness. It examines the role of the various variants of productivity (including land productivity, labour productivity, technical change, and total factor productivity) in promoting structural economic transformation and national development agendas. Productivity seems to be more potent in explaining poverty dynamics than economic growth. Productivity sources must not be limited to chemical fertilizers and capital-intensive irrigation but should also be extended to improving the potential of rainfed agriculture through improved water, soil, and crop management.

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It concludes that a quick-fix approach will not work, and there is no silver bullet to Africa’s agricultural transformation. This book rather proposes agricultural ecosystems-based solutions, underpinned by complex interactions among population growth, food production, non-renewable resource management, industrial output, and population abatement. It also proposes that productivity-enhanced energy-water-food wastage nexus and ensuring agricultural practices respect the planet’s carrying capacity are key to propelling inclusive agricultural transformation and promoting resilient agricultural systems in Africa. The key questions, therefore, are: (1) What should Africa do differently to transform and modernize agriculture? (2) How can Africa innovatively use agriculture to drive economic growth, economic efficiency, and human progress? (3) What specific actions should be taken at the national, regional, and global levels to ensure a successful agriculture-for-­ development agenda? (4) The World Bank projected Africa’s agribusinesses capability to reach $1.0  trillion by 2030 (i.e. agrifood system, excluding on-farm production); therefore, what is Africa doing to leverage this opportunity? To answer these questions, this book is organized into 4 parts with 12 chapters. Part I focuses on a SWOT analysis of Africa’s agriculture potential, performance, lessons, and challenges. In this part, Chap. 1 presents the Introduction, and Chap. 2 addresses agriculture as the fulcrum of inclusive development in Africa. Africa’s agriculture today (performances, challenges, and its political economy) is addressed in Chap. 3. Part II presents the theory, practice, and empirical evidence of agriculture as the engine of economic transformation and inclusive development. Contained in this part are Chap. 4, which delves into the theory and evidence of agriculture as a strategy to operationalize the growth-poverty-­ inequality nexus, and Chap. 5, which addresses the empirical evidence of agriculture as a powerhouse of food security and economic transformation in Africa. Chapter 6 examines the empirical analysis of agriculture as a powerhouse of inclusive development in Africa. Case studies on agricultural transformation from selected countries from Africa, Asia, and Latin America form the theme of Part III.  The introduction to regional case studies is presented in Chap. 7, while Chap. 8 presents case studies from Africa. The case studies from Asia are examined in Chap. 9, while Chap. 10 contains the case studies from Latin America. The final part examines strategic efforts needed to move Africa towards becoming an agricultural powerhouse. In this regard, Chap. 11

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prioritizes policies and programmes for Africa to become an agricultural powerhouse as Chap. 12 presents the implementation frameworks and concludes the book.

References Benin, S., S.  Wood and A.  Nin-Pratt (a). “Introduction” in Benin, S. (edited), Agricultural Productivity in Africa: Trends, Patterns and Determinants. Washington, DC: International Food Policy Research Institute, 2016. Odusola, Ayodele F. “Land Grab in Africa: A Review of Emerging Issues and Implications for Policy Options.” International Policy Centre for Inclusive Growth 124 (April 2014). Odusola, Ayodele F., Giovanni Andrea Cornia, Haroon Bhorat, and Conceição Pedro. “Agriculture, Rural Poverty and Income Inequality in Sub-Saharan Africa.” Essay. In Income Inequality Trends in Sub-Saharan Africa: Divergence, Determinants and Consequences. New York, NY: United Nations Development Programme, Regional Bureau for Africa, 2017.

CHAPTER 2

Agriculture as the Fulcrum of Inclusive Development in Africa

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 A. Odusola, Africa’s Agricultural Renaissance, https://doi.org/10.1007/978-3-030-65748-2_2

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2.1   Africa’s Comparative Advantages in Agriculture Africa presents an avalanche of comparative advantages in agriculture that, if well harnessed, offer opportunities for inclusive growth and development. The inability to exploit these advantages has led to local and external land grabs culminating in absentee landlords, which has turned most of Africa’s arable lands into sleeping or idle assets. Some of these comparative advantages are enumerated below. First, Africa’s comparative advantage on arable land provides opportunities for national transformation and development. An abundance of arable land is a natural and economic pointer to the potential of agriculture to anchor national transformation for the future of the continent’s development. Africa has 733 million hectares of arable land, compared to 570 million in Latin America and 628 million in in Asia (Juma 2011). The continent has the largest share of the world’s arable land by regions— almost equivalent to the rest of the world, excluding Latin America and Asia. And as pointed out by Odusola (2014), close to 600 million hectares of Africa’s arable land (about 60 percent of the global total—excluding forests and conservation areas) are uncultivated. In fact, only 12 percent of African land were under cultivation as of 2017 (Wiley 2019).1 Evidence from World Bank (2010) estimated the potential supply of new land for rainfed agriculture to be highest in Sub-Saharan Africa.2 Even regarding arable land per capita, Sub-Saharan Africa is second to Latin America.3 This clearly shows that Africa has a considerable scope for vertical and horizontal expansion of arable land towards achieving fast-tracked agricultural productivity to ensure food security, to push the frontier of backward and forward economic integration, to facilitate accelerated reductions in poverty and income inequality, and to improve environmental quality and services. The ability to exploit this potential lies in accelerating the  This is based on evidence from FAO’s online database (FAOSTAT).  This is estimated to be over 200 million hectares in SSA compared to less than 130 million hectares in Latin America and the Caribbean (LAC), and less than 60 million hectares in the rest of the world (World Bank 2010, 2011). 3  This is estimated to be 0.228 per hectare compared to 0.281 (Latin America), 0.126 (South Asia), and 0.106 (East Asia and the Pacific). Countries like Niger, Central African Republic, Mali, Namibia, Chad, Burkina Faso, Togo, and Zimbabwe recorded more than 0.310 per hectare. This is based on author’s computation, based on 2005–2016 average from the WDI (accessed 2020). 1 2

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productivity of agriculture, which also holds the key for Africa’s competitiveness in global food production and exports. If well-explored, Africa will continue to play a vital role as a supplier of agricultural commodities to the growing world population and as a major actor in the future of global food production and exports. Second, Africa’s diverse agroecological environment allows for agricultural diversification to unleash structural economic transformation. Africa, being the second largest continent on earth, hosts 20 percent of global landmass (Mcnaughton and Georgiadis 1986),4 and given the multiple vegetational compositions (ranging from arid desert and dry savannah, or grassland to moist savannahs and rain forests), Africa offers much opportunity for diversified agriculture. This makes the continent to be exceptionally rich in flora and fauna with a variety of landscapes and ecosystems. The diversity of ecological vegetation makes Africa qualify for a hyperbolic expression of ‘a world in one continent’. However, the intensification of fire, farming, natural resource exploitation, and climate change has been shaping the dynamics of African vegetation.5 Third, the continent is blessed with vast and rich river basins and water bodies that could unlock economic productivity and transformation potential. Amidst thousands of rivers and streams, Africa is endowed with great water bodies like rivers and lakes. Africa is host to the longest river in the world, the River Nile with its 6825 kilometre length (Raffety 2011). The second largest river in Africa (4375 km length), the Congo River, is also one of the largest rivers in the world and the river with the second largest volume of water (4.2 million km3) after the Amazon because of its location in the heaviest rain belt (60 inches of rainfall annually) globally (Atkins 2010). The River Niger, the third longest river on the continent, also has a length of 4200 kilometres. These three rivers (Nile, Congo, and Niger) are transboundary rivers benefiting many countries for hydroelectric production, agriculture, fishing, and transportation. From the Niger and Congo river basins to the Nile and Mediterranean basins, Africa is yet to fully exploit the potential of its water bodies for irrigation in order to relieve the continent from its overdependence on rainfed agriculture. African lakes are among the greatest lakes 4  Africa is next to Asia, which accounts for 29.1 percent of the earth’s total landmass. https://www.livescience.com/34303-worlds-largest-continent.html. 5   For more information on Africa’s ecological vegetation, see McNaughton and Georgiadis (1986).

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globally. Lake Victoria, the largest in Africa (with 240  km length and 69,495 km2 area), is also the third largest freshwater lake globally. Lake Tanganyika, the second largest in Africa, is the longest freshwater lake in the world (692 km). While Lake Nasser is one of the best fishing lakes in the world, Lake Volta is one of the largest artificially created lakes globally. Lake Nyasa (formerly Lake Malawi) is the eighth largest freshwater lake in the world. Of significant note is the Rift Valley Lake, where Lakes Victoria, Tanganyika, and Nyasa collectively constitute 31,000 cubic kilometres of water, accounting for 25 percent of the planet’s unfrozen surface fresh water and 10 percent of the world fish species—very rich in biodiversity. For instance, the Rift Valley Lakes, and surrounding areas, are naturally endowed with crocodiles, elephants, gorillas, and hippopotamus, and if well managed, could drive ecotourism.6 Effective management of these transboundary resources is therefore pivotal to harnessing them for agricultural transformation and other economic activities. The fourth factor is the tropical climatic condition. Africa’s climatic conditions are amenable to all year farming if efficient irrigation systems are institutionalized. However, climate change impacts are adversely changing patterns of precipitation and temperature as well as aggravating natural disasters like droughts and floods with serious effects on agricultural productivity. Fifth, the continent’s youthful population is also an asset. The population below the age of 25 years is more than 63 percent in Africa, compared to 41 percent in Asia and 27 percent in Europe. Channelling the resources and energy of this agile and productive population into modernized agriculture will not only propel economic growth, but also generate decent jobs and help with economic diversification. Other comparative advantages abound. One of them is the huge exploitable yield gap in most African countries, especially in Malawi, Ethiopia, Nigeria, and Uganda. As observed by World Bank (2013), the yield gaps range from 2.5 ton per hectare in Uganda to 4.5 ton per hectare in Malawi. Another is the rising interest of the private sector (domestic and international). However, these investors’ interests must be harnessed for higher job opportunities for small farm holders, for respecting local communities, and for protecting the environment.

6  Raffety (2011) and Atkins (2010) provide additional illumination of the significance of these water bodies and their contributions to the global water bodies.

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Harnessing Africa’s comparative advantages is not automatic. It requires deliberate efforts of African governments, the private sector, and substantial public support. Appropriate policy and institutional supports are needed to tailor these comparative advantages into agricultural opportunities before agriculture could serve as a tool of development transformation.

2.2   Agriculture and National Development Size matters in economic development, but despite the enormous size of Africa’s rural population, most rural communities remain forgotten, marginalized, and left behind in the development process. The share size of rural population, the labour absorbed by agriculture, and the share of agricultural value added in GDP show the significance of agriculture to Africa’s development. The high share of agriculture in total labour force (about 54 percent) is a clear indication of the high potential for the growth-poverty nexus if induced by structural change. In fact, this high share of labour force is strong enough for many African countries, especially the 33 Least Developed Countries (LDCs) on the continent, to push for an agriculture-for-development strategy as previously argued by some scholars.7 The disproportionate share of agriculture in GDP also shows that this sector could be used to push for structural economic transformation, particularly an agro-based industrialization. Agriculture is the fulcrum of bringing development to the doorstep of about 60 percent of Africa’s population. It contributes immensely to the GDP of most African countries and is the main source of foreign exchange earnings in many countries, the biggest source of domestic rural income and employment, and the lynchpin of rural livelihoods for millions of Africans. As such, agriculture is not only an economic lifeline to African rural dwellers but also a propellant of social cohesion and stability, particularly when the sector is effectively used to drive rapid reductions in poverty, income inequality, and exclusion. Africa’s rural population is urbanizing—declining quite rapidly—falling from 77.6 percent in 1970 to 58.6 percent in 2015, shedding 19.1 percentage points during this period (Fig.  2.1). West Africa is the fastest urbanizing sub-region, followed by Central Africa. The dynamics of how 7  Such scholars include Johnson and Mellor (1961), Schultz (1964), Byerlee et al. (2009a), and Odusola (2017).

-26.7

SOUTHERN AFRICA

NORTH AFRICA

EAST AFRICA

-15.2

AFRICA

-17.1

CENTRAL AFRICA

-18.7

WEST AFRICA

-19.1

A. ODUSOLA

-24.4

22 

Fig. 2.1  Percentage points change in rural population, 1970–2015. (Source: Author’s computation from the World Development Indicators (WDI) [accessed December 2016])

each region progressed between 1970 and 2015 are shown in Fig. 2.2. By all standards, this current proportion of 58.6 percent, particularly in East Africa, where more than 70 percent of it is rural, is an overwhelming proportion of the continent’s population overall. Bringing development to the doorstep of rural dwellers by using agriculture as the fulcrum of rural transformation, industrial advancement, and sustainable development can lay the foundation for national development and the achievement of the SDGs. A transformed agriculture sector presents an avalanche of opportunities, directly through farmgate activities and indirectly through non-­ farmgate and agrofood systems, for decent job creation, especially for youth. As the lynchpin of structural economic transformation, agriculture could lubricate the gears of rapidly growing markets sub-nationally, nationally, and continentally. And as argued by Diao et al. (2019), Africa’s demand for food is growing rapidly and is estimated to more than double by 2050, propelled by a rapidly growing population, rising incomes, accelerating urbanization, shifting national diets from traditional foods to higher-value foods (e.g. fresh and processed foods), and more integration

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100 90 80 70 60 50 40 30 20 10 0

1970

1980

1990

2000

2010

Africa

East Africa

Central Africa

North Africa

Southern Africa

West Africa

2015

Fig. 2.2  Share of rural population, 1970–2015 (%). (Source: Author’s computation from the World Development Indicator (WDI) [accessed December 2016])

into regional and world economies. Through its backward and forward linkages, a modernized agriculture sector could drive economic diversification, industrialization, and expansion of the services sector. The lack of a modernized agriculture, which presents growth opportunity for many African countries, is excluding many people from benefiting from growth and development processes and outcomes. Many rural communities in Africa remain forgotten, marginalized, and left behind (e.g. women, youth, smallholder farmers, and pastoralists losing out from the development process) thanks to limited access to infrastructure and basic necessities of life like sufficient electricity, clean water, schools, and hospitals. An urban bias in development policy is contributing to this marginalization. Providing electricity to Africa (except in North African countries and South Africa) is a good example of this urban bias development policy, which is at variance with the practice in the rest of the world (Table 2.1). Life without electricity in rural areas, especially in Central Africa and Southern Africa (excluding South Africa), makes rural areas unliveable for youth, affecting the participation of young people in agriculture on the continent.

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Table 2.1  Urban bias in the provision of electricity (%), 2016

World Developing countries Africa Sub-Saharan Africa North Africa Central Africa East Africa West Africa South Africa Other Southern African countries

Urban

Rural

96 94 77 71 100 50 66 80 87 65

73 70 32 23 99 5 31 28 83 13

Source: Author’s compilation from IEA (2017)

Unless strong policy actions are taken, the plight of rural dwellers may continue to worsen. As argued by Ravallion et al. (2007), even with the current pace of urbanization, the developing world will remain predominantly rural in most regions until 2020, while the majority of the poor are still projected to live in rural areas until 2040—a decade after the expiration of the SDGs. An important message in this respect is the urgent need to bring rural development and agricultural transformation into the 2030 Agenda for Sustainable Development if the target of ensuring every segment of society benefits from the full economic, social, and environmental aspects of development. Although the 2030 Agenda (UN 2015) mentions the need to ‘devote resources to developing rural areas and sustainable agriculture and fisheries…’ in paragraph 24 (page 6); ‘account for population trends in national, rural and urban development strategies and policies’ in paragraph 34 (page 8); ‘increase investment in rural infrastructure, agricultural research’ in paragraph 2a (page 13); and ‘support positive economic, social and environmental link between urban, peri-urban and rural areas’ in paragraph 11a (page 19), not having specific targets and indicators aimed at rural development makes an agricultural renaissance a good strategy to fill the gap in Africa, where about six in ten people live in rural areas. An agriculture-for-development approach will help shift policy and programmatic attention to rural areas and bring development solutions to their doorsteps: reversing the trend of marginalization of rural and hard-to-reach communities in African countries.

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Another reason agriculture is critical for Africa’s development is the reservoir of labour it employs—52.2 percent in Africa.8 Table 2.2 provides the share of active population engaged in agriculture by country. Agriculture accounted for 57.9 percent of total employment in Sub-­ Saharan Africa between 2011 and 2017 after declining from 66.9 percent between 1991 and 2000. However, the continent’s average tends to hide the peculiarities of individual countries. As a result of structural transformation taking place in countries such as South Africa, Mauritius, and Algeria, the share of the economically active population engaged in agriculture fell to less than 20 percent. In countries like Burundi, Central African Republic, Somalia, and Chad, the share of the population engaged in agriculture is more than 85 percent of the economically active population—far above the low-income average of 70 percent (see Table 2.2). In fact, in Mauritius and South Africa, the share of agriculture in total employment is less than 10.0 percent (Table  2.2). Nevertheless, due to the rural nature of most economies and the weight of agriculture in the overall GDP, agricultural employment dominates overall employment— greater than 70.0 percent—in Burundi, Mozambique, Madagascar, Guinea, Rwanda, Uganda, and Ethiopia. Sources of agricultural growth matter: enhanced productivity growth in food staples is pro-poor in the short run, while accelerated productivity growth in cash crops could also widen income gaps. Transforming agriculture will play a very strong role in enhancing the livelihoods and welfare of people living in agrarian economies, especially in Burundi, Chad, Somalia, and Central African Republic, where a considerable proportion of African farmers are engaged in the cultivation of food staples. In these countries, the sources of growth matter for poverty and income inequality reduction, since the growth emanating from the agricultural sector, through enhanced productivity in food staples, will be broad-based and pro-poor in Africa. Strategies to accelerate productivity of cash crops could widen inequality in the short run because they are mostly cultivated by privileged farmers with large holdings on agricultural land. Boosting cash crops productivity is a veritable way of promoting rural millionaires, which could worsen rural income inequality in the short run. The public expenditure bias towards cocoa since 1961 against staple crops may account for the rising trend of income inequality in Ghana over 8  This represents the average between 2011 and 2017. It was 54.2 percent of economically active population in 2015.

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Table 2.2  Share of economically active population in agriculture in African countries and other regions (%)

Algeria Angola Burundi Benin Burkina Faso Botswana Central African Republic Cote d’Ivoire Cameroon Congo, Dem. Rep. Congo, Rep. Comoros Cabo Verde Djibouti Egypt, Arab Rep. Eritrea Ethiopia Gabon Ghana Guinea The Gambia Guinea-Bissau Equatorial Guinea Kenya Liberia Libya Lesotho Morocco Madagascar Mali Mozambique Mauritania Mauritius Malawi Namibia Niger Nigeria Rwanda Sudan Senegal

1991–2000

2001–2010

2011–2017

22.42 39.54 92.26 52.19 87.95 18.18 85.56 51.04 68.29 86.23 40.23 56.87 78.40 33.88 32.51 83.91 88.77 43.22 53.23 70.93 33.64 85.45 77.55 45.89 56.49 8.89 61.49 41.94 78.17 48.70 83.93 80.22 13.87 84.35 40.61 76.21 58.62 89.00 60.53 46.07

19.72 39.20 91.74 46.83 77.40 23.42 86.37 50.58 65.29 80.95 39.98 55.70 72.61 35.31 30.24 83.49 80.80 43.49 46.67 70.43 32.96 84.51 57.99 41.41 50.54 8.76 26.71 43.11 78.26 47.50 79.13 78.21 9.77 84.64 26.41 77.58 49.27 84.61 53.88 44.81

13.59 49.83 91.36 42.29 37.09 26.88 85.78 49.53 63.14 80.74 38.09 55.22 68.54 31.39 26.86 84.05 71.66 41.87 42.68 68.34 29.01 83.82 55.85 38.09 44.29 14.35 11.46 38.31 72.65 62.47 74.47 76.30 7.54 84.90 26.10 76.35 36.19 71.04 52.86 53.63 (continued)

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Table 2.2 (continued)

Sierra Leone Somalia Sao Tome and Principe Swaziland Chad Togo Tunisia Tanzania Uganda South Africa Zambia Zimbabwe High income OECD members Europe & Central Asia Latin America & Caribbean East Asia & Pacific South Asia World Low & middle income Africa Sub-Saharan Africa Low income

1991–2000

2001–2010

2011–2017

65.98 86.88 35.72 70.36 86.63 43.12 24.80 77.82 73.17 17.12 70.46 60.12 5.71 8.31 15.14 23.48 45.88 61.32 41.18 49.66 59.07 66.94 77.48

65.47 86.64 27.25 68.90 86.78 41.29 20.17 74.64 72.11 8.35 71.12 70.64 3.92 5.68 11.67 18.79 34.67 54.53 34.66 41.45 55.63 62.73 74.34

60.32 86.21 19.95 68.48 86.46 39.24 14.89 68.74 69.74 5.12 55.32 66.84 3.20 4.91 9.35 14.74 23.73 45.73 27.99 33.21 52.18 57.91 70.01

Source: World Development Indicators [accessed June 2018] Note: OECD = Organisation for Economic Co-operation and Development

the years, for instance.9 However, if enhanced productivity in cash crops propels value chains to help absorb rural labour, this dynamic could help sustain and accelerate gains in the poverty-reducing power of growth in food staples. In this regard, when cash crops are used for industrialization, especially among small-scale enterprises, productivity in cash crops reduces both poverty and income inequality. Agricultural transformation that leads to fast-tracked productivity, growth in rural incomes, enhanced competitiveness, and better use of environmental resources is

9  Public expenditure support to cocoa increased by more than 200 percent between 2000 and 2012 compared to less than 50 percent to non-cocoa crops (see Diao et al. 2019 for more illumination on public support to agriculture in Ghana).

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A. ODUSOLA

the antidote for poverty and inequality and overall human development in Africa. The gender composition of agricultural employment is also revealing. The proportion of men employed in agriculture is higher in West Africa (e.g. Burkina Faso, Mali, Togo, Niger, Nigeria, Benin, and Ghana) and Southern Africa (Botswana, Namibia, Lesotho, and South Africa) compared to East and Central Africa. The proportion of women is predominantly higher in Burundi, Rwanda, Kenya, Congo Republic, and Cameroon (Fig. 2.3). This tends to suggest that agriculture can play a role in addressing gender inequality, poverty, and income inequality, especially in terms of distribution of agricultural assets (e.g. land) and inputs (e.g. fertilizers, improved seedlings, and access to finance). The link between agriculture and development is not straightforward, but a complex, multidimensional, mutually reinforcing relationship in the form of agriculture-development nexus. Agriculture plays a key role in any country’s development process; however, such roles have not been fully appreciated in many developing countries. The Arthur Lewis model of a linear relationship between agriculture and the industrial sector tends to underestimate the multidimensional role of agriculture in

Share of agriculture in women's employment

120

100

Burundi Mozambique

Rwanda

Guinea Uganda Zimbabwe Sierra Leone Madagascar Malawi Kenya Tanzania Burkina Faso Ethiopia Mali Cameroon Sudan

80

Morocco

60

Egypt

40

Gambia

Gabon Algeria

20

Congo, Rep.

Zambia Senegal Togo Liberia Ghana Nigeria Benin Niger

Namibia STP

Botswana

Maurius 0

0

Lesotho South Africa Seychelles 10 20

30

40

50

60

70

80

90

100

Share of agriculture in men's employment

Fig. 2.3  Share of agriculture in men’s and women’s employment, latest value (%). (Note: STP = Sao Tome and Principe. Source: Author’s computation from the World Development Indicators [accessed December 2016])

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the development process, going beyond releasing resources, such as labour and capital, to the industrial sector. Instead of merely reallocating resources to other sectors through accelerated productivity, income growth, and sustaining food supply, agriculture can promote backward and forward integration to other sectors of the economy, contribute to gender equality, expand the revenue and export base of a country, and provide environmental services fundamental to national and human development. As a leading sector of most economies in developing world, if effectively prioritized and managed, agriculture could facilitate industrial growth and structural economic transformation. Intersectoral and economy-­wide linkages create a mutually reinforcing role for agriculture to generate strong impacts on overall development, contributing, in particular, to value chains, poverty reduction, lower income disparities, and environmental services. In this regard, agriculture not only serves as the driver of economic transformation, but also enhances social services and environmental quality, especially if use of inputs and farming practices are sustainable. The economic-social-environmental continuum makes agriculture the centrepiece of sustainable development in Africa, especially in low-income and Least Developed Countries. When agriculture grows, citizens, economies, and societies benefit significantly. When a sector feeds an entire population, generates raw materials for other sectors of the economy, increases value chain activities, expands the volume of exports and taxes, and increases per capita incomes, it benefits households, enterprises, and societies. Its developmental impact goes beyond improving welfare of farmers and their households. Therefore, stagnation in agriculture is not only a threat to food security but also an impediment to livelihoods, human, and national development. Based on this reality, neglecting the agricultural sector10 has therefore hindered development progress in many countries, consequently accounting for why 75 percent of the world’s poverty is rural, sectoral income disparities have exploded, and intense food insecurity and environmental degradation became widespread (World Bank 2007; Byerlee et  al. 2009b). The 10  The neglect is manifested in inadequate infrastructure, insecure land tenure system, lack of mechanization, and poor financial allocation including ODA to the sector. For instance, the share of ODA to agriculture relative to total ODA fell from over 15.0 percent between 1980 and 1985 to about 5.0 percent in 2000–2008. Others include market failures in the form of poor access to credit, insurance, and markets for agriculture produce as well as lack of sustainable, affordable access to inputs such as improved seeds, tools, and fertilizers (Odusola 2017).

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literature is replete with evidence that the creation and nourishment of agricultural enterprise is a potent strategy for rural transformation, economic diversification, and human development.11 Investing in transforming and enhancing agricultural productivity is vital to improving the livelihoods and incomes of about 58 percent of the Sub-Saharan Africa’s economically active population. The ability of agricultural productivity to transform non-agriculture rural activities and shift labour out of agriculture provides an opportunity to generate more jobs outside the agricultural sector. The impact of such a transformation on rural poverty, especially where rural poverty is more than 70 percent of the population (e.g. Zimbabwe, Madagascar, Equatorial Guinea, Zambia, South Africa, Guinea Bissau, The Republic of the Congo, The Gambia, Eswatini, and Central African Republic), could be a game changer to generating employment, reducing poverty, and accelerating improvement in human development. These multiple roles agriculture plays are very relevant to Africa’s development. Agriculture is still the backbone of Africa’s rural economy and rural dwellers’ livelihoods. In 2015, 62.3 percent of Sub-Saharan Africans still lived in rural areas. This rate is more than 80.0 percent in countries like Burundi, Uganda, Malawi, Niger, South Sudan, and Ethiopia.12 The sector employs a considerable proportion of Africa’s economically active population (52.2 percent during 2011–2017), compared to 23.7 percent (East Asia and Pacific), 14.7 percent (Latin America and the Caribbean), 4.9 percent (OECD), and 27.9 percent (World) (Table 2.2). It employs as much as 74.4 percent in Eastern Africa and between 71.0 percent and 85.0 percent of women in Rwanda, Guinea, Madagascar, and Zimbabwe (Odusola 2017). Agriculture accounted for 22.7 percent of Africa’s total value added to GDP in 2015, accounting for more than 50.0 percent in Sierra Leone and Chad. In fact, out of the 15 countries where agriculture accounted for more than 30.0 percent of GDP in 2015, only one (Nepal) is not from Sub-Saharan Africa.13 In this regard, the size and dimensions of agricultural activities are bound to have substantial impacts not only on the 11  For more illumination on the linkage between agriculture and development, see World Bank (2007), Byerlee et al. (2009b), Juma (2011), and Odusola (2017). 12  See the World Development Indicators for more information http://data.worldbank. org/indicator/SP.RUR.TOTL.ZS. 13  Other countries are Sierra Leone, Chad, Burundi, Central African Republic, Ethiopia, Mali, Togo, Sudan, Niger, Burkina Faso, Comoros, Kenya, Rwanda, and Tanzania.

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aggregate economy, but also on the livelihoods and living conditions of people, especially rural dwellers, the poor, and hard-to-reach communities. Agriculture not only constitutes the bulk of exports in Africa but is also a major source of foreign exchange earnings for the continent. Both food and non-food crops, as well as trees and animal products, play key roles in driving exports. Sixteen of the 33 countries, globally, whose annual average of agricultural raw materials as a share of merchandise exports (between 2005 and 2015) is more than 5 percent, are from Africa. Figure 2.4 provides some examples of countries that rely on agriculture as a major source of exports and foreign exchange earnings. More than 50.0 percent of total merchandise exports in Mali and Burkina Faso are agricultural raw materials. Global poverty remains a largely rural problem with more than three-­ fourths of the world’s extremely poor living in rural areas.14 AfDB (2016) concludes that food insecurity and rural poverty are linked, especially in North Africa. The lack of a modernized African agriculture—currently characterized by subsistence, rudimentary tools and techniques, rainfed cultivation, and low productivity farming—perhaps explains the endemic nature and high incidence of poverty on the continent. Rural poverty is 60.0

53.1 53.5

50.0

42.4 43.7

40.0 30.0 14.2 10.8 12.0 7.4 7.4 7.7 8.4 8.4 9.3 6.1 5.4 10.0

20.0

19.1

0.0

Fig. 2.4  Share of agriculture raw materials in merchandise exports, 2005–2015 14   This is main conclusion of Dercon (2009), Byerlee et  al. (2009b), and World Bank (2013).

90 80 70 60 50 40 30 20 10 0

A. ODUSOLA

Algeria(2011) Morocco(2008) Uganda(2012) Botswana (2009) Ethiopia(2010) Egypt(2010) Tanzania(2011) Seychelles(2006) Namibia(2009) Ghana(2012) Benin (2011) Cabo Verde(2007) Gabon(2005) Burkina Faso (2014) Comoros(2004) Rwanda(2010) Kenya(2005) Mali(2009) Chad(2011) Nigeria(2009) Niger(2011) South Sudan(2009) Malawi(2010) Cote d'Ivoire (2015) Cameroon(2014) Mozambique(2008) Senegal(2009) Sudan(2009) Angola (2008) Mauritania(2008) Sao Tome and Principe(2009) Lesotho(2010) Guinea(2012) Congo, Dem. Rep.(2012) Sierra Leone(2011) Liberia(2007) Togo(2015) Burundi (2014) Central African Republic (2008) Swaziland(2009) Gambia(2010) Congo, Rep.(2011) Guinea-Bissau(2010) South Africa(2010) Zambia(2010) Equatorial Guinea(2006) Madagascar(2010) Zimbabwe(2011)

32 

Fig. 2.5  Rural poverty in Africa. (Source: Author’s computation from the World Development Indicators [accessed December 2016])

more than 60.0 percent of the population in 17 African countries and is significantly higher in Zimbabwe and Madagascar, where it characterizes more than 80 percent of the population—ranging between 50 and 60 percent in 14 countries (Fig. 2.5). Accelerating agricultural productivity not only increases household incomes, but also reduces poverty in rural areas and income disparity between rural and urban dwellers. The rural poverty phenomenon is structural, particularly given the high fertility rate in rural Africa and governments’ urban-development policy bias. Unless an agricultural renaissance is adequately resourced and pragmatically pursued, it may take far too long to adequately address rural poverty. This evidence tends to confirm the conclusions from Ravallion et al. (2007) that many of those living in rural areas of developing regions are poor—accounting for between 70 and 75 percent of the rural population. The fact that the employment share is greater than the output or value added (sectoral duality) is a clear indication that output per worker is lower than in non-agriculture and that the differences in output per worker are large, ranging from 6-fold to 29-fold differences in countries like Burkina Faso, Democratic Republic of the Congo, Rwanda, Burundi, Niger, Senegal, Uganda, Zambia, Malawi, Zimbabwe, and Madagascar (Gollin 2010). Bridging the productivity gap in agriculture could be an important antidote to poverty and inequality in agrarian economies and rural communities and an important strategy for accelerating food security in Africa.

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Several factors are rekindling interest to use agriculture to drive economic development in Africa. The first is the rising recognition of the imperative of agricultural transformation in economic development, especially in generating decent jobs, creating wealth, promoting economic diversification, generating foreign exchange earnings, and driving inclusive economic growth. Using agriculture to drive growth in marginalized regions and communities and bringing excluded people into the growth and development processes helps to reduce poverty and exclusion. The second is using agriculture to serve as the linchpin of economic diversification and industrialization. With enhanced agricultural productivity, the impetus to promote agricultural value chains would promote backward and forward linkages in the economy. The third is the sharp food prices that started in 2008 and their persistence even during period of primary commodity busts, which challenged the dire need to meet Goal 2 (Eliminate Hunger) and the associated hunger targets of the Sustainable Development Goals as well as the increasing need to feed the rapidly growing urban population, which is also changing the dietary composition of the population. For instance, the Feed Africa initiative of the African Development Bank’s High Fives Strategy is a renascent call to reinvigorate and boost agriculture in Africa—not as a way of life but as a business enterprise. And finally, the successful implementation of strategies that focus on small farm holders in commercialization of agriculture in South Korea, China (mainland and Taiwan), and India in reducing poverty, and to some extent inequality, makes the case more appealing for Africa to use agriculture to drive inclusive growth and development, particularly among LDCs. The argument of Byerlee et al. (2009a) is more apposite in using agriculture to drive development as opposed to just driving industrialization. ‘[G]iven the sheer size of the agricultural sector with an estimated 2.5 billion persons dependent on this activity, with three quarters of the poor living in rural areas, and with agriculture as the largest user of natural resources, it is increasingly recognized that realization of the global development agenda will not be possible without explicitly focusing on the role of agriculture for development rather than agriculture in industrialization’ (Ibid.: 17). China and South Korea are good examples of emerging countries that used agriculture as a strategy for national and rural development—an instrument for social stability and national security. Prior to the mid-­1980s, for instance, China used agriculture to feed and develop its industry, and

34 

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from the late 1980s, it became a political agenda through which agriculture is used as a strategy for rural development. The government saw agricultural transformation as the panacea to the increasing political unrest associated with rising inequalities in rural areas. This approach led to the ‘New Rural Campaign’ that promoted rural infrastructure, development of farmers’ cooperatives, as well as markets and institutional reforms that provided incentives to farmers. This strategic approach to agriculture and rural development paid off. In 2010, about 200 million small-scale farmers (15.4 percent of the population), with an average 0.6 hectares, were feeding 1.3 billion people in China. This agriculture-driven development strategy accounted considerably for the accelerated fall in national poverty headcount ($1.9/day) from 88.3 percent in 1981 to 66.6 percent in 1990 and to 1.4 percent in 2014—a phenomenon that helped the world, on average, to achieve the poverty target of the Millennium Development Goals (MDGs) by 2015. IPRCC (2011) has linked China’s rapid reduction in poverty to development policies that were targeted at the agricultural sector and rural development. In fact, it states that the impact of agriculture in poverty reduction is three times higher than other sectors and helped to spur rural markets that address rural-urban migration.

2.3   Why Invest in Agriculture for Africa? 2.3.1   Can Africa Avoid the Malthusian Trap? In 1798, Reverend Thomas Robert Malthus, in his book, An Essay on the Principle of Population, theorized that the power of population is greater than the power of the earth, that is, population grows geometrically while food production grows arithmetically. And that when population growth outpaces food production, the results are hunger and malnutrition, and eventually famine. This is called the Malthusian trap or catastrophe. The capacity of humanity to deplete the earth’s landmass is not only limited to using land for agriculture, industrialization, or dwelling but could also be linked to the indirect impact of a population explosion (e.g. deforestation, soil degradation, and pollution). The cumulative direct and indirect impacts of humanity on the earth’s landmass could be more catastrophic than predicted by Malthus. Through the power of green revolution and institutional and technological innovations, populous countries like China and India avoided the Malthusian trap but could not manage the environmental consequences of chemical-induced agricultural

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productivity. As of 2013, China was rated the worst carbon emitter, while India was rated the fourth, after the United States of America and the European Union.15 This reality extends the Malthusian trap beyond using a green revolution to ensure that food production surpasses population growth but to do so in a sustainable and environmentally sensitive manner—a ‘sustainable escape’ from the Malthusian trap. How does Africa fare on escaping such a Malthusian trap? In the 1980s, in Sub-Saharan Africa, population growth surpassed the growth in agriculture, but this trend has reversed since the 1990s. It was only between 2000 and 2009 that the growth rate of agriculture (5.54 percent) nearly doubled that of the population (2.74 percent) but declined thereafter. Africa’s population is expected to almost quadruple, from about 1.19 billion in 2015 to 4.39 billion in 2100. Africa will thus account for 39.12 percent of the world’s population by 2100, against 16.14 percent in 2015 (Odusola et al. 2017). Avoiding the Malthusian trap in Africa calls for a concerted effort to revolutionize agriculture by spurring land and agricultural productivity that offers affordable, safe, and quality foods to a majority of the population in sustainable and environmentally sensitive approaches. Looking at the Malthusian postulate from a disciplinary silo misses the point. An agricultural system that looks at the long-term water-soil-food system—smallholder development interactions, including feedbacks and trade-offs between short- and long-term goals—remains critical. This is about long-term thinking and strategies that help to address fundamental solutions, including resilience in agricultural systems. In this regard, a clear understanding of the endogenous dynamics of agricultural ecosystems that identify and minimize the often delayed and unintended impacts arising from feedbacks between management interventions and agricultural and/or natural systems16 is key. This helps to address the twenty-first century resource challenges. As is commonly known, the continental average hides some regional and country peculiarities. As indicated in Fig. 2.6, North Africa is the only region that had managed to avoid the Malthusian trap—only in terms of 15  This translates to 10,330 metric tonnes of CO2: the United States (5300 mt), European Union (3740 mt), and India (2070 mt). http://edgar.jrc.ec.europa.eu/news_docs/ jrc-2014-trends-in-global-co2-emissions-2014-report-93171.pdf. 16  See Turner et al. (2016) for more illumination of agricultural system dynamics and its implications on results.

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5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Population growth (2000-15)

Agriculture growth (2000-15)

Fig. 2.6  Population and agriculture growths in Africa by regions, 2000–2015. (Source: Author’s compilation from WDI 2018)

agricultural productivity—thanks to high use of improved seedlings, fertilizers, and irrigation. However, in the context of sustainability, no one is sure of the long-term dynamic impact of this achievement. This notwithstanding, North Africa’s performance is followed by West Africa, though still very far from avoiding the short-run Malthusian catastrophe. In East and Central Africa, population growth is higher than food production growth and almost at par in Southern Africa. The need to manage population growth is key to accelerating agricultural productivity. As shown in Fig. 2.7, all countries (except Zimbabwe) with population growth of less than 1.5 percent between 2000 and 2015 recorded accelerated growth in agriculture (Morocco and Algeria), while all countries whose population grew by 3.0 percent or more are suffering from a Malthusian trap (e.g. Niger, Chad, Uganda, and Burundi). Out of the 16 countries whose population growth is between 2.5 percent and 3.0 percent, only 4 managed to accelerate food production at a rate that is twice or more of its population growth during the period (Nigeria, Ethiopia, Rwanda, and Republic of the Congo). A proactive population policy in the context of agricultural rejuvenation, as is the case in Ethiopia, seems to be yielding dividends—at least in the short-term. African demographic structures have implications for food demand and production. The continent is the most youthful globally, with a median

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10.00 Nigeria

A griculture growth rate (2000 2015)

8.00

6.00

4.00

2.00

0.00 0.00 -2.00

-4.00

Algeria

Ethiopia

Niger Congo Sierra Leone Rwanda Morocco Mozambi… Mali Equatorial Guinea Mauritius Guinea Cameroon Tanzania Ghana Egypt Faso Comoros Burkina Cabo Verde Benin Djibouti Gabon Kenya Senegal STP Sudan Mauritania Uganda Tunisia Côte d'Ivoire Guinea-BissauTogo Chad Malawi Swaziland Gambia Botswana Madagascar Lesotho South Africa Congo Dem Rep. 0.50

Seychelles 1.00

Namibia 1.50 2.00 Central African Republic Zimbabwe

Eritrea 2.50

3.00

Liberia Burundi 3.50

4.00

4.50

Zambia

Population growth rate (2000-2015)

Fig. 2.7  Africa and the Malthusian trap in the twenty-first century. (Source: Author’s compilation from WDI 2018)

age of 19.4 years compared to 29.6 globally, 29.2 for Latin America and the Caribbean (LAC), and 30.2 for Asia. Moreover, over 60.0 percent of the continent’s population is below the age of 25  years compared to around 42.0 percent globally. In this regard, meeting the food needs of this young population is key to achieving the SDGs. In addition, as income grows along the path of this demographic trend, demand for traditional crops may shift towards high-quality products like fruits and vegetables. Agricultural transformation should also take this into consideration—factoring youth and dietary changes into agricultural plans and strategies. The preponderance of hunger and malnutrition in Africa makes a good case for agriculture as an SDG multiplier and an important driver of development on the continent. Food security is a multifaceted and multidimensional concept that is often influenced by culture, production systems, environment, and geographic location. Based on the 2017 global food security index (measured by affordability, availability, quality, and safety), only six African countries scored between 50 and 64 percent of the maximum (100 percent) food security index—South Africa, Botswana, Tunisia, Egypt, Morocco, and

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Algeria—from descending order. Twenty African countries scored less than 40 percent of the maximum food security index,17 while others scored between 40 and 50 percent. The recurring droughts in the Sahel and the Horn of Africa and the El Niño in the Eastern and Southern Africa are impeding the achievement of food security on the continent, a phenomenon that calls for climate-resilient approaches to agriculture. Progress on the proportion of the population below minimum levels of dietary energy consumption between 1990 and 2013 is lowest in Sub-­ Saharan Africa—falling from 33 percent to 25 percent during the period compared to the world, which fell from 19 percent to 12 percent. The North African countries succeeded in keeping it below 5 percent, while it declined from 15 percent to 8 percent in Latin America and the Caribbean (ECA et al. 2015). Presently, the world views food insecurity from a peripheral lens as opposed to seeing it from a complex, problem-solving food ecosystem lens. Malnutrition, the manifestation of food insecurity, is a major risk factor for burden of disease and a serious threat to public health and human development. Apart from being responsible for high morbidity and mortality rates and irreversible stunted growth in children, as well as compromising immune systems and creating long-lasting physiologic effects, its impairments also include susceptibility to fat accumulation, insulin resistance in adulthood, hypertension, dyslipidemia, and a reduced capacity for manual work. Poor mental development and school achievement as well as behavioural abnormalities, which sometimes could be epigenetic, have also been associated with malnutrition in children.18 Its impact on health and educational attainment is a major determinant of labour productivity and wage earning capability. The fact that about 70 percent of the SDGs targets contain nutrition-­ related indicators and that improved nutrition is central to achieving the health, education, employment, female empowerment, and poverty targets of the SDGs underpins the imperative of prioritizing agricultural development for the realization of the SDGs and laying the foundation for inclusive development in Africa. Wasting and stunting are important 17  These countries are—in ascending order—Burundi, Democratic Republic of the Congo, Madagascar, Chad, Sierra Leone, Niger, Malawi, Zambia, Burkina Faso, Angola, Ethiopia, Mozambique, Guinea, Sudan, Tanzania, Togo, Nigeria, Mali, Benin, and Rwanda. 18  Viewing food security from a complex lens perspective, as opposed to the traditional silo approach, is well captured in May (2017) and IFPRI (2020).

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Percentage

measures of malnutrition.19 Africa is close to the global average on prevalence of wasting, while it is way off the mark on stunting. Although Africa’s wasting rate of 7.4 percent is relatively lower than the global average of 7.7 percent, it is far from the Latin America and the Caribbean of 1.3 percent—based on the 2017 index. A quarter of African children suffer from stunting compared to about one tenth in Latin America and the Caribbean and a global average of about 23 percent. The regional performance across the five African sub-regions is as shown in Fig. 2.8. African countries must step up efforts to achieve the 2030 target of eliminating malnutrition without compromising the long-term goal of sustainable development. Malnutrition is not limited to hunger and undernutrition but also includes overnutrition such as obesity. While hunger is a form of deprivation and a result of vulnerability, overweight could be the outcome of dietary behaviours that could sometimes be linked to affluence. As argued by May (2017), the number of overweighed people double those of 40 35 30 25 20 15 10 5 0

Wasting

6.5

7.3

7.9

Southe rn 5.5

Stunting

36.7

32.5

17.6

28.1

East

Central

North

Wasting

West

Africa

Asia

LAC

8.5

31.4

World

7.4

9.9

1.3

7.7

25

23.9

11

22.9

Stunting

Fig. 2.8  Wasting and stunting prevalence by regions, 2016. (Note: LAC = Latin America and the Caribbean. Source: Compiled and computed from https://data. unicef.org/resources/joint-­child-­malnutrition-­estimates-­2017-­edition/) 19  A child is considered wasting if he/she is too thin for their height and considered stunting if they are too short for their age. See https://data.unicef.org/resources/ joint-child-malnutrition-estimates-2017-edition/.

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undernourished (calorie deficient) people globally, and it is becoming a worrying development among under-five children.20 Overweight and obesity were estimated to cause 3.4 million deaths in 2010 alone, translating to 3.9 percent of years of life lost and 3.8 percent of disability-adjusted life-years globally (Ng et al. 2014). In fact, some scholars (e.g. Ng et al. (2014) and May (2017)) have argued that nutrition transition is driving epidemiological transition. The drift from undernutrition to overnutrition is also shifting epidemiological issues from common infections and maternal mortality towards non-communicable diseases like cancer, diabetes, heart disease, and mental illness.21 Promoting a public good approach to food security is key to addressing under- and overnutrition. This calls for a problem-solving solution that takes into consideration the competing interests of actors in the food ecosystem including farmers, consumers, processors, distributors, and governments. Although food security is a public good that is privately produced and purchased, it requires government to play a role to ensure non-rivalry and non-excludability through effective governance and coordination of the food ecosystem in order to ensure food safety, social protection, and price stability. This requires governments providing the needed public infrastructure to support food availability, access, safety, and utilization while addressing the power asymmetry between farmers and processors as well as distributors. This is about examining the political economy of agriculture and agribusiness in Africa. Addressing the bourgeoning food imports that are draining scarce foreign exchange reserves also makes agriculture an imperative for achieving the SDGs. With Africa’s agricultural advantages and potential, the continent is expected to be a net exporter of foods. However, the lack of a green revolution in Africa is reflected in its food share in the value of total merchandise imports from the rest of the world. Food imports as a share of total merchandise imports is highest in Sub-Saharan Africa (13 percent) followed by the Middle East and North Africa (12.8 percent) compared to the world average of 7.8 percent (Fig. 2.9). East Asia, South Asia, and Latin America performed better than the world average given their advancement in a green revolution and institutional and technical innovations in the agricultural sector. Given current development contexts like high population growth, growing incomes, accelerated urbanization, 20  The number of under-nourished adults was estimated at 795  million compared to 2.0 billion adults that were overweighed in the first decade of 2000 (May 2017). 21  Ng et  al. (2014) provide cross-country, cross-regional, and global perspectives of this issue.

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Fig. 2.9  Food as share of merchandise imports (%), 2010–2015

6.2

6.2

41

13.1

7.5 12.8 7.8 7.8

7.8

Sub-Saharan Africa

Middle East & North Africa

World

OECD members

High income

Latin America & Caribbean

East Asia & Pacific

South Asia (IDA & IBRD)

changing diets from traditional to higher-value fresh and processed foods, and rising trends of globalization, Africa’s demand for food is expected to be more than double by 2050 (McMillan et al. 2017). Unless an African green revolution and a structural economic transformation are achieved, addressing the rising trend of food imports could pose serious development challenges for the continent. Regional averages hide peculiarities of individual countries. Based on available data, many of the world’s countries with food as a higher share of merchandise imports are from Africa. For instance, on average, between 2010 and 2015 (the last 6 years of the MDGs’ era), 15 of the 30 countries with food share of total merchandise imports of 20 percent or more were from Africa. Topping the list are Benin, Comoros, The Gambia, São Tomé and Príncipe, and Cabo Verde. These are countries with low populations, ranging from 0.2  million to 2.0  million (except Benin, which is about 10 million) with a small landmass. In fact, in countries like Cabo Verde and São Tomé and Príncipe, less than 13 percent of their landmass is arable. This reality underpins the importance of regional collaboration and integration on agricultural transformation to achieve synergies and economies of scale. Only South Africa and Zambia performed better than the world average on this indicator (see Fig. 2.9 and Table 2.3). Food imports outpaced ODA in Africa. Evidence from 43 African countries, where consistent data is available, reveals a frightening result. These 43 African countries, on average between 2010 and 2016, are spending a whopping sum of $78.1  billion on food importation (Table 2.3), surpassing all ODA net disbursement to Africa, which stood

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Table 2.3  Value of food imports ($ billion) and their share of total imports and reserves, average 2010–2016 Share of food in merchandise imports (average 2010–2015) Algeria Angola Benin Botswana Burkina Faso Burundi Cabo Verde Cameroon CAR Comoros Congo, Rep. Cote d’Ivoire Egypt, Arab Rep. Ethiopia The Gambia Ghana Guinea Kenya Lesotho Libya Madagascar Malawi Mali Mauritania Mauritius Morocco Mozambique Namibia Niger Nigeria Rwanda Sao Tome and Principe Senegal

Total merchandise imports ($ billion) (average 2010–2016)

Value of food imports, $ billion (average 2010–2016)

Foreign reserves ($ billion, excluding gold)

Food import as % of reverses (excluding gold)

19.571 17.384 39.650 9.901 13.918 18.027 29.021 20.287 27.752 38.924 8.707 19.273 20.568

50.019 21.251 2.560 7.252 3.111 0.704 0.746 6.270 0.326 0.254 5.391 9.575 61.908

9.789 3.694 1.015 0.718 0.433 0.127 0.216 1.272 0.090 0.099 0.469 1.845 12.733

167.162 27.199

5.856 13.582

7.768

9.244

0.258 0.450 3.232 0.200 0.171 4.106

49.242 48.108 39.356 45.189 57.834 11.432

17.128

74.340

11.141 36.074 15.335 23.486 11.384 21.611 12.132 15.708 11.137 13.015 14.434 21.575 11.779 12.000 13.099 23.550 19.675 17.683 31.104

12.955 0.361 14.791 2.049 15.446 2.227 16.753 2.960 2.474 3.619 2.446 5.049 42.232 7.503 7.152 2.045 50.605 2.173 0.140

1.443 0.130 2.268 0.481 1.758 0.481 2.033 0.465 0.276 0.471 0.353 1.089 4.975 0.900 0.937 0.482 9.957 0.384 0.044

2.874 0.176 5.297 0.225 6.279 0.996 95.244 0.968 0.404

50.225 74.155 42.822 214.322 28.003 48.312 2.134 48.031 68.247

0.708 3.325 20.452 2.569 1.634

49.854 32.757 24.323 35.043 57.332

36.926 0.997 0.059

26.964 38.530 73.420

23.036

5.893

1.358 (continued)

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Table 2.3 (continued)

Seychelles Sierra Leone South Africa Sudan Tanzania Togo Tunisia Uganda Zambia Zimbabwe

Share of food in merchandise imports (average 2010–2015)

Total merchandise imports ($ billion) (average 2010–2016)

21.488 15.842 6.595 21.926 8.609 14.155 10.208 12.303 5.034 16.389

1.051 1.504 113.279 9.353 10.626 2.316 22.781 5.551 8.241 4.114

Total/average

Value of food imports, $ billion (average 2010–2016) 0.226 0.238 7.471 2.051 0.915 0.328 2.326 0.683 0.415 0.674 78.113

Foreign reserves ($ billion, excluding gold)

Food import as % of reverses (excluding gold)

0.399 0.505 42.583 0.328 4.137

56.612 47.178 17.545 624.812 22.114

7.573 3.009 2.649 0.518

30.710 22.698 15.661 130.097 62.113

Source: Author’s computation from WDI [accessed December 2018] Note: CAR = Central African Republic

at $51.83 billion in 2017.22 Unfortunately, the big economies with strong capacities to revolutionize their agriculture and produce most of their food domestically are not proving to be good examples. The four largest economies in Africa account for 51.1 percent of resources committed to food importation: Egypt ($12.7  billion), Nigeria ($9.9  billion), Algeria ($9.7  billion), and South Africa ($7.5  billion). A genuine revolution of agriculture in these four largest economies can change the landscape of agriculture and food security on the continent at large. As a share of reserves (excluding gold), this is huge for all the countries except Algeria— translating to 74.3 percent, 26.9 percent, and 17.5 percent for Egypt, Nigeria, and South Africa, respectively.23 Due to underinvestment in—and 22  See https://www.oecd.org/dac/financing-sustainable-development/developmentfinance-data/Africa-Development-Aid-at-a-Glance-2019.pdf. 23  This is inexplicable in a country like Nigeria where arable land is 7.3 percent of the total land area in 2018 compared to 10.3 percent in South Africa, 3.1 percent in Algeria, and 2.7 percent in Egypt.

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undercapitalization of—the agricultural sector, countries like Guinea and Sudan spend between two and six times their total reserves on food importation—a development that is incomprehensible and unsustainable—particularly in a country like Guinea with a very large proportion of unused arable land. On average, Africa spends an equivalent of about 62 percent of its reserves (excluding gold) on food importation. As shown in Table  2.3, most African countries are spending scarce resources that could be used to transform agriculture and promote structural economic transformation on importation of foods that could be produced locally. This unsustainable venture is crowding out spending on agricultural transformation and the financing of the various aspects of the SDGs that could create multiplier effects on development. Spending an equivalent of about 62 percent of reserves on food importation in a continent that has the potential for food self-sufficiency constitutes economic recklessness that beats all sense of managerial and leadership responsibility. The foregoing demonstrates that agriculture is a potential source of financing for the SDGs: if the current resources spent on food importation are saved and invested into achieving the SDGs—as well as transforming the agricultural sector. This gigantic sum of over $78 billion could be used to accelerate progress to free Africa from binding constraints on development, including infrastructure such as irrigation, research and development, farming equipment, and roads. Taking advantage of potential productivity gains through a green revolution shows it is possible to feed Africa’s 1.2 billion people without depleting its scarce resources to import food. Achieving this goal will, however, depend on how well Africa is able to address impediments facing African farmers, especially the small farm holders, while addressing trade-offs between short- and long-term goals towards achieving agricultural system resiliency.

2.4   Agriculture and the SDGs Agriculture is a powerful tool to promote economic, social, and environmental justice and shared prosperity, making investments in agriculture, and in its sectoral transformation, imperative to achieving sustainable development and the SDGs, themselves. The choice of strategies to transform the agricultural sector is fundamental to realizing the SDGs in Africa. For instance, promoting agricultural productivity at large through investments in small-scale farmers will help reverse the trend of marginalization,

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where the powerful farmers feed on the powerless ones; the rich farmers profit from the sweat of the poor ones, who receive very little in return from their sweat. These growth and development patterns contribute considerably to the widening level of inequality in most African countries. Anchoring agricultural transformation on small farm holders helps accelerate reductions in poverty and inequality—as was achieved in South Korea in the 1970s and 1980s and China in the 1990s and 2000s. As indicated in Fig. 2.10, using agriculture to achieve the SDGs requires adroit capacity to manage synergies and trade-offs simultaneously. The choice of strategies matters in this respect. For instance, focusing too much on commercial agriculture will lead to sub-optimal development outcomes—an approach that helps achieve the economic dimension of the SDGs at the expense of the social and environmental pillars of sustainable development. Using agriculture to transform at least 60 percent of African smallholder farmers to market-based farmers by 2030 will not only expand agricultural yields and income of the 40 percentiles, but also produce positive impacts on reducing poverty and inequality, expanding dignified livelihoods, and on decent employment. Implementing environment-saving and climate-resistant technologies will help preserve

Fig. 2.10  Economic, social, and environmental impact of agriculture

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environmental services (e.g. biodiversity, water, and renewable energy) that could develop a new set of specializations that reinforce synergies in the economic-social-environment nexus. A system dynamics model, anchored on smallholder farmers, underpinned by economic, environmental, and social pillars of the SDGs, is key to understanding and achieving fundamental development solutions, including agricultural productivity and its sustainability. Moreover, agriculture is a potent instrument to help socialize the SDGs and a tool to accelerate people-prosperity-planet linkages. Extension workers24 have served as agents of advocacy on education and basic hygiene to rural populations. If farmers, through using agricultural extension services workers, appreciate the role of sustainable agriculture in shifting the frontiers of economic, social, and environmental development, the momentum for ensuring the wellbeing of the people, economy, and the planet can be guaranteed. Asia provides some illuminating examples where extension service workers helped educate farmers about the value of education, basic health services, and hygiene. In Africa, advocating for a sustainable green revolution would help educate farmers that enhanced productivity is not only about empowering them and their relatives, but also about helping to promote shared prosperity through development of agribusinesses, rural non-agricultural activities, as well as providing environmental services that could boost quality of life of all including access to quality food and nutrition. Agriculture is, therefore, a valuable tool to develop the people-prosperity-planet nexus in Africa. As indicated in Fig.  2.11, agriculture and the SDGs have symbiotic relationships that, if well managed, can generate very strong development outcomes. Agriculture has direct and indirect impacts on the SDGs, while the feedback relationships from each of the SDGs to the agriculture sector are mutually reinforcing. Achieving a mutually reinforcing relationship between agriculture and the SDGs is not an easy task. It requires long-term, strategic thinking that strikes a balance between short-term and long-term synergies and trade-­ offs that avoid the snags of quick fixes. A holistic view of the agricultural 24  This terminology means different things in different context. As defined by FAO, it refers to professionals that offer advice and information to help farmers solve agricultural problems they are facing. The aim of any extension service is to increase the efficiency of the family farm, increase production, and generally increase farmers’ standard of living. http:// www.fao.org/docrep/t0060e/T0060E03.htm.

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Fig. 2.11  Agriculture for the Sustainable Development Goals (SDGs)

ecosystem, reinforced by system dynamics models, focused on addressing complex development issues with interacting and overlapping feedbacks, is critical to fostering linkages in the context of the bigger picture of agricultural system resilience (Turner et al. 2016). Annex A provides detailed feedback on effects of the agriculture-SDG relationship. This mutually reinforcing relationship places agriculture as a strategically important development imperative and an unparalleled strategy for achieving the SDGs in Africa. Some examples regarding poverty, food security, energy, and governance provide some illumination to this reality. This section shows that agriculture is a potent strategy to structurally transform African economies; to feed, industrialize, and integrate

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Africa; and to improve the wellbeing of Africans. See Annex A for the fishbone-effect between agriculture and all the SDGs. Genuine agricultural transformation can help diversify production, broaden exports, and expand the service sectors, thereby promoting growth that is rich in jobs and in welfare. The neglect of agriculture over the past four decades or more explains why poverty is very high in Africa, particularly in rural areas. The link between agriculture and development outcomes, like poverty and inequality, is through improved productivity (labour and land). For instance, against the Comprehensive Africa Agriculture Development Programme (CAADP) target of agriculture spending as a share of total expenditure of 10 percent, Sub-Saharan Africa (SSA) managed to reach 3.1 percent between 2000 and 2010, compared to 5.5 percent in Asia. Consequently, agricultural output per hectare of land was $219 for SSA compared to $773 for Asia during the same period (Benin et al. 2016). This low agricultural productivity and income accounts for the preponderance of poverty incidence among farmers—the dominant occupation in rural areas, making them vulnerable to exogenous economic shocks like low terms of trade. Enhanced labour productivity could help increase rural incomes and accelerate poverty reduction. The mutually reinforcing role of the reduction or elimination of poverty on farmers’ livelihoods and productivity—through access to factors and product markets (including land and capital), which enhances their capacity to reduce knowledge gaps, to graduate from subsistence agriculture, and to adapt to climate change and technology—could also be transformative. Agricultural transformation is the panacea to challenges of food security and nutrition. Sustainable agricultural growth, high productivity, and agriculture that produces in abundance (and in good quality) reduce hunger and increase nutrition and food security. Heavy investments in agriculture, including irrigation, fertilizers, financial supports, and post-harvest management, explain why food production more than doubled population growth in North Africa. This accounts for why four of the six African countries with the highest food security index scores are from North Africa.25 Incidentally, these are countries with the most transformed agricultural systems on the continent. For instance, Egypt is rated best on food availability, Tunisia on quality and safety of food, and South Africa on affordability. On the other hand, the absence of hunger and malnutrition 25  These are South Africa, Botswana, Tunisia, Egypt, Morocco, and Algeria. For more information on the 2017 Food Security Index, see http://foodsecurityindex.eiu.com/Index.

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in these countries enhances educational outcomes, health and productivity, and crowd-in investments (e.g. government budgets, FDI, ODA, and other aid-related sources), foreign exchange earnings into agricultural infrastructure (e.g. irrigation) and R&D, and climate-resilient agriculture and promotion of value chains development. Agriculture and energy have interconnected and mutually beneficial relationships. Energy access is key to meeting the rising global food demand, while an efficiently managed agriculture sector could also add to the energy stock—especially through providing solid biomass. For instance, at the downstream level, the agrifood chain cannot blossom without an uninterrupted energy supply (e.g. for production, processing, and transport). And at the upstream level, manufacturing fertilizers, agrochemicals, and machinery is impossible without adequate energy. As argued by FAO (2011), the agrifood sector is responsible for about 33 percent of the world’s total final energy demand. In advanced countries, a high proportion of energy is used at the farmgate and for food processing and distribution (70 percent), while a smaller share is used in low-income countries at these stages, but a greater share is for retaining and cooking (more than 45 percent) (Ibid). On the other hand, a significant amount of energy is lost through food losses26 and unsustainable management of solid waste, such as animal dung. Preventing food losses and managing solid waste add to energy stock, while using renewable energy makes the rising energy demand and intensity of agriculture beneficial, or neutral, to the environment. Dubois et al. (2017) provide some illumination on electricity generated through rice husks in India, cow dung in Pakistan, coffee waste in Honduras, bamboo dust in Ethiopia, and Peru’s solar-powered drip irrigation system. Agriculture presents the easiest pathway to industrialization and economic diversification, laying the foundation for inclusive and sustained economic transformation. First, by transforming agriculture from subsistent into a business enterprise, it unleashes energy and entrepreneurship in small-scale farmers, creating resilient, market-oriented productive engagement. This helps transform many informal activities into those that are formal and tax-paying. Second, through its backward and forward integration, modernized and sustainable agriculture helps expand non-­agriculture rural economies and promotes industrialization either through agroprocessing or expansion of agricultural inputs, such as fertilizers and improved  Amounting to about $4.0 billion annually (see Dubois et al. 2017).

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seedlings, or through enhancing productivity to help expand the services sector through packaging, distribution, and retailing of agricultural products and associated logistics and financial services. A modernized agriculture sector can help reverse premature structural transformation by developing agro-based manufacturing and services. As articulated by ACET (2017), agriculture can be used to propel Africa’s relative labour-­ abundance for labour-intensive and export-oriented manufacturing, while leveraging the continent’s comparative advantage in agriculture to promote globally competitive agro-based manufacturing. The presence of tropical and sub-tropical climates, which allows for long and multiple growing seasons, offers opportunities for supplying elongated inputs to power agro-based industrialization. Moreover, with expanding regional and sub-regional markets (including trade corridors and the newly adopted African Continental Free Trade Area—ACFTA), agriculture presents itself as a veritable instrument of regional integration. Agriculture can be used as a strategy to create pathways for peace and stability. The SDGs identify peace and stability as the bedrock of achieving sustainable development. An unfolding global reality, including in Africa, is the link between food prices and social unrest. This link has been established by several authors (e.g. Bellemare 2015; and Arezki and Bruckner 2011). For instance, Bellemare (2015) established that, between 1990 and 2011, increases in food prices have led to increases in social unrest, while Arezki and Bruckner (2011) found that, in low-income countries, increases in international food prices led to a significant deterioration of democratic institutions and a significant increase in the incidence of anti-government demonstrations, riots, and civil conflicts. This dynamic underpins the role of agriculture, not only in promoting food security, but also in ensuring the good governance, peace, and stability (Goal 16) needed to actualize the SDGs. While enhanced agricultural productivity can lead to stable food prices, the rising trend of conflicts between pastoralists and farmers across Africa is concerning. Developing inclusive grazing tracks, especially in the Sahel (from the Atlantic Ocean through Sudan to the Red Sea—a component of the Great Green Wall initiative), could help promote peaceful coexistence between farmers and pastoralists in Africa. Investing in developing animal breeds that are resistant to climate change could also contribute to peace and stability. The East African Community (EAC) is one of the very few regional institutions that recognize the role of agriculture in national and

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sustainable development by building its overall vision on attaining a ‘well developed agricultural sector for sustainable economic growth and equitable development’. Other regional economic communities should emulate the EAC by focusing on agricultural transformation as the basis for promoting sustainable development. At the continental level, CAADP also has a similar ambition—including the 2003 Maputo Declaration on Food Security and Agriculture in Africa and the 2014 Malabo Declaration on Accelerated Agricultural Growth and Transformation, both by African leaders—to further reinforce the imperative of agriculture for inclusive and sustainable development in Africa. Translating this type of vision into concrete development outcomes calls for heavy financial investment, strong political support and commitment, and massive public support for the design, implementation, and monitoring of agricultural policies, plans, and programmes.

2.5   Conclusions Promoting agriculture-for-sustainable-development is vital to reducing poverty and inequality, as well as to achieving the Sustainable Development Agenda. To ensure benefits of growth and development touch every segment of the population and society (i.e. leaving no one behind by 2030), African governments should rethink how agriculture can work for development and transform the socio-economic conditions of rural dwellers. This chapter also provides compelling reasons why Africa must invest in agriculture, including taking benefits of development to rural dwellers, avoiding a Malthusian trap, achieving the SDGs, and stopping the wastage of over 60 percent of scarce foreign exchange earnings on food imports annually. There is a need for deeper understanding and renewed commitment to the role of agriculture in national development processes, with a view to using agriculture as a strategy to rapidly reduce poverty, income inequality, and exclusions and ensure food security. Prioritizing agricultural transformation and development over the next 15  years is therefore a development imperative. However, a quick-fix approach will not work. Instead, a holistic approach to agricultural ecosystems, underpinned by applied research anchored on complex interactions among population growth, food production, non-renewable resource management, industrial output, and population abatement, is pivotal. Ensuring agricultural production and

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practices respect the mother Earth’s carrying capacity is key to promoting resilience in agricultural systems. In this regard, the approach to agricultural transformation in Africa must be mutually reinforcing to the achievement of the SDGs. The continent cannot afford to avoid the Malthusian trap at the expense of environmental pollution and degradation, as was the case in China, India, and some advanced countries. The focus, instead, must be on a Sustainable Green Revolution (SGR). The evidence from the 2017 Global Food Security Report ranked Sub-Saharan Africa lowest on freshwater resource risks relative to the rest of the world. This shows a possibility to expand the irrigation system on the continent without compromising the limits of the mother Earth. However, the need for conservation-conscious water management policies and innovative technologies that use water and chemical inputs (e.g. fertilizers, pesticides, and herbicides) more efficiently in the context of pursuing agricultural revolution should be pursued with vigour.

References African Centre for Economic Transformation (ACET). African Transformation Report 2017: Agriculture Powering Africa’s Economic Transformation. ACET: Accra, 2017. African Development Bank (AfDB). “Agricultural Production, Food Security and higher Value in North Africa.” AfDB Working Paper—North Africa Policy Series. (2016). Arezki, R. and M. Bruckner, “Food Prices and Political Instability,” IMF Working Paper Series 11, no 62 (2011). Atkins, Carla. African Great Lakes and Rivers. 3. Vol. 3, 2010. Bellemare, M.F. “Rising Food Prices, Food Price Volatility, and Social Unrest”, American Journal of Agricultural Economics, 97, No. 1 (2015) 1–21. https:// doi.org/10.1093/ajae/aau038. Benin, S., S.  Wood and A.  Nin-Pratt. “Introduction” in Benin, S. (edited), Agricultural Productivity in Africa: Trends, Patterns and Determinants. Washington, DC: International Food Policy Research Institute, 2016. Byerlee, Derek, Alain De Janvry, and Elisabeth Sadoulet. “Agriculture for Development: Toward a New Paradigm.” Annual Review of Resource Economics 1, no. 1 (2009a): 15–31. https://doi.org/10.1146/annurev. resource.050708.144239. Byerlee, Derek, Xinshen Diao, and Christopher P.  Jackson. Agriculture, Rural Development, and pro-Poor Growth: Country Experiences in the Post-Reform Era. Washington, DC: Agriculture & Rural Development Dept. Discussion Paper 21, World Bank, 2009b.

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Dercon, S. “Rural Poverty: Old Challenges in New Contexts.” The World Bank Research Observer 24, no. 1 (2009): 1–28. https://doi.org/10.1093/ wbro/lkp003. Diao, Xinshen, P. B. R. Hazell, Shashi Kolavalli, and Danielle Resnick. Ghana's Economic and Agricultural Transformation: Past Performance and Future Prospects. Oxford: Oxford University Press, 2019. Dubois, O., A. Flammini, A. Kojakovic, I. Maltsoglou, M. Puri, and L. Rincon. Energy Access, Food and Agriculture. Rome: Food and Agriculture Organization of the United Nations, 2017. Economic Commission for Africa, African Union, African Development Bank and United Nations Development Programme. MDG Report 2015: Lessons learned in Implementing the MDGs. Assessing Progress in Africa Toward the Millennium Development Goals. 2015. Food and Agriculture Organization. “Energy-Smart Food for People and Climate.” Issue Paper. 2011. Gollin, Douglas. “Chapter 73 Agricultural Productivity and Economic Growth.” Handbook of Agricultural Economics, 2010, 3825–66. https://doi. org/10.1016/s1574-­0072(09)04073-­0. International Food Policy Research Institute (IFPRI). Global Food Policy Report 2020: Building Inclusive Food Systems. Washington DC: IFPRI, 2020. International Poverty Reduction Centre China (IPRCC). “Agriculture, Food Security and Rural Development: A Synthesis.” IPRCC Working Paper 01. (2011) www.iprcc.org/Index/warehouse/id/4538.html. Johnson, D.G, and J.W.  Mellor. “The Role of Agriculture in Development.” American Economic Review 51, no. 4 (1961): 556–93. Juma, Calestous. The New Harvest: Agricultural Innovation in Africa. Oxford: Oxford University Press, 2011. May, Julian. “Food security and nutrition: Impure, complex and wicked?” Food Security South Africa Working Paper Series #002. (2017). McMillan, Margaret, Dani Rodrik, and Claudia Sepúlveda. Structural Change, Fundamentals, and Growth: A Framework and Case Studies. Washington, DC: The World Bank Group, 2017. Mcnaughton, S J, and N J Georgiadis. “Ecology of African Grazing and Browsing Mammals.” Annual Review of Ecology and Systematics 17, no. 1 (1986): 39–66. https://doi.org/10.1146/annurev.es.17.110186.000351. Ng, M., Fleming, T., Robinson, M., Thomson, B., Graetz, N., Margono, C., and Abraham, J.P. “Global, regional and national prevalence of overweight and obesity in children and adults during 1980-2013.” The Lancet, 384, no. 9945 (2014): 766-781. Odusola, Ayodele F. “Land Grab in Africa: A Review of Emerging Issues and Implications for Policy Options.” International Policy Centre for Inclusive Growth 124 (April 2014).

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Odusola, Ayodele F. “Agriculture, Rural Poverty and Income Inequality in SubSaharan Africa.” In Income Inequality Trends in Sub-Saharan Africa: Divergence, Determinants and Consequences. New York, NY: United Nations Development Programme, Regional Bureau for Africa, 2017. Odusola, Ayodele, Yemesrach Workie, and Wilmot Reeves. “Income Inequality and Population Growth in Africa.” In Income Inequality Trends in Sub-Saharan Africa: Divergence, Determinants and Consequences, edited by Fred Mugisha, 203–20. New York, NY: United Nations Development Programme, 2017. Raffety, J.P. The Living Earth: Rivers and Streams. New  York: Britannica Educational Publishing, 2011. Ravallion, M., S. Chen and P. Sangraula. “New Evidence on the Urbanization of Global Poverty.” World Bank Research Working Paper 4199. (2007). Schultz, Theodore W. Transforming Traditional Agriculture. New Haven: Yale Univ. Press, 1964. Turner, Benjamin, Hector Menendez, Roger Gates, Luis Tedeschi, and Alberto Atzori. “System Dynamics Modeling for Agricultural and Natural Resource Management Issues: Review of Some Past Cases and Forecasting Future Roles.” Resources 5, no. 4 (2016): 40. https://doi.org/10.3390/resources5040040. United Nations. Transforming Our World: The 2030 Agenda for Sustainable Development. New York: United Nations. 2015. Wiley, L.A. “Adjusting to new era agrarianism: Tackling the Troubled Interface of Public and Community Property”. Rethinking Land Reform in Africa: New Ideas, Opportunities and Challenges. African Natural Resource Centre, African Development Bank, Abidjan, 2019. World Bank. World Development Report 2008: Agriculture for Development. Washington, DC: The World Bank. 2007. World Bank. 2010. Improving water management in rainfed agriculture : issues and options in water-constrained production systems. Washington, DC: World Bank. http://documents.worldbank.org/curated/en/608111468156864510/ Improving-­water-­management-­in-­rainfed-­agriculture-­issues-­and-­options-­in-­ water-­constrained-­production-­systems. World Bank. Rising Global Interest in Farmland: Can It Yield Sustainable and Equitable Benefits? Washington, D.C: Agriculture and Rural Development, World Bank, 2011. World Bank. 2013. Global monitoring report 2013: rural-urban dynamics and the millennium development goals (English). Washington D.C.: The World Bank. http://documents.worldbank.org/curated/en/720451468171242999/ Global-­monitoring-­report-­2013-­r ural-­urban-­dynamics-­and-­the-­millennium-­ development-­goals.

CHAPTER 3

Africa’s Agriculture Today: Performance, Challenges, and Its Political Economy

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 A. Odusola, Africa’s Agricultural Renaissance, https://doi.org/10.1007/978-3-030-65748-2_3

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This chapter examines the current state of Africa’s agriculture by exploring the dynamic performances, opportunities, and challenges. The political economy of agricultural policy reforms explains why African leaders, amid all evidence, are not investing adequately in agricultural development. It draws relevant lessons that could be used to drive an agricultural renaissance and inclusive, and sustainable development on the continent.

3.1   The Agricultural Sector Performance 3.1.1  An Overview The previous chapter argues that size matters in economic development. If the size of arable land is the main determinant of agricultural performance, Africa should be second to none in influencing global food security and development of the world’s value chains, making the continent a price leader and a price setter in agricultural markets. The reality is, however, that the determinants of agricultural performance are far more than the size of arable land or the population involved in agricultural activities. The quality of agricultural enterprise, the inputs-farmgate-outputs ecosystem,1 and the innovation governance system play a considerable role in setting the pathways for vibrant and a sustainable agriculture, which is at a stage of infancy in some countries and virtually non-existent in others. Is agriculture a propellant of structural transformation in Africa? And how has the agriculture sector performed over the past four decades? Answering these questions provides some illumination into the continent’s agricultural dynamics and drawing relevant lessons for the future of agriculture in Africa. The share of agriculture in total GDP has been declining gradually, but it is yet to experience genuine structural transformation. Compared to other regions, globally, African agriculture has the highest contribution to overall economic activities (Fig. 3.1). This high share is a manifestation of the fact that agricultural transformation has not taken place in Africa, and its potential is yet to be fully explored to serve as the engine of inclusive economic growth, the powerhouse of food security, the springboard of 1  This refers to a three-way relation that brings together all actors to agricultural production from inputs (e.g. seeds, fertilizers, tractors, land, and irrigation) and farmgate (e.g. ploughing, planting, harvesting, and storing harvested produce) to outputs (marketing, packaging, and value-added activities).

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3.99

5.30

5.34

5.47

1.63 OECD members

World

Middle Latin East Asia South Asia & East & America & the the Pacific North Africa Caribbean

Africa

Fig. 3.1  Agriculture’s value added as a share of GDP by regions (average 2010–2016). (Source: Author’s computation from the World Development Indicators [accessed December 2017])

industrialization, the driver of income generation, and the propellant of wealth creation for agriculture to effectively propel national development. Africa is yet to benefit from the power of agriculture in driving growth and development as is being enjoyed in Latin America and the Caribbean, East Asia and the Pacific, and East and Central Europe.2 The high agricultural share of GDP exposes African countries to economic shocks, particularly in the Sahel and the Horn of Africa, experiencing frequent droughts with severe malnutrition, food insecurity, loss of livelihoods, and displacement.3 Why is agriculture not contributing maximally to the continent’s development process? The long-awaited structural economic transformation is yet to take place in Africa. Between 1990 and 2016, for instance, agriculture shed about 6.59 percentage points from its share of GDP (Fig. 3.2). During 2  Studies like Byerlee et al. (2009a), World Bank (2007), and Ravallion et al. (2007) provided substantial evidence on this. 3  In 2017 alone in the Horn of Africa, the impact of drought was devastating, leading to 15.2 million people to be food insecure, and 5.2 million children and women malnourished (UNOCHA 2017).

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60 50 40 30 20 10 0 Agriculture VA

Manufacturing VA

Services VA

Fig. 3.2  Africa’s value added of agriculture, manufacturing, and services in GDP, 1980–2016 (%). (Source: Author’s computation from WDI [accessed June 2018])

this period, the manufacturing sector that was supposed to benefit from the decline in agriculture, if the much-awaited labour and investment reallocation proposed by Arthur Lewis and other scholars is to be realized, also lost 2.69 percentage points.4 This further confirms the existing process of de-industrialization in Africa as articulated by Odusola (2015)—a process bolstered by unguarded deregulation and globalization as well as institutional inertia. Rather, the losses in agriculture and manufacturing sectors were absorbed by the services sector, which is dominated by informal activities; it gained 6.93 percentage points during the period. The features of the informal sector—low productivity, low income, and poor working conditions—coupled with the fact that the sector is being used to cope with poverty and unemployment in most African countries, failed to use this labour reallocation to initiate a much-needed transformation. In a real sense, Africa is bypassing the conventional structural economic transformation5—leading to premature structural economic transformation. 4  During this period, 13 countries experienced expansion of the manufacturing sector led by Cote d’Ivoire (14.38 percent), Equatorial Guinea (11.62 percent), and Congo Republic (8.44 percent). Other countries include The Gambia, Lesotho, Liberia, Namibia, Niger, Nigeria, Rwanda, Sao Tome, and Principe and Uganda. 5  This refers to moving labour and other resources out of agriculture to industry and service sectors that are more productive, generating more incomes, and creating more decent jobs (like in manufacturing, banking and finance, and construction services). However, in this premature transformation context, labour is moving out of agriculture to largely informal service sector that is not better than the agricultural sector in productivity. The lack of education and skills needed by the manufacturing sector by those leaving agriculture made labour to bypass the manufacturing sector, which made enhanced productivity and decent job opportunities to elude the continent.

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6 4 2 0

1982-89

1990-99

2000-09

2010-15

Sub-Saharan Africa

Lan America and the Caribbean

Middle East and North Africa

East Asia and the Pacific

Fig. 3.3  Growth rates of agriculture (%) by regions. (Source: Author’s computation from the WDI [accessed December 2016])

This reality, again, offers a unique opportunity for Africa to use agriculture to drive industrialization and propel growth and development through modernization of agriculture and enhancing productivity. 3.1.2  How Is Africa Performing on Agricultural Productivity? Agricultural growth in Africa has improved over the past two decades. Contrary to the experience of the two decades prior to 2000, when agricultural growth in Africa lagged Latin America and the Caribbean and the East Asia and the Pacific, Africa has been outperforming these regions since 2000 (Fig. 3.3). It should be noted that demand for food items has also increased due to a rise in population and the youthful nature of the Africa’s population. However, this growth is not coming from either agricultural productivity or farm intensification. Rather, it is coming from land expansion and the fallowing system. Again, Africa failed to turn its potential global agricultural powerhouse into a development reality. Instead of using technological change to drive innovation and productivity in this sector, African farmers resorted to cultivating part of the uncultivated 600 million hectares of arable land (Odusola 2014).6 In spite of abundant fertile land—and sparsely populated arable land— agricultural productivity per worker in Africa is the lowest across regions (Fig. 3.4). Higher productivity, as argued by UNDP (2012), is not only to 6  Odusola (2014) argued that the large expanse of uncultivated fertile, arable land accounted for the rising trend of land grab in Africa.

Agricultural productivity per worker,2010-15 (2010 Constant prices,$)

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Comoros Mali Kenya Guinea-Bissau Zambia Niger Senegal Burkina Faso Lesotho Gambia Sierra Leone Burundi Guinea Madagascar Zimbabwe Seychelles CAR Ethiopia 0

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-1000

10

20

30

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Share of Agriculture Value Added in GDP (2010-15)

Fig. 3.4  Agricultural productivity and value added in GDP. (Source: Author’s computation)

ensure food security, better nutrition, and lower food prices, but also to raise incomes of millions of small farm holders,7 elevate living standards, and increase health and education, thereby increasing people’s capabilities and choices. Accelerated agricultural productivity could also enhance agricultural value chains, promote agribusinesses, and propel non-­agricultural rural economic activities. The adoption of science-based innovations (such as tissue culture bananas, NERICA rice varieties,8 and hybrid maize) has had some significant impacts. With the adoption of relevant technologies and innovations, agricultural productivity can also propel improved stewardship of environmental services, including land and water management services. 7  Small farm holders dominate the global farming system with 84 percent of the world farmers belonging to this group (i.e. holders of less than 2 hectares), and they operated about 12 percent of total farmland. However, in sub-Saharan Africa, about 70–80 percent of farms were less than 2 hectares and operated 30–40 percent of farmlands (Lowder et al. 2016). 8  The New Rice for Africa (NERICA) is a hybrid of African-Asian rice by the African Rice Centre, introduced through the partnership among the African Development Bank, the Government of Japan, and the United Nations Development Programme in 2008. This specie produces higher yields, better protein as well as pest and drought resistant than the traditional African rice.

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Productivity is a lever for genuine structural economic transformation in Africa. Countries that succeeded in keeping productivity per worker to at least $3000.00 also managed to reduce the share of agricultural value added in GDP to less than 20 percent. Except for Nigeria, other countries with an agricultural share of GDP higher than 20 percent have a very low productivity per worker (Fig.  3.4). Enhancing agricultural productivity is vital to promoting structural economic transformation that can stimulate farm and non-farm rural economies and urban industrialization processes. Mauritius is one of the few African countries that use agricultural productivity to propel structural transformation and to serve as a powerhouse of its global economic integration particularly to the European Union, France, the United States, the United Kingdom, and South Africa.9 Box 3.1 presents the opportunities and challenges facing Mauritius agriculture.

Box 3.1  Mauritius: An Example of High-Quality Agribusiness Specialization and Sustainable Agriculture

At present, Mauritius has around 60,000 ha of land under cultivation. About 85–90 percent of it is dedicated to sugar cane cultivation; the remaining land is devoted to food crops and tea cultivation. Today, the sugar industry has successfully expanded into a cane cluster to produce refined white sugar, special sugars, molasses, energy, and ethanol. In 2015, the production of refined and special sugars amounted to 366,000 tonnes. Mauritius is the largest exporter of special sugars to the European Union. Its production of green tea leaves also rose from 4171 tonnes in 2016 to 4279 tonnes in 2017, which contributed to a 4.4 percent increase in manufactured tea in 2017. An important advantage of Mauritius’ agriculture is pest- and disease-free production, as well as quarantine and monitoring regimes that help preserve a reputation for high quality. Yet accelerating agricultural skills is a challenge. The skill gap assessment carried out in 2012 reveals the following: youth are aban(continued)

9  This is export-oriented integration (e.g. fish, cane and beet sugar, and clothing) as opposed to imports dominated by China and India. http://www.mauritiustrade.mu/en/ trading-with-mauritius/mauritius-trade-profile.

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Box 3.1  (continued)

doning agriculture; workers are dominated by an aging population—averaging 53.3  years; and skills are being insufficiently renewed. Promoting skill development in agriculture, aquaculture, agroprocessing, fisheries, and fish processing remains a priority for the country’s agriculture to move it to the next level. In this regard, its six-month hands-on, skill-based education in sustainable farming is very transformative. The new agroindustrial landscape is today geared towards enhancing food security through investments in technology-based production and high-value activities. As part of the government’s policy for bio-food production, farmers are encouraged to eliminate the use of synthetic agrochemicals and shift to an environmental-friendly approach to production. Sources: RoM and ITC (2017) and Statistics Mauritius (2014)

Productivity enhancement provides opportunities for smallholder farmers to break away from the shackles of the poverty trap. But smallholders’ low education and low returns keep farmers in a low-equilibrium trap. While productivity unleashes the power of high returns that lifts agriculture and agrobusiness workers out of poverty, enhancing smallholders’ education and knowledge through extension services will help release their innovativeness for accelerated productivity. Low agricultural productivity is a major driver of economic vulnerability in Africa. Without high productivity in agriculture, the African continent is, in many ways, more vulnerable. First, many African countries have become net food importers. As argued in Chap. 2, 43 African countries, on annual average, spent over $78  billion on food importation between 2010 and 2016, constituting about 62 percent of foreign reserves (excepting gold). Dissipating scarce foreign exchange earnings on things that could be produced locally is a colossal economic waste that is not only impeding food security, but also threatening the achievement of the SDGs. In fact, countries with the highest food imports are mostly from North Africa (Egypt, Algeria, Nigeria, South Africa, and Morocco) (Table 2.3). These five countries, with the highest level of merchandise imports, accounted for 57.2 percent of total imports. The share of food import in total consumption is very high in many countries and regions. For instance,

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the ratio of imported cereals to total national consumption in the North African countries is very high.10 Second, recurring droughts in the Sahel and the Horn of Africa are making several countries dependent on food aid, especially during humanitarian crises. However, efforts should be focused on preventing such hazards by emphasizing strong adaptation strategies. Such aid should be provided through development financing in order to build resilience to such extreme events. Third, due to pervasive rural poverty, which is as high as 80.0 percent and above in some countries (e.g. Equatorial Guinea, Madagascar, and Zimbabwe) (see Fig. 2.7), many poor people cannot afford three square meals. Fourth, due to the lack of market integration associated with bad roads and long distances to markets, many Africans, especially those living in remote areas, are prevented from having secure access to food (Fig. 3.5). Sub-Saharan Africa’s input subsidies programmes are yet to shift the agricultural productivity frontier to the level that will sustain food self-sufficiency, because they are very expensive, not targeted to vulnerable farmers, and fiscally unsustainable. Limited access to agricultural inputs impedes agricultural productivity in Africa. Agricultural inputs such as fertilizers, improved seedlings, 30000 20000 10000 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Sub-Saharan Africa

East Asia and Pacific

Middle East & North Africa

Lan America & Caribbean

Europe and Central Asia

OECD Members

Fig. 3.5  Agricultural productivity per worker, 1980–2015 (2010 constant prices $). (Source: Author’s computation from the World Development Indicators [accessed December 2016]) 10  Among the North African countries, for instance, the cereal dependency ratio (the ratio of imported cereals to total national consumption) is disproportionately large—Libya (92.0 percent), Mauritania (75.0 percent), Algeria (71.0 percent), Tunisia (60.0 percent), and Morocco (54.0 percent)—far higher than the world average of 16.0 percent (AfDB 2016).

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irrigation facilities and tools, machines, and equipment like tractors are so limited in supply and use as to curtail an agricultural revolution in Africa. Boosting agricultural productivity requires effective use of these inputs, as well as engaging extension service workers and making fertilizers and water use more environmentally friendly. 3.1.3  What Is the Current Level of Fertilizer Utilization in Africa? Africa’s deficient performance in the use of fertilizers, which to a considerable extent is linked to limited access, helps to explain low agricultural productivity. In this area, Sub-Saharan Africa’s performance is dismal relative to other regions (Fig. 3.6). Sub-Saharan African farmers, on average, use 10 kilograms or less per hectare compared to 123 kilograms in East Asia and the Pacific and 143 kilograms in high-income countries (AGRA 2014a); 100 in South Asia and 73 in Latin America (Baltzer and Hansen 2011). In 2013, for instance, fertilizer usage per hectare in Sub-Saharan Africa was only 5.1 percent of East Asia and the Pacific and 11.5 percent of South Asia. Still, several approaches have been adopted to encourage the use of fertilizers. These range from the state-driven voucher approach in Malawi and 400 350 300 250 200 150 100 50 0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sub-Saharan Africa

Middle East & North Africa

Lan America & Caribbean

South Asia

East Asia & Pacific

Fig. 3.6  Fertilizer consumption per hectare of arable land, 2002–2013, by regions. (Source: Author’s compilation from the WDI [Accessed, December 2016])

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Tanzania, to non-voucher systems in Zambia, and to a market-driven voucher system in Ghana. The level of subsidy varies from about 50 percent in Ghana and Tanzania to 80 percent in Zambia and 91 percent in Malawi.11 The programme cost is as high as 6.6 percent of GDP and 16 percent of the total budget in 2008–2009 in Malawi,12 thereby making it one of the most expensive input subsidy projects globally. In Zambia, if the direct and indirect costs are evaluated, the resource cost of the Zambian Fertilizer Support Programme amounts to $579 per tonne compared to import prices of between $295 and $406 per tonne.13 Except for Ghana, where support to fertilizer covered multiple crops (e.g. maize, rice, vegetables, fruits, and oil palm), it has focused mainly on maize in other countries. For subsidy programmes to lead to attitudinal change in use of fertilizers and pro-poor growth, it must be well-targeted at the marginalized, poor farmers. Most fertilizer subsidy programmes are very expensive, not well-targeted to the vulnerable and poor farmers, heavily dependent on state support—not market-based solutions—and lack a clear exit strategy (Baltzer and Hansen 2011). Targeting input subsidies on staple crops is more pro-poor than targeting cash crops, which could increase inequality. In fact, only five countries (Ethiopia, Kenya, Nigeria, South Africa, and Zimbabwe) accounted for two-thirds of fertilizer usage in Sub-Saharan Africa.14 This is a blessing in disguise. This low intensity of fertilizer use could save Africa from environmental and health hazards associated with excessive use of chemicals. However, the continent refused to deepen technology adoption in the use of organic agriculture. One of the coping strategies for low soil fertility in the absence of access to fertilizers is continuous expansion of arable lands, which is, itself, a threat to biodiversity. This widespread practice is a key driver of deforestation in Africa, a phenomenon that accounted for about 30 percent of greenhouse gas emissions globally.15 The annual loss of forests between 2010 and 2015 is  This is based on percentage of subsidy in 2008–2009 (Baltzer and Hansen 2011).  See Dorward et al. (2010) and Cornia and Martorano (2017). 13  See Baltzer and Hansen (2011). 14  Juma (2011) links low fertilizer usage to high cost of imports and transportation and concludes that the price of fertilizer in Africa is two to six times the average world price. 15  It should be noted that Africa contributes least to greenhouse gas emission globally. The strategic role of forest in development process is not only limited to tackling rural poverty, promoting food security, and providing livelihoods. It also delivers critical environmental services such as clean air and water, conservation of biodiversity, erosion control, and combat climate change. 11 12

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highest in Africa, with 2.8  million hectares (−0.49 percent) followed by South America (−0.40 percent) compared to an increase in Asia (0.17 percent) and Europe (0.08 percent) (FAO 2015b). Hybrid approaches for selecting targeted beneficiaries are emerging. Selecting appropriate beneficiaries is critical to successful agricultural input subsidy intervention and support. These approaches vary across countries: village development committees (Malawi), farmer cooperatives (Zambia), extension officers (Ghana), and village voucher committees (Tanzania). The combination of these various approaches could yield maximum benefits to African countries. As such, these institutional processes should be enhanced in order to ensure sustainability and to maximize the objectives of the input subsidy programme. To what extent is the rate of improved seedlings utilization growing? Limited access to affordable, improved seedlings is also an impediment to agricultural productivity. Most African farmers still rely on traditional seedlings, which are as much as 80 percent below their potential, with less than 30 percent of small-scale farmers having access to improved seedlings. Several efforts have been taken to address this issue at national and regional levels. For instance, at the regional level, the governments of West Africa, in collaboration with ECOWAS and other regional institutions, developed harmonized trade rules and quality control procedures to expand access to affordable seeds and fertilizers. Establishing Alliance for a Green Revolution in Africa (AGRA) in 2006 was also premised on addressing this challenge. Through its Programme for Africa’s Seed Systems (PASS),16 AGRA is supporting seed companies to accelerate access to improved seedlings that are specifically bred for African soil. The annual production of professionally certified seeds from PASS seed producers rose from 2346 metric tonnes in 2007 to 80,606 metric tonnes in 2014 (AGRA 2014b). See Box 3.2 for AGRA’s contribution to seed multiplication in Africa. This initiative must be expanded and made accessible to all African countries at affordable prices to small- and medium-scale farmers.

 PASS, in collaboration with 80 small- and medium-sized seed companies across Africa, is working on improved, locally adapted varieties of maize, cassava, millet, rice, sorghum, beans, sweet potato, cowpea, groundnut, soybean, pigeon pea, sweet potato, banana, durum wheat, and bread wheat. 16

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Box 3.2  Overview of the Programme for Africa’s Seed Systems Achievement

Programme for Africa’s Seed Systems (PASS), an AGRA initiative, is helping to develop, produce, and distribute improved crop varieties contextualized to farmers, climates (drought-resistant), and soils (disease-resistant) in Africa. PASS is facilitating public-private seed production partnerships in African countries (e.g. Uganda, Zambia, Kenya, and Malawi) while also assisting governments to draft policies and build regulatory frameworks for improved seedlings. As of 2014, PASS, in collaboration with 80 small- and medium-­ sized seed companies across Africa, had produced 80,606 metric tonnes of professionally certified seeds, annually. This achievement makes PASS-supported companies to be the largest seed producers in SubSaharan Africa. Its partnership with national research institutes (e.g. Mozambique’s Institute of Agricultural Research) led to the creation of 464 new, improved varieties of 15 important crop species, 312 of which are now commercially produced and available for sale to African farmers. The productivity of these improved seedlings (maize, rice, and cowpea), relative to local ones, rose between 50 and 100 percent.

Seed production, metric tonnes, 2013 Nigeria Ethiopia Uganda Tanzania Malawi Burkina Faso Mozambique Kenya Ghana Niger Mali Zambia Rwanda South Sudan Liberia Sierra Leone 0

5000

10000

15000

20000

25000 (continued)

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Box 3.2  (continued)

PASS also empowers and develops capacity on crop breeding by training and certifying 15,000 rural agrodealers in 16 countries that now provide farmers with 400,000 metric tonnes of seed and one million metric tonnes of fertilizers. In addition to this, it conducted over 7000 technology demonstrations and trained 66 scientists in PhDs and 135 in Master’s degrees on crop breeding. It is also serving as business incubators to promote entrepreneurship in crop breeding through provision of grants that cover purchase of equipment and development of marketing strategies. Source: Author’s compilation and computation from AGRA (2014b)

Is Africa catching up on access to irrigation facilities? Access to irrigation is abysmally low despite its high rate of returns. Notwithstanding the long-term recognition of irrigation as a game changer to agricultural productivity in Africa, since it has the capacity to raise productivity by at least 50 percent, especially when coupled with insufficient rainfall and a high recurrence of droughts (such as in the Sahel and the Horn of Africa), access to irrigation facilities remains abysmally low. On the African continent, the area equipped for irrigation is just about 13  million hectares. This translates to about 6 percent of the all cultivated area, compared with 41 percent for Asia, 13 percent for Latin America, and 21 percent worldwide (FAO 2016). Africa’s share of the world annualized irrigated land area is very low relative to its share of total arable land. Its share is only 2 percent compared to 79 percent (Asia), 7 percent (Europe), 7 percent (North America), 4 percent (South America), and 1 percent (Australia) (Juma 2011). Except for Mauritius, which irrigated 22.1 percent of its arable land, only seven African countries17 irrigated between 1.0 percent and 5.0 percent of its arable land. Other African countries are less than 1.0 percent (Table 3.1). The limited use of technology-based agricultural facilities in Africa considerably explains why cereal yields in East Asia and the Pacific

17   These are Seychelles, Cabo Verde, Morocco, Tunisia, Algeria, Madagascar, and South Africa.

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Table 3.1  Share of agricultural irrigated land in total agricultural land (%) Regions

Less than 1.0%

Between 1.0 and 15.0%

African Countries

Benin, Botswana, Ethiopia, Ghana, Guinea, Kenya, Lesotho, Malawi, Niger, Nigeria, Senegal

Seychelles (5.0) Mauritius Cabo Verde (4.6) (19.5) Morocco (4.6) Tunisia (3.9) Algeria (2.8) Madagascar (2.2) South Africa (1.7) Brazil (1.6) Indonesia (15.2) Mexico (5.5) Italy (19.1) Afghanistan (6.5) Greece (19.7) Chile (6.9) Iran (16.6) China (10.5) Lebanon (20.2) Ecuador (16.1) Cyprus (22.3)

Non-­ African Countries

Spain (13.8) Portugal (13.1) Turkey (1556)

Between 15.0 and 30.0%

Myanmar (24.8) Azerbaijan (29.8) Nepal (29.7)

More than 30.0%

Israel (32.8) Japan (34.8) Malta (33.7) India (36.8) Bahrain (43.5) South Korea (51.6) Bangladesh (52.6) Pakistan (50.5)

Source: Author’s compilation from the World Development Indicators [Accessed, December 2019], http://data.worldbank.org/indicator/AG.LND.IRIG.AG.ZS

are close to 3.5 times those of Sub-Saharan Africa and about 3.0 times in Latin America and the Caribbean (Fig. 3.7). In Africa, the rate of return on irrigation facilities is very high. It is highest in the Sahel and East Africa, especially for small-scale irrigation. The average internal rate of return for small-scale irrigation was estimated for 28 percent and that of large-scale irrigation for 6.6 percent (You et  al. 2011). Yet challenges to developing irrigation systems in Africa abound, including expertise, knowledge, limited capacity to develop and manage irrigation, and absence of adequate policy frameworks. For irrigation to unleash the long-awaited productivity enhancement that will benefit all actors, policies must be geared towards addressing these challenges. Recent experiences in Egypt and Mali, for instance, show the imperatives of irrigation for agricultural transformation and development in Africa.

1514.80

2425.58 MIDDLE EAST & NORTH AFRICA

3058.86 SOUTH ASIA

3658.22 EUROPE & CENTRAL ASIA

LATIN EAST ASIA & AMERICA & PACIFIC CARIBBEAN

4109.98

Fig. 3.7  Cereals yields, average 2010–2015, by regions (kilogram per hectare). (Source: Author’s compilation from the World Development Indicators [Accessed, December 2016])

AFRICA

4925.34

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The age-long and recent experiences in Egypt show the value of irrigation. The Government of Egypt, in partnership with the World Bank, the German Development Bank (KfW), and the Government of the Netherlands, developed the Integrated Irrigation Infrastructure Management Project (IIIMP)—a project that aims to make innovative use of existing Nile flows. With the objective of increasing cost savings and improving water management, the IIIMP, which originally piloted with 6000 acres, expanded its coverage to over 500,000 acres across the Nile Delta in 2009, due to the pilot’s great success.18 In the original pilot area, yields increased by 12 to 25 percent, net income per cultivated acre rose by 20 to 64 percent, and water savings increased by 22 percent (Juma 2011). See Box 3.3 for more impacts associated with this project. The bottom-up approach to managing irrigation services in Mali enhances ownership and strengthens local institutional capacities. The Alatona Irrigation Project (AIP) in Mali is also driving innovative agricultural land tenure, water management practices, and productivity through expanding irrigated land by 4940 hectares and extending land allocation to 954 beneficiary households. Other benefits from AIP include

Box 3.3  Impact of Egypt’s Integrated Irrigation Infrastructure Management Project

The expansion of the Integrated Irrigation Infrastructure Management Project (IIIMP) received a positive assessment. For instance, direct beneficiaries from new or improved irrigation, or drainage, reached 2–3 million people (about 20 percent women). In addition to 27 main canals, 43 branch canals (equivalent to 445 km of canals) were completed and 92,085 feddans (about 95,584 acres) rehabilitated. Moreover, institutional capacity to oversee the management of these resources was enhanced (including 3 General Directorates, 22 directorates, 308 water user associations, and 9 district boards). It also led to a reduction of over 7.4 million kilograms of CO2 emission per year. Source: World Bank (2016)

 http://web.worldbank.org/archive/website01418/WEB/0__C-170.HTM.

18

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enhanced capacity of local financial institutions to track loans; increased ability of farmers to secure loans (financial inclusion), repay them, and manage their financial resources (avoiding adverse selection); and increased access to agricultural services, such as seeds and other inputs for farmers’ associations. There is an important lesson that other African and non-­ African countries could learn from the compensation of acquired irrigated land: through the project’s resettlement, social infrastructure, and social services. Each household displaced or affected by the construction of irrigation received new housing, a full range of social benefits, and two hectares of irrigated land as compensation for their loss of access to land. There was also an obligation to purchase an additional three hectares of irrigated land over 12 years. Women in the affected households were also entitled to 0.05 hectare (500  m2) of market garden land.19 This bottom-up approach, where a federation of nine water-user associations has the legal authority to set water prices, uses proceeds to operate and maintain secondary and tertiary water systems, and pays the government irrigation agency to operate and maintain the primary system and deliver water to farmers, is also revolutionizing the management of irrigation system in Mali. The AIP project led to the formation of 2995 hectares of rural land, as of 2012, and contributed to increases in the net primary school enrolment rate in Alatona zone, which rose by 56 percent (MCC 2016). How is Africa delivering on extension services? Extension services are important tools to socializing modern and sustainable agriculture, playing a critical role in facilitating green revolutions in China, India, South Korea, and Vietnam. When implemented, they facilitated technological diffusion and transfers and helped to promote new ideas and products,20 contributing to socializing agricultural innovations, ideas, and practices that help boost farm productivity. A main challenge in Africa is the inadequacy of extension service agents, both in number and in quality. For instance, even in South Africa, a country well advanced in agriculture, only 20 percent of the extension service agents are sufficiently qualified to operate as agricultural advisors21 that could fill 19  https://www.mcc.gov/resources/doc/summary-measuring-results-of-the-alatonairrigation-project-in-mali. 20  The role of the extension services agents is novel, if well delivered. They educate farmers about the modern technology; how to access, adopt, and apply new inputs; facilitate access to credit systems; and expand farmer’s capacity to process, store, trade, and market their products. 21  www.phuhlisani.com/oid%5Cdownloads%5CPhuhlisani%20extension%20 reviewD1.pdf.

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knowledge and skill gaps among farmers. They lack the practical experience, technical skills, and the needed logistical support (e.g. vehicles) and had limited or no relationship with agricultural research institutes that could avail them to share new ideas and products, or key research findings to farmers. This challenge denies Africa the opportunity to use extension services experts, to socialize agricultural technology, and to use innovations to effectively advocate for sustainable and valueenhanced agriculture. An emerging lesson on extension services is the rising momentum for using a plurality of service providers (government, agricultural research institutions, private sectors, foundations, CSOs, and development partners) to reach farmers, as opposed to relying on government extension agents. The use of multiple actors to deliver this service in Nigeria offers a good lesson (Box 3.4).

Box 3.4  Nigeria Offers a Good Example of Private Sector Involvement in Extension Services

Nigeria has what it takes to train extension workers who could service the entire country. In fact, Nigeria has the largest agriculture research system in Sub-Saharan Africa, with 2688 agricultural researchers, 17 commodity-based research institutes, 18 national universities offering agricultural studies and research, 3 specialized universities of agriculture, and an international agricultural research centre (the Internal Institute of Tropical Agriculture (IITA)). Yet, these facilities remain underutilized. Nigeria has 7000 extension agents, comprising 28 percent female and an unknown number of private agents employed by agribusiness companies and non-­ governmental organizations. Although this number seems high, it is abysmally low relative to the extension-farmers ratio which stood at 1:5000–10,000 ratio as opposed to the situation in the 1990s (1:1000–1500) and target ratio of 1:800–1000 (USAID et  al. 2017)—compared to 1:1500 actual and a target of 1:400 in Ghana (Badaine et al. 2016). Because extension services are mostly donor supported, some Nigerian state governments have not recruited new extension agents after the donor support dried up, about two and a half decades ago; most extension agents are nearing their retirement, as is the case in other African countries, such as Senegal. (continued)

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Box 3.4  (continued)

To compensate, the private sector is helping to scale up extension services in Nigeria. In addition to out-growers and off-takers or contract firms like Olam, Dangote, and Babban Gona, several other private initiatives are shifting the frontier of extension services in Nigeria. The Sasakawa Community Extension Workers (CEWs), purely private sector driven, supported by AGRA and using demonstration pilots, use mostly teachers and e-extension agents. It trained CEWs on agronomics and equipped them to train 500 farmers over a period of five years. These CEWs are being contacted by private firms to market and advocate their products based on commission— an approach that makes the programme sustainable. The role of AG Leventis Foundation in operating six formal farm schools for secondary school graduates, offering both one-year courses and short courses in farm management, deserves commendation. The schools, located in FCT, Osun, Gombe, Kano, Ondo, and Kaduna states, have trained 7000 youth between 1988 and 2014. The training structure includes crop production and agroforestry, animal production, rural enterprise development, and agricultural engineering. Providing financial support to these trainees to become emerging farmers remains critical in accelerating agricultural enterprise. Source: USAID et al. (2017), Badaine et al. (2016)

3.1.4  How Is Africa Faring on Agricultural Mechanization? Low agricultural mechanization is an impediment to Africa’s agricultural revolution. Agricultural mechanization is very low on the continent, although it is common among well-off farmers and rice growers. Mechanical technologies save farmers from arduous and painful labour, divert farmers’ energy into other productive engagements of agriculture (like on-farm storage, post-harvest management, the delivery of irrigation facilities, and the primary processing of agricultural products), and can directly increase yields and production. Despite these advantages, agricultural mechanization remains very low. In Sub-Saharan Africa, as of 2008 for instance, use to tractors stood at 28 tractors per 1000 hectares,

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compared to an average of 241 tractors in other developing regions.22 As captured by Juma (2011), the number stood at 13 tractors per 100 square kilometres of arable land, compared to the world average of 200 tractors; in terms of farm workers, the number stood at 2 tractors per 1000 farmworkers compared to 883 in the United Kingdom. Several factors account for low mechanization in Africa, namely an unfavourable physical environment, including ecological changes; a land tenure system that discourages investment; poor infrastructure; lack of farmers’ skills that makes repairs and maintenance prohibitive; and weak private sector development that limits manufacturing of farm tools and equipment (Houmy et al. 2013). Heavy investment in financing of mechanization (including subsidy support), capacity building of farmers on issues relating to mechanization, and incentivizing the private sector in mechanization are all urgently needed in Africa. How is the implementation of the Comprehensive Africa Agriculture Development Programme (CAADP) progressing? The CAADP, adopted in 2003 (the Maputo Declaration), is an important framework for an agricultural renaissance that has changed the story of African agriculture. Three key targets critical to agricultural transformation were adopted: (1) achieving an annual agricultural growth of 6 percent; (2) spending 10 percent of a national budget on agriculture; and (3) setting agricultural R&D at 1 percent of agriculture value added. Although its implementation varies across countries, CAADP has remained an important driver of agricultural growth, food and nutrition security, and poverty reduction. The first target has remained a serious challenge; only Ethiopia is said to meet it—on annual average between 2004 and 2016. Seven countries each grew at between 5 and 6 percent and 4 and 5 percent during this period.23 Four countries (Central African Republic, Zimbabwe, Zambia, and Namibia) recorded a negative annual average growth during the same period. However, if performance from 2010 to 2016 is considered, Equatorial Guinea, Guinea, Niger, and Republic of the Congo grew at 6 percent and above.

22  This represents the average from nine countries (Bangladesh, Brazil, China, India, Korean Rep., Pakistan, Philippines, Thailand, and Viet Nam) (see Houmy et al. 2013). 23  Eritrea, Niger, Nigeria, Sierra Leone, Congo Republic, Mali, and Mozambique grew more than 5 percent, while Rwanda, Cabo Verde, Guinea, Senegal, Cameroun, Equatorial Guinea, and Morocco grew at an annual average of between 4 and 5 percent.

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On the second target (spending at least 10 percent of national expenditure on agriculture), only seven countries consistently kept pace (Burkina Faso, Ethiopia, Niger, Mali, Malawi, Senegal, and Zambia), as of 2013. Countries like Burundi, Republic of the Congo, Guinea, Ghana, Madagascar, and Zimbabwe achieved this at one point in time—yet not consistently (Bahiigwa and Benin 2013).24 Countries like Botswana, Mauritius, South Africa, Namibia, Mauritania, Morocco, Tunisia, Uganda, Kenya, Burundi, Malawi, and Senegal met the third target between 2003 and 2008 (Benin et al. 2016). In addition to these three targets, CAADP recommended four pillars for investment priorities: Pillar one (land and water management), Pillar two (market access), Pillar three (food security), and Pillar four (agricultural R&D). Evidence from Benin et al. (2016) reveals that Ethiopia and Kenya are strongest on the implementation of Pillar one; Liberia and the Gambia on Pillar two; Malawi and Benin on Pillar three; and Togo and Malawi on Pillar four while Côte d’Ivoire is strongest on cross-cutting issues such as the governance of the agriculture sector. The programme has also enhanced participatory stakeholder engagement on agricultural policy dialogue, promoting mutual accountability frameworks, as well as documenting and sharing good practices. The Malabo Declaration in 2014 expanded the CAADP beyond the three targets mentioned above by adding additional commitments: (1) end hunger, (2) reduce child malnutrition, (3) halve poverty by 2025, (4) triple intra-African trade, (5) enhance resilience in livelihoods and production systems to climate variability and other shocks, and (6) increase mutual accountability for actions and results (Benin et al. 2016). CAADP is shaping the agricultural landscape in Africa. However, the zeal that accompanied its implementation at its early stage of formation should not be allowed to wane. The African Union, through the African Union Development Agency (AUDA) and the regional economic communities, should be empowered to accelerate the implementation of CAADP goals.

24  It is important to note that Kenya also met it in 2006 and 2009. http://www.fao. org/3/a-i4531e.pdf.

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3.2   Challenges Facing the Agricultural Sector 3.2.1  Introduction The previous section reveals the underperformance of the agricultural sector in Africa. Agricultural productivity is very low, production has not benefitted from technology application (e.g. fertilizer, improved seedlings, and mechanization), and the sector remains unmodernized, thereby becoming unattractive to youth. Why is African agriculture underperforming? And what must Africa do differently? One key factor is the abundance of land in the context of limited agricultural capital. Abundant land relative to labour and a small stock of man-­ made capital in African agriculture is in contrast to production conditions in Asia, which are characterized by scarce land, abundant labour, and a relatively large agriculture capital stock, such as irrigation. This explains the low competitiveness of non-farm wages in Asia compared to a high and steep non-agriculture wage rate in Africa. In contrast, the labour-­ constrained African economies in the context of an avalanche of large youth unemployment, accompanied by low productivity, pushed up real wages in both agriculture and non-agriculture sectors. A high population density, abundant labour, and better infrastructure, therefore, made integration of agriculture into the national economy quite easier in Asia than in Africa (Karshenas 1995, 2001).

3.3   What Are the Impediments to Agricultural Transformation That Require Urgent Priority Actions? 3.3.1  Macroeconomic Misalignment The influence of macroeconomic conditions and policies on agriculture, especially in developing countries where agriculture represents a significant percentage of the GDP, employment, trade, and revenues, could be very strong; so also is the reverse causation (Díaz-Bonilla 2015, 2019; Diao et  al. 2019). In this regard, maintaining fiscal balances, avoiding overvaluation of the exchange rate, ensuring optimal lending rates to the agricultural sector, and promoting agricultural tradable products through market access are important macroeconomic policies that are congenial to agricultural growth and expansion. An overvalued exchange rate, for instance, is a serious tax on agriculture and particularly on farmers.

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On the other hand, while an overtly protected agricultural sector is a tax on consumers, a policy of full trade liberalization in agriculture and food production is counterproductive to many developing countries that do not have capacity to manage dumping with diminutive impacts on productive capacity, employment, and welfare of the people. FAO (2011) provides a detailed analysis of the impact of food aid, subsidies, and dumping in distorting Africa’s domestic market prices, which create a dependency syndrome. The study observed that between 1986 and 2007, the average annual OECD direct support to their farmers (Producer Support Estimate—PSE) was about 31 percent of total value of their production, of which the 2007 value was estimated to be US$256 billion.25 This study concludes that the macroeconomic spillover effects of OECD subsidies, dumping, and food aid on food and non-food products (e.g. rice, beef, milk, and cotton) have weakened African farmers’ productive capacity and their ability to increase incomes and accelerate access to food. Trade protectionism and liberalization have diminutive impacts on African macroeconomic conditions and microeconomic situations (e.g. on African farmer productive and earning capacity). One of the policy actions that African policymakers must do differently is to ensure strong alignment between macroeconomic and agricultural policies. Ensuring strong alignment between macroeconomic conditions and agricultural sectors is as important as having solid agricultural policies and programmes. Focusing solely on one of them (macroeconomic policies or agricultural policies) is sub-optimal, and adopting mutually reinforcing and integrated alignments between the two remains critical. To provide additional illuminations on the potency of macroeconomic conditions on agricultural growth and expansion, special attention has been given to access to finance in Sect. 3.3.2 and trade (including tariff and non-tariff barriers) in Sect. 3.3.6. 3.3.2  Limited Access to Finances African agricultural financing suffers from triple tragedies—poor global funding, pitiable national investment, and precarious lending from the financial system. The first tragedy, which is beyond the control 25  Direct transfer to single commodities includes rice (USD 18 billion), beef and veal (USD 19  billion), and milk (USD 20  billion). Further illumination could be found in FAO (2011, p. 54).

Sub-Saharan Africa

81

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

1979

1977

1975

22 20 18 16 14 12 10 8 6 4 2 0

1973

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Africa

Fig. 3.8  ODA to agriculture in Africa as a share of total ODA (%). (Source: Author’s computation and compilation from OECD (2016) for Africa, and One Campaign (2010) for Sub-Saharan Africa)

of African governments, is the poor global funding of agriculture, especially during and after the introduction of the Structural Adjustment Programme (SAP) in the mid-1980s. At the global level, the proportion of ODA directed to agriculture fell from 15 percent in 1980 to only 5 percent in 2008.26 Figure 3.8 provides a trended illustration of the loss of interest in African agriculture. For Sub-Saharan Africa, agriculture’s share of ODA fell from about an annual average of 20 percent between 1979 and 1982 to about 5 percent between 2003 and 2008. However, the rising trend of food insecurity, the 2008 food crisis, and the recurring extreme events in the Sahel and the Horn of Africa, among other factors, have rekindled interest in agriculture in Africa. There has been some improvement after the 2008 global financial, food, and fuel crises but still below 10 percent of the total budget target for the entire African continent. The transformative approach of the G20 since 2008 deserves recognition: the L’Aquila Food Security Initiative in 2008 and the Global Agriculture and Food Security Programme (GAFSP) in 2010 constitute good examples. The GAFSP’s focus on agriculture productivity, value addition, market access, strengthening standards, reducing risks, and increasing environmentally sustainable practices makes this initiative more transformative and development-oriented. As of December  For more illuminations on ODA trends, see IPRCC (2011) and Odusola (2017).

26

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2016, the GAFSP’s Private Sector Window funding—through blended finance—is supporting 42 investment projects in agribusiness in 24 countries (of which 16 are from Africa). The $232  million already deployed from this window is supporting projects that are worth $1.3 billion, targeting about 3.3 million farmers (GAFSP 2016).27 The recent allocation of $160  million to seven countries (including Burkina Faso, Ethiopia, Rwanda, and Tanzania) to boost food security is highly commendable.28 Sequel to low funding of the agricultural sector by the global public sector, the global private sector funding of agriculture, forestry, and fisheries is still abysmally low. Of the USD 9.27 billion total private sector funding to Least Developed Countries (LDCs), only $694 million went to this sector between 2012 and 2017,29 translating to a mere 7.49 percent. There are other very good examples of agricultural funding mechanisms that could be leveraged and strengthened, including the CAADP Multi-donor Trust Fund (the African Agriculture Fund, the African Agricultural Capital Fund, and the Africa Agriculture and Investment Fund). The GAFSP pledge to support the National Agriculture Investment Plan (NAIP) of the CAADP is commendable. There is further evidence of an improvement in donor support to agriculture in some countries. For instance, as revealed by FAO (2014b), in Uganda, donors’ support to agriculture-specific policies rose from 27 percent in 2006 to 64 percent in 2013. In Kenya, external financing is as high as 65 percent of official spending on agriculture, as of 2012.30 Continuous alignment of donor 27  The countries benefiting from this project are Ethiopia, Malawi, Uganda, Liberia, Mauritania, Rwanda, Kenya, Mozambique, Madagascar, Cote d’Ivoire, Cameroon, Mali, Senegal, Burkina Faso, and Tanzania. The distribution of funds is 79 percent (Sub-Saharan Africa), 16 percent (Asia), and 5 percent (Latin America and the Caribbean). http://www.ifc.org/wps/wcm/connect/cefeb201-0027-4c59-a206-14412e982dd1/ Portfolio_Update_Dec2016_FINAL.pdf?MOD=AJPERES. 28  Other countries are Haiti, Myanmar, and Nepal. The distribution of the $160 million is as follows: Burkina Faso ($24 million for agricultural technology and value chain development), Ethiopia ($30 million for agricultural productivity and commercialization of smallscale farmers), Rwanda ($26.3  million for land husbandry, water harvesting, and hillside irrigation), Tanzania ($20 million for food safety and security), Haiti ($10 million for agricultural productivity and food security), Myanmar ($27 million for nutrition and food insecurity), and Nepal ($22.7 for nutrition, agriculture productivity, and resilient farming. As of March 2017, the Programme had received a pledge of $1.3 billion. http://www.worldbank. org/en/news/press-release/2017/03/30/global-agriculture-and-food-security-programannounces-new-round-of-grants-to-fight-hunger-and-poverty. 29  For sectoral breakdown of funding, see UNCTAD (2019). 30  See http://www.fao.org/3/a-i4531e.pdf.

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support to national and continental priorities is improving and should be strengthened. Improving funding to agriculture is key to boosting productive capacity of African economies. Aligning ODA funding to the CAADP target of at least 10 percent is central to making progress. The second tragedy is that the limited agricultural capital is directly linked to government underinvestment in agriculture in Africa. Very few African countries are committed to meeting the Maputo Declaration of dedicating 10 percent of budget to agriculture—15  years after it was established. As discussed in the previous section, only seven countries (Burkina Faso, Ethiopia, Niger, Mali, Malawi, Senegal, and Zambia) consistently met this target. In fact, countries like Malawi even went beyond the target, achieving as high as 21 percent in 2013.31 The gross underinvestment in agriculture accounted for low productivity in the sector. Between 2001 and 2010, the average budgetary allocation to agriculture in Sub-Saharan Africa was 3.1 percent (Benin et  al. 2016:11). Several countries have experienced setbacks on this target. For instance, Uganda’s budgetary allocations, which ranged between 10 and 22 percent from 2006 to 2011, fell to about 6 percent in 2013 (FAO 2014b). It is important to acknowledge that the specific focus on agriculture spending during this period deserves commendation: input subsidy (24 percent), extension services (21 percent), research (18 percent), infrastructure (14 percent), and training (12 percent), among others. Agriculture’s supportive spending (rural infrastructure) is also commendable.32 Enhancing the consistency, efficiency and quality of spending in agriculture and its governance remains a critical area of focus in African countries.33 This is what aligns budgetary spending with actual agricultural productivity enhancements on the ground. The third tragedy is limited private financing. African small-scale farmers face a financial paradox.34 The relationship between the African  For detailed information on Malawi’s agricultural system, see FAO (2015a).  This comprises roads (31 percent), health (30 percent), water and sanitation (23 percent), and energy (14 percent) (FAO 2014b). 33  FAO’s countries analysis of public expenditure on agriculture shows direct payment to agents is as high as 80 percent in Kenya and 70 percent in Malawi. As in many countries, addressing the inefficient targeting and leakages from input subsidies is an important challenge that calls for urgent consideration. Ensuring such interventions reach the target beneficiaries efficiently and effectively is vital to food security and agricultural development. 34  This relates to the existence of large cash reserves in banks but accompanied with little or no credits to agricultural sector especially the small-scale farmers. Banks complained of lack of bankable projects, while small-scale farmers moan lack of credit. 31 32

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banking system and the agricultural sector is a financial puzzle. African banks have the largest cash reserves globally, yet lending to small-scale farmers is almost nil—although these farmers account for 80 percent of food production in Africa. Small-scale farmers do not have access to credit from the African financial system for several reasons. First, small-scale farmers are often too poor to afford the prohibitive lending rates of the formal banking system, which is as high as 60, 44, and 24 percent in Madagascar, Malawi, and Uganda, respectively, in 2016. It is between 15 and 24 percent in many countries like Mozambique, São Tomé and Príncipe, Democratic Republic of the Congo, Sierra Leone, Nigeria, Kenya, and Tanzania. Second, the absence of collateral makes access to the normal financial system more challenging. Farmland is neither registered nor documented in most African countries, which makes it practically impossible for land to be used as collateral security. The Nigerian anchor borrowers’ programme, which offers single-digit lending rates to farmers amidst a double-digit market rate, is a good example that can be emulated by all African countries, however (Box 3.5). Third, the absence of credit

Box 3.5  Nigeria’s Anchor Borrower’s Programme Facilitates Access to Single-Digit Interest Rates

Driven by rising concerns regarding the volume of foreign exchange being spent to import food—estimated at an annual value of US$9.9 billion (Table 2.3)—the Central Bank of Nigeria launched the Anchor Borrower’s Programme in 2015, which today is the largest public-private (non-donor) partnership on extension services. This programme links farmers to buyers, aggregators, or off-takers (e.g. Olam, Babban Gona, and Labana Rice Mills); provides training; and facilitates access to inputs and credit (at 9.0 percent compared to market rate of over 20 percent), while the Nigeria Incentive-based Risk-sharing System for Agricultural Lending (NIRSAL) serves as the buyer of last resort for farmers—in case of market lulls or inability to sell to aggregators. As of December 2017, the federal government affirmed N55.526 billion had been lent to over 250,000 farmers, leading to cultivation of 300,000 hectares of farmland for rice, wheat, maize, cotton, soybeans, cassava, and so on. The evidence from the pilot in (continued)

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Box 3.5  (continued)

Kebbi State with 20,000 rice farmers shows that yields increased from 2.2 tonnes to 6 tonnes under the programme. However, some lessons abound from this programme. First, group support through cooperatives proved to be more effective than individual support, especially on inputs and finances. Second, it is important for farmers to know ab initio the actual subsidy to avoid abuse. Third, effective targeting is needed to ensure only farmers have access to this support to avoid leakages. Fourth, credits to farmers must not be higher than what they need, as is the case under this programme, where just about $220 was needed, but farmers had access to $375–$600, which weakened the capacity of most farmers to pay—a phenomenon that often leads to moral hazards. Source: USAID et al. (2017)

rating agencies makes loan monitoring very transaction-intensive and very difficult for banks to monitor. Fourth, the risks associated with small-scale farmers (e.g. vagaries of weather, diseases, and absence of loan recovery mechanisms for informal operators that are very difficult to trace) discourage formal financial systems to lend to this group. These point to what Africa should do differently to harness the full potential of small-scale farmers. These include promoting farmland registration and titling as well as weather-insured agricultural schemes. These will help to de-risk the financing climate for small-scale farmers. When small-scale farmers do not have access to affordable credit, it becomes difficult to access quality seeds, fertilizer, and tractors. They therefore resort to poor-quality seeds, fallowing in the absence of fertilizer,35 and using rudimentary tools in the absence of tractors. It is therefore not surprising to find that the high lending rate in Africa is negatively related to farmers’ productivity, explaining about 15 percent of the variation in farmers’ productivity—as proxied by the coefficient of determination. All countries with labour productivity higher than $2000 have a single-digit lending rate (excepting Egypt) (Fig. 3.9). 35  A practice that contributes to deforestation and soil degradation, which exposes communities to climate shocks.

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Average Labour productivity, 2001-2012 ($)

10,000 South Africa 8,000 6,000 4,000 Egypt, Arab Rep. 2,000 Guinea-Bissau 0 0 -2,000

5

Swaziland Namibia Liberia Botswana 10

15

Nigeria Angola 20

Sierra Leone

Gambia, The Congo, Dem. Rep.

25

Average Lending rates, 2010-2016 (%)

30

Malawi

35 40 y = -109.58x + 3215.4 R² = 0.1531

Fig. 3.9  Labour productivity and lending rates in Africa

In the absence of access to credit from commercial banks, farmers resort to informal lending from relatives, friends, and money lenders. Incidentally, the informal sources, especially money lenders, are prohibitively expensive—even higher than the banking system. This significantly reduces farmers’ profit margins. Informal lending often constitutes the major source of funding of small-scale farmers. A semi-formal source of lending is the Contract Farming (CF) or out-grower farming, which is becoming a dominant force in funding small-scale farms in Africa. Unlike providing only cash to farmers, the credit is asset- and technical assistance-based. Agricultural inputs like fertilizers, improved seeds, pesticides, herbicides, and equipment are provided on credit. They provide guaranteed price, extension, and market information to farmers. Loans are repaid in the form of farm harvest. They reduce transaction costs on input, product, and exchange markets. Out-grower farming is always for either exports or processing. These include palm oil in Côte d’Ivoire, horticulture exports in Kenya, cotton in Zambia, and vegetable exports in Senegal and Madagascar. Good examples of processing out-grower farming include the British American Tobacco in Nigeria and Uganda, the Guinness Brewery in Ghana, and the Tea Development Agency in Kenya. Olam International, Dangote, and the Export Trading Group (ETG) are examples of contracting farming that operate in Africa.

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Despite the advantages of CF to African agriculture, challenges abound. Out-grower farming involves enormous monitoring and coordination to ensure standards, sufficient quality, and manage risks (Armah et al. 2010). The inability of most out-grower firms to meet the responsibility of providing loans (outside high-yielding seeds, fertilizers, and pesticides) is leading to the emergence of intermediaries, often known as Local Buying Agents, in many African countries. These agents serve as intermediaries between out-grower firms and the farmers—collecting seeds from the out-­ grower firms for distribution to farmers, collecting produce at farmgate prices, and providing credit to farmers. Such intermediation roles often reaped off the famers’ profit margins. In several situations, the income generated by farmers under these agreements is not high enough to lift them out of poverty and exclusion. A critical challenge associated with CF, which is further complicated in communities where local buying agents serve as intermediaries, is the imbalance in negotiating power between the farmers and firms, which often leads to exploitation of farmers. The unfavourable conditions farmers experience, including a lack of market information and poor contract negotiation, often put farmers in awkward situations. Delayed payments for produce and purchases at prices below the market price are commonplace—situations that erode farmers’ confidence in out-grower schemes. How can the asymmetry of power between out-grower farmers and contract firms be optimally addressed? Addressing this is one of the things African governments and stakeholders should do differently. Strengthening institutions, capacities, and practices on contract farming is vital. First, building and nurturing the bargaining powers of the farming community both at the individual, group, and societal levels is vital. Second, as mentioned in other parts of this book, organizing small-scale farmers into cooperative societies or farmers groups or producer organizations can help improve the collective bargaining powers of farmers, boost information sharing, help address credit default, overcome unnecessary transaction costs, and benefit from economies of scale. Third, involving knowledgeable third parties in the CF negotiation is beneficial to farmers. Involving CSOs and social entrepreneurs could also add substantial value to the process. Fourth, using communities of practice on CF, each country could develop guidelines on CF governance, creating a win-win framework. Fifth, creating platforms and networks for sharing experiences and exchanging ideas on best practices on CF, including negotiation, management, and governance, would be vital.

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Finally, evidence from several African countries (e.g. Nigeria and South Africa) has shown that when farmers avoid overdepending on one buyer, negotiation power improves. In this regard, farmers are encouraged to grow multiple crops and have alternate production opportunities outside a leading contracting firm. The analysis of credit in Africa seems unbalanced. Most farmers in Africa do not have an appropriate credit culture. Loans (particularly supported from government institutions) are often seen as ‘national cake’, which tempts many loan recipients to commit moral hazard with limited propensity to repay such loans. As is the case in most African countries, there is evidence that in Nigeria, only three in ten farmers repay their loans (USAID et al. 2017), and such loans are often spent on non-agricultural activities. In many parts of Africa, most women are risk averse to credit. Access to finance will play a strong role in breaking the paradox of agriculture and in laying the foundation for agricultural transformation that can turn Africa to a powerhouse of food security and value addition. What should African governments and stakeholders do differently? An important lesson from this experience is to promote risk-sharing loan facilities with farmers. Avoiding fully guaranteed loans for farmers is a strategy to promote a sound credit culture. A good example that works is a multiple risk-sharing framework, where the Central Bank of Nigeria took 50 percent of the risk, the commercial bank 25 percent, the Olam (off-­ taker) 20 percent, and farmers 5 percent (ibid.). Doing things differently, public advocacy on encouraging women to take loans and on advising loan recipients to avoid moral hazard should be prioritized. The third strategic thing that must be done differently is that financing must not be limited to a few areas of agricultural activities; rather it must be all-embracing for its impact to be far-reaching. The critical areas requiring substantial financial support (as articulated in CAAGP priority areas) include: (1) natural resource management (e.g. land, water, and climate); (2) science and technology (e.g. research, extension services, irrigation); (3) food and nutritional security (e.g. farm supports and subsidies, and post-harvest management); (4) private sector development (e.g. competitiveness and access to market and credit); (5) rural infrastructure (roads, water and sanitation, health and education); and (6) an enabling environment (e.g. policies, institutions, and good governance). All these require strategic support for the sector to be fully transformed at the national and regional levels. These six strategic areas are mutually reinforcing. For instance, investment in rural roads enhances connectivity to markets,

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facilitates transporting extension service workers to villages, and reduces transaction costs; in turn, investment in extension services, training, and research improves farmers’ productivity and capacity to adapt smartly to climate change. Investments in private sector development, good governance, and institutions help promote healthy competition and sustainability. The experience from African countries where a substantial part of the agriculture budget goes to salaries—with very little going to operations and inputs-farmgate-outputs ecosystem support—should be reviewed to be more favourable to the latter. Consequently, many extension workers in Africa only collect salaries without having operational support tools and resources to reach out to farmers for transfer of knowledge. Efforts to reduce salaries and related costs of Ministries of Agriculture and related institutions to a maximum of 30 percent are critical to uncovering more resources to divert to operational, technical, and infrastructural facilities towards supporting agricultural transformation. At the agency or technical institutions’ level, this should not be higher than 15 percent. 3.3.3  Urban Development Policy Bias Decapitalizes Agriculture Africa’s poor agricultural performance has also been linked to a lack of attention to rural sector development. A bias of development policies towards urbanization perpetuated an economic duality that continues to drain any agricultural surplus and productivity in many African countries. The introduction of structural adjustment programmes in most African countries led to an abandonment of rural development, with most development policies focusing on urban transformation. This is further compounded by low levels of investment in agriculture. As argued by Norton (1987), development policies during the structural adjustment programmes discriminated against rural areas. Public resource allocation to rural areas is disproportionately lower than their contribution to the economy. Rural areas received between 17 and 49 percent of their contribution to GDP through public expenditures. Furthermore, rural savings were drained to the cities while domestic terms of trade discriminated against agriculture. This is a policy issue that African policymakers and stakeholders must handle differently if agriculture is to drive inclusive growth and development. The poor state of rural African infrastructure also affected the overall performance of African agriculture relative to Asia and other regions

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(Karshenas 2001). The transaction costs associated with limited infrastructure does not only make bulky agricultural products non-tradable; access to national and international goods markets is quite prohibitive due to distance from ports. Moreover, delivery of agricultural products to marketing boards is costly for millions of dispersed and remote farmers. And as argued earlier, because of the presence of high transaction costs due to sparse populations and a lack of rural infrastructure, coupled with a lack of agricultural integration to markets—all contributing to post-harvest losses—African farmers cannot benefit from price incentives associated with global food and agricultural prices. The poor state of rural infrastructure is one of the reasons why youth are abandoning agriculture. Beyond the rudimentary nature of agriculture, which has been a way of life—not as a business enterprise—the lack of basic facilities like roads, schools, health services, and communication as was built in most Asian countries in the 1970s, and currently being built in India through the Bharat Nirman Rural Infrastructure Flagship Programme that started in 2005 in India,36 pushed African youth out of rural areas to cities. Making development policies pro-rural is key to agricultural transformation and using agriculture to unleash the potential for food security, economic diversification, and industrialization. Reversing the urban development policy bias, using proportionality principle—based on contributions to GDP—is a key to the future of Africa’s inclusive growth and development. 3.3.4  Limited Knowledge and Investment in Post-Harvest Loss Management Post-harvest losses are high in Africa. In 2011, the FAO estimated that as much as 37 percent of food produced in Sub-Saharan Africa is lost between production and consumption; the estimated losses for cereals are 20.5 percent. Losses due only to post-harvest handling and storage were also estimated by FAO to be 8.0 percent. The estimate by the African Post-­Harvest 36  This project, when established in 2015, aimed to achieve by 2009: irrigation (create 10  million hectares of additional irrigation capacity); roads (connect every community to all-weather roads with 1000 located in plain areas or more people or communities located in hilly, tribal, and desert areas with 500 people or more); electricity (provide electricity to remaining 125,000 villages and to 23  million households); housing (construct 60 lakh houses); drinking water (provide drinking water to 55,067 uncovered habitations); telephone connectivity (connect remaining 66,822 villages with telephone) (Odusola 2019).

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Table 3.2 Magnitude of post-harvest losses (PHLs) (%)

Commodities Maize Cowpea Cassava Yam Beans Mango Sweet potato Tomato Fish Rice Banana Groundnuts Irish potato Leafy vegetables Okra Orange Meat Milk

91

Minimum mean

Maximum mean

5.6 4.3 28.0 18.8 2.1 24.8 7.4 10.7 14.7 5.4 – 3.1 7.0 – – 3.0 – –

25.5 23.5 42.3 41.6 14.0 55.9 43.6 33.7 27.3 25.6 35.7 10.1 21.6 43.5 23.4 18.8 3.0 12.7

Source: Author’s compilation from Affognon et al. (2015)

Losses Information System (APHLIS) is between 10.0 and 12.0 percent (World Bank 2015a). Evidence from Affognon et al. (2015) reveals that inadequacies of loss assessment methodologies result in inaccurate postharvest loss (PHLs) estimates. They also found that a majority of available post-harvest loss estimates relate to on-farm storage, mainly of maize. Yet many people in Sub-Saharan Africa rely on a variety of other staples, and post-harvest losses could also occur at various points in supply chains. Table 3.2 provides an estimate for multicrops PHLs, using a supply value chains approach. There is a clear indication that further assessment is needed of PHLs across the entire value chain of the various food commodities of nutritional importance to Africans. In addition, there is evidence that technologies for loss mitigation fail to address supply chain dynamics. The PHLs increase with humidity, temperature, and construction cost of storage facilities. However, PHLs decline with better market access, post-primary education, higher seasonal price differences, better production experience, technology efficiency, membership of farmers associations, access to extension workers, and improved storage

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practices (World Bank 2015b; Affognon et  al. 2015). Policy actions to address post-harvest losses must be done differently through adoption of appropriate methodological approach and heavy investment in PHL management. 3.3.5  Limited Access to Agricultural Inputs Access to modern agricultural inputs was a primary element of the green revolution experienced in Asia and Latin America in the 1960s and 1970s. Africa’s agricultural poor performance has also been linked to limited or a lack of access to modern inputs by smallholder farmers, which worsened during SAP.37 Input subsidies, if well implemented, stimulate agricultural production; they compensate for high transport costs (especially to farmers in remote areas); improve soil quality and combat soil degradation; and offset high costs of supplying inputs when markets have low volumes. Subsidies can also create economies of scale in logistics; make inputs affordable to farmers who cannot buy inputs; allow farmers to try novel inputs and become familiar with their advantages; and promote social equity (Wiggins and Brooks 2010).38 The low use of fertilizers, for instance, explains why the green revolution eluded Africa. Between 2010 and 2013, Sub-Saharan African farmers, on average, used about 16 kilograms of fertilizers per hectare compared to 326 in East Asia and Pacific, and 135 in Southeast Asia and 123 in Latin America (Fig. 3.10). While this is a blessing in terms of agriculture-climate change relationship, the fertilizer utilization-productivity remains a serious challenge. Malawi’s fertilizer subsidies programme (the Starter Pack) is one of the few success stories in Africa (see Box 3.6). It did not only help to increase productivity, but also contribute to increases in farm incomes and wages, improve nutrition, and reduce poverty. However, its fiscal burdens and management challenges accounted for a discontinuation and subsequent 37  The devaluation of currencies, removal of input subsidies, and across the board cut in capital expenditure during SAP raised the prices of agricultural yield-enhancing technological inputs like fertilizers, pesticides, and machinery—mostly imported. Sub-Saharan governments’ annual spending on agriculture fell from 7.1 percent in 1981–1990 to 3.1 percent in 2001–2010, while spending on R&D fell from 1.7 percent to 1.0 percent between 1971–1980 and 1991–2000 (Benin et al. 2016). 38  In Sri Lanka, fertilizer was subsidized to the tune of 93 percent and 72 percent in Malawi (Wiggins and Brooks 2010), which made farmers benefitted from opportunities associated with access to inputs supply.

93

160.22

123.12

15.73

88.29

326.50

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SUB - SAHARAN M IDDLE EA ST & LA TIN A M ERICA AFRICA NORTH AFRICA & CARIBBEAN

SOUTH ASIA

EAST ASIA & PACIFIC

Fig. 3.10  Fertilizer consumption (kilograms per hectare of arable land) (average, 2010–2013). (Source: Author’s computation from WDI)

Box 3.6  Malawi’s Fertilizer Subsidy Programme

Malawi’s fertilizer subsidies programme (the Starter Pack), introduced in 1998–1999 to provide a subsidy pack on seed and fertilizer sufficient to plant one-tenth of a hectare, aimed to create awareness of modern inputs, increase food production, and improve farmers’ incomes. Although it was initially distributed freely to all households in 1998–1999, in 2001–2002 it was targeted to limited households and finally scaled down substantially in 2004–2005. A universal application was introduced in 2005–2006, which allowed beneficiaries to buy two 50-kilogram bags of fertilizer at 28 percent of the original price. However, the level of subsidy gradually rose to 64 percent in 2005–2006 and further to 91 percent in 2008–2009. This led to the rising programme cost from $51 million in 2005–2006 to $117 million in 2007–2008 and $285 million in 2008–2009— with a budget overrun ranging from 42 percent in 2005–2006 to 105 percent in 2008–2009 (Dorward et al. 2010). (continued)

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Box 3.6  (continued)

By 2006–2007, 2.0 million seed vouchers and 3.0 million fertilizer vouchers were distributed (Wiggins and Brooks 2010). Although the proportion associated with fertilizer use was around 23 to 54 percent (Baltzer and Hansen 2011). 100 90 80 70 60 50 40 30 20 10 0

Subsidy coverage in Malawi 2005-2009

54

2.1 3.1 3.4

59

65

64

72

91

79

6.6

% of budget 2005/6

% household coverage 2006/7

2007/8

% subsidy 2008/9

This is one of the few success stories in Africa. As stated by UNDP (2012), the coverage of beneficiaries reached 54.0 percent of households in the first year and rose to 65.0 percent in the second year. The programme contributed to raising output of the main staple, maize, to exceed the target of 2.4 metric tonnes. Maize production rose from about 1.3  metric tonnes in 2005–2006 to 3.6  metric tonnes in 2009–2010. Yield per hectare rose from just about 0.8 tonnes to about 2.1 tonnes per hectare during the same period (Wiggins and Brooks 2010). In 2006–2007, Malawi went from a food deficit to a surplus of 1.3  metric tonnes, exporting close to 400,000 tonnes of maize amounting to about US$100.0  million (UNDP 2012); the programme also contributed to increases in farm income and wages, improvements in nutrition, and a reduction in poverty. Furthermore, the programme shielded farmers from volatile (continued)

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Box 3.6  (continued)

fertilizer prices. Many other factors, including good rain, economic stability, and high tobacco prices, accounted for this success. Income inequality (Gini) also fell from about 0.50 in 1998–1999 to below 0.40 in 2004–2005 due to the implementation of the Starter Pack, yet rose sharply to 0.45 in 2011, largely because of its removal in 2005 (Cornia and Martorano 2017). While the objective of productivity has been achieved, the challenges of political patronage, crowding out of local suppliers due to its centralization, and the use of non-market-based solutions, fertilizer importers benefitted more from the programme—and the rising cost of the programme was becoming a fiscal burden to the government. The cost rose from US$54 million in 2005–2006, when the universal subsidy was introduced to $285 million during 2008–2009, representing 16.0 percent of the total government budget (Dorward et al. 2010; Cornia and Martorano 2017) with limited support from donors (only about 5 percent). In addition to the fiscal unsustainability of the programme, the absence of any exit strategy was another challenge.

adjustment in scope. A similar effect of fiscal challenges led to discontinuing another successful subsidy programme in Nigeria (Box 3.7). This fiscal burden of input subsidies is not limited to Africa. A similar experience was also noted in Asia, for example, Sri Lanka and India. For instance, in India, the cost of subsidies as a share of government spending rose from less than 5 percent in 1981 to about 25 percent in 2003 (Wiggins and Brooks 2010). And is often the case in several other countries, in India, the cost of subsidies crowded out other public investments including spending on physical infrastructure, and research and extension services, which accounted for a slowdown in the increase of production since the middle of the 1990s. The governance and fiscal sustainability of input subsidies remain critical in sustaining such policies globally. Experience across the world shows that fertilizer subsidies are beneficial in their own right. However, for them to contribute to an agriculture-for-­ development paradigm, their application must not crowd out other agricultural ecosystem actions (e.g. rural roads, extension services, or irrigation). Understanding this reality also calls for an ecosystem approach

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Box 3.7  E-Wallet Fertilizer Subsidy Programme in Nigeria

Fertilizer use is very low in Nigeria—15 kilograms per hectare compared to the African Union’s 50 kilograms per hectare and FAO’s 200 kilograms per hectare. Recognizing this serious challenge, the federal government of Nigeria, in 2012, launched an e-Wallet system to distribute fertilizer subsidies directly to farmers through mobile money. This mechanism was designed to avoid the graft and losses that marred previous fertilizer subsidy programmes. Fertilizer subsidizes covered 50 percent of the cost, with 25 percent borne by the federal government and 25 percent by the state governments. Note that 4.5  million farmers (250,000 women) registered in the first year, and by 2016, 14 million farmers (including 3 million women) were registered. Of this, between 70 and 80 percent of the registered farmers received subsidies (USAID et al. 2017). This initiative ran into a hitch due to the lull in the primary commodity market that badly affected governments’ revenues. Subsequently, most state governments pulled out of the programme in 2016. Debts owned by state governments to banks were over NGN 600  billion (US$1.9  billion) in December 2015, while the federal government owed agroinput dealers NGN 72  billion (US$230 million) (Okojie 2016). This notwithstanding, the federal government committed to pay a 50 percent subsidy to farmers growing rice during the dry season and 25 percent to those cultivating during the wet season. The main challenge of this solution is that very few people cultivate rice, while only less than 1 percent of arable land is irrigated, leaving very small proportion of people benefiting from such an initiative. that promotes accelerated and sustainable agricultural productivity by aligning the use of fertilizers to soil-water-plant relationships. In this regard, fertilizer application must safeguard environmental quality, protect public health, and enhance social progress. Agricultural input support programmes must not compromise long-term production solutions. The overall objective is to use agriculture to drive national development objectives, especially in low-income countries. Support to agricultural inputs must be targeted at enhancing the productivity of small-scale farmers in a sustainable manner;

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furthermore, such productivity enhancements should be able to propel rural non-­agricultural activities. Adopting the right technology to target small farm holders plays an important role in taming poverty in Asia. Long-term investments in agriculture research and development, rural infrastructure, extension services, and irrigation are generating high returns through their impacts on agricultural productivity and poverty reduction. In fact, Pingali (2010) reiterates that investment in agriculture research and development has much greater impact than any other public (non-research) spending. The long-­ term impact of agriculture research and development, especially on lower food prices, affects a majority of urban dwellers, particularly in China and India, where the urbanization process is large. This was also evident in Taiwan, especially in the 1970s and 1980s (Council for Economic Planning and Development 2013). Malawi has been following the implementation of the Maputo Declaration since 2005, but has been unable to address chronic food insecurity and malnutrition. In addition to allocating resources to agriculture at a rate higher than the Maputo target—as high as 21 percent in 2013— the country has also been implementing the Agriculture Sector-Wide Approach (emphasizing food security; commercial agriculture and agroprocessing; and sustainable agriculture through land and water management); focusing on input subsidies on small-scale farmers (Farm Input Subsidy Programme); and reforming the land tenure system through the 2002 National Land Policy and the 2013 Land Bill and Customary Bill (FAO 2015a). To promote long-term production solutions, it is imperative to address inefficient allocations of resources, lack of crop diversification, fragmented agricultural and environmental policies, and limited focus on risk management to small-scale farmers. Addressing the problem of costs, targeting and distribution should therefore be a priority to most African governments for input subsidies to achieve the short-term objective of productivity and the long-term goal of reducing poverty and exclusion, as well as respecting the limits of the mother Earth. Ensuring good government and corporate governance of the Green Belt Initiative in Malawi—whose objective is year-round agricultural production, enterprise development, and exports through PPP and joint ventures—could unleash the productivity that could propel the growth of rural economies and livelihoods. What must Africa do differently on input subsidy programmes? Key among these are managing the governance of such programmes to be

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fiscally sustainable through cost containment, ensuring effective targeting of beneficiaries, and institutionalizing efficient distribution mechanisms that do not crowd out local suppliers. Focusing input subsidies on a single commodity makes small-scale farmers most vulnerable to market and climate change shocks. Historically, most African subsidy programmes (e.g. as in Malawi, Zambia, and Kenya), similar to the experience in the Asian and Latin American green revolution, have focused on a single commodity, mostly maize (one exception is the input subsidy programme in Ghana in 2008–2009). Focusing only on one commodity does not reflect the diversity of food staples across Africa: grains are commonplace in East and Southern Africa (e.g. maize), root and grain crops in West and Central Africa (yam, cassava, and rice), and grains and vegetables in North Africa (wheat and spinach). Across the five regions, livestock and aquaculture are common, yet not much has been done to support these sub-sectors. Yet, the future of agriculture in Africa remains incomplete without their transformation. To this end, farmers unengaged in such crops supported by input subsidies may not be able to benefit from the poverty- and inequality-­reducing effects of these support programmes. Agricultural productivity in Africa must be experienced across different sub-sectors and commodities for its impact to be all-embracing—increasing food security, sustaining livelihoods, reducing poverty, and providing quality environmental services. Furthermore, focusing input subsidies on only one crop weakens Africa’s well-known crop diversification and makes African farmers more vulnerable to market and climate change shocks. This reality is one of the reasons why Africa was neither able to avoid the impact of a bust in primary commodity prices since the last quarter of 2013, nor able to cope very well with recurring droughts, floods, and heat waves across African regions (especially the extreme events in the Sahel and the Horn of Africa). Promoting crop diversification that builds resistance to climate change and to vicissitudes of global markets will require strong political will, heavy investments, and massive public support. Accelerated access to agricultural inputs (fertilizers, seeds, machinery, and irrigation) is not only key to breaking the shackles of agricultural paradox, but also to turn agriculture into the powerhouse of food security, nutrition, and wealth creation—as well as a tool to drive overall national development.

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3.3.6  Inadequate Attention Given to Water-Soil-Productivity Linkage Through Rainfed Agriculture The success of the first and second waves of green revolution in Asia and Latin America is not without serious costs—gargantuan environmental damage, colossal biodiversity loss, and enormous loss of food sovereignty. The urge to make agriculture contribute to sustainable development, as opposed to being a major contributor to greenhouse gases and environmental degradation, is generating more interest on agroecology in Africa.39 This is an age-long practice that takes care of nature and culture while producing diverse, nutritious, and abundant food. The combination of a rich cultural knowledge and practice with relevant science and technology could be a game changer for water-soil-productivity nexus in a rainfed agriculture environment. If well-practiced, agroecology could foster regeneration and restoration of the environmental ecosystem while promoting biodiversity, enhancing productivity, building resilience, and integrating small-scale farmers into the agriculture ecosystem. In this regard, agroecology could be a potent tool to harness Africa as a major producer of environmental services rather than being a destroyer. How can Africa use agroecology to drive agricultural productivity and transformation? After about five decades of the negative impact of green revolutions, the world has come to realize that rainfed agriculture could be a blessing after all. About 95 percent of Sub-Saharan African agriculture depends on rainfall. As such, improving the potential productivity of rainfed agriculture is focusing more research on the water-soil-­productivity nexus in Africa. The value of this exercise has been bolstered by the conclusions from the World Bank (2010) that improved water, soil, and crop management in the context of rainfed agriculture could double agricultural productivity in areas with low yields. Agroecology also reinforces complementarity between agriculture and biodiversity through crop rotation, planting of covered crops, and reducing tillage. Several studies have documented four strategic techniques that could help Africa leverage the power of agroecology for enhanced productivity (e.g. World Bank 2010). The first relates to adoption of the age-long structural measures likes terracing, mulching, and fallowing in enhancing efficiency of water and soil in tropical Africa. Terracing helps to control erosion while mulching and fallowing help retention, restoration, and regeneration through storage of carbon stocks. 39  This is the practice of diversifying farming system through mixed cropping, intercropping, agroforestry, and livestock integration (AFSA 2016).

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This leads to the second technique, which is sparingly used in Africa— payment for environmental services (PES). As indicated in Fig.  3.10 above, Africa has the lowest fertilizer consumption globally—and fertilizer consumption is a major factor contributing to carbon emissions. This reality, among others, makes Africa a major environmental services provider to the world. Yet, Africa benefits the least from the Clean Development Mechanism—just about 2.0 percent of CDM projects.40 The age-long traditional forest reserves in Africa, presently coined by foreign partners as ‘ecotourism and conservation mechanisms’, could also be explored to strengthen PES in Africa. Developing infrastructure to promote ecotourism and conservation businesses that benefit the rural poor is key to accelerating this version of agroecology, which encompasses agroforestry. The enhancement of forest carbon stock,41 building on the traditional conservation system, is evolving.42 Still, this mechanism is yet to maximally benefit the rural poor. How can the CDM be turned in favour of rural Africans? A four-­pronged approach is proposed. First, carbon finance should be expanded from its current limited carbon finance (which is focusing more on large emitters through the use of CDM) to move from agroforestry to ecology by incorporating sustainable farming practices (especially giving incentives to nonabuse of chemicalized fertilizers), which is the dominant farming practice in Africa—promotion of organic agricultural production. The second is developing solvent demand for payment for ecotourism, conservation, and watershed services at the local and national levels. This includes developing legal, institutional, and fiscal mechanisms to generate new public and private financing mechanisms for climate mitigation. Third, payment for environmental services (PES) cannot work without a dependable and trusted land tenure system and an enhanced local coordination capacity that is based on grassroots participation. Finally, the big elephant in the room is dealing with the risks associated with payment for environmental services in

 Odusola (2017) provides a detailed analysis of the CDM potential for Africa.   Introduced by the United Nations Framework Convention on Climate Change (UNFCCC) in 2005 through the Reducing Emissions from Deforestation and Forest Degradation (REDD) has contributed to the expansion of carbon sequestration in Africa. 42  Good examples include avoided deforestation in Congo, Trees for Global Benefit Project in Uganda, Land Lease Programme in Amboseli ecosystem in Kenya, and Equitable Payment System for Watershed Services in Usambara mountains in Tanzania (AfDB 2015). 40 41

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Africa. In this regard, strong political will and public support must be created to develop and implement policy, legal, and institutional mechanisms to mitigate perennial and potential risks to successful PES, such as conflicts over natural resources; unfair arrangements with communities, especially on contracting modalities; elite capture and mismanagement; all remain critical in pushing the frontier of PES to support rural economic transformation, including sustainable agriculture and agroforestry.43 The third technique that could help promote the productivity of rainfed agriculture is the adoption of risk-sharing strategies. Adoption of an effective insurance system for small-scale farmers by shifting from an indemnity-based approach to an index-based approach could help shift the frontier of agroecology in Africa. Finally, regular provision of climate information to farmers through radios, text messages, and community information dissemination mechanisms could make appreciable impacts. In this regard, each country should invest in acquiring state-of-the-art equipment for weather forecasting to help farmers better plan their activities. The establishment of scores of automated solar-powered weather stations in Ethiopia is a solid example of such investments in Africa. 3.3.7  Heavy Burden of Tariff Barriers, Non-Tariff Barriers, and Globalization African farmers have been victims of fiscal exploitation for a long time through several mechanisms, including export duties, overvalued exchange rates, and marketing boards. Tariff and non-tariff barriers to African agriculture and agroindustrial trade are high. A high rate of agricultural taxation (through the price or the terms of trade mechanisms) is a major impediment to the sector’s growth, transformation, and development. African agricultural products face dual tragedies: export taxation from African governments and import tariffs in destination countries. Overvaluation of the exchange rate is another form of indirect tax on agricultural products. Through these various forms of exploitations, some

 Odusola (2014) elucidates more on contracting modalities. AfDB (2015) examines legal and fiscal mechanisms, while AFSA (2016) explores institutional mechanism for deepening agroecology in Africa. 43

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sparsely populated and resource-rich African countries (e.g. the Democratic Republic of the Congo and Zambia) taxed their agriculture higher than many densely populated, resource poor, Asian countries (e.g. Bangladesh, India, and Sri Lanka).44 Heavy taxes on agriculture lead African farmers to receive producer prices that are lower than the global price, thereby decreasing farm profits and welfare. Ghana’s COCOBOD, which fixes cocoa farmgate prices at 30 percent below the world price, in addition to the 3–4 percent export tax and taxation in kind,45 is a good example of pricing mechanism that disempowers African farmers—leading to substantial price distortions. This amounts to governments prioritizing revenue collection at the expense of marginalized farmers’ welfare. All these contribute to trapping cocoa farmers in poverty and low productivity. Declining terms of trade is another form of taxation on African agriculture. Historically, these various forms of taxation led to the plundering of African agriculture through losses of profit margins for farmers—a phenomenon that reduced incentives to invest in productivity enhancement. This dynamic makes African agriculture less competitive in the global market. Low profit margins discourage investment in farming and participation of young populations in agriculture. This reality is further compounded by ambivalence of international policies—where the global North is enmeshed in heavy agricultural subsidies and through their bilateral and multilateral relations, forced African

44  Further exposition on the various forms of exploitation has been documented by scholars: marketing boards (Bates 1981), dual tragedies (Lipton 2009; Binswanger and Townsend 2000), exchange overvaluation (Oyejide and Njinkeu 2008), and comparison between Africa and Asia on agricultural taxation (Karshenas 2001). 45  The multiple tax burdens on cocoa farmers as evident in Asche (2018) take several forms. The taxation in this kind is paid when the farmers hand in their cocoa beans to the local purchasing clerk, a bowl from each bag is deducted as a ‘community tax’, and at the community level, one kilogram is withheld from each bag for the provision and maintenance of the sacks and another one for the weighing machine. Ordinarily, this ought to have been compensated by the 30 percent of world price discounts charged by COCOBOD. And when the weighing scale manipulations and the cascading impact of fertilizers and agrochemicals prices (through the FOB approach) are added, the ‘real’ tax on farmers becomes intense.

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governments to do away with agricultural subsidies—no thanks to the Structural Adjustment Programmes (SAP).46 High transaction costs, such as those from a lack of market integration, poor infrastructure, prohibitive transport costs, and high labour costs make African subsistence farmers unable to benefit from price incentives offered by the market. Limited technological change in the agricultural sector also contributes to low productivity in this sector, partly as a result of underinvestment and undercapitalization in agriculture by the governments, the private sector, and foreign investors. African agriculture is influenced not only by domestic policies (trade regimes, sectoral, and macroeconomic policy environments) but also by external developments in the context of the new world order. Globalization is a double-edged sword. Countries that strategically take advantage of technology adaptation and diffusion can transform their agricultural sectors to increase food security and develop value chains, including industrialization. However, the dumping in Africa of agricultural products that benefit from huge subsidies from most OECD and Asian countries is hurting and decapitalizing Africa’s agriculture. The value of agricultural subsidies, which was estimated at $486 billion in 2012, from just 21 countries, is strong enough to distort the global agricultural market.47 The disproportionate distribution of agricultural subsidies across regions could be a major source of global inequality and the unequal distribution of poverty across countries. The unequal distribution of subsidies globally is presented in Box 3.8. In this regard, African countries should strategically and competently manage globalization for their agricultural development via outlawing dumping and promoting technological adoption and diffusion in the agricultural sector.

46  Good news. This is however changing because other advanced countries are also experiencing the impact of tariff and non-tariff barriers. This culminated to the resolve to end some of these trade-distorting practices during the WTO 2015 ministerial Conference in Nairobi. 47  These top 21 food-producing countries, which are the members of the Organisation for Economic Co-operation and Development (OECD) and seven other countries (Brazil, China, Indonesia, Kazakhstan, Russia, South Africa, and Ukraine), are responsible for almost 80 percent of global agricultural value added in the world (WWI 2018).

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Box 3.8  Agricultural Subsidies from the Top 21 Food-Producing Countries Control About 80 Percent of Agricultural Value Added Globally

Agricultural subsidies are not equally distributed around the globe: just the top 21 food-producing countries accounted for subsidies of $486 billion in 2012, alone. The largest share comes from Asia—just four countries from this region accounted for 57.2 percent of the total subsidies from these 21 countries. For instance, subsidies are estimated to be $165 billion in China, $65 billion in Japan, $28 billion in Indonesia, and $20 billion in South Korea—totalling $278 billion. In Europe, the Common Agricultural Policy (CAP) and the EU price supports (the practice that governments use to keep domestic crop prices artificially high to give farmers further incentives at the expense of the consumer) were estimated to be over $106 billion in 2012. North America provides almost $45 billion in subsidies (just over $30 billion in the United States, $7.5 billion in Canada, and $7 billion in Mexico). Further evidence shows that 94 percent of subsidies were spent by Asia, Europe, and North America—leaving only 6 percent for the rest of the world. OECD countries alone spent $258.6  billion in subsidies to support farming in their respective countries in 2012— declining marginally from $280 billion in 2004. Subsidies take several forms, including the direct payment policy of the EU CAP (or the Single Farm Payment) and price supports, and the crop insurance program in the United States. Price supports to staple crops (rice and wheat) in China are as high as 70 percent of the country’s subsidy spending. These imbalanced subsidies distort global agricultural markets and tend to create inequality between farmers in heavily subsidized countries, compared to non-subsidized ones. Subsidized farmers are insulated from the actual cost of farming, so they can afford to sell at a lower price than their less-subsidized foreign counterparts. This undermines the agricultural sectors of developing countries considerably, since they cannot afford to spend billions in subsidies to overcome such an imbalance. Accordingly, this imbalance accounted for why the Least-Developed Countries turned rapidly from being net exporters into being net importers; between 2002 and 2008, their food imports rose from $9 billion to $24 billion. Source: Author’s compilation from World Watch Institute (WWI) (2018)

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Many African countries have signed bilateral, regional, and multilateral agreements that directly or indirectly impinge on the ability of African agricultural products to access global markets and even access trade within Africa, itself. A case in point is the fact that access to African markets is governed by a series of preferential trading arrangements.48 Despite these trading arrangements and agreements, the continent still faces additional market access impediments such as the tariff peaks and tariff escalation, contingency measures, product standards, sanitary and phytosanitary standards (SPS), trade-distorting export subsidies, and non-competitive primary commodity export market structures.49 Addressing these barriers requires policy attention at the national, continental, and global levels. Making WTO frameworks inclusive, simple, and rule-based is central to promoting prosperous trade among Least Developed Countries—a key instrument for ensuring global peace. African agriculture has not accumulated enough capital to help the sector grow sufficiently and rapidly to become an important engine of food security and economic diversification, and to contribute to massive reduction of poverty and exclusions. However, turning this potential to actual development results must be underpinned by African governments, the private sector, and farmers’ capacity to manage emerging global challenges to agriculture. These include recurring global price fluctuations; meeting the demand of diet diversity, resulting from rapidly rising incomes; balancing the rising demand for bio-fuel; feeding rapidly growing urban populations; a rising globalization of the food sector; accessing technology that continues to be controlled through proprietary protections; and addressing the rising menace of ecological changes. 48  Some of these include the European Union (Lomé, Cotonou, and Everything But Arm—EBA), the United States (the African Growth and Opportunities Act—AGOA), and other OECD countries (the Generalized System of Preferences—GSP). See Oyejide and Njinkeu (2008) for more information on this. 49  Tariff escalation is an agricultural trade protection strategy where tariffs are zero or low on ‘primary products’ and then increase as the product undergoes additional processing. That is, tariffs escalate as more value is added to the product. For instance, products such as meat (in Southern Africa and Western Europe) and vegetable oil and sweetener (in North Africa) experienced tariff escalation of about 50 percentage points relative to the original value of the primary commodities. It is mostly in Sub-Saharan African and the Caribbean countries that the use of tariff escalation is not pronounced. This is aimed at reducing imports of processed products and to ensure processing remains in the local food processing industry. As argued by Gibson et al. (2001) and Oyejide and Njinkeu (2008), tariff escalation makes it possible for farmers in one country to benefit from tariff protection, while farmers in other countries lose income, a phenomenon that perpetuates income inequality across countries.

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The recently adopted African Continental Free Trade agreement (ACFTA),50 if well managed, could help address some burdens of tariff barriers, non-tariff barriers, and negative impacts of globalization on Africa’s agriculture. The rules-of-origin principles and subsidiarity of all bilateral and multilateral agreements (excluding WTO) to ACFTA could be used to leverage intra-Africa market access and to counter obstructive policies and programmes to Africa’s access to international markets. 3.3.8  Climate and Ecological Changes Remain Serious Threats Agricultural practices are also impeding progress in Africa through contributions to land degradation, extinction of naturally endowed biodiversity (plants and animals), and ecological changes. Increases in agricultural production are borne of land expansion instead of increasing productivity through technical progress and farm intensification. Land exploitation through overgrazing, biomass energy consumption, and pollution associated with the extractives has caused losses of vegetation. Africa accounts for 27 percent of land degradation globally—a phenomenon that translates into about 500  million hectares of moderately or severely degraded land.51 Unless something urgent is done, the future and potential of Africa’s agriculture may be compromised. The conclusion from Juma (2011) that about 75 percent of Sub-Saharan Africa’s surface area is dryland or desert further supports this reality. The reality that about 80.0 percent of Africa’s energy comes from biomass; about 20 percent of its GDP comes from rainfed agriculture; (as of 2011) 20 African countries are experiencing water shortages; and an additional 12 will be added by 2035 is even more revealing (Ibid). Adopting a sustainable agriculture sector that can rapidly reverse this trend is critical to agricultural rejuvenation and sustenance in Africa. The Songhai Initiative in Benin, which is being replicated in other parts of Africa, has shown this is possible. Africa is the world’s most vulnerable region to climate change. Four of the world’s five countries most vulnerable to climate change are Africa

50  Its main objectives are to create a single continental market for goods and services, allow free movement of business persons and investments, and accelerate the establishment of the Customs Union in Africa. The initiative, which came into force in May 2019, became the largest trade area globally. 51  Degradation is one of the drivers of low productivity in Africa. Land degradation affects 65 percent of cropland and 35 percent of pastureland (Juma 2011).

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Africa

2,89

Central America

4,05

Caribbean

4,56

Oceania

4,93

Asia

5,55

South America

5,69

North America

7,81

Europe

8,13

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Fig. 3.11  Africa is the most vulnerable to climate change risks (risk score, 2017). (Source: Computed from Climate Change Vulnerability Index 2017)

(Central African Republic, Democratic Republic of the Congo, Haiti, Liberia, and South Sudan), as of 2017. And 27 of the 33 countries categorized as extremely vulnerable are also hosted on the continent, while none are categorized as having low vulnerability, and only 12 of the 75 are ranked as having medium vulnerability.52 Figure  3.11 presents Africa’s climate change risk score in 2017 relative to other regions of the world. Rapid ecological change is becoming a serious threat to the pursuit of food security and shared prosperity in a region dominated by fragile ecosystems, which make Africa highly vulnerable to droughts and floods. Farming, livestock keeping, aquaculture, forestry, and water resources—the main economic activities of the region—are heavily affected by climate change. As shown in Fig.  3.12 below, the linearized annual rainfall index fell from about 100 cm in 1901 to less than 20 cm in 2015. Also, the absolute change in temperature, between 1961 and 2009, for instance, was as high as between 2.0 and 3.00 °C in countries such as Niger, Chad, Egypt, and Sudan (Abidoye and Odusola 2015). Box 3.9 provides some illumination on extreme weather events in Africa. This is a double tragedy to a continent whose economy’s mainstay is about 94 percent dependent on rainfed agriculture. 52  See Climate Change Vulnerability Index 2017 (https://reliefweb.int/sites/reliefweb. int/files/resources/verisk%20index.pdf).

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300.00 250.00

150.00 100.00 50.00 0.00

-50.00

1901 1904 1907 1910 1913 1916 1919 1922 1925 1928 1931 1934 1937 1940 1943 1946 1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015

Annual rainfal index

200.00

-100.00 -150.00

Fig. 3.12  Precipitation index for the Sahel, 1901–2016. (Source: Author’s computation from JISAO data: http://research.jisao.washington.edu/data_sets/ sahel/#values)

Box 3.9  Extreme Weather Events in Africa

El Niño has continued to ravage the continent, especially the Eastern and Southern regions. The impact of El Niño is multidimensional, ranging from floods affecting more than 3.4  million people in 2006–2007 to droughts affecting more than 14 million people in 2009–2010. The impact of the recent El Niño varies across regions. For instance, the drought exacerbated by El Niño in the Horn of Africa region led to an increase in food insecurity and malnutrition that affected close to 24  million people in August 2016. However, due to excessive rains in late 2015 and early 2016, flooding in parts of Somalia, Kenya, Ethiopia, and Uganda culminated in the displacement of 231,916 people and deaths of 271 people, coupled with cholera and acute watery diarrhoea outbreaks in the region. During the same period, Southern Africa experienced an El Niño-induced drought that crippled rainfed agricultural production, accounting for a regional maize production shortfall of (continued)

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Box 3.9  (continued)

about 9.3 metric tonnes.53 The Cyclones Idai and Kenneth, experienced between March and April 2019, left catastrophic impacts on Mozambique, Zimbabwe, and Malawi with about 2.2 million people seriously affected.54 The recurring droughts in the Sahel have had dramatic environmental, societal, and economic effects upon the Sahelian countries, especially Mauritania, Mali, Chad, Niger, and Burkina Faso. Between the mid-1960s and the mid-1990s, annual rainfall declined by 25–30 percent, depending on the location. An example from Kano (in northern Nigeria) is even more illuminating—with average annual rainfall falling from 853 mm in 1931–1960 to 714 mm in 1960–1990—and a similar trend is predicted towards 2050. The crisis associated with the 2012 drought ranged from too little food and high grain prices to high environmental damage and large numbers of internally displaced persons. This drought left 11.3 million people food insecure and 4.9 million suffering from malnourishment.55 Ecological changes are slowing down economic growth and accelerating a permanent reduction in income. Several studies have shown the impact of climate change on Africa’s economy.56 For instance, Abidoye and Odusola (2015) established that a one unit rise in climate change reduces GDP growth by 0.667 percentage points. Similarly, Odusola and Abidoye (2015) also found that a 1 °C rise in temperature led to an average of a 1.586 percentage point decline in Africa’s economy between 1961 and 2009. The impact varied widely across countries—ranging from −1.244 percent (Equatorial Guinea) and −1.409 percent (Egypt) to −1.800 percent (Sierra Leone) and −1.822 percent (Democratic Republic of the Congo).

53  See http://www.unocha.org/legacy/el-nino-east-africa; and http://www.unocha.org/ legacy/el-nino-southern-africa. 54  https://www.worldvision.org/disaster-relief-news-stories/2019-cyclone-idai-facts. 55  See Mortimore (2010) for weather dynamics and OCHA (2013) for the impact of drought. 56  Some of these are Abidoye and Odusola 2015; Odusola and Abidoye 2015; and Juma 2011.

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A simulation from the World Bank (2010) found that any rise in temperature up to 2.00 °C could lead to a 4.0 to 5.0 percent permanent reduction in annual income per capita in Africa, compared to about 1.0 percent in high-income countries. Given that about 20 percent of value added GDP comes from agriculture, and about 54 percent of Africa’s population is involved in agriculture, untamed ecological change would undermine the objectives of ensuring food security, sustaining decent jobs and livelihoods, promoting shared prosperity, and achieving human development. Impacts of climate change are mostly felt by small-scale farmers because they lack access to insurance and financial resources to cope with seasonal losses and the impact of extreme events such as the heat waves, droughts, and floods. There is the urgent need, more than ever, to accelerate the design and implementation of resilient food system strategies in the face of increasing climate vulnerability. The impact of climate change vulnerability on jobs and livelihoods in Africa could be the most grievous impediment to lifting people out of poverty and reducing exclusions. The proportion of jobs and livelihoods involved in agriculture and agrifood systems in Africa is estimated to be 78.9 percent. An important policy challenge, therefore, is to design and implement strategies that make Africa’s agricultural ecosystem more resilient to climate change. And as mentioned above, agroecology may offer a sustainable future for African farming. In this regard, African governments and their partners must strengthen the continent’s adaptive capacities through protecting and conserving its natural assets, constructing and maintaining robust infrastructure, enhancing and utilizing human capabilities, and promoting entrepreneurship for agricultural transformation and environmental sustainability. Excluding African farmers and youth from both agricultural and climate change adaptation strategies makes the process unsustainable. Incorporating the needs of the future generations into the actions of the current generation is therefore pivotal to promoting resilient, inclusive, and sustainable agriculture. 3.3.9  Exclusion of Youth in the Design and Implementation of Agricultural Ecosystem Policies and Programmes Is a Serious Impediment The neglect of youth in Africa’s agriculture sector requires urgent policy and programmatic interventions, including entrepreneurial tutelage and mentorship. The exclusion of youth and other younger

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populations in the preparation and implementation of current and future policies and strategies of agricultural ecosystems and key issues affecting agriculture like climate change is a major challenge to agriculture in Africa. This neglect accounts for why the current average age of farmers in Africa is about 60, even higher in countries like Malawi, Cameroon, and South Africa—an age that is less likely to smartly adopt and diffuse agricultural technology, a phenomenon necessary to revolutionize agriculture and turn it into a powerhouse of food and nutritional security, a lynchpin of industrialization, and propellant of poverty reduction. The neglect of youth in the most youthful continent of the world is a paradox. Africa is the most youthful continent—with 364 million youth (15–35 years old), constituting about 31 percent of the continent’s population in 2015. While the youth population is expected to double by 2045, employment opportunities remain very limited and stagnant in many African rural areas. In fact, about 10–12 million youth enter the labour market each year. Although rural youth are the future of food security in Africa, most youth do not see their future in agriculture or in rural areas. Even those currently involved do it as a matter of necessity—a coping strategy—with the aim of quitting farming when alternatives or better jobs emerge. The FAO puts the average African farming age at 60 years. This age, however, varies across countries, from 44 years in Ethiopia and 45 years in Côte d’Ivoire, to 62 years in South Africa and 65 years in Malawi.57 Given the aging population involved in farming today, the lack of youth interest in agriculture poses a serious threat to agriculture’s objectives of food security and development. Agriculture is unappealing to youth because it is traditional and rudimentary, driven by low productivity, characterized by poor working conditions, portrayed as labour-tasking and unprofitable, and suffers from poor rural infrastructure and facilities. This further points to the need to change agriculture from a way of life to a business enterprise and tap into the significant potential of this growing demographic. Engaging African youth in agribusinesses is impeded by a lack of access to agribusiness knowledge and information, land, green jobs, markets and financial services, and limited involvement in agribusiness policy dialogue (FAO 2014a). A mismatch between the formal education and labour market realities, where the education curricula are oriented towards

57  Others include 50  years in Morocco and Algeria, Mauritius (53  years), Ghana and Rwanda (55 years), Nigeria (55–60 years), Kenya (60 years), and Cameroon (63 years).

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white-­collar employment as opposed to focusing on self-employment or blue-collar jobs in rural economies, further compounds the situation. The good news is that some models have started to evolve since 2012, focusing on changing African youth mindsets towards agribusinesses. Box 3.10 provides some examples of innovative ideas that must be scaled up at the national and regional levels to yield maximum benefits that ensure inclusive growth and development. A key question, therefore, is how to evolve an agricultural system that supports the lifestyle of educated African youth?

Box 3.10  Initiatives Helping to Address Impediments to Youth Participation in Agribusinesses

Some pilots targeted at specific challenges facing African youth participation in agribusinesses have started, but require urgent expansion. First, efforts at expanding agribusinesses to African youth include establishing rural entrepreneurship for Malagasy youth, which is providing start up kits, set up a guaranteed fund for seed capital, and trained 2694 beneficiaries. The ICT for extension services in Ghana and Kenya is empowering young farmers, while the ICT solutions for agriculture in Rwanda is providing meteorological data to help determine crop suitability and connect young farmers to experts and markets. The Ethiopian Commodity Exchange is transforming the agricultural landscape, while youth resource centres in Zambia are connecting young farmers to local experts, information services, and research institutions. Second, some efforts are increasing access to land ownership. The Songtaab-Yalgree in Burkina Faso is working with stakeholders to expand land ownership for shea butter producers—a development that supported 800 women to own land. The Rivall Uganda Limited, also working with landlords of unused land for lease to youth, succeeded in facilitating access to land for 411 youths within a few years of take-off. The reclaiming of desert land for young graduates in Egypt has also facilitated access to irrigated land and home ownership through long-term credit—beneficiaries rising from 35,550 in 1993 by 25 percent in 2002 and 98 percent in 2012. Third, the value chain component is also booming. For instance, Shambani, a dairy processing company, established in 2003 by three (continued)

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Box 3.10  (continued)

Tanzanian young graduates without any capital, now receives regular milk supplies from 256 Masaai households, has a processing capacity of 2000 litres a day (comprising six products: pasteurized and cultured milk, pasteurized fresh milk, butter, cheese, ghee, and flavoured yogurt), and employs 18 full-time staff. Fourth, financial services to youth are expanding in several countries. A good example is the Youth Venture Capital in Uganda, established through government partnerships with a consortium of banks to raise $9.8  million for youth (18–35  years) entrepreneurs providing $95 to $2000 to individuals and $195 to $9700 to companies based on certain criteria (e.g. capacity to generate at least four jobs). As of 2014, 3000 people benefitted from the fund. The Project for the Promotion of Rural Entrepreneurship II in Senegal, through Support Service to Rural Finance, has trained and coached young entrepreneurs to develop their project ideas and business plans, and then linked them to any of the designated five microfinance institutions that provide guaranteed loans to cover the working capital and essential equipment. As of 2014, about 500 young people had joined financial institutions, and over 340 of them have had access to finance. Finally, the gender dimension is also expanding. The Mfarm, a women’s agribusiness software company, based in Kenya, connects farmers, suppliers, and buyers, and pools outputs for bigger markets. It shares prices of produce and essential inputs like fertilizers, seeds, and pesticides and helps to negotiate bulk discounts through a pooling of farmers. Within three years of operation, it had covered over 8000 farmers. Source: Author’s review and compilation from FAO (2014a)

The African Union’s advocacy on youth is influencing attention given to this demographic cohort in Africa. In addition to the adoption of the African Youth Charter, the period 2009–2019 was declared as the African Union’s ‘decade of youth development’ and ‘Accelerating Youth Empowerment for Sustainable Development’ was chosen as the theme for its 2011 summit. Also, accelerating demographic dividends was declared

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as its 2017 Summit theme. Reinvigorating the youth dimension of CAADP also provides an impetus for youth as key stakeholders in achieving agricultural transformation on the continent. Moving from advocacy to concrete implementation of youth empowerment and development, especially regarding agribusinesses, is critical to using youth as an engine of economic transformation and sustainable development in Africa. The African Union and its relevant organs should continue to advocate for youth entrepreneurial mentorship in the agricultural sector and promote efforts that incentivize youth to participate in agribusiness. 3.3.10   Agricultural Performance Lacks Inclusivity and Sustainability The lack of sustainability and the absence of regional specificity are among the factors that led to the failure of the first generation of a green revolution in Africa. The failure of the green revolution (GR) in Africa in the 1970s and 1980s has been attributed to technology, policy, and institutional and scalability failures—all linked to lack of sustainability. First, the green revolution technologies were not suitable for African agroclimatic conditions: such technologies were neither location-specific nor adjustable. For instance, the homogenic application of green revolution with limited attention to ecological and environmental conditions of Africa including absence of coherence between soils, plants, and fertilizers properties is viewed as a major factor (e.g. Voortman 2013). As argued by Voortman (2013), the inappropriateness of fertilizer technologies that could raise yields close to agroclimatic yield potentials was a bane of African green revolution. Second, when applied, programmes were too focused on specific crops, as opposed to focusing on systems. Third, attention to crop-livestock interactions was too limited, research was top-down, and extension systems applied in a limited manner, as opposed to widespread. Fourth, a lack of infrastructure, including irrigation facilities, policy distortions, and institutional impediments, weakened the sustainability of GR initiatives (Holden undated). Fifth, policy, institutional, and scalability failures, including lack of market development, impede the effectiveness of green revolution in Africa (e.g. Byerlee et al. 2009b; and AGRA 2017), especially in the second (late 1990s) and third (early 2000s) phases, and to an extent in the first phase

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(1970s and early 1980s). The future of Africa’s agriculture lies in game-­ changing technology accompanied by game-changing policies and practices. Such technology-policy-practice nexus must facilitate small farmers’ access to modern inputs and credits and ensure profitability and scalability. And as articulated in other parts of this book, the policy ambivalence and inconsistency introduced through the adoption of the Structural Adjustment Programme (SAP) across Africa in the 1980s wiped-off gains from early efforts by eliminating support systems to farmers and creating drastic cuts in agricultural research. Finally, the GR agenda (especially in the first phase—1970s and early 1980s) was heavily driven by government, with limited involvement of the private sector, which also contributed to the failure of the programme. Even when the private sector was designated as the main driver in the second phase of GR in the early 2000s, the absence of a system approach— anchored on public-private sector partnership—is another factor. In a nutshell, the lack of a consistent approach built on learning by doing, the lack of systemic approach anchored on swings between public and private sector approach with respect to who drives the process, and the lack of a well-targeted approach on input support systems all contributed to the failure of earlier attempts to create a green revolution in Africa. Promoting sustainable agriculture in the context of the SDGs calls for feeding the bottom 2 billion of the world’s population, using agriculture to contribute to decent job creation, eradicating poverty, and preventing production ecosystems from being degraded. Ensuring food and water security, while protecting the mother Earth (including soil and its habitats)—the planet—requires tough, but necessary decisions to safeguard the environment. The need to promote an agriculture-environment symbiotic continuum, through practices that promote environmental quality services, remains critical. In this regard, empowering farmers to monitor soil texture and variability will help them to optimize inputs (including water, seeds, and herbicides), thereby protecting the environment while maximizing outputs and profits. This points to the inapplicability of a siloed, sectoral approach to agricultural development. Rather, holistic and systems approaches are more promising. A variety of actions are central to ensuring sustainable agriculture: strengthening, across all African sub-regions, farmers’ access to and participation in  local and regional markets and trade; reducing high dependency on rainfed agricultural production systems while at the same time boosting innovative agroecological practices; creating an accessible

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land tenure system (particularly to small and medium farm holders). Complementing national actions with regional initiatives—based on context and peculiarities—is also crucial. Some emerging action-oriented regional initiatives include increasing farmers’ access to production technologies that enhance efficient use of endogenous and exogenous resources (West Africa); sustainably managing forests (Central Africa); sustainably managing freshwater resources, conserving soil, and diversifying crops (North Africa); introducing new drought-resistant crops and new fertilizer formulations, and using technologies that conserve resources (Southern Africa); and practicing ecological farming, integrated soil and water resources management, and adaptation of indigenous knowledge practices (East Africa). Africa is not starting from the scratch. It requires building on successful national and regional initiatives that could be scaled up for agricultural ecosystem development. 3.3.11  Limited Access to Productive Agricultural Land Land tenure and tenancy security are principal factors to improving and investing in land. Where land security is low, the willingness and incentives to invest in land improvement are very low. And where land improvement is small, agricultural productivity remains similarly low, thereby weakening the channel through which agriculture promotes rural and national development—leading to low incomes, wellbeing, and environmental sustainability (Odusola 2017). Increasing the proportion of land held by the poor does not only increase incomes for the poor, but also increase their power and status. In fact, Lipton (2009) argues that land is the poor people’s main productive asset. Poor people’s access to land is critical to agricultural transformation, pivotal to raising rural dweller’s incomes through farm labour income, income from land either via renting or owning, income from farm enterprise, non-farm incomes, and the economy-wide effect of land access that skews growth towards smallholder or landless farmers. Land concentration in developing countries does not only increase inequality; it also reduces farm outputs and economic growth. Wiley (2019) argued that decolonization of land rights by limiting government compulsory acquisition of communal lands and making customary land rights a registrable ownership is promoting inclusive and equitable social transformation. The land reforms, through constitutional pronouncements in countries such as Brazil, Ecuador, Kyrgyzstan, Kenya, and Uganda, are turning customary landholders into legitimate and protected

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owners. If this is made pervasive in Africa, it will benefit about 625 million people that acquire, hold, or sustain land under customary regimes, which translates to about 2 billion hectares—approximately 78 percent of continental land area as of 2017. In fact, community-owned forest land is a major source of carbon capture, a public good whose utility cuts across individuals, groups, and countries. Cornia (2017) linked land ownership to the dynamics of inequality in Africa. Income and land inequality is low in West and Central Africa, where communal land ownership prevailed—as opposed to Southern and East Africa, where private ownership and land concentration led to high income inequality. Land Gini, for instance, is very high in Southern and East Africa—ranging, in ascending order, from 0.7 to 0.84 in countries like Zambia, Tanzania, Mauritius, Madagascar, and Swaziland. Griffin et  al. (2000) and Lin (1992) also argued that improved land distribution in China led to enhanced farm income, with equalizing effects on overall income in the country. The ‘Small Landlords and Big Tenants’ policy in Taiwan is also considered to be equalizing (LCS 2014). Lipton (2009) also observed that poverty and landlessness in South Africa and Bolivia are concentrated among rural dwellers. Evidence from Ghatak and Roy (2007) shows some mixed results on Indian land and tenancy reforms on agricultural productivity, revealing the negative impact of land-ceiling legislation on agricultural productivity. Despite the role of access to land in promoting inclusive development, only a very small proportion of land held by small farm holders is titled and registered. The high cost of land registration is an impediment to land registration in Africa. Recent efforts in Benin, Burkina Faso, Ethiopia, Niger, Rwanda, and Mozambique as discussed in Odusola (2014) should be strengthened. Untitled lands58 remain sleeping assets, because such lands could not be used to achieve their full material existence, that is, to further enhance their market values, including serving as collateral for loans and using the land to rekindle markets and institutions. Due to unregistered land or lack of formalized property rights, rural dwellers and small farm holders have not been able to maximize the impact of using land to reduce poverty and inequality in Africa. The lack of secure tenure and ownership hinders heavy investment on land improvement and water management, a major impediment to the first generation of a green revolution in Africa.

58  Manji (2006) cites the Peruvian Economist’s (Hernando de Soto) estimation of the value of unregistered titles in developing countries to be as much as $9.3 trillion.

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Land ownership and registration enhance poor people’s participation in a land legal system by allowing them to benefit from a land market system (Manji 2006; Wiley 2019). It also increases rural credit markets that further help the poor to cross the poverty line and increase their wealth. Bringing poor people’s assets to the legal system via titling and registration helps to maximize the productive and material value of land. In this regard, bringing land into the legal system through title registration does not only produce the surplus value of land, but also enhance both the productive capacity, income, and wealth of rural dwellers. An analogous situation is observed in Vietnam, which has one of the most comprehensive land reforms in the world. Between 1953 and 2004, Vietnam experienced more than six comprehensive land reforms. See Box 3.11. Over the years, and coincidentally, the country succeeded in reducing poverty from 49.2 percent in 1992 to 2.8 percent in 2014 and in reducing income inequality by about 6.0 percent between 2002 and 2014.59 The land transfer ceiling (see Box 3.11) might have helped to curtail land concentration, which is a major driver of land and income inequality. This helps to protect 41.2 percent of labour force and 74.5 percent of the poor that still eke their living from agriculture in Vietnam. Using agriculture to reduce poverty among rural households, to cut income inequality between the poorest and the richest quintiles, and to dent horizontal inequality (among women, tribes, and remote communities) calls for improved land ownership.60 Unequal access to farmland disqualifies good and productive farmers either because they are women or because they come from a tribe, a region, a religion, or hard-to-reach communities. Where agriculture contributes a large share of output, income, and employment, land redistribution is a valuable tool for a rapid reduction in poverty and inequality. Efforts to reduce farmland inequality have direct impacts on reducing poverty and income inequality in countries where agriculture is the mainstay of their economies—as is the case in Africa. Reducing farmland inequality helps reduce vulnerability of the poor and near-poor, and increase productive capacity, especially when combined with a rural

59  The poverty and income inequality figures are author’s compilation from the WDI database [accessed January 2018]. However, income inequality has started to rise. 60  Agarwal (1994), Stewart (2008), and Lipton (2009) view land ownership as a potent tool to tame income inequality in rural areas.

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Box 3.11  Vietnam’s Land Tenure System Experienced One of the Most Comprehensive Reforms with the Largest Landholding in Asia

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Since its independence in 1945, Vietnam’s agricultural land tenure system has undergone fundamental changes. Such changes include taking land from landlords and redistributing it to the poor, promoting collective farming and landholding (which was later abolished), and establishing state ownership of land. Vietnam’s land reform remains one of the most comprehensive globally, and the amount of landholding ceiling is one of the largest. The 1953 Land Reform Law, which took land from landlords and distributed it to the poor and landless on an egalitarian basis, laid the foundation for land reform in Vietnam. Adopting a Soviet landholding style between 1957 and 1980 encouraged farmers to pool land and means of production to promote collective farming and landholding. In 1980, the Vietnam National Assembly pronounced ownership of land belonged to the State. The establishment of a system of land use rights, which enshrines collective land ownership and farming, came to force in 1987. The 1992–1993 law was a landmark that allowed public ownership of land to coexist with land use rights to individuals, corporations, and other organizations, and recognized transferability of land rights. The 2003–2004 Act established a comprehensive legal framework for a well-functioning land market and improved provisions for land valuation and compensation. The Act also clarified the role of government as the owner and administrator of land in Vietnam. The provisions of the law are far reaching. They provided a maximum of six hectares for annual cropland for the South Eastern and the Melkong Delta regions and four for other regions. The perennial crop ceiling was put at 20 hectares for plainland and 50 hectares for midland mountains. This is one of the largest landholdings in Asia. The duration is 20 years for annual cropland and 50 years for perennial cropland. The average landholding stood at 0.46 hectares (about 1.14 acres). This land security enhanced farmers’ access to formal credit lines and allowed for transfer of land rights. The main challenge is not only the small duration of landholding, but also the lack of clarity about the procedures for renewal, especially for ‘non-directly cultivating farmers. The 2003–2004 law also authorizes the State to compulsorily acquire land upon expiration without compensation for land or real estate. Source: Author’s compilation and interpretation from Nguyen (2012)

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dweller’s sometimes main asset—labour. The redistributive impact of tenancy markets in several developing countries, especially in China and Ethiopia, points to the fact that reducing economic and other powers of landlords is central to a rapid reduction in income inequality in many countries (Sign 2005; Deininger and Jin 2005, 2006). A comparable situation is observed through the ‘Small Landlord and Big Tenant’ programme in Taiwan and the ‘land-to-tiller’ in South Korea (see Chap. 6). Enhanced land distribution to small farm holders raises the demand for farm labour and consequently increases wages to farmworkers. 3.3.12  Other Drivers of Deficient Performance in Africa’s Agricultural Sector Abound Although Africa accounts for more than half of the world’s uncultivated arable land, large tracts of land are too often inaccessible due to either conflicts, transport, or both—as is the case in the Democratic Republic of the Congo (ACET 2017). Other drivers of deficient performance have also been adequately captured in Binswanger and Townsend (2000) under four areas: (1) adverse resource endowments characterized by abundant arable land in the face of low population density and remoteness—which makes agriculture transaction costs quite high; (2) poor policies and institutional failures; (3) underinvestment and undercapitalization; and (4) adverse trade regimes of OECD countries, including restricted market access and price-distorting subsidies that make developing countries’ agriculture non-competitive.

3.4   Political Economy Mechanisms of Agricultural Reforms This book sees agricultural reform, not as a technocratic exercise, but a pragmatic process involving vested interests and power relations requiring a systems thinking and an ecosystems approach. The absence of this approach in the past has made Africa’s agriculture suffer from market and policy failures that derailed it from accomplishing its potential and seizing the momentum for development opportunities. Several studies61 have

61  For comprehensive expositions on this, see Bates (1981), World Bank (2007), Hoeffler (2011), and Diao et al. (2019), among others.

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linked the recurring policy neglect, underinvestment, and disinvestment in the agricultural sector to the failure to acknowledge the political economy mechanism of agricultural policy reforms that invariably leave the sector, and particularly smallholder farmers, behind in the development process. In this regard, this book, using the political economy lens, seeks to know: what does Africa need to do differently to use agriculture to drive the future of its economic transformation and development? In practice, the political economy mechanism takes several forms in Africa. Many scholars have argued that historical legacies still continue to shape agricultural policy failures—from the post-independence era to cold war era, and from the SAP era to the post-democratization era. Their key conclusions are that colonial legacies of authoritative government, patrimonial politics, elite capture, and agriculture-international trade dependency syndrome, which was transferred to the post-independence era, continue to influence and shape agriculture policy formulation and implementation in Africa.62 Some of the fall outs of colonial history include inadequate incentives for politicians due to loss of personal gains and absence of a guarantee of re-election (Meredith 2005 and World Bank 2007) as well as politicians’ preferring group or tribal allegiances to allegiance to their national population (Hoeffler 2011) and political capture of resources (including lands) (McMillan et al. 2017). And since the adoption of the Sustainable Development Goals in 2015, competition for development resources is another political economy mechanism that has become more intense—anchored on the need to spend adequately on economic, social, and environmental programmes in national budgets. However, the Maputo Declaration’s provision for a 10 percent budgetary allocation to agriculture is helping to manage a resource competition. Other historical developments that have shaped the dynamics of agriculture sector reforms include ideological struggles between capitalism and socialism that took the focus away from the impact of agricultural reforms; democratization and decentralization movements that created politician-voter relationships; economic liberalization and privatization that created vicious private monopolists in the absence of strong institutional frameworks and market regulations with their associated market distortions; urbanization with its effects on changing national diets and rural-urban migration push; and globalization that is creating power asymmetries between African farmers and farmers from Africa’s major  See Meredith (2005) and Hoeffler (2011).

62

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trading partners due to international policy ambivalence. Each of these historical legacies left in their trail losers and winners63 as well as government and market failures,64 which continue to haunt the agriculture sector. Across the various spectra of policy and market failures, smallholder farmers are consistently marginalized in factor and output markets as well as in the production process. For instance, African smallholder farmers suffer from the problem of rural duality in many forms: first, the large majority are powerless, smallholder farmers operating side by side with small, powerful mechanized farmers; second, a large proportion of smallholder farmers will concentrate on staple crops as opposed to a very few who will focus on cash crops, which benefit mostly from input subsidies; and third, smallholder farmers who could not access financial resources from banks or government guarantee schemes will frequently patronize outgrower or contract farming financiers with usurious tendencies. Also linked to the politics of historical and colonial legacies is the belief of early nationalists (like Kwame Nkrumah and Thomas Sankara) that focusing on agriculture is a colonial design to continue economic dependence and perpetuate colonial hegemony. In this regard, many African leaders see industrialization as modernization—and agriculture as an existing, traditional sector to finance the creation of industry, or even the fourth industrial revolution (including artificial intelligence and robotics), or even to support a food security agenda. This is the beginning of urban bias in development policy as opposed to driving genuine rural transformation and development. Very few countries have succeeded in using agriculture to drive or initiate the process of industrialization. Mauritian and Ethiopian agriculture-led industrializations are among the few success stories on the continent. Even after Mauritius used sugarcane and textiles to drive its industrialization, unalloyed support for agriculture continues. This is not the case in many other African countries and even in countries genuinely committed to agriculture at the onset (e.g. Nigeria, Kenya, Côte d’Ivoire, and Zimbabwe) lost steam at some point in time—either because of crude  Among the losers are smallholder farmers, farmworkers, and rural dwellers while elites (e.g. politicians, public bureaucrats), the moneybags (e.g. traditional landlords, mechanized farmers, middlemen and middlewomen, exporters, contract farming entrepreneurs) are among the gainers. 64  As effectively articulated in Ndulu et al. (2008), Hoeffler (2011), and Diao et al. (2019), some examples include government failures (e.g. corruption, nepotism, rent seeking, and abuse of power associated with agent–principal relationships) and market failures (e.g. high production and transaction costs, low economies of scale associated with smallholding farming, replacing government monopolies with private monopolies, information asymmetry between small and large farmers, and low degree of market integration). 63

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oil and gas discovery in Nigeria or because of populist land reform in Zimbabwe, or because of protracted conflicts in Côte d’Ivoire. Today, many African leaders support agriculture not because of its value for development but because it was seen as a ‘cash cow’ and as value in foreign exchange earning capacity, especially where agriculture still remains the leading foreign exchange earner. This is applicable to most non-­ mineral-­rich LDCs in Africa. And as discussed in other parts of this book, the support for agriculture is a derived support because it could be taxed to generate resources to fund other sectors including industrialization.65 In some countries, the group of commercial farmers-exporters, as is the case in many countries like Malawi, Zimbabwe, and South Africa—the ‘moneybags’—or even their trading partners, pressurized governments to support agriculture for their trading and exporting works to be sustained. In some countries, agriculture was supported to produce cheap food to meet the needs of minority but politically powerful urban dwellers who could mobilize collective action to swing the political fortunes of the ruling class. The role of marketing boards in imposing price ceilings on farmers in order to sell food cheaply to urban dwellers is a good example of how small farmers are marginalized to curry favours from urban voters. However, the recent resurgence of input subsidies in countries with a large rural voting population is reclaiming the power of rural voters, which could be leveraged for relevance and strategic support to agriculture. In this regard, farmer pressure groups could advocate for electoral cycles that align to planting seasons in order to elicit maximum political support for agriculture. In fact, the political economy mechanism of agriculture policies is complex and deep; it is difficult to know the genuine reasons behind shaping agricultural reforms in Africa. This reality is further complicated by the politics of capacity. Most agricultural institutions are given to people with limited technical know-how and managerial capability. Governments embarking on massive production, price, and distribution controls in the hands of technically weak technocrats speak volume about the potential impact of such actions on

 Several studies have provided substantial evidence to show that the pursuit of agricultural growth is because of other advantages derived from it (for industrialization by Meredith (2005), to curry political support from rural dwellers by Ndulu et al. (2008) and generate tax to finance government expenditure and pursue social distribution by Hoeffler (2011)) not because of African leaders’ commitment and belief in agriculture to drive genuine development. 65

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smallholder farmers. Although SAP helped to streamline some of the duplicative, competing agricultural institutions, fragmentation is still dominant and further complicated with absence of effective coordination. Some of these institutions exist not to accelerate the transformation of the agricultural sector, but to create jobs for political and ethnic cronies. And despite emerging progress on the African private sector, though at different level of capability across countries, many African leaders and politicians still do not have strong confidence in their domestic private sectors. Governance capacity and coordination challenges contributed to the reversal of some past gains in the sector, including the aggressive formation of cooperatives and producers associations in the 1980s and 1990s that are mostly dysfunctional in many countries. These cooperative societies (e.g. cotton farmers associations in Niger, Burkina Faso, and Zambia; cocoa farmers associations in Côte d’Ivoire, Ghana, and Nigeria; coffee farmers associations in Ethiopia, Kenya, and Rwanda) should be rekindled and empowered to serve as virile coalitions, collective actions, and pressure groups to make farmers’ voices heard and respected across the various tiers and branches of government and to make farmers’ votes count towards becoming a formidable actor in the market system. In Africa, emphasis is given to the technicality of the sector as opposed to its governance, the associated policymaking processes, and the alignment of varying political interests among the agricultural ecosystem stakeholders (including public and private, national, and international). The political economy mechanisms of agricultural sector development, therefore, take several forms. But for analytical simplicity, they are grouped into two broad groups: domestic and foreign mechanisms. The political system and the governance structure matter in agricultural development of any country. The experiences from many parts of the world, including Europe, Latin America, and Asia, have shown the imperatives of these factors. In these regions, transformative agricultural R&D and value chain development require a long-term commitment of resources, oversight, and political will and consistency (Hoeffler 2011). However, in Africa, agricultural policy regimes have been characterized by ‘stop-and-go-affair’— changing each time political leadership changes. Most African political leaders are known for high-profile but inefficient white elephant projects (e.g. input subsidies, special economic zones, and export processing zones) that are populist in orientation—not thoroughly thought through, tested, and targeted. Africa’s agricultural transformation has been mostly driven by the public sector. Not much has been done on an agricultural ecosystem approach to policy formulation, management, and development. A political-­economy

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approach underpins the need to examine the interests of the farming community, the business community, and the international community to align interests for smooth implementation of agreed policies and programmes. A good example is the implementation of the structural adjustment programme (SAP) that failed to align external interests with domestic interests on agriculture, mostly anchored on power asymmetries between Africa and the Bretton Woods institutions (the Washington Consensus). This era led to the abandonment of agricultural policies (including across the board cuts on subsidies, extension services, irrigation infrastructure, R&D, and credit guarantee systems, to mention a few), which contributed to undercapitalization and underinvestment of the agricultural sector. The market liberalization that came with it weakened farmers’ productive capacity, particularly in the context of intense subsidies in advanced countries—a development that made most African countries food import dependent. To most farmers and other agricultural stakeholders in Africa, SAP, despite its modest achievements, significantly impeded agricultural development on the continent. Agriculture value added to Africa’s GDP is immense, and in several countries, it is the single most important source of foreign exchange earnings. In this regard, the power relationships between cash crops and staple food producers, as well as between mechanized and smallholder farmers are other political economy factors. The practical reality of this abounds in many African countries. For instance, with governments’ drive to generate more revenues and foreign exchanges, preference was more on cash crops (e.g. cotton in most West African countries; cocoa in Côte d’Ivoire, Ghana, and Nigeria; coffee and tea in Ethiopia, Kenya, and Rwanda)— with input subsidies and facility development going mostly to regions producing these cash crops.66 This bias towards cash crops has high propensity to create inequality between cash crop and staple food growers, as well as generate imbalance in impact on poverty reduction between the two groups—as is revealed in this book’s empirical findings in subsequent chapters. Most of these cash crop farmers became rich overnight during exchange rate liberalization when the fortune of staple growers plummeted or remained stagnant.67

66  Similar development was observed in Malawi (tobacco and cotton), Zambia (cotton and sugar cane), Kenya (tea and flowers), and Ethiopia (coffee and Khat) where their respective cash crops were more favoured than other crops. 67  Good examples are cocoa farmers in Ghana, Cote d’Ivoire, and Nigeria during the SAP era in the mid-1980s.

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In Africa, the focus has been much on the technicality and content of agricultural reforms but not on its processes and politics. That is, the focus is more on the ‘what’, not on the ‘how’. Developing policymakers’ technical, governance, and coordination capacity to effectively formulate and implement the ‘how’ of agriculture policies and programmes and to move away from short-term to long-term goals and visions with adroit skills of learningby-doing and feeding lessons into policymaking processes and loops. The key question to ask, therefore, is: what are the power relations mechanisms that shape policy formulation, implementation, and development outcomes in Africa’s agriculture sector? Achieving this would be time-consuming and challenging in Africa but not impossible. Using Omamo analytic approach, ‘power-cognisant narrative’ could be apposite.68 This calls for a thorough understanding of the losers and gainers and an adequate knowledge of who can implement reforms and effect positive change. The forgoing underpins the need for a careful analysis of the agents, institutions, markets, and networks within the agricultural ecosystem, which is key to a successful implementation of agriculture for development. This is one of the things African countries must do differently in ensuring an inclusive and sustainable green revolution on the continent. The past and current practices have left the job of understanding these dynamics to agricultural scientists and agricultural economists at the expense of an interdisciplinary approach that addresses inputs-outputs outcomes holistically. Understanding the political economy approach to agriculture sector reforms requires a combination of approaches: a scientific and technological approach (focusing on productivity enhancement), an anthropological approach (behaviours), and a political science approach (power relations and development economic approach including poverty and inequality dynamics). This interdisciplinary research agenda must be complemented by interdisciplinary trainings and interdisciplinary networks and platforms that regularly bring researchers and policymakers together, especially for knowledge and experience codification, sharing, and dissemination. All these point to ecosystem thinking of agriculture development— an approach that breaks the silos of agricultural policy formulation and implementation and imbibes stakeholders’ engagement in the policymaking process. The adoption of interministerial task forces in the formulation and implementation of agricultural policies and programmes is another innovation that could promote a systems thinking approach.  For a deeper analysis of this approach, see Omamo (2003).

68

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The political economy analysis of agriculture sector reform has also underpinned another thing Africans should do differently—building a nation-state where government will respond to needs of the people, not to tribal or group pressure. A political system that is responsive to the national population’s demands and anchored on rural citizens holding elite leaders accountable is key to moving ahead. Building strong coalitions and alliances through rekindling and nurturing producers and marketing cooperative societies, as is being done in Argentina, could create mutually beneficial politician-farmer relationships. This will make agricultural institutions and bureaucratic leaders more demand-driven and responsive to the needs of smallholder farmers in Africa. The political economy lens used in this book is macro in orientation. It is therefore suggestive that further research is needed in more microlevel analysis of case studies to really understand the power relations, losers, winners, and game changers in the agricultural sector. More research work is also encouraged in micro-macro linkages that facilitate a better understanding of agricultural reforms on macroeconomic fundamentals and on the achievement of the sustainable development agenda of ensuring balances in economic, social, and environmental dimensions of development.

3.5   Conclusions In spite of a gradual decline of agriculture’s share of GDP in Africa, the continent’s agriculture value added contribution to GDP is still the highest globally—a reflection of low structural economic transformation. Growth in agriculture surpassed other regions, including Latin America and Asia, over the past two decades. This growth is not emanating from productivity enhancement or farm intensification, but through expansion of cultivated arable land. However, the long-awaited structural transformation is yet to take root because the share of manufacturing to GDP also declined during the period, while services—mostly dominated by informal activities—blossomed. This low agricultural productivity is a major driver of economic vulnerability in Africa—a phenomenon that has led to the continent spending over $78 billion on importing food on an annual basis. Some progress has been recorded on fertilizer use and access to improved seedlings, but access to irrigation and mechanization remains dismally low. In Africa, input subsidies are yet to contribute to accelerated productivity because such efforts are very expensive, not well-targeted, and unsustainable. This

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notwithstanding, targeting input subsidies on staple crops is more pro-­ poor, while targeting cash crops could lead to inequality, unless such cash crops are used to drive local value chain development. The challenges facing African agriculture are complex and multidimensional. Figure  3.13 provides the highlight of the key challenges facing agriculture in Africa. This is presented as the hexagon of complex problems—cutting across limited access to factors of production (including finance, skills, and land), weak institutions (e.g. limited inclusion of farmers and youth in policy designs, implementation, and poor governance), limited market access (e.g. tariffs and non-tariff barriers), population issues including an aging farming population and high population growth, low access to technology (such as R&D, irrigation, and fertilizers), and sustainability issues (such as climate change, pollution, and access to water).

Fig. 3.13  A systemic approach to drivers of agricultural underperformance

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The political economy of agricultural reforms plays a strong role in explaining the current state of agriculture in Africa. Agricultural policy formulation and implementation is not a technocratic exercise as is often prioritized in most African countries: the management of the vested interests and power relations within and outside of governments, private sector actors, and farmers remains critical in shaping agriculture for national development. The cash crop bias, the selling of strategic grain reserves at subsidized prices to private millers, and the power asymmetries between African farmers and farmers from Africa’s major trading partners—due to policy ambivalence—are political economy issues that require considerable attention to achieve agriculture for economic transformation and the inclusive development agenda. Understanding various actors’ interests and interactions between various stakeholders, as well as integrating them into agricultural policy formulation and implementation in a Pareto optimal version remains critical.

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Chapter. In Income Inequality Trends in Sub-Saharan Africa: Divergence, Determinants and Consequences, 23–52. New York, NY: UNDP, 2017. Cornia, Giovanni Andrea, and Bruno Martorano. “The Dynamics of Income Inequality in a Dualistic Economy: Malawi over 1990–2011.” Chapter. In Income Inequality Trends in Sub-Saharan Africa: Divergence, Determinants and Consequences, 270–92. New York, NY: UNDP, 2017. Council for Economic Planning and Development. Executive Yuan. Taipei: Economic Development Republic of China, 2013. Deininger, Klaus, and Songqing Jin. “The Potential of Land Rental Markets in the Process of Economic Development: Evidence from China.” Journal of Development Economics 78, no. 1 (2005): 241–70. https://doi.org/10.1016/j. jdeveco.2004.08.002. Deininger, Klaus, and Songqing Jin. “Tenure Security and Land-Related Investment: Evidence from Ethiopia.” European Economic Review 50, no. 5 (2006): 1245–77. https://doi.org/10.1016/j.euroecorev.2005.02.001. Diao, Xinshen, P. B. R. Hazell, Shashi Kolavalli, and Danielle Resnick. Ghana's Economic and Agricultural Transformation: Past Performance and Future Prospects. Oxford: Oxford University Press, 2019. Díaz-Bonilla, Eugenio. Macroeconomics, Agriculture, and Food Security: a Guide to Policy Analysis in Developing Countries. Washington, DC: International Food Policy Research Institute, 2015. Díaz Bonilla, E. Macroeconomic Policies and Agricultural and Rural Development. 2030—Food, agriculture and rural development in Latin America and the Caribbean, Santiago, Document No 7. FAO. 2019. Dorward, A., E.  Chirwa and T.S.  Jayne. 2010. The Malawi Agricultural Input Subsidy Programmen2005/6 to 2008/9. World Bank Project Report. Washington DC. FAO. 2011. Why Has Africa Become a Net Food Importer?: Explaining Africa Agricultural and Food Trade Deficits. Rome: Trade and Markets Division, Food and Agriculture Organization of the United Nations FAO, 2011. FAO.2014a. Youth and Agriculture: Key Challenges and Concrete Solutions. Rome: Published by the Food and Agriculture Organization of the United Nations (FAO) in collaboration with the Technical Centre for Agricultural and Rural Cooperation (CTA) and the International Fund for Agricultural Development (IFAD), 2014. FAO. 2014b. Analysis of public expenditure in support of food and agriculture in Uganda, 2006/07–2012/13. Technical notes series, MAFAP, by Shinyekwa, I., Katunze, M. and Ahmed, M., Rome FAO. 2015a. Country fact sheet on food and agriculture policy trends: Malawi. Rome: FAO http://www.fao.org/3/a-­i4491e.pdf. FAO. 2015b. Global Forest Resources Assessment 2015: How Are the World's Forests Changing? Rome: Food and Agriculture Organization of the United Nations.

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FAO. 2016. “Global Map of Irrigation Areas (GMIA).” AQUASTAT—FAO's Information System on Water and Agriculture. Accessed June 21, 2020. http://www.fao.org/nr/water/aquastat/irrigationmap/chn/index.stm. Ghatak, M., and S. Roy. “Land Reform and Agricultural Productivity in India: a Review of the Evidence.” Oxford Review of Economic Policy 23, no. 2 (2007): 251–69. https://doi.org/10.1093/oxrep/grm017. Gibson, Paul, J Wainio, D Whitley, and M Bohman. Profiles of Tariffs in Global Agricultural Markets. 796. Vol. 796. Washington, DC: Market and Trade Economics Division, Economic Research Service, 2001. https://naldc.nal. usda.gov/download/38363/PDF Global Agriculture and Food Security Programme (GAFSP). 2016. “Private Window: Portfolio Review”. International Finance Corporation. http://www. ifc.org/wps/wcm/connect/cefeb201-­0 027-­4 c59-­a 206-­1 4412e982dd1/ Portfolio_Update_Dec2016_FINAL.pdf?MOD=AJPERES Griffin, Keith B., Azizur Rahman Khan, and Amy Ickowitz. Poverty and the Distribution of Land. Riverside, CA: Dept. of Economics, University of California, Riverside, 2000. Hoeffler, Heike. “The Political Economy of Agricultural Policies in Africa: History, Analytical Concepts and Implications for Development Cooperation,” Quarterly Journal of International Agriculture 50, no.1 (2011). Holden, Stein, “How to promote sustainable agriculture in Africa” Presentation, Norwegian University of Life Sciences, undated. Houmy, Karim, Lawrence J.  Clarke, John E.  Ashburner, and Josef Kienzle. Agricultural Mechanization in Sub-Saharan Africa: Guidelines for Preparing a Strategy. Rome: FAO, 2013. International Poverty Reduction Centre China (IPRCC). “Agriculture, Food Security and Rural Development: A Synthesis.” IPRCC Working Paper 01. (2011) www.iprcc.org/Index/warehouse/id/4538.html Juma, Calestous. The New Harvest: Agricultural Innovation in Africa. Oxford: Oxford University Press, 2011. Karshenas, Massoud. Agriculture and Economic Development in Sub-Saharan Africa and Asia. London: University of London, School of oriental and African studies, Department of economics, 2001. Karshenas, Massoud. Industrialization and Agricultural Surplus: a Comparative Study of Economic Development in Asia. Oxford: Oxford University Press, 1995. Legislative Council Secretariat. Information Note: Taiwan's agricultural policy. Taipei: Republic of China (Taiwan), 2014. Lin, J. Y. “Rural reforms and agricultural growth in China.” American Economic Review, 82, no.1 (1992): 34–52. Lipton, Michael. Land Reform in Developing Countries: Property Rights and Property Wrongs. New York, NY: Routledge, 2009.

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Lowder, Sarah K., Jakob Skoet, and Terri Raney. “The Number, Size, and Distribution of Farms, Smallholder Farms, and Family Farms Worldwide.” World Development 87 (2016): 16–29. https://doi.org/10.1016/j. worlddev.2015.10.041. Manji, Ambreena. The Politics of Land Reform in Africa: From Communal Tenure to Free Markets. London: Zed Books, 2006. McMillan, Margaret, Dani Rodrik, and Claudia Sepúlveda. Structural Change, Fundamentals, and Growth: A Framework and Case Studies. Washington, DC: International Food Policy Research Institue (IFPRI), (2017). https://doi. org/10.2499/9780896292147. Meredith, M. The State of Africa: a History of Fifty Years of Independence. London: Simon & Schuster Ltd., 2005. Millennium Challenge Corporation. Measuring Results of the Alatona Irrigation Project in Mali, Washington, DC: MCC, 2016. Mortimore, Michael. “Adapting to Drought in the Sahel: Lessons for Climate Change.” Wiley Interdisciplinary Reviews: Climate Change 1, no. 1 (2010): 134–43. https://doi.org/10.1002/wcc.25. Ndulu BJ, O’Connell SA, Bates RH, Collier P, Soludo C, eds. The Political Economy of Economic Growth in Africa 1960–2000. Cambridge, UK: Cambridge Univ. Press. 2008. Nguyen, H. L. “Agricultural Land Tenure Security under Vietnamese Land Law: Legislative changes and improvements since economic reforms” Land Tenure Journal, no.2 (2012): 67–92. Norton, R.D. “Agricultural Issues in Structural Adjustment Programme.” FAO Economic and Social Development Paper, (1987). Odusola, A. and B. Abidoye (2015). “Effects of temperature and rainfall shocks on economic growth in Africa.” Paper presented at the 29th Triennial Conference of the International Association of Agricultural Economists (IAAE) in Milan, Italy from 8 to 14 August, 2015. Odusola, Ayodele F. “Land Grab in Africa: A Review of Emerging Issues and Implications for Policy Options.” International Policy Centre for Inclusive Growth 124 (April 2014). Odusola, Ayodele. “Africa’s Structural Transformation: From Strategy to Action”. Nigerian Journal of Legislative Affairs, 7, no.1 (2015): 109–134. Odusola, Ayodele. “Agriculture, Rural Poverty and Income Inequality in SubSaharan Africa.” Chapter. In Income Inequality Trends in Sub-Saharan Africa: Divergence, Determinants and Consequences, 77–102. New York, NY: United Nations Development Programme, Regional Bureau for Africa, 2017. Odusola, Ayodele. “Growth-Poverty-Inequality Nexus: Toward a Mutually Inclusive Relationships in Africa.” Chapter. In African Economic Development – Second Edition, 157–182 (2019). Bingley, UK: Emerald Publishing Limited.

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Wiggins, S. and J. Brooks. “The Use of Input Subsidies in Developing Countries”. Global Forum on Agriculture, Policies for Agricultural Development, Poverty Reduction and Food Security. OECD: Paris. 29–30 November 2010. Wiley, L.A. “Adjusting to new era agrarianism: Tackling the Troubled Interface of Public and Community Property”. Rethinking Land Reform in Africa: New Ideas, Opportunities and Challenges. African Natural Resource Centre, African Development Bank, Abidjan, 2019. World Bank. World Development Report 2007: Agriculture for Development. Washington, DC: The World Bank. 2007. World Bank. Implementation Completion and Results Report (IBRD-72910). Washington, D.C.: World Bank, 2016. World Bank. Improving water management in rainfed agriculture : issues and options in water-constrained production systems. Washington, DC: World Bank, 2010. http://documents.worldbank.org/curated/en/608111468156864510/ Improving-­water-­management-­in-­rainfed-­agriculture-­issues-­and-­options-­in-­ water-­constrained-­production-­systems. World Bank. “Is Post-Harvest Loss Significant in Sub-Saharan Africa?” Africa myths and facts Brief. (2015a). http://www.worldbank.org/en/programs/ africa-­m yths-­a nd-­f acts/publication/is-­p ost-­h ar vest-­l oss-­s ignificant­in-­sub-­saharan-­africa World Bank. “Technology Drives Sustainable Agricultural Development in China.” 2015b. Accessed June 21, 2020. http://www.worldbank.org/en/news/ feature/2015/10/23/technology-­d rives-­s ustainable-­a gricultural-­ development-­in-­china. World Watch Institute (WWI). “Agricultural Subsidies Remain a Staple in the Industrial World.” June 2018. http://www.worldwatch.org/agricultural­subsidies-­remain-­staple-­industrial-­world-­0 You, Liangzhi, Claudia Ringler, Ulrike Wood-Sichra, Richard Robertson, Stanley Wood, Tingju Zhu, Gerald Nelson, Zhe Guo, and Yan Sun. “What Is the Irrigation Potential for Africa? A Combined Biophysical and Socioeconomic Approach.” Food Policy 36, no. 6 (2011): 770–82. https://doi.org/10.1016/j. foodpol.2011.09.001.

PART II

Agriculture as the Engine of Economic Transformation and Inclusive Development: Theory, Practice, and Empirical Evidence

CHAPTER 4

Agriculture as a Strategy to Operationalize Growth-Poverty-Inequality Nexus: Theory and Evidence

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 A. Odusola, Africa’s Agricultural Renaissance, https://doi.org/10.1007/978-3-030-65748-2_4

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4.1   Introduction This chapter provides the theoretical and empirical anchor to the arguments and analytical propositions in subsequent chapters. It helps to articulate the various perspectives for an agriculture-for-development proposition and identifies the transmission mechanisms between agriculture and national development. Section 4.2 examines the classical, Orthodox Marxian, neoclassical, and structuralist approaches to ‘agriculture in development theory’ through production and distribution, resource-use efficiency, and efficacy of markets with a primary focus on farm efficiency, dualism, and surplus labour. Section 4.3 provides the highlights of the literature on empirical evidence of the role of agriculture for economic transformation and a national development agenda. Overall, this chapter provides the reference point and baseline for the analytical exploration in subsequent chapters.

4.2   Theoretical Perspectives The history of the theory of agricultural development is as old as economic development itself. To better appreciate this theoretical exposition, a dual-track approach is adopted: the ‘traditional versus modern sectors’ approach and the ‘classical versus non-classical approach’. The common feature of both approaches, agricultural productivity, is also presented as the concluding part of this section. 4.2.1  Traditional Versus Modern Sectors Approach The early works that link agriculture to overall development1 focused on linearized market-mediated frameworks. For instance, scholars like Lewis (1954) and Ranis and Fei (1961) hypothesized subsistence agriculture as a default source of employment and as a pool of reserve labour. They argued that resources flow from the traditional sector (agriculture) to the modern sector (industry); the traditional sector is characterized by low wage rates, while the modern sector is categorized by above market-­ clearing wage rates. The interactions of these two sectors, through the 1  Some of these include Rosenstein-Rodan (1943), Lewis (1954), Rostow (1960), Johnson and Mellor (1961),  Ranis and  Fei (1961), Schultz (1964),  Fei et  al. (1967) and Ranis et al. (1990).

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factor market, bring about an equilibrium wage rate in the economy. Under this school of thought, it is the gradual absorption of the surplus labour in the traditional sector (agriculture) or low productivity sector, by the modern (industrial) or high productivity sector, that reduces poverty and improves welfare. These scholars argue for a dual economy model where the traditional sector is technologically backward and the modern sector is propelling accumulation, innovation, and productivity growth—a model that emphasizes relationships and flows between and among sectors. The movement of factors from the surplus sector to the deficit sector propels growth across sectors. When surplus labour in the agricultural sector is exhausted, wages in the agricultural sector begin to rise—bridging income disparities between agriculture and the rest of the economy. The elimination of surplus labour in the agricultural sector generates innovations that promote productivity enhancement. This pushes wages in the industrial sector upwards and reduces profit levels; it is at this point that the income disparities between workers and capital owners shrink and the process of capital accumulation slows down. An increase in demand for labour leads to increases in returns to human capital. The decreasing importance of farming in household incomes leads to growth of non-farm activities, especially in communities where agricultural conditions are unfavourable.2 Landless households also benefit from labour reallocation and the growth of non-farm activities. Based on an unlimited supply of labour from the traditional sector, Lewis (1954) throws more insight into structural dualism. The transfer of labour from the subsistence to the capitalist sector comes to reflect sectoral differences in the marginal productivity of labour, eventually leading to an integrated labour market and transformation towards a homogenous economy. Over the past six decades, the Lewis hypothesis has helped to define and broaden an understanding of the nature of economic transformation in many developing regions.3 It clarifies part of the interactions

 See Johnson and Mellor, 1961; Mellor 1995, Mellor et al. 1996; and Gollin 2010.  This is premised on unlimited supplies of labour from subsistence economy (of which agriculture is a part), and it ensures that capital accumulation is sustained over time, but the dynamics of the economic forces at play lead towards economic transformation. When the reservoir of surplus labour in the agriculture sector is exhausted, and wages in the subsistence sector begin to rise—laying the foundation for bridging income disparities. This pushes wages in the capitalist sector upwards and reduces profit levels—another avenue for stemming income gaps. The process of capital accumulation slows down. The open economy variant of Lewis’ model lays the foundation for the role of migration and capital export in economic development (Kirkpatrick and Barrientos 2004). 2 3

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between farm and non-farm sectors of the economy (Kirkpatrick and Barrientos 2004) as well as rural and urban economies. From the product market side, Schultz (1953) hypothesized that poor countries suffered from a ‘food problem’ and face the challenge of ‘high food drain’—a situation where people spend a large proportion of their income on food—because their income is too low (Engel’s Law).4 To Schultz, countries in this category cannot initiate the development of a modern economy until their subsistence food needs are met. The theoretical postulate from Schultz’ dimension is that before agriculture can propel industrialization, it must first meet food sufficiency. 4.2.2   Classical Versus Non-Classical Approach The history of the theoretical perspectives of agriculture-for-development is an age-long phenomenon—running from the classical economists (Adam Smith, David Ricardo, and Thomas Malthus) era and the neoclassical model approach (like William Stanley Jevons, Léon Walras, Alfred Marshall, and John Maynard Keynes) to the populist economists (Vladimir Lenin and Karl Marx) era and structuralist macroeconomists school (like Joseph Stiglitz).5 The role of agriculture in development theory is mostly premised on modes of production and distribution, with a focus on resource-use efficiency and efficacy of markets, as espoused by the classical, Orthodox Marxian, neoclassical, and structuralist approaches. The primary focus of debate is about farm efficiency, dualism, and surplus labour. The neoclassical school and their extensions believe in individual rationality, market efficiency, and absence of surplus in a well-functioning market enterprise (i.e. existence of efficiency or competitive wage regime or zero involuntary unemployment). To them, unequal distribution of means of production is irrelevant to resource allocation and use in agriculture and their outcomes. The other schools (the classical, orthodox Marxian, and structuralist approaches) hold the view that traditional agriculture is neither stationary nor efficient and that the social relations of production may inhibit 4  Ernst Engel (1821–1896) hypothesized that income elasticity of demand for food is between 0 and 1, that is, as income rises, the proportion of income spent on food falls, even if absolute expenditure on food rises. This implies that the rise in expenditure for food in percentage term is less than the increase in income. 5  See Rao (1985) and Dercon and Gollin (2014) for further reflections on the etymology of this historical perspectives.

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accumulation and forms of technological change, a phenomenon that goes beyond ‘getting the price right’ axiom.6 To the non-neoclassicals, technological and accumulation advantages of the capitalist enterprise over peasantry enterprise or modes of production tend to perpetuate dualism, resource dependence, and surplus labour that increase and propagate poverty and inequality. The key features of the agricultural sector that tend to influence development theory espoused by these various schools of thoughts are enumerated below. • The classical approach from the pioneering works of Adam Smith and Thomas Malthus espoused the existence of a powerful rentier class (e.g. landlords, merchants, and moneylenders) whose interest conflicts with accumulating class interested in agricultural production and expansion. David Ricardo’s theoretical perspective extended this approach to include progressive and unproductive classes with the interest of powerful rentiers slowing down the process of capital accumulation, distorting employment and output growth, and patterns of development.7 • The neoclassical approach, on the other hand, argues that the allocation of resources in production is independent of the distribution of control over the means of production.8 And by extension, economic institutions rationally respond to technology, and the form of the enterprise has no self-determined influence on either production or income distribution. Economic institutions (either capitalist enterprise or peasant (but efficient) enterprise) are viewed primarily as rational responses to technology.9 To them, and their extensions (e.g. Schultz, 1964), what matters are exchange relations and technology—though with the assumptions that markets exist to ­

 For more illuminations on this theoretical thinking, see Rao (1985).  Arthur Lewis (1954) articulated the theoretical underpinning of this school and provided substantial support to the surplus labour theory. Also see Rao (1985) for further illuminations. 8  This is based on the assumptions of full employment, absence of link between inequality and resource efficiency, and irrelevance of enterprise forms. 9  To the classical, there is no distinction between peasant and capitalist enterprises. What matters is an efficient enterprise irrespective of who owns it. In this regard, inequality in the control over the means of production is of no consequence for resource allocation (Rao 1985). 6 7

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ensure full employment of all resources, including labour.10 In Schultz’s thesis, smallholder farmers are rational economic beings who allocate available resources efficiently—a phenomenon that led to the development of ‘poor but efficient’ farmers. This school argues that growth in inequality, poverty, and vulnerabilities was not as a result of growth of commercialization and markets but due to an imperfect political system (Rao, 1985). • The pioneering work of the Lenin-Marx approach championed the role of class relations and expropriation in agrarian production. This approach argues that an underdeveloped full-time wage labour, especially landless labourers, explains inadequate work opportunities and widespread poverty, particularly in rural areas (including Lewis 1954). The domineering presence of this class of people in rural areas dominates the Classical and the orthodox Marxian analyses that the mode of agricultural production—mostly shaped by technology—controls the means of production, access to the resources of the state, and institutions that organize production (e.g. enterprise forms). This dynamic significantly influences productivity, employment, and income distribution within and outside agriculture (Rao 1985), having a significant bearing on the macroeconomics of agrarian development—the ‘peasant-capitalist economy’.11 In fact, the underpinning assumptions of full employment, the absence of any link between inequality and resource use efficiency, and the irrelevance of enterprise forms that form the bedrock of neoclassical theory are found to be inconsistent with the contemporary agrarian economies. • There have been counter arguments to the neoclassical extension that believes population and technology are stationery. For instance, Boserup (1983, 1993) argues that population pressure, including through high area density, is a major factor that leads to technical changes, resulting in agricultural growth and food supply. The experiences of the Asian countries in the 1970s and 1980s have attested to the relevance of population pressure in a green revolution. This school of thought also argues that the power asymmetries between 10  This idea is to counter the growing trend of the classical and Marxian approach of unlimited surplus labour in the traditional sector like agriculture. 11  The peasant enterprise sustains itself with its own and/or family labour and other means of production.

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feudal elites and peasant cultivators make it impossible for resource ratios to be equalized everywhere as argued by the neoclassicals and their extensions. Rather than maximizing rents, they resort to extracting limited surplus from poor, peasant farmers—individual rationality that leads to predatory behaviours. The reality in several Southern African countries (especially South Africa and Eswatini) is a testimony to this argument. For instance, in South Africa, big landlords are extracting unlimited surplus from smallholder and rural farmers. A similar relationship is established between traditional authorities and smallholder farmers in Eswatini. This functional dualism exacerbates surplus extraction in several ways including weakening labour’s bargaining and economic positions, and the absence of collective actions from smallholders (e.g. to benefit from market incentives) tends to propagate large-scale unemployment and squalor among smallholders. In this regard, unequal distribution of factors of production—arising from market and public policy failures—accounts for the rising poverty, inequality, and risks among rural dwellers in several countries. As opposed to individual rationality, a moral economy is advocated for to address predatory rents, usurious interest on credits, and unfavourable conditions of sale for smallholder produce. The existence of an inverse relationship between farm size and labour intensity or farm yield, as well as the existence of involuntary unemployment, tends to support a non-neoclassical approach that argues that the unequal distribution of ownership and control over the means of production is a significant determinant of resource use in agriculture.12 • In a similar vein, the structuralist macroeconomist approach promoted the link between agriculture and industry.13 The proponents of this thought, building on the earlier works of Lewis (1954), Johnson and Mellor (1961), Mellor (1995), and Mellor et al. (1996), among others, see agriculture as the precursor to industrial growth 12  See findings from Sen (1966) and Rao (1985) for detailed expositions of the debate and relationships. 13  The relationship between agricultural development and industrialization still remains an ongoing debate. Some scholars like Gardner and Tsakok (2007) and Allen (2009) conclude that the relationship is too complex to disentangle easily.

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and expansion in England (in the mid-eighteenth century) to Japan (in the late-nineteenth century), and the newly industrialized countries in Asia (in the late-twentieth century). Despite this strong linkage, they posit that the dynamic transformation of the agrarian economy is complex, involving class structure, private accumulation, and public investments. And that the long-term expansion in agrarian economy depends on investments, technical change, and an ability to address the complex relationship in the agricultural ecosystem, as well as advancing entrepreneurial and accumulative drive among smallholder farmers including sociological and technological barriers to accumulation.14 Taking this approach further, Byerlee et  al. (2009a) posit that given a large size of the population depending on agriculture for a living, the fact that three-quarters of all poor people living in rural areas are poor, and agriculture being the largest user of natural resources, focusing on agriculture-led industrialization could derail the achievement of the global development agenda—if the focus is not on the role of agriculture for development. • Some structuralists (Kirkpatrick and Barrientos (2004) and Gollin (2014)) view this from a different perspective. They argue that dualism is not necessarily confined to an industrial/urban versus agricultural/rural dichotomy and that this dualism exists within rural areas, where capitalist and subsistent agriculture are completely disconnected. When the capitalist sector operates as an enclave, the connection in the form of productive linkages, technological transfers, or labour demand that triggers productivity enhancement disappears. The experience in Southern African countries is very relevant. The Lewisian theory breaks down in an open economy framework, particularly when profits from the capitalist sector are invested outside the country. Globalization that helps to confine developing countries to exporters of primary commodities and importers of capital creates an enclave that disallows the transformative connections that propel overall productivity to take place. In a globalized economy, the primary commodity booms could raise the incomes of farmers without enhancing their innovation and technical know-how needed for sustained productivity.

14   Further illuminations could be found in Rao 1985; Byerlee et  al. 2009a; and Odusola 2015.

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• Some scholars have succeeded in putting agriculture within the mainstream macroeconomic frameworks. For instance, Johnson and Mellor (1961) effectively linked agriculture to a macroeconomic structure of consumption and production. In an open economy framework, they argued that agricultural productivity would lead to higher rural incomes; lower food prices in urban areas; increased savings in rural areas; and an expanded domestic market for non-­ agricultural goods. In an open economy approach, on the other hand, agricultural productivity would allow nominal wages in manufacturing to remain low and make non-agricultural exports more competitive. This framework posits that agriculture is an engine of growth and that growth in agriculture has larger economy-­ wide effects.15 • Similarly, other scholars (e.g. McMillan and Harttgen 2014; McCullough 2016; and Odusola 2017) underpin the role of agriculture in development through the structural transformation process. They argue that the process of economic development is distinguished by rising output per agricultural worker and the exit of labour from agriculture to other sectors—the cumulative effect of which results in rising incomes and a falling incidence of poverty. The transmission mechanism from agriculture to development hinges on complex structural relationships that derive essentially from agricultural productivity growth, leading to non-farm activities’ growth and resulting in labour exiting from farming. These cumulatively lead to overall economic growth, and reduction in poverty and exclusion. This theoretical exposition, apart from revealing that analysis of market processes alone is insufficient to understand economic outcomes in agricultural transformation, has also helped to guide the main thrust of this book in several ways. First, it throws more illuminations on how the book should examine factors that propagate the persistence of smallholders, including a deeper understanding of smallholder rationality, the pace and structure of economic growth, the role of state policy, and the 15  Despite this relationship, the debate about the best approach to spur agricultural productivity remains unsettled. While Dercon and Gollin (2014) agree with the growth impact of agriculture, they argue that the evidence is less clear on the social welfare benefits of public investments in agriculture compared to other sectors of the economy.

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mechanisms through which smallholders are exploited. Second, it helps to understand factors propagating seasonal unemployment, including the pace of accumulation, technical change, climate change, cultural endowment, institutions, and state policy. Third, it helps the book to move from ideology to pragmatism by thinking about how to ensure organization of production and wealth distribution are managed to promote better resource allocation and use, as well as productivity enhancement in the agricultural sector. 4.2.3   The Transmission Mechanism of Agriculture for Development Agricultural productivity is the transmission mechanism for a virtuous relationship between agriculture and development. For instance, Schultz (1964) argues that changes in technology, including better crop varieties and improved livestock, are important for transforming indigenous agriculture. This is far beyond relying on extension services alone. Rather, profitable technologies must be developed, bearing in mind knowledge and experience of farmers in poor communities. This is one of the missing links of the first generation of a green revolution in Africa. Some scholars like Kirkpatrick and Barrientos (2004) and Gollin (2014) argued that the theoretical characteristics of the Lewisian dualism is not modern (industrial) versus subsistence (agriculture) sectors, but by productivity gaps and labour differences. The high productivity in the industrial sector and the exodus of excess labour from the agricultural sector, which makes it more productive, combine to raise total productivity of the economy. Several scholars16 have developed this further. To these scholars, accelerated agricultural productivity generates general equilibrium impacts that spur faster employment generation and equitable growth, with resounding effects on societal wealth and stability. Some of these integrated impacts, as articulated in Gollin (2010: 3844), include: (1) improvement in farm income and profitability, leading to better welfare of farmers and the rural poor; (2) reduction in food prices, benefiting rural and urban consumers, including farmers who are net-purchasers of foods; (3) a decline in nominal wages, consistent with an increase in real wages that 16  These include Johnson and Mellor 1961; Mellor 1995, Mellor et  al. 1996; and Gollin 2010.

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allow the industrial sector to reduce costs; (4) an expansion in domestic demand for industrial goods; (5) better agricultural and industrial export competitiveness, resulting in improved foreign exchange earnings; and (6) an enlargement of the domestic industrial sector that helps to reallocate labour and investment from agriculture to the industrial sector. Rapid modernization of the agriculture sector, through science-based technology that accelerates agricultural productivity, is critical to maximizing these general equilibrium impacts. Relocating surplus labour from rural to urban areas is one part of the equation; other parts include investing in rural human capital (Lucas 2004), raising small farm holders’ productivity (Mellor et al. 1996; Dercon 2009; Gollin 2010), and raising rural incomes to create demand for manufactured goods and services (Adelman 1998). Other studies have also confirmed this transmission mechanism from agriculture and national development. For instance, through the direct effects on farm workers (McCullough 2016), through indirect impacts that lead to growth in non-agriculture sectors (McMillan and Harttgen 2014), and through increased per capita food supplies associated with lower food prices (De Janvry and Sadoulet 2009). These scholars conclude that enhanced productivity is the propellant of agriculture for development agenda. Mellor (1995) and Mellor et al. (1996) argued that the failure of past development strategies that excluded agriculture in many developing countries (e.g. direct allocation of resources to growth in capital stock, import displacement, basic needs, and export-led growth)17 always led to food crises, large-scale importation of food, foreign exchange scarcity, and income disparities between rural and urban areas. He theoretically argued that these constraints will be removed if an agriculture- and employment-­ based strategy is adopted. Such strategies must be rooted in accelerated agricultural productivity, allocating resources to goods and services with high employment content, and creating growth poles18 in rural areas. The 17  Excluding Taiwan, Thailand, Ivory Coast, Malaysia, and the Punjab of India and Pakistan (see Mellor 1995). 18  Growth poles refer to agriculture-driven growth clusters where agribusinesses create direct and indirect opportunities. It is a form of agricultural settlement that attracts upstream and downstream activities. Upstream engagements could include hiring of tractors, irrigation management schemes, and seed multiplication firms. Downstream engagement could be storage facility management, markets of outputs, feedstock firms, banking services, and transport services. These backward and forward linkages could generate employment opportunities.

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spillover from farm to non-farm activities arises from the assumption that increased food marketing depresses food prices, thereby encouraging employment in other sectors by making labour somewhat cheaper to produce goods and services (Mellor 1995). The transformation of agriculture from a paradox to a powerhouse of development can be categorized into six channels: first, providing labour for an urbanized industrial work force; second, producing food for expanding populations with higher incomes; third, supplying savings for investment in industry; fourth, enlarging markets for industrial outputs; fifth, providing export earnings to pay for imported capital goods; and sixth, providing primary materials for agro-processing industries (Pingali 2010). All of these can be maximized when agricultural productivity is very high. The Kuznets’ hypothesis of the inverted U-shaped relationship between inequality and development, proxied by per capita income, also contributes to the agriculture-development nexus. This framework posits that at the initial stage of development, inequality increases as per capita income rises, largely because of increases in a rural-urban inequality gap and inequality within urban sectors. This rise in urban industrialization and the mismatch between the rise in workers’ pay and the profits of capital owners makes a rise in inequality inevitable. But this trend is expected to eventually reverse as many households benefit from the industrialization process, as well as rise in rural wages, due to an increase in demand for labour in agriculture and non-agricultural sectors in rural areas.19 In recent times, some scholars posit that agriculture follows rather than leads the development trajectory, particularly in regard to reducing rural poverty and inequality. For instance, Ellis and Harris (2004) argue that facilitating rural-urban migration could be more potent than policies promoting agriculture. This assumes that more rural-urban migration leads to higher wages for those staying behind in rural areas and to greater diversification of rural economies. This concept is premised on the assumption that rural dwellers have the level of education and technical knowledge necessary for securing decent jobs in urban centres, which is not the case in practice. For instance, migration from rural areas to urban centres is often impeded by lack of information, skill gaps, and social and cultural ties. Rising urban poverty and expanding urban slums have further shown this assumption to be false. Rather than targeting small farm holders to 19  Several scholars have provided illuminations on this (Bourguignon and Morrisson 1998; Barro 2000; Acemoglu and Robinson 2002; Hazell 2010; and Estudillo and Otsuka 2010).

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generate growth and to address poverty and inequality, Collier (2008) posits that urban dynamism, commercial agriculture, and non-farm sectors are the panacea to driving growth and development. However, evidence from China, India, and South Korea have shown the power of small-scale farmers’ productivity in driving non-agriculture rural activities.

4.3   Evidence from Existing Studies This section provides evidence from the extant literature on how agriculture has been driving economic growth, diversifying economies, and reducing poverty and inequality across developing countries. It also tries to establish the veracity of the theoretical propositions articulated above across the various regions of the world. Strong forward and backward linkages between agriculture and the rest of an economy generate high spillover effects on development by facilitating economic diversification and reducing poverty and income inequality. The World Development Report 2008 rekindled the centrality of agriculture in promoting a development agenda by arguing that agriculture is a strong option for spurring growth, overcoming poverty, and enhancing food security in Sub-Saharan Africa (World Bank 2007). The report concludes that agriculture offers new opportunities to hundreds of millions of rural, poor populations to move out of poverty. But this requires accelerating a productivity revolution in smallholder farming, supporting smallholder farmers including those in remote areas, promoting high-value agricultural products (e.g. vegetables and dairy), using agriculture to drive entrepreneurship and jobs in emerging rural, non-farm economies, and providing better stewardship of natural resources, including water management. How South-East Asia used a green revolution to reduce poverty and inequality is the focus of Estudillo and Otsuka (2010). The processes that helped millions of rural households to move out of poverty are summarized below. The first channel is by raising income from rice production through enhanced access to land (including size of cultivated areas) and adopting modern technology (including access to irrigation pumps and improved seedlings in the Philippines and Thailand). The second is by diversifying incomes from farm to non-farm activities, a phenomenon that stimulates non-farm employment opportunities for the rural labour force. Furthermore, production and consumption linkages in rural areas assisted to develop labour-intensive non-farm activities, which accelerate

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reductions in poverty and inequality. The third channel is by increasing farm and non-farm incomes, allowing many poor households to invest in their children’s education (e.g. Philippines and Thailand), which further deepens the long-term impact of agriculture on development. The implementation of a green revolution in South Asia (especially in Bangladesh and Pakistan) contributed immensely to reducing poverty, but not quite as well in reducing interhousehold and interregional inequalities, possibly because of seasonal migration from less favoured to more favoured regions (Hazell 2010). South Asia’s agricultural transformation focused on shifting from focusing only on achieving increases in production of food grains to a more integrated approach that strengthens natural resource management and sustainability; enhances the productivity and quality of high-valued crops, trees, and livestock; deepens agricultural intensification in less favoured areas; and improves pro-poor policy targeting. The harvested area under modern cereal varieties (i.e. rice, wheat, and maize) in South Asia, which was almost zero in 1965, rose to 71.0 percent, 94.5 percent, and 53.5 percent, respectively in 2000. This transformation was possible through enhanced budgetary allocation, improved R&D in these targeted areas, market liberalization, private sector and CSOs involvement in R&D, and extension services. In this region, this approach was found to generate more returns (in terms of poverty reduction) than just rural development programmes. However, the results of this approach were accompanied by rising inequalities—a major lesson that calls for a broad-based growth strategy through improved education and employment opportunities, accompanied by well-targeted social protection schemes for the marginalized people, people experiencing multidimensional poverty, and hard-to-reach communities. Productivity enhancement is an overarching transmission channel between agriculture and development in Asia. And agricultural productivity is an important strategy for rapid poverty reduction among the poorest quintiles and rural dwellers—particularly in low-income countries. Foster and Rosenzweig (2003) found, in India, that agricultural productivity tends to increase intervillage inequality, while non-farm growth tends to reduce it, particularly when the non-farm sector is low-­ skilled and labour intensive. In this regard, the growth in non-farm sectors increases the income of the poor, and because the better off, landed households are net hirers of agricultural labour, they decrease intravillage inequality.

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Thirtle et al. (2003) show that 1.0 percent increase in crop productivity reduces the number of people in poverty by 0.46 percent in Asia. Ravallion and Datt (1996) show that a 1.0 percent increase in agricultural value added per hectare leads to a 0.4 reduction in poverty in the short run and 1.9 percent in the long run in India. They also found that growth in agricultural and tertiary sectors mattered more for reducing poverty than growth in the manufacturing sector and also mattered more for rural growth than urban growth in India—all thanks to higher farm productivity in some states.20 Fan et  al. (2000) also observed that a 1.0 percent increase in agricultural productivity in India reduces poverty by 0.24 percent. Evidence from Rangarajan (1982) shows that in India, a 1.0 percentage point increase in agricultural growth rate generated an additional 0.5 percent and an additional 0.7 percent in industrial output and national income, respectively—a phenomenon that increases the indirect impact of agriculture on poverty reduction. In China, agricultural growth contributed to poverty reduction up to four times higher than growth from industry and service sectors—thanks to favourable land distribution (Ravallion and Chen 2007). Imai et al. (2016) and Imai and Gaiha (2014) found that agricultural growth is more important to reducing poverty than inequality in developing countries. They conclude that the assumption of rural-urban migration and urbanization as the main drivers of growth in developing countries is misleading. The agricultural growth elasticity of inequality is weakened by ethnic fractionalization, while inequality was found to have some corrosive effects on poverty reduction, social cohesion, and stability. Christiaensen et al. (2006) reveal that the poverty elasticity of agriculture is 2.3 times larger than that of the non-agriculture sector for low-­ income countries. It is even larger for Sub-Saharan Africa by 4.25 times than that of the service sector. Christiaensen et al. (2011) conclude that agriculture is significantly more effective in reducing poverty among the poorest of the poor, and agriculture is also as much as 3.2 times better at reducing poverty headcount ($1.0 per day) in low-income and resource-­ rich countries, particularly when societies are not fundamentally unequal.

20  This is not to say agricultural growth is the only solution to poverty reduction in India. Evidence from Foster and Rosenzweig (2003) suggests complementarity with rural nonfarm tradable sector growth in states that experienced slowest growth in agricultural productivity.

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However, for the better-off poor (using the $2-day measure), non-­ agriculture sectors become more effective. The poverty and income inequality–reducing power of agriculture depends on the extent to which policies are distorted in the sector. Using Computable General Equilibrium and micro-simulation models, Hérault and Thurlow (2009) find that removing agricultural distortions in South Africa is pro-poor and welfare enhancing. Removal of policy distortions generates net employment of 0.83 percent in the formal sector and 6.67 percent in the informal sector. This leads to a substantial decline in poverty ($2.0 per day) by 1.12 percent (nationally), 1.32 percent (rural), and 0.96 percent (urban). However, the fall in income inequality is relatively small—0.005 percent (nationally), 0.004 percent (rural), and 0.006 percent (urban). Similarly, a 1.0 percent GDP growth in agriculture raised the expenditure of the fifth poorest deciles by 3.7 percent, as opposed to 0.9 percent for GDP growth from the rest of the economy (Ligon and Sadoulet 2007). Similarly, Bravo-Ortega and Lederman (2005) also show that an increase in overall GDP from labour productivity in agriculture is 2.9 times more effective in raising incomes of the poorest quintiles than the equivalent GDP rise from labour productivity from non-agricultural sectors. Moreover, the comprehensive review by UNDP (2012) provides evidence of how the impact of agriculture on poverty reduction is higher than in non-agricultural sectors. First, agricultural GDP growth per agricultural worker is 2.9 times more effective in increasing the average incomes of the poorest 20 percent than growth in non-agricultural GDP. Second, growth in agricultural GDP is 3.0 times more effective at increasing household spending in the poorest households than is non-agricultural growth. Evidence from Tschirley and Benfica (2001) shows that, in Mozambique, the non-farm economy tends to grow faster and distributes its income more equally when smallholder agriculture becomes more profitable and productive. Diao et al. (2010) also find agriculture to be a major driver of overall economic growth in Rwanda, with every dollar invested in agriculture leading to a return to GDP of more than three dollars. Nseera (2014) also identifies agriculture as the sector with the greatest impact in reducing rural poverty in Lesotho. Genuine growth in agricultural productivity generates strong multiplier effects on the entire economy by creating job opportunities in inputs-farmgate-outputs ecosystem whose effects cut across the rural-­ urban continuum. As shown in Allen et al. (2016), the proportion of the

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labour force in the off-farm agrifood system is about 8 percent in Rwanda, 17 percent in Tanzania, and 23 percent in Nigeria. This sector accounted for 40 percent, 16 percent, and 11 percent of all new jobs in Nigeria, Tanzania, and Rwanda, respectively. They observe that employment in the off-farm portion of the agrifood system is growing much more rapidly in percentage terms than employment in farming—albeit not in absolute terms. Evidence from Nielsen (1994) shows sectoral dualism raises income inequality while a shift in the agriculture labour force reduces it. Dercon (2009) argues that the absence of an agricultural transformation is contributing to urbanization of poverty in Sub-Saharan Africa. Similarly, Byerlee et  al. (2009b) argue that the persistence of rural poverty in Africa, in spite of rapid economic growth over the past two decades, shows the difficulty of redistributing income generated outside of agriculture and deep inertia in people’s occupations as economies restructure. Econometric evidence from other scholars also corroborates the stronger poverty-reducing effect of rural economy than from urban economy, or other sectors.21 The World Bank’s (2007) decomposition analysis shows that 81.0 percent of the global reduction in rural poverty during 1993–2002 can be linked to improvements in rural areas, while migration accounted for only 19.0 percent. Pratt and Diao (2008) show there are ample opportunities for agricultural growth through regional linkages in Southern Africa. Due to close proximity, both low- and middle-income countries are expected to benefit from regional production, productivity, trade, and investment if regional integration is focused on agricultural products and integration. It is also observed that productivity growth in grain and livestock in low-income countries generates more growth in food consumption than growth in non-traditional export crops. With increased production, low-income countries are more likely to benefit from higher demand for their exports, higher prices that stimulate production for domestic markets, and a slower decline of prices. 21  For a comprehensive review of the significant role played by incomes from agriculture in rapidly reducing poverty in China, Vietnam, and India compared with little impact in Bolivia, Peru, and Brazil where growth concentrated on export-oriented sectors, see Byerlee et al. (2009b). For more information on sub-Saharan Africa, see Odusola (2017) and UNDP (2012).

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The role of agriculture in accelerating socio-economic development in developing countries is heterogeneous—depending on country typology and development contexts (e.g. low- or middle-income groups). For instance, agriculture could be a key driver of growth and economic diversification for the Least Developed Countries. On the other hand, emerging countries could focus on small farm holders to drive agricultural commercialization and enterprise development to help accelerate economic diversification, bridge rural-urban income gaps, and reduce rural poverty. Adopting a homogeneous approach could be misleading, even in the context of Africa—a key factor that led to the failure of the first generation of green revolution in Africa.

4.4   Conclusions The review of empirical evidence from across the world shows agricultural productivity is a potent factor in driving economic diversification, promoting the input-farmgate-output ecosystem value added nexus, pushing labour out of agriculture to non-agricultural activities, and reducing rural poverty. Its poverty-reducing power could be four times higher than off-farm sectors. Increasing agricultural productivity is a powerful instrument to substantially impact the income and expenditures of extremely poor populations and help to promote social mobility between older and newer generations in poor households. For this transformative impact to be optimized, and in line with the SDGs’ objectives, a strategic focus should be on small-scale farmers that produce over 80 percent of food on the continent, who are more effective at creating jobs than large-scale farmers. Connecting the small-scale farmers to national, regional, and global markets and value chains and improving their access to credit, land, inputs (e.g. fertilizers, seedlings, and tractors) and technology, including modern storage facilities, are all vital to promoting agricultural productivity and transformation.

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CHAPTER 5

Agriculture as a Powerhouse of Food Security and Economic Transformation in Africa

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5.1   Context This chapter examines the role of agriculture in food security and economic transformation and how Africa could leverage these opportunities to lay the foundation for inclusive and sustainable development. Conceptualizing and extricating factors that drive agribusinesses and food security in Africa is a tall order: this chapter tries to do justice to these issues. The earlier part addresses how agriculture could become the powerhouse of food security, while the latter focuses on the imperatives of becoming a powerhouse of agriculture-based economic transformation. Food security1 (access to sufficient, safe, and nutritious food) is not only vital to human survival, but also critical to cognitive learning, healthy living, and having an active and productive life. Higher agricultural productivity can increase food security, thereby comprising an important driver of almost all aspects of human development. First, agricultural productivity helps to increase availability of food; an accelerated supply of food relative to demand can lower food prices, thereby making food more accessible to a population. Second, higher agricultural productivity can foster increases in incomes of smallholder farmers, lifting up living standards and improving health and education. While higher incomes avail people’s capability to afford better and more diverse diets, better health and education could also create a virtuous cycle for nutrition and food security. Third, through developing value chains, productive agriculture can propel non-agricultural growth for rural and urban populations, through transforming agribusiness, thus expanding livelihoods, entrepreneurship, and decent incomes for most members of a population. When enhanced agricultural productivity is accompanied with a strong local content beneficiation policy, agriculture can be used to unleash backward and forward integration in the economy through agribusinesses. And as argued by BAG (2010), when an appropriate business environment is cultivated and nurtured, a 1 percent growth in agriculture can ignite 1.73 and 1.82 percent growth in secondary and tertiary sectors activities, respectively. With formulation and implementation of appropriate policies, agriculture could simultaneously propel food security and agribusinesses.

1  Food security is defined by the 1996 World Food Security Summit as the access to sufficient, safe, and nutritious food.

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Food security is not easy to quantify, since it involves measuring the availability, access, and utilization of food. Clearly, food availability is a necessary pre-condition to achieving food security, yet food availability is only sufficient if households can obtain the required quantity and quality of food, and this food is prepared under sufficient hygienic conditions. This dynamic, alone, demonstrates that failures that lead to food insecurity can be complex, nuanced, and pervasive, ranging from issues of agricultural, health, sanitation, education, and nutrition policies to governance, infrastructure, transport, and distribution. This section does not aspire to unravel the complex determinants of food insecurity in Africa, but instead examines how agriculture affects food security on the continent. Still, before this issue is addressed, it is important to know: how has Africa fared on food security over the past two or three decades?

5.2   Food Security in Africa Food security is defined by FAO as a situation where all people, at all times, have physical and economic access to sufficient, safe, and nutritious food that meets their dietary needs and food preferences for an active and healthy life.2 Using this definition, about 200  million Africans were food insecure (i.e. left behind on food security) in 2015. Enhancing agricultural productivity offers opportunities to close this gap. As mentioned in Chap. 2, compared to all other continents, food insecurity is most rampant in Africa. Using the prevalence of undernourishment as a proxy for measuring food insecurity, Africa is ranked as the most food insecure region of the world. The proportion of the African population suffering from food insecurity fell from about one third in the 1990s, to just a little above one fifth, then below one fifth between 2000–2009 and 2010–2015, respectively. The actual number of people suffering from undernourishment rose during these periods—from 183.4 million people in 1991 to 204.0  million people in 2015. This reality translates to an additional 21  million people joining the food insecure population within 25 years. Food insecurity is very acute in East and Central Africa; it is also high in Southern Africa. Low levels of agricultural productivity in Central Africa and recurring droughts on the Horn of Africa are among the factors that contribute to high levels of undernourishment in these 2  http://www.fao.org/fileadmin/templates/faoitaly/documents/pdf/pdf_Food_ Security_Cocept_Note.pdf.

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Table 5.1  Prevalence of undernourishment in Africa and other regions 2000–2009 Africa Western Africa Southern Africa Northern Africa Eastern Africa Central Africa Latin America & Caribbean South Asia East Asia & Pacific European Union Europe & Central Asia North America World

21.5 14.0 25.3 5.8 38.1 30.2 9.3 19.4 14.7 2.6 3.8 2.5 13.9

2010–2015 17.2 10.2 20.3 5.1 30.6 23.1 6.7 16.0 10.2 2.5 3.1 2.5 10.9

Source: Author’s computation from FAO Database (ReSAKSS) and WDI Database

regions. Only North and West Africa performed relatively better than the world average (Table 5.1). It is no wonder, then, that malnutrition is one of Africa’s leading causes of illness and death, causing irreparable physical and mental damage to infants and children, and exposing pregnant mothers to greater risks at childbirth (UNDP 2012). Because it directly combats food insecurity, accelerating agricultural productivity is therefore an important multiplier for boosting nutrition levels, human wellbeing, and certainly the achievement of the 2030 Agenda for Sustainable Development in Africa. Viewing achievements from continental and regional perspectives can hide country peculiarities. In terms of undernourishment, how have individual African countries performed since 1991? This performance is divided into three groups, based on 43 countries where consistent data is available. The first group constitutes the three countries with very low rates of undernourishment (5 percent or below)—Tunisia, Egypt, and South Africa. Nutrition rates in these countries remained relatively stagnant since 1991, since it is very difficult to fight malnutrition when it is at such a very low level. Although, in 2015, the absolute number of people affected in Tunisia was 0.6 million, it was as high as 2.7 million in South Africa and 4.6 million in Egypt. Enhancing productivity, accompanied by improved social protection for children and pregnant women, for instance, contributed to this success. In Egypt, for instance, nutritional

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80.0 70.0 60.0 Zambia Namibia

2015

50.0 40.0 30.0

Eswatini

20.0 10.0 0.0 0.0

10.0

Liberia Guinea Benin

Egypt 20.0

Central African Republic

30.0

Malawi

Chad Rwanda Mozambique

Cameroon Ghana 40.0

50.0

60.0

Ethiopia

Angola

Djibouti

70.0

80.0

1991 Fig. 5.1  Level and changes in undernourishment between 1991 and 2015. (Source: Author’s computation)

supplementation for infants and nursing mothers, as well as exclusive breastfeeding practices, contributed to the low rate of undernourishment. The second group constitutes 32 countries that experienced improvement in nourishment (below the diagonal line in Fig. 5.1). Seven of these countries recorded a decline in undernourishment higher than 70 percent between 1991 and 2015 (Ghana, Djibouti, Angola, Cameroon, Benin, Togo, and Mali). Despite this improvement, the absolute number of people affected by food insecurity, as of 2015, was as high as 31.8 million in Ethiopia, 17.1 million in Tanzania, 12.7 million in Nigeria, and 9.7 million in Kenya. Food, iron, and folic supplementation programmes and improved breastfeeding behaviour, especially in Ghana, contributed to progress. In Angola and Mali, improved agricultural productivity contributed to the accelerated progress. Enhanced budgetary allocations to specific nutrition interventions contributed to success in most countries that experienced substantial improvements in nutrition. For instance, in Ghana, Cameroon, Benin, and Chad, budgetary allocation to nutrition interventions, as a share of total government interventions, in recent times, is at least 4.5 percent (DI 2017). The third group constitutes eight countries that recorded setbacks during this period—a majority of which are from the East and Southern African regions (Central African Republic, Liberia, Uganda, Namibia,

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Madagascar, Tanzania, Zambia, and Eswatini). The absolute number of people affected reached 10.1  million in Uganda and 8.0  million in Madagascar in 2015. In countries like Uganda and Zambia, budgetary allocation for nutrition interventions was 0.5 percent and below (DI 2017). Performance of individual countries regarding underweight and stunting tends to reflect the existence, or otherwise, of peace and stability. Most peaceful countries (Tunisia, Gabon, and Equatorial Guinea) tend to show progress on these two indicators, while countries that have experienced conflict over the past decades tend to degenerate on these two indicators (Libya, Djibouti, and Côte d’Ivoire) (Fig.  5.2). Other countries not shown in this Figure include the Central African Republic and Burundi. However, country performance regarding wasting tends to exhibit a different pattern from performance regarding underweight and stunting. Contrary to findings on underweight and stunting, 30 countries experienced improvement on wasting. Wasting is very common in the North African region, especially in Libya, Egypt, and Morocco. This indicator worsened by 46.1 percent in North Africa, while it improved in other sub-­ regions—ranging from a decline of 14.1 percent (Southern Africa) to around 35 percent in the West and Central African regions.3 Incidentally, 60.00

y = 0.5343x - 8.2012 R² = 0.5985 Côte d'Ivoire

Stunting (%)

40.00 20.00

Mali

Niger 0.00 -120.00 -100.00 -80.00 -60.00 -40.00 -20.00 0.00 -20.00

Madagascar 20.00 40.00 South Africa

60.00

Djibouti Libya 80.00 100.00

-40.00

Equatorial Guinea Tunisia Angola

Gabon

-60.00 -80.00 -100.00 -120.00

Underweight (%)

Fig. 5.2  Percentage changes in prevalence of stunting and underweight, 1991–2016 3  The 7 highest-performing countries among the 30 countries that improved wasting are Lesotho, Benin, Botswana, Mozambique, Equatorial Guinea, Guinea Bissau, and Rwanda.

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the use of multiple crops and staples is more prevalent in these two regions (West and Central Africa) compared to other regions. The reliance on a single crop as a staple may not be an effective strategy to promote food security, mostly because of climatic variations, reliance on rainfed agriculture, and dietary diversity. There is also a wide gap between countries that adopted CAADP by 2012 and those that did not. The reduction in food insecurity in countries that adopted CAADP prior to 2013 is more than 30 percent, while food insecurity rose by more than 32 percent in countries that have not adopted CAADP. Ensuring all countries adopt and implement the provisions of CAADP could be a policy target for accelerating food security on the continent. Countries’ performance on the 2017 Global Hunger Index (GHI) further underscores the seriousness of food insecurity in Africa. Only two countries were categorized as ‘low’ hunger—Tunisia and Algeria—with a GHI of less than 10 percent. Another seven countries were ranked as experiencing ‘moderate’ hunger.4 Moreover, 27 African countries were ranked among those facing ‘serious’ hunger, while another six were ranked among those undergoing ‘alarming’ hunger.5 The Central African Republic is the only country ranked as ‘extreme alarming hunger’, globally. The war against hunger cannot be won without addressing fragility and conflicts in Africa. Most of the countries ranked under alarming hunger, or more, have experienced one form of conflict over the past two decades. In fact, the worst seven African countries regarding hunger are among the worst in the 2015 Fragile States Index. Three of them are among the ten worst countries on the conflict index (the Central African Republic, Sudan, and Chad).6 Agricultural productivity and production are heavily affected by conflicts. The rising wave of conflicts between pastoralists and farmers could be another impediment to food security in Africa. Strong political Progress was stagnant in seven countries (Burkina Faso, Congo, Malawi, Sierra Leone, Eswatini, Zambia, and Zimbabwe). Among the 12 countries that experienced setbacks are Libya, Egypt, Morocco, South Africa, Gambia, Djibouti, Cameroon, Comoros, and Sao Tome and Principe. 4  These are countries that scored between 10 and 19 percent in the 2017 GHI: Morocco, South Africa, Mauritius, Gabon, Egypt, Ghana, and Senegal. 5  They are Liberia, Sudan, Zambia, Madagascar, Sierra Leone, and Chad. Their GHI score range between 35.0 and 49.9 percent. 6  The correlation measure between fragility and hunger indices further reveals an index of 0.62—an indication of very serious linkage. A further analysis shows that fragility explains about 38.6 percent changes in hunger index in Africa. See author’s database for more information on the relationship between the two variables.

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commitment is needed to ensure a mutually cohesive relationship between these two populations and the important activities they perform (crop and animal production) to ensure food security in Africa. The symbiotic relationship between crop production and animal husbandry in agroecology makes this very important. To end all forms of malnutrition by 2030, as targeted by the SDGs, accelerated progress on agricultural productivity and nutritional enhancement is required.

5.3   Drivers of Food Security in Africa Global hunger index is a good predictor of food security in Africa. Two indicators of food security index are used: global hunger index and undernourishment index. The two indices are highly correlated (0.78) (Table  5.2), and the coefficient of determination is 0.61 (Fig.  5.3). As shown in Fig. 5.3, the GHI is a very good predictor of undernourishment. Given the comprehensiveness of the GHI, which is a composite index of four indicators,7 it is used as a key predictor of food security. Table 5.2  Correlation between food security indices and their determinants Variables

UI

Undernourishment Index (UI) Land Productivity (LP) Labour Productivity (LaP) Agriculture Production Index (API) Food Price Volatility Index (FVI) GDP per capita (PCI) Global Hunger Index (GHI) Population (Pop)

1

LP

LaP

API

FVI

−0.347 1 −0.614 0.341

1

−0.086 0.070

−0.019 1

0.162

−0.182 −0.101 1

0.012

PCI

GHI

Pop

−0.454 0.038 0.821 −0.008 −0.216 1 0.784 −0.367 −0.650 −0.106 0.269 −0.653 1 0.441

−0.193 −0.586 0.114

0.239

−0.648 0.666 1

Source: Author’s computation

7  The GHI is measured based on the following four indicators: (1) the proportion of the undernourished as a percentage of the population; (2) the proportion of children under the age of five suffering from wasting; (3) the proportion of children under the age of five suffering from stunting; and (4) the mortality rate of children under the age of five.

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y = 0.9021x - 6.5548 R² = 0.6147

70.0

Undernourishment Index

60.0 50.0 40.0 30.0 20.0 10.0

0.0 0.0 -10.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Global Hunger Index

Fig. 5.3  Undernourishment and global hunger index, 2000–2015

Productivity of land and farm workers is central to accelerating food security in Africa. Productivity plays a key role in ensuring food security in Africa. Improvement in land and labour productivity accelerates reductions in food insecurity through accelerated increases in food availability. Both land and labour productivity tend to reduce undernourishment and hunger indices (Table  5.2). The food security enhancing power of land and labour productivity is also shown in Fig. 5.4a–b and Table 5.3. For instance, a 10 percent rise in land productivity (tons per hectare) reduces both undernourishment and the Global Hunger Index by about 0.9 percent. For labour productivity, its impact is stronger on undernourishment. A 10 percent increase in farmers and agricultural workers’ productivity reduces undernourishment by about 5.0 percent (Table 5.3). These relationships are statistically established at 1.0 percent level of significance. Enhancing productivity of land, farmers, and agricultural workers is pivotal to addressing hunger in all its manifestations— undernourishment, stunting and wasting, as well as under-five morbidity and mortality. Farmers and land productivity can be affected by several factors. The first is access to well-trained, knowledge-driven agricultural extension services agents. Second, a strong linkage is vital between the farming community and agricultural research institutions that provides opportunities for farmers to have access to R&D findings in their locality. Government’s

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Fig. 5.4  Hunger index, undernutrition, and their determinants. (Source: Author’s computation)

heavy investment in agricultural research and development is also key to enhancing farm productivity in Africa. The third is investing in improving soil and climatic conditions, helping to increase the quality of agricultural land. Efforts that can rapidly accelerate land quality include (1) policies that encourage land ownership, registration, and certification, which often enhance commitment to land investment; (2) access to irrigation facilities such as canals, tube-wells, dams, and tanks; and (3) adoption of efficient erosion controls. Fourth, continuous improvement in methods of cultivation, such as the use of fertilizers (organic and inorganic), the use of improved seedlings, and mechanization, promotes acreage yields. However, this must be done in an agroecological manner to avoid loss of

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Table 5.3  Multiple regression results on determinants of food security in Africa Variables/Statistics

Intercept Land productivity (LP) Labour productivity (LaP) Food Price Volatility Index (FVI) GDP per capita (PCI) Population (Pop) F-Statistics Adjusted R2 Variance inflation factor (VIF)

Global Hunger Index

Undernourishment

Coefficient

t-Statistics

Coefficient

t-Statistics

1.954 −0.094 −0.059 0.091 −0.136 0.087

23.329* −7.762* −2.118** 3.700* −4.652* 8.554* 154.853* 0.596 2.476

2.376 −0.087 −0.501 0.117 0.087 0.056

16.966* −4.281* −10.632* 2.864* 1.778*** 3.471* 127.649* 0.548 2.215

Note: *, **, and *** indicate variables are statistically established at 1 percent, 5 percent, and 10 percent levels of significance. The model of estimating the determinants of food security is Eq. 2 in Annex B.

environmental quality service. Finally, promoting access to agricultural land through quality roads helps connect farmers to markets and inputs— addressing the challenge of remoteness. Investment in these areas could help boost the link between agricultural productivity and food security. Access to food is another essential element of food security; price is an important indicator to measure this. Food availability does not translate to access unless people are able to afford the price of such foods. Therefore, food availability is necessary, but having access to it is a sufficient condition for the poor. Promoting price stability of agricultural products not only enhances welfare for poor populations but also stabilizes farmers’ incomes. This helps farmers to invest in their farms and raise productivity. In this regard, the food price volatility index is used as a determinant of food security. What does the evidence say on this? Evidence from Fig.  5.4c and Table 5.3 reveals the corrosive impact price volatility has on food security: food price volatility worsens hunger and undernourishment in Africa.8 For instance, a 10 percent rise in food prices worsens hunger and undernourishment by 0.9 percent and 1.2 percent, respectively. This corrosive impact of price volatility perhaps explains why several countries have adopted the 8  In addition to the devastating effects of price volatility on food security for the poor, it could also affect sustainable farming, especially among small-scale farmers.

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buffer stock scheme to stabilize agricultural prices. For example, with the objective of stabilizing farmers’ incomes and promoting access to food for low-income groups, the European Union’s Common Agricultural Policy (CAP) is a very popular and a widely applied intervention for price stabilization. It is a system to preserve welfare, promote long-term viability of agricultural populations, and prevent people from falling into poverty.9 Similar strategies to CAP include import and export tariffs (including tariffs escalation) and production support to farmers. The above finding tends to confirm the issues raised by Wiggins and Keats (2010) that price shocks experienced during 2007–2009 made many African countries exposed to external shocks with their associated vulnerabilities. Fourteen of the 21 countries exposed or highly exposed to price shocks are from Africa.10 Keeping food prices stable, especially through a buffer stock scheme, is vital to ensure domestic food security. Given the fiscal situation and capacity to manage an efficient buffer stock scheme in most low-income countries in Africa, the issue of sustainability becomes critical. Addressing factors that drive agricultural food prices, such as the rising population, demand for biofuel, dependence on exports of few commodities, changing diets associated with rapid urbanization, and climate change, to mention a few, should also be given policy priority. Household income is another factor for promoting access to food; per capita income is used as a proxy for this indicator. At the micro level, household incomes enhance the capacity of families to access quality food and nutrition, while at the national level, high incomes allow countries to afford specific nutrition interventions for marginalized populations, including children and pregnant women, as well as school feeding programmes for pupils in marginalized public schools. It also increases government fiscal space on food security initiatives. The evidence of the relationship between per capital income and food insecurity is mixed. Fig. 5.4d shows the relationship is negative, and per capita income alone explains about 31 percent of changes in the hunger index. This is further reinforced by evidence from Table  5.2, with a 9  While this policy (e.g. buffer stock and production quotas) helps to achieve internal objectives for countries implementing them, however, given the magnitude of market distortions, it could be a driver of poverty and inequality in countries not implementing them. 10  These countries are Eritrea, Comoros, Somalia, Liberia, Djibouti, Guinea Bissau, The Gambia, Senegal, Sierra Leone, Mozambique, Togo, Sudan, Kenya, and Guinea (Wiggins and Keats 2010). For the impact of EU’s CAP on food price volatility in developing countries, see Cantore (2012).

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correlation index of −0.653. A 10 percent increase in per capita income reduces the hunger index by 0.14 percent, and the relationship is statistically established at a 1.0 percent level of significance (Table  5.3). This suggests that enhancing income improves households and countries’ access to food security. Increasing income allows countries to import machinery and expertise to transform agriculture, import food to fill the domestic production gaps, and devote substantial resources (at least 10 percent of total budget) to agricultural financing, including funding R&D—as suggested by CAADP. The relationship between hunger and per capita income confirms Ernest Engel’s law, which states that as income rises, the proportion of income spent on food falls, even if absolute expenditure on food rises. As such, the poor spend a higher proportion of their incomes on food than the rich. This is evident in Fig. 5.4d for all countries and Fig. 5.5a–c for Angola, Burkina Faso, and Botswana. Income explains a higher proportion of changes to food security in low-income countries (e.g. Burkina Faso) than in high-income countries (e.g. Botswana). Cultural practices could be a major driver of undernourishment in several African countries. The relationship between per capita income and undernourishment is different. Instead of a continuous inverse relationship between the two variables, the relationship is convex (see Fig. 5.4f). While this is not the case for all countries, in some countries nutrition is not responding to a rise in income—making nutrition to behave like an abnormal good (Fig.  5.5d–f). A 10 percent increase in income often leads to a 0.8 percent rise in undernourishment (Table 5.3)— though this is only established at a 90 percent confidence interval. Namibia, Uganda, and Zambia, among others, are good examples, where culture tends to diminish the role of income on nutrition. In these countries (especially Namibia and Zambia), nutritious foods behave as abnormal goods. For instance, findings from Muggaga et  al. (2017) indicate that cultural norms restrict consumption of animal-sourced foods and some green vegetables by women. Where these cultural practices prevail, income may not be a major determinant of these food items. Moreover, evidence from Pollard (2013) reveals that in Tanzania, the Maasai see any non-traditional foods not derived from cows as inferior (e.g. ugali and vegetables). For instance, the traditional Maasai diet (milk and meat) is rich in protein and fat, but characterized by an inadequate intake of the carbohydrates and micronutrients vital for a strong immune

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Fig. 5.5  Food security (hunger and undernourishment) and per capita income relationship in selected countries, 2000–2015

system (e.g. vitamin C and vitamin E). Cultural practices contribute to malnutrition by preventing women from consuming adequate nutrition (because men are to be served first) and by putting men at risk, as they are discouraged culturally from eating fruits and vegetables because these are believed to be foods for the weak. Regarding nutrition in Africa, culture tends to act as a double-edged sword. In many African societies, traditional diets, which are being displaced by diets associated with globalization, urbanization, and acculturation, are healthier than non-traditional diets (Delisle, 2010). Preponderance of processed foods, by private companies, is exposing people to cancers and other health hazards. As found by O’Keefe1 et  al. (2015), rates of colon cancer are much higher in African Americans than in rural South

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Africans. The higher rates are associated with higher animal protein and fat, and lower-fibre consumption in processed foods. They then confirm that traditional African high-fibre and low-fat diets reduced exposure to cancer risks. Agricultural policies that promote cash crops as opposed to more nutritious traditional foods or horticulture could also compromise food security in Africa. On the other hand, cultural beliefs also drive poor nutrition in several parts of the continent. Evidence from pastoralist communities in Kenya, for instance, indicates that selling cows or goats to buy food in periods of crisis, or drought, is a sign of cowardice. Even when cows and milk are available, priority allocation is reserved to herders with very few portions available to children and women (Irin 2015). In this regard, if available food is not culturally acceptable, someone may be food insecure while surrounded by plenty of affordable food. Cultural food preferences and taboos play a key role to driving food insecurity in Uganda as argued by Owaraga (2014). Moreover, in many traditional societies in Africa, the best part of meals, especially meat (beef, chicken, and fish), is always reserved for parents or the elderly—leaving infants and young children, who need more nutrients to grow, underserved. Even the preparation of foods in most African countries, which is often overcooked, excepting few countries, also destroys food nutrients. For instance, heat diminishes vitamins and phytonutrients (beneficial plant compounds other than vitamins or minerals) in fruits and vegetables, while chopping of certain foods can also erode their nutrients. In several African countries, food insecurity could be linked to the loss of indigenous plants, limited knowledge on how to grow them, and cultural acceptability and taboos towards available nutritious foods. Changing this behavioural issue requires extensive education, strong awareness campaigns, and consistent advocacy on the importance of balanced diets and nutrition and their impacts on cognitive learning and exuberant growth for children, reduced exposure to risks by pregnant and nursing mothers, and a productive and healthy life for all. Finally, population growth can promote or hinder availability and access to food. Africa, being the most youthful region of the world, has the tendency of inhibiting food security if the population is growing faster than agricultural productivity—which is the current situation in most African countries, as mentioned in Chap. 2 under Malthusian trap. How does population growth affect both hunger and undernourishment in Africa?

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Population growth is positively correlated with both the hunger index and undernourishment index at 0.67 and 0.44, respectively (Table 5.2). In fact, population growth explains about 44.3 percent of variations in the hunger index (Fig. 5.4e). A 10 percent increase or decrease in population raises or reduces the hunger index by 0.87 percent and 0.56 percent in the undernourishment index (Table 5.3). These relationships are established at a 1.0 percent level of significance. Food security is sensitive to countries with large populations and countries experiencing population growth below its replacement rate. The relationship between food security and population is complex. Countries with large population sizes are sensitive to hunger and undernourishment indices. For instance, all countries with a population size of more than 40 million record a coefficient of determination (adjusted R2) between hunger index and population growth of more than 0.60. In fact, it is more than 0.94 for Ethiopia and Nigeria for both hunger and undernutrition indices. For instance, the hunger index is as high as 35 percent in Ethiopia, 30 percent (Tanzania), and 28 percent (Nigeria). It is only in Egypt that it is 14.5 percent. A slight change in population growth rates (in either direction) can have a substantial impact on food security. This realization re-echoes the Malthusian catastrophe that predicts hunger and famine as concomitant results in countries where a population grows faster than food production—particularly where the capacity to import is very limited. Another factor is the level of demographic transition. Food security is also sensitive to population changes in countries that are experiencing a population growth rate of less than 2.0 percent like Algeria, Tunisia, South Africa, Mauritius, Morocco, and Lesotho. These countries (except Lesotho) are also associated with the lowest rates of hunger and undernourishment on the continent. Their coefficient of determination ranges from 0.64 to 0.87. Aggressive population policies are therefore central to promoting food security in Africa. Gender, nutrition, and food security are gaining currency in agricultural transformation. Despite women constituting a large portion of farmworkers in Africa,11 their level of participation and benefits are constrained by cultural norms and a lack of resources. At the core of this is an 11  As documented in Negin et al. (2009), women are responsible for 70 percent of staple food production in the 1990s and contributed between 60 and 80 percent of the labor used to produce household and cash crops.

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unequal power relationship, which traps women at a lower equilibrium on food security issues compared to their male counterparts. Women are consistently most affected by food and cash shortages due to imbalances in intrahousehold distribution. Culture-imposed malnutrition for children and women could create intergenerational nutritional problems if not addressed head-on (UNDP 2012). Malnutrition of childhood and women is a plague on African societies. As argued by UNDP (2012) and Negin et al. (2009), women are the foundation of Africa’s agricultural future. As such, giving adequate priority to female farmers is key to using agriculture to drive future development on the continent. There is good news: a high proportion of the most cost-effective nutrition interventions are inexpensive, and empowering girls and women to make educated choices in favour of sound nutrition could be a game changer. For agriculture to be the driver of inclusive and sustainable development, gender empowerment and nutrition elements should be prioritized. Better health and education for women could engender gender equality with profound impacts on community nutrition and wellbeing. Advocacy should be directed towards empowering women with more influence on household nutritional choices for their families (including all children) for nutrition to prosper. Women must be involved in the productivity enhancement agenda if an inclusive and sustainable African green revolution is to be achieved. In this regard, gender and nutrition-responsive land management, strengthened agricultural markets and trade, greater access to fertilizer and improved seed varieties, improved technology transfer, and robust environmental considerations are key to achieving an agriculture for development agenda. Ensuring equal access to and control over land and agricultural resources is key to greater long-­ term investment in farms.

5.4   Tapping Agribusiness for Economic Transformation 5.4.1  Promoting Agrobusiness in Africa Is Sound Economics and Development Imperatives The publication of the seminal work of Brookfield Agricultural Group (BAG) in 2010 has shifted the landscape of the agribusiness debate in Africa. It uncovered the immense potential of agriculture’s contribution

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to economic diversification and structural economic transformation of many developing countries. It provides evidence that agribusiness, through the upstream (e.g. input production and supplies) and downstream (e.g. processing, logistics, and retail) activities from farming, accounts for 78 percent of overall agricultural value chains.12 The breakdown of the total agricultural value chains comprises: the primary sector (agriculture) (22 percent), the secondary sector (processing 15 percent and inputs supply 23 percent), and tertiary sector (logistics 15 percent and retails 25 percent). When an appropriate business environment is allowed to thrive, a 1 percent growth in agriculture can propel a 1.73 percent growth in secondary sector activities and a 1.82 growth percent in tertiary sector activities. This seminal work rekindled international agencies and African governments’ interests in the role of agribusiness in the transformation of the continent’s economy. UNIDO in 2012, building on its earlier works, examined the heterogeneity of agribusiness in Africa, focusing on eight case studies, and delved extensively into factors shaping African agribusiness including geography; climate, resource, and factor endowment; simplicity of industrial policies; and rate of regional integration.13 The World Bank estimated in 2013 that the value of agriculture and agribusiness had risen from $313 billion in 2010 to $1.0 trillion in 2030 (in 2010 prices).14 Heightened debates and discussions on agribusiness have led to the development of the Strategic Framework for markets and agribusiness in Comprehensive Africa Agricultural Development Program (CAADP) and the associated debates at national, regional, and continental levels. The exposition here is to further present more evidence to the potential agribusiness in Africa. The foregoing shows agriculture and agribusiness could still play a game-changing role in Africa’s development process. Agribusiness is very good for economic diversification (both production and exports), industrialization, and rurbanomics (linking rural and urban production systems) but also an important panacea for addressing vulnerabilities associated with primary commodity cycles and terms of trade shocks. It also serves as 12  Detailed analysis of the various components of agribusiness are contained in Brookfield Agricultural Group (2010). 13  These countries are Cameroon, Ethiopia, Kenya, Mali, Nigeria, Senegal, South Africa, and Zambia (UNIDO 2012). 14  It argues that an avalanche of opportunities abounds for achieving this in Africa including the exploitable yield gaps, large uncultivated arable lands, and the continent diverse agroecological zones (World Bank 2013b).

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a development driver by improving the diet and the quality of food, providing jobs for the youth, and generating incomes and wealth for the population, including farmers—all helping to accelerate reduction in poverty, income inequality, and exclusions. Agribusiness contributes to the development aspirations of countries in varied ways. It is an instrument to accelerate growth and create opportunities for development in Ethiopia, Mali, and Zambia; a tool to overcome over-dependence on hydrocarbon revenue and export and maximize the benefits of resource rents in Angola, Algeria, Gabon, and Nigeria; a strategy to promote export diversification and international competitiveness (e.g. in Kenya and South Africa); an instrument to speed up structural change in Senegal and Cameroon; and a policy to ensure stable supply of agricultural raw materials for agro-based industrialization and food sufficiency (Egypt and Ghana). As such, agribusiness means so much to Africa—all pointing to stopping the pejorative accolade of producers and exporters of agricultural primary commodities. 5.4.2   The Potential of Agribusiness in Africa Africa’s economy is mostly agrarian, accounting for about 23 percent of total value added to GDP in 2015; it was higher than 30 percent in at least 14 countries on the continent. A transformed agriculture sector presents substantial opportunities for economic diversification through value addition in non-farmgate and agrofood systems and for decent jobs in farmgate, upstream, and downstream activities including inputs production and supplies, processing, logistics, and retail activities. If farming is changed from being a way of life to becoming an entrepreneurial endeavour, and African farmers become more market-oriented, agriculture could be the linchpin of economic diversification, structural economic transformation, and socio-economic development. The evidence here shows agriculture’s potential to drive overall agribusinesses has been underestimated. If Africa fully adds value to its agriculture products, it has the power to generate $1.607 trillion in outputs today. But because African countries are primary commodities exporters, this value is being created outside Africa. By exporting primary commodities to the rest of the world, job creation and wealth generation are taking place outside Africa. In this regard, the opportunity to create jobs for the army of

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unemployed African youth, that could help reduce poverty and income inequality, is lost to the rest of the world.15 If the power of technical change in agriculture (e.g. improved seedlings, fertilizers effectively contextualized to African soil textures, the use of agroecology and sustainable agro-chemicals, irrigation, and mechanization) is explored, agricultural value added could be increased from $374.24 billion (in 2010 prices) in 2018 to $812.74 billion in 2030. With effective commercialization and value addition to agriculture, this could unleash $1406.05 billion and $1487.32 billion in secondary (processing and input supplies) and tertiary (logistics and retails) respectively by 2030 (all in 2010 prices) (Table 1). Overall, agriculture and agribusiness could reach $3.706 trillion in outputs in 2030. Agribusiness’ potential is highest in West and North African regions given the outlandish size of Nigeria, Egypt, and Algeria, represented by the 73.0, 40.0, and 22.4 percent share of their respective regions. The Central and Southern Africa regions contributed the least (Table  5.4) partly due to an overemphasis accorded to the extractive sector, which tends to crowd out investment on the agricultural sector in these regions. The regional leaders on agribusiness potential are Central Africa (Democratic Republic of the Congo and Chad); East Africa (Kenya, Table 5.4  Africa’s agriculture and agribusiness potential for 2030 (US$’ billion) Regions

Primary sector

Secondary sector

Tertiary sector

Total

Central Africa East Africa North Africa Southern Africa West Africa Africa (All)

28.14 117.59 222.71 60.89 383.42 812.74

48.68 203.43 385.28 105.33 663.32 1406.05

51.49 215.19 407.55 111.42 701.66 1487.32

128.31 536.21 1015.54 277.64 1748.41 3706.11

Source: Author’s computation from data from WDI (accessed December 2019) Note: Primary stands for agriculture; Secondary for processing and inputs supply; and Tertiary for logistics and retails. The figures are in 2010 prices. Figure for each country is available on request.

15  This is urgently needed to address the looming challenge of unemployment in Africa. Africa only manages to create 3.1 million job each year compared to 10 to 12 million youth that enter labour market each year by 2025 (AfDB 2016), and this has been projected to reach 25 million by 2025 (World Bank 2013a).

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Ethiopia, and Tanzania); North Africa (Egypt, Algeria, and Morocco); West Africa (Nigeria, Ghana, and Côte d’Ivoire); and Southern Africa (Angola and South Africa). In South Africa, for instance, it is important to pursue policies that help change the production and trade structure in favour of agribusiness. In Africa, agriculture is virtually linked to most sectors of the economy (especially manufacturing),16 thereby creating the potential to use agricultural productivity to propel economic diversification and job creation. The sensitivity analysis from actual data from Mauritius shows a high level of accuracy with the projected figures. For instance, in Mauritius, the agriculture output multiplier to agroprocessed food was 1.59  in 2016. This was possible because of the market orientation of agribusiness in the country. For instance, the sugar sector in Mauritius succeeded in shifting from raw sugar production to value-added refined sugar, production of energy products, and beverages to the extent that it became a major exporter of processed and specialized sugar to Europe. The low ranking of African countries on the 2019 Ease of Doing Business report shows the challenges to achieving accelerated value chain development in agribusiness could be daunting, but surmountable. This may include, among others, erratic policies in agricultural input and output markets and trade; limited access to land and respect for communal rights; poor infrastructure and transport costs; and limited numbers of small farmers and firms accessing technology, skills, information, and finance. Addressing these impediments is central to developing agroprocessing industries and promoting agribusiness, which could make economic growth more resilient, broad-based, and inclusive. 5.4.3  What Must Be Done Differently to Unleash the Massive Potential of Agribusiness in Africa? Several things must be done differently to leverage this opportunity. First, changing African farmers’ lifestyle from agriculture as a way of life and livelihood to an entrepreneurial and market-oriented approach by increasing production for markets and profit is vital. In this regard, African farmers must tailor production away from meeting their own tastes but to meet 16  For instance, agriculture accounts for substantial part of other sector’s outputs: 33 percent of manufacturing outputs in Kenya; 80 percent of non-oil exports in Nigeria; and 96 percent of manufacturing activities in Zambia (UNIDO 2012).

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specific market demands and specificities. This transformation requires certain competencies, knowledge, and behaviours as well as skills to take calculated risks and to grow and manage businesses as going concerns. This book’s clarion call to African governments is to transform 60 percent of African subsistent farmers to commercial farmers by 2035, which is vital to re-orient the sector towards market and profits. In this regard, promoting agribusiness and agripenture underpins the need to add entrepreneurship skills as part of the skill sets of extension officers. For farmers to take advantage of opportunities arising along the agribusiness value chain, the technical knowledge of extension workers should not only go beyond agronomy skills but also provide training and technical assistance on farmers’ entrepreneurial development. Second, commercializing African farming calls for dedicated actions on technology and innovations. The role of technology towards addressing agricultural competitiveness and market orientation remains critical. As argued in other parts of this book, the lack of seed, irrigation, and machinery accounts for low agricultural productivity and competitiveness. In Senegal and Ghana, for instance, limited access to these factors leads to low rice yield and higher production costs relative to Thailand and other countries which are trailblazing in rice competitiveness, globally. On the other side, the adoption of cross-bred cattle by small farm holders, linkages between informal and formal dairy sectors through cooperative collection, and setting quality and safety standards for informal chains are making Kenya’s dairy industry very competitive.17 Third, at the national and regional levels, agriculture and agribusiness must be prioritized on the transformation and development agenda. Commitment to developing agro-based businesses is vital to reversing the premature structural economic transformation for decent jobs and higher incomes for the world’s most youthful continent. The imperative of this commitment is based on the virtuous relationship between agricultural growth and agribusinesses. Achieving this calls for effectively aligning strategies for agricultural productivity with growth in agribusiness through involving small, medium, and large enterprises in both sectors. This involvement is vital to addressing current challenges faced in Ghana, where, due to low cocoa productivity, cocoa-based enterprises only meet

17  The role of technology in shaping the frontier of production competitiveness is addressed in World Bank (2013b).

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60 percent of their productive capacity. Aligning agricultural productivity strategies with growth in agribusinesses remains critical. Fourth, strong commitments to implementing local content policies on agribusinesses are needed. Building alliances between the public and private sectors on the promotion and development of downstream (agricultural produce processing) and upstream (inputs production and supplies, logistics, and retails) agribusinesses through developing national and regional value chains is central to implementing local content policy on agribusinesses. Developing agroindustry-related infrastructure is key. This may require converting and rehabilitating existing or establishing new Special Economic Zones (SEZs), Economic Growth Corridors (EGCs), Export Processing Zones (EPZs), and dry ports to address some of the challenges impeding ease of doing business in most African countries. The One Community One Factory Initiative in Ghana is aimed at promoting local content policies for agriculture and agribusiness. This agrobusiness infrastructure should be complemented by mechanisms for traditional and innovative financing, private sector development, public-private partnerships, and provision of rural infrastructures. Some of the requirements for implementing local content policies that should be done differently include: (1) promoting anciliarization of the production process by: (a) facilitating rural-urban production linkages through creating strong relationships between urban enterprises and rural small producers, a phenomenon called ‘rurbanomics’; (b) creating incentives for small farm holders and SMEs to become engines of value chain development through targeting support to increase technical efficiency and productivity; and (c) promoting strong linkages between formal and informal value chains, as is being done in dairy industry in Kenya, to ensure production processes meet the needs of the various consumers (informal for low-income groups; formal for high-income groups and exports) without compromising quality and standards; (2) harmonization of markets and business environments, building on successes already achieved in ECOWAS, EAC, and COMESA; and (3) improving the governance of the agricultural sector through open, transparent, and accountable governance, public-private partnership on agribusiness, and learning from other countries on sound policies that helped promote value chain development. Fifth, learning from how Mauritius, Rwanda, and Morocco achieved globally competitive rankings on the 2019 Ease of Doing Business could be transformative. One thing that stands out among these countries is

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creating a ‘one-stop-shop’ to address bottlenecks to registering businesses and developing value chains. Sharing experiences among countries that have made appreciable progress on enhancing agricultural productivity; upgrading value chains; targeting producers and commodities for increased competitiveness and enhanced structural change; strengthening technological effort and innovation capabilities; promoting effective and innovative financing; stimulating private sector participation and investment; and improving infrastructure and energy access could all accelerate progress. Finally, developing an index to measure progress on agribusiness, through an agribusiness-agriproduction ratio, is necessary to determine policy success and to gauge stakeholders’ performance on agreed roles and responsibilities. Strong partnerships between national statistical offices and ministries of agriculture and industries, as well as networks of private sector organizations are vital to ensure a robust index is developed and measured. In this regard, an agricultural census should be expanded to include agribusiness, conducted regularly in all countries through dedicated resources from national governments, instead of depending on donors’ money.

5.5   Conclusions Unleashing the gigantic potential of agricultural productivity could be the lever to rekindle Africa as a powerhouse of food security and agriculture-­ based economic transformation, instead of being the major exporter of primary commodities to the rest of the world. Promoting agricultural transformation and agribusinesses in Africa is sound economics and a major development imperative. But achieving these goals is not straightforward; it requires multidimensional policies and actions. Agricultural productivity is a potent tool to reverse the trend of food insecurity on the continent. For instance, about 200 million Africans suffered from food insecurity in 2015; an additional 21 million may join the food insecure population by 2040, unless accelerated policy actions are implemented. Specifically, between 2010 and 2015, 17.2 percent of Africans were malnourished, compared to 10.2 percent (East Asia and Pacific), 6.7 percent (Latin America and Caribbean), and 2.5 percent (North America and European Union). However, several factors explain food insecurity in Africa. Food security is sensitive to population sizes: countries with large populations (especially those above 40 million people) are more susceptible to food insecurity, while countries experiencing

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population growth below its replacement rate are least exposed to it. On the other hand, countries with a population growth of 3 percent and above are more predisposed to experience a Malthusian trap. Other factors include low land and farmers’ productivity, agricultural price volatility, reliance on a single staple, household income, and per capita income levels. Cultural practices are also seen as a double-edge sword: dealing with traditional practices that discriminate against children and women in consumption of nutritious foods remains critical to accelerating progress. Enhancing agricultural productivity (including land and worker productivity) offers opportunities to close this gap. However, achieving food security can be complex, because a solution does not lie in agricultural transformation alone. Solutions range from agriculture to health, sanitation, education, and nutrition policies to governance, infrastructure, transport, and distribution. Engendering gender and nutrition in agricultural productivity enhancement—including greater access to and control of land and agricultural resources, as well as agro-based ecosystems—is critical to achieving an inclusive and sustainable green revolution in Africa. Enhanced budgetary allocations to specific nutrition interventions (especially for children and pregnant women), early adoption of CAADP programmatic and policy interventions, and reliance on multiple crops as staples are among effective strategies to promote food security in Africa. Besides, the war against hunger cannot be won without addressing fragility and conflicts in Africa—a major impediment to agricultural productivity. Most of Africa’s traditional diets, although being displaced by globalization, urbanization, and acculturation, are more nutritious than most non-traditional diets. Efforts to rekindle interest in consumption of nutritious traditional diets, strong advocacy on hygienic food processing, and investment in indigenous plants are vital to accelerating progress. The overarching objective of food security cannot be achieved unless Africa fully taps the massive potential of agribusiness for economic transformation by connecting agriculture to its upstream and downstream activities. If Africa fully adds value to its agriculture products, it has the power to generate $1.607 trillion in outputs in 2020, with a high potential to scale it up to $3.706 trillion outputs by 2030. This will allow jobs and income-generating activities, associated to the age-long primary products often exported to the rest of the world, to remain on the continent. In this regard, strong alignment between agricultural productivity and agribusiness strategies remain critical to accelerating progress on food security, economic transformation, and the inclusive development agenda in Africa.

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References African Development Bank (AfDB). “Agricultural Production, Food Security and higher Value in North Africa.” AfDB Working Paper—North Africa Policy Series. AfDB. 2016. Brookfield Agriculture Group (BAG). Farmland Investment Thesis: Why Brazilian Farmland Will Outperform. New  York: Brookfield Asset Management Inc, 2010. Cantore, N. Impact of Common Agricultural Policy on Food Price Volatility for Developing Countries. London: ODI, 2012. Delisle, Hélène. “Findings on Dietary Patterns in Different Groups of African Origin Undergoing Nutrition Transition. This Is One of a Selection of Papers Published in the CSCN–CSNS 2009 Conference, Entitled Can We Identify Culture-Specific Healthful Dietary Patterns among Diverse Populations Undergoing Nutrition Transition?” Applied Physiology, Nutrition, and Metabolism 35, no. 2 (2010): 224–28. Development Initiatives (DI). Global Nutrition Report 2017: Nourishing the SDGs. Bristol: Development Initiatives, 2017. Integrated Regional Information Networks (IRIN). “The Role of Culture in Child Nutrition.” The New Humanitarian, December 1, 2015. http://www. irinnews.org/report/87454/kenya-­role-­culture-­child-­nutrition. Muggaga, C., D.  Ongeng, B.  Mugonola, I.  Okello-Uma, N.  A. Kaaya, and D. Taylor. “Influence of Sociocultural Practices on Food and Nutrition Security in Karamoja Subregion of Uganda.” Ecology of Food and Nutrition 56, no. 5 (2017): 424–47. https://doi.org/10.1080/03670244.2017.1366318. Negin, Joel, Roseline Remans, Susan Karuti, and Jessica C. Fanzo. “Integrating a Broader Notion of Food Security and Gender Empowerment into the African Green Revolution.” Food Security 1, no. 3 (2009): 351–60. https://doi. org/10.1007/s12571-­009-­0025-­z. http://cgsd.columbia.edu/files/2012/11/ Integrating-­a-­broader-­notion-­of-­food.pdf. O’Keefe, Stephen J. D., Jia V. Li, Leo Lahti, Junhai Ou, Franck Carbonero, Khaled Mohammed, Joram M. Posma, et al. “Fat, Fibre and Cancer Risk in African Americans and Rural Africans.” Nature Communications 7342, no. 1 (April 2015). https://doi.org/10.1038/ncomms7342. Owaraga, Norah. “The Uganda Food and Nutrition Policy and Culture.” nowaraga.com, October 14, 2014. https://nowaraga.com/2014/10/14/ the-­uganda-­food-­and-­nutrition-­policy-­and-­culture/. Pollard, Jennifer, “Implications of Tanzanian Culture on Nutrition and their Effects in People Living with HIV/AIDS” . Anthropology. 24 (2013). https:// scholarsarchive.library.albany.edu/honorscollege_anthro/24.

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United Nations Development Programme (UNDP). Africa Human Development Report 2012: Towards a Food Secure Future. New York: UNDP Regional Bureau for Africa, 2012. UNIDO. “Agribusiness for Africa’s Prosperity Country Case Studies.” Working Paper Second Edition, April 2012. Wiggins, Steve, and Sharada Keats. Countries Vulnerable to a Price Spike in 2011. London: ODI, 2010. https://www.odi.org/sites/odi.org.uk/files/odi-­ assets/publications-­opinion-­files/6522.pdf World Bank.  Global monitoring report 2013 : rural-urban dynamics and the millennium development goals (English). Washington D.C. : The World Bank. 2013a. http://documents.worldbank.org/curated/en/720451468171242999/ Global-­monitoring-­report-­2013-­r ural-­urban-­dynamics-­and-­the-­millennium-­ development-­goals World Bank. Growing Africa: Unleashing the Potential of Agribusinesses. Washington DC: World Bank, 2013b.

CHAPTER 6

Agriculture as a Powerhouse of Inclusive Development in Africa

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 A. Odusola, Africa’s Agricultural Renaissance, https://doi.org/10.1007/978-3-030-65748-2_6

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6.1   Introduction The channels and transmission mechanisms through which agriculture can exert its strength as a powerhouse for inclusive development, especially towards promoting food security, economic transformation, and reducing poverty and income inequality, are described in Chap. 4 through analytical works developed by scholars and empirical evidence established by researchers. The transmission mechanisms are through reallocating labour and enhancing productivity. First, resources are reallocated from the (labour-­ abundant) agricultural sector to the (labour-scarce) industrial sector; lavish supplies of labour from agriculture allow capital accumulation to be sustained over time in the industrial sector. Second, enhanced productivity must complement resource reallocation of small-scale farmers through intensifying agriculture and land reforms. The combined effects of reallocating labour and enhancing productivity are increased wages and profitability. Backward and forward linkages between agriculture and the rest of the economy (e.g. manufacturing) create opportunities to play a powerhouse role to achieve food sufficiency, drive agribusinesses and value chain development, create decent jobs for youth, and promote accelerated reductions in poverty and inequality. This chapter examines factors that can help agriculture to effectively play a powerhouse role for inclusive development in Africa. The approach used to estimate the parameters is contained in Annex B, which deals with model specification and data description.

6.2   Emerging Evidence on Agriculture as a Potential Powerhouse in Africa What does the evidence suggest in terms of agriculture being a powerhouse for development transformation on the continent? This section examines how agriculture affects key development indicators such as employment, industrialization, poverty, and income inequality. The extent to which agricultural variables affect these economic and socio-economic development indicators would help design appropriate policies, programmes, and projects that can accelerate the SDGs and lay the foundation for Africa to become an economic powerhouse. Agriculture’s contribution to development indicators and achieving SDG targets depends on its own growth performance, structure, and

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sources of such growth, its indirect impacts on growth in other sectors, the extent to which poor people participate and benefit in agriculture’s growth process, and the size of the sector in the overall economy. Bivariate and multivariate regressions are used to determine the role of agriculture and other variables in influencing the dynamics of resource allocation within sectors, poverty, and inequality in Africa. How activities in the agricultural sector affect manufacturing and services sectors, structural economic transformation, employment, rural poverty, and income inequality are examined below. Agriculture’s impact on manufacturing and services sectors. The relationship between agriculture and manufacturing growth rates is positive and indicates a mutually reinforcing relationship. Without pre-empting the direction of causation, the correlation index between the two variables is 0.8 (Table 6.1). The correlation index between the services sector and both the agriculture and manufacturing sectors is negative. The reality in most African countries is that the services sector serves as a coping strategy for poverty. A simple ordinary least squares (OLS) regression confirms causality running from agriculture to the manufacturing sector with a 1.0 percent increase in agricultural value added, raising manufacturing value added by 0.63 percent (Table 6.2). This tends to confirm the findings by Rangarajan (1982) that a 1.0 percentage point addition to agricultural growth rate generated an additional 0.5 percent output in India. This evidence reveals that agricultural transformation and productivity are central to promoting industrialization and rural economic transformation in Africa. As reiterated by earlier scholars,1 subsistence agriculture is a default source of employment and a pool of reservoir of labour. This reality is also Table 6.1  Correlation index between agriculture, manufacturing, and services sectors Agriculture Agriculture Manufacturing Services

1.00 0.80 −0.87

Manufacturing 1.00 −0.73

Services

1.00

Source: Author’s computation 1  Such scholars include Lewis (1954), Ranis and Fei (1961), Fei et al. (1967), and Gollin (2010).

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Table 6.2  Impact of agriculture on the manufacturing value added Manufacturing value added as the dependent variable Variables/Model statistics

Coefficients

Intercept Agricultural value added Services value added Adjusted R2 F-Statistic Variance inflation factor (VIF)

0.758 0.625 −0.309 0.635 30.523* 2.74

t-Statistic 0.956 2.703** −1.022

Source: Author’s computation Note: * and ** indicate the independent variable is significant at 1 and 5 percent respectively

evident in this study. The relationship between agriculture and the other two sectors (industry and services) in terms of sectoral employment remains competitive. Agriculture remains a major source of labour reallocation to industrial and services sectors. Both industry and services crowd out surplus labour in the agricultural sector. The correlation index is as high as −0.78 for both sectors (Table  6.3). See intersections of row 6 (ATE) with columns 7 (ITE) and 8 (STE). The main challenge, however, is the quality of labour reallocated from agriculture to other sectors. For labour reallocation from rural areas (mostly from the agriculture sector) to reduce national poverty, for instance, it must have the level of education and skills needed for the industrial and service sectors. For labour reallocation from agriculture to propel industrial productivity, the quality of such labour matters. The low level of education and the limited skill content of rural migrants impede the transformative role of labour reallocation. In this regard, this may be contributing to a rising trend of urban poverty in many African countries, including Côte d’Ivoire, Egypt, Guinea, and Lesotho. 6.2.1  Agriculture’s Impact on Employment Agricultural labour productivity propels labour reallocation from agriculture to other sectors of the economy; the impact is higher for women than men. At the bivariate level, agricultural value added tends to pull employment into the sector, with some tendency to reduce inequality

0.39 1.00

0.23 0.75 1.00

RPG RP

AME ATE

ITE

STE

−0.07 −0.08 −0.09 0.02 0.10 0.00 −0.04 −0.05 −0.04 −0.08 0.57 0.55 0.56 −0.46 −0.31 1.00 0.90 0.96 −0.72 −0.73 1.00 0.99 −0.77 −0.77 1.00 −0.78 −0.78 1.00 0.80 1.00

AFE −0.30 −0.38 0.08 0.41 0.43 0.43 −0.38 −0.36 1.00

AVA −0.07 0.01 −0.34 −0.58 −0.54 −0.56 0.39 0.47 −0.41 1.00

−0.26 −0.40 −0.31 −0.24 −0.24 −0.24 0.14 0.17 0.77 −0.04 1.00

AVApw SD −0.05 −0.08 −0.57 −0.68 −0.78 −0.76 0.74 0.64 −0.36 0.45 0.16 1.00

AE −0.03 −0.15 −0.12 −0.03 0.00 −0.01 −0.13 −0.13 0.12 −0.03 0.13 0.13 1.00 0.16 −0.02 −0.55 −0.76 −0.81 −0.82 0.67 0.67 −0.34 0.41 0.22 0.75 −0.01 1.00

AFR SSE 0.33 −0.18 −0.41 −0.47 −0.44 −0.48 0.42 0.29 −0.28 0.26 0.04 0.31 0.16 0.58 1.00

CC

0.23 0.13 −0.39 −0.64 −0.72 −0.71 0.63 0.69 −0.62 0.40 −0.16 0.76 −0.06 0.64 0.34 1.00

0.12 −0.11 −0.69 −0.71 −0.80 −0.79 0.55 0.54 −0.28 0.46 0.27 0.64 0.12 0.70 0.63 0.63 1.00

GDPpc TFP

Source: Author’s computation

RPG = Rural Poverty Gap; RP = Rural Poverty; AFE = Share of Agriculture in Female Employment; AME = Share of Agriculture in Male Employment; ATE = Share of Agriculture in Total Employment; ITE = Share Industry in Total Employment; STE = Share of Services in Total Employment; AVA = Share of Agriculture Value Added in GDP; AVApw = Agriculture Value Added per worker; SD = Sectoral Dualism; AE = Access to Electricity; AFR = Adolescent Fertility Rate; SSE = Secondary School Enrolment; CC = Control of Corruption; GDPpc = GDP per capita; TFP = Total Factor Productivity

Gini 1.00 RPG RP AFE AME ATE ITE STE AVA AVApw SD AE AFR SSE CC GDPpc TFP

Gini

Table 6.3  Correlation index among variables of interest

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and rural poverty gaps. Agricultural productivity per worker, on the other hand, tends to push labour out of the sector with a correlation index of between 0.54 and 0.58 for male and female employment in agriculture, respectively (Table 6.3). To avoid multicollinearity bias, and based on a signal from variance inflation factor (VIF), agricultural productivity per worker was excluded from the multivariate analysis. Special attention was given to its impact on overall employment in agriculture, industry, and service sectors. Agricultural productivity pushes workers out of the sector—the impact is highest for women (Table 6.4). This is not surprising: as productivity per worker increases, less labour is needed in the agricultural sector. Arising from the backward and forward linkages with services and industrial sectors, more labour is absorbed into these sectors. Enhanced productivity in the agricultural sector is a crucial factor in labour reallocation to other sectors of the economy. Productivity enhancement and movement out of agriculture are the precursors of structural economic transformation, which are yet to take place in Africa. The preponderance of labour in the agricultural sector still makes participation in farming adequately unresponsive to productivity shocks. This is in line with the findings from McCullough (2016) who found participation in farming unresponsive to productivity shocks. This is a further reconfirmation of the evidence that agriculture generally still remains a way of life, instead of a business enterprise. Another implication Table 6.4  Impact of agricultural productivity on total employment Variables

Model statistics Intercept

Share of agriculture in female employment Share of agriculture in male employment Share of agriculture in total employment Share of industry in total employment Share of services in total employment

Coefficients(t-­ statistics)

R2

F-Statistics

2.775*

−0.369 (−4.071)*

0.309

16.569*

2.446*

−0.257 (−3.466)*

0.245

12.013*

2.524*

−0.281 (−3.692)*

0.269

13.635*

0.531***

0.157 (1.792)*** 0.079

3.210***

0.887*

0.205 (3.098)*

9.597*

0.206

Note: * and *** indicate the independent variable is significant at 1 and 10 percent respectively

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from this finding is that labour exits from agriculture to other sectors could play a strong role in explaining worker productivity.2 Similarly, evidence from Diao et al. (2019), on Ghana’s labour productivity growth between 1984 and 2011, reveals that about 75 percent of total growth in labour productivity was due to within-sector labour productivity growth. They found that structural changes accounted for 25 percent—a phenomenon that led to movement of labour from low productivity work in traditional agriculture to more productive jobs in the modern agricultural and non-agricultural sectors. This implies that a significant proportion of workers moved out of agriculture to relatively low-­ sector like services as opposed to moving to manufacturing. A major policy consideration is the need to enhance agricultural productivity to encourage labour reallocation to the services and industry sectors. However, there is no automatic relationship between labour reallocation and reducing poverty and inequality. To maximize the benefits of reallocating labour from agriculture to other sectors, the quality of education in rural communities must be enhanced, giving special attention to the quality of primary, secondary, and vocational education. Developing rural human capital is vital to ensure labour reallocation leads to rapid reductions in poverty and income inequality. 6.2.2  Agriculture’s Impact on Inequality and Rural Poverty Seeing agriculture as a business enterprise by promoting commercial small-scale farming will not only increase agricultural productivity and expand non-agricultural activities, but also increase decent incomes and rural wellbeing. On the other hand, employment in agriculture helps to reduce the rural poverty gap. It does not, however, have any significant impact on income inequality. The preponderance of surplus labour in agriculture tends to propagate rural poverty. The role of agriculture in driving development outcomes is determined not only by the level of employment it generates, nor by its contribution to the value added GDP alone, but also by its influence on poverty and inequality. Appreciating the pervasive role of agriculture on development (i.e. of both rural and urban populations), the focus of 2  The conclusion from McMillan and Harttgen (2014) that labour exit from agriculture explains about half of the observed increases in annual output per worker is a confirmation of this development.

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analysis regarding poverty is on the rural population, largely because that is where the bulk of agricultural activities take place. The role of agricultural employment on poverty tends to confirm the argument of scholars like Lewis (1954) and Ranis and Fei (1961) that employment in the agriculture sector serves as survival strategy. To this end, the low wages and meagre incomes associated with being the reservoir of surplus labour, many people working in the sector fell below poverty lines. Agriculture’s share of female-, male-, and total employment tends to have a positive relationship with rural poverty. The positive relationship between agriculture’s share of total employment and rural poverty is established to be statistically significant at 95 percent confidence interval. In fact, a 1.0 percent increase in the share of agriculture in total employment raises rural poverty by 0.14 percent (Table 6.5). This explains why the sector inclines to harbour a high proportion of poor people on the continent. Agricultural employment contributes to rural poverty partly because of the predominance of subsistence farming. Most Africans see farming as a way of life rather than a business enterprise. The role of sectoral dualism in driving the inverted U-shaped development-­ inequality relationship has long been acknowledged by Kuznets (1955). Sectoral dualism, an indicator of shifting a labour force away from agriculture and a gauge for determining the average income difference between sectors, is expected to raise inequality at the initial stage and to decline as the economy develops. Shifting labour away from the agriculture sector could lead to an ambiguous relationship, depending on the net effect on agriculture and industrial sectors. Evidence from the bivariate analysis shows the sectoral dualism tends to have a negative relationship with rural poverty, rural poverty gap, and income inequality (Table 6.3). It also tends to reduce employment in agriculture for male, female, and employment in total. Although shifting labour away from agriculture to other sectors of the economy helps to reduce a rural poverty gap—1.0 percent shift leads to 0.282 percent reduction in the rural poverty gap—it, however, leads to a rise in rural poverty. This tends to suggest that most of the labour that moved out of the sector is relatively well-off, particularly those with a secondary education. An endemic rural poverty gap is becoming a serious development concern, since it accentuates rural poverty. A 1.0 percent increase in a rural poverty gap raises rural poverty by about 0.7 percent (Table  6.5). This strongly established relationship is a major pointer towards rethinking the direction of policies if rural poverty is to be addressed. Scaling up rural

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Table 6.5  Impact on inequality and rural inequality Variables/Model statistics

Rural poverty

Intercept Share of agriculture in total employment Share of services in total employment Sectoral dualism

0.676 (2.875)* 0.586 (0.384) 0.141 (2.097)** −01783 (−1.874)*** 0.107 (1.416)

Secondary school Enrolment Rural poverty gap Control of corruption

Rural poverty gap

0.071 (2.317)** −0.282 (−1.870)*** −0.126 (−2.072)** 0.672 (21.776)* −0.099 (−0.826)

Share of agriculture value added in GDP GDP per capita

−0.405 (−2.017)***

Rural poverty Gini Total factor productivity Share of agriculture in female employment R2 F-Statistic Variance inflation factor (VIF)

Inequality 1.687 (5.889)* 0.040 (0.568)

0.456 (3.540)* 0.038 (1.624)*** 0.031 (0.828) 0.060 (1.414) −0.522 (−2.790)*

1.628 (2.602)** −0.270 (−0.329) 1.236 (1.962)*** 0.946 115.185* 9.483

0.409 3.058** 1.200

0.510 5.559** 1.352

Note: * and *** indicate the independent variable is significant at 1 and 10 percent respectively

incomes through diversifying rural economies and implementing social protection programmes will help to reduce the rural poverty gap and overall rural poverty. The rising wave of social protection programmes across many African countries such as South Africa, Ethiopia, Rwanda, Malawi, Senegal, Ghana, Burkina Faso, and Nigeria, among others, should be strengthened and made more targeted to the extremely poor. Furthermore, they should be conditional on core development targets, such as sending girl children to school and encouraging pregnant women to patronize anti-natal and post-natal services, which could further enhance the effectiveness of such programmes. Education is power: It helps accelerate structural economic transformation. The role of secondary school education in shaping rural

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poverty dynamics is evident. At both bivariate and multivariate levels, secondary school education is a veritable tool to dent rural poverty (Tables 6.3 and 6.5). At the bivariate level, the correlation coefficient is −0.55. This relationship is also statistically established at the multivariate level. For instance, a 1.0 percent increase in secondary school enrolment reduces rural poverty by 0.13 percent. This relationship is statistically established at a 95 percent confidence interval. It also tends to play a key role in reallocating labour away from the agricultural sector (with a correlation coefficient ranging from −0.76 to −0.82) and tends to push resources to the industrial and services sectors (with a correlation coefficient of 0.67). Education is likely to help in promoting structural economic transformation, as secondary education helps to reduce the share of agriculture in value added GDP through expanding activities of other sectors. This result tends to confirm findings from the World Bank (2015) and Affognon et  al. (2015) that education helps to enhance adoption of technologies and reduces post-harvest losses. Other important drivers of the rural poverty gap are also noted. GDP per capita and shifting labour away from agriculture (sectoral dualism) helps to reduce the rural poverty gap—both significant at 5.0 percent. However, women’s employment in agriculture and levels of income inequality are impediments to dealing with rural poverty gaps. Low wage rate for women is one of the factors that widens rural poverty gaps. Addressing income inequality is therefore a development imperative, as it helps to reduce rural poverty gaps. 6.2.3  Agriculture’s Elasticity of Poverty and Income Inequality This section examines the poverty and income inequality–reducing power of agriculture. Agriculture is not only a major source of ensuring food security globally, but also an important source of income for the majority of Africa’s population—including the 54.2 percent of the continent’s economically active population and their dependents engaged in agriculture. Poor and food-insecure families depend essentially on farming activities while extreme poverty, hunger, and malnourishment are prevalent in rural areas. Achieving accelerated and high incomes for this population is vital to achieving inclusive development by 2030 through rapid reductions in poverty and inequality, and accelerated generation of job opportunities.

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The growth of agriculture, if inclusive, could be an important strategy for denting poverty and inequality. If agriculture’s interventions and programmes are well structured and targeted, these interventions could be a pivotal strategy to achieve inclusive and sustainable development, particularly in addressing poverty and income inequality. As established earlier, poverty tends to be more prevalent in agricultural and rural populations than elsewhere; improving incomes in these areas could generate substantial improvements in the wellbeing of the African population at large. As indicated in the earlier part of this book, and as argued in other studies (e.g. Odusola 2017; and Cervantes-Godoy and Dewbre 2010), the channel of transmission from agriculture to poverty and inequality reduction is multidimensional. The first channel is the direct impact on rural incomes. The second is promoting food security for the urban and rural populations and making food cheaper for the poor. The third channel serves as a growth propellant for the non-farm sector, especially in rural areas. The fourth, accelerated agricultural productivity provides opportunities for product, labour, and factor markets expansion. Finally, as a major source of inputs to meeting the rising higher-income elasticities of demand for non-agricultural goods and services, through structural economic transformation, agriculture also broadens human choices and provides job opportunities in other sectors of the economy. Being a major source of livelihoods in Africa, countries that succeed in changing agriculture from a way of life to a business enterprise are more likely to use agriculture to drive structural transformation and a rapid reduction in poverty and inequality. To further reinforce the findings from the regression analysis, agriculture elasticity of national poverty, rural poverty, and income inequality was computed (Table 6.6). Some countries exhibit very good examples of how to use agriculture to promote inclusive development (Algeria, Burkina Faso, Morocco, Ghana, and Rwanda). For instance, in Africa, the poverty and income inequality–reducing power of agriculture is highest in Algeria, Burkina Faso, and Tunisia. The high agriculture elasticity of national poverty in other countries like Tunisia, Egypt, South Africa, Morocco, Cabo Verde, Uganda, Ethiopia, and Senegal tends to suggest the vital role of agriculture in accelerating the reduction of national poverty in these countries. Rwanda, Morocco, Uganda, and Burkina Faso are particularly good at using agriculture to dent rural poverty. Thanks to

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Table 6.6  Agriculture’s elasticity of national poverty, rural poverty, and income inequality in Africa

Algeria Tunisia Egypt Burkina Faso South Africa Morocco Ghana Cabo Verde Uganda Ethiopia Senegal Niger Congo, Rep. Congo (Dem. Rep.) Guinea-Bissau Benin Swaziland Zambia Cameroon Tanzania Guinea Mali Djibouti Mozambique Rwanda Cote d’Ivoire Sierra Leone Central African Republic Togo Botswana Burundi Lesotho Malawi Sao Tome and Principe Nigeria Madagascar Mauritius

Period

National poverty

1995–2011 1995–2004 2004–2012 2003–2014 2000–2011 2000–2007 1998–2012 2001–2007 1999–2012 1995–2010 1994–2010 2005–2014 2004–2011 2004–2012 1993–2010 2003–2015 2000–2009 2006–2015 1996–2014 1991–2011 1994–2012 2001–2009 2002–2012 1996–2008 2005–2013 2002–2015 2003–2011 1992–2008

−4.601 −3.237 −2.725 −2.697 −2.277 −2.242 −1.841 −1.655 −1.359 −1.129 −1.098 −0.872 −0.820 −0.806 −0.764 −0.549 −0.515 −0.390 −0.378 −0.376 −0.375 −0.316 −0.314 −0.277 −0.213 −0.199 −0.188 −0.185

2006–2015 1985–2009 1998–2013 1994–2010 1997–2010 2000–2010 1992–2009 2001–2012 2006–2012

0.000 0.013 0.106 0.173 0.199 0.256 0.673 0.787 0.961

Rural poverty

1.184 −1.493 −1.881 −0.533 −1.248 −0.498 −0.508 0.459 0.392 −0.322 −0.025 −0.088 −0.567 −0.437 −3.835 −0.440 −0.284 0.021 0.060 −0.861 −0.077 −0.252 −0.166

Income inequality −1.097 −0.467 −0.296 −1.523 0.616 0.011 −0.056 −0.338 −0.260 −0.777 −0.135 −0.666 0.106 −0.011 −0.565 1.301 −0.117 −0.342 0.056 0.027 −0.438 −0.505 0.358 0.090 −0.086 −0.168 −0.274 1.190 −0.941 −0.132 2.107 −0.334 −0.368 −0.124 0.975 −0.786 0.011 (continued)

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Table 6.6 (continued)

Comoros Kenya Mauritania Namibia

Period

National poverty

2004–2013 1992–2005 2000–2014 1993–2009

1.262 4.029 4.790 7.942

Rural poverty

Income inequality

1.026 2.833

−0.791 3.680 −1.017 1.021

Source: Author’s computation

dedicated and consistent budgetary allocation to agriculture in countries like Burkina Faso, Ethiopia, and Senegal. Policymakers should take advantage of the prevalence of poverty among farmers and rural dwellers by using agricultural transformation and productivity to drive reductions in rural poverty. In Algeria, the link between agriculture and rural development programmes that supported producers, upgraded farms, expanded irrigation facilities, and increased investment in sustainable use of natural resources facilitated the agriculture elasticity of poverty and income inequality. In Rwanda, efforts that have driven productivity gains include successful land consolidation, increased areas under irrigation, protection against soil erosion, improved access to agricultural finance, proximity to knowledge-­ driven and problem-solving extension services agents, access to improved inputs (agrochemicals and seeds), distribution of livestock to poor families through programmes such as Girinka,3 investment in post-harvest infrastructure, and subsidized transport. The overall agricultural growth rate between 2000 and 2010 was 5.8 percent per  annum with about 68.2 percent of rural households having access to livestock in 2010 with coffee and tea constituting Rwanda’s largest export volumes (MANR 2013). Burkina Faso, a country that succeeded to simultaneously reduce both income inequality and poverty over the past two decades, also offers good examples on how agriculture could serve as a powerhouse of inclusive development. As shown in Table 6.6 (high agriculture elasticity of poverty 3  The One Cow per Poor Family Programme, ‘Girnka’, introduced in 2006, had benefitted over 198,000 poor families and had helped to reduce malnutrition and raised incomes of poor families in Rwanda.

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and income inequality) and Box 6.1 (dynamic agriculture policy focusing on rural and crop-specific development), Burkina Faso offers itself as a case for agriculture for development in Africa.

Box 6.1  Burkina Faso’s Efforts Towards Agriculture That Promote Inclusive Development

Burkina Faso’s agriculture elasticities of poverty and income inequality are one of the highest in Africa. How is this possible? Agriculture is the mainstay of Burkina Faso’s economy: it employs 86 percent of the active population and accounts for 33 percent of GDP and 80.6 percent of exports. Yet only 12 percent of its potential irrigation and 45 percent of its arable land are in use. Burkina Faso is one of the very few countries that have been allocating more than 10 percent of its budget to agriculture since 2006—ranging from 14 percent to 18 percent between 2006 and 2010—one of the highest in Africa. Support to agriculture has been very dynamic: initially focused on rural development, it later moved towards agriculture-specific policies, while agriculture-specific expenditures shifted more towards general support (i.e. training, agricultural research, and off-farm infrastructure) and away from direct payments to farmers and other people working in the agricultural sector. In the 2009–2010 season alone, 7263 tonnes of improved seedlings were distributed to farmers, and a 50 percent subsidy on fertilizers was provided (11,253.5 tonnes of fertilizers sold). The government supported commodities with the highest multipliers on the economy through high value chains (e.g. cotton, livestock, and horticulture). The protection (through import tariffs) of rice, cotton, and sorghum provided farmers with high incomes, while the use of a price setting system through the commodity marketing board, which shielded consumers from excessive prices, helped to link agriculture to national poverty reduction. Building and stockpiling food reserves and setting up standards are other cross-cutting initiatives that supported an agriculture-for-development objective. Despite the success in linking agriculture with Burkina Faso’s development process, there is substantial room for improvement, if (continued)

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Box 6.1  (continued)

the government’s long-term goal of ‘By 2025, agriculture in Burkina Faso will be modern, competitive, sustainable and an engine of growth, founded on household farms and effective agricultural enterprises and ensuring all people of Burkina Faso have access to the food they need to lead active, healthy lives’ is to be achieved. Some of these improvements include: improving infrastructure and market efficiency; diversifying commodity-supported public expenditure beyond rice and cotton (which currently received about 90 percent of government support) to crops of high dietary importance to the Burkinabe population with high external trade potential (oilseeds, cereals and cowpeas, fruits and vegetables, and milk and dairy products); focusing more on improvement of value chains; and supporting reductions in cost of processing and transportation—particularly since Burkina Faso is a landlocked country. Expansion of irrigation facilities (e.g. the Samendéni dam in Ouest province) and the establishment of many growth poles (e.g. the Bagré Growth Pole project in the Centre Est region) are key to turning agriculture into a powerhouse of economic and development transformation. Source: FAO (2013) 6.2.4  The Role of Productivity Agricultural productivity plays a strong role in taming poverty, especially in rural areas. Unlike a partial approach used in most studies, this chapter examines the various dimensions of productivity and their impacts on poverty and inequality. Four variants of productivity are used: land productivity, labour productivity, technical change, and total factor productivity.4 Evidence from this chapter shows that productivity matters towards reducing poverty and income inequality. While labour productivity is a potent tool to tame poverty, income inequality is best addressed by land productivity in Africa. As shown in Table 6.7, the relationships across most of the productivity indexes tend to be mutually reinforcing. The relationship between rural 4  The productivity indexes used here are as computed by Benin et al. (2016) for the period between 1961 and 2012.

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Table 6.7  Correlation index between productivity index and rural poverty Rural poverty Rural poverty Land productivity Labour productivity Efficiency change Technical change Total factor productivity

Land productivity

Labour productivity

Efficiency change

Technical change

Total factor productivity

1.000 −0.383

1.000

−0.380

0.586

1.000

−0.173

−0.031

−0.140

1.000

−0.189

0.307

0.253

0.029

1.000

−0.227

0.124

−0.005

0.867

0.515

1.000

Source: Author’s computation

poverty and the various indicators of agricultural productivity appears to be negative—an increase in agricultural productivity tends to reduce rural poverty. Both land and labour productivity tend to have higher impacts on rural poverty than total factor productivity and technical changes at the bivariate level. A factor that appears to be playing a significant role on reducing poverty is labour productivity. A 10.0 percent increase in agricultural labour productivity reduces poverty by 0.12 percent (Table 6.8). This relationship is statistically established at 1.0 percent level of significance. This is further reinforced by Fig. 6.1, where all countries with labour productivity of $2000.00 or more succeeded in reducing national poverty rate to less than 20 percent of the population (Mauritius, Tunisia, Egypt, and Morocco). Also, all countries with labour productivity of less than $1000.00 are associated with poverty rates of more than 20 percent, except Botswana, thanks to its strong social protection policy. A similar trend is observed for the role of labour productivity in addressing poverty gaps (Table 6.8). In this regard, focusing policy actions on improving labour productivity of poor, small-, and medium-scale farmers, particularly those in the third to fifth quintiles of the poor, will accelerate progress. Evidence from the normal probability test indicates the need to give considerable attention to the fourth and fifth quintiles of those in poverty gaps. This tends to

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Table 6.8  Impact of agricultural productivity on poverty and income inequality Variables/Statistics

Dependent variables National poverty rate National poverty gap National Gini

Intercept Land productivity Labour productivity Technical productivity Total factor productivity Gini Adjusted R2 F-statistic VIF

56.759 (12.761)* −0.003 (−1.264) −0.012 (−4.869)* −0.451(−0.142) 0.402 11.549* 1.673

14.601 (1.589) −0.001 (−0.689) −0.005 (−3.707)* 0.218 (1.094) 0.279 7.073 1.388

44.985 (23.465)* −0.003 (−2.913)* 0.001 (0.861) −0.334 (−0.534) 0.115 3.029** 1.129

Source: Author’s computation Note: * and ** indicate 1% and 5% levels of significance respectively. The results of this is the outcome of a parsimonious regression from all indicators of productivity. The combination of variables with the best fit is presented here

7,000 South Africa

labour productivity

6,000 5,000

Mauritius Tunisia

4,000

Egypt 3,000 Morocco 2,000 1,000 0 -1,000

0

Swaziland Namibia Nigeria Gabon Sudan Botswana Cameroon Botswana Tanzania Guinea-Bissau Burundi Kenya Congo (Dem. Rep.) Zimbabwe Kenya Angola Ethiopia Gambia Mozambique Zambia 10 20 30 40 50 60 70 80 90 100 y = -32.262x + 2514.6 R² = 0.417

poverty rate

Fig. 6.1  Poverty and labour productivity. (Source: Author’s computation)

suggest that the extreme end of the last miles should be given policy priority, including targeted social protection schemes that are anchored on productivity enhancement. Investing in land productivity (including the use of organic and inorganic fertilizers and high yielding seeds, access to irrigational

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70 Botswana 60

Gini

50 Mauritius

40

Egypt

30 20

y = -0.0031x + 45.485 R² = 0.1516

10 0

0

1000

2000

3000

4000

5000

6000

7000

Land productivity Fig. 6.2  Relationship between Gini and land productivity. (Source: Author’s computation)

facilities, and tractors) is therefore critical to accelerating reduction in income inequality in Africa. The potent power of land productivity in dealing with income inequality is also evident (Table 6.8 and Fig. 6.2). For instance, the cases from Egypt, Mauritius, and Botswana reveal the importance of land productivity in income inequality dynamics (Fig. 6.2). Most of the countries with land productivity of less than 1000 tonnes per hectare experienced a Gini of more than 0.4. This relationship is statistically established in Table 6.8 (column 4) at 1.0 percent level of significance. A 10.0 percent improvement in the level of land productivity reduces income inequality by 0.03 percent. In fact, the coefficient of determination shows that land productivity explains about 15 percent of changes in the level of income inequality on the continent. It is evident from the empirical analysis that policies that help reduce poverty are not necessarily the same to tame income inequality. The role of total factor productivity on income inequality (Gini) is shown in Fig. 6.3 and Table 6.8. The positive relationship is statistically established at a 1.0 percent level of significance. In fact, evidence from bivariate analysis shows that total factor productivity alone explains about 13 percent of variations in income inequality. How each country performs on total factor productivity and income inequality is shown in Fig.  6.3. For instance, four of the seven countries with a total factor productivity index of greater than 0.40 had higher than 55 Gini Coefficient (in

6  AGRICULTURE AS A POWERHOUSE OF INCLUSIVE DEVELOPMENT…  70

Seychelles

65

Gini Coefficient

60 55

213

Comoros Zambia CAR Lesotho

South Africa

Namibia Botswana

Rwanda Gambia Kenya Malawi Mozambique 45 DRC Togo Uganda Cabo Verde ChadBenin Cote d'Ivoire AngolaGhana Morocco Cameroon 40 Madagascar Tanzania Guinea-Bissau Sierra Leone 35 Ethiopia Guinea Burundi Mali Niger 30 0.000 0.100 0.200 0.300 0.400 50

Gabon Mauritius

Tunisia

0.500

0.600

0.700

0.800

0.900

1.000

Multi-factors productivity (1990-2010)

Fig. 6.3  Correlation between Gini and multifactor productivity. (Source: Author’s computation)

percentage form)—Seychelles, South Africa, Botswana, Namibia, and Gabon. For Mauritius and Tunisia, both of which performed well on both indicators, both countries always accompany their productivity enhancement with effective social protection mechanisms for marginalized populations, especially those that did not benefit from increased productivity. On the other hand, of the 29 countries that recorded a total factor productivity of 0.20 and below, 24 (about 82.7 percent) had a Gini coefficient of less than 0.50. Most countries with high level of income inequality levels, that is, a Gini of more than 0.55 (South Africa, Namibia, Botswana, and Zambia), are associated with high economic complexity index.5 In this regard, when economic complexity and total factor productivity are rising, strong and well-targeted social protection programmes must be implemented to take care of those left behind in these economic sophistication indices. African countries should give priority attention to boosting national productivity in order to accelerate reductions in rural poverty. Figure 6.4 shows the relationship between poverty and total factor productivity in Africa. Of the ten countries with the lowest poverty rates in the region, eight of them had a total factor productivity index of 0.30 5  The data and figures showing the relationships between economic complexity and Gini are available on request from the author.

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and above. On the contrary, a majority of countries with high poverty rates had a total factor productivity index of less than 0.30. This tends to confirm the findings from CSLS (2005) that productivity explains changes in poverty better than just economic growth. Figure 6.4 presents the findings between multifactor productivity (MFP) and national poverty rate. Efforts to raise multifactor productivity in agriculture are key to accelerating poverty reduction in Africa. This tends to be the case in countries like Mauritius, Seychelles, Tunisia, Gabon, South Africa, and Botswana—where MFP of 0.4 and above are associated with a low poverty rate of 20 percent and below. As shown in the left topmost corner of Fig.  6.4, a low MFP of less than 0.3 is associated with higher poverty rates of more than 40 percent (e.g. Burundi, Democratic Republic of Congo, Malawi, and Guinea). As articulated above, policies that help reduce poverty may not necessarily reduce income inequality. For instance, while MFP tends to reduce poverty, it is not the case for income inequality, where MFP tends to worsen income inequality (e.g. South Africa, Seychelles, Namibia, and Botswana). This tends to confirm the findings from Odusola (2017).

100

Poverty rate Latest value

DRC

Burundi

Madagascar

80

Malawi Guinea-Bissau Kenya Mozambique Zambia CAR Burkina Faso Nigeria Benin Sierra Leone Mali Niger Tanzania Gambia Chad Senegal Guinea Ethiopia UgandaCote d'Ivoire Congo Cameroon Namibia Angola Ghana South Africa Comoros Cabo Verde Botswana Gabon Mauritania Morocco

Tunisia

60

40

20 Mauritius

Seychelles

y = -97.032x + 62.424 R² = 0.5139 0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

0.900

0

-20

-40 1.000

Multi-factors productivity (1990-2010)

Fig. 6.4  Correlation between poverty and multifactor productivity. (Note: DRC is Democratic Republic of the Congo. Source: Author’s computation)

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6.3   Conclusions The transmission mechanism through which agriculture generates a virtuous circle of job creation, poverty, and inequality is through enhancing labour reallocation and agricultural productivity. Agricultural productivity and transformation are critical to industrialization, expansion of non-­ agriculture rural activities, and generation of decent jobs. Emerging evidence from this chapter reveals that the preponderance of surplus labour in agriculture tends to propagate rural poverty. But enhanced agricultural productivity per worker pushes labour out of the agricultural sector to manufacturing and services. However, for labour reallocation from agriculture to propel transformation in other sectors of the economy, including manufacturing and services, the quality of education (including secondary education) matters. To fully optimize the benefits of labour reallocation, heavy investment in developing rural human capital is vital for such reallocation to lead to rapid reductions in poverty and income inequality. The poverty and income inequality–reducing power of agriculture is the highest in Algeria, Burkina Faso, Tunisia, and Egypt. Its impact is only strongest for poverty in South Africa and Morocco. The income inequality–reducing power of agriculture is strong in Mauritania, Togo, and Ethiopia. Algeria and Burkina Faso offer themselves as good examples of agriculture as a strategy for inclusive development. The agriculture elasticity of poverty and income inequality, in Algeria for instance, was facilitated by rural development programmes that supported producers, upgraded farms, expanded irrigation facilities, and increased investment in sustainable use of natural resources. Burkina Faso succeeded in reducing both poverty and inequality for about two decades simultaneously—thanks to a dynamic approach to agricultural support, which initially focused on rural development, followed by agriculture-specific policies (e.g. improved seedlings, and subsidized fertilizers), and later to general support including training, agricultural research, and off-farm infrastructure. Strategic support to agricultural commodities of high multiplier effects on the economy through value chain development like cotton, livestock, and horticulture contributed to the link between agriculture and inclusive development. The link between productivity, poverty, and income inequality reduction is not homogenous. For instance, labour productivity is a potent tool to tame poverty, while income inequality is best addressed by land

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productivity in Africa. Focusing policy actions on improving labour productivity of poor, small-, and medium-scale farmers, as well as investing in land productivity (e.g. access to fertilizers and agroecology practice) will accelerate progress. In this regard, policy priorities, including targeted social protection schemes, should be directed at the third to the fifth quintiles. It is also evident that policies that help reduce poverty are not necessarily the same to reduce income inequality in Africa.

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Mcmillan, Margaret, and Kenneth Harttgen. “What Is Driving the ‘African Growth Miracle’?” National Bureau of Economic Research Working Paper Series 2077 (2014). https://doi.org/10.3386/w20077. Ministry of Agriculture and Animal Resources of Rwanda (MANR). Strategic Plan for the Transformation of Agriculture in Rwanda Phase III. Kigali: Republic of Rwanda, 2013. http://www.minecofin.gov.rw/fileadmin/templates/documents/sector_strategic_plan/PSTA_III_Draft.pdf Odusola, Ayodele F. “Agriculture, Rural Poverty and Income Inequality in SubSaharan Africa.” Chapter. In Income Inequality Trends in Sub-Saharan Africa: Divergence, Determinants and Consequences. New York, NY: United Nations Development Programme, Regional Bureau for Africa, 2017. Odusola, Ayodele. 2017. Achieving the Sustainable Development Goals in Africa in the Context of Complex Global Development Cooperation. Centre for Sustainable Development Monograph Series (CESDEV Issue Paper No. 2017/2). University of Ibadan. Rangarajan, Chakravarthy. Agricultural Growth and Industrial Performance in India. Washington, D.C.: International Food Policy Research Institute, 1982. Ranis, Gustav and John C. H. Fei. “ATheory of Economic Development”. The American Economic Review 51(4) (September 1961): 533–565. World Bank. “Is Post-Harvest Loss Significant in Sub-Saharan Africa?” Africa myths and facts Brief. (2015). http://www.worldbank.org/en/programs/ africa-­m yths-­a nd-­f acts/publication/is-­p ost-­h ar vest-­l oss-­s ignificant-­ in-­sub-­saharan-­africa

PART III

Case Studies on Agricultural Transformation from Africa, Asia, and Latin America

CHAPTER 7

Introduction to Regional Case Studies

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7.1   The Context The Asian green revolution miracle in the 1960s and 1970s and that of Latin America, which came much later, happened under different scenarios and contexts—with varying degrees of lessons for Africa. The Asian miraculous achievement came under protectionist and totalitarian regimes, which would be very difficult to replicate under today’s circumstances. The revolution in Latin American countries, on the other hand, happened under more democratic, liberalized trading and globalized regimes—a pattern similar to what Mauritius, Morocco, and Ethiopia are adopting to unleash the potential of an agricultural transformation. The dramatic achievement in Asia led to serious impacts on the environment and ecology, but that of Latin America is relatively more sustainable and more amenable to the current global trading architecture—the World Trade Organization (WTO) rules. Both experiences offer different lessons and experiences for Africa, to shape the pattern of a green revolution that would be more contextual, inclusive, and sustainable for the continent. History, narratives, and contexts for an agricultural transformation matter. Generally, Asia is viewed as a land constrained region; Latin America is land unconstrained; while Africa sits in between in terms of arable land per capita. The average land per capita, between 2005 and 2016, in East Asia and the Pacific and South Asia, was 0.106 and 0.126 per hectare, respectively, compared to 0.228  in Sub-Saharan Africa and 0.281  in Latin America and the Caribbean.1 As such, pressures on land vary across regions, which explains adopting different approaches to agricultural transformation. In this regard, avoiding a land and food crises-induced revolution was a major motivation for agricultural reform in Asia—underpinned by land reform and distribution, as well as productivity-driven technology. On the other hand, avoiding a Malthusian trap in a land abundant region underpins the commercialization of agriculture in Latin America, where productivity is driven by technology-oriented programmes, particularly the no-till technology in Argentina and crop-livestock integration system in Brazil. The differences in results across various approaches explain the strengths and weaknesses associated with each option. The success associated with land reform, farming intensification, and increases in productivity by smallholders in Asia propelled poverty reduction—and to some extent 1

 This is based on author’s computation from WDI accessed in May 2020.

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reductions in exclusion—through rural economic transformation. On the other hand, Latin America’s agriculture-led growth and status as a major net exporter agriproducts to the rest of the world,2 propelled by agricultural commercialization (but more sustainable than the Asian approach), and enhanced productivity-driven technology, succeeded in taming poverty. However, because of a non-inclusive manner of transforming agriculture, income inequality ballooned until the early 2000s,3 when social protection was intensified to rectify skewness associated with distribution of growth benefits. Although the earlier versions of a green revolution failed in most African countries, some recent developments in several African countries have shown that transformation of agriculture is possible. The African case studies show the dynamics and successes of agricultural transformation, agriculture-based inclusive development, and drivers of progress so far. Some of these examples include Mauritius, Morocco, Ghana, and Ethiopia. Experiences from these countries, among others, reveal agriculture as a beacon of hope for structural economic transformation and inclusive development. These countries have rekindled hope that African governments can still use agricultural transformation to promote rural economic diversification, raise the income of rural dwellers, and rapidly reduce poverty and exclusion. A striking lesson across Africa, Asia, and Latin America is the increasingly aging population of farmers. In Africa, the average age of farmers is 60 years old, but thanks only to countries whose numbers are far lower than the regional average (44 years in Ethiopia and 45 years in Cameroon). The average age of farmers is more than 60  years in Taiwan and South Korea; it is 50 years in India and 53 years in China, compared to 48 years in Central America.4 These findings, however, depend on which approach 2  For instance, between 2012 and 2014, Latin America was a global food powerhouse with its exports of food and agricultural products standing at 16 percent compared to corresponding imports of 4 percent (Duff and Padilla 2015). 3  A good example is the launch of the Bolsa Familia (a conditional cash transfer programme) in Brazil in 2003. 4  Measuring age of farmers could be controversial depending on the approach being used. Arslan (2019) argued that most of these estimations are based on heads of household, not based on age of all farm workers. This tends to overestimate age of farming population. When samples of 38 countries were used for people spending at least 50 percent of their time in farms per week, the average age for Africa, Latin America, and Asia and the Pacific regions reveals the age of farming population to be 50 years for heads of households and 41 years for all farm workers.

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was used to measure the indicator. The old approach (using head of household based on a census) put the figure at 53 years in Brazil, compared to new approach of 46 years (survey of all farm workers). Whichever approach is adopted, the need to continuously attract youth, the age group more amenable to technology-savvy agriculture to the sector, remains an imperative. This calls for an accelerated modernization of the sector and turning agriculture from way of life into a business enterprise. Evidence from this book has shown there is no silver bullet for successful agricultural transformation. Aligning experiences across Africa, Asia, and Latin America to the continent development context, using a South-­ South Cooperation framework could be a game changer. In this regard, the African-Asian-Latin American experiences are more apposite and sanguine, as there are opportunities for mutual learning on developing smallholder and commercial farming through land and crop intensification (Asian model); adoption of sustainable agricultural practices (Latin American model); and adapting market mechanisms (Asian-Latin American models) to support agricultural transformation. The need to construct the agriculture-development nexus, and bearing in mind the technological, institutional, and political changes both in Asia, Latin America, and Africa, offers a good model to illustrate agricultural transformation in Africa. Similarities of development contexts across the three regions during the first and second generations of the green revolution make such comparisons appealing, offering opportunities to understand the policies and institutions that helped transform agriculture in Asia and Latin America—and relevant to propel Africa’s own agricultural transformation. Drawing on Asian and Latin American lessons and experiences could lay a profound foundation for sustainable agriculture in Africa, while correcting for mistakes associated with the Asian-Latin American models. To ensure targeted lessons, cases are limited to only 12 countries—four from each region, comprising Africa (Ghana, Ethiopia, Mauritius, and Morocco), Asia (China, India, South Korea, and Taiwan (Republic of China)), and Latin America (Argentina, Brazil, Costa Rica, and Colombia). These case studies offer opportunities for invaluable, well-tailored, and contextual analysis, insights, knowledge, and lessons that are relevant to African countries.

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7.2   Regional Drivers of Agricultural Transformation Productivity matters in agricultural transformation. In this regard, the long-term view of agricultural total factor productivity (TFP)5 index has been steadier in Asia and Latin America than in Sub-Saharan Africa (Fig. 7.1). Using 2005 as the base year, Sub-Saharan Africa has not seen an appreciable improvement in agricultural TFP in the post-2005 era, compared to the other two regions. Regional levels tend to hide country contexts. Fourteen countries, each from Africa and Latin America, and 12 from Asia, performed better than or at the pre-2005 era in agricultural TFP.6 Figure 7.2 shows TFP in pre and post 2005 era in the case study countries. What are the key drivers of agricultural transformation across the various regions? Context matters in agricultural transformation. This reality, therefore, makes the drivers of regional agricultural transformation differ globally. As

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Fig. 7.1  Agriculture total factor productivity index. (Source: Author’s computation from USDA agricultural database)  This represents agricultural output not explained by its total inputs.  The countries are from Africa (Cameroon, Rwanda, Seychelles, Tanzania, Djibouti, Ethiopia, Angola, Malawi, Mozambique, Zimbabwe, Ghana, Sierra Leone, Morocco, and Algeria); Asia (Sri Lanka, India, Bangladesh, Vietnam, Thailand, Myanmar, Laos, Indonesia, Cambodia, Brunei, China, and South Korea); and Latin America and the Caribbean (Suriname, Paraguay, Chile, Guyana, Brazil, Peru, Bolivia, Guatemala, Costa Rica, Puerto Rico, Jamaica, Haiti, Dominican, and Bahamas). 5 6

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5 4 3 2 1 0 -1

Total Factor Productivity 1990-2000

Total Factor Productivity 2006-2015

Fig. 7.2  Total factor productivity growth in case study countries. (Source: Author’s computation from USDA agricultural database)

such, it is important to ensure these drivers are relevant to each country’s socio-economic and political contexts before such factors are used to drive the transformation process in Africa. What are the drivers across Africa, Asia, and Latin America that could be a lever of agricultural transformation on the continent? The synopsis of the analysis in the previous chapters, and the next one, identified ten distinct drivers of agricultural transformations. First, relative scarcity of arable land determines the form and tenacity of land reform in order for agricultural transformation to be meaningful. In Asia, the rising scarcity of arable land is a major driver. The lack of abundant arable land and the need to avoid food insecurity were seen as serious development issues. In this regard, tapping the cliché of ‘necessity is the mother of invention’, the Asian region prioritized turning their sleeping capital into a productive one. To fully utilize these scarce land assets, agriculture was prioritized as a strategy to achieve food security, spur rural market development, expand off-farm enterprises, and reduce rural-urban migration. Arable land per capita (hectare per person) for the region is among the lowest, globally. Between 2005 and 2016, for instance, the average land per capita was estimated to be 0.106 hectare in East Asia and the Pacific, and 0.126 hectare in South Asia, compared to 0.228 in Sub-Saharan Africa and 0.281 in Latin America and the Caribbean. The situation for China,

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Indonesia, Malaysia, and Vietnam is even lower than the regional average—with India almost at par with its regional average. Both China and India, for instance, are faced with the challenge of feeding 36.6 percent of the world’s population from 18.5 percent of the global arable land. Expanding productivity, coupled with a high population of farmers, created surplus labour and scarcity of land in most Asian countries. In this regard, not much agricultural development can be achieved without efficient and effective land reform. The ‘Small Landlords and Big Tenants’ in Taiwan, the ‘Household Responsibility System’ in China, the 1972 landholding ceiling legislation in India, and the comprehensive reforms between 1953 and 2004 in Vietnam were all groundbreaking. It is obvious from these countries that an important incentive for enhanced productivity is a secure land tenure system. Secure tenancy provides incentives for farmers to make long-term investments on land improvement. Land distribution was therefore a major policy of driving agricultural reform in Asia. This was not a serious issue in Latin America, where average land per capita is mostly above the global average of 0.201 hectare.7 As such, large-­ scale farming was prioritized in Latin America, with landholding greater than 50  hectare accounting for more than 85 percent in countries like Argentina, Uruguay, Paraguay, Chile, and Brazil. This makes land reform a least priority compared to large-scale mechanized farming in the region. In recent times, however, there has been some rising interest in reconciling land ownership with rural populations’ personal capital as a tool for sustainable livelihoods.8 Africa’s reality is mixed. Some countries are arable land constrained, while others are not. The communal landholding system in Western and Central Africa existed alongside private landholding in Southern, Eastern, and Northern Africa, which did not allow a cohesive and unified approach to land reforms on the continent. Landholding was not a serious issue in most countries that gained independence between 1950s and 1970s but was serious in most countries that achieved independence much later, especially in Southern Africa. This notwithstanding, aggressive land 7  With the exceptions of countries like Costa Rica and Colombia, most other countries are far above the global average, which was as high as 0.906 hectare in Argentina and 0.663 hectare in Paraguay. 8  See Duff and Padilla (2015) for landholding structure and ECLAC et al. (2012) for how landownership affects rural population.

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distributions in Ethiopia, Morocco, Mauritius, and Zimbabwe at some points in time in their agricultural history, to mention a few, show that several African governments tried to use land reform to drive agriculture development, but with varying degrees of success. The rising trend of land grabs in Africa is making land reform a political economy issue even to non-Africans. Second, an agricultural revolution was an integral part of overall rural development. Providing rural public goods like roads, electricity, and water boosted agricultural activities in several ways. First, it ensured that rural communities are integrated into national and regional markets. Second, these public goods ensured agricultural productivity boosted non-rural agricultural activities through value chain development. Third, it encouraged youth to remain in rural areas, ensuring basic living conditions were provided. Fourth, agricultural development in these countries provided opportunities to extend social services like literacy, education, and health services to rural areas—and in some cases agricultural extension services workers were used as agents of social transformation. Creating special economic zones in Taiwan and establishing vegetable clusters in Shandong Province in China are examples of using agriculture development to boost growth poles in rural areas. The ‘New Village Campaign’ in China, the ‘New Village Movement’ in South Korea, and the Bharat Nirman Rural Infrastructure Flagship Programme in India are additional good examples of rural agricultural development strategies used to push agricultural transformation. In Latin America, the direct improvement of rural communities, aggressive social protection, and improved agricultural productivity accelerated the transformation of rural economies, including increase in non-­ agricultural rural employment and salaried employment with appreciable benefits to more women participating in the labour markets, especially those in Chile, Costa Rica, the Dominican Republic, and Panama. While the Asian agricultural transformation mostly deepened domestic markets through import substitution strategies, Latin America’s approach was geared towards export-oriented agricultural development strategies in Costa Rica (large-scale) and Chile (small-scale) and export-oriented agribusiness strategies for family-based SMEs in Mexico and Brazil.9 Other factors that tend to align agriculture transformation with rural 9  The impact of agriculture strategies on rural economic transformation in Latin America and the Caribbean is the focus of ECLAC, FAO and IICA (2012).

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development, leading to a decline in rural-urban migration, include the rising trend of agricultural employees with residing in urban areas and high demographic transitions. The absence of these approaches in many African countries explains why the needed structural transformation from agriculture to non-farm activities did not take place. The experience in most African countries, as argued by Jayne et al. (2011), is that African farmers were ‘pushed’ off farms into low-paying, urban desperation jobs to the inability of local agriculture to provide a reasonable standard of living, instead of being ‘pulled’ off the farm into viable, rural non-farm activities. The catalyst of a ‘pull-off transformation strategy’ is broad-based rural development combined with smallholder-led agricultural growth and commercialization that unleashes productivity within and outside the sector. Third, certain flagship programmes are often used to drive agricultural development. The adoption and implementation of the Comprehensive Africa Agriculture Development Programme (CAADP), through the 2003 Maputo Declaration and the 2014 Malabo Declaration, is one of the game-changing strategies in Africa. Its long-term vision, which generated leadership momentum around its three key targets (achieve an annual agricultural growth of 6 percent; spend 10 percent of a national budget on agriculture; and set agricultural R&D at 1 percent of agriculture value added), is closing divergence in agricultural policies on the continent. For instance, in addition to seven countries that have consistently met the 10 percent budgetary allocation to agriculture (Burkina Faso, Ethiopia, Niger, Mali, Malawi, Senegal, and Zambia), many other countries are moving towards the spending target—though at varying speeds. Translating the CAADP vision into concrete development outcomes is deepening political commitment to agriculture in Africa. The monitoring of these three targets is aligning and unifying countries on these indicators, influencing the growth of several initiatives including solidarity agriculture through cooperatives (Ethiopia and Morocco), agricultural value chain development (Ghana and Mauritius), contract farming (Côte d’Ivoire, Kenya, and Nigeria), community-based seed multiplications (Mali, Senegal, Uganda, and Zambia), and agricultural corridors (Cameroon and Mozambique). Fourth, it is noteworthy to mention that the emerging trend of farmer-­ managed seed multiplication systems is shaping agriculture in Africa. African seed breeders are emerging (e.g. cocoa in Ghana, coffee and teff in Ethiopia). In addition to learning from the traditional culture of seed

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multiplication, which is seen as a tool of cooperation, exchange, survival, and diversity, the Alliance for Food Sovereignty in Africa (AFSA) is deepening community-based seed multiplication systems. The implementation of the Programme for Africa’s Seed Systems (PASS) by the Alliance for Green Revolution in Africa (AGRA) is developing locally adapted varieties of seeds (African home-gown seeds) through small and medium enterprises seed multiplication industries across the continent. This is in addition to regional and continental initiatives that are supporting seeds enterprise development on the continent. Africa’s participation in the seed multiplication ecosystem is blossoming but should be nurtured to protect African food diversity and avoid dependence on foreign seeds. For Africa to serve as the last frontier of the global agrobusiness, the African seed multiplication system must ensure African food diversity, based on own resources and blended knowledge (local plus scientifically contextualized knowledge). In this regard, seed multiplication must not be based on cash crops alone, but also based on Africa’s rich and nutritious food diversity. The rising trend of farmers’ seed extension services, including agroecological seed practices, in Ethiopia, Mali, Senegal, Uganda, Zambia, and Zimbabwe, should be encouraged and strengthened. The cooperative community seed banks in Ethiopia, the community managed seeds security in Uganda, and the Zimbabwe Seed Sovereignty Programme, which lends seeds to farmers and return after harvest with additional quantitative margins, are laudable and should be encouraged.10 The continuous engagement of the private sector in seed multiplications and value chain development across Africa must be strengthened to ensure inclusiveness and sustainability and avoid overdependence on corporate seeds giants and foreign companies. Fifth, very good macroeconomic policies are needed to accelerate progress. For a very long time in the Asian countries described in the following case studies, macroeconomic policies were highly aligned with their agricultural policies—avoiding exchange rate misalignments, ensuring credit policies propel lending to the agricultural sector, prioritizing cautious and guided deregulation, and further ensuring trade regimes are very supportive to agriculture. Many African and Latin American countries failed this litmus test, with many of them saddled with Dutch Disease, which derailed or delayed achieving agricultural transformation. 10  See GRAIN and AFSA (2018) for the various approaches to farmers-managed seed multiplication programmes in Africa.

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Sixth, strong political commitment and massive public support are essential to success. In China, for instance, high-level political commitments and policy priorities across national and local authorities—including coordination and partnership—made a substantial difference. The political-­financial-public support is a unique nexus that is absent from the experience of most African countries. This tripod is historically powerful in the success achieved in China, Taiwan, and South Korea and could play a significant role in Africa’s agricultural renaissance. The high political and public supports to the family-based farming in Chile, Mexico, and Brazil contributed immensely to progress in these countries. These two regions (Asia and Latin America) were committed to addressing the political economy of agricultural development and did not allow the structural adjustment programmes (SAP) imposed on most developing countries to derail their agricultural agendas. This was not the case in Africa, where agriculture was seen as a ‘cash cow’ to drive an urban development agenda and to exploit smallholder farmers, where SAP led to decapitalization and de-­ investment in agriculture. A similar trend was observed in Ethiopia, Malawi, Morocco, and Mauritius, to mention only a few. For instance, the Malawi ‘Starter Pack’ programme exhibited a high level of political commitment to agriculture. Agriculture-led industrialization propelled a similar process in Ethiopia. However, these initiatives were not continuously scaled up and replicated in other countries to propel the needed energy to take African agriculture to the next level. Seventh, aggressive assistance to agricultural production systems also plays a key role. A holistic view of the production ecosystem is key across countries where remarkable success is discernible. In India—as was the case in China, Taiwan, Costa Rica, Brazil, Ethiopia, and Malawi—supplying institutional, subsidized credit to farmers; providing modern inputs like improved seeds, fertilizers, and tractors; and increasing access to irrigation facilities contributed to success. Investing heavily in agricultural technology; technical advances and R&D; and establishing mass extension services, accompanied with continuous training of agricultural extension personnel (e.g. Ethiopia)—to provide technical assistance and advice to farmers—are important drivers of agricultural transformation. Providing low interest loans, farming equipment grants, financial awards, and disaster relief assistance to farmers are among necessary items in an integrated package of support. An important attribute of agricultural transformation is experimenting and learning-by-doing. Unlike the ‘stop-go and

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abandonment’ experiences in Africa, the Asian experience was characterized by experimentation and learning, institutional memory, and continuous capacity strengthening. Establishing special economic zones, supported with fiscal, financial, and technical incentives, promoted the development of local and national value chains that facilitated backward and forward integration between industry and agriculture. Promoting quality assurance systems, such as a Certified Agricultural Standard, is another feature of integrated support. The technological savviness of the Brazilian agricultural system, coupled with an increased level of education and enhanced entrepreneurial spirits, where social media is becoming the medium of communication among farmers, explains why, unlike most other countries globally, the average age of farmers fell from 48 years in 2013 to 46 in 2017.11 This accounts for the lowest average age of farmers among the country case studies used in this book. Eighth, a focus on small-scale farmers is key to reducing poverty, income inequality, and exclusions. Across all the countries reviewed, the primary objectives were achieving food security, improving the wellbeing of the rural population, and reducing poverty and exclusion. To ensure this is achieved, poor farmers are the central focus of strategic and programmatic interventions. In China, South Korea, and Taiwan, a green revolution changed agriculture from a way of life to an agricultural enterprise. In China and Taiwan, for instance, the focus on entrepreneurial farmers transformed the agricultural system into specialized, commercialized, vertically integrated agricultural production, helping to turn agriculture from a way of life into a business enterprise. This programme lifted millions from subsistence farming to small- and medium-scale commercialized farmers. Ninth, adopting an agricultural ecosystem approach anchored on agricultural system resiliency is ubiquitous. A common trait of agricultural transformation across these countries is that agricultural development is viewed from a holistic approach. Agricultural management avoids disciplinary and sectoral silos, promoting complex and non-linear feedback by looking at agriculture in terms of the economy, social sector, and the environment.

11  https://farmingfirst.org/2018/01/will-brazilian-millennials-look-to-a-future-in-thefields/#:~:text=At%20the%20same%20time%2C%20the,of%20education%20and%20 tech%20savviness.

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Finally, strategic partnerships, collaborations, and alliances that reflect whole-of-society and agricultural ecosystem approaches play pivotal roles, including horizontal and vertical collaborations between and within government agencies and institutions, the private sector, and the farming community. Necessary partnerships include those with the international community, particularly trading partners—as was the case between Latin America and the North America; between Morocco and Europe; and Taiwan and Japan, or the United States.

7.3   Conclusions This comparative analysis reveals the importance of context in transforming agriculture. Diverse drivers of agricultural development across the three regions are testimonies to the absence of a silver bullet to achieving meaningful agricultural development in any country. Policies and programmes must be social, economic, and political context-specific and must reflect the political economy of development in each country to be successful. For agriculture to be the future of development in Africa, it must be technology and innovation savvy. Developments in Latin America (especially Brazil and Argentina), in Asia and the Pacific (e.g. China and South Korea), and in Africa (e.g. Ethiopia and Rwanda) have shown the power of technology in driving agriculture development. Adoption of technology in farm and off-farm activities remains critical to shaping the landscape of agriculture on the continent. Besides, the role of economies of scale is also critical. The aggregator programmes in Ethiopia and Morocco are laying a solid foundation for addressing production and marketing fragmentation. There are certain lessons that Asia could learn from Africa and Latin America. One of these lessons is the absence of a strategic focus on gender and nutrition. An integrated programme that combines gender, nutrition, and food security remains critical to an African green revolution. Productivity enhancement programmes must be gender sensitive, with greater access to—and control of—agricultural resources including land, improved seedlings, and finance. Promoting peace and stability is key to accelerating agricultural transformation across all regions.

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References Arslan, A. How old is the average farmer in today's developing world? IFAD. July 2019. https://www.ifad.org/en/web/latest/blog/asset/41207683. Duff, Andy and Andres Padilla. Latin America: agricultural perspectives. RaboBank Economic Research Special (September 2015). Economic Commission for Latin America and the Caribbean (ECLAC), FAO, and Inter-American Institute for Cooperation in Agriculture (IICA). The Outlook for Agriculture and Rural Development in the Americas: A Perspective on Latin America and the Caribbean 2011-2012. Santiago: ECLAC, FAO and IICA, 2012. GRAIN and Alliance for Food Sovereignty in Africa (AFSA). The Real Seeds Producers: Small-Scale Farmers Save, Use, Share and Enhance the Seed Diversity of the Crops That Feed Africa. GRAIN and AFSA, 2018. Jayne, T.S., S. Haggblade, N. Minot and S. Rashid. “Agricultural Commercialization, Rural Transformation and Poverty Reduction: What have We Learned about How to Achieve This?” Synthesis report prepared for the African Agricultural Markets Programme Policy Symposium, Alliance for Commodity Trade in Eastern and Southern Africa April 20-22, 2011, Kigali, Rwanda.

CHAPTER 8

Case Studies from Africa

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8.1   Case of Ethiopia 8.1.1  Context Ethiopia has been one of the global success stories on economic growth over the past two decades. In fact, it was the fastest growing economy globally between 2008 and 20181—averaging 9.99 percent annually. As a non-natural resource rich country,2 but a major producer and exporter of coffee and a traditional, leading producer of teff,3 in Ethiopia, agriculture and agribusiness remain very low; it is one of the countries mostly prone to catastrophic famine globally—between the ninth to twentieth centuries, with the worst famine between 1983 and1985. By all standards, Ethiopia is an agrarian economy with about 80 percent of its population living in rural areas. As of 2017, agriculture accounted for 35 percent of the country’s GDP;4 65 percent of employment, and more than 80 percent of exports.5 Apart from the fact that Ethiopia has the largest livestock population in Africa, only 12.67 million hectares of its 74.3 million arable, diverse agro-ecological land is cultivated—representing a mere 17.1 percent of cultivable arable land in the country. Historically, and based on climatic conditions and dictatorial governance structures of the past, the agriculture sector suffered from incessant crop failures, subsistence farming, lack of incentives for production by smallholder farmers who lived from harvest to harvest. Ethiopia’s diverse ecological environment, large amounts of uncultivated arable land, and high exploitable yield gaps make it a good candidate for agricultural transformation. A reduction in agriculture share of GDP

1  This is based on the author’s computation from the IMF data-mapper GDP Projections 2018–2023. 2  Its natural resource rent as a share of GDP is estimated to be 12.7 percent in 2018 (see WDI, accessed December 2019). 3  It is the largest producer and exporter of coffee in Africa and the fifth largest globally after Brazil, Vietnam, Colombia, and Indonesia (https://www.worldatlas.com/articles/top-coffee-producing-countries.html). 4  This fell from 54 percent in 1981 (WDI, accessed December 2019)—shedding 35 percent of its agricultural share of the total economic activities within four decades. 5  For more information, see EATA (2019).

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Agriculture, forestry, and fishing, value added (% of GDP) Manufacturing, value added (% of GDP) Services, value added (% of GDP) Fig. 8.1  Structural economic transformation in Ethiopia. (Source: Author’s computation from WDI Database)

since 1992 has not been truly reflected in manufacturing expansion (Fig.  8.1). Rather, agriculture and services have been playing cat-andmouse games, with the latter serving as the coping strategy for the developments in the former. There has not been any appreciable change in manufacturing value added. In this regard, labour moves out of agriculture to the less productive and low-income earning services sector. The country experienced fractured structural transformation. Investing in retooling labour to be more relevant and productive to the receiving sectors becomes critical in enhancing the quality of labour, shifting the frontier of productivity in the manufacturing and services sectors. However, over the past decade, some appreciable gains have started to emerge. The rise in agricultural production by 79 percent has contributed to increased incomes, which has been linked to the decrease in in poverty from 71.1 percent in 1995 to 30.8 percent in 2015, while income inequality (Gini Coefficient Index) declined from 0.446 to 0.35 during the same period—though with some setbacks in income inequality since 2004, due to the urban-biased policies. The period also witnessed improvement in prevalence of undernourishment from 37.2 percent in 2007, to 20.6

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percent in 2017 and an appreciable rise in literacy rates from 39.9 percent in 2007 to 51.7 percent in 2017.6 Despite this unfathomable agricultural endowment and recent accelerated rates of transformation, the country’s agricultural and agribusiness potential is yet to be harnessed to effectively transform national socio-­ economic development. Subsistence-oriented low-output farming, inefficient agronomic practices, heavy dependence (more than 97 percent) on rain-fed agriculture, and limited adoption of agro-based value chain development are impeding progress on agricultural productivity and transformation. This inability to adapt to the climatic conditions makes the country highly susceptible to vagaries of weather and climate change— leading to avoidable recurring famines. 8.1.2  Setting the Pace for Agricultural Transformation The overarching goal of the Government of Ethiopia is to accelerate productivity, quality, competitiveness, and commercialization of the agricultural sector in order to achieve sustained and inclusive economic growth to help improve livelihoods—moving the country to middle-income status by 2024. Among the initiatives shaping agricultural transformation in the country are the following four strategic programmes: agricultural land management, extension services, commodity exchange and the establishment of Ethiopian Agricultural Transformation Agency (EATA). 8.1.2.1 Progress in Increasing Access to Land Access to land is key to agricultural productivity and transformation. What is the current situation on access to land in Ethiopia? In the traditional Ethiopia, land ownership was regionally diverse—private, communal, and oligarchy holdings existed across regions.7 Contrasting developments on landholding took place between 1941 and 1989. Agricultural land in

6  The figures for poverty and income inequality as well as nutritional and literacy impact of agricultural production have been computed by the author from the World Development Indicators Database. 7  In the North, land is seen as traditional rights, where households and smallholders cling to their land, while it is mostly communal in the West. In the South, which is mostly patrilineal, the military stronghold of the resistance to Menelik II, warlords became the dominant landlords (Kornman 2019).

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Ethiopia, before a 1975 reform, was characterized by high inequality with high concentration in the hands of absentee landlords and arbitrary evictions, leading to extensive tenure insecurity, low investment in agricultural land, and low productivity.8 Emperor Haile Selassie I regime (1941–1974) used land to compensate military warlords for military centralization (especially those from the north who contributed to capturing the southern territories), which deepened land consolidation in the hands of the military and made private tenure dominant during the imperial regimes. High land concentration, exploitative tenancy, and insecurity fostered tenant-landlord relationships in Ethiopia.9 The Derg under the leadership of Mengistu Haile Mariam,10 through the 1975 land reform (proclamation No. 31, 1975), turned landholding into a communal system, where the government owns land while people lease it for use. It also empowers smallholder associations, of which by the end of 1987 there were 20,367 such associations with a membership of 5.7 million farmers. This reform, which promoted agricultural production and rural income expansion, made land tillers into landowners (to a maximum of 10 ha of land per family), prohibited transfer-of-use rights by sale, exchange, succession, mortgage or lease, except upon death. The adoption of agricultural development-led industrialization policy (ADLI) in 1994–1995, focused on enhancing productivity of small farm holders—premised on agriculture as the engine of economic growth due to its backward and forward linkages—is trying to foster the linkage between agriculture and industry. However, much needs to be done to use this strategy to drive productivity to increase and enhance competitiveness. The 1995 Federal Constitution vested land tenure on public ownership, but made any land reform very tasking due to a requirement for the full agreement of regional parliaments and a two-thirds majority in a nationwide referendum. Article 3 of the Constitution made land sale or exchange impossible. The Rural Land Administration Proclamation No. 89/1997 vested regional governments with the power of land administration.

 Deininger et al. (2008) provide some evidence of the impact on absentee landlords.  For more information on the negative aspects of imperial system, see Nega et al. (2002). 10  This is a council of 120 military elected officials running the affairs of the country. 8 9

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Land registration and certification reforms implemented in Ethiopia since 1998 are one of the largest, fastest, and least expensive in Africa. Between 1998 and 2007, more than 90 percent of affected people received certificates—a phenomenon that deepened security of tenure. By 2008, certificates had been issued for 20 million plots for 5.5 million households11—a phenomenon that allows land to be used as collateral. Participatory and transparent approaches, limited cost of registration, and meeting the needs of local people made such registration novel. Evidence from revealed land registrations show positive effects in terms of increased investment, land productivity, land rental market activities, and sustainable land use practices.12 Unlike many developing countries, landlessness is not high in Ethiopia, but land fragmentation and smallholding is predominant with an average of 1.05 hectares handholding—against the world average of 5.5 hectares.13 Although land reform is a contested issue in Ethiopia, this fragmentation deserves further consideration to achieve all-embracing agricultural transformation. Several factors still affect investment in land: first, the expectation by most farmers that land would be redistributed in the near future; second, although land transfer through rental is only recently officially allowed, award and continued enjoyment of land use rights is still contingent on physical residence in the village; third, limiting the amount of land that could be rented to 50 percent of holding size and setting a maximum duration for rental contracts for three years; finally, mortgaging and sale of land are prohibited everywhere. Land registration is a major milestone in the land reform process, yet it does not address the lack of investment in land. In this regard, efforts to address these issues leading to land fragmentation and impinging on agricultural land investment deserves urgent consideration. 8.1.2.2 Trailblazing Agricultural Extension Services Ethiopia has one of the most dynamically evolved and expansive agricultural extension services (AES) globally, with a focus on adopting improved seeds with fertilizers, improved management practices, and soil moisture

11  Formal certificates were issued in the names of the head and spouse(s), excepting in Tigray region. See (Deininger et al. 2008) for more information. 12  The various impact could be found in Deininger et al. (2008) and Mengesha et al. (2019). 13  The regional average ranges from 0.54 ha in Tigray to 3.51 ha in Somali (Nega et al. 2002), while the figure for the world is from FAO (2010).

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conservation practices. Since the 1950s, when the Imperial Ethiopian College of Agriculture and Mechanical Arts was established, the government has adopted agriculture as a strategy for national development, including the Agriculture Development-Led Industrialization (ADLI) Programme. Continuous investment in- and prioritization of- agricultural extension services (AES) between 1953 and 2017 has translated to (i) growth of farmer training centres from 77 to over 15,000 accompanied by 7000 subject matter specialists and 4000 supervisors; (ii) increase in AES agents from 132 to 72,402; and (iii) the increase in beneficiaries from 1600 in 1993 to 16.7 million in 2017 (See Box 8.1). In terms of its extension agent-to-farmer ratio, in 2010, Ethiopia’s AES–farmer ratio stood at 1:476 compared to ranging from 2500 to 5000 farmers to one AES in India, Nigeria, and Tanzania (Fig. 8.2). This has further improved to about 1:230 in 2017—thanks to ATA and the introduction of the hotline initiative. In July 2014, for instance, an automated agricultural 8028 hotline (an Interactive Voice Response and a Short Message System) was launched to complement AES agents, focusing on land preparation, crop planting, and application of fertilizers. In the first year, 7.3 million callers were registered. This innovation is one of the game changers in Ethiopian agricultural transformation, helping to set the pace for the future of agriculture in Africa. The government’s consistent commitment and massive public support of the AES system have increased adoption of modern inputs such as chemical fertilizers, improved seeds, herbicides, irrigation, and planting 5000 5000 4000 3000 2000 1000

3333 2500 1667 625

476

0

Fig. 8.2  Agricultural extension service worker-farmers ratio in selected countries, 2010. (Source: Author’s computation from IFPRI 2018)

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practices. Adopting these technologies and approaches has substantially increased agricultural productivity. For instance, between 2008 and 2017, total crop production has increased by 79 percent, with increases in each crop standing at 85 percent (cereals), 52 percent (pulses), and 30 percent (oil seeds). Overall productivity also rose: between 2007 and 2017, for instance, the average yield of 46 commodities rose by 31 percent.14

Box 8.1: Ethiopia Agricultural Extension Services Remain a Global Trailblazer

Ethiopia is known for its consistency in agricultural extension services even during the period of dictatorial regimes before the 1990s. Through its investments in the establishment of the Imperial Ethiopian College of Agriculture and Mechanical Arts in the 1950s, the Agriculture Development-Led Industrialization (ADLI) in the 1990s, the implementation of the 10 percent target of annual government expenditures earmarked for agriculture under the Comprehensive Africa Agriculture Development Programme (CAADP) between 2003–2013 and the implementation of the Growth Transformation Plans (GTP) I and II (2010–2020), the government prioritized expansion of agricultural extension services (AES) agents. This translated to the growth of farmer training centres from 77  in 1953 to over 15,000  in 2017 (though at varying degree of functionality), accompanied by 7000 subject matter specialists and 4000 supervisors. This is in addition to the formation of farmers development groups, each comprising 20–30 farmers. Consequently, the number of AES agents rose from 132 to 72,402 during the same period. The corresponding beneficiaries also rose from 1600 in 1993 to 16.7 million in 2017—91.6 percent of the GTP II target for 2020. With this achievement, Ethiopia is trailblazing on investments and achievement in agricultural extension services globally, particularly extension agent-farmers ratio (1: 476)—far ahead of countries like China (625), Indonesia (1667), and India (5000). (continued)

14  Additional information about the overall productivity associated with each crop can be found in EATA (2019).

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Box 8.1  (continued)

The massive public support of the AES system has increased adoption of modern inputs such as chemical fertilizers, improved seeds, herbicides, irrigation, and planting practices. Adopting these technologies and approaches has substantially increased agricultural productivity. While the state of Ethiopia’s agricultural extension system is commendable in terms of its reach and intensity—and a good model for Africa—it faces challenges including an inflexible delivery system, overburdened extension agents, under-resourced farmer training centres, and poor research-extension linkages. Expertise of these AES agents is on crop production; with very few skilled in water and soil conservation or animal production. The need to be exposed to more farm demonstrations, access to smartphones, and being computer-­literate remain critical to accelerate progress. Building on these successes includes making AES more research-based, knowledge-­ driven, and problem-solving to fully achieve an agriculture-for-­national development agenda. Sources: Davis et  al. (2010), IFPRI (2018); and Ethiopia ATA (Accessed 2019).

8.1.2.3 M  aking Farming More Market-Oriented through a Commodity Exchange The Ethiopian Commodity Exchange, established in 2008 as a public-­ private partnership platform, is changing the country’s agricultural landscape. After its tenth year anniversary, the Exchange has recorded remarkable progress. Apart from connecting buyers and sellers in a more transparent manner, it introduced an electronic trading system in 2015. Moreover, it has achieved traceability of coffee at the national and international markets. The journey to coffee traceability started in 2010 with the introduction of the Direct Specialty Trade (DST), which was complemented in 2013 by a partnership with IBM that led to a cloud-­based geotagging programme, starting with 250 washing and milling stations in the country.15 This process was completed in 2017 with the establishment of  For the chronological trend of traceability process, see Kornman (2019).

15

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the Preserved Coffee Trading System. This constituted a major accomplishment to meet international standards of global quality, health, and safety standards. The exchange also succeeded in eliminating middlemen and middle women who had previously denied smallholder farmers full proceeds from their hard-earned labour. Box 8.2 provides more information on how this initiative is connecting millions of Ethiopian farmers and reducing regional price dispersion, among other results. Other accomplishments of the exchange include unbundling of the exchange for operational efficiency, pioneering the establishment of the Rwandan East African Exchange, and serving as a capacity-development exchange to other countries including Ghana and Nigeria. Box 8.2: The Ethiopia Commodity Exchange Is Changing Agricultural Landscape

The Ethiopian Commodity Exchange, established in 2008 as a public-­ private partnership, is the only functioning commodity exchange in Least Developed Countries (LDCs). Its achievement is legendary. The Exchange implemented an electronic trading system and established a traceability mechanism within ten years of its existence. It also connected 3.5 million small farm holders through its 200 information centres, as of 2017. The volume of trading for coffee and sesame rose from 138,000  metric tonnes in 2008 to 715,000 metric tonnes in 2016 with transaction values rising from $295 million to $1.371 billion in 2014—but fell to $1.073 billion in 2016 due to a primary commodity price bust. The exchange enhanced operational efficiency of output markets for smallholder farmers by reducing the spread of coffee prices between regional markets. Between 2007 and 2012, it reduced average price dispersion between market pairs by 25.8 to 53.3 percent. In 2011, it won the Africa Investors Award. To achieve operational efficiency and avoid conflict of interests, the warehousing and regulatory activities of the exchange were reassigned to The Ethiopian Agricultural Commodity Warehousing and the Ethiopian Exchange Authority respectively. Apart from pioneering the establishment of the Rwandan East African Exchange, it has also trained several countries, including Ghana and Nigeria. Source: Andersson et al. (2015), IFC (2017).

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8.1.2.4 Establishing Ethiopian Agricultural Transformation Agency Establishing the Agricultural Transformation Agency in 2010,16 building on existing gains over the years, aimed at institutionalizing a system that drives and accelerates agricultural transformation to bring development to the door-steps of over 80 percent of Ethiopia’s population who live on agricultural incomes in rural areas in the country. The Ethiopia ATA17 started with evidence-based studies to fully understand root causes and optimal solutions to problems. As of 2018, a total of 70 analytical studies were conducted focusing on policy and market analyses, organizational effectiveness, programme and project design, planning, and implementation. The studies led to a number of findings including: (i) identifying 54 livestock marketing units, 31 processing units, and an end-to-end value chain map for four livestock commodities at national and regional levels; (ii) developing the Agriculture Investment Prioritization brochure that identified a shortlist of critical investment areas and a six-year investment operational plan; (iii) diagnosing high-level bottlenecks that identified policies, regulations, and incentives to support the development of the food and beverages processing industry; and (iv) evaluating and learning studies that provide opportunities to: (a) document baselines for the Ethiopian Agribusiness Accelerator Platform, the Integrated Apiculture Value Chain Project, the Input Voucher System (IVS) and Cooperative Based Seed Production, (b) monitor targets and deliverables, (c) identify efficiency enhancing approaches, and (d) discover projects ready for scale up and replication.

16  The time-bound organization, which is expected to complete its mandates and lifespan between 25 and 30 years, became operational in 2011. EATA serves as the Secretariat to the Agricultural Transformation Council chaired by the Prime Minister and was legitimized by Regulation No. 198/2003 and Regulation No. 380/2008—both in the Ethiopian calendar year (seven years behind the Anglo-Saxon calendar year). While ATA was owned by the Ministry of Agriculture and its agencies, ACC is owned by regional governments and the regional board on agriculture. 17  Its main mandates are to coordinate strategic actions on the Agricultural Transformation Agenda and the Agricultural Commercialization Cluster (ACC) Programme focusing on small farm holders in partnership with various stakeholders in the agricultural ecosystem. It aims to drive job creation, entrepreneurial development, and reduction in poverty and income inequality, while pushing the frontier of the country’s national development beyond aid (EATA 2019).

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This accomplishment, in just ten years, is unbeatable in Africa. Implementing 14 projects on the production and productivity18 pillar yielded remarkable results with targets for GTP II achieved in business training at the farmers training centres (FTCs), commercial farm services centres, cooperative-based seeds production, teff improvement, and next generation agricultural researchers engaging seasoned scientists. And with few exceptions (agricultural one-stop shops, service centres, and climate smart FTCs), most other areas are also nearing completion. Key results include creating 10,743 direct jobs; supporting 2213 micro, small, and medium enterprises and cooperatives; 6.4 million smallholder farmers accessing improved technologies; and more than 800,000 women-farmers benefiting from production and productivity intervention programmes. Moreover, Climate Smart Agriculture technologies were introduced to 2031 farmers and an additional 103 Development Agents; 146 agricultural experts were hired and 13,000 quintals of improved short-maturing, drought- and pest-resistant pulse seeds were distributed to farmers in 2019 alone. More than 250 seed-producing cooperatives operating at different scales and efficiencies in Ethiopia, which, if effectively standardized, could completely change the trajectory of agricultural productivity. In fact, the introduction teff seedlings in 2011 increased productivity by 21 percent in 2014/15.19 To help pastoral and farming communities respond better to increasing and recurring climatic shocks, 50 automated, solar-­ powered weather stations were also installed. 8.1.2.5 Expanding Agribusiness Ethiopia is one of the very few countries that believes in agriculture as the cornerstone of industrialization. To achieve this objective, several strategies and plans have been launched, including ADLI, the Agro Industrial Master Plan, the Development Master Plan for Priority Crops and Livestock, the Livestock Development Master Plan, and the Economic Growth Corridors.

18  This is out of the 23 projects implemented, of which the balance of 9 projects focused on the agribusiness and markets. 19  For more information on what has been achieved so far, see Tafirenyika (2015) and EATA (2019).

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The development of agribusiness was later integrated into EATA mandates when it was established in 2010. The implementation of the Agribusiness and Markets pillar, focusing on nine interventions (8028 hotlines, agricultural investment mapping, agricultural trade and investment promotion, cooperative storage pilots, Electronic Information and Communication support, Ethiopian Agribusiness Acceleration Platform, Input Voucher System, National Market Information System, and the Rural Saving and Credit Cooperatives (RuSACCO) capacity building), whose completion rates range between 68 and 100 percent, are also changing agriculture from a way of life to an enterprise. Three examples of interventions in 2018 are illuminating. First is the dissemination of price and supply information for wheat, teff, maize, haricot beans, and sesame in local languages across the country via Interactive Voice Response was aimed to link farmers to markets. Second, implementing the Input Voucher System (both electronic and paper-based) provided 5.14 million smallholder farmers with access to 8.62 million quintals of fertilizer, seed, and chemical inputs worth ETB 10.85 billion—promoting a dynamic supply of raw agricultural materials to feed agrobusinesses. And third, promoting entrepreneurship in the beekeeping sub-sector through facilitating access to seed capital, working capital, machinery leasing, and developing input financing schemes benefited 200 beekeepers to procure beekeeping inputs. The Agriculture Commercialization Cluster (ACC), aiming to develop five million emerging farmers within five years and to facilitate access to national and international markets, is another initiative that helps to promote agribusinesses in the country (See Box 8.3). The government’s commitment to plans, strategies, and policies to translate high growth rates into a dynamic agro-processing industry, inputs production, and supply industry is novel—yet there is still room for improvement. First, much effort and actions are required to integrate formal and informal agro-processing. Ethiopia’s informal processing industry is very large: integrating it to the formal sector, as is being done in Kenya’s dairy sector, offers opportunities for technology adoption, productivity enhancement, standardization, and better market-orientation in Ethiopia.20 Second, developing and coordinating the national innovation system for

20  UNIDO (2012) estimated the informal agro-processing to be as large as 98 percent especially in flour milling, local oil extraction, and preparation of spices and snacks. The World Bank (2018) also provides the emerging good practices in Kenya’s dairy sector.

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transforming agribusiness, including integrating agricultural extension services into the national innovation ecosystem, is vital. Strategies to facilitate linkages between enterprises, research, and extension institutions should be encouraged. Third, harmonizing trade and investment agreements to promote competitiveness in agriculture and agribusiness and to ensure locally owned SMEs are not short-changed is urgently needed. Finally, while appreciating that Ethiopia is very good in developing and implementing strategies and plans, such strategies must be anchored on long-term visions. Therefore, long-term visions must guide medium-term plans, strategies, policies, and implementation actions to avoid the vicissitude of regime changes in policy implementation. Box 8.3: Ethiopia Agricultural Transformation Agency is Revolutionizing the Country’s Agriculture

The Ethiopian Agricultural Transformation Agency (EATA), established in 2010 is changing the agricultural landscape in Ethiopia and its environs. EATA’s strategic interventions are innovative, evidence-­ based, targeted, collaborative, and impact-driven. Its activities comprise 49 deliverables and 181 sub-deliverables in four strategic areas: Crop and Livestock Production and Productivity; Agribusiness and Markets; Environmental Sustainability and Inclusive Growth; and Enhancing Implementation Capacity. Its solution-oriented interventions, in less than ten years, are helping to address bottlenecks; modernize traditional processes, practices, and systems; and commercialize structurally ingrained subsistence farming. Innovative examples abound. First, establishing the Ethiopian Soil Information System (EthioSIS) in 2012 led to digital soil mapping of all regions of the country. In 2018, 80,000 soil samples from 874 woredas were collected and tested with efforts to establish a National Soil Information System underway. This pioneering work led to at least 12 types of fertilizers contextualized to the country’s diverse soil—as compared to the erstwhile two types of fertilizers that were never customised to the diverse local soil context. The formation of five farmers’ cooperative unions to customize blended fertilizers for different soil textures—each with an annual capacity of 50,000 tonnes—is novel and revolutionary. These kinds of innovations drive productivity enhancement and income generation for farmers. (continued)

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Box 8.3  (continued)

Second, the Integrated Shallow Ground Water Irrigation Development was introduced to address the problem of erratic rainfall patterns and to allow farmers to produce multiple times annually. By 2018, a mapping of water resources, covering 168,000  square kilometres across Ethiopia’s regions was completed, benefitting 34,100 farmers and creating 363 jobs. It plans to introduce energy-­ efficient and water-saving technologies by 2020. Third, to accelerate access to quality inputs, the agricultural One Stop Shops and Service Centres (OSSSCs) were established. To achieve the target of creating 200 one-stop input shops and centres, 53 entrepreneurs were trained, and memorandums of understanding signed on OSSSC construction and management. The project, if completed, will deliver high-quality agricultural inputs and advisory services to over 300,000 smallholder farmers, train over 100,000 on improved agricultural technologies, and create nearly 500 new jobs Fourth, the Agriculture Commercialization Cluster (ACC) is integrating systemic solutions with the business processes of farmers producing ten strategic commodities across 300 woredas (or districts) to develop five million emerging farmers within five years and to facilitate access to national and international markets. The initiative is being implemented in four regions—Amhara, Oromia, Southern Nations, Nationalities, and Peoples’ Region (SNNP) and Tigray. To implement this programme, the Agricultural Full Package Scale-up (AFPS) was introduced in 2017, renamed “Farmer Production Clusters” (FPC) in 2018, to promote agricultural enterprise by clustering farmers together for faster diffusion of technology and improved farming practices, for better access to input and finance, for enhanced bargaining power, and better market access. In 2018, the five-year plan for each region was completed; for the 2018 planting season alone, 19,589 farmers’ clusters, benefiting 837,878 farmers, were registered on this project. Evidence from the 2018–19 EATA Annual Report reveals that 60 interventions across value chains are being implemented, covering 2.7 million planted hect(continued)

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Box 8.3  (continued)

ares, with 544,450 quintals of seeds and 4.7 million quintals of fertilizers distributed and a production target of 90.4 million quintals.21 The inclusiveness and sustainability approaches of the various interventions gradually help to domesticate an agricultural revolution on the continent. They align economic, social, and environmental approaches to bring development opportunities to marginalized farmers and communities, providing jobs and development to youth, women, and smallholder farmers. The closely knit partnership between the public sector, private sector, academia, and development partners contributed immensely to this success. Sources: Tafirenyika (2015), EATA (2019).

Implementing the Agribusiness and Markets pillar (focusing on nine interventions) is changing agriculture from a way of life to an enterprise. Beyond disseminating price and supply information for wheat, teff, maize, haricot beans, and sesame into local languages—and implementing Input Voucher System benefitting 5.14 million smallholder farmers (Box 8.3)— the Ethiopian Agriculture Accelerator Platform (EAAP) distributed seed capital (ETB 5.9 million) to five honey and beeswax MSMEs, secured working capital from commercial banks (ETB 34 million) to two honey and beeswax MSMEs, and secured machinery lease financing (ETB 8.3 million) from the Development Bank of Ethiopia. Additional efforts are already underway to implement contract farming schemes to benefit 6000 beekeepers, support 1800 beekeepers to access credit, improve inputs worth ETB 20 million, and facilitate the export of 200 MT of quality processed honey. 8.1.3  Critical Success Factors and Conclusions Ethiopian agricultural transformation, including the Commodity Exchange and the EATA programmes, is geared towards addressing the root causes of agricultural problems—setting the pace of agricultural transformation in Africa and rekindling the hope that sustainable  One quintal means 100 units of pounds or kilogrammes.

21

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agricultural revolution is possible on the continent. Success factors hinge on partnerships between agricultural ecosystem actors and committed leaders. The first important lesson is the collaboration between the government and development partners. This partnership support focuses on problem-­ solving, knowledge-building, technical and implementation capacity complemented by learning-by-doing and feeding monitoring and evaluation results into programme management cycles. This dynamic takes several forms. For instance, the Government of Ethiopia, in collaboration with international development partners like the FAO, UNDP, and the World Bank on the commodity exchange and with the Bill & Melinda Gates Foundation on EATA play a key role. The second is the partnership between tiers of government (national and regional governments and their bodies), which fosters ownership and accountability between levels of government. The third is the partnership between the public and the private sectors (including businesses and farmers), especially with the Ethiopian Commodity Exchanges, an idea that promotes public-private-­ producer partnerships. Coordination is another determinant of success. While the Ministry of Agriculture coordinates activities across this sector, EATA focuses on creating linkages between stakeholders and coordinating activities among partner institutions working on the EATA and ACC (Box 8.4). The EATA Secretariat’s role in promoting local buy-in and governance fosters ownership. For instance, through a local cluster governance forum on ACC, the Secretariat builds local and public ownership by connecting local implementers, regional governments, the Federal ACC team, and partners via regular stakeholders’ consultation, socialization, and validation forums. This approach provides ownership, effectiveness, and governance structures. Further. this approach allows local value-chain actors (especially the Value Chain Alliances) to take clear ownership and accountability of agreed actions and to monitor progress on agreed deliverables. EATA is playing a significant, multi-dimensional role in serving as systems integrator, building linkages and coordinating ecosystem stakeholders’ efforts. Leadership is another key success factor. First, the government’s uncompromising leadership attitude sets the tone for direction. For

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instance, the technical and managerial leadership of the Ethiopian Commodity Exchange and EATA shows preference to respected technocrats as opposed to political patronage. Second is the high-level political leadership, the Prime Minister as the Chair of the Council, who makes a substantial difference. The forward-looking approach of EATA is shaping the future of agriculture in Ethiopia. For example, the target for 2019–2020 on ACC is to move from a pilot to full scale-up and operationalization to cover more than 40,000 Farmers Production Clusters including more than one million farmers, commencing the use of drones and satellite technology to model crop yields, capturing imagery for crop marketing, as well as adopting market-oriented, climate smart, and gender-sensitive soil health and fertility extension packages. If this is achieved in the next two years, Ethiopian agriculture will never be the same. Despite remarkable progress, limited competitiveness, an underdeveloped private sector, and political disruptions remain the binding constraints to accelerated progress. If these challenges are effectively addressed in the next five years, accelerated progress will remain boundless by 2030 and Ethiopia will rekindle Africa’s hope to use agriculture to drive economic transformation as has been accomplished in Mauritius. Box 8.4: Ecosystem Coordination and Division of Labour

The EATA ecosystem coordination mechanism, with clear division of labour and separation of powers, is enviable. The Agricultural Transformation Council provides leadership and guidance on the transformation agenda, while Parliament provides guidelines on design and implementation. Public sector agriculture organizations implement deliverables and interventions as non-government organizations, like NGOs and the private sector, provide support to interventions and offer feedback on implementation. Development partners, on the other hand, provide strategic inputs, offer international best practices, and support funding of interventions. The EATA Secretariat coordinates the activities of ecosystem stakeholders through prioritization and planning of deliverables, providing implementation support to stakeholders, and progress on tracking and reporting. Source: EATA (2019).

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8.2   The Case of Ghana 8.2.1  Context Ghana is one of the few countries in the world that recorded economic growth for about three consecutive decades, growing at an annual average of 5.44 percent between 1990 and 2018. The continuous growth in GDP, which accounted for steadily rising per capita incomes at an annual average of 4.96 percent since 1991, helped the country to reach the middle-­ income status and to appreciably reduce poverty. For instance, poverty fell from 49.8 percent in 1991 to 13.3 percent in 2016,22 far beyond the 50 percent target for the MDGs in 2015. This in addition to maintaining peace and social cohesion and promoting multi-party democracy. Globally, Ghana is one of the best performing countries informed by economic, social, and political indicators. Today, despite oil and gas discoveries and the contribution of solid minerals like gold, agriculture plays a dominant and strategic role in Ghana’s economy. Apart from contributing two-third of non-oil manufacturing raw materials, it contributes at least a quarter of foreign exchange earnings and one-fifth of the global cocoa exports. Agriculture and agribusinesses are the main sources of livelihood to most impoverished Ghanaian households. And because of backward and forward integration, agriculture has the largest multiplier effects on employment, with every US$1.0 million outputs generating 750 jobs.23 However, low productivity and limited private sector involvement in agricultural transformation explains why only low productivity labour has succeeded in moving out of agriculture. Although the share of agricultural value added to GDP fell from over 60 percent in 1978 to just about 20 percent in 2017, the country experienced premature structural transformation (Fig. 8.3). The economy de-­ industrialized with manufacturing falling from about 14 percent in 1975 to 4.9 percent between 1981 and 1984, before rising to an annual average of 9.5 percent between 2010 and 2018. The service sector, dominated mostly by the informal sector, did not do well either. Between 1993 and

 The country experienced a setback in poverty reduction in between 2012 and 2016, when poverty rose by 1.3 percentage points. 23  The World Bank (2018) documents the importance of agriculture to the Ghanaian economy. 22

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70 60 50 40 30 20 10 0

1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

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Agriculture, forestry, and fishing, value added (% of GDP) Manufacturing, value added (% of GDP) Services, value added (% of GDP)

Fig. 8.3  Ghana’s unchartered structural economic transformation. (Source: Author’s computation from WDI database)

2005, the service sector took the lead in driving growth, especially after the GDP was rebased, which was as high as 47.1 percent during 2007 and 2012, but declined to an annual average of 42.7 percent during 2013–2018 due to a boost in manufacturing over the previous decade. The rapid growth of urbanization in Ghana over the past decade, which rose from 48.7 percent in 2007 and 55.4 percent in 2017,24 with heavy economic reliance on services—particularly consumption—provide a vivid explanation for the dominance of the services sector. 8.2.2  Why is Ghana’s Agriculture not Leading the Structural Economic Transformation Process? Modernized and transformed Ghanaian agriculture holds the key to promoting a resilient economy, producing a next generation of high-income elastic foods, especially high-quality and safe food for both local and foreign economies. 24  For the dynamic trend of urbanization in Ghana, see https://www.statista.com/statistics/455827/urbanization-in-ghana/

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However, the unchartered transformation experienced in Ghana failed to generate adequate, decent jobs for its youthful population, where people below the age of 30 constitute 66.7 percent of Ghana’s 27 million people.25 This has been linked to within-sector labour productivity growth, which accounted for about 75 percent of Ghana’s total growth in labour productivity between 1984 and 2011, slowing down movement from low productivity agriculture to modern agriculture and non-agricultural sectors. In the case of Ghana, only 25 percent was linked to between-sector productivity, which limited much-awaited structural changes between traditional and modern sectors. In fact, labour moved out of agriculture and manufacturing to another low-productivity, but expanding sector like the services dominated by the informal sector.26 During this period, agriculture largely remains traditional, with limited incentives for youth to join. While strong potential exists to produce for exports and imports substitutes towards creating decent jobs for the 7.7 million Ghanaians within 15–29 years, the country rather focused on minerals and cocoa exports, with limited efforts to modernize agriculture to propel long-awaited, all-­ embracing structural economic transformation. With a total arable land of 4.7 million hectares in 2016—and most of its semi-arid North Savannah Ecological Zone, including Afram Plains (40 percent of the country’s surface areas) untapped—Ghana has no business in relying on imported food. As indicated in Table 2.3 of this book, the country imported an average of $2.27 billion worth of food between 2010 and 2016, representing 42.82 percent of its scarce foreign reserves (excluding gold). This again weakens Ghana’s capacity to develop the agricultural sector to drive structural economic transformation. 8.2.2.1 Some Progress on Agricultural Transformation As mentioned in Chaps. 3 and 4, for the wave of structural economic transformation (SET) to lift all boats of development outcomes, SET must address productivity of both staple and cash crops. In Ghana, the emphasis was far too high on cash crops, especially the cocoa sub-sector, which is the first agricultural exports commodity—an important source of foreign

 This is as of 2015 based on UN Statistical Division projections.   For detailed analysis of within and between-sectors labour movement, see Diao et al. (2019). 25 26

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exchange and a long-term source of tax revenues. The 500,000  tonnes target outlined in the “Cocoa Sector Development Strategy I” has been surpassed: from 594,184 tonnes in 2006 to 874,000 in 2015, with about 1.6  million  hectares dedicated to cocoa production. This is thanks to implementing the National Cocoa Rehabilitation Project, which expanded free distribution of hybrid seedlings to 50 million and 60 million cocoa to farmers in 2015 and 2016, respectively, making Ghana the second largest producer of cocoa beans in the world—after Côte d’Ivoire. This success has emboldened the government to raise current levels of productivity from 500  kilograms per hectare in 2010 to 1000  in 2027, with a production target of 1.1  metric  tonnes in 2022 and 1.5  metric tonnes in 2027.27 Can this be achieved through atomization of landholding? Evidence from Fig. 8.4 reveals the rising trend of atomization of landholding for cocoa, where the proportion of farmers holding more than 2  hectares declined between 2002 and 2013.28 Cocoa farming is quite labour intensive and the rising cost of labour may be responsible for reductions in medium and large landholding.29 Efforts to reverse shrinkage in landholding is vital to meeting the new production targets. Fig. 8.4  Ghana’s cocoa growers by land size. (Source: Author’s computation from Vigneri and Kolavalli 2018)

50 50 40 30 20 10 0

33

44

39 15

Less than 2ha

Between 2-5ha 2002

9

7

2

Between More than 5-10ha 10 ha 2013

 More information about the new cocoa strategy can be found https://www.modernghana.com/news/924339/cocobod-to-finalise-new-cocoa-devt-strategy.html 28  This tends to confirm the findings that between 1960 and 2000s, average farm size decreased in low and middle income countries and increased in high-income countries (Lowder et al. 2016). 29  The higher wage in the non-farm sector, particularly due to urbanization, moves people out of agriculture. The shrinkage in the agricultural farm workers increased the cost of labour and difficulty of finding labour during critical periods like planting and harvesting thereby forcing farmers to adopt more labour saving technologies like herbicides and tractors. 27

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In Ghana, appreciable progress has been accomplished in cocoa processing (Box 8.5). The local beneficiation policy on cocoa is helping Ghana to kick off agro-based industrialization. In 2014, 253 thousand tonnes of cocoa beans, out of the total of 721 thousand tonnes shipped overseas, were processed into semi-finished products by local factories— translating to 35.1 percent.30 The growing domestic market for chocolate and other final products is extending development of domestic value chains for cocoa—and prospects remain bright. However, efforts to deal with the long-term sustainability of cocoa value chains are yet to be addressed. The key drivers of sustainability include responding to market information, aligning trade agreements with industrial policies, as well as promoting strong partnerships with cocoa-­ producing neighbouring countries (e.g. Côte d’Ivoire and Nigeria produced 58.7 percent of the global cocoa in 2016). Moving forward, integrating small-scale cocoa farms into decision making processes, and addressing governance issues surrounding operations of Ghana’s cocoa marketing board (COCOBOD) should be prioritized.31 Through experience as the most favoured crop, cocoa has demonstrated that agriculture can be a source of financing for government projects—not only as a springboard of industrialization and development. Extracting between 30 and 60 percent of cocoa producers’ surplus over the past four decades constitutes a huge expropriation. Until recently, starting with cocoa value chain development, agriculture was never seen as a strategy for socio-economic transformation and development. Learning from the experiences of the Ethiopia Commodity Exchange—eliminating price dispersions, expropriation of farmers, and assuring product quality could be vital to accelerating progress. As such, there were no coherent approaches to using agriculture to drive national development strategies. The lack of harmonized developmental and political agendas on agricultural transformation represents a

30  In addition to local manufacturing of cosmetic face cream and soap from cocoa and shea butter, and some locally owned companies undertaking semi-finished cocoa products, there were 12 foreign-owned grinding companies in the country in 2014. Among companies processing cocoa products are Barry Callebaut, Cocoa Processing Company, Niche Cocoa Industries, Plot Enterprise, Cargill Ghana Limited, OLAM, BD Associates, and Real Products (Asche 2018). 31  Asche (2018) provides illumination on some of the missing links to cocoa value chain development as well as its political economy in Ghana.

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major lacuna. Successive governments and public bureaucrats were overpowered by the influence of cocoa marketers and buyers, limiting the reach of agricultural policies on non-cocoa crops and non-crop commodities. Jobs generated from cocoa-based industrialization are very limited, making significant impacts on labour movements from agriculture to manufacturing. The cumulative institutional neglect and inertia across the large spectrum of the agriculture sector by governments and donors and the inability to consistently partner with the private sector to genuinely transform agriculture along on-farm and off-farm activities, which could unleash development of agro-food system value chains failed to address public and market failures that impede agricultural development. In this regard, coherence and consistency across national, sub-national, and donor policies and programmes are needed to achieve genuine agricultural transformation and bring development to the doorsteps of most Ghanaians. Ghana is an African country making significant changes in seed multiplication: promulgating new seed laws and regulations, appointing a National Seed Council, and promoting a diversified commercial seed sector.32 Continuous expansion and engagement of the private sector in Box 8.5: Cocoa and the Ghanaian Economy: Progress, Challenges, and Prospects

Cocoa employs about 800,000 families with about 4.0 million people depending on cocoa for their livelihood; it contributes about 3.0 percent to GDP and 10 percent to agriculture value added. Ghana’s cocoa is reputed for high-quality beans, enjoying 3–5 percent market premiums. The cocoa sub-sector is most advanced in the agricultural sector in Ghana. Due to heavy investment in and distribution of improved seedlings, fertilizer, and labour productivity, cocoa production rose by 80 percent and annual land productivity rose by an annual average of 5.5 percent between 2001 and 2010. Poverty among cocoa households fell from 60.1 percent in 2002 to 26.9 percent in 2013—representing 55.2 percent compared to 53.2 (continued)

32  The World Bank (2017) provides some detailed illumination on seed multiplications in the country.

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Box 8.5  (continued)

percent for non-cocoa households. Cocoa revenue as a share of total government revenues averaged 30 percent (1955–1975), fell to 25 percent (1985–1987), and accounted for 61 percent of total export earnings in 2011. Cocoa revenue has been used to implement several development programmes, including the import substitution industrialization strategy and many infrastructural projects like roads, rails, and electrification. Thanks to the Cocoa Rehabilitation Project of the 1970s, which popularized improved seedlings and pesticides, the intensification of farming practices through technology and controls on disease and pests (e.g. fertilizer subsidies, seed breeding and hand pollination programme) led to an 80 percent increase in productivity between 2001 and 2010. Cocoa, through local beneficiation, is helping Ghana to kick off industrialization. In the 2013–2014 crop year, 253 thousand tonnes of cocoa beans (out of a total 721 thousand tonnes shipped overseas) were processed into semi-finished products by local factories—35.1 percent. This is in addition to local manufacturing of cosmetic face creams, soaps, and related products from cocoa and shea butter. This value addition is helping to bolster the development of domestic value chains in the country. Honouring top-performing young cocoa farmers and awarding them prizes in order to encourage youth participation in cocoa farming is a novel idea. Providing disease and drought resistant seedlings at free, or subsidized rates, is also contributing to progress. The introduction of mechanized pruners, slashers, and solar pumps for irrigation via cooperatives further contributed to productivity in this sub-sector. Despite this progress made, the sector is still grappling with challenges. First, the inability to address on-farm productivity is a serious challenge: the rising trend of moribund and diseased cocoa trees (about 40 percent of the total) among cocoa farming families is a good example. Second, the entrenched political economy of the sector, where the government is expropriating 30 percent of cocoa prices from farmers living at the margins of the poverty line, while (continued)

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Box 8.5  (continued)

foreign chocolate companies and cocoa buyers and agents are swimming in opulence still remains a puzzle. The farmgate price does not suffice for a living wage to the extent that a smallholder farmer cannot afford to hire labour based on this price. Third, coping strategies for scarce labour (e.g. overuse of agrochemicals, child labour, and deforestation) are taking a toll on the economy, including school attendance and performance rates, loss of biodiversity, and land degradation, to mention a few. The COCOBOD,33 acting as a legal monopsony despite its long-­ standing experience since establishment in 1947 and the only surviving marketing board after SAP, is unable to (i) fight devastating cocoa diseases, (ii) undertake ground-breaking research to address challenges facing the sector, (iii) expand extension services to meet the needs of cocoa farmers, and (iv) plan and coordinate its various activities. This inability to balance commercial and agro-technical services with mechanisms to exert political and economic powers from farmers’ mandates remains an issue for urgent consideration. The differential between farmgate and world prices of cocoa of 30 percent still a serious tax on impoverished cocoa farmers. Deepening prospects for further transformation would require shedding the board from partisan politics, making its operations more transparent and accountable, allowing the private sector to take over most of the board’s technical functions, and making its programme of support to farmers more planned and effectively timed. Addressing these issues are vital to achieving the goal of the government, as articulated in 2017, to expand cocoa production to more than one million metric tonnes per annum within the next four years. Addressing these issues will put Ghana at a vantage position to leverage the potential 25 percent increase in chocolate markets over the next decade as a result of highly populated countries, like China, joining chocolate consuming nations. Sources: Author’s formulation from Asche (2018), Vigneri and Kolavalli (2018), and Löwe (2017).

 Operating through its subsidiaries: the Produce Buying Company, the Quality Control Division, and the Cocoa Marketing Company. 33

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developing the seed value chain, including the production of breeder seed, foundation seed, seed multiplication, and the distribution of certified seed—while eliminating inefficiencies that impede competitiveness of the seed industry—is vital. Involving cooperatives in seed breeding and multiplication in Ethiopia offers an opportunity for learning. Agricultural transformation in Ghana is incomplete without successful, government supply leading approaches, particularly in addressing market and institutional failures (e.g. inputs, technology, and mechanization, including establishing the Agricultural Mechanization Services Centres in 2007). Moreover, better results have been achieved where there are strong public-private sector partnerships, especially in developing cocoa value chains. 8.2.2.2 Challenges Impeding Accelerated Progress First, Ghana is yet to experience technical change-induced agricultural yields, which explains why such yields are still low. Ghana’s cereals yield (1.7  tonnes/ha) lags behind the African average (2.0  tonnes/ha). The results from cocoa, the most favoured, better mastered crop are not significantly better. Cocoa’s average yield of 400–450 kilograms per hectare is among the lowest globally, although yields vary significantly across different farms and producers.34 Accelerated progress in total production, which increased from 400,000 metric tonnes in the period 1999–2000 to 1,000,000  metric  tonnes in 2011–2012, has since been fluctuating between 750,000 and 850,000 metric tonnes per year.35 Aging trees, high rates of pests and diseases (e.g. the cocoa swollen shoot virus disease), poor soil health, soil nutrient depletion, limited adoption of fertilizers, and limited use of productivity enhancing technologies coupled with agronomic, political, economic, and environmental factors limit cocoa productivity and sustainability of production in Ghana. Using

34  For instance, between 50 percent and 65 percent of cocoa farmers produce around 0.4 tonnes per ha, while between 20 percent and 40 percent about 0.65 tonnes per ha. Only a very small proportion use high technology to achieve an average of 1.4  tonnes per ha, according to Kozicka et al. (2018). 35  This has been linked to expansion of cultivable land and crop intensification as well as reduction in fallowing periods rather than resulting from technical change (World Bank 2017). It is one of the factors driving deforestation, loss of biodiversity, and soil degradation in the country, as is the case in most African countries.

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an average of 2–4 hectares for small and medium farm holders in Ghana, the income from cocoa farming is still very low. This is computed at $0.80 (PPP = $1.68) per day per family member, without membership of cooperative societies and $1.26 (PPP = $2.65) for those with membership in cooperative societies. Regarding purchasing power parity (PPP), only those with membership in cooperatives are able to earn revenues above the poverty line.36 Expanding membership of cooperatives across all regions, irrespective of crops, should be encouraged. Addressing the issues of aging farmers and aging cocoa trees through plantation upgrades and attracting a youthful generation of professional farmers are also vital to addressing productivity. Second, Ghana is one of the countries struggling to meet up with the Maputo Commitment to spend 10 percent of its annual budget on agriculture by 2008. Such performance has been dismal over the years, with an annual average of 1.45 percent between 2010 and 2018. In this area, Ghana has been performing below the regional (West Africa) and continental (Africa) averages during the same period (Fig. 8.5). The funding of

14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Ghana

Western Africa

Africa wide

Fig. 8.5  Government agriculture expenditure as a share of total expenditure (%). (Source: Author’s computation from RESAKSS Database http://www. resakss.org/)

36  Author’s computation from Fair Africa. 2019. “How much do cocoa farmers earn in Ghana?” https://fairafric.com/how-much-do-cocoa-farmers-earn-in-ghana using a PPP per 2.1 LCU in 2019.

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the non-cocoa sector and rural infrastructure is even more dire. Due to large vulnerabilities in development financing, agriculture’s financing needs are largely unmet. What started as a short-term issue in 2007 became more intense since 2011, when the sector’s budget fell from GH¢ 576 million to GH¢ 400 million in 2014 (30.6 percent decline), resulting in the sector’s share declining from 4.2 to just 1.2 percent—compared to 10 percent and above in Malawi, Mozambique, Burkina Faso, and Zimbabwe.37 In addition to the very low agricultural orientation index (0.71–0.22) between 2015 and 2018, the share of agricultural credit relative to total credit ranged between 3.64 and 4.08 percent during the period, compared to between 4.35 and 8.02 percent in Ethiopia. Given the rising shortfall in revenues in the context of the fiscal consolidation agenda of the government, halting the declining trend of funding, while improving spending efficiency and targeting high-impact spending are all key. Given the current administration’s objective of growing beyond aid, Ghana should endeavour to reduce over-dependence on development partners, who account for more than 70 percent of investment expenditure. Third, the pricing asymmetry between farmgate and world prices is begging for urgent attention. The current pricing system used by COCOBOD is detrimental to farmers and serves as a disincentive to production. The pricing system allows expropriation of farm surplus (presently 30 percent, down from as high as 50 percent in 1988–1989).38 This expropriation of surplus contributes to low earnings of cocoa producers and the low poverty reduction elasticity of cocoa incomes. Surplus expropriation in the midst of asymmetric power plays between opulent foreign cocoa companies, or influential local cocoa buyers, and impoverished local cocoa farmers—creates farmgate prices that do not suffice for a living wage to the extent smallholder farmers can afford to hire labour based on these prices. It is not therefore surprising that cocoa producers, who do not belong to cooperatives, are earning revenues below the poverty line.

37  The trend analysis of agricultural spending in comparison with regional comparators is contained in World Bank (2018). 38  This is the difference between farmgate and Free on Board (FOB) world prices of cocoa that is extracted by COCOBOD from cocoa producers. Prior to 1988–1989, it was 70 percent of the long run world price, it ranged from 50 to 65 percent of FOB world price during 1989–1999 and became 30 percent since 2004–2005. See Vigneri and Kolavalli (2018) for the dynamics of the expropriation from farmers.

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Expropriating farmers’ surplus (e.g. produces and incomes) through taxes and levies to fund development projects in urban centres explains why Ghana found it very challenging to address income inequality for more than three decades—a reflection of the entrenched political economy of agricultural development in Ghana. The fact that cocoa farmgate prices are estimated at 5–7 percent of Europe’s final consumption price also implies a global power asymmetry in cocoa pricing that tends to widen income inequality between Ghana and cocoa importing countries. When all forms of tax in kind paid by cocoa farmers are accounted for, tax burdens on marginalized farmers become intense, while large companies and rich individuals enjoy tax exemptions—a phenomenon exemplifying a fiscal paradox in Ghana. This notwithstanding, the 30 percent expropriation is still considered better than the pricing system in Côte d’Ivoire. The price dispersion between Ghana and Côte d’Ivoire attracts Ivorian cocoa farmers, which results in cocoa smuggling from Côte d’Ivoire to Ghana.39 The need to address this market distortion underpins recent meetings between the leadership of these two countries. Fourth, Ghana, like most other African countries, suffers from a micro-­ macro labour paradox in the agricultural sector. With a youthful population, where more than 66 percent of the population is below the age of 30, facing labour scarcity in the face of an increasing overall workforce, who are not productively engaged, is abnormal. The non-modernity of the sector and low attractiveness to youth are propelling rural-urban migration and a preference among youth for alternative jobs in rural areas. Part of the coping strategies for scarce agricultural labour is a rising wave of overuse of agrochemicals and child labour. Fifth, sound agricultural practices are difficult to implement for individual, non-organized farmers. Farmers’ organizations, in the form of cooperatives, are vital to institutionalize and spread knowledge, innovation, and technology in agriculture. As articulated above, membership of cooperatives enhances earning the capacity of its members to live above poverty lines. Although this membership is on the rise—about 40 percent among cocoa farmers—it is lower among non-cocoa farmers in Ghana.

39  The dimension and scope of the impact of price dispersion between the two countries is documented in Kozicka et al. (2018).

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Table 8.1  Land tenure system Tenure typology

Rural sector (Sq km) Urban sector (Sq km) Total

State Land Stool/Skin Vested Land Stool/Skin Land Family/Individual Land Communal Land Total

1431 954 95416 13558 5725 117084

6202 954 28625 7633 1908 45322

% share

7633 4.70 1908 1.17 124041 76.38 21191 13.05 7633 4.70 162406 100.00

Source: Author’s computation from Bugri (2013)

This low propensity for self-organization is due mostly to dashed hopes in the past through limited political commitment and the sometimes elusive benefits of cooperatives. The politicization of cooperatives and low levels of social trust are other disincentives for willingness among farmers to be part of cooperatives. Finally, the existing land tenure system is non-congenial to agricultural transformation. Ghana has 23 million hectares (ha) of land areas, of which 57 percent (13.1  million  ha) is cultivable, with varied ecological zones from the humid cocoa growing regions of the southwest to the semi-arid savannah zones of the north.40 Land is the main source of livelihood for the poor, while mining (especially gold, petroleum, and natural gas) and demographic forces, as well as the rising trend of commercial farming, rapid urbanization, and climate change are adding serious pressures to landholding in Ghana. The dominance of communal landholding in Ghana is very unique compared to many other African countries. Table 8.1 presents the typology of land tenure in Ghana. Five general types of land tenure exist in Ghana: allodial title (where traditional title is vested in the community, presided over by a traditional authority, clan or family, and in public land it is vested in the State), customary freehold (granted to sub-groups and individuals by the community in which the allodial interest is vested), common law freehold (an express grant of land rights in accordance with the rules of common law with strict restriction on transfers to foreigners), leasehold (created for specific durations e.g. 99 years), and customary tenancies (sharecropping agreements between freeholders or lessees of farmland and tenant-farmers in exchange for farm produce, money, or shared farming). Today, more

 The regional composition of arable land is contained in Bugri (2013).

40

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than 80 percent of land is customarily owned and the rest held by the state (Bugri 2013). The customary ownership of land was reaffirmed by the 1979 and 1992 Constitutions, as well as documented by the National Land Policy of 1999 and the Lands Commission Act of 2008. Customary tenure systems vary from the traditional skin land in the north, traditional stool land in the centre and south, and family land in the south and east.41 Despite the advantage of low land inequality in Ghana, the land tenure system is challenged by indeterminate boundaries of traditional authorities’ lands, compulsory acquisition of large tracts of land by the government, inadequate tenure security, and a weak land administration system that affects the sustainability of Ghana’s agriculture.42 Agricultural transformation will be impossible without formalizing communities’ and individuals’ land rights while improving governance of land and water resources. 8.2.3  Some Policy Actions for Agricultural Transformation Accelerating productivity growth, both in labour and land, remains critical to position agriculture to lead structural economic transformation. This should be complemented with tackling market and institutional impediments to market-oriented solutions and private sector development. A deliberate attempt to use agriculture to drive industrialization remains critical to this agenda. Using agriculture promises to enhance exports or import substitutes, moving more workers out of agriculture, creating appreciable jobs, expanding national incomes and wealth, and helping to reduce poverty and inequality faster. The One District One Factory Initiative of the present administration could be operationalized through agricultural development-led industrialization. Implementing the beneficiation policy in the cocoa sector, which has led to value chain development increasing exports to over 30 percent of exported cocoa as semi-finished or finished products, should be extended to the entire agriculture sector. However, in line with the main thrust of this book, increasing the semi-finished and finished component of cocoa exports to 60 percent by 2035 is achievable. Identifying priority commodities for developing value chains, especially for non-traditional export and import substitutes, plus meeting domestic needs for high-­income elastic  Both skin and stool are symbols of traditional authority and unity among people.  The limitations associated with land tenure system in Ghana are examined in Bugri (2013) and World Bank (2017). 41 42

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foods like rice, dairy, fruits, vegetables, and livestock (poultry and beef) can meet the rising middle income group demand. This could be used to facilitate Ghana’s effective engagement in ECOWAS’ regional integration and the African Continental Free Trade Area (ACFTA). The existing export processing zones and industrial clusters could be used to promote this effort. Learning from the experiences of the cocoa sub-sector underpins the need to ensure sustainability of raw materials for maximum utilization of installed capacities, which is currently at 60 percent. However, it is important to promote coherence in industrial policies by avoiding overlapping incentives granted under investment agreements (including the standard FDI promotion, export processing zone (EPZ) benefits, and the general promotion of industrial investment) to avoid free-riding activities among companies that could dis-incentivize local companies. It is also vital to note that incentive packages are costly in terms of forgone tax revenues, thereby calling on the need to rationalize all existing tax exemptions to avoid fiscal leakages and fiscal paradoxes. Alternative forms of farm business models must be inclusive and sustainable, contingent upon stable prices, growth of farmers organizations, reliable and win-win value chain development frameworks, and a stable political environment. In this regard, reversing pricing asymmetries in the cocoa market requires urgent action. This reversal could take several forms. First, ending the expropriation of farm surplus and all forms of tax in kind is key to achieving new production and productivity targets. Second, joint pricing systems with neighbouring countries is needed to reduce market distortions and smuggling. The agreement between the Presidents of Ghana and Côte d‘Ivoire to harmonize pricing and selling systems to enhance market powers and reduce distortions should be designed, implemented, and monitored. Shifting the frontier of agricultural transformation in Ghana requires some immediate policy actions. First, promoting effective agricultural diversification beyond cocoa across other cash crops, staple foods, fisheries, and livestock is needed to make impacts more transformative.43 This 43  Recent findings from the World Bank reveals that the semi-arid Northern Savannah Ecological Zone, with about six million hectares of potential arable land, hold the promise to commercial production of cereals, sugarcane, cassava, cotton, cashew, shea, and livestock if fully developed through investment in infrastructure like roads and irrigation, skills development, facilitating access to finance and eliminating the complicated land tenure system (World Bank 2017).

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diversification is necessary to achieve the agricultural modernization initiative, the planting for food and jobs initiative, and for implementing the Medium-Term Agriculture Sector Investment Plan. Second, promoting rural banking or adopting an inclusive financial system that allows smallholder farmers to have access to credit or market-based voucher system requires urgent action. The voucher-based system in Ethiopia and E-wallet system in Nigeria provide opportunities for development exchange, learning, and possible adoption. Third, unlike the situation in most Southern African countries, Ghana is not bedevilled by land inequality; yet, facilitating equitable access to land is key. This includes accelerating land titling and registration; ensuring fair and timely compensation for expropriated lands by governments; curbing speculation, encroachment, and racketeering by mostly absentee landlords; and building institutional capacity for land service delivery and management. Strengthening capacity of the 37 Customary Land Secretariats to deliver on their mandates, replicating piloted demarcations of customary land boundaries, and undertaking comprehensive inventories of state lands are also vital. In addition to the foregoing immediate policy actions, some strategic five-agenda points are proffered: prioritize spending on agriculture, improve quality of public investment, improve agri-business operational environment, use cocoa to leverage agricultural transformation, and enhance the capacity of farmers. The various elements of these strategic agenda are contained in Box 8.6. 8.2.4  Conclusions Reversing premature structural economic transformation in Ghana, which is characterized by de-industrializing urbanization, an inability to diversify agriculture beyond cocoa, limited development of value chains, and inadequate enhancement of sector productivity, is critical to success. Further, a lack of harmonized developmental and political agendas on agricultural transformation; an inability to meet the Maputo Declaration on aggregate funding and prioritizing R&D in agriculture; and a lack of political will to overhaul COCOBOD, among others, are issues impeding agriculture’s potential to serve as the engine of structural economic transformation—bringing development outcomes to the doorsteps of marginalized populations. Ghana could benefit maximally from the African agribusiness potential, projected to rise to $2.9 trillion by 2030 (in 2010 prices) (excluding agriculture value add), if agribusiness is prioritized in Ghana’s national

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transformation and development agendas. Central to achieving this in Ghana is prioritizing productivity enhancement and developing national and regional value chains. Promoting agri-food and agri-business development systems is key to stimulating economic transformation, ushering in much-­needed decent jobs and creating wealth. Achieving this transformation requires a dedicated development of downstream and upstream agribusiness, development of commercial agriculture, and linking smallholder farmers with enterprises involved in developing national and regional agro-value chains. This transformation cannot be achieved without sound policies, complemented with sustained public and private investments, and public-private partnerships characterized by open, accountable, and transparent processes for developing value chains. Specifically, transformative agricultural policy reforms must prioritize securing land tenure systems, developing rural infrastructure, and investing in agricultural research and extension to achieve technological breakthroughs and diffusion of knowledge. Other reforms include creating private sector-driven seed systems, targeting fertilizer access to farmers to enhance productivity, managing soil to contextualize fertilizer to local soil textures, implementing irrigation for all season farming, mechanization to break the jinx of traditional labour-sapping farming, providing inclusive financial services to farmers, and enhancing coordination of agricultural ecosystem activities.

Box 8.6: Some Strategic Policy Actions

Ghana, through the cocoa beneficiation strategy, has demonstrated that agriculture could be used to promote genuine structural economic transformation, generating decent jobs, creating wealth, and reducing poverty and inequality—shaping the country’s development future. Agriculture must be modernized, yet some strategic actions are needed to make this happen. A five-point agenda is suggested to initiate the process. Agenda 1: Prioritize spending on agriculture. While the current shortfall in revenues and government fiscal consolidation efforts may make it difficult to immediately reverse declining spending on agriculture—which fell from 5.2 to 1.3 percent, far below the Maputo Declaration target of 10 percent—developing a strategic plan on how to reverse this trend is key. Spending should also be diversified from cocoa to other strategic areas of agriculture. Further, spending (continued)

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Box 8.6  (continued)

on R&D, targeted at transformative solutions, should move from the current 0.7 percent along the trend of its comparators, like Kenya and South Africa (between 1.4 and 2.0 percent). Allocating more funding to research institutions like the Council of Scientific and Industrial Research (CSIR) for breakthrough researches is essential. Agenda 2: Improve quality of public investment. First, the current situation where two-third of the Ministry of Food and Agriculture’s budget focuses on operations (salary and subsidies) is unsustainable. Rising costs, late delivery, and ineffective targeting mechanisms of the (26 percent) subsidies on agricultural inputs requires an overhaul to ensure sustainability. Second, a substantial proportion of agricultural spending should go to R&D on agricultural infrastructure such as irrigation, water and land management, extension services, and climate- and pest-smart agriculture. Third, priority should be given to agricultural productivity and better targeting of commercialization of small farm holders—promoting entrepreneurial agriculture. Finally, urban-biased development policies should be nuanced. Agriculture cannot truly transform without an adequate focus on rural infrastructure and development. Agenda 3: Improve the agri-business operational environment. Ghana is ranked as 118  in the 2019 Ease of Doing Business Report—a clear indication of an inclement business operating environment. Substantial improvement is needed in all indicators including trading across borders, resolving insolvency, paying taxes, protecting minority interests, starting businesses, obtaining credits, and accessing electricity to make agricultural businesses in Ghana more globally competitive. Improving legal and regulatory frameworks for doing business in agriculture, and improving the quality and efficiency of agricultural services are similarly essential. Further, heavy investment in developing national and regional agricultural value chains is needed to leverage the ACFTA for Ghana. Strengthening private sector involvement in input supplies, including fertilizers, seed breeding and multiplications, and even in extension services is also critical. (continued)

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Box 8.6  (continued)

Agenda 4: Leveraging cocoa for agricultural transformation. Ghana is a pacesetter in using cocoa to unleash economic transformation in West Africa. However, rapid improvement is urgently needed. First, the Cocoa Sector Development Strategy (CSDS) II should be finalized, implemented, and monitored. It should target not only expansion of production and productivity, but raising the value addition to cocoa exports from the current 35 percent to 60 percent by 20 30 is achievable. Second, COCOBOD is due for an overhaul in order to ensure it corrects both market and public failures (e.g. insulation from partisan politics; be more transparent and accountable; unbundling its omnibus mandates by ceding some of it to the private sector for operational efficiency). Recent lessons from unbundling the Ethiopia Commodity Exchange and experience from eliminating price dispersions, exploitation of farmers, and assuring product quality could unleash some vitality into this very promising sector. Strong partnerships with neighbouring countries like Côte d’Ivoire and Nigeria on price, purchase, and production mechanisms are key to addressing market distortions. Finally, improving productive and social infrastructure in cocoa-producing communities are necessary to enhance productivity and incentivize youth. Agenda 5: Enhanced capacity of producers. First, the overall decentralization policy is good. But poor capacity of extension services at the local level is counter-productive and should be expanded in terms of quantity and quality, informed by Ethiopia’s novel experience on extension services. Second, improved targeting input subsidies premised on enhancing productivity and anchoring on better utilization of fertilizers and technology, with expanded involvement of the private sector, is an imperative for success. Third, the power of cooperatives is limitless when empowering marginalized farmers. Building on past experiences in Ghana, strengthening farmers’ cooperatives, which has proved to increase earning capacity of its members, is vital to leveraging economies of scale, ownership, and empowerment. Fourth, statistics is power in agricultural transformation. The absence of a comprehensive agricultural census for more than 30 years reflects weak commitment to developing statistical (continued)

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Box 8.6  (continued)

capacities. Relying on administrative statistics from local extension works is inadequate. Notwithstanding funding constraints, this should be prioritized. Fifth, building capacities of small-scale farmers to mitigate and adapt to climate change is critical. How the Ghanaian government adapts to climate change will shape the future of agriculture in the country. In this regard, agricultural policies and programmes must be climate-proofed and climate-risk informed. Finally, existing coordinating mechanisms require strengthening. The dialogue platform of the Agriculture Sector Working Group led by MoFA should be developed into a coordination mechanism for formulating policies, aligning partners to national priorities, promoting result-oriented M&E, and facilitating public-private partnerships.

8.3   The Case of Mauritius 8.3.1  Context Mauritius, a Small Island Developing State (SIDS), with a population of 1.27 million in 2019, is one country that has successfully transformed its economy from agriculture to manufacturing and services through a more consistently developmental state and policy-driven strategy. About 43 percent of the country’s land area of 186,475 hectares is under cultivation— although this has been declining over time. Mauritius is known for quality sugar, which accounts for about 90 percent of cultivated land, while tea accounts for 1.0 percent and 9.0 percent for other crops.44 Mauritius succeeded in transforming from a mono-product economy (sugar) to a more diversified economy over the past five decades. Unlike most African economies, Mauritius weaned itself from sugar to textiles, gradually moved

44  For more information, see the Ministry of Agro Industry and Food Security’s website http://agriculture.govmu.org/English/AboutUs/Pages/An-overview.aspx. In addition to arable land as its natural resource endowment is a total maritime zone of 2.3 million square kilometres, of which 1.96 million square kilometres is of an Exclusive Economic Zone and 396,000  square kilometres of a continental shelf (co-managed with the Republic of Seychelles) https://www.edbmauritius.org/opportunities/manufacturing-traditionalindustries/agriculture/.

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6 5 4 3 2 1 0

277

5.72

2.26

2.89

3.17

4.01 2.67

Fig. 8.6  Mauritius cereals yields per hectare in multiples of Sub-Saharan African average. (Source: Author’s computation from WDI Database)

into tourism, and now uses finance and technology to drive its economy. The leadership, bureaucrats, and politicians committed to implementing the policies and programmes articulated in their national development plans. Promoting agricultural productivity has been the main propellant of this transformation. Cereals yields grew phenomenally since the 1960s and has grown in multiples beyond Sub-Saharan African averages (see Fig.  8.6). However, this astronomical performance has been declining since the turn of the twenty-first century, falling from the peak of 9454 kilograms per hectare in 2007 to a mere 2696 kilograms per hectare in 2015. Despite this decline, Mauritius is still among the highest performing in terms of agricultural value added per hectare in Africa. Mauritius ranks third (4421  kg/ ha) after Seychelles (22,121  kg) and Egypt (8520 kg). Yet, Mauritius had the highest productivity per worker, averaging $8621 compared to Morocco ($4128) and Ghana ($ 1413) between 2007 and 2015—thanks to a high fertilizer consumption per hectare and a high number of researchers per 100,000 farmers, which were considered the highest on the continent.45 Rising advocacy efforts to discourage chemical fertilizer and promote sustainable agriculture—focusing more on quality and safety—the food production index has been on a declining trend in recent times. Using

45  For instance, its fertilizer consumption of 258.6  kg per ha during 2002–2016 and researchers per 100, 000 farmers of 382 remain the highest in Africa.

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80 60 40

0

1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

20

Agriculture, forestry, and fishing, value added (% of GDP) Manufacturing, value added (% of GDP) Services, value added (% of GDP) Fig. 8.7  Mauritius’ structural economic transformation. (Source: Author’s computation from WDI Database)

2004–2006 as base years, the food production index in Mauritius was only 94 percent of the 2004–2006 average in the 2014–2016 production period, compared to higher than 150 percent in Ghana and Ethiopia. Sequel to the adroit management from a sugar-based into a more diversified economy, agriculture’s contribution consistently fell from about 23 percent in 1976 to less than 3 percent in 2018 (Fig. 8.7). Given the country’s comparative and technical advantages, sugarcane accounts for 53 percent of agriculture in GDP value added, while 17 percent is for food-crops, 12 percent for livestock, and 4 percent for flowers, fruits, and forestry. The ability to move from mono-crop to multi-crops agriculture is commendable and other African countries should emulate this novel and uncommon African achievement. Agriculture was transformed from the mainstay of the Mauritius economy in the 1960s and 1970s to an integral part of the economy in the 1990s and is now a major tool for integrating the country’s economy into today’s global economy, as a major exporter of processed and specialized sugar to the EU (See Box 3.4). Mauritius’ multi-agriproducts comprise sugar products, seafood, spirits and beverages, fresh produce, and processed foods.

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This transformative role of agriculture provided opportunities to keep poverty and income inequality low for a very long period. Poverty was kept as low as 0.4 percent of the population until 2006, before it worsened to 0.5 percent in 2012. Recurring droughts and cyclones and the depletion of marine resources in coastal regions accounted for poverty’s rising trend. During the same period, the Gini Coefficient rose from 0.357 to 0.385. Managing poverty and income inequality at this very low rate is much more challenging than when the rates are high. Despite this, Mauritius is one of very few countries in Africa (e.g. Tunisia, Algeria, and Egypt) with low levels of poverty and inequality.46 Moreover, Mauritius has made appreciable progress on the Human Development Index, which has risen steadily from 0.620 in 1990 to 0.796 in 2018, with an annual average growth of 0.9 percent since 1990.47 8.3.2   What Makes Mauritius’ Structural Economic Transformation Unique? The structural economic transformation that started five decades ago was an unstoppable wave that has lifted all boats of the economy—reallocated jobs from agriculture to manufacturing, tourism, and finance, among others; diversified and transformed the economy; and yielded socio-­economic dividends in terms of low poverty and reducing income inequality. As a result of enhanced agricultural productivity, which was 2.26 and 5.72 times higher than Sub-Saharan African averages during 1961–1969 and 2000–2009 respectively, Mauritius was able to transform its manufacturing and services sectors considerably. For instance, manufacturing grew consistently for 18 years (1983– 2001), while the services sector has been growing since 1986. Through a consistent focus on diversifying away from agro-based businesses in sugar and textiles since 1998, a resounding attention on tourism, finance, and technology has expanded the services sector appreciably (Fig. 8.7).

46  These countries succeeded in keeping poverty as low as 0.3 percent (Tunisia) and 1.3 percent (Egypt), and Gini as low as 0.318 (Egypt, the lowest in Africa) and 0.395 (Morocco). See World Development Indicators https://data.worldbank.org/indicator/SI.POV.GINI (Accessed December 2019). 47  For the dynamic progress in the various components of HDI, see UNDP (2019).

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In Mauritius, commitment to structural economic transformation is not only a driver of rapid economic growth, but also a driver of sustained growth. This transformation kept growth at a high rate of about 6.0 percent during 1981–1989 and sustained long term-growth at an annual average of 5.2 percent for three consecutive decades (1981–2009). Even when the world economy was grappling with post 2008–2009 global economic crisis, Mauritius was able to achieve 3.8 percent growth during 2010–2018 compared to 3.6 percent for Sub-Saharan Africa and 1.8 percent for Latin America and the Caribbean. This rapid and sustained economic growth provided job opportunities and helped alter the country’s economic structure. It succeeded in reducing national unemployment from 9.3 percent during 1991–2000 to 7.2 percent during 2010–2018—a near fully employment level, while unemployment was escalating in most other African countries. And as argued by IFAD, Mauritius was able to alter the occupational structure of the country, where the number of people employed in the agricultural sector was 2.5 times the number in manufacturing in 1972, which fell to 1.2  in 1983.48 Figure 8.8 reveals the employment structure in Mauritius between 1991 and 2019, which has been monotonically declining over the period. Even agriculture’s share in total employment fell from about 15 percent to less than 7 percent. This is possible from the dynamic approach to development frontier, which helped to shift production and exports from agriculture to manufacturing, tourism, finance, and technology supported by the political class, the bureaucracy, and the public. 8.3.3  Key Drivers of Progress This progress in agricultural transformation was not by accident but instead through a consistent commitment to policy-driven interventions with strong support from political and development partners. First, the introduction of free education in 1976 contributed to improvements in quality of education, especially skills that facilitated movement from agriculture to other sectors. For instance, the population that completed at

48  The unemployment rate is based on ILO estimates, while the job structure is from IFAD (1994).

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40 30 20 10 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Share of agric employment in services employment Share of agric employment in industry employment Share of agric employment in total employment employment Fig. 8.8  Mauritius’ share of agricultural employment in industry, services and total employment. (Source: Author’s computation from WDI database)

least primary school education rose from 39.1 percent in 1990 to 66.9 percent in 2011, a phenomenon that aided diffusion of technology in the agricultural sector and supported movement from one sector to another. Second, the country has a comprehensive social security assistance system with wide coverage. The Small Farmers Welfare Fund, dedicated to small farm holders, offered (i) grants of as much as 50 percent of the cost of purchasing rainwater harvesting equipment; sheltered farming; agricultural and processing equipment and machinery; seeds purchase schemes; animal breeding schemes; and 75 percent cash grants on introduction of technological application and diffusion; (ii) subsidies on anti-bird nets for fruit protection, a compost subsidy scheme, a tea sector support scheme and a freight rebate scheme; and (iii) special loans on promoting a biofarming scheme, including the MauBank SME Development Scheme at a below-market lending rate, a tax holiday scheme, and a value-added tax exemption scheme.49 Third, achieving agricultural transformation in Mauritius is an integral part of the country’s rural development policies, starting with the first

49  For more information on the various support to the Small Farmers Welfare Fund, see http://sfwf.govmu.org/English/Pages/Financial-Facilities.aspx

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national development plan (1971–1975).50 Rural development programmes are aimed at improving smallholders’ agricultural productivity, encouraging agricultural diversification, and natural resource conservation with the objective of promoting opportunities for rural employment. Fourth, building on the success of village transformation, the second development plan focused more on the Arsenal Litchis and Riche Terre Cooperative Projects, aimed at increasing incomes of small farm holders through access to credit facilities. The Small Holding Project, which started in 1959—allocating 1–3 acres to individual planters—had distributed 5500  acres to 3100 beneficiaries by 1980. And by 2011, Crown Land accounted for 22 percent of the land, while Metayage (either freehold or sharecropping system) accounted for the balance, including the consolidated seven sugar estates. The policy of allocating State lands in lots to cooperative societies (i.e. Agricultural Marketing Cooperative Credit Societies) for renting to ‘bona fide’ cane growers, vegetable growers, and breeders has also proved successful.51 Similarly, the allocation of plots of land to Farmers Cooperative Groups and Associations under various agricultural production schemes (500 arpents or acres scheme) and the implementation of the ‘Sheltered Farming Scheme,’ that was launched in 2011 to modernize vegetable production, is helping to reverse the declining trend on the food productivity index in Mauritius. One key result is an increase in food crop production by 23.7 percent during 2008–2011.52 Fifth, in 2008, the government adopted a food import-substitution strategy, setting up a Food Security Fund to increase local food production. In addition to the 500 arpents scheme and the Sheltered Farming Scheme, kitchen gardening—eating more locally produced foods and reducing food wastage—are also being promoted by the government. The increased advocacy of demand-oriented markets and the need to produce what customers want—rather than what farmers want to produce—is also shifting the landscape of agriculture. These efforts are also to meet

50  This led to the transformation of 29 villages in terms of roads, electricity, schools, health centres, village councils, and village markets (Truth and Justice Commission 2011). 51  In Mauritius, there is no formal traditional form of land ownership. Land is mainly owned by private, corporate, church, and crown-owned land. Truth and Justice Commission (2011). 52  The performance of the various crops can be found in FAO (2018).

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changing consumption habits regarding the rising demand for convenience food and high-quality foods, like processed vegetables and fruits. Finally, several other policies over the past four decades have contributed to transformations in agriculture and agribusiness in Mauritius. These include the Agriculture Settlement Schemes; the Roadmap for the Sugar Sector for the twenty-first century; the Food Security Fund Strategic Plan; the Strategic Options in Crop Diversification and Livestock Sector; the strategic objectives for the fisheries sector development; the Forestry Resources, Native Terrestrial Biodiversity and Conservation; and the Southern African Development Community (SADC) Regional Agricultural Policy. 8.3.4  Emerging Challenges Requiring Urgent Attention The Mauritian economy suffers from several limitations, such as challenges of a narrow domestic market, land scarcity, and a high cost of production including high inputs and labour costs. Mauritius’ small population size disallows it from benefiting from economies of scale. Mauritius, being a Small Island Developing State, is prone to constraints, such as isolation, that affects transport costs, escalates freight charges; and denies benefits of positive spillovers from continuous neighbours; as well as high vulnerability to natural disasters such as droughts and cyclones. A strong commitment to implementing the National Plan of Action on the National Determined Contribution on climate change adaptation and mitigation remains critical to promoting climate-smart agriculture in Mauritius. However, Mauritius is leveraging existing regional economic platforms by investing in regional development agendas, including the Continental Free Trade Area. The country is already investing in agriculture in the region, including in Mozambique, in the production of rice, maize, pulses, potatoes, and onions. Mauritius also suffers from a dependency on food imports. Despite its numerous achievements in sugar production,53 Mauritius is estimated to experience a 30 percent food self-sufficiency, thereby making the country

 Sugar constitutes 90 percent of its agricultural production and 20 percent of total exports and, in 2012, 98.8 percent of sugar produced was exported, of which 60 percent was to Europe (FAO 2018). Overdependence on the export of processed sugar to Europe could become an impediment and could be a major source of external shock, in case of any policy change in Europe, as was the case in 2010 when the preferential and quotas system was reformed, if not well-managed. 53

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a major net food importer. In 2008, the country’s net food requirement was estimated at 690,000 tonnes annually, of which 75 percent is made up of agricultural and food products imports.54 The country’s annual average share of food in merchandise imports between 2010 and 2016 was 21.6 percent, with the annual average value of food imports during the period at $1.1 billion. The country spends 32.8 percent of its scarce foreign exchange reserves on importing food, annually (Table 2.3). A 36 percent reduction in the price of sugar, following the EU reform of preferential and quota systems in 2010, and a rise in price of inputs (e.g. fertilizers) and transport costs (especially to sugar factories), dried up farmers’ profits, contributing to an abandonment of farming in the country. Improving land information systems remains critical in Mauritius. The Truth and Justice Commission recommended establishing a Land Bank in Mauritius, serving as a one-stop-shop vested with the functions and powers presently bestowed in many Ministries, Departments and Agencies (MDAs) for effective coordination and sustainability of this very scarce resource (land) for the unborn generation. The ability of Mauritius to meet the Maputo Declaration commitment of 10 percent budgetary allocation to funding agriculture is key to addressing the challenges enumerated above. The current budgetary allocation of between 1.87 and 3.68 percent between 2010 and 2018 is one of the lowest on the continent. Meeting the CAADP target is key to ensuring Mauritius regains its trailblazing leadership in transforming agriculture and agribusiness in Africa. 8.3.5  Conclusions The Government of Mauritius used agriculture to integrate its domestic economy into the global economy. Today, it is a major exporter of processed and specialized sugar into the EU. Unlike most countries, which focus on a single cash crop, Mauritius adopted multiple agriproducts, including sugar products, seafood, spirits and beverages, fresh produce, and processed foods. The country’s strategic and long-term approach to

54  The country is only sufficient in poultry, eggs, and fresh vegetables production, 60 percent in potatoes, 50 percent in bananas, pineapples, and mangoes, 33 percent in onions and 5 percent in livestock (excluding poultry) (MoAIF 2008).

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structural economic transformation has become unstoppable—transforming the economy from agrarian to a manufacturing hub (using sugar and textile as inputs), later diversifying further into tourism, finance, and technology. Mauritius’ structural economic transformation was an overwhelming wave that helped reallocate jobs from agriculture to manufacturing, tourism, and finance; diversified the economy; and led to reduced poverty and income inequality. This progress in agricultural transformation was driven by a consistent commitment to complementary policy interventions (including quality education, an effective social security assistance system, an integrated rural development strategy, a strategic focus on agglomeration of small-scale farmers through cooperatives, and a food import substitution strategy) with strong support from political and development partners. Yet, the economy suffers from several challenges including a narrow domestic market, land scarcity, and a high cost of production including high inputs and labour costs.

8.4   The Case of Morocco 8.4.1  Context About 40 percent of the 36.4 million Moroccans earn their livelihoods from crop farming, livestock, and fisheries benefiting from 85,000 square kilometres of arable land. The country’s geographical diversity is an important asset. The temperate Mediterranean climate, rain forest, Atlantic coast, savannah zone, and marine resources hosting the famous Canary current and fishing harbours offer millions of Moroccans opportunities for livelihood in agriculture. This agro-zone diversity provides opportunities to grow a wide range of crops from cereals and vegetables to fruits and nuts—and non-crops from fish to livestock.55 In addition to its well-­ developed wine industry, Morocco is ranked among the best producers of olives, almonds, barley, string beans, and hashish globally.

55  In Morocco, fish accounts for about 55 percent of exports and livestock account for livelihood for about 80 percent of the rural population. The country’s agricultural production capacity is huge if explored—capable of meeting its population consumption needs (100 percent for meats, 78 percent for fruits and vegetables, and 62 percent for cereals) (Faysse 2015; Ennaji 2019).

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60 50 40 30 20 10 0

Agriculture, forestry, and fishing, value added (% of GDP) Manufacturing, value added (% of GDP) Services, value added (% of GDP) Fig. 8.9  Morocco’s share agriculture, manufacturing, and services value added in GDP (%). (Source: Author’s computation from WDI Database)

Several opportunities make Morocco a good candidate for agricultural transformation. These include proximity to the North and West African and the European markets, relatively developed and improved logistical facilities, a dynamic domestic market, a qualified and competitive agricultural workforce, and strong potential for development of agrobusiness.56 The share of agriculture value added in the country’s GDP declined by 11.1 percentage points between 1965 and 2018, while the share of manufacturing has been stable—and that of the services sector blossomed over the years (Fig. 8.9). Agricultural value added in Morocco was lower than the regional average prior to 1991, at par during 1991–2000, but higher post 2000. The non-consistent approach to agricultural development, until the recent launch of the Green Morocco Plan, plays a strong role in explaining this dynamic. Between 1991 and 2018, the agricultural sector was able to shed 9.31 percentage points of its workforce, from 47.17 percent in 1991 to 37.86 percent in 2018. Low productivity in the agricultural sector drags the push of employment to services and manufacturing sectors, which

 For more challenges to agriculture, see MAFRDWF (2014).

56

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50 40 30 20 10 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Agric

Industy

Services

Fig. 8.10  Morocco’s employment in agriculture, manufacturing, and services sectors. (Source: Author’s computation from WDI Database)

were considered to be more productive sectors (Fig.  8.10). The labour exit from agriculture and manufacturing since 2011 was absorbed essentially into the service sector. In contrast to development in most other African countries, the service sector seems to be more productive than the agricultural sector in Morocco, with 40.5 percent of the labour force producing 50 percent of the GDP value added, compared to 37.9 percent of the labour force producing 12.3 percent of the GDP value added in 2019 for the agriculture sector. The main challenge, however, is retooling the labour moving out of agriculture to fit properly and contribute more productively to the services and manufacturing sectors. Growth of agriculture has been highly unstable due to droughts recurring almost every three years. However, it has been less volatile since 2000 and irrigational facilities introduced under the Green Morocco Plan help to ameliorate the intensity and impact of such climatic events. Growth in the annual average agricultural value-added rose from 1.3 percent during 1997–2007 to 6.7 percent during 2008–2018. The food production index (at 100 from 2004–2006) rose from 102 percent in 2008 to 139 percent in 2015, while the cereal import dependency ratio ranks as one of the lowest in North Africa. Increased access to irrigation facilities, including better use of fertilizers, is an achievement higher than the African target of 50 kilograms per hectare, also contributing to success. The national poverty line declined from 16.3 percent in 1998 to 4.8 percent in 2013, while absolute poverty ($1.9/day PPP) declined from 6 percent in 1995 to 1 percent in 2018. However, poverty is more pronounced in rural areas, with 14.4 percent of the rural population living

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below the national poverty line. In fact, three quarters of impoverished people live in agrarian communities. The need to target agricultural transformation is therefore central to addressing poverty in Morocco. The Gini index, on the other hand, fell from 0.407 in 2006 to 0.395 in 2013, compared to 0.334 for North Africa overall. A systematic increase in productivity of small scale and family farmers (labour and land) is key to reducing disproportionate rural poverty, which is three times higher than urban poverty, with high spatial and regional income gaps and rising rural-urban migration. Progress on agricultural transformation is helping to address the twin problems of hunger and malnutrition in Morocco. For instance, undernutrition fell from 6 percent in 2005 to 4 percent in 2016, compared to 4.76 percent in North Africa overall. The reduction on wasting (low weight for height) is even more astronomical, falling from 21 percent in 2005 to 10 percent, compared to 16.31 percent for the region. Morocco was able to reduce the global hunger index by one half, between 1980 and 2018, far better than the North African performance. 8.4.2  What Are the Factors Shaping the Agricultural Landscape and Transformation in Morocco? The Government of Morocco played an active role in developing the agriculture sector between independence in 1956 and the year 1984.57 However, introducing the structural adjustment programme in 1985 created a lull and inertia in investment and development of agriculture until the introduction of the Green Morocco Plan (Plan Maroc Vert, PMV) in 2008. The Green Morocco Plan (GMP), implemented by the Agricultural Development Agency (ADA), aims to promote productivity, enhance competitiveness, and heighten export orientation of agriculture by 2020. The first pillar focuses on developing modern, high-valued, and high productivity agriculture via large projects using public-private partnerships, mostly through foreign direct investment. The second pillar, on the other hand, focuses on small or family farmers through government- financed projects by targeting 950,000 farmers who operate in remote and difficult

57  Some of these include construction of dams since independence, cooperatives development in the 1970s, and erosion control in the 1980s. The Western Rift Mountain Project (1965–80), the Middle Atlas Central Project Area (1982–1987), and the establishment of state-owned farms are among the strategic initiatives undertaken.

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areas. Primarily, Pillar One focuses on economic diversification and export orientation, while Pillar Two focuses on increasing incomes of marginalized and vulnerable farmers to reduce poverty in rural areas. Both pillars aim to create agricultural enterprises in favourable and unfavourable areas, shifting agriculture from traditional cereals to high-value agriculture and value-added processing (Box 8.7).58 The launch of the Programme ushered in a new paradigm in agricultural investment in Morocco. Apart from attracting international investors to Moroccan agriculture, it also led to accelerating increases in allocation of resources to agriculture, with the share of agriculture budget in total budget (which declined from 7.3 percent in 1981 to 2 percent in 2007) rising steadily to 6.5 percent in 2018—more than triple—though still below stipulations in the Maputo Declaration. Allocation to the Agriculture Development Fund also expanded paying out 210 million euros in subsidies to farmers in 2011, alone. Against the targets set for 2020, appreciable improvement had been recorded, including exceeding the one million hectare of planted olive trees by 2016; reaching the cereal and fruits tree production by 2018; exceeding the decade target of 550,000 hectares for localized irrigation in 2019; and improving relationships and partnerships between the state and professionals in livestock, mechanization, and water management (Ennaji 2019). Unlike the previous policies that focused on agricultural specialization, the GMP focuses on developing value chains through contract programmes and aggregator projects 59 that encourage forming leaders to

58  The component of this programme includes the construction of dams, the expansion of irrigation, promotion of climate-resistant crops and encouragement of high-valued crops (vegetables, fruit and olive trees) in areas traditionally used for growing grains. Prioritizing agricultural intensification, heavily dependent on global and market liberalization are among the downsides of the programme’s implementation. https://sustainablefoodtrust.org/articles/moroccan-agriculture-facing-challenges-divided-system/. Also, see Ghanem (2015) for the components of the two pillars. 59  A contract program is a series of actions to improve the organization, production, and productivity of a value chain over a period of seven to ten years with clear definition of roles and responsibilities of each actor in the chain (Olivié and Pérez 2018). An aggregator, on the other hand, is an investor-owned agro-industry, a high-performing actor taking a leadership role in terms of productivity and commercialization by providing technical support to smallscale farmers and linking them to inputs and credits and agrees to process the inputs purchased from farmers. By 2012, there were 111 aggregator projects with Euro 6.7 billion public-private sectors funding (Faysse 2015).

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coordinate and empower small farm holders. As a mentorship network, it offers practical experience to farmers on value chain and entrepreneurship. The enforcement of the performance contracts drawn between the state and professional organizations based on agreed targets and indicators contributes to success. The aggregator projects are very unique in promoting entrepreneurial farming and energizing agro-processing. Morocco’s commitment to expanding irrigation facilities to cover more than 2,500,000  acres (i.e. 10,000  km2) through the Plan National d’Economie d’Eau d’Irrigation (PNEEI), introduced in 2010, deals with the impact of climate change, which is shifting the landscape of agriculture in Morocco. The Plan changes irrigation from sprinkler to a dripped approach—which now covers about 16 percent of cultivated land— improving agricultural water services and increasing productivity and farmers’ incomes, now accounting for 50 percent of agricultural GDP and 75 percent of exports.60 Both labour and land productivity rose during this period. Labour productivity grew by 58 percent, from $3384 in 2008 when the Green Morocco Plan was introduced to $5345 in 2018—though still below the performance of Algeria and Tunisia. Egypt remains the regional leader on land productivity, estimated at $8520  in 2018. Investment in agricultural research (as a share of agriculture GDP), presently estimated to be 0.9 percent, is one of the highest in North Africa. However, when compared with 2.4 percent for OECD, 1.9 percent (Mexico), and 1.4 percent (Brazil), there is room for improvement. Other components of the GMP include adopting compulsory regional cropping patterns, shifting from cereals to high-valued products like fruits and vegetables, and agrarian reform cooperatives aimed at stopping land fragmentation.61 Creating synergies between pillars one and two, as envisaged in GMP, would have yielded substantial results. Evidence from Olivié and Pérez (2018) shows that productivity under pillar one is ten times higher than in pillar two, implying that technical change in the subsistence sector is yet to be maximized. Fragmentation of farms and farmers, as well as limited technical and organizational skills among family farmers has not allowed transfers

60   For more information, see https://www.worldbank.org/en/news/feature/ 2016/02/18/growing-morocco-s-agricultural-potent ial1 61  Under this initiative, land could not be subdivided for inheritance, but one person has to manage on behalf of the family.

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of technology and commercialization of aggregator projects to be fully achieved. In addition to deepening the solidarity agriculture, fiscal incentives given to FDIs under pillar one should be tied to synergistic relationships that foster innovation, technical change, and commercialization of subsistence farmers. Tax exemptions to foreign investors in agriculture, which tend to direct public resources to these firms at the expense of local farmers and agripentures—with limited technology transfers to the traditional farming community—may be counterproductive to the GMP goal. General fiscal incentives should be discouraged while innovation, technology transfer, and commercialization-induced fiscal incentives should be encouraged. Resources generated through cancelling general tax exemptions could fund policies supporting upgrades to subsistent farming technologies. Building partnerships, coalitions, and alliances are another set of drivers of progress for transforming Morocco’s agriculture. This includes partnering with international organizations, local development associations, agricultural water users’ associations, professionals, women’s associations, and microfinance cooperatives to promote efficient and sustainable water use and deepen diffusion of technologies. Further, the private sector plays a key role in forming contractors and aggregators to coordinate development of agricultural value chains. Some past policies also laid the foundation for current progress. For instance, allocating 500,000  hectares of previously owned European settlers’ farmlands to Moroccan farmers in the late 1960s and the 1970s, and investing in the Haouz and Tassaout region irrigation projects that benefitted 200,000 small farmers in the early 1990s, all supported the implementation of on-going programmes.62 Yet, land inequality is pronounced. Small farm holders (those with less than 5 ha) account for about 70 percent of total landholders, controlling only about 24 percent of total land. Medium and large landholders (more than 5 ha), which constitute about 30 percent of landholders, control about 75 percent of total land. This is not unique to Morocco—it is a common reality across the Arab States—excepting Egypt and Lebanon, where the proportion of those holding less than 5 hectares controls more than 60 percent of total land.63 Addressing excessive parcelling of arable land, reviewing the current complex land laws to be in sync 62  https://www.nationsencyclopedia.com/Africa/Morocco-AGRICULTURE. html#ixzz6AJjpEyG5 63  The average for the Arab region, based on data availability, is 25.3 percent, but the lowest is in Qatar (3.4 percent) and Tunisia (10.9 percent). Ghanem (2015).

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with secure land tenure, and undertaking comprehensive agricultural land demarcation and registration all play a strong role in transforming agriculture in Morocco. Graduating subsistent farmers to market-oriented entrepreneurs also requires accelerated access to more and better land. Developing cooperative societies and community-based organizations that support agricultural transformation in Ethiopia and Mauritius has also started to generate positive impacts on small farmers in Morocco. The solidarity agriculture, setting up of cooperatives and farm associations, help to share the costs of market access, machinery, and packaging; further, a cooperative society in a village near Taounate and the Community Supported Association in Sala Almoustaqbal are helping to share sustainable organic farming practices and promote access to markets. The seawater desalination project signed in 2017, which becomes operational in 2021, intends to produce 450,000  m3 per day of desalinated water to benefit 2.3 million people at the end of the first phase. It also plans to provide desalinated water to irrigate 15,000 hectares in the second phase.64 This is a welcome development towards undertaking a comprehensive mapping of water resources (underground and surface water) to develop evidence-based and sustainable irrigation systems. The success of agricultural transformation is measured in its ability to drive growth of other sectors. If agricultural potential is fully explored with full commercialization of small and family farmers, it could power economic transformation, adding $169.65 billion to the economy in 2030 through agriculture and agribusinesses (Fig.  8.11). This is possible in Morocco if farming evolves from a form of livelihood to entrepreneurship; productivity of small-scale farmers is maximized; producers integrate into local and international markets; strong linkages form among small, medium, and large farms; and local content policies are fully implemented. The current situation, where only 33 percent of agribusiness is explored, is less desirable for the country.65 This also requires developing agro-­industrial infrastructure, which still only transforms a third of the production. Developing a local content policy for agribusiness development (processing, producing inputs and supplies, retail, and logistics) remains critical.

64  https://smartwatermagazine.com/news/smart-water-magazine/africas-largestdesalination-plant-be-built-morocco

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169.65

200.00 150.00 100.00 50.00 0.00

64.36

68.08

Seconday

Tertiary

37.20

Agric

Total

Fig. 8.11  Morocco’s projected value of overall agribusiness by 2030 ($’ billion). (Source: Author’s estimation)

Trade, especially between Morocco and the EU, plays a strong role in the agricultural transformation in the country. The EU, as the largest trading partner, accounted for 59.4 percent of Morocco’s trade in 2017—or 1.0 percent of the EU’s total global trade.66 Building on its historical trade relations, establishing the EU-Morocco Association Agreement in 2000 led to creating a Free Trade Area, liberalising two-way trade in goods (including tariff-free agreements on trade in agricultural products, agro-­ food, and fisheries products; capital movements; and intellectual property), boosting implementation of the GMP. This is followed by the 2013 Deep and Comprehensive Free Trade Area (DCFTA) and subsequent rounds of negotiations in 2014—all aimed to create new trade and investment opportunities to further enhance integration of Morocco’s economy into the EU market. This is in addition to Morocco’s membership in the Europe and Mediterranean (Euromed), promoting regional integration between the EU and the Mediterranean region. The US-Morocco Free Trade Agreement (FTA) also entered into force in 2006, eliminating most agricultural tariffs and reaching a mutual commitment not to use agricultural export subsidies in each other’s markets. Morocco also has an FTA with a number of Arab countries—such as Jordan, Egypt, and Lebanon— all of which provide opportunities for FDIs in agriculture and exporting agriculture products and agro-foods to these FTA partners.

65   Olivié and Pérez (2018) provide the detailed challenges confronting Morocco’s agribusiness.

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Box 8.7: Implementation of Green Morocco Plan (GMP)

The GMP, adopted in 2008, aims to achieve modernized and balanced agricultural development through two pillars: (i) promoting private sector-led, market driven high-value and high-productivity agriculture; and (ii) promoting solidarity-driven transformation of small farmers through conversion to commercialized farmers, farm intensification, and product diversification to increase incomes of about three million rural farmers. The GMP was built on seven objectives: (i) agriculture as the engine of growth for the next 15 years; (ii) adopting a new business model through aggregation initiatives targeting 961 aggregation projects and 562,000 farmers in hard to reach communities; (iii) global development of Moroccan agriculture without exclusion; (iv) promoting private investment; (v) adopting a continental approach to accomplish the GMP; (vi) building sustainable agriculture (including converting natural resources, climate smart agriculture, converting one million cereal crops to tree crop plantation, converting semi-arid desert to arable land, increasing irrigation from 154,000 hectares to 692, 000 hectares, and supporting renewable powered agriculture; and (vii) dismantling segmented practices on property (land privatization, registration, and titling), water (adopting modern irrigation technology and managing irrigation by stakeholders), and national markets (e.g. modernizing distribution channels). The GMP has proved that the virtuous circle of dualism and development is possible in Africa. The top-down approach of this strategy, with limited involvement of farmers in its formulation—in contrast with the strategies like the 2020 Rural Development Strategy and the Strategy for Agricultural Development—as well as governance of the value chains process, and monitoring aggregators, are learning points. The limited farm or commodity diversity for value chain disempowered local and case-specific development initiatives targeting small territories and those who did not have up to 100 farmers or producers to organize themselves into cooperatives. Indicators did not reflect key project actions, including changes in farmers’ incomes, improvement in productive capacities, and progress in capacities to better manage agricultural value chains. These biases limit real improvements at farm, value chain, and territorial levels. Fragmentation of land and farmers—and their lack of managerial capacities—also hinder progress on the aggregator initiative. Sources: Oulhaj (2013), MAFRDWF (2014), Olivié and Pérez (2018).

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8.4.3  Key Challenges Impeding Progress Phenomenal progress could have been achieved if key bottlenecks impeding the sector were to be effectively addressed. First, although productivity has started to rise, it is below the regional average in several areas including maize, meat, and milk. Low productivity in cereal is a serious concern. For instance, maize yield of one tonne per hectare is among the lowest in Africa, compared to eight times in Egypt, seven times in Mauritius, and four times in South Africa. This explains why cereals, which account for 75 percent of usable agricultural land, only generate 10 to 15 percent of agricultural revenues and incomes.67 Generally, land productivity, the agricultural value added per worker, is one of the lowest in North Africa. The potential to further increase agricultural productivity (both labour and land) varies across the different groups of producers. The first is the competitive group—mostly medium and large firms operating in niche areas who have access to irrigation and finance—comprising 22 percent of farmers, have appreciably succeeded in improving productivity. The second is the potentially competitive group—mostly small and medium farmers—comprising 37 percent of farmers who still face such challenges as ambiguous land titles and ownership, poor transport, poor communication infrastructure, poor access to credit, and poor extension services and markets. The third group represents structurally non-­ competitive farmers—comprising 41 percent of farmers—who are mostly family farmers in remote and hard to reach communities, facing severe challenges associated with the second group.68 Strategic interventions to make these three groups competitive remain critical to accelerating agricultural productivity. Developing well-targeted interventions for the non-competitive group in hard to reach and remote communities to inform input subsidies and dedicated extension services would play a strong role in accelerating their productivity and linking them to local and international markets. Low utilization of modern inputs across the three groups, especially the non-competitive and the potentially competitive groups, is a major drag in productivity enhancement. For instance, the fertilizer use of 57 kilograms per hectare, although above the

66  In 2017, 64.6 percent of Morocco’s exports went to the EU, and 56.5 percent of Morocco’s imports came from the EU resulting in €37,4 billion total trade in goods between the two parties in the same year. https://ec.europa.eu/trade/policy/countries-andregions/countries/morocco/

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African Union target, is still very low compared to more than ten times in Egypt and about five times in Mauritius.69 Limited interactions between researchers, extension service workers, and farming communities is also taking a toll on productivity. Strengthening a system approach to coordinating agricultural ecosystem stakeholders and their activities, including effective supervision, monitoring, and evaluation, is required. Second, land access to small farm holders is a concern. Reversing the declining trend of farm size holding, which is currently put at 2 hectare, should be a priority. The rising population pressure and cost of hiring labour are contributing to the declining farm size holding. This is also compounded by difficult inheritance laws and an absence of a well-­ functioning land market. Absence of land title registration further limits access to finance, inputs, and technology. Third, agricultural financing is one of the major impediments to the sector’s development. Morocco’s performance on agricultural financing has been U-shaped since 1980, with 2007 as a turning point after which the trajectory has been positive—along the direction of the Maputo Declaration. As evident in Fig.  8.12, Morocco performed below its regional average between 1981 and 2008, but thereafter outperformed

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Fig. 8.12  Share of agriculture budget in total budget. (Source: Author’s computation from ReSAKSS Database) 67  The sectoral dualism attribute of the cereal sub-sector in Morocco in terms of high share of land space relative to low revenue and employment share is in MAFRDWF (2014). 68  Ghanem (2015) provides challenges associated with the three groups.

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both regional and continental averages, yet still below the Maputo target. Meeting the 10 percent continental target is key to fully and sustainably transforming agriculture, using it to promote inclusive growth and to further drive down poverty and inequality in the country. Credit to the agricultural sector ranged between 3.62 and 4.26 percent between 2013 and 2018, with the agricultural orientation index ranging between 0.29 and 0.34 during this period.70 The current situation, where only 18 percent of farmers have access to agricultural loans, is sub-­ optimal.71 However, Morocco is one of the countries leading the North African region in terms of agricultural credits as a proportion of agricultural value added. In the process of promoting agricultural investments, several fiscal incentives, including tax exemptions, were put in place until the 2014 Finance Law that introduced progressive corporate income taxes for agricultural firms. Providing blanket fiscal incentives without a clear social contract, or compact on a quid pro quo basis, is counterproductive and should be avoided in any programme of support. Lack of access to credit for most family farmers and a situation where most available credits go to large farmers should be addressed in order to fully transform agriculture in Morocco. Fourth, the need to diversify Morocco’s exports, which are currently 60 percent concentrated on Europe, is an important challenge in order to avoid vulnerabilities associated with such dependence—a similar situation Mauritius faces on exports of processed sugar to Europe. Morocco’s rising trends on intra-African export trade, which rose from $210 million in 2006 to $564 million 2018, could help diversify trade overall. Moreover, the coming into force of the African Continental Free Trade Area is another opportunity to further diversify trade in order to reduce external shocks to trade. This requires linking together small, medium, and large farmers with inputs and outputs markets, while reducing the role of intermediaries who deprive farmers of hard-earn proceeds—as was done through the Ethiopia Commodity Exchange.

69  Although this would have contributed to lower yields, however, this could be a strength in terms of limited damage to the environment and healthier food. 70  The Agriculture Orientation Index is defined as the agriculture share of government expenditures, divided by the agriculture share of GDP. http://www.fao.org/sustainabledevelopment-goals/indicators/2a1/en/

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Managing the pressure to liberalize trade, including agricultural trade, requires strategic actions that do not undermine local productivity and competitiveness of local producers. Avoiding dumping, unnecessary fiscal incentives based on race-to-the-bottom games, and exposing local farmers to heavily subsidized, imported agricultural products is sine qua non to progress. Fifth, the climatic fluctuations manifesting in declining precipitation, recurring droughts, rising soil degradation, and desertification—as pressure from a rising population adds to loss of forests and vegetation due to deforestation as a function of expanding cultivable lands—are all major impediments to agricultural productivity in Morocco. Addressing recurring droughts (almost every three years) through climate smart agriculture, underpinned by adaptive research and extension services, is vital. Sixth, the duality of Moroccan agriculture—a dichotomy between small (subsistent and mostly family owned) and big (modern) farmers—is a dire challenge. Small farmers (about 70 percent of total farmers) who produce mainly for local markets, account for 25 percent of cultivated land, while big farmers produce for exports and account for about three-quarters of cultivated land.72 The latter is more productive and profitable than the former. Large farms dominate the fertile and irrigable areas—with secured tenure, access to infrastructure, and credit as well as technical and market support—making their productivity more than nine times higher than that of small farmers. This power imbalance makes small farmers more vulnerable when climatic and market shocks occur (particularly due to pressures on trade liberalization), forcing small farmers to live on the margins of poverty lines. Many small farms face problems that make it difficult to increase their earnings, including ambiguous land ownership, a lack of infrastructure, access to credit, and poor technical and marketing support. Seventh, Morocco must produce what it consumes. Like many African countries, Morocco is cutting its nose to spite its face. A zeal to modernize agriculture is making Morocco produce for foreign markets instead of meeting domestic demands. The primary focus on cash- and mono-crop production at the expense of traditional mixed-cropping and farm intensification is making Morocco’s agriculture produce what Moroccans do not eat. This dynamic could weaken aggregate demand in the long run. Very rich traditional crops and foods (e.g. ‘beldi’ foods) are going into 71   The various impediments to agriculture including finance is the focus of MAFRDWF (2014).

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extinction along with associated local knowledge and practices. The cash cropping model, apart from making farmers more vulnerable to shocks, is also making the country become heavily dependent on imports. As indicated in Table 2.3, the average annual share of food in total imports, between 2010 and 2016, was 11.8 percent, leading Morocco to spend 35 percent of its foreign reserves on food imports alone. And as mentioned in other parts of this book, the country’s cereal dependency ratio of 54 percent, three times higher than the world average of 16 percent, will continue to pose serious threats to accumulating foreign reserves and promoting macroeconomic stability—including diminutive impacts on balance of trade and payments, as well as fiscal sustainability and imported inflations in periods of food price hikes. Finally, abandoning the palm grove farming system in Morocco and the associated extinction of local knowledge and practice systems, are detrimental to home-grown agricultural transformation and environmental sustainability. The agricultural oasis system—a traditional approach that promotes agro-ecology through collective management of plants, soil, and water—is a potential strategy for achieving sustainable agriculture and development in Morocco. This farming system allows a three-layer structure of date palms, fruit trees (e.g. almond and olives), and arable crops (sorghum and vegetables) to co-exist with different harvesting periods. If well-managed, through integration of sustainable local knowledge and practices with light mechanization and effectively organized into cooperatives, this system can help to reduce exposure to economic and climatic shocks, increase profits, and attract youth to this sector. However, over the years, this system is being inadvertently allowed to go extinct. Launching the Programme Oasis Sud and the Plan Maroc Vert to restore a sustainable oasis ecosystem through producing dates—a traditional crop that contributes about 40 percent of agricultural income to over two million Moroccans—is leveraging the country’s competitive advantage while promoting environment sustainability.73

 Small farmers are those cultivating fewer than five hectares.  The date sub-sector covers 48,000 ha of date palm plantations involving over 200,000 small-holder farmers, could become more competitive, profitable, and attractive if the right interventions are adopted (Pegna et al. 2017). 72 73

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8.4.4  Conclusions Introducing the 1985 Structural Adjustment Programme created a lull in agricultural investment and development until the launch of the Green Morocco Plan in 2008, which addresses the perennial agricultural challenges of duality, low investment capacity of small-scale farms, complex land status, and farm fragmentation. Current efforts to address challenges associated with post-harvesting operations, marketing capability of producers and cooperatives, should be strengthened and sustained. Lessons from its implementation should be fed into the next phase of implementation to foster learning-by-doing. Using agriculture to promote inclusive development and food security calls for strategies to increase productivity of small and family farmers, enhance their voices in inputs and output markets, and accelerate their strengthened integration into the market economy. Accelerating farmers productivity to serve local and foreign markets should be prioritized. Critical to achieving this objective includes increasing access to land to help address land inequality, expand title registration, and protect the land rights of small-scale farmers. Promoting climate-smart agriculture and practices, adapting research and extension services to local ecologies—as well as social and economic realities—while addressing the declining quality of extension services through adopting public-private-CSOs partnerships with producers’ associations or cooperatives towards scaling up extension services are additional policy priorities. Investing in agricultural research and innovation ecosystems is also vital. A critical component of this agricultural innovation ecosystem is developing agricultural parks, in the form of integrated one-stop-shop agricultural centres that support transfers of technology, offer training and advice, connect inputs and markets, and facilitate agro-­ processing and logistics to farmers. A non-traditional approach to financing family and medium-scale farmers, including use of credit guarantee schemes, community or microfinance banks, and other schemes that adapt finance and investment services with various categories of farmers—family farmers, medium-scale, and large farmers—is urgently needed. Transformation of Morocco’s agriculture sector remains incomplete without special attention to youth and women. Specific programmes that accelerate their access to land, extension services, inputs, technology (including climate smart agriculture), and markets should be created. The foregoing cannot be achieved without scaling-up financing for agriculture to reach the Maputo Declaration target of 10 percent of the total budget.

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Resuscitating the traditional palm grove farming system, through light mechanization and organizing producers into cooperatives, could rekindle sustainability, competitiveness, and profitability to attract youth into the agriculture sector.

References Andersson, Camilla, Mintewab Bezabih, and Andrea Mannberg. “The Ethiopian Commodity Exchange and Spatial Price Dispersion.” Grantham Research Institute on Climate Change and the Environment Working Paper 204 (September 2015): 1–11. https://doi.org/10.1016/j.foodpol.2016.11.003. Asche, Helmut. “Whose Cocoa?.” Exposure- und Dialogprogramme Occasional paper, 2018. www.edpev.de/en Bugri, John Tiah. “Issues and Options for Improved Land Sector Governance in Ghana—Application of the Land Governance Assessment Framework.” Synthesis Report, The World Bank, 2013. https://doi.org/10.1596/28528. Davis, K, B Swanson, D Amudavi, A Mekonnen, A Flohrs, J Riese, C Lamb, and E Zerfu. “In-Depth Assessment of the Public Agricultural Extension System of Ethiopia and Recommendations for Improvement.” International Food Policy Research Institute (IFPRI) Discussion Paper 1041 (2010). Deininger, Klaus, Daniel Ayalew Ali, Stein Holden, and Jaap Zevenbergen. “Rural Land Certification in Ethiopia: Process, Initial Impact, and Implications for Other African Countries.” World Development 36, no. 10 (2008): 1786–1812. https://doi.org/10.1016/j.worlddev.2007.09.012. Diao, Xinshen, P. B. R. Hazell, Shashi Kolavalli, and Danielle Resnick. Ghana’s Economic and Agricultural Transformation: Past Performance and Future Prospects. Oxford: Oxford University Press, 2019. Ethiopia Agricultural Transformation Agency (EATA). Annual Report 2018–19. EATA, 2019. http://www.ata.gov.et/ Ennaji, Kawtar. “The ‘Green Morocco’ Plan Strengthens Localized Irrigation.” Morocco World News, August 21, 2019. https://www.moroccoworldnews. com/2019/08/280816/green-­morocco-­plan-­localized-­irrigation/. Faysse, Nicolas. “The Rationale of the Green Morocco Plan: Missing Links between Goals and Implementation.” The Journal of North African Studies 20, no. 4 (2015): 622–34. https://doi.org/10.1080/13629387.2015.1053112. FAO.  A System of integrated agricultural census and surveys: Volume 1: World Programme for the Census of Agriculture (WCA) 2010, FAO Statistical Development Series 11. FAO. Country Programming Framework for Mauritius 2014–201. Food and Agriculture Organization of the United Nations (FAO), 2018.

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Ghanem, Hafez. “Agriculture and Rural Development for Inclusive Growth and Food Security in Morocco.” Brookings Global Economy and Development Working Paper 82 (February 2015). IFAD. Mauritius: Small-Scale Agricultural Development Project. IFAD, 1994. IFC. “Creating Agricultural Markets: How the Ethiopian Commodity Exchange Connects Farmers and Buyers through Partnership and Technology.” EMCompass 37 (April 2017). International Food Policy Research Institute (Ifpri). “The State of Agricultural Extension Services in Ethiopia and Their Contribution to Agricultural Productivity.” Ethiopia Strategy Support Programme Working Paper, 2018. https://doi.org/10.2499/1037800843. https://www.ifpri.org/publicat i o n / s t a t e -­a g r i c u l t u r a l -­e x t e n s i o n -­s e r v i c e s -­e t h i o p i a -­a n d -­t h e i r-­ contribution-­agricultural Kornman, Chris. “Exchange as the Constant: The Solution of the Ethiopia’s Commodity Marketplace.” Royal Magazine, February 2019. http://royalcoffee.com Kozicka, M., F.  Tacconi, D.  Horna, and E.  Gotor. Forecasting Cocoa Yields for 2050. Rome: Bioversity International, 2018. ISBN: 978-92-9255-114-8 Lowder, Sarah K., Jakob Skoet, and Terri Raney. “The Number, Size, and Distribution of Farms, Smallholder Farms, and Family Farms Worldwide.” World Development 87 (2016): 16–29. https://doi.org/10.1016/j. worlddev.2015.10.041. Löwe, Alexandra. “Creating Opportunities for Young People in Ghana’s Cocoa Sector.” Overseas Development Institute (ODI) Working Paper 511 (2017). MAFRDWF. Green Morocco. Ministry of Agriculture, Fisheries, Rural Development, Water and Forest (MAFRDWF), 2014. Mengesha, Ayelech Kidie, Reinfried Mansberger, Doris Damyanovic, and Gernot Stoeglehner. “Impact of Land Certification on Sustainable Land Use Practices: Case of Gozamin District, Ethiopia.” Sustainability 11, no. 20 (2019): 5551. https://doi.org/10.3390/su11205551. MoAIF. Blueprint for a Sustainable Diversified Agri Food Strategy for Mauritius 2008–2015. Ministry of Agro Industry and Fisheries, 2008. Nega, B., B.  Adenew, and S.  Gebre Sellasie. “Current Land Policy Issues in Ethiopia.” land reform—land settlement and cooperatives—Special Edition, 2002. http://www.fao.org/3/y5026e/y5026e08.htm. Olivié, Iliana, and Aitor Pérez. “The Difficult Escape From Dualism: The Green Morocco Plan At A Crossroads.” New Medit XVII, no. 3 (2018): 37–50. https://doi.org/10.30682/nm1803d. Oulhaj, Lahcen. “Evaluation of the Agricultural Strategy of Morocco (Green Morocco Plan) with a Dynamic General Equilibrium Model.” Femis Research

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Programme FEM35-20 (2013). http://www.femise.org/en/studies-­and-­ research/evaluation-­o f-­t he-­a gricultural-­s trategy-­o f-­m orocco-­g reen-­ morocco-­plan-­with-­a-­dynamic-­general-­equilibrium-­model/ Pegna, F.G., P.  Bartolini, L.  El Rhaffari, S.  Fahim, E.  Bonaiuti, Q.  B. Le, and C.  Zucca. 2017. “Sustaining Moroccan Oasis Agricultural System through Small Mechanization Inputs”, CUCS Conference Milano 2017: V Congress of the Italian University Network for Development Cooperation 14–15th of September 2017 Tafirenyika, Masimba. “Ethiopia: Fixing Agriculture—A No-Nonsense Agency Works to Remove Bottlenecks.” Africa Renewal 29, no. 3 (2015): 14–15. https://doi.org/10.18356/c28fe1fa-­en. Truth and Justice Commission. Land Reform: Legal and Administrative Aspects. Truth and Justice Commission, 2011. http://pmo.govmu.org/English/ Documents/TJC_Vol2Final.pdf UNDP. Human Development Report 2019: beyond Income, beyond Averages, beyond Today: Inequalities in Human Development in the 21st Century. New York, NY: United Nations Development Programme, 2019. UNIDO. “Agribusiness for Africa’s Prosperity Country Case Studies.” Working Paper Second Edition, April 2012. Vigneri, M, and S Kolavalli. Growth through Pricing Policy: The Case of Cocoa in Ghana. Rome: Food and Agriculture Organization of the United Nations, 2018. World Bank. “Ghana: Agriculture Sector Policy Note.” Transforming Agriculture for Economic Growth, Job Creation and Food Security, 2017. World Bank. 3rd Ghana Economic Update. Agriculture as an Engine of Growth and Jobs Creation. Washington DC: World Bank, 2018.

CHAPTER 9

Case Studies from Asia

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9.1   The Case of China 9.1.1  Context Arable land is very scarce in China—comprising a total of 119  million hectares, or an average of 0.087 hectares per person—one of the lowest globally. In this regard, the urge to ensure food security, promote agriculture-­led industrialization, and address rural poverty and inequality drives China’s agricultural transformation. Today, China feeds its 1.376 billion people (over 20.0 percent of the world’s population) with about 10.0 percent of the world’s cultivated land and 6.5 percent of the world’s water resources.1 9.1.2  Innovations Driving Agricultural Transformation An efficient tripartite partnership (government-market-farmers), pervasive adoption of science and technology, strong government commitment, effective coordination of policies, and  relevant  incentive structures significantly contributed to China’s agricultural success. This success lies in a strong policy mix regarding the role of the state and the market in generating the right incentives to small farmers—and using agricultural productivity to drive off-farm activities in rural areas. The State, markets, and small farmers are the main actors who have been shaping agricultural transformation since 1978. The State adopted pragmatic land reforms and invested heavily in rural infrastructure, providing a range of supports, as well as public goods to the agricultural community. The State also works with the market to create the right incentives; the farming community responds to these incentives, promoting rural credit cooperatives and schemes funded mainly by farmers—through a learning-­ by-­ doing approach. This strong tripartite arrangement (government-­ markets-­ farmer roles), high-level political commitments, and policy priorities across national and local authorities, including coordination and partnerships, make a substantial difference. Chinese agricultural transformation is attributed to an array of institutional reforms (including land reform in 1978), market reforms

1  China-DAC Study Group (2010) present a copious narrative and contexts leading to the unthinkable achievement in China.

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(liberalizing state procurement process), technology progress, and increasing public investments driven by authoritarian regimes that helped shape rapid policymaking and implementation. The role of agriculture in China’s development history from ‘feeding industry’ prior to the mid-eighties eventually changed to a political agenda of using agriculture as a strategy for rural development, easing political unrest due to rising inequalities. This led to the ‘New Rural Campaign’ that promoted rural infrastructure, development of farmers’ cooperatives, as well as markets and institutional reforms that provided incentives to farmers. See Box 9.1 for various institutional reforms that facilitated China’s agricultural transformation. The ‘Spark Programme,’ targeted to upgrade the technological skills of young rural dwellers to improve their capabilities, was also very successful: creating a nation-wide network of distance learning to encourage rural enterprises. A combination of visionary leadership, responsible government, efficient market mechanisms, and enterprising social entrepreneurs is central to agricultural development.

Box 9.1: Selected Institutional and Strategic Agricultural Reforms in China

Transforming agriculture into a powerhouse of inclusive development depends on the sequence of several sets of strategic actions in China, which included: • Implementing land reform through the Household Responsibility System (HRS) introduced in 1979. This policy decollectivizes landholding and leasing, including transferring responsibility for profit and loss to local managers or households, as opposed to receiving compensation for the prescribed quotas from the Maoist traditional system—a development that sporadically enhanced productivity and welfare of poor farmers. • Reliance on government policies and programmes—which were experimental, learning-by-doing, and eventually effectual. Top among this includes improving land rights, establishing market incentives, and gradually eliminating agricultural taxes. Others include promoting off-farm employment through developing village and town-level enterprises—one of which is the Township and Village Enterprises Scheme; and diversifying farming from (continued)

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Box 9.1  (continued)

staple grains to forestry, livestock, and vegetable production as China’s industrial and service economies grew and demand patterns changed over time. • Investment and adoption of science and technology included applying improved seedlings, which reached about 90 percent; fertilizer use; access to equipment; expanding irrigation and hydrological management systems; and massive extension services. Investment in agricultural R&D was high, of which about 2000 institutes and universities were engaged in agricultural research and development. For instance, between 1979 and 2007, irrigation expanded by 25 percent and commitment to technical innovation and dissemination was very high—to the extent that the rate of technical progress rose from 17 percent in the 1980s to 41 percent in the 2000s. Applying technology also helped transform agriculture. For instance, intensity of fertilizer use rose from about 50  kilograms per hectare in 1970 to more than 350 kilograms per hectare in 2010—far above the global average of about 100 kilograms per hectare in 2004. This level was considered to be the fourth highest in the world (Huang 2012). Further, the proportion of irrigated land to total cultivated land reached 56.9 percent in 2013 (FAO n.d.). • Adopting tripartite, mutually-reinforcing partnerships between governments, markets, and the farming community. Strong connectivity between farmers and regional markets is another novel driver of progress. China’s quest for mutual learning from the international community, which was adapted to local conditions, contributed considerably to progress. • Massive accumulation of human capital (vocational and technical education, basic education, and health services), social capital (e.g. farming-community-government leadership, social protection), and infrastructure capital (e.g. rural roads, rural electrification, water conservation systems, and irrigation) helped agricultural strategies to achieve maximum social and economic impacts to enhance productivity and rapidly reduce poverty. Special attention was given to rural education and farmer (continued)

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Box 9.1  (continued)

extension services; social protection for the farming community through stabilizing farmer’s incomes; rural homes for urban migrants; and developing rural-urban economic linkages, towards integrating the farming community to regional and national markets; and supporting forward integration to manufacturing. Sources: Lin (1992), China-DAC Study Group (2010), IPRCC (2011), Huang et al. (2012), and FAO (n.d.). The result is marvellous. The economy grew at an annual average of 9.6 percent (between 1990 and 2016); agricultural GDP grew by about 4.6 percent, and farmers’ incomes grew by 7.0 percent. In 2010, 200 million small farmers fed over 1.3 billion people. China was able to feed 18.7 percent of the world’s population using its 8.4 percent share of cultivated land, avoiding the Malthusian trap by ensuring its population grows slower than the growth rate of food. Between 1979 and 2010, Chinese agriculture grew four times faster than its population,2 characterized by a falling share of crops and a rising share of livestock and fishery (a gradual agricultural diversification), with maize and cash crops (e.g. horticulture) dominating. China experienced structural economic transformation, with the share of agriculture value added falling from 41.6 percent in 1968 to 8.9 percent in 2015, and agricultural productivity per worker rising from $390.2 in 1980 to $1465.2 in 2015.3 The share of rural labourers who had off-farm jobs rose from about 18.0 percent in 1980 to more than 55.0 percent in 2009, while farmers’ incomes became more diversified (Huang et al. 2012).4 Land de-collectivization alone accounted for about

 While agriculture grew at the rate of 4.6 percent per year (1978–2008), they were able to limit population growth to 1.07 percent (Juma 2011). Through agricultural growth and crop diversification that outstripped population growth, China was able to avoid the Malthusian trap, which many African countries are still contending with today. 3  Computed from the World Development Indicators database, accessed in March 2017. http://data.worldbank.org/indicator/ 4  Farmers income from agriculture fell from about 80.0 percent in 1978 to less than 40.0 percent in 2010 as non-farm incomes rose from about 15.0 percent to more than 60.0 percent during the period (see Huang et al. 2012). 2

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half of agricultural output growth at the early stages (Lin 1992). In fact, the institutional reforms from 1978 to 19845 accounted for 60.0 percent of total agricultural production growth and a 51.0 percent reduction in poverty reduction (Fan et al. 2004; Luo et al. 2011). From 1985–2000, public investments became the main engine of agricultural development, which accounted for 63.0 percent of agricultural growth and 94.0 of poverty reduction (Jia and Fock 2007). The agriculture-for-development strategy, reinvigorated with export-­ oriented industrialization, helped reduce the national poverty rate ($1.9/ day) from 88.3 percent in 1981 (a state of agricultural paradox), to 60.8 percent in 1987, and to 1.4 percent in 2014 (a powerhouse of inclusive growth). This remarkable progress facilitated achieving the global target of halving poverty by 2015. Rapid economic growth and urbanization are influencing per capita food consumption (kg/person)—decreasing grains consumption (e.g. rice and wheat) and increasing non-grains consumption (fruits, milk, red meat and poultry) over the past four decades—with income elasticities rising for the latter and falling for the former (Huang et al. 2012). This progress notwithstanding, transformation in the industrial sector outpaced agricultural development. To correct this, in 1990, the vision of modern agriculture was rearticulated by the Chinese then-supreme leader Deng Xiaoping—with a primary focus on agribusiness (mostly owned by the government) and entrepreneurial farmers that transformed the Chinese agricultural system into specialized, commercialized, vertically integrated, and larger-scale agricultural production. Product specialization, through agricultural clusters, helped harness the needed economies of scale, synergistic support, and technology diffusion to enhance productivity. An example is the establishment of the vegetable cluster in Shandong Province ‘Vegetable City,’ established in 1978—a 53,000  hectare vegetation plantation that produced 4  metric tonnes annually. By 1996, it had established 210,000 greenhouses for

5  Some of the institutional reforms include, in 1977, the development of market institutions where farmers were allowed to trade grains on market after fulfilling their delivery quota to the state procurement system. The raising of procurement prices in 1978 which was further raised to the market level in the 1990s as well as the replacement of the obligatory procurement quotas by purchasing contract in 1985 gave substantial incentives to farmers (Jia and Fock 2007). These raised farmers’ decision-making powers and responsiveness to markets.

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all-­season vegetable production. The government facilitated its links to local and international markets, including 10 small agricultural markets, 30 large specialized markets, and 40 large food processing enterprises. The cluster was effectively integrated into the national economy through transport and marketing networks. And since 1997, due to domestic market saturation and the rising trend of non-tariff barriers, a partnership with Swiss-based firms made integration into the global market possible.6 China’s increasingly difficult challenge to satisfy growing domestic food demand through local production (which was estimated to reach 32 metric tonnes by 2020) further drove the penchant for agricultural transformation. Shortfalls in domestic agricultural supply are exacerbated by the rapid loss of arable land due to reforestation, industrialization, urbanization, natural disasters, and environmental degradation—all of which were estimated to result in 6.16 million hectares lost between 2000 and 2005 alone, translating to about 1.23 million hectares lost per year.7 Technology is driving sustainable agriculture in China; the implementation of the Guangdong Agricultural Pollution Control Project (GAPCP) is a good example. The use of an integrated circuit card is helping to meet growth and high efficiency needs, low toxicity, and low residue pesticides.8 Fertilizer application dropped by 24.0 percent for the spring rice and 12.0 percent for the autumn rice in 2014, while applied pesticide for rice dropped by 27.0 percent; spring rice yields grew by 6 percent and autumn rice yields rose by 19.0 percent.9 Converting animal wastes into biogas and organic fertilizers also helps to promote sustainable agriculture in China.

6  These networks include the ‘green channel’ (roads), the ‘blue channel’ (ocean), the ‘sky channel’ (air) and the ‘Internet channel’ (virtual) (Juma 2011) 7  See Luo et al. (2011) for the challenges associated with zealous agricultural transformation, industrialization, and urbanization. 8  The participating farmers receive an integrated circuit card (or IC card) that contains their names, the size of their land, the amounts of subsidized fertilizers and pesticides they can get and the corresponding subsidy level. http://www.worldbank.org/en/news/feature/2015/10/23/technology-drives-sustainable-agricultural-development-in-china 9  This drop is relative to what the Guangdong farmers used—770 kilograms of fertilizer per hectare in 2007, which was twice the figure of Japan, five times the figure of Thailand, and six times the figure of the United States (World Bank 2015).

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9.1.3  Lessons and Challenges Several lessons from China could help the transformation process in Africa. First, evidence from China’s success is that agricultural transformation is not about giving hand-outs to farmers. It is about building capacity through experimentation, self-discovery, and self-development. Apart from massive extension services that teach, experiment, and disseminate agricultural knowledge, heavy investments in vocational education were also key. Young people, through the Spark Programme, were incentivized into farming. In fact, farmers financed 34 percent of fixed capital investment in rural areas through co-financing and cash-for-work programmes. Self-discipline drives this unalloyed commitment, as opposed to an entitlement syndrome that characterizes most African strategic interventions. Second, the process of agricultural transformation was made possible through strong, high-level political commitment. This process was propelled by a passionate, proficient, and well-informed government that set clear medium- to long-term goals and implemented them with a sense of seriousness, discipline, and commitment. Third is the novel state-market-­ farmers interactions, which makes the process ecosystem actors friendly. This sequential transition in implementing agricultural policies could also offer learning points for Africa. The gradual transition from using agriculture as a tool to feeding people, to feeding industry, and later to propelling rural development is novel. Fourth, agricultural transformation was not achieved under the lens of a short-term approach. Rather, it was achieved under integrated and long-­ term approaches—as opposed to short-termism approaches and the dictated vagaries of electoral cycles in most African countries. Finally, Africa could also learn from China’s adoption of gradual and integrated agricultural diversification. The country gradually moved from grains to livestock, later to fisheries and forestry, and now to horticulture and vegetables. The strong connectivity between small-scale farmers to retail and regional markets helps transform agriculture from smallholder farming to a commercial one. Agricultural commercialization was also promoted through specialized farming (e.g. the vegetable city), integrating agriculture vertically and horizontally, and strategic support to large-scale agriculture existing side-by-side with small-scale farmers in an integrated fashion that avoids dualistic enclaves. Yet, Chinese agriculture faces a serious challenge regarding environmental quality from which African countries can learn. It is carbon

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intensive; the country remains the largest carbon emitter globally. China avoided the Malthusian trap at the expense of the quality of the planet and its own environment. However, China’s efforts in reversing the trend through the adoption of sustainable practices are also notable including popularizing the use of compost and animal manure, and raising awareness on the values of cover crops, crop rotations, and intercropping. Moreover, challenges of remoteness and human capital are still constraining progress in some communities—an impediment requiring a home-­ grown solution.

9.2   The Case of India 9.2.1  Context India is one of the five countries endowed with a share of cultivated land higher than 50 percent of its total land area—52.6 percent.10 Although India had the largest share of the world’s total cultivated land in 2015 (10.88 percent), it has one of the lowest levels of cultivated land per person (0.119).11 India’s agricultural revolution propelled the country’s structural transformation and food security. Agriculture value added to GDP fell from 56.5 percent in 1952–1953 to 14.6 percent in 2012–2013, an indication of structural transformation. With an average annual growth rate of 3.1 percent between 1990 and 2016, the population grew at an annual average of 1.6 percent—an indication that India avoided the Malthusian trap. Food production almost doubled its population growth. As of 2012, 47.1 percent of Indians still depended on agriculture. To this end, India accelerated a reduction of absolute poverty ($1.9 per day), falling from 53.9 percent in 1983 to 21.2 percent in 2011, representing about 61 percent reduction—a feat that made India reach the MDG’s poverty target in 2015.

10  Other countries are Bangladesh (59.6 percent), Ukraine (56.2 percent), Denmark (55.9 percent), and Moldovia (55.5 percent). 11  Other leading countries on the share of the global cultivated land in 2015 and their cultivated land per person are respectively: USA (10.68 percent and 0.474), Russia (8.64 percent and 0.854), China (8.35 percent and 0.087) and Brazil (5.61 percent and 0.388).

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9.2.2  Innovations Driving Agricultural Transformation Prior to 1965, the government’s agricultural policy priority was mainly on land reform and promoting farmers’ cooperatives. Severe droughts for two consecutive years and serious economic and political crises in India in the mid-1960s triggered a rejuvenation of agriculture that further deepened land reform and emphasized technological innovation. The land ceiling legislation of 1972 was ground-breaking. It introduced a land ceiling and limited landholding that ranged from 10–18 acres for irrigated land with two crops, 27 acres for irrigated land with one crop, and 54 acres for dry land. Governments were to acquire the surplus land and redistribute it to landless rural dwellers, as identified by panchayats. By December 2015, the total land declared ‘surplus’ across India was 6.7 million acres, of which the government possessed 6.1 million acres and redistributed 5.1 million acres.12 The share of landholding based on the size of farming is shown in Fig. 9.1, below. While the distribution is novel, 4.30% 0.70% 10%

17.90%

67.10%

Masrginal

Small

Semi-medium

Medium

Large

Fig. 9.1  Land holding statistics in India, 2011. (Note: The average size of landholding is defined as: large  =  42.95  acres; Medium  =  14.23  acres; Semi-­ medium  =  6.7  acres; Small  =  3.51  acres and Marginal  =  0.96  acres. Source: Author’s computation based on data from Chaturvedi 2016)

12  For more information on land ceilings variation by states and land quality, and land surplus acquired and distributed by the Government, see Chaturvedi (2016).

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the existence of absentee landlords is still prevalent, with only 10.6 percent of large landholding cultivated and 21.2 percent of medium landholding operated. Besides, only 22.5, 17.9, and 23.6 percent of marginal, small, and semi-medium landholdings, respectively, were cultivated as of 2011. The State of West Bengal’s land reform was one of the most successful stories that could serve as a champion to many developing countries that intend to carry out results-oriented land reform (Box 9.2). The 2013 Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act is considered to be one of the most advanced globally regarding changes in compulsory land acquisition in terms of its humane, participative, and transparent processes. The law allows payment of compensation at twice the market rate in rural areas, prohibiting eviction before all compensations are paid, and alternative settlements provided, and additional benefits when people are relocated outside their districts. In addition to promoting fairness and equity, it reduced incessant evictions of tenants and sharecroppers and enhanced the bargaining power of poor landowners.13 Box 9.2: West Bengal State Land Reform

The West Bengal State is the fourth most populous state in India, occupying 2.0 percent of its geographical area and 3.5 percent of arable land. About 72 percent of its population lives in rural areas, 53 percent of the economically active population is engaged in agriculture, which accounts for 30 percent of the State GDP. Prior to India’s independence, the land tenure system was very obstructive to agricultural development since no incentives existed for farmers to invest in land improvement, which affected their productivity and incomes considerably. To address the excessive increase in rents (land tax) paid by the poor to land agents (Zamindars) and their frequent evictions, the British Government promulgated the Bengal Rent Act of 1859 and the 1885 Bengal Tenancy Act. Three legislations were put in place shortly after independence: the West Bengal Bargadar Act (1950), the West Bengal Estate Acquisition Act (continued)

 Wily (2019) provides more illumination on the benefits of this law.

13

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Box 9.2  (continued)

(1952), and the West Bengal Land Reforms Act (1955). Yet, these laws were not fully enforced due to limited political will. West Bengal started to experience committed implementation of both tenancy reform and redistributive land reforms from 1977 when the Socialist Party of India–Marxist (MPIC) came to power. Given the role of agriculture in the State, since 1977, the government invested in land reform, focusing on: redistribution of vested land ownership, regulating sharecropping relationships, and distributing homestead plots. The West Bengal Landholding Revenue Act (1979) and the Revenue Rules (1980) further strengthened security of tenancy and redistribution of surplus land to poor farmers. Implementing this programme included supplying institutional credit, permanent titles to sharecroppers, modern inputs like improved seeds, fertilizers, and access to irrigation facilities.14 As of 2015, the West Bengal State declared 1.14 million acres of land as surplus (21 percent of nationally declared surplus), possessed 1.32 million acres, and redistributed 1.05 million acres—54.2 percent of Indian land beneficiaries. The objectives of land reform, among others, were to unleash the productive power of rural areas, create markets that increase the purchasing power of rural dwellers, and lay the foundation for the expansion of literacy, education, and public health. This land reform created greater social equality, greater self-confidence among the poor, and enhanced the poor’s political position (Chaturvedi 2016). Evidence from Bardhan et al. (2014) reveals that tenancy reform lowered inequality while land distribution programmes lowered landlessness, yet this was partly offset by targeting failures and induced increases in immigration. The high-­ level political commitment, decentralization, and the responsiveness of local government contributed to this success. Sources: Chaturvedi (2016), Bardhan et al. (2014) and http:// shodhganga.inflibnet.ac.in/bitstream/10603/2970/12/12_chapter%208.pdf

 http://shodhganga.inflibnet.ac.in/bitstream/10603/2970/12/12_chapter%208.pdf

14

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The successful land reforms, heavy investment in improved seedlings, irrigation, and water management, rural transformation since 2005, and the inclusion of the private sector changed the agricultural landscape. The first wave of green revolution in India was faced with limited foreign exchange that weakened the ability to import intermediate inputs for agricultural transformation. The green revolution’s impact was also limited by its scope and coverage: it was restricted to wheat crops and to northern India (e.g. Punjab, Haryana and the western part of Uttar Pradesh). This reality therefore limited its ability to impact rural incomes and poverty, achieving a wider scope in rural India. The delay in rural electrification and fragmented landholding in Eastern India explained the low adoption of agricultural technology in the region. The second wave of the green revolution in the 1980s, driven by heavy investment in government canals and private tube-water and diffusion of seed-fertilizer technologies, included many staples including rice, which was the main staple food in eastern and southern India. Subsidies for agricultural inputs (e.g. chemical fertilizer, irrigation, and electricity) increased rapidly during this second phase—with benefits going to advanced regions and wealthy farmers. The green revolution changed the story of India from a famine-ridden nation to a global agricultural powerhouse, depicting a period of increased agricultural yields, especially food grain production (mainly wheat and rice), resulting from improved agro-technology that started in Punjab, Haryana, and Western Uttar Pradesh between 1965 and the early 1980s. The green revolution in India led to a grain output of 131 metric tonnes from 1978 to 1979—a phenomenon that made India attain food self-­ sufficiency within a decade, establishing the country as the world’s biggest agricultural producer. The yield rose from 854.4 kilograms per hectare in 1965 to 2984.1  kilograms per hectare in 2014—representing a 249.3% increase.15 In India, agriculture was used as a strategy to achieve food security and as an anchor of integration into the global economy.

15  And as observed by Ganguly (2009), the high crops yields were achieved with more water, more fertilizer, more chemicals (e.g. pesticides and fungicides).

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Specifically, the IR8 yields,16 in optimal conditions, could be as much as ten times that of traditional varieties. By 1980, high-yielding wheat and rice cultivation constituted about 75.0 percent and 45.0 percent, respectively. The green revolution programme was implemented mainly in areas with assured supplies of water and the means to control it, large inputs of fertilizers, and adequate farm credit (USLoC n.d.). This was made possible by simultaneous adoption of high-yielding varieties of seeds and modern farming techniques such as chemical fertilizers, irrigation, and mechanized farming. For instance, fertilizer usage rose from 100.3 kilograms per hectare in 2002 to 165.1 kilogram in 2014 and irrigated land stood at 36.8 percent in 2013.17 Government policies were driven by the need to make better use of resources like land and labour, as well as to ensure a food secure nation and meet the rising needs of the rest of the world. Through the backward linkages with the rest of the economy, agriculture became a springboard for expansion of manufacturing. This dynamic spurred growth of the local manufacturing sector to create new jobs and increase livelihoods and incomes. Construction of dams for irrigation was also used to generate electricity for some villages, which spurred non-farm growth and improved the quality of life of many villagers. As a net exporter of grains, India was able to pay back its loans and became creditworthy; the Indian model of green revolution became a major source of inspiration and experience-sharing globally, within developed and developing countries. This productivity in agriculture, cutting across many crops, especially during the second wave of the green revolution in the 1980s, spurred non-farm rural economies and rapid economic growth. It contributed to a substantial reduction in rural poverty, which fell from 50.1 percent in 1993 to 25.7 percent in 2011. Continuous improvement in water management provided an impetus for agricultural productivity. This includes improvement of the traditional water management system, the Vayalagam programme. Involving social

16  The IR8, also known as miracle rice in India, is a high-yielding rice variety developed by the International Rice Research Institute (IRRI) in the early 1960s, which has revolutionized rice production in Asia. 17  However, evidence from FAO (n.d.) shows the proportion of land equipped for irrigation as a share of cultivated land to be 41.6 percent in 2013. http://www.fao.org/nr/ water/aquastat/data/query/results.html

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entrepreneurs like the Development of Human Action (DAHN) Foundation helped transform the Vayalagam into the Tank-Fed Vayalagam Agricultural Development Programme that operated in 34 communities through matching grants and supported 1807 microfinance groups, assisting 102,266 members to access affordable finance. Adopting drip irrigation, especially to sugarcane, also revolutionized agriculture in India. This helped to address the weeding problem, saved water by 58 percent (compared to flood or surface irrigation with otherwise high-water evaporation and distribution losses), and increased productivity by 54 percent.18 Heavy investment in the seed industry played an immense role. National and state government investments in public sector plant breeding and crop management research—as well as investments from the international community—laid the foundation for improved seed varieties. Key interventions included increased investment in crop improvements in the 1970s, developing efficient seed systems in the 1980s, and liberalizing the seed industry in the 1990s. There was a gradual inclusion of the private sector in the production, sale, and distribution of improved seeds. As of 2010, more than 60 private firms were supplying improved millets and 40 firms supplying improved sorghum, accounting for 82 percent and 75 percent of the total supply for millet and sorghum, respectively.19 Cross-regional coverage of agricultural transformation contributed to raising rural incomes, increasing real wages of agricultural labourers, alleviating poverty, and improving structural transformation. However, this has not led to a substantial shift of labour from agriculture to non-farm activities: the agricultural share of total employment only dropped from 69.8 percent to 54.6 percent between 1952 and 2013.20 The agricultural revolution was complemented by rural transformation through the expansive and ambitious Bharat Nirman Rural Infrastructure Flagship Programme, which started in 2005. It has six main elements: irrigation, drinking water, electrification, roads, housing, and rural telephony. The targets to be achieved by 2009 are irrigation (create 10 million ha of additional irrigation capacity); roads (connect every community

18  More information about the success and impact of Vayalagam project can be found in Juma (2011). 19  For more information on seed industry in India, see Juma (2011). 20  The impact on rural poverty is contained in Fujita (2009).

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located in plain areas with a population of 1000 or more people) or communities located in hilly, tribal, and desert areas (with 500 people or more) to all-weather roads; electricity (to remaining 125,000 villages and to 23 million households); housing (construct 60 lakh houses); drinking water (to 55,067 unconnected habitations); telephone connectivity (to the remaining 66,822 villages). Overall, by 2009, 70 percent of the targets had been achieved, including irrigating over 7 million hectares, constructing 3.6 million houses, and connecting 61,000 villages to public telephones. The inability to complete its implementation in 2009 pushed the timeline to 2012. And by June 2011, for instance, road habitation coverage reached 74.5 percent, with new construction reaching 68.5 percent and upgrades reaching 90.7 percent. And by mid-2012, irrigation surpassed the targets by 1.16 million hectares, while 65.87 lakh houses have been completed (against the targets of 60), by March 31, 2012.21 9.2.3  Lessons and Challenges India, being one of the oldest modern democratic institutions globally, offers very useful lessons to Africa. Most reforms in India, unlike many other countries in Asia, were done through democratic regimes, which makes them more appealing to Africa. To a very large extent, India’s successful land reforms; remarkable investment in improved seedlings; enhancement of irrigation and water management; integration of rural transformation into agricultural development since 2005; and the inclusion of the private sector reflect a participatory approach to agricultural ecosystems that has changed the sector’s landscape fundamentally. Another important lesson for African countries is how India used agriculture as a means, not an end. India used agriculture as a gradual and sequential tool to: first, achieve food self-sufficiency within a decade; second, integrate the Indian economy into global markets; and third, serve as a springboard of manufacturing. India’s capacity to move from near mono-cropping in the first wave of green revolution in the 1960s and 1970s to multiple crops in the second wave in the 1980s is also novel. Today, India is known to be the biggest agricultural producer globally, offering inspiration for Africa to become an agricultural powerhouse.

21  The remarkable achievement of this programme can be found in Das (2013); and Odusola (2019).

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However, Africa must learn not to fall into the mistakes India made in input subsidies, which benefited advanced regions and wealthy farmers more than least developed regions and smaller farmers. Africa also needs to manage its crop yields more sustainably, as opposed to India’s approach where productivity is achieved at the expense of more water, more fertilizer, and more chemicals. The urge to institutionalize and deepen agro-­ ecology into agricultural practices remains a development imperative. Finally, India’s inability to adequately shift labour from agriculture to off-­ farm activities is also a learning point for Africa. What can Africa do differently in this respect calls for deeper research and innovation.

9.3   The Case of the Republic of China (Taiwan) 9.3.1  Context The green revolution in the Republic of China (Taiwan) transformed the Taiwanese agricultural landscape and laid the foundation for structural economic transformation. Agriculture-related activities value added to GDP was 11.2 percent in 2010, while primary production accounted for only 1.9 percent in 2012, falling from 32.2 percent in 1952.22 With only 2.3 percent of the population engaged in agriculture, Taiwanese agriculture has shifted from traditional crops to high-valued varieties (fruits, vegetables, and organic rice) largely due to dietary changes.23 Taiwan’s Agricultural Development Act, promulgated in 1973, aims at ensuring sustainable agriculture, stabilizing agricultural production and sales, increasing farmers’ income, and enhancing farmers’ well-being, among others. In this regard, the government succeeded in keeping poverty very low over a long period of time, ranging between 0.9 and 1.6 percent between 1999 and 2012.24

22  For agriculture-related activities see Sun (2012) and primary production see Council for Economic Planning and Development (2013). 23  Taiwanese agriculture comprises 46.6 percent (crop), 31.1 percent (livestock), 22.2 percent (fishery), and 0.1 percent (forestry). http://www.legco.gov.hk/research-publications/ english/1314in16-taiwans-agricultural-policy-20140703-e.pdf 24  See https://www.indexmundi.com/g/g.aspx?c=tw&v=69

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9.3.2  Innovations Driving Agricultural Transformation Agriculture was used as the lynchpin of industrialization, economic transformation, and inclusive development in Taiwan. Many factors accounted for the success achieved. Strategic support from the American and Japanese governments was key: they provided first-rate agricultural scientists to support agricultural transformation as a strategy to curb the growth of socialism in mainland China (Lin 2012). This strategic alliance, with support from international organizations like the United Nations, facilitated rapid development of water conservation systems (irrigation that reached 82.4 percent of the cultivated area in 2005), land reclamation, extension services, and farmers’ associations, as well as establishing agricultural research centres,25 all playing a critical role in Taiwan’s green revolution. Some of the specific actions are highlighted below. Taiwan’s agricultural transformation was driven by science, technology, and innovation (STI), using agriculture to propel labour-­ intensive industrialization, effectively using special economic zones; implementing the “Small Landlord Big Tenants” land reform programme; and creating results-oriented stakeholder partnerships. First, introducing land reform programmes in the 1950s stimulated agricultural production, stabilized food prices, fostered labour-intensive light industries, and promoted social stability. Second, special agricultural zones (SAZs), including organic zones (534  ha), flower and vegetable zones (486 ha), rice production and marketing zones (14,000 ha), recreational agricultural zones, and agricultural technology parks were established. These were complemented with aggressive assistance to agricultural production and marketing groups, including continuous training of agricultural extension personnel to provide technical assistance and advice to farmers. These SAZs were linked to developing value chains, hence, leading to backward and forward integration between industry and agriculture. The implementation of the ‘Small Landlords and Big Tenants’ programme helped 18,265 landowners lease 9579  hectares of farmland to 1328 tenants (Legislative Council Secretariat 2014). Consequently, the average acreage of farms cultivated by farmer families increased seven times—in 2012, the farm size operated by a tenant was 7.2  hectares 25  Some examples include the Food and Fertilizer Technology Center and the Asian Vegetable Research and Development Center—now the World Vegetable Centre that promoted improved verities of rice and sugar cane and appropriate fertilizers regimes (Dahlberg 1979). Also see, FAO (2016a, b) for the level of irrigation.

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compared to that of ordinary farms, which averaged 1.1  hectares. The average age of tenant-farmers was also 44 years compared to 62 years for other farmers. Technology plays a key role in agricultural transformation in Taiwan. This includes establishing agricultural institutes,16 including the Agricultural Technology Research Institute (a platform for transforming research results into commercially viable products), the Pingtung Agricultural Biotechnology Park, and the Taiwan Agricultural Land Information. Stakeholders’ partnerships and alliances are another driver of progress—with governments, private sector, international organizations, and farmers. The first is the partnership between the central and local governments, which is especially beneficial towards establishing agricultural biotechnology parks, such as the Pingtung Agricultural Biotechnology Park (PABP) and the Taiwan Orchid Plantation Park (the largest orchid industry greenhouse cluster in the world), that accommodates many companies’ farming activities. The PABP occupies a total land area of 233 hectares and provides one-stop services, including various areas of governmental support, R&D funding, factory licensing, and international marketing aid.26 The second is the academia-industry cooperation, a partnership that led to funding 689 projects between 2009 and 2012; the partnership between government and landlords is another alliance that helps operationalize the ‘Small Landlords and Big Tenants.’ Promoting Agricultural Production and Marketing Groups (APMGs) reduces the cost of materials, facility equipment, and other expenses through collaborative procurement, co-shipping, and co-marketing, as well as increasing their bargaining power, fostering specific product development and promoting domestic and international competitiveness. Well-­ run APMGs receive low interest loans, farming equipment grants, financial awards, and disaster relief assistance. Through the Taiwan Agriculture Land Information Service, the government can promote land planning and the development of precision farming. With this initiative, farmers are able to assess availability of 26  The various partnership arrangements are contained in CoA (2014), while LCS (2014) provides more information on PABP. For instance, as of 2013, there were 78 park tenants in PABP categorized into six agri-bio clusters: (i) functional foods and bio-cosmetics; (ii) aquaculture; (iii) bio-fertilizer and bio-pesticide; (iv) breeding livestock and animal vaccine; (v) biotechnical service; and (vi) green energy automatic control facility for agro-use (LCS 2014).

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farmland using data on soil properties, cropping suitability, irrigation facilities, land use zoning, and feasibility consolidating farmland. Moreover, establishing a mobile information platform and the using cloud computing technology to support a real-time database on agricultural production, market prices, and plant disease warnings is also transforming the agricultural landscape in Taiwan. Promoting a quality assurance system (such as Certified Agricultural Standards introduced in 1989, Good Agricultural Practices in 1993, Food Traceability System in 2007, Accreditation, and Certification System in 2009) is strengthening the quality of services and practices in the sector (LCS 2014). Promoting sustainable use of pesticides and fertilizers, as well as water-saving agricultural production zones, also promote sustainability. The efficiency of managing irrigation systems in Taiwan has been driven by: recognizing that water is a scarce factor in agricultural production; mutually-reinforcing centralized planning and investments and decentralized management of irrigation systems; a system of agronomic and engineering information exchange between the users and managers of irrigation systems; and the use of incentive structures for both the users and managers of irrigation systems that are compatible with the efficient use of water within an irrigation system (Abel 1976). To address farmers’ aging population, the New Agricultural Movement was launched in 2016. Some of its elements include: first, since 2009, the Council on Agriculture started organizing vocational trainings on agriculture to unemployed youth—geared towards meeting a demand for labour for long-term agricultural development. Second, since 2013, a two-year counselling programme for ‘Hundred Young Farmers’ was initiated. Third, 16 networking and communication platforms were established. Finally, subsidies for facilities and equipment, including the NT$5.0 million loan with zero interest to young farmers, helped to stabilize agricultural operations and incentivize youth involvement in the sector (COA 2016) 9.3.3  Lessons and Challenges The achievement of Taiwanese agriculture offers possible lessons for what Africa could do differently. First, diversify agriculture from traditional crops to high-valued crops as diets change, without losing traditional diversity context. Second, the large investment in irrigation, which made Taiwan to be one of the countries with the largest irrigated arable land is worth learning from. Third, adopting an integrated farming system

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comprising an organic zone, flower and vegetable zones, recreational agriculture, agri-tech park, and production and marketing platforms, to mention a few. Others include land aggregation, adoption of an agricultural one-­stop shop, and promoting food standards and certification. The rising trend of water conservation, land preservation, and agro-ecology also present excellent opportunities for lessons to do things differently in Africa. Despite these feats, Taiwanese agriculture still faces several challenges, which Africa could also learn from leapfrogging its agricultural transformation. The first is the rising age of the farming population, which is presently put at 62 years. Second is land fragmentation, leading to diseconomies of scale associated with small and scattered arable areas. And finally, the mismatch between education systems and agricultural employment is another impediment to agricultural transformation in the country.

9.4   The Case of South Korea 9.4.1  Context The ability of South Korea to achieve self-sufficiency in rice production within six years earned the country a global accolade as one of the most successful stories on green revolutions. The country experienced genuine structural economic transformation—from agriculture into industry and services, with agriculture serving as the powerhouse for transformation of the industrial and services sectors. The share of agriculture in national GDP fell from about 40 percent in 1960 to just 2.2 percent in 2016. The population of farmers also declined from 56.9 percent in 1960 to 6.3 percent in 2010, with landholding per farmhouse rising from 0.82 hectares to 1.46 hectares during the period. Self-sufficiency in rice production rose from 83 percent in 1971 to 109 percent in 1977, a phenomenon globally referred to as the ‘Korean miracle.’ Grain yields (tonne per hectare) rose from 3.75  in the 1960s, to 5.13 in 1970s; by 2010, it reached 7.53 (Kim 2012). The country succeeded in eradicating poverty ($1.9/day) for a long time, which remains at 0.3 percent of the population as of 2012. The government purchased grains from farmers at rates higher than the market price and distributed them to the rapidly growing urban population at below market prices—a development that transformed Korean welfare considerably. The physical transformation and uplifting of villages and household incomes, through the New Village Movement (Saemaul Undong) also contributed considerably to eliminating poverty.

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South Korea is one of the very few countries in the world that has adjusted agricultural production along its climatic conditions and along with dietary changes while its income grows. Both rice and vegetables are grown year-round. Today, South Korea has the largest acreage under protected cultivation per capita globally (RDA and KFGA 2013)—a development tagged ‘White Revolution.’27 Between 1962 and 1965 alone, extension service workers rose from 1192 to 6684, helping to expand the distribution and diffusion of agricultural technology in the country. 9.4.2  Innovations Driving Agricultural Transformation Visionary leadership, effective developmental states, adoption of a participatory New Village Movement that transformed 34,000 villages, and institutionalized competition for results all contributed to making agriculture the powerhouse of economic transformation and inclusive development in South Korea. Visionary leadership, development of a high-yielding variety of rice (Tongil), improvement of cultivation technologies, self-sufficiency in producing fertilizer, strengthening linkages between agricultural research and extension services, expanding the quantity and quality of extension services and technologies, and international cooperation are all key drivers of progress. The radical land reform of 1950–1970 that returned land from rural elites to smallholder farmers (called the radical land-to-the tiller reform) lay the foundation for a green revolution. This reform transformed land holding, where 70 percent of farm holding were operated by farm tenants in 1945, to 97 percent owner-farmers in 1961. This land reform limited farm size to a maximum of three hectares. Urbanization and industrialization encroached on prime agricultural land to the extent that available agricultural land shrunk from about 24,000 square kilometres in 1968, to a little above 18,000 square kilometres in 2008.28

27  This refers to modernization of structure, material, and technology for greenhouse aimed at achieving rapid expansion of protected cultivation area and stable supply of vegetable. See RDA and KFGA (2013) for processes, interventions, and achievement made under the white revolution. 28  The rationale, strengths, and weaknesses of the land reform are documented in Douglass (2013).

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The mechanization programme that started in 1978 to address labour shortages and a shrinking rural population bolstered agricultural development. Through the Mechanization Promotion Law, provided subsidies spanned a variety of incentives: producing farm machines in Korea, establishing repair and maintenance facilities, assisting research and development in machinery, providing tax exemptions to purchasing farm machinery, and organizing joint-use of machine systems.29 The government’s heavy support made machines, such as power tillers, tractors, transplanters, sprayers, threshers, dryers, and forage crushers to become ubiquitous in Korean farming. Because of atomistic landownership, which limits intensification of production, an important feature of the Korea green revolution was sharing of off-farm infrastructure and equipment. Such facilities and equipment included irrigation and water management systems, post-harvest and storage facilities, roads, and agricultural services. At a later stage, group farming was also supported as a way of dealing with labour shortages. Pooling of resources does not only augment labour shortages, but also helps to leverage economies of scale in the use of agricultural facilities. Unlike the Taiwanese and Japanese persuasion-induced green revolution, the South Korean version was a directed green revolution: the developmental state played a very strong role. The strong political commitment and the commanding height of the state under President Park Chung Hee—based on a strong state-society relationship—made this happen. Korea, under the Park administration, was an interventionist state that set visions and goals and pursued them with all vigour and temerity, galvanizing popular participation in development work including the New Village Movement—Saemaul Undong (SMU) (Douglass 2013). Through the New Village Movement (NVM), 34,000 villages were transformed; 2.8 million households were connected to electricity; 717 factories were established to add value to agricultural commodities; and the welfare of urban dwellers was enhanced through distribution of subsidized agricultural products. See Box 9.3 for the implementation, achievements, and lessons from the programme.

29  Mechanization was also used as a strategy to cope with the rapidly declining rural population, which fell from 2.6 million in 1967 to 1.8 million in the 1980s (Douglass 2013), and to increase operational efficiency and productivity (Cho 2003).

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This was an era when development plans were not only an expression of government intention, but an indication of direction and commitment. For instance, self-sufficiency in food production was a priority in the first national development plan (NDP) (1962–1966); developing agrobusinesses, fertilizer, and agricultural chemicals were set for the second NDP (1967–1971); and strengthening the production of greenhouse farming was the focus of the third NDP (1972–1976). These goals were not only achieved, but targets were exceeded in several cases (Ibid.). South Korea, under President Park, exhibited a high degree of autonomy30 that allowed the government to adopt and implement overarching development policies and programmes with an extensive reach to the people—a government that distributed the benefits of growth, including proceeds from agricultural transformation, to both urban and rural populations. The heavy government presence in the economy and society was ubiquitous, an extreme prototype of a developmental state which makes replication of the Korean approach very challenging in the rising democratic setting of Africa.

Box 9.3: The South Korean Rural Development Programme

The New Village Movement (NVM), known as Saemaul Undong (SMU) in South Korea, was established in 1970 as a community-­ based village modernization programme, focusing on community upgrading, rural welfare, and livelihoods. It is a programme based on learning by doing that, within a decade, became a symbol of participatory development, transformed villages, and rural economies that blossomed. NVM went through three phases. The first phase (1970–1975) focused on modernizing villages (improving village infrastructure, amenities, and housing), training community leaders on self-­ improvement, participatory development, rural mobilization, and building a culture of cooperation. The second phase (1972–1978), which overlapped with the first phase, focused on agricultural devel(continued) 30  As argued by Douglass (2013), Park’s autonomy ranged from pervasive land reform that took power out of the rural elites (landlords), the nationalization of the financial system that took hold of business interests, and the control over the military.

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Box 9.3  (continued)

opment by prioritizing forced adoption of high-yielding varieties of grain, aggressive extension services, building rural cooperatives, and agricultural mechanization. The third phase extended SMU to non-­ agricultural activities and cities, including establishing Saemaul factories. The programmes allowed for competitive performance among villages—based on efficient use of resources and quality delivery— with more resources provided to the best performing villages. SMU served as a cross-cutting institutional arrangement to mobilize people and coordinate development efforts at the community level. The programme, for the first time, made local officials accountable for improved rural life; it institutionalized competition for results; and facilitated grassroots decision-making. It inculcated the spirit of self-­ help nationally to the extent that about 60 percent of materials and labour for upgrading villages came from villagers, themselves. The programme brought shared prosperity across the country. In the 1970s alone, NVM led to the expansion of 43,588 kilometres of village roads, construction of 61,797 kilometres of new agricultural roads, installing 79,516 units of small bridges, constructing of 37,012 village centres, building 22,143 warehouses, constructing of 15,559 kilometres of sewage systems, supplying electricity to 2.8 million households, and operating 717 Saemaul factories, to mention a few. The initiative transformed 34,000 villages in South Korea. High-level political and government commitment, the homogeneity of the Korean society, and the de-politicized nature of the programme contributed to its considerable success. Sequel to this success, the programme has been adopted in 70 countries as of 2011. For instance, Mongolia adopted it to construct community centres, wells, bridges, green houses and planting trees; in the Philippines, it was used to solve water problems, distribute pigs to households, and to teach computer classes; its adoption in Vietnam helped to construct animal husbandry, health centres, and elementary schools; and in the Republic of the Congo, it focused on clearing land for farming, crop seeds, and small farm management. Source: Douglass (2013).

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9.4.3  Lessons and Challenges The country’s achievement of food sufficiency in six years, self-sufficiency in fertilizer production, high level of agricultural mechanization, and being the country with largest protected cultivation per capita globally are unparalleled and call for emulation by others. Other strategies that could serve as lessons for African countries abound. First is the adoption of group farming and sharing of off-farm facilities like irrigation, equipment, and post-harvest management facilities. The second is the sequential approach to agricultural development through the national development plans (NDPs): food production (NDP 1), agro-processing development (NDP 2), and greenhouse farming development (NDP 3). Given the commanding height of the state, these plans were not only government intentions but directions and commitments—an approach that is difficult to achieve in the current democratic dispensation. The rural development approach, through a self-help project called the New Village Movement, opened up rural areas for agriculture and non-farm activities, which allowed backward and forward integration between agriculture and other sectors of the economy. Although some of these initiatives were adopted by many countries, however, the context has changed dramatically. Dictatorial regimes are no more in vogue; such achievements may be difficult in the democratic settings that require lengthy consultations and discussions for national policies and strategies to be effectively implemented. The homogenous Korean society is also not common in Africa, which is characterized with complex and heterogeneous societies. Korean agriculture is also challenged by several factors including land fragmentation and atomization that still makes economies of scale difficult, as well as labour shortages, and an aging farming population.31

31  The 2010 agricultural census put the average age of Korean farmers at 62.3 years with the largest age group between 70 and 75 years.

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References Abel, Martin E. “Irrigation Systems in Taiwan: Management of a Decentralized Public Enterprise.” Water Resources Research 12, no. 3 (1976): 341–48. https://doi.org/10.1029/wr012i003p00341. Bardhan, Pranab, Michael Luca, Dilip Mookherjee, and Francisco Pino. “Evolution of Land Distribution in West Bengal 1967–2004: Role of Land Reform and Demographic Changes.” Harvard Business School Working Paper, January 20, 2014, 14–066. https://doi.org/10.1016/j.jdeveco.2014.02.001. Chaturvedi, Sumit. “Land Reforms Fail, 5% Of India’s Farmers Control 32% Land.” IndiaSpend, May 5, 2016. https://archive.indiaspend.com/cover-­ story/land-­reforms-­fail-­5-­of-­indias-­farmers-­control-­32-­land-­31897. China-DAC Study Group. Agricultural Transformation, Growth and Poverty Reduction. Report of the international conference on Agriculture, Food Security and Rural Development held in Bamako, Mali on 27–28 April 2010. International Poverty Reduction Centre in China and OECD. http://www. oecd.org/dac/povertyreduction/46767135.pdf Cho, K.J. “30 Years of Agricultural Mechanization in the Republic of Korea”, UNESCAP/APCAEM TAC/GB 2nd Session, 24–27 November 2003, Beijing. Council of Agriculture, Executive Yuan. Council of Agriculture, Executive Yuan, R.O.C.(Taiwan), 2014. https://eng.coa.gov.tw/theme_data.php?theme= eng_news. Council of Agriculture (CoA) Executive Yuan Republic of China (Taiwan). “Taiwan’s New Power of Agriculture—The Training and Prospective of Young Farmers.” Agriculture Policy and Review 4, no. 286 (2016). Council for Economic Planning and Development. Executive Yuan. Taipei: Economic Development Republic of China, 2013. Dahlberg, Kenneth A. Beyond the Green Revolution: the Ecology and Politics of Global Agricultural Development. New York and London: Plenum Press, 1979. Das, Pallav. “Bharat Nirman—A Sustainable and Durable Rural Infrastructure in India.” ABHINAV 2, no. 1 (2013): 63–70. Douglass, Mike. “The Saemaul Undong in Historical Perspective and in the Contemporary World.” Asia Research Institute Working Paper Series 197 (2013). https://doi.org/10.1057/9781137339485.0015. http://www.ari. nus.edu.sg/wps/wps13_197.pdf Fan, Shenggen, Linxiu Zhang, and Xiaobo Zhang. “Reforms, Investment, and Poverty in Rural China.” Economic Development and Cultural Change 52, no. 2 (2004): 395–421. https://doi.org/10.1086/380593. FAO. “Area Equipped for Irrigation and Percentage of Cultivated Land,” 2016a. h t t p : / / w w w. f a o . o r g / n r / w a t e r / a q u a s t a t / t a b l e s / Wo r l d D a t a -­ irrigation_eng.pdf.

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FAO.  “Global Map of Irrigation Areas (GMIA).” AQUASTAT—FAO’s Information System on Water and Agriculture. 2016b. Accessed June 21, 2020. http://www.fao.org/nr/water/aquastat/irrigationmap/chn/index.stm. FAO. “Aquastat,” n.d. http://www.fao.org/nr/water/aquastat/data/query/ results.html. Fujita, Koichi Nagoya. “Green Revolution in India and Its Significance in Economic Development: Implications for Sub-Saharan Africa.” 2009. h ­ ttp:// policydialogue.org/files/events/Fujita_green_rev_in_india.pdf Ganguly, Saby. From the Bengal Famine to the Green Revolution. IndiaOneStop, 2009 Huang, Jikun, Xiabing Wang and Huanguang Qiu. Small-scale farmers in China in the face of modernization and globalization. IIED/HIVOS: London/The Hague. 2012. International Poverty Reduction Centre China (IPRCC). “Agriculture, Food Security and Rural Development: A Synthesis.” IPRCC Working Paper 01. (2011) www.iprcc.org/Index/warehouse/id/4538.html Jia, X. and A.  Fock. 2007. ‘Thirty Years of Agricultural Transition in China (1977–2007) and the ‘New Rural Campaign”. Paper presented at the 106t Seminar of the EAAE, Pro-poor development in low income countries: Food, agriculture, trade, and environment, 25–27 October 2007—Montpellier, France. Juma, Calestous. The New Harvest: Agricultural Innovation in Africa. Oxford: Oxford University Press, 2011. Kim, Je-kyu. “The Green Revolution in Korea: Development and Dissemination of Tongil-Type Rice Varieties.” Comprehensive one-stop references on key development issues of Korea, 2012. https://www.kdevelopedia.org/themeSub.do?themeMainId=42. Legislative Council Secretariat (LCS). Information Note: Taiwan’s agricultural policy. Taipei: Republic of China (Taiwan), 2014. Lin, J. Y. “Rural reforms and agricultural growth in China.” American Economic Review, 82, no.1 (1992): 34–52. Luo, P., J.A.  Donaldson, and Q.F.  Zhang. “The Transformation of China’s Agriculture System and Its Impact on Southeast Asia.” International Journal of China Studies 2, no. 2 (2011): 289–310. http://ink.library.smu.edu.sg/cgi/ viewcontent.cgi?article=2343&context=soss_research Odusola, Ayodele. “Growth-Poverty-Inequality Nexus: Toward a Mutually Inclusive Relationship in Africa.” Chapter. In African Economic Development – Second Edition, 157–82 (2019). Bingley, UK: Emerald Publishing Limited. Rural Development Administration (RDA) and Korea Fruit Growers Association (KRGA). Modularization of Korea’s Development Experience: White Revolution of Agriculture in Korea: The Achievement of Year-Round Production and Distribution of Horticulture Crops by the Expansion of Greenhouse Cultivation. Seoul: Ministry of Strategy and Finance, 2013.

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U.S.  Library of Congress (USLoC). n.d. “India—The Green Revolution.” U.S. Library of Congress. Accessed June 22, 2020. http://countrystudies.us/ india/104.htm. Sun, J.C.L. “Shaping the Future for Agriculture in Taiwan.” The Future of Agriculture, GFAR Brief 20 (July 2012). http://www.biotaiwan.org.tw/ download/aboutchief2/10201/GFAR-­Shaping%20the%20future%20for%20 agriculture%20in%20Taiwan.pdf Wily, L. A. “Adjusting to New Era Agrarianism: Tackling the Troubled Interface of Public and Community Property.” Chapter. In Rethinking Lan Reform in Africa: New Ideas, Opportunities and Challenges, edited by Comas Ochieng. Abidjan: Africa Natural Resource Centre, AfDB, 2019. World Bank. “Technology Drives Sustainable Agricultural Development in China.” 2015. Accessed June 21, 2020. http://www.worldbank.org/en/news/feat u r e / 2 0 1 5 / 1 0 / 2 3 / t e c h n o l o g y -­d r i v e s -­s u s t a i n a b l e -­a g r i c u l t u r a l -­ development-­in-­china.

CHAPTER 10

Case Studies from Latin America

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 A. Odusola, Africa’s Agricultural Renaissance, https://doi.org/10.1007/978-3-030-65748-2_10

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10.1   The Case of Argentina 10.1.1  Context and Overview of Structural Economic Transformation Argentina, a low-cost agricultural producer, successfully transformed itself from a net food importer into a leading net food exporter of global repute. The country is a leading food producer and a net exporter globally,1 next to Ukraine and Russia. It is the largest exporter of soybean meal and soybean oil and third in beans export in the world—and has used agriculture to drive a trade surplus with agricultural exports averaging $42.0 billion annually compared to imports of $1.5 billion during 2012–2015, from $40.1 billion between 2012–2014.2 The country’s competitive advantages on soil properties and quality of land, rainfall, and climate make Argentina to be a low cost-agricultural producer. Its pacesetting role in no-till farming that simultaneously achieved agricultural productivity and environmental quality makes Argentina stand out among its peers. Today, Argentina has the highest agricultural productivity per capita globally—$237,642 compared to a global average of $14,808. It is also the world’s largest grains producer per capita. A situation where less than 1.0 percent of the labour force is producing 5.6 percent of the GDP remains a globally phenomenal level of productivity: a country of about 45 million produces enough food that could feed 400 million people.3 Argentina is not only a leading net exporter of food globally, it is also a pacesetter in sustainable agriculture, including no-till farming. In fact, the commitment to the trilateral principles of agricultural policy—agricultural productivity, biosafety, and environmental sustainability—makes the country stand out globally. Argentina is one of the first sets of developing countries that experienced substantial structural transformation prior to the 1960s. For instance, in 1965, its agriculture share of GDP was 12.9 percent compared to 41.2 percent for manufacturing (Fig. 10.1). Between 1965 and 2017,

1  The accelerated productivity made Argentina the second largest exporter of corn globally (GRO Intelligence 2018). 2  Only Brazil surpassed this achievement in the entire Latin America (Duff and Padilla 2015). 3  The productivity measurement is based on average of 2008–2017 and agriculture production capacity is addressed in detailed in INTA and MoA (2018).

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70 60 50 40 30 20

Agriculture

Industry

2017

2014

2011

2008

2005

2002

1999

1996

1993

1990

1987

1984

1981

1978

1975

1972

1969

1966

1960

0

1963

10

Services

Fig. 10.1  Argentina’s sectoral share of GDP (%). (Source: Author’s computation from WDI database)

both agriculture and manufacturing fell to 5.6 percent and 12.9 percent, respectively—with services becoming more dominant. In fact, agribusiness as a share of GDP is estimated to be between 25 and 30 percent.4 Unlike the situation in many developing countries, and particularly in Africa, employment in agriculture is extremely low. It averaged 0.72 percent between 1991 and 2016 (Fig. 10.2)—compared to over 50 percent in Sub-Saharan Africa. For a very long time, the services sector has been the driver of employment. A further analysis reveals employment in agriculture may have reached its near long-term level. Changes in agricultural productivity have marginal effects on the sector’s employment, but serves as an equilibrating factor in movement of employment between the services and industry sectors, whereby improvement in agricultural productivity increases job opportunities in the services sector. However, because agricultural productivity elasticity of employment in the agricultural sector is inelastic, increases in services push out jobs in the industry sector.5 The structural transformation influenced the dynamics of poverty and income inequality—both of which rose, stabilized, and appreciably fell below their values two decades ago. For instance, poverty rose from less

 This is compared to 25 percent in Brazil (Duff and Padilla 2015).  This is evident in the correlation analysis that is near zero for agricultural employment, near minus one for industry and near one for services. 4 5

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90 80 70 60 50 40 30 20 10 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Agriculture

Industry

Services

Fig. 10.2  Argentina’s employment in agriculture, industry, and services. (Source: Author’s computation from WDI database)

than 1 percent in 1990 to as high as 9.4 percent in 2001, but fell to 0.4 percent in 2017. Similarly, the Gini coefficient rose from 0.408 in 1980, to 0.538 in 2002, and by 2017, it fell to 0.406—even below its level in the 1980s.6 Yet, poverty in Argentina is still predominantly rural, particularly among the indigenous populations, due to limited access to productive land, remoteness to markets, and a limited secured land tenure system.7 As is the case in several Latin American countries, land inequality is very high in Argentina—land Gini was estimated to be 0.83; the proportion of land held by the largest 1 percent of farms is estimated to be 35.93 percent; and small farm holders that constituted 83 percent of total farms were estimated to hold only 13.3 percent of total land. The proportion of farms managed by women is still very low (16.2 percent)—although one of the

6 7

 The data are from WDI.  IFAD (2017) examines key drivers of rural poverty in Argentina.

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highest in the region.8 All of these explain why rural poverty is predominantly high in Argentina. These facts offer ample lessons for African countries to learn from its successes and mistakes to become the global powerhouse of agricultural transformation. Yet, agricultural transformation in Argentina is still impeded by several factors including a non-region- and non-product-wide approach to agricultural transformation; non-alignment between short-­ term objectives (taxes) and long-term objectives (competitiveness and sustainability) as is the case in Brazil; a rising trend of environmental challenges (including excessive use of pesticides); and overdependence on Brazil’s imports. 10.1.2  Innovations Driving Agricultural Transformation Unlike most Asian countries, where land reform played a significant role in agricultural transformation and enhancing productivity, land reform was not a serious issue in Argentina—thanks to the availability of abundant quality land and good agro-climatic zones. Argentina has one of the highest arable land per capita globally and the highest among the case study countries used in this book. Compared to a world average of 0.201 hectare, Argentina’s arable land per capita stood at an annual average of 0.906 hectare between 2005 and 2016—the fifth largest after Australia, Canada, Kazakhstan, and Niger. However, land inequality is more pronounced. For instance, 75 percent of individual and family farms account for only 18 percent of landholding. However, those owning more than 10,000 hectares constitute less than 1 percent of the total land holders, they control 36 percent of total landholding (about 62.8 million ha).9 In contrast with many other countries in these case studies, Argentina did not pay direct subsidies to input or output producers. Rather, surplus was expropriated from the sector through export taxes. The producer support estimates ranged from −51 percent in 2008, to −14 percent during

8  OXFAM (2016) provided a comprehensive analysis of land inequality in Latin America, which shows that countries like Paraguay, Chile, Venezuela, Colombia, Brazil, and Peru are even more unequal in land distribution than Argentina. 9  Detailed breakdown of landholding can be found in Berdegue and Fuentealba (2011). Evidence from OXFAM (2016) reveals that this has worsened with 83 percent of farm holders accounting for only 13.3 percent of total land.

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2015–2017.10 Most financial support was provided to such services as knowledge, innovation, and inspection services. Agriculture was used as a tool of expropriation through taxes. This case study delineates the key drivers of agricultural transformation in Argentina to four groups: enforcement of agricultural regulations and rural landownership; technology adoption; collective institutions; and agricultural-oriented policies (e.g. export taxes on agriculture). Argentina adopted a systemic approach to agricultural transformation—an approach that simultaneously contributes to agricultural productivity, biosafety, and environmental sustainability—a phenomenon absent in the Asian green revolution.11 10.1.2.1 Enforcement of Agricultural Regulations and Rural Landownership Argentine agriculture is subject to several regulations to ensure biosafety and environmental sustainability, covering such areas as crop and dairy production, health and agri-food quality, agricultural commerce and brands on livestock, and environmental protection and preservation. Due to efficacy of its agricultural regulations, Argentina was the first Latin American country to implement an organized system of assessing the biosafety of genetically modified crops (Blake et al. 2016). The enforcement of hygiene and sanitary regulations on plants, animals, agri-foods, agrochemicals and fertilizers by the National Food and Agriculture Quality Services (SENASA) and the National Health Registry for Agricultural Producers (RENSPA)12 contributed immensely to the successful monitoring of quality and standards that created the global safety reputation for Argentine agriculture. The quality orientation earned the country a reduced EU import tariff on high-quality boneless beef under the Hilton

10  There are some exceptions, at some point in time, on preferential credits on tobacco and agricultural provincial services programme (Anton et al. 2019). 11  Argentina was not only interested in the scientific transformation of agriculture but also on the safety of agricultural produce from genetically modified organisms (GMOs). As such, it was the first Latin American country to institutionalize a system of assessing the biosafety of genetically modified crops and to implement strong regulatory frameworks for GMObased agriculture (Blake et al. 2016). 12  For instance, in addition to mandating all entities undertaking agricultural and livestock activities to register with RENSPA, it is also mandatory for RENSPA to direct producers to relevant farms (Blake et al. 2016).

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Quota. Arising from the strict forestry regulations, it is mandatory for any landowner or tenant to obtain permission to cultivate forest land. This is one of the reasons why deforestation is low in the country. Lessons from regulatory frameworks and enforcement could be a turning point for Africa’s agricultural transformation. Although land reform was not a priority in Argentina, policies and regulations to protect rural dwellers from being dispossessed of their lands, to protect tenants from being unnecessarily evicted, and to avoid land grabs were instituted and enforced. For instance, Law No. 13, 246 mandated all lease agreements on rural land to have a minimum of three-year term and a maximum of ten-year term, but could be extended to 20 years if the land requires improvements (e.g. irrigation) by tenants. Also, Law No. 26,737 forbids foreign entities to own rural land located beside significant water bodies; limits foreign ownership of rural land to a maximum of 15 percent; and restricts foreign entities or individuals of the same nationalities to own more than 4.5 percent of rural lands in Argentina.13 10.1.2.2 Technology Adoption and Diffusion The renewed transformation14 during the 1990s under President Carlos Saúl Menem Akil completely changed the agricultural landscape in Argentina. His regime led to a fundamental change in agricultural production systems that included the ‘no-till’ technology, biotechnology, and farm intensification through agrochemicals, fertilizers, and irrigation. Adopting genetically modified crops in 1996 and wide acceptance of direct seedlings in the Pampas region (especially glyphosate-resistant soybeans) are among the innovations that shifted the frontier of agricultural transformation in Argentina. The no-till farming and direct seedling systems support soybeans production to the extent that soybeans eclipsed corn production by over 25 metric tonnes between 2013 and 2017. Argentina became the largest exporter of soybean meal,15 while the high-­ protein content of Argentine soybeans encourages foreign demand, especially from Brazil, United States, China, and Vietnam. The technological  For detailed overview of agricultural laws in Argentina, see Blake et al. (2016).  This period witnessed substantial agricultural modernization, land concentration, and diversification between crops and livestock that put Argentina on the world map of agricultural transformation. 15  The country has 42 percent of the global market share of soybean estimated to be an annual market worth of $27.3 billion. https://commodity.com/argentina/ 13 14

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diffusion accounts for a high level of productivity in Argentina, where less than 1 percent of the labour force accounts for about 5.6 percent of GDP, contrasting other developing countries where substantial labour force accounted for relatively smaller share of GDP. Through the instrumentality of no-till farming, Argentina adopted a precision-farming system, which goes beyond the planting system to selecting high-quality seeds, deepening crop rotation systems, adopting on-farm environmental-friendly practices (e.g. fertilization, pest management, and weed control), and integrating harvesting and post-harvesting management practices (INTA and MoA 2018). The adoption of an integrated agricultural production system that comprised at least eight technological parameters, namely, no-till farming, precision agriculture,16 irrigation, fertilizers, inoculants, silo bags, phytosanitary measures, and GMO.  Since 2000, however, only no-till, precision agriculture and silo bags have been growing monotonically, while GMO and phytosanitary measures have flattened. Special equipment (including planters and harvesters) were designed for this precision farming in order to maintain soil integrity and an equilibrium balance between agriculture and the environment, which appreciably reduced carbon emissions. Making precision farming a strategic priority is positioning Argentina to represent the future of agriculture more than many other countries globally. Adopting artificial intelligence, big data, blockchain, genetics, and product traceability technologies are not only enhancing precision farming, but also promoting agricultural cost-effectiveness and sustainable agriculture. All these aspects are making Argentina better equipped to produce foods for world markets and making their produce more appealing to market agents. The rising trend of R&D, especially between 1996 and 2012, contributed to the level of innovativeness in the sector. For instance, it rose from 0.30 percent in 1996, to 0.57 percent in 2014,17 but declined to 0.42

16  The use of agricultural automatic pilots and variable rate seeding and application (VRA) (including seeding control monitors, satellite mappers, and yield monitors) have become basic requirements in Argentina’s agriculture. For more illumination, see https://worldcrunch.com/tech-science/argentina-digs-into-data-driven-precision-agriculture 17  It was as high as 0.63 percent in 2012, based on author’s computation from WDI database.

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Table 10.1  R&D expenditure as a share (%) of GDP, 1996–2017 Year 1996 2014 2017 Average 2000–2017

Argentina

Brazil

Colombia

Costa Rica

LAC

0.42 0.62 0.54 0.51

1.05+ 1.27 1.26 1.12

0.29 0.31 0.24 0.20

0.30 0.31 0.24 0.20

0.57+ 0.76 0.74++ 0.66

Note: + means data is for 2000; ++ means data is for 2016, and LAC stands for Latin America and the Caribbean Source. Author’s computation from WDI (accessed June 2020)

percent in 2017. Overall, this is below 0.66 percent for the Latin America and the Caribbean region and Brazil’s performance during 1996–2017 (Table 10.1). The integrated production system promoted developing agricultural value chains nationally, including upstream and downstream integration. For instance, on the upstream side, Argentina is excelling with its 50 planter factories and 55 sprayer manufacturers. Given its multiple climatic zones, a caricature of most global climatic zones, it is mandatory for manufacturers to ensure their equipment meets at least four eco-zones, soil, and crop diversity. This makes Argentine equipment relatively more suitable not only for Latin America but also for African, Asian, and Eastern European countries. This reality made the country’s agricultural machinery exports rise from a mere $10.3 million in 2002 to over $400 million 2018. The strong alignment to local content policies in developing agricultural value chains accounted for why 98 percent of seeders used in Argentina are manufactured in the same country (INTA and MoA 2018). 10.1.2.3 Stronger Collective Institutions This success in agricultural transformation is incomplete without the role of collective institutions to help inculcate learning by doing, technology acquisition, and sharing at the community and regional levels. On one hand, the proactive attitudes of cooperative and producer 18   Some of these associations include the Argentina No Till Farming Association (AAPRESID), the Argentine Rural Society (SRA), the Argentine Rural Confederations (CRA), the Argentine Association of Regional Consortiums for Agricultural Experimentation (AACREA), the Agricultural Inter-Cooperative Confederation (CONINAGRO), and the Argentine Agrarian Federation (FAA).

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Box 10.1: No-till Farming is Revolutionizing Agriculture in Argentina

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No-till farming—a process of cultivating crops without tilling and keeping residues from previous crops as ground cover, was introduced in 1977 to reduce soil degradation and enhance better use of rainwater—has become the pillar of conservation, better use of natural resources, and a tool to adapt to and mitigate impacts of climate change. The no-till system protects the physical, biological, and ecological integrity of the soil, which amounts to storing of about 100 millimetres of usable water per year compared to conventional methods—leading to 23.6 percent and 30.8 percent yields in soybeans and maize, respectively. Today, it has become an integral part of agricultural systems—with its utilization rising from less than 3.0 million hectares in 1992 to about 33.0 million hectares in 2015. As of 2018, this planting system that efficiently improves water capture and storage in soil, as well as better accumulation of organic materials, covered 92 percent of the country’s cultivable arable land. Due to this technique, production consistently increased by 197 percent between 1977 and 2015. This made Argentina become the largest grain production per capita, followed by Canada, Australia, the United States, and Brazil in descending order. The value of no-till farming (including protecting soil integrity, enhancing operational efficiency, improving productivity, preserving the environment, and its adaptive capability to different ecological situations) has enhanced the adoption of this technique in several parts of the world (e.g. South Africa, Russia, Ukraine, Kazakhstan, and many Latin American countries). As of 2018, Argentina exports agricultural machinery, spares, and the no-till know-how to 50 countries. Source: Author’s compilation from INTA and MoA (2018).

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associations 18 contributed immensely to farmers receiving better access to information, credit, and markets. These associations played a vital role in group negotiation in inputs markets, which contribute to efficiency and economies of scale. Other factors include large-scale contractors, sowing pools (see Box 10.2), and farmers innovation associations (Duff and Pandilla 2015; and Anton et al. 2019). On the other hand, stakeholders’ collaboration and partnerships played a strong role. For instance, strong alliances between government institutions; research and technology institutions (e.g. the National Agricultural Technology Institute, INTA); and manufacturers contributed to the astronomical increase in Argentina’s exports of machinery to many parts of the world. In fact, it was an integral part of the missions of Argentina’s embassies in several countries. Argentina adopted a system of decentralized institutions, with long-standing traditions for competence and stability, to manage agricultural policies and strategies.19

Box 10.2: Sowing Pool is Changing Agricultural Production Landscape

The Sowing Pool (SP) is a child of necessity in Argentina. It became prominent because of a lack of an inclusive domestic credit system for small-scale agriculture in Argentina, resulting from the Mexican Tequila crisis in 1995 and the national debt default in Argentina in 2002, which made lending rates very prohibitive (presently over 30 percent). SP is a speculative investment fund that provides financial management—commercial and agronomic—for the large-scale production of cereals. It is an outsourcing framework that contracts land to third parties with the objective of achieving crop and regional diversity to hedge for climatic and price risks in order to maximize investment returns. There are several variants of ‘Sowing Pool.’ One form of SP is the partnership among a landowner, an agricultural expert, (continued)

19  Good examples include the National Institute of Agricultural Technology (INTA) for research and extension services and the National Service for Agro-Food Health and Quality (SENASA) for animal and plant health services (Anton et al. 2019).

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Box 10.2  (continued)

and a contractor to run agriculture as a business enterprise. In this partnership, the purchase of inputs, and the sowing and harvesting work are done by the contractors, while the sale is predetermined and done through networks of buyers, processors, or exporters. It is a major tool for turning agriculture from a way of life into a business enterprise. Investment layouts range from $10,000 to US $100,000 with an annual average rate of return of 15–20 percent. Some of the factors driving SP profitability include minimization of climatic risk, efficiencies associated with economies of scale in inputs and output markets, favourable international commodity prices (including increasing demand for biofuel), diversification across regions and crops, distrust of the local financial system, and low interest rates in Western markets. Some of these initiatives are translating to investment trust funds. Sources: http://www.emia.org/news/story/2123 and http://www.fao.org/3/y5210e/y5210e0d.htm#TopOfPage and Kennedy (2013)

10.1.2.4 Liberalization of Agricultural Policy Agriculture is a victim of instability of fiscal policy in Argentina: since the early 2000s, fiscal policy has disincentivized the agricultural sector. Argentina’s agriculture has not only been subsidizing the rest of the economy, but has also been expropriating a surplus of poor farmers to finance the wealthy population. For instance, the producer support estimate has been negative, averaging −14 percent between 2015–2017 from the lowest value of −51 percent in 2008—compared to positive values in OECD countries (OECD 2019a). High export tariffs on wheat, corn, and soybeans were a major disincentive to farmers and an important factor for low productivity.20 The agricultural liberalization policy adopted by President Mauricio Macri’s administration since 2015, for instance, changed the

20  Over the past three decades, for instance, the administrations of Néstor Kirchner (2003–2007) and Cristina Fernández de Kirchner (2007–2015) introduced draconian export taxes on grains and livestock, which served as a major impediment to productivity.

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production landscape for grains (wheat and corn). Eliminating the 23 percent export tariff,21 removing export limitations, and devaluing the peso22 have all been linked to the expansion of 4.9 million acres in wheat cultivation between 2015 and 2017 and massive planting of corn—leading to an increase of 5.19 million acres planted nationally—with corn between 2016 and 2017 alone and leading to an upsurge in 10.5 metric tonnes during this period (GRO Intelligence 2018). Building a diversified trade and investment partnership across regions and products could further strengthen competitiveness and diversification. 10.1.3  Lessons and Challenges Argentina offers ample lessons for Africa’s agricultural transformation. First, the strategic focus on integrated and sustainable innovations that are contextualized to their agro-climatic zones and soil is a major lesson. A clear policy message is that agricultural technology must not be adopted blindly. It must be contextualized to the local context and easily understood by local farmers. Second, the role of collective institutions like cooperatives, as being done in several African countries like Ethiopia, Ghana, and Morocco, should be strengthened to allow for economies of scale in inputs and outputs markets, with a view to reducing exploitation of farmers by big contract farmers and government institutions. The sowing pool arrangement could also be useful to Africa. Third, the legendary tradition of putting agricultural policies and programmes in the hands of competent and stable institutions is novel for Africa to emulate. Fourth, the robust enforcement of regulatory frameworks and laws that protect rural dwellers from capitalist and contractors is also worthy of emulation. Finally, the symbiotic relationship between government, private sector, farmers associations, and research institutions would be valuable to African countries. In spite of these lessons and achievements, Argentine agriculture still faces some daunting challenges, which also offer opportunities for

21  Agricultural tariffs and export taxes between 2001 and 2015 as well as export restrictions were a major impediment to agricultural performance and productivity in Argentina (OECD 2019). However, the reintroduction of temporary taxes on all exports in September 2018 triggered by macroeconomic instability (e.g. large exchange rate depreciation), could dampen producers’ prices and agricultural productivity. 22  This is estimated to be about 17 percent since December 2017 (GRO Intelligence 2018).

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learning to leapfrog agricultural transformation. First, there is urgent need to address production and productivity challenges in locations outside the Pampas region, as well as outside soybeans, grains and animal husbandry—to make the transformation holistic. Regional approaches to agricultural development, based on regional soil and crops context and diversity, are key to using agriculture to drive inclusive development in Argentina. Second, the overdependence on Brazil’s importation of wheat (accounting for 84% of Brazil’s demand in 2017) could pose some risks that expose Argentina’s economy to external shocks. A diversified market is key to insulating itself from the vagaries of localized external shocks. Third, volatile macroeconomic conditions—including policy uncertainty, especially exchange rates and instabilities, and export restrictions on meat and dairy products—all of which affect competitiveness are other impediments, which require strategic priority for agriculture to be at its peak. In addition to addressing the fiscal bias against the agriculture sector in a more consistent and sustainable manner, having well-targeted, stable, and predictable policies are urgently needed. Consistent policies to eliminate the negative producer support estimates are imperatives. In addition to balancing the short-term objective of fiscal revenue from agriculture to the long-term objective of agricultural competitiveness and sustainability, addressing the scarcity of financial services to farmers, deficiencies in public investment in infrastructure, particularly to regions outside the Pampas, and the lull in statistical information arising from lapses during the 2007–2015 era remain vital. Fourth, the recent droughts in Buenos Aires, Cordoba, and Santa Fe are affecting farmers’ expectations and prospects for economic viability and agricultural stability. This calls for a copious review of the environmental implications of agricultural practices, especially on deforestation and rising use of pesticides, which are emerging challenges that are begging for urgent attention from stakeholders. The increasing trends in erosion associated with intense, but often short duration rains could derail long-term agricultural viability. The need to regulate use of pesticides is also relevant in this respect. Finally, the predominance of rural poverty, especially among the indigenous populations, often associated with their limited access to productive land, remoteness to markets, and inadequate access to a secured land

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tenure system, deserves strategic attention in making agriculture an engine of inclusive growth and development in Argentina. The overconcentration of agricultural transformation in the Extended Pampas region and limited strategic support to family farmers restricts its development impact.23

10.2   The Case of Brazil 10.2.1  The Context Brazil is a very large country in many respects. Apart from being the largest country in Latin America (geographically, demographically, and economically), it is the fifth largest in the world on landmass,24 the sixth most populous country,25 and the eighth biggest in GDP.26 Overall, Brazil is blessed with abundant arable land, with its agricultural land accounting for 10.3 percent of all countries (of which 29 percent is arable),27 and its water reserves account for about 20 percent of the world;28 the country remains a major global agricultural powerhouse, either by production or exports. All these factors combined make agriculture the oxygen of the Brazilian economy and a power to be reckoned with in the global food market and food security agenda.

23  The concentrated agricultural transformation has not been able to bridge the poverty gap between the Northeast region (33.2 percent) and other regions in the country—compared to the national average (25.7 percent), Pampas (25.4 percent), and Patagonia (18.9 percent) in 2017—based on national headcounts. https://www.thebubble.com/ argentina-poverty-rate-2017-25-7-percent 24  With its land area of 8.358 km2, it accounts for 5.6 percent share of the world landmass, comes after Russia (11 percent), China (6.3 percent), Canada (6.1 percent), and the USA (6.1 percent). https://www.worldometers.info/geography/largest-countries-in-theworld/ 25  With its 212.56 million in 2020, it accounts for 2.73 percent of the world population after China (18.47 percent), India (17.7 percent), USA (4.25 percent), Indonesia ((3.51 percent), and Pakistan (2.83 percent). https://www.worldometers.info/world-population/ population-by-country/ 26  Brazil’s $2.054 trillion GDP in 2017 accounted for 2.54 percent of the world share. 27  For the agricultural power and potential, see OECD (2019). 28  See https://www.worldbank.org/en/news/feature/2016/07/27/how-brazil-managing-water-resources-new-report-scd#:~:text=For%20example%2C%2062%25%20of%20 Brazil’s,72%25%20of%20Brazil’s%20water%20supply.

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Between 1960 and 2000, Brazil transformed itself from a net importer to a super net exporter,29 with substantial impacts on food security and poverty reduction. Brazil is the largest producer and exporter of coffee, orange juice, soybeans, and sugar as well as the largest exporter of beef, poultry, and soybeans. It is the world’s leader in orange juice, accounting for about 80 percent of the world export, which is novel. This transformation does not only improve Brazil’s global competitiveness and balance of trade, it also helps to improve the country’s global progress on hunger and food security as well accelerated poverty reduction. 10.2.2  Overview of Brazil’s Structural Economic Transformation Brazil’s economic development landscape has been dynamic, turbulent, and transformative throughout the Import Substitution Industrialization Strategy (1960–1980), the transition decades (1980–2000), and the economic stability and growth (2000 to date). Since 2000, the Export Promotion Industrialization Strategy has been a strategic focus. Brazil has succeeded in promoting sustained structural economic transformation by consistently reducing the share of agriculture in the GDP value addition— from 17.7 percent in 1960 to 6.9 percent in 1990 and 4.4 percent in 2018 (Fig. 10.3). Prior to 1990, both industry and services were competing in absorbing the labour loss in agriculture. This trend changed after 1990, when the service sector become dominant and its share rose from 43.4 percent in 1994 to 62.6 percent in 2018. Its contribution to GDP value added since 1995 surpassed the combined shares of agriculture and industry. Unlike many countries in Latin America and Africa, Brazil’s services sector is more advanced, particularly in those sub-sectors such as hospitality, financial services, retail sales, and personal and professional services. The rising trend of business and government services, which focus on servicing domestic demand, boosted the dominance of the services sector. The consumption-driven financial system services is also boosting

29  Between 2012 and 2014, Brazil’s annual agricultural trade balance averaged $81.3 billion (Duff and Padilla 2015), one of the largest globally. Based on the volume of exports, Brazil was the third largest exporter after USA and EU as of 2015. Brazil accounted for 7.3 percent of the world agricultural exports (FAO 2014). In fact, Brazil accounted for 62 percent and 79 percent of orange juice production and exports globally (USDA 2018).

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70 60 50 40 30 20

Agriculture

Industry

2017

2014

2011

2008

2005

2002

1999

1996

1993

1990

1987

1984

1981

1978

1975

1972

1969

1966

1963

0

1960

10

Services

Fig. 10.3  Brazil’s sectoral share of GDP (%). (Source: Author’s computation from WDI database)

consumer confidence in the economy. However, the country has been underperforming in export market services, which explains why Brazil has not been able to attract substantial FDIs into the sector in recent times. As evident in Fig. 10.3, Brazil has been deindustrializing since 1989, when industrial value added fell from 42.3 percent to its lowest ever since 2016 (about 18 percent). Paradoxically, the period when agriculture’s contribution to GDP value added declined continuously also witnessed an impressive strengthening of agriculture in the economy. The structural economic transformation helped transform Brazil from a net food importer into a leading net food exporter—and one of the largest exporters of agricultural products in the world. For instance, while agro-food exports as a share of total exports rose from 29.3 percent in 1995 to 37.3 percent in 2017, agro-food imports as a share of percentage of total imports declined from 12.4 to 6.8 percent during the same period (OECD 2019). Moreover, agriculture was also playing a fantastic role in propelling a fast-growing agribusiness sector that has been boosting small-scale businesses and promoting inclusive growth.30 A bivariate analysis between

30  The size of agribusiness in Brazil is large—about B$1.5 trillion in 2016 (World Bank 2017).

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80 70 60 50 40 30 20 10 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Industry

Agriculture

Services

Fig. 10.4  Brazil’s employment in agriculture, industry, and services (%). (Source: Author’s computation from WDI database)

agricultural total factor productivity and the services sector reveals that increases in agricultural productivity pushes out labour from the sector: employment in the sector declined from 18.9 percent in 1991 to 9.2 percent in 2019. Productivity in agriculture is also propelling the growth of employment in the services sector.31 Agricultural productivity promotes the growth of such activities as logistics, retail, and packaging services in Brazil. Figure 10.4 presents the dynamics of employment across the three sectors. Despite the low relative share in the GDP value added, agriculture remains a major stabilizer of the economy. For instance, while the growth of the entire economy averaged −0.11 percent (2013–2018), without

31  While agricultural productivity pushes labour out of farming (with a correlation index of −0.981), it also helps pull labour into the services sector (with a correlation index of 0.964) for data between 1991 and 2016.

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160 140 120

Axis Title

100 80 60 40 20

-40

1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

0 -20

Labour

TFP

Fig. 10.5  Brazil’s TFP index and labour growth (%). (Source: Author’s computation from WDI database)

agriculture’s growth rate of 4.78 percent during the period, the overall growth outcome would have been worse. Brazil experienced a consistent rise in agricultural total factor productivity (TFP) (Fig.  10.5). Annual average growth in agriculture TFP between 2005 and 2015 was 3.86 percent, an improvement from 2.26 percent during 1995–2005. The TFP index rose astronomically from 49 in 1961, to 75 in 1990, and 142 in 2015, compared to the world average of 70, 80, and 120 during the period.32 Technological adoption, prioritization of agricultural R&D, enhanced funding of agricultural programmes (especially the rural credit scheme), the development of new frontiers for farming, lower prices for imported inputs, and recent increases in cultivable areas33 have all contributed to this impressive achievement. All these factors helped diversify production away from primary and traditional products (e.g. coffee and orange juice) to exports and

32  Author’s computation from https://www.ers.usda.gov/data-products/internationalagricultural-productivity 33  The share of arable land in agricultural area rose from 22 percent in 1995 to 29 percent in 2017.

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agribusiness development (including soybeans, sugar, poultry and pork).34 The rising importance of agriculture leads the agribusiness sector to account for about 24 percent of the country’s GDP in 2016.35 Agriculture is not only a net job creator, but a growth driver that does not deplete the natural capital of the country monotonically, as is the case in countries that fully transformed their agricultural sector—even among OECD members. This contributed substantially to reductions in poverty and hunger. For instance, poverty ($1.9 per day) consistently declined from 26.9 percent in 1984 through 2014, to 2.7 percent, before it rose to 4.4 percent in 2018. The Global Hunger Index also declined from 12 percent in 2000 to 5.3 percent in 2019. The proportion of undernourishment in the population followed the same trend. Yet, income inequality in rural areas remains a challenge. 10.2.3  Innovations Driving Agricultural Transformation Since the 1960s, Brazil has been prioritizing strategic actions that help increase productivity (such as access to technology, credit, product marketing, and risk mitigation and management) and market competitiveness that has earned the country accolades as a competitive agricultural exporter of a global repute. Today, Brazil’s producer support, through market price support and input payment systems, are aligned to international markets—falling from 5.7 percent to 2.6 percent between 2000 and 2002 and 2016 and 2018 (OECD 2019). What makes productive and competitiveness objectives achievable? 10.2.3.1 Evidence-based Integrated Agricultural Plans, Policies, and Programmes The long-term vision and goal of an agriculture sector that is devoid of political administration vicissitudes and adopting a whole-of-government approach in a federal setting (at both the vertical and horizontal levels)

34  The share of livestock in total agricultural production rose from 28 percent in 1995 to 33 percent in 2017. This is in contrast to reduction in land dedicated for pasture from 165 million ha in 1977 to 145 million ha in 2016, while annual crops expanded from 36.8 million to 69.5 million (OECD 2019b; Clements et al. 2019). This is an indication of productivity in the livestock sector. 35  This comprises agriculture inputs, transformation, production, and distribution, and this was estimated to be R$1.5 trillion in 2016 by the World Bank (2017).

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played a critical role in Brazil’s success. Agriculture was not supported for its own sake, but was seen as a tool to accelerate inclusive development, achieve food security, and foster global competitiveness. Ensuring annual budgets derive from medium- and long-term plans, policies, and strategies, supported by astute implementation and regular monitoring, is one of the narratives behind the country’s success. Investing in the implementation capacity of various actors played a pivotal role, including the technical capacity of extension workers and entrepreneurial capacity of farmers. Regular interactions between agricultural research institutions, extension workers, and farmers is another critical success factor. All these, coupled with the Presidency as the Special Secretariat for Family Farm and Agrarian Development, helped the Brazilian Government to walk-the-talk of policy and programme implementation. 10.2.3.2 Implementation of a Dynamic Rural Credit Scheme Brazilian family farms represent 85 percent of total farms—having access to only 25 percent of rural financing—accounted for about 38 percent of agricultural production in 2010 and about 40 percent in 2018.36 In this regard, the national rural credit scheme plays a central role in Brazil’s agricultural development. The continuous expansion, reinforcement, and reinvigoration of rural credit schemes contributed to this incredible progress. The National Development Bank, the largest creditor in Latin America, was the main institution providing subsidized credits to farmers. Understanding the operational frameworks and their critical success factors could offer some learning points for Africa. During the first two decades of this scheme (1965–1985), emphasis was on the use of state instruments with official sources, accounting for about 80 percent, while commercial banks accounted for about 12 percent of credits. Since 1985, emphasis shifted to using market-based instruments, with government accounting for only about 28 percent of credits, and private sources accounting for the balance (Box 10.3). Under this scheme, banks are required to loan certain proportions of their current accounts, sight deposits, or rural savings deposits, which is currently pegged at 30 and 60 percent respectively—based on reforms in 2017 and 2018, to family and small-scale farmers.

36  The value and contributions of family farms are extensively discussed in Guanziroli and Basco (2010) and Assuncao and Souza (2019).

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Given the new focus, some institutions were established to align rural credit practices with emerging agricultural strategies. For instance, in 2006, the National Programme for Strengthening Family Farming was created to finance family farm investments. In 2008, subsidized credit lines were offered to rural farms to invest in modern infrastructure, while in 2010, the Medium Scale Agricultural Producer Support Programme and the Low Carbon Agriculture Programme were established to support subsidized farming.37 In addition to a debt rescheduling programme of the 1990s and 2000s,38 several agricultural insurance subsidies were offered to production losses due to natural disasters.39 Building on the achievements of the Agricultural Activity Guaranteed Programme established in 1973, the Programme of Support to Rural Insurance Premium (established in 2005) has been providing insurance at lower rates to family farmers and the Fund for Rural Catastrophe has been providing supplemental coverage to insurance and reassurance companies during disasters (FAO 2014). In 2018, the government, through the Agriculture and Livestock Plan 2018–2019, established a minimum budgetary allocation for rural credit of $51.1 billion, a marketing programme ($716 million), and insurance subsidies ($165 million). In addition to reducing the deposit requirements for rural credits, the compulsory resources are now extended to livestock and investments in permanent reservation areas, while warehouse expansion, GHG emission reductions, and technological innovation programmes, among others, were also prioritized. During this period, 80 percent of rural credit benefited from preferential interest rates, while 20 percent were based on market rates, which led to increases in credit for investment by 24 percent and credit for working capital by 9.0 percent during the year (OECD 2019).

37  FAO (2014) examines the various institutional mechanism for supporting rural agriculture between 2000 and 2012. 38  The continuous renegotiation and guaranteeing of loans in arrears or uncollectible loans remains a major weakness of the programme, which could create moral hazard, if not finally addressed. 39  The notable programmes are the Insurance Premium Programme and the General Agricultural Insurance Programme paid to commercial producers in the Southern region mainly to soybeans farmers as well as the Family Agriculture Insurance and the Crop Guaranteed Programme paid to small-scale farmers (OECD 2019).

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As a result of the need to promote entrepreneurial capability of small farmers, the National Family Farm Strengthening Programme (PRONAF) was established in 1999. Loans issued for working and investment capital rose from about B$4.0 billion in 1999 to about B$12.0 billion in 2011. This programme did not only match different farmers based on locations and crops to ranges of production systems (including land and technology), it also strengthened their loans’ operational capacities and financial disciplines. It specifically provided farm infrastructure support, credit facilities, and technical assistance to farmers. Most credit and input-based supports since 2008 are conditional on environmental and family practice criteria as incentives to promote sustainable farming. In promoting sustainable agricultural practices, a special credit programme called the Low Carbon Agricultural Programme was created to incentivize recovery of degraded lands, promote production of organic agriculture and livestock, enhance no-till farming, and preserve natural resources. This initiative also aims to support biofuel production and use and reduce GHG emissions. Evidence from Assuncao and Souza (2019) reveals the valuable contribution of rural credit. A 1.0 percent increase in rural credit lending increases municipal crop production by 0.29 percent, agricultural GDP by 0.17 percent, and cropland productivity by 0.22 percent. It also contributed to an increase in rural incomes. Now that the Policy Rate has fallen from an all-time high of 42 percent in March 1999 to an all-time low of 3.0 percent in May 2020, an important means to further accelerate small farmers access to credit is to continuously simplify borrowing regulations and procedures. Linking agricultural credit to farming technical and non-technical innovations, plants and animal health (including adhering to sanitary and phytosanitary measures), and entrepreneurial and environmental practices will help push the frontier of small-scale farming.

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Box 10.3: Rural Credit Scheme

The rural credit system was established in 1965 to provide credit at low interest rates to acquire agricultural inputs and machinery— which were adjudged to be beyond the reach of poor farmers—and to finance operating costs and marketing of agricultural products. The three main features of the system are: interest rates must be lower than the inflation rate; lower interest must be charged on loans to small farmers; and a legal requirement for banks to reserve certain proportions of their deposits (e.g. 15 percent, later changed to 34 percent of check or sight deposits of commercial banks, then changed to 30 percent in June 2018, and 74 percent of rural savings deposit also changed to 60 percent in November 2017). The credit rose from about B$20 billion in 1969 to about B$140 billion in 1979. Due to the crises in the 1980s and 1990s, coupled with the structural adjustment programme, it gradually declined to an all-time low of less than B$20 billion in 1996 before rising to about B$80 billion in 2009. The loan was to acquire land, modern inputs (like tractors, improved seeds, and fertilizers), and to market produce. This led to increases in the use of fertilizers by 550 percent between 1966 and 1976. The implementation of rural credit also boosted the industrialization agenda by increasing local production of tractors, which rose from 6300 in 1967 to 62,000 in 1975, which were mostly sold locally. Prior to 1985, commercial banks accounted for about 12 percent of credits, while official sources accounted for about 80 percent. From mid-1980, a market-based system40 was adopted, and by 2003, official sources (i.e. The National Rural Credit System) shrunk to only 28 percent, while other sources (e.g. resources from farmers, traders, input processors, and private banks) accounted for 72 percent. Since 2000, there was a shift from working capital credit to (continued)

40  Some of the market-based instruments include the Agricultural Certificate of Deposit, the Agribusiness Credit Note, the Certificate of Agribusiness Credit Rights, and the Certificate of Agribusiness Receivable (FAO 2012).

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Box 10.3  (continued)

investment credit with the aim of promoting agricultural investments such as tractors, machinery, irrigation facilities, agro-ecology, conservation, and biodiversity. Despite its significant role and impacts, this scheme has several challenges. The rural credit scheme did not benefit all regions (it concentrated mostly in the South and Southeast), producers (mostly large and medium-scale farmers), nor products (mostly cotton, soybeans, and rice) equally, which led to varying degrees of adopting modern technology in the focused regions at the expense of others. For instance, as of 2010, small farmers that constituted about 74 percent of all farmers only received 11.38 percent of the loans; medium farmers, accounting for 22.9 percent, received 35.1 percent of the loan, while large farmers who represent only 3.3 percent received 53.5 percent in 1976. Inequity in loan applications across the various groups of farmers is an issue. Efforts to overhaul the debt rescheduling programme are also long overdue. Sources: FAO (2014), OECD (2005, 2019).

10.2.3.3 Strong Agricultural Extension, Research, and Technological Capacities Technology has been playing a very strong role in Brazil’s agricultural outputs and productivity, rising consistently over the past five decades. For instance, it rose from 50 percent in 1996, to 68 percent in 2006, and to about 81 percent in 2016.41 Several factors contributed to this technical change. Brazil’s agricultural extension and technical assistance services, which started in 1948, was patterned along the North American approach. In addition to promoting the use of modern tools and techniques, it also helped farmers to prepare fundable projects under the agricultural credit schemes. The coverage of this scheme rose phenomenally between 1960 and 1980. For instance, the number of extension offices rose from 199 to

 See World Bank (2017) and Clements et al. (2019) for further illuminations.

41

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2231 and the number of extension officers from 270 to 6757 during this period. This growth expanded the number of farming communities covered from 10 percent in 1960 to 78 percent in 1980 (FAO 2012). To obviate the limited technologies and technical knowledge transferred to farmers, the Brazilian Agricultural Research Corporation (EMBRAPA) was established in 1973.42 It has since been contributing to deepening agricultural research and building human resource capacities. Within a very short period, EMBRAPA, through innovative research and technology, succeeded to bring the acidic and non-nutrient soils of the Cerrado region into the country’s agricultural production ecosystem— now a major producer of grains. Another grain production frontier region, called MATOPIBA, was also created in the northeast of Cerrado, strengthening agricultural production by about 73  million hectares (Clements et al. 2019). And coupled with its decentralized agricultural centres, it was able to develop specialized products (contextualized to different climatic zones) and resources.43 The transformation of the Cerrado region from less productive to a very productive agricultural zone, in the Midwest, is another example.44 Dedicated resource allocation, which increased by about 1000 percent between 1974 and 1982, and by about 62 percent between 2000 and 2017, contributed to these feats. And by 2017, the budget of EMBRAPA stood at $1.02 billion, almost the size of the total GDP of several African countries. While the budget to EMBRAPA is huge, the declining trends on overall agricultural innovations are a source of concern.45 Brazil is a leading country in advancing technology for tropical agriculture—thanks to strong partnerships between EMBRAPA, research 42  This is in addition to several other research institutions like the National Agricultural Research System (SNPA) that was established in 1992 and Agencia MATOPIBA in 2017, as well as state research institutes, universities, and private organizations—all aimed to achieve resilient and sustainable agriculture. 43  These include EMBRAPA rice and beans, and EMBRAPA maize and sorghum (for products), and EMBRAPA savannah, EMBRAPA temperate agriculture, EMBRAPA Territorial, EMBRAPA agrobiology, EMBRAPA food technology (for resources). Other resources include the Agricultural Zoning Programme and AGROPENSA serving as an agricultural intelligence centre among other initiatives (FAO 2012; Clements et al. 2019). 44  This led to migration from the South, where landholding is small due to high prices, to the Cerrado region, where landholding is large and affordable. This increases economies of scale for the migrants. 45  The current share of R&D in total agriculture public goods and services of 40 percent is lower than the OECD countries that ranged between 60 and 90 percent (World Bank 2017).

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institutions, and universities. In addition to contextualizing fertilizer, machinery, and other inputs to its climatic zones and soil structure, the mastery of two-harvesting seasons in one marketing year for certain crops makes Brazil a pacesetter among its peers. The volume of land committed to double-crop production has doubled since 2000, amounting to 9.6 million hectares, producing about 54 million metric tonnes (Duff and Padilla 2015). Adoption of technology to soils and climatic conditions of the tropics;46 agroforestry and management of native forests; development of livestock breeds for meat and milk; optimization of irrigation systems; intensification of agricultural mechanization and local production (of tractors, planters, and harvesters); biological control of pests and diseases; among others, all shifted Brazil’s agricultural frontiers completely. All these efforts helped to phenomenally propel productivity. Figure 10.5 above presents the TFP index trend with its annual growth, rising from 2.26 percent during 1995–2005 to 3.86 percent (2005–2015)— far better than the world average. The continually widening gap between TFP index and labour growth indicates more outputs are being produced with less labour. Annual average labour growth between 1962 and 2015 is −0.34 percent. The decades’ growth of TFP, farm machinery, fertilizers, irrigation, and labour are presented in Table  10.2. Unlike most African countries, most of the inputs were manufactured in Brazil. In fact, input subsidies in Brazil at most points in time were used to boost domestic Table 10.2  Growth of agricultural total factor productivity and inputs

TFP Machinery Fertilizer Irrigation Labour

1970–1979

1980–1989

1990–1999

2000–2009

2010–2016

0.46 11.86 20.35 7.19 0.90

4.28 3.97 1.78 5.45 −1.15

1.61 1.13 5.95 2.02 0.42

2.72 0.48 5.81 5.35 0.71

2.12 3.51 7.80 3.85+ −6.60++

Note: + indicates figure for 2010 only and ++ stands for the average for 2010–15 Source: Author’s computations from USDA (2018): Database https://www.ers.usda.gov/data-­ products/international-­agricultural-­productivity

46  Some of the soil fertility improvement efforts include the biological fixation of nitrogen, no-till production, and the novel cultural practices of agro-ecology such as the crop-livestock-forest integration system (FAO 2012; Clements et al. 2019).

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19.31 166.46

116.70

87.05 129.45

397.21

8.85 226.21 92.63 234.43 Cassava

Coffee

Cotton

Edible beans

Maize

Rice

Sorghum

Soybeans

Sugar Cane

Wheat

Fig. 10.6  Brazil’s percentage change in crop yields, 1978–2008. (Source: Author’s computations from FAO 2012)

market demands for inputs, especially tractors. Efficiency use in inputs led to a substantial rise in yields of various crops. Yield per hectare rose across various crops between 1978 and 2008 (Fig. 10.6). It is important to note, however, that productivity growth is not homogenous across farm-sizes and regions. The fastest annual average TFP growth was among the smallest farms (0–5 ha) and the largest farms (500 ha and above). Regionally, TFP growth declined with farm size in the North region, increased with farm size in the Centre-West region, while it is U-shaped in the South region.47 The agricultural innovations and associated crop yields made Brazil the powerhouse of regional and global food production and exports. Brazil’s share of global production and exports of selected agricultural commodities are shown in Fig. 10.7. Brazil is not only the world leader in the production of orange juice, coffee, soybeans, and sugar, but also the leading exporter. It is also ranked among the fourth leading countries in beef,

 Key drivers of productivity across the various regions are contained in World Bank (2017).

47

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Orange juice

1st 79% 1

1st Global 1st Exports (ranking) 2nd 1st 2

nd

4

th

62%

27%

st

36%

Soybean 45% Sugar 18% Beef 36% Poultry 22% Maize 43%

10% Pork 3%

32%

1st 1st 1st

18% 15%

1st Global Production 2nd (ranking)

15%

2nd

9%

3rd 4th

90 80 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 80 90 Global Exports (%) Global Production (%)

Fig. 10.7  Brazil’s share of global production and exports of agricultural commodities in 2017. (Source: Author’s computation and adaptation from Clements et al. 2019)

poultry, corn, and pork. This is an unparalleled achievement worldwide. Based on these giant strides, the world cannot achieve food security without Brazil. 10.2.3.4 The Price Support Programme Brazil has a long tradition of price support systems dating back to the establishment of the Policy of Guaranteed Minimum Prices in 1966. The National Food Supply Company, established in 1990, is responsible for implementing the policy. This is a regionally set minimum guaranteed price to protect producers from losses during periods of gluts through public and private contracts backed up by private risk premium options. Several programmes were set up to implement this programme and producers were also offered interest-reduced marketing loans, which allowed farmers to defer sales of their products in anticipation of future higher prices. As a way of supporting family farms, it was mandatory for the National Feeding Programme to buy at least 30 percent of their food stuffs directly from small farmers.48 As a result of rising inflation in 2017, crops such as beans, coffee, milk, rice, and soybeans benefited from a 3.0 percent price adjustment in the price support programme as a way of increasing the real incomes of producers. 48  See FAO (2012) and OECD (2019) for the implementation of this programme and FAO (2012) for support to family farming.

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Table 10.3  Agriculture-environment indicators Indicators

1995

2017

Nitrogen balance, kg/ha Phosphorus balance, kg/ha Agriculture share of total energy use (%) Agriculture share of GHG emissions (%) Share of irrigated land in agricultural area (%) Share of agriculture share in water abstraction (%) Water stress indicator

39.4 6.3 5.5 50.9 … 50.5 0.6

42.5 8.5 4.6 43.4 2.0 61.7 1.0

Source: OECD (2019)

10.2.3.5 Sustainable Agricultural Practice The centrality of agriculture to Brazil’s development landscape is generating its own backlash—the growing concern of environmental sustainability. Brazilian agricultural contributions to GHG emissions and water abstraction remain very high and evidence of water stress is rising (Table 10.3). The water shortage experienced in Sao Paulo in 2014 and 2015 is a testimony that water crises could become an issue in Brazil. And when such shortages become a recurring phenomenon, wellbeing and productivity will be at risk either by shortages in households’ access to water supplies, declines in access to irrigation (which consumes about 72 percent of its water supply), and shortages in generation of electricity (of which 62 percent comes from hydropower generation).49 Avoiding environmental catastrophe has rekindled the Brazilian Government’s continuous efforts to create incentives to promote environmental protection and conservation through strategic directions and actions. Some of these include establishing the Programme for the Modernization of Agriculture and Conservation of Natural Resources in 2009, the Low Carbon Agricultural Programme in 2010, and the Rural Environment Registry,50 all of which are among initiatives to promote the agriculture-environment nexus. These programmes and laws are helping to promote sustainable practices in agriculture among farmers by

 The looming water crisis in Brazil is well captured in World Bank (2016).  The registry was established to enforce the Forest Code of 2012, which reserves 80 percent and 35 percent of private property in the Amazon biome and Cerrado biome respectively, to be kept under natural vegetation. The Registry collects geo-referenced information on each rural property. 49 50

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providing discounted credit to those helping to recover degraded lands; producing organic products (plants and animals); adopting no-till farming and improved production systems; and preserving natural resources. Moreover, access to large markets by the private sector is contingent on adhering to strict environmental requirements, including those stipulated in the Forest Codes and related laws. Brazil is also known for a long-standing history and tradition of biofuel production, starting from its adoption of national programmes on alcohol and vegetable oil production in 1975. Since then, several initiatives have been launched to promote biofuel as an integral part of the agricultural system to reduce GHG emissions. Some good examples include the launch of the National Programme for the Production and Use of Biodiesel in 2004 and the National Policy on RenovaBio in 2018.51 10.2.3.6 Strong Partnership and Competitive Trade Policies At the local level, Brazil maintains very strong partnerships with the private sector, research institutions, and farmers (including associations and cooperatives).52 Providing the right incentives to the private sector and farmers elicited strong ownership, which helped to propel backward and forward integration of agriculture into the rest of the economy. A good example is the local manufacture of inputs (e.g. tractors, fertilizers, and pesticides) and value addition to agricultural outputs (e.g. orange juice, biofuel, animal feeds, and vegetable oil). Agricultural extension services workers provided strong linkages between agricultural research institutions and farming communities, which contributed immensely to the entrepreneurial capability of Brazilian farmers. Without the partnership with Japan, development of the savannah areas and their integration into the agricultural production ecosystem of Brazil would not have been possible. This partnership was an icebreaker to transforming agricultural technology in the country. Brazil has been transferring similar skills to other countries including Cameroon, Gabon, and Mozambique. FDIs also played an important role in the structural 51  The RenovaBio Decree 9308 of 15 March 2018 is targeting ethanol production to increase from 30 billion litres to about 50 billion litres and biodiesel from 4 billion litres to 13 billion litres by 2030 as well as to increase the biodiesel mandate from 8 percent to 10 percent (OECD 2019). 52  As of 2015, Brazil has over one million cooperatives that tried to protect the economic interest of their members (World Bank 2017).

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economic transformation process, which by 2008 accounted for about 45 percent of all FDIs in South American countries.53 This would not have been possible without an appropriate business climate that incentivized investments into agriculture and nature-based activities. Trade liberalization and gradual realignment of price incentives to agricultural policies helped eliminate adverse and misleading trade policies, contributing to the sector’s operational efficiency. Brazil’s agricultural productivity was used to propel trade and global competitiveness. The 1996 implementation of the MERCOSUR54 introduced a new dynamism into the country’s agriculture. Brazil’s active membership in the WTO strengthened its negotiation capabilities to promote trade competitiveness and its ability to fight dumping of agricultural products in its economy. Forming an agricultural attaché in its strategic embassies globally courted this strategic trading relationship. Further, the low subsidy content of its agriculture created trust among its trading partners. China, the United States, the EU, and the MERCUROs constitute Brazil’s strategic trading partners.55 The longstanding trading relationship, coupled with competitive trading system characterised by low producers’ support estimates (that are far better than those of the EU, China, and the United States) also contributed to progress especially on export promotion strategy. 10.2.4  Lessons and Challenges Brazil transformed itself from a net food importer into a leading net food exporter and a leading technology generator in tropical agriculture within 35 years. Several lessons abound for African countries from this transformation prowess. First, substantial reforms of agricultural policy in Brazil made its agriculture products more diversified, integrative, and competitive. Second, although Brazil provides a much lower producers’ support estimate (PSE) to its agricultural sector than most of its peers in Latin

53  Not all went into agriculture or related sectors. Between 1996 and 2009, for instance, FDIs inflows to agriculture and related sectors ranged from 1 percent to 20.4 percent (FAO 2012). 54  The membership of MERCOSUR comprises Argentina, Brazil, Paraguay, and Uruguay. 55  The EU was the leading importer of agricultural products in the 1990s, but now has been overtaken by China.

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America, BRICS, and OECD countries,56 PSE was geared towards expanding the capability of small-scale and family farmers to contribute to enhancing productivity and to sustain improvements in international competitiveness. Brazil’s ability to enhance farmers’ entrepreneurial capacity is one of the game changers. This could be a learning point for African countries in terms of what is to be done differently. Third, strategic support to rural agriculture through rural credit schemes and prioritizing commercial banks’ lending to agriculture is novel. Fourth, Brazil is one of the few countries in the world whose R&D spending as a share of GDP is above 1.0 percent. This calls for an urgent need to increase spending to general support services like research and extension, training, and development of rural infrastructure as enunciated in the Maputo Declaration. Fifth, Brazil’s agricultural dexterity is based on a long-term vision of agricultural transformation complemented by learning-by-doing, turning crises into opportunities, and taking corrective actions when unintended impacts emerge. Changes in political administration were not allowed to impact effective implementation of the country’s vision. Sixth, the incremental approach to agricultural development is noteworthy. Starting from simple instruments like credit, extension services, and technical assistance to a more sophisticated market-based approach helps to foster ownership, build trust, and promote learning-by-doing. Finally, the smooth transition from an import substitution industrialization strategy to an export promotion industrialization model, from state instruments for rural agricultural credit system to market-based instruments, and from supporting large farms to small and indigenous farms, show Brazil’s ability to change strategies instead of abandoning its goals—as was the case in many African countries, where agricultural development trajectories depended on the whims and caprices of changing political administrations. African countries could also learn from the mistakes of Brazil in their agricultural transformation agendas. First, if agriculture is to be an instrument of inclusive development, they must avoid over-concentrating 56  Most of Brazil’s PSE went to import-competing staples like wheat, maize, and rice as well as cotton, ranging between 6 percent and 17 percent. Yet, the country’s PSE in 2002–2004, for instance, was 3 percent compared to OECD average of 30 percent (OECD 2005). In fact, Brazil is comparable to Australia but far better than China, EU, and USA on PSE.

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agricultural transformation in the hands of large farms. Undue advantage given to large farms at the expense of small and family farms, which was not mitigated until mid-1990s, made it very challenging for Brazil to successfully use transforming agriculture to tame income inequality and reduce poverty among the poorest of the rural poor. Second, over-concentration of crops transformation in limited regions (e.g. South, Southeast, and Central West regions) worsened income inequality. Concentrating support on such crops as rice, cotton, wheat, and coffee substantially worsened exclusion and income inequality relative to communities not producing these crops (FAO 2012 and 2014). This must be avoided in the African transformational agenda. Third, restructuring outstanding debts arising from the agricultural credit system, compounded by the economic crises of the 1980s and 1990s could also be an important learning point for Africa. Developing private sector-based instruments for agricultural credits, as was done since the mid-1990s in Brazil, could help prevent moral hazards and avoid the African mentality of turning government-driven loans into national cake syndromes, which have crippled many agricultural credit systems on the continent. Fourth, the country’s abundant water resources, commensurate to its landmass, have not been properly utilized for irrigation. Brazil’s total renewable surface water is massive, estimated to be 8647 billion m3 per year. Although irrigated land rose from about 800,000 hectares in 1970, to 6.95 million in 2016 (5.8 percent, appreciable progress compared to many other countries), it is still below its potential of about 76  million hectares.57 Although this is higher than most African countries, it is important for African countries to move along their irrigation potential trajectories. Fifth, despite its abundant land and high average land size holding (15.9 ha),58 the country is still grappling with land inequality. The land Gini coefficient is one of the worst in the region with the largest 1 percent

57  This is relatively small compared to 120.0 million land available for agriculture. More information about the various types of irrigation and the potential capacity are contained in BNWA (2017). 58  Only Paraguay and Argentina surpassed this average size of land holding in the entire region. In fact, Brazil is one of the countries in the region with generous landholding system where farms greater than 50 ha account for 88 percent of the total agricultural areas—surpassed by Argentina, Chile, Uruguay, and Paraguay (Duff and Padilla 2015).

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of farms holding 44.43 percent of total farmlands, while the remaining 99 percent holds 55.57 percent. And of this, 86 percent of farm holders (all small-scale farmers) only hold 21.4 percent of total farmlands. Besides, a very small proportion of women (12.7 percent) are involved in running farms in Brazil.59 Several African countries offer good lessons for Brazil on this. Sixth, the captivating incentives given to medium, large, and foreign farms with local and indigenous farmers having very limited access to such incentives—and sometimes pushed to marginal lands—is another issue calling for urgent attention in Brazil. This is also reflected in production inequality across the various agricultural products. For instance, in rice production, 1.8 percent of farms (large firms) account for 73.2 percent of rice production, while small farmers (who constitute 89.1 percent of total farmers) accounted for only 4.6 percent of total rice production in 2006. Similar trends were observed for maize, coffee, and edible beans.60 This explains why addressing rural inequality remains a daunting challenge in Brazil. The foregoing, among others, account for why incomes of Brazil’s poorest of the rural poor have not improved appreciably compared to the non-poor. Evidence from FAO (2012) revealed that geographical concentration of crops and cattle is a major driver of income inequality in rural Brazil. Regionally over-concentrated crops like rice, cotton, beans, wheat, and coffee fuelled income inequality, while geographically spread crops like beans, cassava, and soybeans are helping to reduce poverty and inequality. In addition, de-concentrating crops and livestock productivity growth, upgrading farming skills of family and small farmers, and promoting rural and regional development are vital to spreading the dividends of agricultural transformation to all. Finally, addressing growing concerns of environmental sustainability should be an utmost priority. As indicated above, Brazilian agriculture is driving GHG emissions and its water abstraction remains very high. Addressing the rising trends of pollution and water stress is not only good for the environment, but a development imperative. It is noteworthy to 59  Brazil land Gini Coefficient of 0.87 is higher than the South American average of 0.85 although better than countries like Paraguay, Chile, Venezuela, and Cambodia. OXFAM (2016) provides a detailed analysis of land inequality in Latin America. 60  Table 12 of FAO (2012) provided the distribution of various crops across small, medium, and large farms between 1995 and 2006.

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mention the continuous efforts of government to create incentives to promote environmental protection and conservation through strategic directions including establishing the Programme for the Modernization of Agriculture and Conservation of Natural Resources in 2009 and the Low Carbon Agricultural Programme in 2010—among other initiatives to promote the agriculture-environment nexus. Strengthening this effort is vital to taking agriculture to the next level in Brazil. Addressing the foregoing challenges calls for very strong public-private partnerships including in rural credit, storage facilities, and logistics infrastructure. Making environmental criteria an integral part of accessing agricultural inputs supports a strong alliance between the private sector and CSOs on the war against deforestation through vouching not to buy products derived from deforested and degraded land is a novel approach. The Brazilian agricultural transformation that succeeded in achieving economic competitiveness, social progress, environmental quality, and a pillar of global food security remains with unbeatable lessons to Africa and the rest of the world.

10.3   The Case of Costa Rica 10.3.1  Context and Overview of Structural Economic Transformation Costa Rica, a small country with a population of 4.8 million (2015), has a land area of 51,000 square kilometres and an agricultural area of 1.82 million hectares. Costa Rica has, however, turned its smallness into splendour. The country is unique as it offers a special case study for a structurally diversified economy. Costa Rica strategically strikes a balance across the primary, secondary, and tertiary sectors in terms of exports and revenue earnings, as its economy is based on agriculture, manufacturing of high-­ tech, electronic, and medical equipment for export, tourism, and services. Very few countries have been able develop simultaneous comparative advantages in food processing, high-tech manufacturing, and tourism. The structural transformation of Costa Rica’s economy has been relatively stable, excepting some gyrations in the 1980s. Between 1960 and 1990, industry was a powerful force shaping the structural transformation, pulling resources out of agriculture and services. Since the early 1990s, however, services became a driving force, with its share of GDP rising from 51.2 percent in 1992 to 68.4 percent in 2018 (Fig. 10.8), thanks to

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80.00 70.00 60.00 50.00 40.00 30.00 20.00 0.00

1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

10.00

Agric VA

Industry VA

Services

Fig. 10.8  Costa Rica’s agriculture, industry, and service value added. (Source: Author’s computation from WDI Database)

the rising significance of tourism in the economy—which as of 2017 stood at 28.54 percent of total revenues.61 Across the three sectors, productivity in the industrial sector seems highest with 18.4 percent of total employment accounting for 19.5 percent of GDP in 2018. Since 1993, the services sector has been consistently absorbing labour lost from industry and agriculture sectors (Fig.  10.9). In Costa Rica, the structural economic transformation is genuine. The food processing industry, as of 2014, accounted for about 25 percent of the country’s total manufacturing sector and about 35 percent of total manufacturing jobs, or 4.5 percent of total employment.62 The agriculture sector’s overarching objective has been to reduce poverty and increase productivity growth. The share of agriculture dropped from 26.4 percent in 1960, to 4.6 percent in 2018 (Fig. 10.8), also associated with a declining share of employment, which fell from 16.9 percent 61  The tourism revenue share for 2017 was computed from https://stats.oecd.org/Index. aspx?DataSetCode=REVCRI for total revenues ($13.42 billion) and https://www.statista. com/statistics/814868/costa-rica-tourism-revenue/ for tourism revenues ($3.83 billion). 62  One unique feature of the dynamism in the food processing industry is its nationallydriven orientation with most of them established through national capital or family-owned business models (Gustavo et al. 2018 and Ferreira and Harrison 2012).

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80 70 60 50 40 30 20 0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

10

Agric

Industry

Services

Fig. 10.9  Costa Rica’s employment in agriculture, industry, and services. (Source: Author’s computation from WDI database)

in 1990 to 12.3 percent in 2019 (Fig. 10.9).63 The uniqueness of Costa Rica’s agriculture is profound. This ranges from being recognized as a global standard for the quality of gourmet coffee, which earned the country the accolade of ‘coffee is life,’ to being the second largest producer of bananas and the largest exporter of pineapples, globally.64 The country’s traditional crops are coffee, bananas, and sugar cane, with pineapple, rice, and palm trees as emerging crops, and livestock as a major strategy for agricultural diversification. For instance, livestock in agricultural production rose from 23 percent in 1995 to 33 percent in 2015 (OECD 2017). The conducive warm temperate climate, fertile soils, abundant water (including regular yearly rainfall and construction of irrigation in arid regions), and investment in agricultural support services like research, training, and technical assistance contributed to Costa Rica’s agricultural productivity. Agricultural growth has been fuelled by total factor productivity. Between 1962 and 2016, the growth of agricultural TFP averaged 2.71 percent—though it has been declining in recent times because it is approaching its optimal level (Fig. 10.10).

63  Agriculture employed about 55 percent of labour force in the late 1950s, with coffee and bananas as the key economic drivers (Gustavo et al. 2018). 64  Costa Rican agricultural competitiveness made it a global leader (Agudelo 2019) and to control about 55 percent of pineapples world market as of 2015 (OECD 2017).

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5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00

Fig. 10.10  Costa Rica’s agriculture TFP growth. (Source: Author’s computation based on data from https://www.fas.usda.gov/data) Table 10.4  Impact of agricultural productivity in sectoral value added and employment Correlation index

Value add

Employment

Agriculture Industry Services

−0.977 −0.311 0.769

−0.955 −0.940 0.961

Source: Author’s computation based on data from USDA (2018): https://www.fas.usda.gov/data

The Costa Rican structural economic transformation has been driven by productivity in the agricultural sector. Agriculture TFP does not only push labour out of agriculture, it is also central to reducing the sector’s share in GDP value added due to higher multipliers generated in the services sector (Table 10.4). Given the sophistication of the services sector, its core educational requirement, which may not be fully available in agriculture, is also pulling out labour from the industry as well as shrinking the industry’s share of the GDP value added. Costa Rica succeeded in diversifying its exports from its primary commodities (coffee and bananas) which was as high as 90 percent in the 1950s to about 7.0 percent in 2011. Unlike many countries in Africa, Costa Rica is a net exporter of food and agricultural products. Between

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2012 and 2014, for instance, its food and agricultural imports were less than one-third of its corresponding exports (Duff and Padilla 2015). During this period, the agricultural trade balance stood at $2.2 billion,65 one of the largest agricultural trade surpluses in Central America. This helps to build foreign reserves—rather than depleting them—as has been the case in many developing countries. Although land Gini in Costa Rica is rated the lowest in Latin America (0.67), land inequality that allowed for a duality between small, large, and corporate farmers is however pronounced. For instance, the largest 1 percent of farms accounted for 33.9 percent of total farm holdings, while small farmers (67.6 percent of total farmers) accounted for only 7.7 percent of cultivated land. Furthermore, only 15 percent of farms are run by women. Average farmland holding is 2.9 hectares, higher than average of 1.3 hectares in Central America, but lower than the 7.9 hectares in Latin America.66 10.3.2  Innovations Driving Agricultural Transformation Stable economic and democratic institutions: Agricultural development benefited immensely from Costa Rica’s stable economy and long-standing democratic traditions, which allowed for institutional stability, policy consistency, high levels of basic education, health service provisions, and robust macroeconomic conditions including strong economic growth (averaging 4.6 percent between 1990 and 2015), declining inflation (from over 20 percent in early 1990s to less than 1.5 percent between 2016 and 2019), and relatively low unemployment (averaging 6.7 percent between 1990 and 2019),67 though unemployment has been rising in recent times. The long-standing democratic institutions helped secure land property rights. These stable political and economic systems also helped sustain enduring partnerships that ushered in accelerated growth of foreign direct investments. For instance, the strategic partnerships leading to numerous 65  See Annex 1 of Duff and Padilla (2015) for the comparative agricultural trade balances among the Central American countries. 66  OXFAM (2016) provides substantial analysis of land inequality in Costa Rica and other Latin American countries including proportions shared by women. 67  This has been on a rising trend in recent times, averaging 9.6 between 2009 and 2019 (Author’s computation from WDI, accessed May 2020).

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trade agreements68 and the engagement of several multinational corporations, especially from the European Union and the United States, including the establishment of Intel in 1998, played a key role in the transformation process. In fact, more than half of Costa Rica’s bananas, pineapples, and palm plantations are owned by foreign investors.69 The stability of democratic institutions contributed to the effective articulation and robust implementation of agricultural plans, policies, and programmes, as well as the rural development programmes and the national development plans. Commitment to implementing these plans and programmes is a major lesson for most African countries. Consistent implementation of economic diversification and export promotion strategies: Long-standing political stability laid the foundation for meaningful and consistent structural economic diversification. The Figueres Administration (1953–1958) laid a solid foundation for agricultural productivity and diversification through concerted programmes on use of fertilizers, adoption of new varieties seeds, better technological adoption and diffusion, and enhanced access to credits, which helped to implement import substitution strategies in subsequent years. However, the economic crisis of the 1980s necessitated a shift from import substitution to an export promotion model. The non-traditional exports promotion programs, started under the Luis Alberto Monge administration,70 prioritized such products as textiles, fresh and frozen fish and shrimp, flowers, ornamental plants and foliage, and fresh pineapple. The export diversification drive reduced the economic significance of traditional crops like coffee and bananas in terms of contribution to exports.71

68   This includes the Central American Common Market (CACM), the Dominican Republic—Central America Free Trade Agreement, the Caribbean States Community (CARICOM), the United States-Central America-Dominican Republic (DR-CAFTA), and the People’s Republic of China. These constitute among the top 15 export markets for the country (OECD 2017). 69  Several authors have examined the role of political stability on economic transformation in the country: stable institutions (World Bank 2006), secure land rights and enhanced infrastructure (OECD 2017), and enduring partnership, and trade and investment agreements (World Bank 2015; Gustavo et al. 2018). 70  This was built on the export promotion efforts of the Figueres (1970–1974) and Oduber (1974–1978) administrations. 71  For instance, bananas and coffee’s shares of export fell from 19.16 and 25.74 percent in 1970–1979 to 4.92 and 2.07 percent in 2011, respectively. Sugar also fell from 3.59 to 0.45 percent (Gustavo et al. 2018).

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The rising level of manufactured exports also contributes to the declining trend of exporting primary commodities. The shift in economic development strategy from the import substitution industrialization model, due to the economic crisis of the 1980s, to the export-based industrialization model propelled export growth, export diversification, and inward foreign direct investments (including the capital-­intensive firms like Intel). This accounted for a rise in the domestic market share of the total agro-industrial value added, which was estimated to be more than 65 percent in 2002, compared to the regional average of about 45 percent.72 The export promotion strategy, unlike in many countries, was not based on a mono-commodity nor only on traditional goods and services; it was based on strategic product diversification including agriculture and agribusiness, livestock and fishing, electronics and medical precision manufacturing, and textiles and footwear—to mention a few. For instance, the government export subsidy to non-traditional products exporters (15 to 30 percent of the export FOB value) was contingent on at least 35 percent local value added to their exports (Gustavo et  al. 2018). This model yielded significant results which, by 2014, agriculture and food alone accounted for 35.52 percent of exports, electronics and medical equipment (39.13 percent), chemicals, metals, and plastics and rubber (10.86 percent) (See Fig.  10.11). If agriculture and agrobusinesses are considered, this translates to about 42 percent of total exports. In the agriculture sub-sectors, fruits, vegetables, legumes and roots accounted for over 80 percent with traditional commodities like coffee, tea, and spices accounting for only 11 percent. This export diversification strategy led to the emergence of the pineapple and food processing industries, which placed a strong comparative advantage on Costa Rica. As of 2014, pineapples and bananas accounted for about 78 percent of agricultural exports and 16 percent of total exports. In the livestock and fisheries sub-sectors, dairy accounted for about 40 percent, fisheries (31 percent), and meat (23.4 percent),73

 This is next to Colombia and El Salvador (Berdegue and Fuentealba 2011).  Gustavo et  al. (2018) provides a comprehensive analysis of the export diversification strategy in Costa Rica. 72 73

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1.53

1.74 7.98

3.24 35.52

10.86 39.13

Agric and foods

Electronic and medical equipment

Chemical, metals, plastic and rubber

Livestock and fishing

Textile, leather and footware

Paper, cardboard and timber

Others

Fig. 10.11  Sub-sectors’ percentage share of exports in Costa Rica. (Source: Computed from Gustavo et al. 2018)

another feat in sub-sector export diversification.74 Developing agribusiness also helped to reduce the impact of primary commodity volatility in the global markets. Consistent application of agricultural policy instruments: Costa Rica is known for its adept implementation of domestic, general services provision, and trade policy instruments in accelerating agricultural development. The key aspects of the domestic policy instruments include: (i) subsidized or preferential interest rates on loans to farmers for working capital, marketing, acquisition of machinery and equipment; (ii) offering implicit insurance subsidies that availed cheaper insurance facilities to producers;75 (ii) formation of subsidized agricultural fixed capital on investment supporting product diversification, support to auto-consumption

74  Some of the strategies that helped export diversification include the establishment of the Exports and Investments Promotion Centre, granting tax exemption to exports of non-traditional products, providing export incentives, and promoting the use of domestic raw materials in manufacturing. The result from this led to the World Bank conclusion that Costa Rica graduated from manufacturing the ‘golden beans’ to the ‘golden chips’ (World Bank 2006). 75  The National Commission of Risk Prevention and Emergency Response assesses current risk, reduces risk exposure, and prepares for an emergency response through early warning systems, active training of community on emergency response, and provision of inputs, finance, and cash in the event of disasters.

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production modules, and on-farm-irrigation investments; (iv) tax exemptions for agricultural machineries, veterinary products, and agricultural inputs; and (v) payment for services contributing to environmental protection and improvement, supporting organic production, and promoting sustainable use of natural, social, and economic resources through benefit compensation. This includes regulations and technical enforcement of sanitary and phytosanitary measures. Accelerated technological adoption: Costa Rica provided general system support to farmers as opposed to hand-outs to individual farmers. The country’s support to agricultural R&D, extension services, plant health, and irrigation is substantial. Investment in irrigation, for instance, led to areas equipped for irrigation relative to total agricultural land to rise from 13.7 percent in 1990 to 19.4 percent in 2000, but this declined to 17.1 percent in 2016, while machinery (40 metric horsepower tractor equivalent of farm equipment) rose from 6460 to 7595 and 7833 during the same period.76 As observed by Gustavo et al. (2018), heavy investment in efficient production systems, proper treatment of fruits, efficient transport systems, and connection to international markets contributed immensely to agricultural transformation. One of these led to the introduction of the Cayenne Lisa pineapple variety to replace the Chanpaca variety in 1986, which led to an astronomical rise in pineapple exports—from 100,000 tonnes in 1985 to 1.8 metric tonnes in 2012.77 Although spending on R&D, on average, rose between 1996 and 2014,78 from 0.30 percent to 0.57 percent before it declined to 0.42 percent in 2017 (Table 10.1), it has been highly unstable and performed below the regional average (0.66 percent between 1996 and 2017), and far below the Brazilian pacesetting achievement of more than 1.25 percent since 2014. Surprisingly, government contribution to R&D spending is about

76  Author’s computation from https://www.ers.usda.gov/data-products/internationalagricultural-productivity 77  This is complemented by provision of incentives to products helping to diversify agricultural exports. For instance, incentives to pineapples include export contract on production, establishing free trade zones for processing, and provision of preferential credits to small and medium farmers by the Costa Rica National Bank (Gustavo et al. 2017). 78  This coincided to the time the Ministry of Science and Technology and the research centres of Hewlett-Packard and Intel were established as well as the establishment of the Centro Nacional de Alta Tecnologia (CENAT) to convene and connect the government, businesses, and research institutions on high-tech research (Paus 2019).

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one-­sixth, compared to over one-third from the private sector, and close to one-half from the academic sector in 2008.79 Raising R&D spending above the regional average, like Brazil, should be prioritized. Heavy investment on innovation and technology played a significant role. Costa Rica’s performance on general service support estimates (GSSE) was rated by OECD (2017) to be better than the OECD average, especially between 2013 and 2015. During this period, about 94 percent of the GSSE budget was allocated to innovation oriented items: (i) 48 percent to agricultural knowledge and innovation systems (e.g. R&D and extension services); (ii) 32 percent to infrastructure development and maintenance (irrigation, post-harvest management, and warehouse); and (iii) 14 percent to inspections and control services.80 Promotion of agro-ecology and organic agriculture: The country’s natural endowment of substantial biodiversity, fertile land, and favourable climatic conditions offer Costa Rica a comparative advantage. This is further supported through state capacity to enforce environmental protections that made afforestation, reforestation of damaged areas, and expanding protected areas an additional advantage to agricultural practices, helping to reduce vulnerability to structural hazards, and promoting high-valued green production. This contributes to an increase in the share of arable land in agricultural areas—rising from 11 percent in 1995 to 13 percent in 2015.81 The rising cost of labour and inputs has intensified the use of chemicals like herbicides, pesticides, and fertilizers with significant impacts on the environment (especially in the Atlantic region in pineapple production). Addressing this issue has led to the promotion of organic agriculture with increasing reliance on crop rotation, natural fertilizers, and biological pest control. This also led to the launch of a public-private sector alliance on Green Growth Programme in 2017, with the goal of converting 200 small and medium enterprises (SMEs) to produce and export organic food products. Efforts to introduce new technologies to help producers grow fruits and other crops more efficiently and ecologically are underway.  Author’s computation from Table 6.8 of Puas (2019).  World Bank (2015), Gustavo et al. (2017) and OECD (2017) provided in-depth analysis of the role of technology in Costa Rica’s agricultural development. 81  As argued by OECD (2017), about 26 percent of the country’s territory is under protected areas. However, this is putting pressure on land availability in the country, one of the factors accounting for why agricultural land area declined from 2.05 million in 1995 to 1.82 million in 2015. 79 80

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Land management as an integral part of rural development programme: The efficiency of land management and regulations contributed to preserving the country’s richness in biodiversity, increasing acreage of protected areas, and providing easy access to land acquisition, assignment, and titles. Commitment to rural and territorial development programmes led to accelerated development of rural development projects, improved entrepreneurial and organizations skills in rural areas, and preferential rural credits. Cooperatives and producers’ associations: Costa Rica has a long-standing history in cooperatives and producers’ associations that helped to galvanize actions and movements around agricultural practices, provision of credits and technical assistance, and protection of membership interests. In addition to 101 cooperative movements in Costa Rica in 2014 (of which 24 percent is for coffee and 15 percent for sugar cane), there are several umbrella associations like the National Chamber of Agriculture and Agribusinesses, the Union of Small-Scale Farmers, the National Farmers Organization, and the Costa Rican Chamber of the Food Industry. These associations have helped enhance awareness and advocacy of sustainable agricultural practices and use of innovations and technology. Despite the significant influence wielded by producers’ associations, only about 30 percent of Costa Rican farmers belong to an association. The dichotomy between 1) organized farms focusing on exports of non-­ traditional or emerging crops, like pineapples, and 2) small-scale farmers focusing on traditional crops (coffee) and producing for the local markets—could be a factor for the limited number of memberships in producers’ associations due to non-integration of these distinct groups in the value supply chain. Leveraging some of the existing examples like sharing packing, storage, and export infrastructures between small and big corporations—business agglomeration—could be strengthened. Moreover, membership of associations should be prioritized by ensuring it is a precondition for benefiting from agricultural incentives. 10.3.3  Key Lessons and Challenges Achievements and challenges of agricultural transformation in Costa Rica offer substantial lessons for African countries on what to do differently. Several lessons abound from this success story. First, access to inputs and markets is a major driver of sustained agricultural and structural transformation. Second, heavy investment in innovations and technology

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(including spending about 30 percent of agriculture expenditure on extension service) and seeing agriculture as an integral part of rural development remains critical. Third, strategic and favourable partnerships with foreign investors and markets offer another lesson for transformational change. Finally, and more importantly, the role of stability in economic and political institutions is essential to promoting sustained and transformational change. Despite the country’s agricultural achievements, some challenges remain, which African countries could also use to leapfrog agricultural transformation. Ensuring environmental sustainability: Achieving sustainability, in the context of the economy depending on agriculture for about 5 percent of its GDP and about 12 percent for employment, is a challenge. Bad agricultural practices, especially over-exploitation of land and excessive application of chemicals such as pesticides and fertilizers, leading to water pollution, have been major sources of communal, environmental, and labour conflicts in Costa Rica. Regardless of this, about 6.0 percent of the world’s biodiversity is in this country, while about 26 percent of its territory is allocated to protected forests, national parks, and nature reserves.82 All countries, irrespective of their regions, need to learn from this achievement. Tackling agricultural dualism: The existence of highly productive and export-oriented large corporate farms existing side by side with less productive and domestic market-oriented small farmers creates a dualistic agriculture that limits the spillover effects of export markets on traditional and small-scale farmers. The rising trend of fragmentation among farmers cultivating less than 5 hectares, reducing market-based farming, and non-­ replacement of retired extension service workers could also be fuelling dualism. The lack of integration between small and large farmers limited the rate of technological diffusion. Inadequate access to agricultural infrastructure (e.g. irrigation, post-harvest, cold-chain and warehouse facilities) and non-integration into markets, coupled with low levels of education, limit productivity of small farmers. Developing local firms’ agrobusiness capabilities is key to promoting non-agriculture rural economies.

82  For more information on forest coverage and biodiversity see http://www.new-ag.info/ en/country/profile.php?a=1901

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Strengthening institutional coordination and budgetary frameworks: Taking agriculture to the next level will require effective coordination among government institutions, consolidation of fragmented agricultural and environmental laws, cutting excessive bureaucracy, increasing budgetary allocations to agricultural innovation systems (including R&D, irrigation, risk management, and market information system), and enhancing budgetary implementation of lagging institutions. Enhancing the technological and managerial competency of agricultural extension service workers is an imperative. Addressing overdependence on limited international markets and neglect of domestic markets: While the export-oriented model helped to accelerate structural transformation and improve terms of trade,83 it however, led to the neglect of policies to enhance domestic food market potential and the loss of economic importance of traditional export commodities, such as coffee and tea, while export destinations are regionally limited with 78 percent of exports concentrated in Central America, North America, and the European Union in 2014. Strong links with the United States and the EU explain the stability of the Costa Rican Colon for a very long time. The shift from the import substitution development model (1960–1979) to export promotion approach (since 1983) created its own downsides that were not effectively managed. This export-oriented model, driven by multinational corporations, has its strengths and weaknesses. For instance, while it promoted the emergence of the pineapple and food processing industries, it led to the neglect of policies to enhance the potential of domestic food markets and the loss of economic importance of traditional export commodities, such as coffee and bananas.84 Moreover, given the skills sophistication and labour-saving technology associated with this approach, the policy only contributed to poverty reduction, while worsening income inequality. For instance, poverty ($1.9/day) fell from 8.0 percent in 1996 to 1.4 percent in 2018. Income inequality, on the other hand, rose from 0.459 during 1990–1999 to 0.485 during 2010–2018. Uneven integration of small-scale farmers into supply chains (upstream and downstream integration) also contribute to this inequality. A future export promotion strategy should be more inclusive by factoring in how 83  Export diversification accelerated reduction in trade volatility which declined from 0.18 in 1985–1989 to 0.02 in 2010–2013. 84  Gustavo et al. (2018) provides a detailed analysis of the success and shortcomings of the country’s export diversification strategy.

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future economic prosperity benefits the entire population through effective distribution, tax policies, and accelerated rural development programmes. Finding lasting solutions to Costa Rica’s rice competitiveness remain critical while prioritizing climate adaptation policies through strategic prioritization, information dissemination, rule-based regulation, and financial incentives—all remain vital to promoting inclusive agricultural development.85 African countries trying to learn from Costa Rica should take cognizance of the strengths and weaknesses associated with Costa Rica’s transformation process.

References Agudelo, Guillermo. Agricultural Costa Rica. The Costa Rica News, 6 June 2019. https://thecostaricanews.com/agricultural-­costa-­rica/ Anton, J., D. Cervantes-Godoy, F. Bossard, and S. Guerrenro. Agricultural Policies in Argentina. OECD Trade and Agriculture Directorate Committee for Agriculture, January 2019. Assuncao, J. and P. Souza. The Impact of Rural Credit on Brazilian Agriculture and the Environment. Climate Policy Initiative Policy Brief. Rio de Janeiro: Climate Policy Initiative, 2019. Berdegue, J. A. and R. Fuentealba. Latin America: The State of Smallholders in Agriculture. Paper presented at the IFAD Conference on New Direction for Smallholder Agriculture, 24–25 January 2011. Blake, P. V., I. S. Echagüe, M. O’Farrell-Marial. “Agricultural law in Argentina: overview”, 2016. https://uk.practicallaw.thomsonreuters.com/Document/ Ie8669a35df7611e498db8b09b4f043e0/View/FullText.html?contextData= (sc.Default)&transitionType=Default&firstPage=true&bhcp=1&comp=pluk Brazilian National Water Agency (BNWA). Atlas da Irrigação, 2017. Available online: http://atlasirrigacao.ana.gov.br/ Clements, Yuri, Daglia Calil and Luis Ribera. “Brazil’s Agricultural Production and Its Potential as Global Food Supplier.” Choices 34(3): 1–12. Agriculture and Applied Economics Association, 3rd Quarter 2019. Duff, Andy and Andres Padilla. Latin America: agricultural perspectives. RaboBank Economic Research Special, (September 2015). FAO. Public Policies and Agricultural Investment in Brazil. Final Report prepared by Carlos A. M. Santana and José R. Nascimento. Food and Agriculture Organization of the United Nations Policy Assistance Support Service, August 2012. 85  Despite the 2015 adoption of a reference minimum price for rice, based on the domestic production cost, the country still has the highest domestic price of rice globally.

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FAO. “Brazil: Country Fact Sheet on Food and Agriculture Policy Trends”. Food and Agriculture Policy Decision Analysis, April 2014. Ferreira, G. and R.  W. Harrison. From Coffee Beans to Microchips: Export Diversification and Economic Growth in Costa Rica. Journal of Agricultural and Applied Economics 44, 1–15, November 2012. GRO Intelligence. Argentine Agriculture Stimulated by Policy Reforms, 2018. https://gro-­intelligence.com/insights/argentina-­agriculture-­growth-­policy-­ reforms Guanziroli, C. E. and C. A. Basco. “Construction of agrarian policies in Brazil: the case of the National Program to Strengthen Family Farming (PRONAF)”. Rural Development (COMMUNIICA), 2010. http://repiica.iica.int/docs/ B2031i/B2031i.pdf Gustavo, F., C. Ferreira, P. Antonio, G. Fuentes, and J. Pablo. “The successes and shortcoming of Costa Rica exports diversification policies.” Background paper to the UNCTAD-FAO Commodities and Development Report 2017 Commodity Markets, Economic Growth and Development. Rome: FAO, 2017. Gustavo, F., C. Ferreira, P. Antonio, G. Fuentes, and J. Pablo. The successes and shortcoming of Costa Rica exports diversification policies. Background paper to the UNCTAD-FAO Commodities and Development Report 2017 Commodity Markets, Economic Growth and Development. Rome: FAO, 2018. IFAD. Investing in rural people in Argentina. Rome: IFAD, September 2017. INTA (National Agricultural Technology Institute) and Ministry of Agroindustry. No-till Planting: A contribution to productivity and environmental sustainability. Ministry of Agroindustry: Buenos Aires, 2018. Kennedy, J.  Sowing Pools. Emerging Market Investment Association (EMIA), 2013. http://www.emia.org/news/story/2123 OECD.  OECD Review of Agricultural Policies—Brazil, 2005. https://www. oecd.org/brazil/oecdreviewofagriculturalpolicies-­brazil.htm OECD. “Agricultural Policies in Costa Rica”. OECD Food and Agricultural Review, 2017. Paris: OECD Publishing. http://dx.doi.org/10.178 7/9789264269125-en. OECD. Agricultural Policies in Argentina. TAD/CA(2018)9/FINAL. Trade and Agricultural Directorate Committee for Agriculture. OECD, 2019a. OECD. “Agricultural Policy Monitoring and Evaluation 2019 Part II— Developments in Agricultural Policy and Support by Country”. Working Party on Agricultural Policies and Markets, July 2019b. OXFAM. Unearthed: Land, power and inequality in Latin America. OXFAM, 2016. Paus, Eva. ‘Industrial Development Strategies in Costa Rica: When Structural Capability Accumulation Diverge’. A background paper for the International Labour Organization’s (ILO) research project on Capabilities, productive transformation and development, 2019.

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United States Department of Agriculture. Foreign Agricultural Service Data & Analysis, 2018. Available online: https://www.fas.usda.gov/data World Bank. The impact of Intel in Costa Rica: Nine years after the investment. Washington, DC: World Bank, 2006. World Bank. ‘Costa Rica’s Development: From Good to Better”. Systematic Country Diagnostic. Washington, DC: The World Bank, 2015. World Bank. “Brazil may be the Owner of 20% of the World’s Water Supply but it is still Very Thirsty’, 2016. https://www.worldbank.org/en/news/feature/2016/07/27/how-­b razil-­m anaging-­w ater-­r esources-­n ew-­r eport-­ scd#:~:text=For%20example%2C%2062%25%20of%20Brazil’s,72%25%20 of%20Brazil’s%20water%20supply. World Bank. Agriculture Productivity Growth in Brazil Recent trends and future prospects. Washington, DC: The World Bank, 2017.

PART IV

Towards an Agricultural Powerhouse in Africa

CHAPTER 11

Policies and Programmes for an Agricultural Powerhouse in Africa

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 A. Odusola, Africa’s Agricultural Renaissance, https://doi.org/10.1007/978-3-030-65748-2_11

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11.1   Introduction The evidence from parts 1 to 3 of this book have shown that Africa can use agricultural transformation to drive inclusive development, become a powerhouse of food security, a net food exporter, and a provider of environmental quality services. Lessons from past experiences from the Asian countries (e.g. China, South Korea, and India), recent experience from the Latin American countries (e.g. Argentina, Brazil, and Costa Rica), the achievements of Mauritius and South Africa, and the on-going transformation in Ethiopia, Ghana, and Morocco have shown such achievements are possible in Africa. This requires translating strategies into concrete policy actions with clear targets, astute implementation with adept follow through, and effective monitoring and evaluation mechanisms. Agriculture’s role in economic transformation and development have been less understood in Africa, however, than in Asia and Latin America. Limited appreciation of agriculture’s potential to transform the African continent explains the current state of paradox—malnourishment, de-­ industrialization, and poverty amidst immense agricultural potential. The case studies in Chaps. 8, 9, and 10 show that with dedicated leadership, functional institutions, adopting a whole of society approach to agricultural policy management (government, business, and farming community), and genuine international support, Africa’s agriculture can effectively play multi-dimensional functions of serving as a major source of product, factor, and foreign exchanges; contributing to value chains, industrial development, and structural economic transformation; providing food security, environmental protection; and facilitating accelerated reductions in poverty and income disparities. Nevertheless, several factors impede the capacity of each African country’s agricultural sector to efficiently perform these development-focused functions. Beyond the pervasive, rapid technological change and institutional innovations examined in this book’s case studies, addressing the complex political economy of Africa’s agricultural sector (including agents, institutions, markets, and networks), making globalization work for Africa’s agriculture through effective market access and eliminating policy ambivalence (e.g. ending asymmetric subsidies and agricultural dumping), are all key to successfully shifting the frontiers of agriculture in Africa. In this chapter, lessons are examined across experiences from Africa, Asia, and Latin America, including the policies and programmatic actions that are needed to transform Africa’s agriculture.

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11.2   Leveraging the Power of Political Economy of the Agricultural Sector Developing a political economy approach to national agricultural management is ineluctable. A paradigm shift that overcomes domestic and foreign anti-agriculture biases in the context of a country’s national development strategy should be given priority. In addition, strengthening governance of the agriculture sector, focusing on small- and medium-scale farmers— providing increased access to agricultural land, fertilizers, tractors, water, and irrigation management—are ineluctable. A history of under-investing and under-capitalizing Africa’s agriculture explains how agriculture’s role in economic diversification and national development has been chronically and consequentially underestimated. All these issues play critical roles in unleashing agriculture as a powerhouse of food security, structural economic transformation, and inclusive development. The political economy of agricultural transformation is key to accelerating progress. The success of agricultural policies and programmes should not be solely based on its technicality (biophysical or technological aspects). The political leadership, the governance of the agricultural sector, the policy making processes, and the alignment of varying political interests among stakeholders in the agricultural ecosystem are even more important than the technical dimensions. A careful assessment of the agricultural ecosystem’s agents, institutions, markets, and networks is key to successfully implementing an agriculture for development strategy in Africa. Relationships between supra-monopolist institutions of government, powerful private sector exporters, powerless rural producers, and powerful urban consumers who benefit from agricultural produce price controls— as well as relationships between cash croppers, staple croppers, mechanized farmers, and micro- and small farmers—must all be well understood and considered when strategizing for positive change. Strategic efforts to address the cash crop bias, reverse the marginalization of farmers through selling strategic grain reserves at subsidized prices to private millers, tackle policy ambivalence, and power asymmetry between African farmers and farmers from Africa’s major trading partners remain critical to achieving an agriculture for development agenda. The imperative of building nation-states where government responds to the need of the people, not to tribal nor group pressure, lends credence to building strong coalitions and alliances through nurturing producers and marketing cooperative societies. This strategy will lead agricultural

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institutions and bureaucratic leaders to be more demand driven and responsive to the needs of smallholder farmers in Africa. To effectively unravel the intricacies of political economy of agricultural reforms, further research is needed in more micro-level analysis case studies to truly understand the power relationships, losers, winners, and game changers in the agricultural sector. This includes encouraging micro-­ macro linkages that facilitate better understanding of agricultural reforms on macroeconomic fundamentals to strike a balance in economic, social, and environmental dimensions of development. The context under which the first generation of the green revolutions took place across the world between the 1960s–1980s is entirely different today. In this first-generation era, a congruence of objectives existed between developing and developed countries. Developing countries were driven by generating revenues from agricultural exports, while developed countries needed raw materials to feed their manufacturing sectors and meet changing diets. Second, the overarching objectives were to reduce poverty and ensure food security. Such congruence of objectives provided the basis for a collective willingness to support agricultural development. This basis explains why most successful countries in the first generation of the green revolution were heavily supported by developed countries— Costa Rica, Mauritius, Taiwan, and South Korea are very good examples. The annual average of ODA to agriculture in Sub-Saharan Africa during 1975–1982, for instance, stood at about 19.0 percent compared to about 4.9 percent during 2005–2015. A divergence of development objectives between developed and developing countries accounts for declining trends in ODA targeted to agriculture. In recent times, curtailing rising trends of conflicts through humanitarian interventions, dealing with migration, and mitigating impacts of climate change became more important determinants of ODA flows to developing countries. The key question is, how can these conflicting objectives be reconciled with towards achieving the vision of developing Africa through agricultural transformation? Modernizing and transforming Africa’s agriculture sector is sound economics and an imperative for food security, inclusive development, and global stability. First, a sustainable green revolution in Africa provides employment and income generation opportunities for the millions of youth who enter the labour market annually.1 This is further reinforced by higher multipliers generated in the industries and services  AfDB (2018) projected an average of 10.0–12.0 million youths entering into labour market yearly. 1

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sectors, which drive the growth of agribusiness. A lack of decent jobs is what drives external migration from most African countries; to a considerable extent, therefore, providing decent jobs could stem the tide of migration from Africa. Second, a lack of decent jobs is one of the factors driving conflicts on the continent. Spending on humanitarian works, including conflicts, and on natural disasters such as droughts and floods crowds out resources that could otherwise be targeted for agricultural development. Revolutionizing agribusinesses in Africa tends to promote political stability, encourage free flows of foreign direct investment, and promote reductions in share of ODA spent on humanitarian works. Also, promoting a sustainable green revolution in Africa, through developing climate-resilient seeds and sustainable farming practices can help reduce the impact of climate change across the world. No-till farming in Argentina; implementation of the low carbon agricultural programme, as well as the rural environment registry in rural Brazil; and the promotion of agro-ecology and organic agriculture in Costa Rica are all solid examples of achieving agricultural productivity while promoting environmental protection and preservation. Finally, pragmatic support to an African green revolution helps stabilize global food prices, helping to enhance global welfare and achieve the SDGs. In this regard, investing in Africa’s agriculture yields positive returns, with high multipliers, to the world. Africa’s agricultural transformation, if well managed, could be a global public good and a win-win strategy for global stability. Africa can learn from the leadership demonstrated by Argentina and Brazil in this respect.

11.3   Prioritizing Transformation of Small-Scale Farmers Agriculture for economic diversification and an inclusive development agenda cannot be achieved without prioritizing enhancing the productivity of small-scale farmers and involving them in policy design, implementation, and monitoring. How growth is achieved matters for reducing poverty and income disparities. To ensure agriculture meets the short-, medium-, and long-term objectives of expanding growth and reducing poverty and inequality, agricultural transformation should focus on enhancing the productivity of small- and medium-farm holders, including adopting technologies that meet the needs of excluded or marginalized farmers—such as unemployed youth as was done in China, Taiwan, and South Korea, and

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as being done in Brazil today. Such agricultural productivity-induced strategies have transformative impacts on rural areas through strengthening off-farm activities, increasing rural employment, and improving rural wages (Pingali 2010), with direct and indirect impacts on reducing poverty and inequality. African farmers were pushed off farms into indecent, urban jobs—instead of being pulled off farms into dignified, non-farming rural employment. As a result of a total neglect of rural areas and agricultural development in the past, the needed structural transformation from agriculture to non-farm activities did not take place. In most African countries, as argued by Jayne et  al. (2011), African farmers were ‘pushed’ off farms into low-paying, desperation jobs in towns due to an inability of local agriculture to provide a reasonable standard of living—instead of being ‘pulled’ off farms into viable, non-farm activities in rural areas. The catalyst of a ‘pull-off transformation strategy’ is a broad-based, smallholder-led agricultural growth and commercialization that unleashes productivity within and outside the sector. Past experiences from Mauritius, South Korea, and China are very useful in this regard and recent experiences from Ethiopia and Morocco are setting the pace in Africa. South Africa is presently experiencing structural transformation. However, managing reallocation of labour activities away from agriculture requires deeper reflections. Training, reskilling, and vocational empowerment for those pulled off agriculture to thrive in non-agricultural activities (especially those that add value to agricultural products) are urgently needed for this transformation to be sustainable. One of the reasons why the first set of green revolutions adopted in Africa, between 1960s and 1980s, and the newly introduced agricultural policies failed, is due to imposition of ideas, approaches, and technologies on farmers without adequately involving them in the planning, formulation, and implementation of agricultural policies. Agriculture has a lot to do with rural communities in Africa. As argued by Siqwana-Ndulo (2007: 21), ‘rural communities are socio-cultural systems in which farmers have extensive knowledge of their ecosystems and developed farming techniques accordingly.’ Rural agriculture is a part of this socio-cultural system. This reality underpins the need to involve rural farmers in designing, planning, and implementing agricultural policies and programmes. Rural farmers are not only critical for agriculture as an engine of growth, but also as a pillar of sustainable development.

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Integrating small-scale farmers into agricultural ecosystems and development processes is sound economics and a development imperative. Integrating small-scale farmers into the production and development processes, including having a voice in decisions affecting agriculture and food security, helps to align agricultural transformation to their needs, which promotes food security, reduces rural poverty, and weakens urban inequality.2 Focusing on small-scale farmers is not only sound economics, but a development imperative—it is a wave capable of uplifting both rural economies and aspects of urban livelihoods. Small- and medium-scale farmers produce 80 percent of food in Sub-Saharan Africa, have higher a propensity to generate more jobs than large farms, and are most affected by rural poverty. Enhancing the productivity of this group is therefore a development imperative, because such an inclusive approach would help create more jobs for youth,3 reduce poverty and exclusion, and promote food security at the national level. This economic imperative underpins the necessity of the private sector’s involvement, while the development imperative underscores the centrality of public investment and programmes dedicated to agricultural transformation. Public-private partnerships are key to rekindle small scale, market-based, and commercialized agribusiness. The focus of agricultural transformation should not be on agricultural production, but on the entire inputs-farmgate-outputs ecosystem. This focus is important to ensure that short- and medium-term objectives do not trade-off long-term objectives, including agricultural resiliency systems in the context of sustainable development. This inclusive transformation, however, requires a strategic approach. Not all African subsistent farmers see agriculture as an opportunity, have viable business prospects, or have the necessary capabilities. Transitioning subsistent farmers into viable small- and medium-scale commercial farms, or transiting to agriculture-based value chain entrepreneurs, is critical. In either category, a viable business proposition based on high-value production that is commercially and financially viable and sustainable is required. Both entrepreneurs following agricultural production or value-chain production must receive further exposure to knowledge, technical skills, and entrepreneurial skills, either through associated network organizations, or  See AfDB (2016) for its impact in North Africa and AGRA (2017) for sub-Saharan Africa.  Jobs are created directly through agriculture and indirectly through agribusinesses and related value chains. As argued by the World Bank (2018), every $1.0 million agricultural outputs generate 750 jobs in agribusinesses. 2 3

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in partnership with successful operators in the field—through guided support from the government, or through public-private partnerships. Targeted typologies of assistance that cut across subsistence, transition, pre-­ commercialized, and commercialized farmers are needed to ensure support is based on farmers’ capacity and genuine interest. Innovative and strategic interventions are needed for effective targeting. Viability, capability, and interest are important criteria for assisting any subsistence farmers. Subsistent farmers, all over the developing world, are either too poor or too remotely located to be able to become commercially viable farmers— with little or no resources to buy inputs—or are highly vulnerable to impacts of climate change. They need help on a short-, medium-, and long-term basis, depending on their degree of poverty and remoteness from markets. However, such assistance must be able to increase affordability, productivity (labour and land), and profitability to generate economic and social returns to justify this assistance. Malawi’s Starter Park could reach the lives of these types of farmers. However, a big lesson from such an intervention is the need to make the process sustainable. In this regard, generalized support is unhelpful; such assistance should be based on capacity, interest, and willingness. Farmers with viable business ideas, strong capabilities, and keen interest to transit to commercial activities should have distinct sets of support from those who only want to scale up subsistence farming, or those who want to transition to value-added activities. Support should be categorized into subsistence, transition, pre-commercialized, and commercialized farmers. Ethiopia is presently working on turning five million micro-farmers into commercial farmers in the next five years. Morocco is implementing a similar initiative. This approach provides heterogeneous assistance that may not necessarily lead to financial support. The support that could help transform subsistence farmers includes social protection, access to low-­ cost technology and inputs (e.g. improved seeds, fertilizer), land rights, and building resilient farming systems.4 However, financial credit must only be targeted to those with ability to repay. Subsidized inputs should also be targeted to poor farmers to avoid leakages that often drain national treasuries. The Malawi Starter Park provides a good example and lessons for reaching extremely poor farmers. Organizing them into producers’ cooperative societies could also be helpful to achieve economies of scale, 4  For detailed information on the typology of assistance to the various category of farmers or entrepreneurs, see AGRA (2017).

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especially when purchasing inputs and marketing outputs. Such producers’ organizations, if well managed, could mobilize technical, commercial, and financial resources to support their members. Running a profitable agro-enterprise is not automatic. Genuine interest, managerial and technical skills, and financial access matter. Helping these agripenueurs realize their dream requires strategic support through governments, the private sector, social entrepreneurs, and partnerships across various stakeholders. Subsistence farmers who have viable business prospects and strong capabilities, but are not interested in farming could transition to pre- or post-farmgate activities, including marketing and agro-processing value chains. But creating an enabling business environment (such as providing access to electricity, property rights, quality and standards, effective contract management, and security) is key to the survival of small businesses. They also need to be trained in business management skills and assisted to access credit. The government cannot do this alone. Innovative and strategic partnerships (e.g. public-private-social entrepreneurs’ collaboration) are needed to take such an effort forward. Relevant government institutions handling agriculture must think and act entrepreneurially to make this a success. Promoting agricultural settlements, corridors, clusters, or poles is another innovative approach that helps to address market failures associated with small-scale farming, remoteness, and hard-to-reach areas. This is not new to Africa. Such an approach was dominant in Western Nigeria in the 1960s, and the result was remarkably positive until oil was discovered and the agriculture sector became marginalized. The Beira Agricultural Growth Corridor in Mozambique and the Southern Agricultural Growth Corridor of Tanzania promote inclusive and commercially viable agrobusinesses. Some out-grower schemes have started to run cluster farming (e.g. the Dangote Youth Farming Project in Kogi State of Nigeria). The growing strength of the ‘sowing pool’ farming approach in Argentina is aimed at achieving the same objective and minimizing regional climatic risks. This approach allows for the agriculture sector to reap the benefits of economies of scale; increase access to inputs, financial and infrastructures services; and integrate into markets and agro-processing activities. Cluster farming also has the tendency to attract youth into the sector and to spur job opportunities through developing value chains—both in rural and urban areas. Genuine transformation of agriculture in Africa, especially transforming micro-farmers into commercial farmers, requires strong political

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commitment, heavy financial investment, and massive public support. Agricultural transformation in Africa needs strong political will via strong political commitments, adequate allocation of resources to agriculture, high-level executive power, and designation of engaged high-level and transformative champions. Implementing the “Starter Pack” in Malawi and the public-private partnership on ‘Feed the Future’ in Egypt,5 both exhibited such types of commitments in the past; the Maputo Declaration on agriculture provided the investment target, which drives agricultural financing in several African countries. A major lesson from the past is that agricultural support is mostly supply-driven, with very limited engagement of the farming community and public at-large in supporting the transformation process. Sustainability implies inclusiveness and integration into the local knowledge system; mobilizing massive public support for agricultural transformation is key to using agriculture as a strategy to drive economic diversification, promote shared prosperity, and accelerate achievement of the SDGs in Africa.

11.4   Accelerating Agricultural Productivity as the Game Changer One major finding in this book is that the reallocation of labour from the agricultural sector to other sectors of the economy is not automatic. The share size of agriculture value added is a pull factor, serving as a magnet to keep labour perpetually in this sector, while agricultural productivity de-­ magnetizes and pushes labour out of the sector. For African governments to effectively encourage labour reallocation to the industrial sector, where income is high enough to push people out of poverty, policy attention should be focused on enhancing productivity and boosting relevant complementary actions like rural education and skill development for emigrants from the agricultural sector. Bridging the knowledge gap in African agriculture is ineluctable. The knowledge gap is the dividing line between developing and developed 5  This Food Security and Agribusiness Support project is a market-driven initiative supported by USAID covering four interrelated components: improved on-farm production, better post-harvest management, improved marketing of agricultural products, and improved nutritional status. The project, which is expected to end in 2020 has improved incomes and food security for at least 14,000 Upper Egyptian smallholder farmers. https://www.cnfa. org/program/food-security-and-agribusiness-support/

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countries. In agriculture, the knowledge gap cuts across the downstream, farmgate, and upstream levels. Addressing the knowledge gap across the agricultural ecosystem produces broad-based and sustainable impact to farmers, societies, and the economies at large. In this regard, unravelling knowledge gaps across the inputs, farmgate, and outputs ecosystems is key. This calls for strategic actions across the following. First, aligning traditional and modern agricultural systems in a participatory manner. A hybrid of good traditional practices and modern practices—specifically contextualized to each country’s need—is vital for ownership and sustainability. Second, arising from the momentum of the first generation and subsequent efforts of the green revolution in Africa, several novel institutions have been created across countries. However, due to neglect and non-­ political commitment, most of these institutions have become moribund. Addressing the dysfunctionality of agricultural research institutions is a priority to all African countries. Confronting this reality is needed to propel adoption of technologies and diffusion. The tradition of functional and competent agricultural institutions is central to the successes achieved in Asia and Latin America (e.g. Brazil, China, Costa Rica, and South Korea). Third, bilateral and multilateral trade and investment agreements in agriculture should spell out the technology transfer component to local actors. Many African countries, because of the urge to transform their economies, are trapped in the race-to-the-bottom game (through tax breaks and other incentives), which not only deny them of revenues to finance agriculture, but also limit knowledge transfers that could bolster productivity of small farmers. The local content of all FDIs in agriculture should be explicitly identified, managed, and monitored for agriculture to be fully transformed and serve as a propellant for food security, economic diversification, and shared prosperity. Finally, direct investment in agricultural technology by African governments is vital to bridge the knowledge gap. Such investments must be a combination of market and non-market solutions that are affordable and sustainable. Agricultural productivity and innovations, driven by strong institutions that help create and disseminate best practices and technological breakthroughs in Africa, are key. Despite advancements in communication systems, geography still matters when attempting to make a leap in critical mass of agricultural innovations. The African experience has shown that groups who are closer physically, culturally, and socially are more likely to

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trust one another, exchange information and assets, and enter into complex cooperative production, processing, financing, markets, and exporting activities.6 An integrated approach that supports public and private sector investment in services, technologies, and institutions which enhances broad-­ based inclusive farm productivity growth is necessary for progress. Central to this approach are: crop breeding and agronomic research programmes, extension programs to improve farmer husbandry practices, and marketing skills. Public investment in physical infrastructure that links rural areas to regional and national markets is vital to accelerating market access and has been done in several Asian countries (e.g. Taiwan, South Korea, India, and China) and in Latin America (e.g. Argentina, Brazil, and Costa Rica). Several strategic actions lend themselves to enhancing productivity. • Improving access to fertilizer and its sustainable usage. The current rate of fertilizer usage is too low to propel a productivity revolution (Fig. 3.10). This is far below the target of 50 kilograms per hectare target by 2015 as agreed in the 2006 Abuja Declaration. Based on the 2010–2014 average, only six countries met the target;7 the North African average is more than double the target—111.3 kilograms per hectare during 2010–2014. Unlike the situation in most Asian countries, Brazil and Argentina achieved high productivity through sustainable use of fertilizers. The no-till farming in Argentina and the agro-ecology practice in Brazil have achieved a global reputation. Moreover, African governments should learn from the experiences of South Asia and East Asia and the Pacific countries regarding their inability to use chemical fertilizer sustainably, damaging their environment considerably. Learning from this, Africa must avoid the environmental damage resulting from excessive use of agricultural chemicals. The new set of fertilizers must simultaneously optimize the following quadruple objectives: improve efficiency of fertilizer use; increase yields; improve nutritional quality; and enhance ­environmental

6  Juma (2011) provides the potential role of collective institutions in agricultural technology diffusion. 7  These countries and their fertilizer consumption (kg per hectare), based on 2010–2014 average are: Seychelles (823.9), Egypt (614.7), Mauritania (206.9), Botswana (61.5), Morocco (60.7), and South Africa (58.4) (FAO Database, accessed May 2018).

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sustainability. Argentina and Brazil are masters of the game on these issues. It is important to note that the capacity of some African countries to establish fertilizer companies is relatively limited. Yet, a regional approach could help make fertilizer production more cost effective. Nigeria and Côte d’Ivoire could lead the process in West Africa; Ethiopia and Kenya in East Africa; the Democratic Republic of the Congo and Cameroon in Central Africa; South Africa and Angola in Southern Africa; and Egypt and Algeria in North Africa. Having at least one regional champion in each of the five African regions will allow for economies of scale to build national capacities in the medium- and long- term.8 The various elements of the Abuja Declaration remain relevant in improving access to fertilizer usage in Africa.9 • Expanding irrigation facilities. Agricultural transformation cannot take place with rain-fed agriculture, alone. Except for Mauritius (where the peak of 22.1 per cent of its arable land is irrigated— though declined to 19.5 recently) and a few other African countries, less than 1.0 per cent of total cultivated land, in most African countries, is irrigated (Table 3.1). Heavy investment in irrigation and related facilities, as was done in several Asian countries (e.g. Bangladesh, Pakistan, India, Taiwan, South Korea, and Japan),10 is urgently needed in Africa. Strong partnerships with the private sector and development partners is vital to make this a reality. Africa can learn from the efficient  management of irrigation systems in Taiwan, which reached 82 percent of arable land in 2005, and has been driven by several factors: (i) recognition that water is a scarce 8  The recently formed consortium of the International Plant Nutrition Institute (IPNI), International Fertilizer Development Center (IFDC), International Fertilizer Association (IFA), International Potash Institute (IPI), International Institute for Tropical Agriculture (IITA), Africa Fertilizer Agribusiness Partnership (AFAP) and the fertilizer industry is a good development that must be supported by all actors to achieve its objective of ensuring efficient and sustainable use of fertilizer in Africa. http://www.afap-partnership.org/ esafa-conference-highlights-consortium-planned-promote-fertilizer-recommendations-africa/ 9  These include addressing fertilizer needs of African farmers, establishing national financing facilities for input suppliers, and establishing fertilizer procurement and distribution. 10  In these countries, the share of irrigated land to agricultural land ranged from about 35 percent (Japan) to over 80 percent (Taiwan).

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factor in ­agricultural production; (ii) mutually reinforcing centralized planning and investments, and decentralized management of irrigation systems; (iii) a system of agronomic and engineering information exchange between the users and managers of irrigation system; (iv) the use of incentive structures for both the users and managers of irrigation systems that are compatible with the efficient use of water within the irrigation system; and (v) diversification of irrigation facility use and improvement of irrigated water distribution patterns.11 Promotion of non-tillage farming and access to farming inputs such as tractors (ploughing machines, planters, and harvesters) improved seedlings, herbicides, and pesticides (that are not damaging to the environment) should be proactively encouraged. Using cooperative societies, out-grower farming, and farm settlements to make these inputs accessible to small farm holders is important. All case studies in this book have shown the value and imperatives of cooperatives and producers’ associations. One important lesson from managing input subsidies becomes critical: for subsidizing inputs to raise agricultural productivity, it must be efficiently run, well-targeted to promote equity, address exclusion, and be sustainable to promote self-sufficiency in production. Such programmes must support the development of existing private supply networks and not become crowded out by state-driven supply. Using market-based instruments is a critical success factor in Argentina and Brazil and these instruments are gaining currency in many African countries (e.g. Ethiopia, Morocco, and Nigeria). To avoid entitlement and over-dependency syndrome, input subsidy programmes must have a built-in exit strategy and must incentivize private sector engagement. Addressing land inequality by increasing small and landless agriculturalists’ (including women’s) access to productive land sets the climate for taming poverty and inequality in many rural areas in Africa. This made land reform a key strategy in Asian countries (China, India, Taiwan, and South Korea). Land reforms targeted to where the rural poor reside are likely to substantially reduce poverty and inequality. Focusing land gains on rural farmers and farmworkers has a very strong propensity to reduce the rural-urban inequality divide. 11  Abel (1976) and Chang et  al. (2016) provide detailed historical dimension to the dynamics of irrigation in Taiwan.

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Gender-neutral landholding and inheritance is of further importance to address gender poverty and gender inequality in Africa. The inability of Latin American countries to use agricultural transformation to tame income inequality and reduce poverty of the poorest farmers, due to an over emphasis on large scale farming in the past, offers good lessons for Africa. • A pragmatic approach for correcting market failures affecting input supply, finance, and insurance. It is obvious that market failures lock farmers into low productivity traps. The Taiwanese zero lending rate to youth in agriculture, and the Brazilian subsidized rural credit system both aimed at addressing market failures in agricultural credit. In Africa, however, past efforts to implement subsidies, accelerate small farmers’ access to financial services, and promote insurance against shocks and vulnerabilities yielded mixed results. In the short to medium term, subsidies help promote use of inputs, raise outputs, and reduce poverty, but there is limited evidence of a sustained positive impact. And in some cases, they are very counterproductive— inefficient and inequitable. The Nigerian Agricultural Credit Guaranteed Scheme (NACGS), which allocated about 90 percent of its total expenditures to wages and salaries, administrative, and mobility-related expenditures, as of 2009, is an example that should be avoided. Context-specific subsidies, insurance, and credit programmes that evolve and build on past experiences, is vital. The effectiveness of a subsidy depends on how programmes are designed and implemented. Critical issues for consideration include targeting (types of farmers, crops, or inputs to apply subsidies), indexing to inflation to avoid cost escalation, points of provision of subsidies (at the level of production or importation, or consumption by farmers), and duration of subsidies.12

 Zander et  al. (2013) provide a detailed analysis of the NACGS management, while Wiggins and Brooks (2010) present critical success factors in inputs subsidy management. 12

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11.5   Strengthening Special Agricultural Zones or Corridors Scaling up special agricultural zones or corridors offers opportunities for economies of scale, springboards for agrobusinesses, and eliciting youth interest. Special agricultural zones or agro-poles, if well managed, can be effective strategies for promoting an agricultural revolution, stimulating economies of agglomeration, and fostering backward and forward integration. The urge to modernize agriculture and make it more attractive to African youth has rekindled an interest to use agricultural growth poles and agro-corridors as strategies for agricultural transformation in Africa.13 This strategy, which as of 2017 has been adopted in at least 29 African countries, is aimed at attracting private and multilateral development institutions, dealing with land fragmentation, and promoting access to modern techniques—all of which are changing Africa’s agricultural landscape. It also provides economies of scale to agricultural production and marketing, linking value chain development firms with small-scale farmers as well as facilitating access to training, financing, equipment, and markets to local farmers. The experience from Madagascar’s growth poles in Nosy Be, Fort Dauphin, and Antananarivo-Antsirabe has led to skills acquisition, job creation, business development, and investment promotion opportunities. In Mali, adopting the right financing mechanisms, private sector leadership, risk-sharing arrangement, and high-quality technical support to manage value chains, such as market research and benchmarking, contributed to further success.14 However, recent experiences have demonstrated an imperative to learn from past lessons and strengthen capacities to manage challenges. Using such an approach to transform agriculture calls for urgent political and 13  Agricultural growth poles are simultaneous, coordinated investments in agriculture to support food sufficiency and agro-based industrialization through value chain development in a country. They are to leverage and augment opportunities already existing in an economy. This can take several forms like agro-poles, agro-corridors, agro-industrial parks, agro-clusters, agro-aggregators, agro-incubators, and special economic zones. A common feature of these terminologies is a coordinated investment in transport, power, communications, and market access to unleash agricultural productivity and potential for economic transformation. See Picard et al. (2017), for the distinctions among these terminologies. 14  Speakman and Koivisto (2013) provide some good case studies of special agricultural zones in Africa.

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policy attention to addressing challenges and lessons from experiences over the past one decade (Box 11.2). These approaches include ensuring that substantial private investors are attracted to the sector, effective coordination is promoted among stakeholders (including horizontal and vertical coordination), sufficient land is made available, the interests of small-scale farmers are protected, affected local populations are effectively compensated, and local nutritional security is promoted. It also requires adequate risk management and sharing, as well as promotion of accountable and transparent governance of agro-poles to promote trust and sustainability. Africa’s agricultural growth poles, or corridors, as was done through the Asia’s first generation of agricultural revolution, requires sustained support from governments and the international community to drive agricultural competitiveness, economic diversification, value addition, and inclusive development. The Sowing Pooling farming system in Argentina, Brazil, and other Latin American countries offer substantial economies of scale and technical assistance to farmers.

Box 11.1: Emerging Trends in Special Agricultural Zones or Growth Poles in Africa

Agricultural growth poles and corridors are becoming more dominant as a veritable agricultural strategy in Africa. They were popular in the 1960s and 1970s before African countries started to discover mineral resources in commercial quantities (Odusola 2017). Abandoning these approaches, because of Dutch disease, created lulls in agricultural investment and capitalization. This trend has been reversed since the dawn of the twenty-first century. For instance, as argued by Picard et al. (2017), 36 agricultural growth poles and 9 corridors were established in African countries, culminating into about 3.5 million hectares of land, while AAH, CCFD, and Oxfam (2017) put the number of African countries implementing this strategy between 2008 and 2017 at 29. The commitment of African heads of state to eradicate hunger and rural poverty through agricultural modernization and commercialization in 2014 further reinvigorated the use of these strategies, especially in countries like Cameroon, Democratic Republic of the Congo, Gabon, Ivory Coast, Nigeria, Mali, Morocco, Mozambique, and Togo. This model has received substantial support from the World Bank, UNIDO, and AfDB in recent times. (continued )

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Box 11.1 (continued)

This strategy, if well managed, could help transform African agriculture from subsistence to commercial farming, promote agro-­ agglomeration to harness economies of scale, attract private and public investment into agriculture, modernize farming techniques, and help capitalize agriculture through coordinated investments in infrastructure such as roads, power, irrigation, communication, and market access. Agro-based special economic zones are associated with favourable regulatory, tax, and investment frameworks that allow private investment and public-private partnerships to thrive, while it also allows access to large areas of titled and formalized land. This approach is amenable to youth and congenial to promoting a new form of agricultural revolution in Africa. The recent experiences in the Bagré agro-pole (Burkina Faso), the Meknes agro-pole (Morocco), the Mpal agro-pole (Senegal), the Baekeri agro-pole in Ethiopia, the Imota agro-industrial park in Nigeria, the Bizerte agro-pole in Tunisia, and the 40 small projects established since 2016 in Cameroon offer some lessons for improved implementation of agro-poles in Africa. The experience from the Southern Agricultural Growth Corridor of Tanzania and the Beira Agricultural Growth Corridor in Mozambique also lend credence to learning by doing and experimentation—not abandonment due to challenges. Sources: Odusola et al. (2017), Picard et al. (2017), and AAH, CCFD and Oxfam (2017).

11.6   Making Agricultural Transformation Mutually Reinforcing to Environmental Sustainability Achieving the SDGs will be impossible without aligning agricultural practices with environmental protection and preservation. Evidence from the 2017 Food Security Index Report shows that both China and India avoided the Malthusian trap at the expense of environmental pollution. It also reveals that in the Great Lakes region of the North America, which holds 20 percent of the world’s freshwater, agriculture consumed 80

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percent of water withdrawn from water sources in Canada in 2013 alone. Moreover, urbanization and high concentration of fertilizer nitrates have contaminated almost half of Europe’s freshwater bodies (EIU 2017). The same report ranked 13 Sub-Saharan African countries among the top 20 globally in terms of the quality and quantity of freshwater. Sub-Saharan Africa, itself, rated best on freshwater resource risks (72 percent) compared to 48.6 percent for high income countries and 46.2 percent for Asia and the Pacific. This situation provides a good opportunity to expand irrigation systems on the continent. However, the need for conservation-­ conscious water management policies and innovative technologies that use water more efficiently, while pursuing an agricultural revolution, is very important to avoid the experiences of China, India, Canada, and most European countries that achieved food security at the expense of environmental degradation. Ensuring sustainable agriculture through climate-resilient farming practices is key. Emerging climate-resilient innovations coming from agricultural research institutes within and outside Africa are yielding positive results. For instance, as indicated in Chap. 10, countries like Argentina and Brazil achieved food security and a global agricultural powerhouse status, while preserving and protecting the environment. Some examples from African countries demonstrate that the continent can also achieve this feat. For instance, the Kenya Agricultural Carbon Project in Naigai community, introduced in 2010, provides an example of strengthening climate-resilient agriculture. The Project’s adoption of ecological farming practices like agroforestry, organic soil fertilization, water harvesting, and crop and livestock diversification is building resilience in farming systems by focusing on soil, water, diversity and communities.15 Similarly, the Government of Uganda has taken important steps to promote climate resilient agriculture—adopting the Uganda Organic Standard in 2004; the Regional Organic Products Standard in 2007; and preparing the Uganda Organic Agriculture Policy in 2009, to mention a few. These efforts yielded considerable results, including increasing the number of certified organic farmers by 359 percent and the acreage under organic agricultural production by 60 percent between 2002 and 2007; improving income of farmers (the farmgate prices of organic pineapple, ginger, and vanilla were 300 percent, 185 percent, and 150 percent higher, 15  See http://www.greenpeace.org/africa/en/campaigns/Ecological-Farming-in-Africa/ ClimateResilience/

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respectively, than conventional products in 2006); reducing greenhouse gas emissions; reducing agricultural chemical runoff into local water bodies; and increasing certified organic exports from US$3.7 million in 2003–2004 to US$22.8 million in 2007–2008.16

11.7   Making Agriculture a Strategy for Entrepreneurial Transformation for Youth Meeting the needs of future generations in the current generation’s actions is key to using agriculture to achieve shared prosperity and sustainable development. Productively engaging youth in agricultural, nature-based solutions and climate change policies and programmes in Africa is long overdue. Reversing the era of deciding for youth is critical to advancing agricultural transformation in Africa. The governance of innovation should be an integral aspect of agricultural transformation, with youth at the epicentre of such a system. In this regard, youth must be fully involved in managing natural resources; and designing and implementing infrastructure (especially those relating to agriculture and climate change). The rising trend of engaging African youth in agriculture and related activities should be leveraged to develop youth-compliant agriculture. In this regard, Africa must strive to improve its capacity to manage natural resources through engaging youth in seed multiplication and seed banks, zoological expansion and management, and managing protected areas and protected farming. Involving youth in adapting African agriculture to climatic threats—desertification, coastal erosion, droughts, and floods—is pivotal. For instance, based on the various challenges facing agriculture, each African country must rethink the need to switch between crop production and livestock breeding, as well as switching from producing cereals or tuber crops to fruits and vegetables, and switching between water-intensive crops to less water-intensive crops. Building youth capacities around these emerging issues is vital to strengthening resilience. Youth involvement calls for formidable networks of young farmers, as have been created in several African countries. The Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN), a regional policy research and advocacy network, is playing a role in supporting youth engagement in agricultural policies, programmes, and processes—shaping 16  See https://sustainabledevelopment.un.org/index.php?page=view&type=99&nr=34 &menu=1449

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their attitudes and interests in agriculture. FANRPAN is promoting evidence-­based and youth-focused agricultural policies since 2012 in many countries.17 It is also training its members on agriculture value chains; promoting policy advocacy for female farmers and youth; facilitating internships; promoting agricultural innovation and creativity through agriculture awards; and enabling participation in continental and global fora. This initiative should be expanded beyond Southern and East Africa to become a continent-wide network. The support of governments, private sector, development partners, and agricultural research institutes is needed for this to become a powerful platform for pan-African agricultural transformation. Some country-specific examples of youth farmers abound. For instance, the Young Producers and Agricultural Professionals of Togo (REJEPPAT), formed in 2010, in less than four years had 1403-member organizations and 14,751 individual members, including 5502 women. Its participation in national, regional, and international meetings on agriculture has become notable. REJEPPAT influenced the government of Togo’s clearing of farmland for rural youth, participated in drafting the national policy on access to land for youth and women, and facilitated market access (FAO 2014b). Deepening this initiative in Togo and replicating it in other countries, based on each country’s context, is vital to advancing agricultural transformation, enticing youth into agriculture, and promoting inclusive and sustainable development in Africa. African youth need agricultural entrepreneurial tutelage and mentorship. Making agriculture very attractive to African youth could help to turn idle assets into engines of growth and vitality, not only for agriculture, but also for off-farm agribusinesses and entire African economies. Turning agriculture from a way of life into a business enterprise calls for a modernized agriculture sector. The current rudimentary agricultural system hinders the willingness of youth to commit to participating in agriculture as an opportunity, instead of seeing it as a necessity. This reality accounts for why the current average age of farmers in Africa is about 60 years, even higher in countries like Malawi, Cameroon, and South Africa. Farmers of higher ages are less likely to adopt and diffuse agricultural technology in a smart manner—a phenomenon necessary to revolutionizing agriculture— and may not be dynamic enough to modernize and commercialize agriculture. 17  Some of these include Malawi, Mauritius, South Africa, Swaziland, the United Republic of Tanzania, and Zimbabwe (FAO 2014b).

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Building human capital, particularly focusing on technical, agricultural, and climate related skills, vocational training, and fostering entrepreneurial activities remain critical to entice youth into this sector. Promoting mentorship alliances between commercial farmers and youth in African countries, as is being promoted in South Africa, could help advance agricultural entrepreneurship among youth. Since 2012, the role of kLab, a high-tech lab in Rwanda, shows how the private sector could help young people develop ICT-based agricultural solutions and turn them into commercial ventures—by connecting young entrepreneurs with mentors who help convert their dreams into reality. As of 2014, kLab had helped about 70 members to shape their ideas into business ventures, including ICT applications for agriculture. For instance, kLab mentors are working to help four high tech agricultural applications get off the ground.18 The Dangote Youth Farming Project in Nigeria is a privately-owned initiative that helps to mentor youth in farming.19 The 100 hectares farmland, mainly for youth, aims to generate jobs and create new agripreneurs. It is one of the strategies to achieve the target of producing one million metric tonnes of parboiled rice in 2018 by the Dangote Group. Other innovative, youth-based agribusiness pilots include those being implemented by African Development Bank, the International Institute of Tropical Agriculture (IITA), Alliance for Green Revolution in Africa (AGRA),  Forum of Agricultural Research in Africa (FARA), and the Technical Centre for Agricultural and Rural Cooperation (CTA) (See Box 11.2) calling for all African governments, regional institutions, and development partners’ support for the mindset and capability of African youth to be fully directed at agribusinesses as employers of labour. The future of food security and the achievement of the SDGs in Africa depends on the extent to which youth are productively engaged in agriculture. In this regard, ensuring that youth have access to: the right information, education, and skillsets via integrated training; exposure to information and communications technologies; and a supportive environment and targeted support to address the daunting challenges facing their involvement in agribusinesses are all critical. 18  Goemans (2014) and FAO (2014a), reveal  how kLab is deepening technology-based applications in Rwanda. 19  This form of out-grower farming, managed by the Dangote Rice Company, provides the seedlings, anti-pest-chemicals, and fertilizers to farmers, while the Government, through the Lower River Niger Basin Authority, provides the land.

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Box 11.2: Emerging Internship and Mentorship Programmes for Youth in Agribusiness

Several continental and global stakeholders with keen interest on Africa (e.g. AfDB, IITA, AGRA, FARA, and CTA) have initiated efforts to strengthen the networks of internships, mentorships, and champions with dedicated support to incubator systems in agribusinesses. The International Institute of Tropical Agriculture’s (IITA) Youth Agripreneurs in Nigeria, trained 30 young people on production, marketing, and value-adding enterprises on maize, soybeans, vegetables, and fishery and the manufacture of protein-rich snacks and soymilk, which have further trained over 500 youth across the country. The Kalambo Youth Agripreneur in the Democratic Republic of the Congo, focusing on seed and fish production, has trained 950 women and youth in agro-processing enterprises and nutrition. The Kibwezi Hortipreneur Youth Group in Kenya, focusing on irrigated vegetable farming and similar initiatives in Tanzania and Uganda, have started to yield positive results. AGRA is catalysing rural African youth interest in agricultural value chains through basic agribusiness training, intensive agribusiness entrepreneur programmes, and multi-track vocational programmes. It is strengthening collaborations between research institutions, universities, and the private sector to commercialize technologies and innovations, while incubating youth for employment and entrepreneurship. The Technical Centre for Agricultural and Rural Cooperation’s (CTA), ICT-based and social media training programmes for agribusiness stakeholders, mentors, and champions have led to training over 1620 youth in 42 countries. The AfDB’s Youth in Agribusiness Programme was designed to empower youth productively and spur their interest in agribusinesses. It was aimed at providing information, life-skills education, financial services, proven technologies, and agribusiness opportunities to at least 800,000 African youth. The initiative comprises at least 35,000 internships, 18,400 agribusiness start-ups, and 154,000 new decent jobs, as well as contract farmer and marketing opportunities. The targeted investment is about $700 million over five years in 20 African countries. Nearly 1536 unemployed tertiary graduates are expected to be trained under an 18-month long agribusiness incubation. Sources: Sanginga et al. (2015) and FAO (2014a).

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Sixty is Africa’s magic number to transit from challenges to opportunities. Turning Africa’s challenges into opportunities by leveraging the strength of youth and the experience of subsistence farming communities to galvanize market-based farming is vital. Youth (persons less than 25 years old) constitute more than 60 percent of Africa’s population and 60 percent of the unemployed people on the continent. By contrast, the average age of African farmers is 60 years. However, as articulated by FAO, food production must improve by 60 percent to overcome the impending food insecurity associated with Africa’s rising population. The solution lies in incentivizing young people into agriculture. But the current poor and subsistent conditions and low productivity in agriculture discourage youth participation. How can Africa leverage the long-standing experience of older farmers, the dynamism of its youth, and the avalanche of technology-­ induced productivity to transform the continent’s agriculture sector? Transforming at least 60 percent of the current subsistent, poor farmers into market-based, small-scale, and commercial farming entrepreneurs remains a viable solution. Developing African agricultural venture capital, using a green revolution fund, and strong alliances between the public, private, CSOs, academia farming community, and other sectors is central to reaching this target. Developing youth entrepreneurship on the inputs-farmgate-outputs ecosystem is key to using agriculture as a strategy for economic transformation and sustainable development in Africa. Past efforts concentrated on inputs, and partially on outputs, without looking at the agricultural ecosystem at large. Heavy investment in developing an agricultural entrepreneurial ecosystem such as direct financing, matching grants, supportive incubation clusters, fiscal incentives, and reward and recognition focused on creativity and innovation, is needed to build and nurture entrepreneurial development in agriculture. In line with the concept of an ecosystem, a participatory and multi-stakeholders approach to identifying, developing, and applying agricultural research and development is necessary to promote farm-firm linkages, raise demand for agricultural R&D, build community-based capacities, and enhance utility and profitability of agricultural innovation is key.

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11.8   Taking Agriculture to the Next Level Through Digitalization in Africa Transforming 60 percent of over 250 million African smallholder farmers and pastoralists into commercialized and emerging farmers20 by 2040 can only be realized if farmers who operate in challenging environments access innovative products, services, and business models, through digital solutions. Remote sensing, unmanned aerial vehicles or drones, blockchain, machine learning, computer vision, internet of things, robotics, artificial intelligence, satellite system, and big data are digital technologies poised to shape the global future of agriculture—and Africa cannot afford to be left out. In addition to stimulating innovations for sustainable and high-­ productivity-­based agriculture, the potential for promoting inputs, outputs, and markets aggregation and integration; building farmers’ capacity to promote better and safer food system; preserving natural assets (including rich traditional crops and biodiversity); and strengthening resilience is huge.21 Digital innovations can benefit farmers in many ways: unlocking and optimizing supply chains; promoting automation (e.g. in irrigation); aiding data collection and generation; processing and analysing data (e.g. precision farming and livestock sensors); aggregating and distributing information; expanding opportunities for financing and insurance activities including crowd-farming; increasing transparency through traceability of food products; and linking farmers with markets and ecosystem actors. How has digitalization for agriculture progressed in Africa? Although agricultural digitalization is at an embryonic stage, it is growing rapidly. The rising penetration of basic mobile phones is transforming expensive, in-person extension services that are fraught with accountability issues, while accelerating access to market information for farmers. And as argued by Fabregas et al. (2019), this dynamic has contributed to a 4 percent rise in yield—and expanded the adoption of technology-based inputs by about 22 percent across the continent. As mentioned in other parts of this book, adopting commodity exchanges in Ethiopia also contributed immensely to reducing transaction costs and regional price dispersions. 20  These are farmers being transformed from subsistent to commercialized farmers selling not less than 90 percent of their produce for profits. 21  Several studies (e.g. Tsan et al. 2019 and Gillwald et al. 2020) have articulated the real and potential values of digitalization for agriculture in Africa ranging from cost reduction and resource conservation to inputs and outputs optimization.

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Tsan et al. (2019) observes that at least 390 active digital solutions to agriculture were operating in Africa, as of 2019, cutting across five strategic areas: advisory services, market linkages, financial access, supply chain management, and macro agricultural intelligence. About 60 percent of these solutions have been launched since 2016—growing at annual average of 44 percent. And at least 43 of the 49 surveyed Sub-Saharan African countries are benefiting from digitalization solutions—over 33 million smallholder farmers and pastoralists benefited from such services, with about two-thirds in East Africa as of 2019 (ibid.). Several challenges impede exploring digital solutions in agriculture in a more equitable and sustainable manner including limited access to technology and connectivity, and low levels of digital literacy in a context of low levels of education. The lack of infrastructure for digital agriculture (e.g. smartphones, weather information, farmer registries, digital agronomy data, soil mapping, and pest and disease surveillance infrastructure) in many African countries could impede progress and positive impacts. Moreover, limited efforts to tailor digitalization of agriculture to each country’s contexts and to integrate them into national innovation ecosystems, while proactively managing the risks of digital tools associated with each context are further impediments. Addressing these issues remains a critical success factor to accelerating progress. The future of Africa’s agricultural development lies, among other areas, in digital technologies and innovations that do not only accelerate high productivity and operational efficiency, but promote inclusivity and sustainability. Achieving this objective is not straightforward. It requires dedication and investment across the spectrum of ecosystem stakeholders. First, Africa must leverage the rising penetration of mobile phones, which reaches more than 70 percent in many countries (e.g. South Africa, Tunisia, Nigeria, Kenya, Ghana, Senegal, and Tanzania).22 Mobile phones are the most accessible and affordable digitalization tool for smallholder farmers in Africa, which must be leveraged to expand capacity and enhance productivity. This simple technology can be used to permanently shift the frontier of extension services in Africa. Clustering farmers into cooperatives and producers’ associations, then attaching an agricultural extension service worker to the cluster could be transformative. Each of these clusters could be assigned toll-free calls and toll-free text messages to exchange 22  Fabregas et al. (2019) provide a detailed analysis of mobile phone penetration in developing countries.

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information and ideas. This mechanism can be used to address perennial problems sharing information on markets and prices; inputs sources and applications; customised soil characteristics; weather situations; pest outbreaks and control; and post-harvest management. The power of voice and text messages in changing long-lasting farm and entrepreneurial practices cannot be underestimated towards transforming smallholders into emerging farmers. Second, it is crucial to develop digital human capital for every actor at every level of the ecosystem, from farmers and value chain actors to extension service workers and government officials. Critical elements include raising awareness about digitalized agriculture, improving digital literacy, and building digital skills among small-scale farmers, extension service workers, agribusiness operators, other agricultural value chain actors, and officials of the ministries of agriculture—across all African countries. Third, cooperative-based business models on digitalization for agriculture could be particularly impactful. Given the low level of literacy in Africa, reaching over 250 million smallholder farmers without using collectivised institutions like cooperatives and producer’s associations23 may seem a herculean task. Yet, in South America, the countries of Argentina, Brazil, and Costa Rica are masters at using collective institutions to leverage technology transfers and diffusion in agriculture. Therefore, leveraging local institutions like cooperatives to develop strong consortia and platforms that share experiences on digitalization could yield unfathomable benefits. Models that incentivise farmers to share lessons and experiences are necessary to promote technology diffusion. These models could be complemented by supporting emergence of strong platforms and alliances between small agrobusiness and big agrobusiness to deepen and share agricultural digitalization skills, experiences, and lessons—as well as promoting relationships and building partnerships across ecosystem actors. This dynamic could be nurtured to become a ‘one-stop-shop’ for agricultural digitalization at sub-national, national, and regional levels. Fourth, ensuring sustainability of agricultural digitalization through including marginalized actors could yield outstanding results. The perpetuation of dualism between elite and non-elite farmers is a major factor driving the current level of underdevelopment in agriculture. Leveraging the comparative advantages of vulnerable groups through digitalization 23  This is being done in countries such as Ethiopia, Nigeria, Morocco, and Uganda and such experiences and lessons could help to scale it up at the national and regional levels.

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could be a game changer. Galvanizing youth, women, and farmers in remote locations, among other marginalised groups, to become the means and end of digitalization for agriculture could unleash the much-awaited agricultural transformation in Africa. This is therefore a clarion call to governments, businesses, and international partners (including donors) to provide necessary incentives to use youth and the marginalized groups as the fulcrum of digitalization for an agriculture renaissance in Africa. Efforts to accelerate rural internet access should be encouraged to make this goal a reality.24 Finally, a coordinated approach to digitalization for agricultural investment, risk mitigation, knowledge generation, and dissemination among ecosystem actors (e.g. governments, investors, business community, farmers, research institutions, and donors) is needed to avoid unnecessary duplication, transaction costs, and to promote operational and regulatory efficiency and effectiveness. In this regard, an ecosystem-actors coordination in supportive infrastructure (e.g. electricity, transport, and water) and digital infrastructure investment (e.g. digital agronomy data, soil testing data and maps, weather tracking facilities, disease surveillance systems, farmer databases, and commodity exchanges) is needed to accelerate progress. The Digital Green Project in India is a good example of this coordinated digital approach (Box 11.3). To this end, substantial investment in research is needed to address the needs of marginalized farmers, gather better market and business intelligence, and collect vigorous evidence on the impacts different digitalization policies and business models create on farmers and other ecosystem actors. Moreover, a collective approach to identifying and mitigating digital risks is ineluctable for ownership and sustainability. And as argued by Gillwald et  al. (2020) and Tsan et  al. (2019), this approach requires designing and implementing policies and regulations to promote good data stewardship, including policies on registering farmers and protecting the privacy of consumers and farmers. In several African countries (e.g. Ethiopia and South Africa), efforts to protect citizens and state security 24  Although countries like Egypt, Tunisia, Mozambique, Ghana, Guinea, Guinea Bissau, Rwanda, and Kenya are among leading countries in providing cheap mobile  data  pricing compared to Zimbabwe, Mali, Democratic Republic of the Congo, Central African Republic, South Africa and Botswana whose mobile data prices are among the most expensive globally (RIA 2019).

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lead to overregulation that stifles innovation and creativity. Striking an appropriate balance between promoting data governance and regulatory effectiveness is vital for the digitalization of agriculture in Africa. Lastly, promoting a collectivised knowledge agenda for digitalization of agriculture through building and nurturing communities of practices and strengthening knowledge and development exchanges across farmers, cooperatives, and communities is pivotal. Box 11.3: Digital Green Initiative

This social enterprise is a cost-effective and scalable technology-­ enabled tool of behaviour change communication which brings together researchers, development practitioners, and rural communities to produce and share problem-solving information through videos. This video-enabled approach to agricultural extension was pioneered by Microsoft Research in 2008, anchored on technology-­ based approaches (community videos, advisory services, training, data generation and analysis, and innovation laboratories) to enhance productivity, connect farmers to markets, and promote precision or smart farming. It partnered with India’s National Rural Livelihoods Mission and its state-level counterparts to train over 12,500 frontline extension workers to promote sustainable agriculture and nutrition practices in 13,195 villages, reaching 1.1 million farmers—with a plan to expand to more than seven million farmers within the next five years. Through its partnership with the Government of Andhra Pradesh, it is using appropriate and cost-effective ICTs to deliver timely information to farmers and adopt climate-resilient agronomic practices (e.g. soil degradation, biodiversity loss, and water scarcity management); the project, which within the first two years starting from 2018, reached 2500 new villages and benefitted 300,000 smallholder farmers (Digital Green 2020). Agricultural aggregation schemes are strengthening farmers’ bargaining power, reducing transportation costs, and improving access to markets. A new product called ‘Loop’ is like an Uber service, which pools together farmers’ fresh fruits and vegetables to take to market. Based on information each farmer logs into the app, a van picks up the produce at a designated time and spot. Also, the ‘Kisan (continued )

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Box 11.1  (continued)

Diary’ app helps farmers track their production, sales, and profits in a given store or market (Iyengar 2019). A 2015 breakthrough is the mobile crop doctor, ‘Plantix,’ an artificial intelligence app that helps identify crop diseases and provides diagnoses and treatment plans. This app also offers guides on pesticides, fertilizers, and nutrition. As of 2019, Plantix was able to identify more than 450 diseases in 50 different crops, with 1.1 million monthly users—about 880,000 from India. Due to the accelerated rise in the use of smart phones and drastic reductions in mobile data price, the Digital Green’s YouTube channel recorded about 50 million views (Iyengar 2019). In India alone, over 15,200 villages and more than 1.8 million smallholder farmers benefit from the Digital Green initiative, of whom 90 percent are women. It succeeded in improving beneficiaries’ farm practices by 63 percent and raised yields by 22 percent and incomes by 16 percent. Evidence from Gandhi et  al. (2009) finds that the Digital Green approach is at least ten times more effective than a conventional extension system. This programme, which started in 2011 in Ethiopia, has reached 374,979 farmers and has been extended to other countries like Afghanistan, Bangladesh, Ghana, Guinea, Malawi, Mozambique, Niger, Senegal, and Tanzania. The programme today reaches 2.3 million farming households, globally. Sources: Gandhi et  al. (2009), Iyengar (2019), Fabregas et  al. (2019), and Digital Green (2020).

11.9   Strong Stakeholders Partnership and Collaboration Partnership between governments, business, research institutions, and the farming community are important critical factors to success. This is very prominent in Argentina, Brazil, China, and India. Some of the salient issues for consideration are enumerated below.

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• Structural transformation will not take place unless an enabling environment is created for private investment to thrive in the value chain process. This is an area where public-private partnerships could be a catalyst. A state can create an enabling environment to promote private sector investment at all stages of agricultural commodity value chains, as well as allow small farmers to commercialize and link to markets. However, this initiative requires a social contract between various actors to avoid dependency syndrome, as has been the case in the past. This social contract should clearly indicate roles, responsibilities, and expected results from each actor based on timelines. China’s agricultural transport and marketing networks, such as the ‘green channel’ (roads), the ‘blue channel’ (ocean), the ‘sky channel’ (air), and the ‘Internet channel’ (virtual), which link farmers and agri-pentures (in the Vegetable City of Shandong Province) to local, national, and international markets is a very good example. The transformation of the Cerrado Region in Brazil could not be possible without a similar approach. Strong partnership also contributed to the success of the integrated farming system in Taiwan, comprising agriculture production zones, marketing zones, and R&D zones. • Strong partnerships and investments in post-harvest management should be prioritized. Research or assessment of post-harvest losses is clearly required given the lack of convergence on the level and nature of post-harvest losses in Africa. This research should go beyond concentrating upon on-farm storage losses and maize losses to the entire value chains of the various food commodities of nutritional significance to Africa. A thorough post-harvest loss assessment using systematic methodologies and holistic approaches for loss mitigation is important. In addition, approaches that focus on wide-ranging and far-reaching user participation in disseminating, managing, and applying post-harvest knowledge should be encouraged. Given that construction costs of storage facilities deter their adoption in most African countries, efforts should be encouraged to support small-­ scale farmers to afford this technology, particularly supporting farmers’ associations to have access to affordable storage; pooling outputs and resources for storage facilities is an option. South Korea offers a solid example in sharing off-farm facilities for economies of scale. Evidence that low levels of education and lack of market access lead to higher post-harvest losses suggests that policy interventions outside the agricultural sector are also important. For instance, i­ mproving

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market orientation, such as market access and access to market information, as is being done by the Ethiopian Commodity Exchange, could be helpful. Vocational training and skill development, a twoyear counselling programme, and the networking and communication programmes adopted in 2016 for youth in agriculture in Taiwan are geared towards optimizing the value of technology in agriculture. African countries could learn from this. • The institutional setting for agricultural transformation is changing in Africa. Past and current efforts are dominated by the farming community, governments, and donors. The financial paradox facing the farming community, fiscal constraints facing African governments, and the humanitarian focus of most donor agencies make the current institutional arrangement unable to cope with current challenges. This reality calls for expanding the institutional environment to include the private sector, foundations, and CSOs—with each focusing on its areas of comparative advantage—leveraging finance, knowledge, and capacities of all actors for better synergy and impacts that transcend economic and social objectives. For instance, governments can focus on public goods and social services with high social returns (including information dissemination, setting standards, and enforcing regulations), while the private sector focuses on investments targeted at economic returns (financing, customizing fertilizer applications to local conditions, efficient irrigation systems, and technological transfers). A public-private-partnership allows public resources to flow to areas of economic returns through the private sector in a more transparent and accountable manner. Other actors (CSOs, donors and foundations) could then intervene at their strongest points.

11.10   Integrated Partnerships Across National, Regional, and Global Actors The level of interdependence in the global economy has made cooperative bilateralism, multilateralism, and global partnerships inevitable. Africa’s agricultural transformation will be difficult to achieve without global support. In this regard, national-regional-global collaborations on institutional and policy designs and implementation are vital to success. Some examples of the transformative institutions and policies required at the national, continental, and global levels are enumerated below.

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11.10.1  The National-level Actions • Promoting sound macroeconomic policies targeted at agricultural sectors such as ensuring stable exchange rates to avoid generating Dutch Diseases on agriculture and promoting single digit credit rates to agriculture are important to foster competitiveness. The Nigeria’s Anchor Borrower’s Programme that facilitates access to credit at 9 percent is a good example. The Brazilian rural credit scheme that provides graduated subsidized rural credit, tied to technology adoption, environmental protection and conservation, and organic farming, is another example. Implementing an effective agricultural credit guarantee scheme, as well as an agriculture-focused micro-financing scheme, remain critical to progress. Strong prevention and control of corruption is also helpful, particularly in the governance and management of the agricultural sector. • Ensuring predictability and credibility of policies and rules are crucial to progress. Strengthening the capacity of the state and the private sector to ensure credibility and accountability of policies, processes, and rules is vital. It also includes strategies that encourage competition and incentivize the private sector to invest and engage in agriculture. Costa Rica is known for a long-standing tradition of stable institutions and policies. Ethiopia’s experience over five decades of continuous investment in agricultural extension services makes it to be known as the largest extension service per capita globally. Therefore, predictability and credibility of policies matter. • Mobilizing resources for agriculture and rural development from public and private sectors, as well as from domestic and foreign sources, are ineluctable. This requires strong partnerships between the public and the private sectors. On-farm investment by farmers and private sector actors should focus on inputs, livestock, soil management, farm machinery, financial capital, irrigation, and human capital. Governments (national and sub-national), in addition to establishing farm settlements, should also focus on investing in transport infrastructure, electrification, communication, water supply, irrigation, extension services, post-harvest management, and research and development that focuses on sciences, technology, and innovation. Development partners should dedicate a large proportion of their support to agriculture and rural development. The successful implementation of the Bharat Nirman Rural Infrastructure Flagship

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­ rogramme introduced in 2005 in India is a good example that has P substantially changed the agricultural landscape in the country. • Education is vital to unlocking agricultural productivity, while social protection schemes targeted at communities who do not benefit from enhanced productivity helps reduce exclusion. Education plays a key role in promoting an agriculture-for-development agenda. Education does not only help reallocate labour from the agricultural sector to other sectors and attract higher wages, it also helps to increase adoption of science and technologies, increasing productivity per worker. Promoting post-secondary school education among farmers, and particularly among their children and wards, is vital to stimulate rural economic transformation and reduce rural poverty. Both post-­ secondary education and total factor productivity are vital to reducing poverty, but in most cases, it accentuates income inequality. In order to accelerate reductions in rural poverty, African countries should give priority attention to boosting national productivity. However, to avoid worsening income disparities, communities who do not benefit from enhancing productivity should be supported through social protection interventions that help enhance their incomes and wellbeing without creating an entitlement syndrome. South Africa, Argentina, and Brazil offer good examples of how to distribute benefits of growth to marginalized and vulnerable groups. • Organizing small-scale farmers into farm organizations and cooperative societies is fundamental to reaping the benefits of economies of scale. Small-scale farmers cultivate about 80 percent of arable land in Africa. However, a substantial portion of small-scale farmers are not viable. Establishing, nurturing, and honing farm organizations and cooperative societies to pool resources through collectively procuring inputs (e.g. fertilizers, improved seedlings, tractors, and water management systems), pooling of post-harvest management resources and group marketing of products are very important. Collective purchasing, post-harvest management, and marketing platforms help farmers to manage their input costs, reduce post-­ harvest losses, and boost profitability. Group pool purchases not only have maximum discounts on inputs, but also empower farmers with additional purchasing power. Ethiopia and Morocco have succeeded in establishing and scaling up cooperative societies and producers’ associations to optimize economies of scale.

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11.10.2  The Continental-Level Actions • Africa needs a green revolution Bank and Fund to galvanize the needed agricultural breakthroughs. What type of support can help graduate at least 60 percent of African farmers from the current subsistence level to market-based, small- and medium-scale commercial farmers by 2040? African Central Banks must work with a consortia of banks within and outside Africa, in tandem with regional and global technical institutions like AfDB, AGRA, FARA, and IITA. On the Green Revolution Fund, dedicating 10 percent of ODA coming to Africa into this fund for the next ten years will provide the needed impetus for an agricultural transformation. Such funds should be dedicated to support an agricultural breakthrough that would empower and help graduate small-scale farmers to medium-scale and commercial farmers. The Bank and the Fund must help transform agriculture from a way of life into a business enterprise and promote agriculture venture capital in Africa. • Africa must build on the successes of CAADP to reposition the agricultural sector. CAADP has set the pace for strong political momentum and support for agriculture that could galvanize heavy investment in the sector. The Maputo Declaration’s provision for a 10 percent budgetary allocation to agriculture is novel; ensuring African countries adhere to this provision is key. This allocation will lay the foundation for reversing under-capitalization and under-investment in the agricultural sector, as well as promote science, technology, and innovation with a view to raising agricultural productivity. Facilitating strong alliances between the state, the market, and the farmers is central. Some complementary efforts include enhancing the competitiveness of the sector, improving connections between inputs and product markets, and developing regional integration that supports agricultural specialization and trade across regions. The African Continental Free Trade Areas (AfCFTA) could be used to realize this goal. • The burning question to ask, therefore, is how can bilateral and multilateral cooperation and partnerships help support the implementation of CAADP? In this regard, CAADP could be a strategy of engagement with the international community. The African Union and African leaders must be bold to insist that bilateral and multilateral support to Africa must respect the Maputo Declaration’s 10 percent allocation to agriculture, food security, and rural development. This allocation should be a priority agenda for new and existing strategic

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partnerships, such as the  Forum on China-Africa Cooperation (FOCAC), Tokyo International Conference of Africa’s Development (TICAD), and EU-Africa.25 Using CAADP as the mechanism to support African agricultural transformation, however, calls for African countries to respect the Maputo Declaration. The African Development Bank, in line with its ‘high fives’ strategic priorities, should prioritize the ‘feeding Africa’ initiative by focusing on financing agriculture and rural development. Lessons should be identified and learned from implementing existing regional funding mechanisms like the CAADP Multi-Donor Trust Fund, the African Agriculture Fund, the African Agricultural Capital Fund, and the Africa Agriculture and Investment Fund. Similarly, all stakeholders should support harmonizing regional initiatives and global efforts towards establishing the African Green Revolution Bank or Fund. • Agricultural transformation calls for aligning science and technology to agricultural policies and programmes. Given the atomistic nature of several economies and the boundary-less nature of ecological changes, a regional approach to agricultural development offers opportunities for economies of scale. Regional economic commissions in the five regions in Africa should focus on regional specializations that are supportive to the agricultural transformation of each region. These regional efforts must complement national agricultural research systems, agricultural knowledge, and information systems. Investment in regional agricultural science, technology, and innovation (STI) institutions will help scale up rates of technical progress in agriculture, including precision farming systems in Argentina, Brazil, China, and Taiwan. The Common Market for Eastern and Southern Africa’s (COMESA) efforts to promote investment in the construction of large reservoirs—aimed at expanding irrigated land areas—could be scaled-up and replicated across other regions. Youth must be incentivized to take up science, technology, 25  Some of the existing partnerships have started to support agricultural transformation in Africa. For instance, as of 2005, China had established 145 agriculture aid projects in the form of constructing farms, testing stations, technology demonstration centres, and sending agricultural experts (IPRCC 2011). TICAD also provided some support on this, particularly initiatives that led to the development of New Rice for Africa (NERICA) and Coalition for African Rice Development. Taking such initiatives to commercially viable joint venture is important. Besides, more commitment in agricultural support is needed.

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and engineering education at the national and regional levels. Competitions and prizes based on innovations in R&D and on agribusinesses should be encouraged among youth and enterprises. 11.10.3  The Global-Level Actions • Eliminating policy bias against African agriculture and agri-food products. The role of the international community is central to breaking away from low elasticity of demand for basic agricultural commodities in Africa. This includes addressing tariff and non-tariff barriers against agricultural and agribusiness products, improving market access in OECD countries, and developing instruments to cope with fluctuations in prices for agricultural commodities. Reducing trade-disruptive subsidies and tariffs (tariff peak and tariff escalation) that make African agricultural products non-competitive is critical to accelerating an agriculture-for-development agenda in Africa. • The recent WTO decision to eliminate export-distorting subsidies is commendable. The historical achievement on international trade rules in agriculture at the 2015 Nairobi Ministerial Conference, when WTO members agreed to eliminate agricultural export subsidies, is novel.26 The decision aimed at creating a level playing field across countries to achieve zero hunger by 2030; developed countries agreed to eliminate export subsidies immediately (excepting a handful of agriculture products), and not later than 1 January 2017 for developing countries. While this is laudable, it may not take most Least-Developed Countries (LDCs) out of the doldrums—ensuring this agreement covers all trade-distorting domestic support (total aggregate measurement of support) will be ground breaking. Australia and Brazil offer good examples of promoting agricultural competitiveness through efficient producer support estimate (PSE), better than most other OECD countries. Adopting preferential trade arrangements, duty-free, and quota-free market access for exports of cotton and cotton-related agricultural products from LeastDeveloped Countries (LDCs) are also commendable. But for the SDGs to be achieved in LDCs, this arrangement should be extended 26  This concludes the negotiation that began in 2000, integrated into the Doha Round in 2001, and adopted at the 2013 Bali Ministerial Conference.

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beyond cotton to cover most agricultural products coming from these low-­income countries. The proposal of the special support measure (SSM) that would allow developing countries to temporarily increase import tariffs in cases of import surges or price depression is also vital for low income countries (LICs) to manage supply shocks and associated vulnerabilities. • Scaling up global financing of Africa’s agriculture is key to success. The global attention to agricultural financing and development that arose since the establishment of the L’Aquila Food Security Initiative in 2008 and the Global Agricultural and Food Security Programme (GAFSP) in 2010, shortly after the 2008 crises (financial, fuel, and food crises), should be strengthened. The share of ODA allocated to African agriculture rose from 3.6 percent (2002–2008) to 5.9 percent (2009–2015). The $160 million support to seven countries (including Burkina Faso, Ethiopia, Rwanda, and Tanzania) in 2017 should be scaled-up to cover all African countries, focusing on transforming agriculture through enhanced productivity to small-­ scale farmers. • Africa does not need food aid, but instead food production and productive capacity. It is evident that international support is vital to accelerating food production and agricultural transformation in Africa. However, what forms of support are needed? It is obvious that African farmers lack the required resources to procure inputs (e.g. tractors, improved seedlings, fertilizers, and pesticides); lack access to community infrastructure (e.g. water, post-harvest facilities, roads, and power); and even lack access to land and markets that could help them transform from subsistence to market-based farmers. For African farmers to operate profitably in a market economy, innovative and efficient mechanisms are needed to support a home-grown green revolution. Such support must not be in the form of hand-­ outs or food aid, but in support that contributes directly to productive capacity. Green revolutions in Argentina, Brazil, China, Costa Rica, India, South Korea, and Taiwan were not engineered by markets, but were driven by governments with strategic and financial supports from the international community, which later adopted market-based instruments to scale up interventions.

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11.11   Conclusions Success lies in the strong policy mix of the role of the state and the market in generating the right incentives to small farmers and using agricultural productivity to drive off-farm activities in rural areas. The state, markets, and small farmers are the main actors who have been shaping agricultural transformation. Tripartite arrangements (state-market-farming community) where the State, in addition to adopting pragmatic land reforms, also invests heavily in rural infrastructure and providing a range of support, as well as public goods, to the agricultural community are particularly advantageous. The state works with the market to create the right incentives; the farming community responds appropriately to these incentives and promotes rural credit cooperatives and schemes mainly funded by farmers— through a learning by doing approach. High-level political commitments and policy priorities across national and local authorities, including coordination and partnerships, make a substantial positive difference. Today, agricultural transformation cannot be achieved through disciplinary or sectoral silos. The solutions lie in the agricultural ecosystem approach, informed by feedback effects between short-, medium-, and long-term goals in a way to avoid trade-offs between quick fixes and long-­ term goals—the big picture of a resilient agricultural system and the sustainability agenda will depend on the extent to which youth are empowered to drive a technology-driven and entrepreneurial agricultural sector in Africa.

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CHAPTER 12

Conclusions

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12.1   Using Africa’s Agricultural Renaissance to Turn Paradox to Powerhouse Africa’s agricultural experience is analogous to a nation sitting on fathomless gold bullions but remaining perpetually poor. Africa is host to about 60 percent of globally uncultivated arable land, yet has the world’s highest rate of malnutrition and poverty. The continent’s agricultural experience depicts a paradox—malnutrition amidst massive agricultural potential. Africa not only spends over 60 percent of its scarce foreign exchange earnings on importing food, but has failed to use agriculture to drive its own industrialization, structural economic transformation, and reduce poverty and inequality. Its lack of modernization is a major disincentive to youth to participate in agriculture. As such, the continent fails to leverage its youth, who make up more than 60 percent of total population to replace aging farmers (who average 60 years old), and to achieve at least 60 percent in agricultural production for Africa to be food secure. Although Africa’s agriculture is yet to maximize its strength as a powerhouse of food security and economic transformation, nevertheless, it remains the mainstay of rural economies and livelihoods of its rural dwellers—employing 54.2 per cent of the continent’s economically active population and contributing about 22.5 percent of GDP. This is a testimony to low levels of productivity in this sector. Between 1981 and 2015, both agriculture and manufacturing sectors, respectively, lost 6.4 and 4.3 percentage points from their shares of GDP to a service sector that is predominantly informal, characterized by low-productivity, and low-income generating capacity. This demonstrates that Africa is bypassing structural economic transformation. Between 2010 and 2016, for instance, agriculture’s growth rate grew by 3.88 in Sub-Saharan Africa compared to 2.59 percent and 3 percent in Latin America and the Caribbean, and East Asia and the Pacific, respectively. However, this growth is not coming from agricultural productivity enhancement or farm intensification in Africa. Rather, it comes from land expansion and the fallowing system—again jumping the channel through which agriculture can positively affect the rest of the economy. This neglect has slowed down development progress in many African countries. As such, rural poverty has become a serious development concern—it affects more than 60.0 percent of the population in 17 African countries. This is further compounded by widening sectoral income disparities and rising food insecurity (manifesting in high levels of malnutrition). In this context, promoting Africa’s agricultural renaissance is vital to

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achieving food security, economic diversification, shared prosperity, and the SDGs.

12.2   Key Findings and Policy Messages This book, using empirical analysis on African data and case analysis from eleven countries1 across Africa, Asia, and Latin America, observes that Africa is operating at low-equilibrium traps that would be practically impossible to lead into a virtuous circle of development unless the continent breaks away from its historical past. Evidence from these empirical findings and the case studies reveal that achieving a new green revolution with environmental sustainability is possible. However, Africa must manage the agriculture sector differently for that goal to be achieved. The overarching message from the findings of this book is that productivity is the main propellant of structural economic transformation. However, agricultural productivity per worker in Sub-Saharan Africa is the lowest across developing regions; this is largely due to low fertilizer use, low mechanization, and limited access to irrigation facilities. Low agricultural productivity is a major drag on the continent’s structural economic transformation process. Several factors account for this mediocre performance of the agricultural sector: limited adoption of technological change; development policies biased towards urban areas; institutional inertia; poor investment in agriculture; weak human capacity and political will; high agricultural tax rates; and adverse trade regimes from advanced and economically powerful nations.2 Enhancing agricultural productivity should remain a central policy agenda for African governments to promote structural economic transformation, propel strong backward and forward integration into the rest of the economy, and become a leading global net food exporter. What must Africa do differently? The findings and conclusions from this book reveal what Africa must do differently for the continent to turn its agricultural paradox into a powerhouse of food security, agriculture-­ based industrialization, and inclusive development.

1  These are Africa (Ethiopia, Ghana, Morocco, and Mauritius); Asia (China, India, South Korea, and Taiwan); and Latin America (Argentina, Brazil, and Costa Rica). 2  These include heavy subsidies on their agricultural products and non-tariff barriers on African agricultural products.

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First, the neglect of agriculture is responsible for why the continent spends an equivalent of about 62 percent of its scarce foreign reserves (approximately $78.1 billion annually) on food importation in a continent that has full potential for food self-sufficiency and to be a powerful net exporter to the rest of the world—surpassing all ODA net disbursement to Africa of $51.83 billion in 2017. This constitutes an economic recklessness that beats all sense of managerial, governance, and leadership responsibility. Implementing the recommendations from this book will help reverse this unwarranted trend. Second, this lacklustre approach to agriculture is dragging down growth in agribusiness. As such, one of the things to do differently is to accelerate technical change in agriculture to unleash the power of agribusiness. If this power of technical change3 in agriculture is explored, agricultural value added could be increased from $374.24 billion (in 2010 prices) in 2018 to $812.74 billion in 2030. And with strong value chain development, this could unleash $1406.05 billion and $1487.32 billion in secondary (e.g. processing and input supplies) and tertiary (e.g. logistics, packaging, and retails), respectively, by 2030. Overall, agriculture and agribusiness could reach $3.706 trillion in outputs in 2030. This is strong enough to generate substantial, decent jobs for African youth and turn the continent from being a net importer to a powerful net exporter. A major requirement for this to occur is for Africa to stop exporting its primary commodities to the rest of the world in order to halt exporting potential African jobs. Third, African governments have under-estimated the power of agricultural productivity. This book finds that the poverty reducing power of agricultural productivity is strong and very effective in reducing poverty among the poorest of rural populations. Moreover, agricultural productivity is the principal factor in reallocating labour from agriculture to other sectors. Low productivity explains why more than 54 percent of the labour force is still in agriculture, struggling to produce just 25 percent of the GDP value added. Enhanced agricultural productivity helps promote labour intensive, non-farm rural activities that contribute to accelerated reductions in poverty and inequality. By unpacking productivity, it is clear that factors that help reduce poverty may not necessarily reduce inequality. For instance, agricultural 3  This comprises accelerating the use of improved seedlings, fertilizers effectively contextualized to African soil texture, the use of agro-ecology and sustainable agro-chemicals, irrigation, mechanization, and precision farming techniques.

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labour productivity is a potent strategy for poverty reduction, while land productivity is more impactful in taming income inequality. Deepening agricultural intensification through adopting modern technologies matter greatly for agricultural transformation. This includes R&D and extension services, efficient irrigation systems, least soil degrading and water polluting fertilizers, improved seedlings, and precision farming. Improving the productivity and quality of high-valued crops, horticultures, and livestock make their positive impacts on development more pervasive. Argentina, Brazil, and China’s ability to diversify agricultural crops, horticulture, and livestock help promote the rapid transformation in their economies. Fourth, not all green revolutions lead to environmental degradation. Argentina’s no-till farming technique; Brazil’s advancement in technology for tropical agriculture, its rural environmental registry initiative, and strict implementation of the low-carbon agricultural programme; and the rising trend of agro-ecology in Africa are showing a new trajectory of achieving agricultural transformation while protecting and preserving the environment. Strengthening natural resources management (e.g. land and water) helps to promote environmental sustainability. Fifth, strategic support to small-scale farmers makes the agricultural impact on development more pervasive. Promoting land ownership, land titling, and enhancing farmers’ skills helps to accelerate agricultural transformation while connecting small-scale farmers to local, national, regional, and global markets and value chains; enhancing their access to credit, inputs, and technology are critical to accelerating progress. The inability of African governments to address agricultural fragmentation and enhance the entrepreneurial capability of micro and small farmers is also a serious drag in the transformation process. Sixth, Africa’s policy focus on agricultural production, alone, at the expense of an integrated approach has contributed to the dismal performance in agricultural transformation efforts. Past efforts failed to acknowledge the centrality of prioritizing an inputs-farmgate-output ecosystem in productivity and agricultural transformation enhancement. The sowing pool in Argentina, the agricultural corridor in China, and an integrated farming system (that integrates production zones, marketing zones, and R&D zones) in Taiwan, to mention a few, are among the efforts that help maximize the impact of agricultural transformation, all of which have been ignored for too long in Africa.

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Seventh, enhanced budgetary allocation and effective utilization of such resources helps bridge knowledge, information, and infrastructure gaps in agriculture. Implementation of the Maputo Declaration makes Africa stand out in this regard—though with varying degrees of commitment across countries. Brazil’s over 1.2 percent of budgetary allocation to R&D contributed immensely to the country’s leading role as a net exporter and number one producer and exporter of at least four commodities including orange juice, coffee, sugar, and soybeans. Eight, promoting broad-based strategies, including improved education, expanding employment opportunities, and deepening social protection for the marginalized, further distributes impacts across the board. One of the key drivers of economic transformation is quality of education—an important factor that explains why Costa Rica enjoyed balanced structural transformation with agriculture and agribusiness, manufacturing of electronics and medical equipment, and tourism and high-valued services, all of which serve as mutually reinforcing drivers of economic transformation. Implementing well-targeted social protection systems in Brazil, China, and India further help to distribute the benefits of growth to vulnerable and the marginalized people. Finally, developing capacity in agriculture should not be limited to technical and financial capabilities, but should enhance farmers’ entrepreneurial capacity, as well as institutional, governance, and political capacities for its impact to be widespread. Africa must learn from its experience of focusing mainly on technical shift in its pursuit to achieve inclusive agricultural development. Financial and entrepreneurial capabilities of African farmers are equally important as was the case in Asian and Latin American countries that are trailblazing in agricultural transformation. The long-standing stable and credible agricultural institutions in Brazil, China, and Costa Rica have shown the resounding value of institutional, governance, and political capabilities in kick-starting, nurturing, and sustaining agricultural transformation.

12.3   A Home-Grown Paradigm Shift to Propel Agricultural Powerhouse Arising from the foregoing, some key messages on how to turn current challenges into opportunities remain vital. They provide the lens from which to view what should be done differently in order to turn this

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agricultural paradox to a powerhouse in Africa. They provide the entry points for Africa to transform 60 percent of its micro- and small-scale farmers into commercialized, market-oriented farmers (i.e. producing at least 90 percent of its produce for the market) by 2040. There is no silver bullet in Africa’s agricultural transformation. A paradigm shift is needed for a home-grown, African sustainable green revolution focusing on country and regional specificity, a bottom-up approach, and an inputs-farmgate-outputs continuum. The focus should not be on agriculture alone, but on agricultural ecosystems, including pre- and post-­ farmgate activities, such as value chains with their untapped potential that are more enticing to youth. Other transformative factors include transfer and diffusion of technologies customized to local contexts; extension systems that focus on training and application of modern technology and managing sustainable farming; research on farming systems based on farm experimentation and participatory farm research; and linkages with markets and value chains. Achieving a sustainable, African green revolution calls for a systemic approach built on small-medium-large scale farmers, with a focus on providing these farmers with access to integrated information systems on agriculture that avoid information asymmetries; access to appropriate technologies and being part of technology engagement; and tenure security and land conservation. Strong partnerships (government, private sector, CSOs, research institutions, and development partners) that help address market, policy, and institutional imperfections should be given policy priority. The paradigm shift in agricultural transformation cannot be managed by current institutional capacities. Government institutional capacity is currently not positioned to manage such a shift alone. These limitations include limited capacities to effectively design, implement, and monitor agricultural programmes; to partner with the private sector and social entrepreneurs; to monitor regulatory norms and standards; to protect property rights; and to organize farmers into producers’ organizations. These limitations also include capacities to impose sanctions appropriately when rules are violated. Using public-private-partnerships to implement and monitor agricultural policies and programmes are also limited in Africa. The African banking system is not accustomed to doing business with small-scale farmers and does not provide farmers with viable mechanisms to establish credit and receive appropriate loans. Even with the establishment of micro-finance institutions in some African countries, most farmers still cannot achieve such access. The prohibitive lending rate

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to farmers of 20 percent and above (as high as between 40 and 60 percent in Malawi and Madagascar) further makes access to credit very challenging on the continent. Several factors explain why African banks are not interested in subsistence farmers: high risks and service costs, a lack of collateral security (most farmers do not have a certificate of tenancy on land), and policies inconsistent with public support to agriculture guarantee credit schemes. Addressing these challenges is vital to moving forward. African governments must prioritize an agricultural renaissance. This calls for a deeper understanding and renewed commitment to the fundamental role of agriculture in Africa’s development—far beyond seeing agriculture as a mere cash cow. This development process relates especially to long-term economic growth, economic diversification, and reducing poverty and inequality. Business-as-usual will not work. African governments, private sector actors, CSOs, farmers, and development partners must collectively address impediments to agricultural modernization and productivity, using agriculture as the lynchpin of industrialization and economic diversification, and as the driver of economic development. This includes addressing restrictive market access and price-distorting subsidies from advanced countries. This approach requires proactive engagement in promoting efficient land, labour, and credit markets; building human and institutional capacities; and facilitating higher-quality infrastructure. Strategic efforts to promote climate change adaptation in terms of drought-resistant seedlings and climate-resistant animal breeding, as well as scaling up investment in agricultural research and development, are all critical to moving forward. Furthermore, an integrated approach is needed which prioritizes policies and programmes for support to an input-­ farmgate-­output ecosystem as a way of promoting strong backward and forward integration between agriculture and the rest of Africa’s economy. Accelerated productivity of smallholder farmers is key to achieving a resounding success. Promoting an agriculture-for-development agenda requires fast-tracking productivity of smallholder farming, including through rural education; supporting smallholder farmers to connect to markets and access credits, inputs, and technology; and investing in post-­ harvest and water management. The objective of transforming 60 percent of African small farmers into commercialized farmers by 2040 will not be possible without concerted efforts to develop the technical, financial, and entrepreneurial capacities of small-scale farmers. Focusing policy attention on agribusiness is key. This focus includes promoting high-value products, such as vegetables and dairy products; and using agriculture to drive

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entrepreneurship in agricultural value chains and promote jobs in rural areas, especially in the non-farm economy. Agricultural productivity is a principal factor in reallocating labour to other sectors of the economy. In this regard, promoting access to fertilizer, expanding irrigational facilities, promoting non-tillage farming, and investing in agricultural research and development are pivotal to promoting agricultural productivity that could help link agriculture to reductions in poverty and inequality in Africa. Productivity enhancement is needed to unleash the gargantuan potential of agriculture and agribusiness estimated in this book to be over $3.7 trillion by 2030. The next generation of green revolution in Africa must be gender-­sensitive. Women constitute more than half of agricultural labour force in Africa. And by the law of proportionality, more emphasis should be given to women and other marginalized farmers. The strong and mutually reinforcing links between expanding women’s capabilities—through better education, more direct control over resources, and a more decisive voice in decision-making—and enhancing food security should be leveraged for inclusive agriculture for development. Ensuring a gender lens in agricultural productivity, including control over land, technology, improved seedlings, fertilizer, and finance remain critical. Massive investments in female, small-scale farmers is necessary to ensure women become key players in the next green revolution on the continent. Priority should be given to creating a sustainable green revolution in Africa. Learning lessons from other regions underpins the necessary paradigm shift needed to achieve this revolution, focusing on transfer and diffusion of technologies; extension systems that involve training and knowledge enhancement; farming systems based on participatory farming research and experimentation; and bottom-up approaches. Achieving a sustainable green revolution calls for a systemic approach built on smalland medium-scale farmers having access to integrated information systems on agriculture (farm inputs, technology, market, and climatic conditions) that avoid information asymmetries; provide access to appropriate technology and take part in technology immersion; achieve tenure security and land conservation; and address market, policy, and institutional imperfections. An African green revolution should promote agricultural resiliency anchored in small scale farmers’ sustainable actions and practices that set the trajectory of an agricultural ecosystem for the continent. Africa’s sustainable green revolution is premised on an agricultural enterprise for the benefit

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of the economy, society, and the environment. Such an agricultural enterprise is built on four pillars: improved production, enhanced profits, shared prosperity, and a better planet. Evidence from case studies in this book has proved that this is achievable. Ensuring a strong chemistry among soils, plants, and fertilizers is key to achieving a successful green revolution in Africa. Fine-tuning fertilizers to the African soil and plant specificity, while considering the entire spectrum of essential nutrients, beyond the macronutrients N and P adopted in Asia, is critical to success. In this regard, the most appropriate approach would be adopting a unifying principle and a coherent analytical framework underpinned by the strong chemistry among soils, plants, and fertilizers in Africa. Recent efforts in Ethiopia, where fertilizers are blended to local soil textures and farmers’ associations are trained on improved seeds multiplication, are efforts in the right direction. In addition to inappropriate technology, African farmers’ capacities to adopt the technologies were further complicated by a lack of agro-dealer networks, lack of credit, lack of collateral, and high fertilizer prices in the context of cash-constrained smallholder farmers. Bearing this lesson in mind, fertilizers should be inexpensive and their application should be low-dose to avoid decreasing marginal returns and ensuring profitability for African farmers. This is central to sustainability of such initiative. Promoting productive, resilient, and low-carbon agriculture requires a total shift in the way agriculture is supported. The envisioned sustainable green revolution in Africa calls for creating, nurturing, and sustaining a new generation of agricultural scientists who will be equipped, incentivized, and propelled to perform future research that will take African agriculture to the next level—spurring healthy agricultural productivity, expanding quality environmental services, and promoting climate-smart agriculture. Agricultural R&D, as well as knowledge-driven and problem-­ solving extension services, must prioritize building capacities of small-scale farmers to flexibly and rapidly respond to productivity enhancement, environmental services, climate-smart, and social agenda issues. Focusing on incremental approaches alone, such as increasing access to: technology (seeds, fertilizers, tractors, post-harvest management, and information), finance and insurance, markets, and extension services may not produce optimal results. Building on the trailblazing role of the Ethiopian extension services system is recommended. Combining this incremental approach with a transformative approach—by shifting the source of farmers’ livelihoods, either by diversifying crop production, shifting from

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low-resilient to high-resilient crops, or from crops to livestock, or from farming to non-farming activities—could create conditions sufficient to achieve superior results. Combined incremental and transformational approaches help promote a productivity-environment-climate smart-social agenda nexus in a more sustainable manner. Regional collaboration and integration on agricultural transformation is critical for low income countries. The fact that most of the countries with food share of total merchandize imports of 20 percent or more are countries with a low population (ranging from 0.2 million to 2.0 million) underpins the importance of regional collaboration and integration on agricultural transformation to achieve synergy and economies of scale. A regional approach would be critical to accelerate access to fertilizers, improved seedlings, and mechanization. Pooling resources together could generate the needed economies of scale to create opportunities for small and low-­income countries to be fully integrated into regional and global markets. Selecting regional champions across the five African regions in the production of fertilizers and agricultural machineries remains critical in accelerating progress. Regional Economic Commissions and continental organizations have a very strong role to play in making this happen. Landholding systems must be aligned with commercial agriculture— driven by market-oriented smallholder farmers. Land rights are not secure enough to attract investment in land for viable agricultural entrepreneurship. And because most agricultural lands are not registered, rental and collateralized values are so low for landlords that they either want to secure loans from banks or are not interested in farming and want to rent the land instead. Moreover, small holding of farmlands makes commercial farming unviable for many small-scale farmers. For instance, about 85 percent of farmland holding is under two hectares in Ghana and more than 50 percent in Zambia, while about 58 percent are less than one hectare in Uganda (ACET 2017). This will be a serious impediment to commercializing 60 percent of the current smallholder farmers by 2040. A land tenure system that promotes commercial farming among small-scale farmers that respects the ownership rights of land holding systems of traditional communities will help attune landholding towards commercialized agriculture. This includes low-cost formalization and titling of farmland holding (including rights of women to landholding e.g. in Ethiopia and Rwanda); easing access to land by developing local governance of land institutions (e.g. Botswana); simple communal land registration update (e.g. Kenya and Liberia); ease restrictions to rental markets and improve

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land information systems (e.g. Rwanda, Mauritius, and Uganda); and bring idle land under cultivation. The experience from land grabs in Africa offers an important lesson. Protecting the land rights of local communities from being dispossessed by large land investors (including absentee landlords) and to promoting responsible and sustainable agricultural investments are pivotal.4 Moving agriculture beyond subsistence requires proactive, innovative, and integrative approaches. Today’s business model will continue to preserve the low-equilibrium agricultural production that perpetuates subsistence farming. Improving upon the status quo calls for addressing barriers to adapting technologies, access to financial services, and market linkages. Promoting secure land rights (especially for women and youth) that support productivity and conservation practices; accelerating adoption of appropriate fertilizer use and other integrated soil fertility management technologies; and ensuring small-scale farmers have access to affordable improved seeds, agronomic practices, technology packages, and financing (credits, grants or subsidies), will help shift the frontier of agriculture away from subsistence to commercial levels and from a paradox to a powerhouse of food security, economic transformation, and shared prosperity. Integrated support to the agribusiness ecosystem (input-farmgate-output system), with strong alliances and partnerships among ecosystem actors and sustained innovation platform are also key to embracing agriculture as a business. Current institutional and government capacities to design, implement, and regulate sustainable green revolution policies and programmes require a substantial scale-up and must create a conducive environment for farmers to be more efficient and productive—and for the domestic private sector to thrive and become more competitive. Continuously enhancing capacity is key to transforming agriculture in Africa. Africa’s agricultural transformation is impossible without dedicated development of agricultural capacity. This fact should not be misconstrued to suggest only technical and financial capacities. Far from these narrow dimensions, an inclusive and a broad-based approach would be more rewarding: Increasing technical capacity of all stakeholders—private sector actors, agricultural extension service agents, supervisors, and farmers—is 4  See Odusola (2014), for protecting the land rights of local communities local and foreign land grabbers and ACET (2017) and Wily (2019) for the rising trend of ownership rights of landholding systems in Africa.

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ineluctable. Ensuring all stakeholders keep abreast of science, technology, and innovation (STI) in agriculture is central to meaningful agricultural transformation. This is what is shifting frontiers of agriculture and enticing youth in Argentina, Brazil, China, South Korea, and Taiwan. Financial capacities (public, private sector, and farmers) to fund agricultural development should be strengthened and sustained. This includes mobilizing adequate financial resources through ODA, IFIs, national development banks, commercial banks, micro-finance banks, private sector investors (including out-growers or contract farmers), and regional funding mechanisms to effectively fund agricultural development. It includes the establishment of the African Green Revolution Bank, or Fund, to be operationalized in strong alignment with existing continental mechanisms. Strengthening institutional capacity for agricultural transformation includes policies, practices, and processes, as well as effectiveness of agricultural organizations. Looping lessons and experiences from the past into agricultural sector policies and management is a critical component of building forward-looking institutional capacities. The learning-by-doing from Argentina, Brazil, China, Costa Rica, Ethiopia, Ghana, India, Mauritius, Morocco, South Korea, Taiwan, and Vietnam is an important institutional capacity that African governments must imbibe for agriculture to effectively serve as a powerhouse of economic transformation. The lessons from Argentina, Brazil, and Costa Rica are more sanguine for sustainable agricultural transformation. Strong collaboration and alliance building among producer groups, governments, private sector, agricultural research institutions, and development partners is an imperative for success. This partnership must support inclusive policy dialogues, agro-ecological co-learning and co-management, and sharing information and experiences. The African Continental Free Trade Area (AfCFTA) could be a potent strategy to boost agricultural transformation as MERCUSOR did for Argentina and EU did for Brazil. Strengthen governance capacities of the agricultural sector. Effective participation of stakeholders in agricultural policies and management, monitoring and evaluation; efficient targeting and management of support programmes; zero tolerance to corruption in the management of the agricultural sector; and a balanced approach to operational and capital expenditures in agricultural funding mechanisms are vital to agricultural transformation. This is very important for implementing agricultural

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credit guarantee system in Africa. Addressing the policy bias against rural development is also critical. Finally, strong political commitment is also an asset to turning agriculture from its current state of paradox into a powerhouse. Strong political will, accompanied by mass popular support, agricultural policies, and programmes will contribute as immensely as the success that was achieved in Asia and Latin America. A sectoral approach to agricultural development is sub-optimal to achieving Africa’s sustainable green revolution. Instead, an agricultural ecosystem approach that harnesses synergies and addresses trade-offs between short- and long-term goals, that avoids the pitfalls of quick fixes, is an imperative. This approach focuses on long-term thinking and strategies aimed at fundamental agriculture and development solutions. To ensure resiliency in agricultural systems and agricultural transformation, stakeholders should constantly examine agriculture’s impact on the economy, society, and environment. In addition to looking at the soil-water-­ plant relationship, it should be able to promote a mutually reinforcing relationship between population growth, food production, managing non-renewable resource depletion, propellant of industrial outputs, and a driver of pollution abatement.

12.4   Conclusions Africa’s achievement of food sufficiency and becoming a leading net exporter of food, without compromising environmental sustainability, by 2030 is possible. The continent can also become a net exporter of food within the timeframe, thereby stopping the wanton drain on scarce foreign reserves amounting to an annual average of $78 billion. And poverty and hunger amid plenty and potential is an anathema in an era of agricultural transformation. Africa must transform its agriculture to avoid being transformed by the rest of the world. This book offers policies and programmatic actions to turn over five decades of paradox into an enduring powerhouse of food security, agriculture-led industrialization, and inclusive development. The time is ripe for Africa to use agriculture to change its development narrative forever.

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References African Centre for Economic Transformation (ACET), African Transformation Report 2017: Agriculture powering Africa’s economic transformation. Accra: ACET, 2017. Odusola, Ayodele F. “Land Grab in Africa: A Review of Emerging Issues and Implications for Policy Options.” International Policy Centre for Inclusive Growth 124 (April 2014). Wily, L.A. “Adjusting to new era agrarianism: Tackling the Troubled Interface of Public and Community Property”. Rethinking Land Reform in Africa: New Ideas, Opportunities and Challenges. African Natural Resource Centre, African Development Bank, Abidjan, 2019.



Annexes

Annex A: Bilateral Relationships between Sustainable Agriculture and the Sustainable Development Goals (SDGs)

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 A. Odusola, Africa’s Agricultural Renaissance, https://doi.org/10.1007/978-3-030-65748-2

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Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

1

End poverty in all its forms High agricultural productivity and everywhere. income reduce poverty incidence among farmers—the dominant occupation in rural areas. It also reduces poverty among non-­ agricultural rural economic operation. Low productivity explains why poverty is the highest in rural areas—making farmers vulnerable to shocks. Enhanced labour productivity helps increase rural incomes and accelerate poverty reduction.

2

End hunger, achieve food security and improved nutrition, and promote sustainable agriculture

Agriculture that produces what people eat in abundance, characterized by sustainable growth, high productivity, and good quality reduces hunger and increases nutrition and food security.

How the SDGs affect agriculture Low—or no—poverty increases farmers access to factors and product markets (including land and capital), which enhances their capacity to reduce knowledge gaps, to graduate from subsistence agriculture, and to adapt to climate change and adopt technologies. Absence of hunger and malnutrition enhances health and productivity and crowds-in investments (e.g. government budgets, foreign direct investment (FDI), Official Development Assistance (ODA), and aid) and foreign exchange earnings into agricultural infrastructure (e.g. irrigation) R&D, climate resilient agriculture, and development of value chains. (continued)

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(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

3

Access to affordable quality food, through agriculture, enhances nutrition, well-being, and health of the population. Enhanced agricultural incomes facilitate access to drugs, vitamins, and nutrition. Enhanced incomes also promote access to organic drugs, reduces malnutrition, thereby lowering child mortality rates.

4

Ensure healthy lives and promote well-being for all at all ages

How the SDGs affect agriculture

Healthy populations hasten labour productivity, promote demand for agribusinesses, and accelerate diversification and sophistication that bolster agricultural transformation. Ensure inclusive and Agricultural transformation Quality equitable quality education generates rural incomes that education and promote lifelong accelerate numeracy and literacy, enhances learning opportunities for reduces child labour in farming, technology all keeps children in schools for longer adoption in periods, increases cognitive agriculture, learning, and deepens agricultural enhances R&D, skills, specialization and production modernizes technologies (e.g. improved agriculture, seedlings, fertilizers, irrigation, and promotes mechanization). productivity, facilitates market access, and promotes development of agricultural enterprises. (continued)

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(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

How the SDGs affect agriculture

5

Achieve gender equality and empower all women and girls

Women constitute a substantial proportion of farm and agribusiness workers. Buoyant agricultural income empowers women, helps keep more girls in school and increases female literacy, reduces gender disparities in income and decision-making process, as well as increases women’s contributions to society.

6

Ensure availability and Sustainable agriculture preserves sustainable management of water, makes more water available water and sanitation for all for non-agricultural activities— including domestic use. Improved agricultural incomes increase investment in water management and incentivize rural people to invest in sanitation facilities.

Gender equity increases women’s access to landed property, agricultural inputs, and markets; it supports agricultural productivity, boosts non-agriculture rural economic activities, and reduces rural poverty. It unleashes women’s energies and enterprise into modern farming. Sustainable water management can promote all-season farming, while better waste management can make organic fertilizers and biomass accessible to small farmers— both contributing to agricultural productivity. (continued)

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(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

How the SDGs affect agriculture

7

Increased agricultural incomes promote rural infrastructure development (including rural electrification) and access to improved cooking systems, as opposed to wood fuel that pollutes the environment and increases risks to public health. Conservative agriculture and improved management of solid waste increases energy efficiency and energy supply.

Improved energy facilitates access to efficient land cultivation and harvesting; increases small-scale pumping irrigation and solar-based storage facilities; and enhances development of agro-based value chains. It promotes smart water-energy-­ food systems, sustainable transportation from farm to distribution points, and raises all-season employment in farming. Rural energy access releases men and women from substantial hours (about 1–8 hours per day) of agricultural activities. Collecting firewood and producing charcoal is the major cause of deforestation.

Ensure access to affordable, reliable, sustainable, and modern energy for all

(continued)

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(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

How the SDGs affect agriculture

8

Agriculture accounts for about 23 per cent of value added GDP, over 54 per cent of the labour force, and an appreciable proportion of export merchandize in Africa. The labour intensity of agriculture provides opportunities for direct jobs. But the predominance of subsistent agriculture limits the capacity to generate decent jobs and incomes. Modernized agriculture promotes more opportunities for enhanced productivity, decent jobs, and accelerated economic diversification. A booming agriculture sector productivity helps expand employment in the industrial and services sectors. It also helps improve the balance of payments situation through increased net exports.

Accelerated and sustainable GDP growth would lead to transformed, modernized, and diversified agriculture; enhanced development of agribusiness value chains; rural development; rural-urban production chains; and business connections as well as national employment. Engagement of educated youth in agriculture facilitates adoption of technologies in agriculture.

Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all

(continued)

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(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

How the SDGs affect agriculture

9

A transformed agriculture sector requires climate-smart irrigation, storage facilities, and rural infrastructure that add to the stock of national physical assets. A thriving agriculture sector, through backward and forward integration, promotes upstream and downstream development of low- and high-value chains, and acceleration of the services sector.

Resilient and sustainable infrastructure facilitates access to farm inputs and markets, reduces transaction costs, and enhances agricultural productivity. Accelerated industrialization reduces the costs of farm inputs, promotes agricultural innovations, and helps modernize agriculture. It also promotes climate smart agriculture.

Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation

(continued)

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(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

10

Reduce inequality within and among countries

A thriving agricultural sector bolsters the income of the majority and improves land productivity, helping to accelerate reductions in inequality. Enhancing access to agricultural land also facilitates reductions in income inequality and gender inequality.

11

Make cities and human settlements inclusive, safe, resilient, and sustainable

How the SDGs affect agriculture

Improved income equity and social inclusion promotes access to agricultural inputs, markets, and technology. It empowers small-scale farmers and helps transition from subsistent to medium- and large-scale farming that further bolsters modernization of agriculture. Making food accessible to all Resilient settlements, providing inputs for settlements and housing construction (e.g. wood), rising supporting afforestation for green urbanization settlements, and providing serve as livelihoods in all human settlements important helps promote inclusiveness, markets for resilience, and sustainability. agri-products; Promoting urban agriculture could absorber of help sustain livelihoods in cities. surplus labour in the agricultural sector; and source of innovative farming including greenhouse farming for high-valued products like vegetables, flowers, and aquaculture. (continued)

 ANNEXES 

463

(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

How the SDGs affect agriculture

12

A modernized, climate-smart, and sustainable agriculture sector promotes efficient use of natural resources (including land and water); substantially reduces food losses and wastes; and protects the environment and the agricultural ecosystem.

Countries adhering to sustainable consumption and production patterns will help strengthen scientific and technological capacity to moving towards more sustainable and climate-­ smart agriculture; promoting sustainable organic agriculture; moving towards removing market distorting subsidies; and addressing negative spillover effects of production, consumption, and trade on the rest of the world.

Ensure sustainable consumption and production patterns

(continued)

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ANNEXES

(continued) Goals Sustainable Development Goals (SDGs) 13

How sustainable agriculture affects the SDG

Take urgent action to Agriculture is the second largest combat climate change and contributor to greenhouse gas its impacts (GHG) emissions after energy production. Climate-friendly technology and practices in agriculture (e.g. the use of methane inhibitors) could help reduce GHG appreciably. Developing climate-­ resistant crops and animals that help improve farming practices is key: different crop and animal management approaches, soil specific-fertilizer management, conservation tillage, and better management of grazing lands.

How the SDGs affect agriculture Strengthening efforts such as climate change mitigation; adaptive capacity to climate-­ related hazards and natural disasters; and capacities for early warning could help transform agriculture. Developing meteorological capacities of farmers could be helpful. Deepening climate financing and partnerships is also critical. (continued)

 ANNEXES 

465

(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

How the SDGs affect agriculture

14

Agricultural practices that respect sustainable water use and management of water resources, including avoiding illegal-, over-, and destructive-fishing; water and ocean pollution; killing mangroves, and degrading oceans and coasts will help accelerate progress. Stopping fishing subsidies by buoyant economies will help address over-fishing in African oceans and seas.

Efficient management of the blue economy will help diversify agriculture, expand livelihoods, and broaden agro-processing. Addressing ocean acidification, fish replenishment, restoration of mangroves, reef rehabilitation, and conservation of marine and ocean areas could shift agriculture frontiers. Innovations in management of ocean ecosystems could transform agriculture in Africa.

Conserve and sustainably use the oceans, seas, and marine resources for sustainable development

(continued)

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ANNEXES

(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

How the SDGs affect agriculture

15

Sustainable agricultural practices that help accelerate afforestation, combat desertification, and promote conservation could bolster environmental protection and enhance productivity.

Protection of habitats, stemming the displacement of traditional agriculture by monoculture and industrial agriculture, and making fertilizers and pest control chemicals more ecosystem-­ friendly help bolster agriculture, promote environmental services, and expand livelihoods.

Protect, restore, and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

(continued)

 ANNEXES 

467

(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

How the SDGs affect agriculture

16

Thriving agriculture and agro-­ processing boost the well-being of a majority of the population, while accelerated labour productivity helps reduce poverty and land productivity, promoting equity; thereby, promoting peace and stability. An informed agricultural community promotes fiscal citizenship and demands accountable and transparent governance. Targeted support to farmers bolsters participation in elections and electoral chances.

Transparent and accountable governance enhances the quality of agricultural investment; ensures that targeted supports reach the ultimate small-scale farmers; and ensures that extension agents perform their jobs professionally, ethically, and effectively. Good governance promotes peace and stability that allows more time devoted to productive activities and crowds-in private investment in agriculture.

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

(continued)

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ANNEXES

(continued) Goals Sustainable Development Goals (SDGs)

How sustainable agriculture affects the SDG

How the SDGs affect agriculture

17

Modernized agriculture could mobilize resources for the SDGs: increasing out-of-pocket expenses on health and education from farmers; increasing incomes of small-, medium-, and large-scale farmers increase the tax bases of countries; stopping a race-to-the-­ bottom game for FDIs in agriculture, making more resources available for government; and expanding value chains increase job opportunities, livelihoods, and foreign exchange earnings.

Building capacity, mobilizing finances, enhancing technology diffusion and adoption, and mobilizing partnerships for agricultural transformation will change the agriculture landscape through enhanced productivity, diversification, post-harvest management, value chain development, and access to foreign markets.

Strengthen the means of implementation and revitalize the global partnership for sustainable development

Annex B: Model Specification and Data Description Transformation in the agricultural sector leads to inclusive development, including reductions in poverty, income disparities, and exclusions. The variables that serve as proxies for this transformation include agricultural value added and employment in both agricultural and industrial sectors. Mellor (1995 and 1996) hypothesizes that agricultural productivity is an important source of long-term growth and reductions in poverty and income inequality. Human capital is proxied by secondary education. Estudillo and Otsuka (2010) predict an inverse relationship between education and poverty, while Lindert and Williamson (1985) predict a curvelinear relationship.

 ANNEXES 

469

The existence of sectoral dualism underpins the need to accelerate the process through which labour is reallocated away from agriculture to other sectors in order to speed up reduction in poverty and income inequality (Nielsen 1994; Estudillo and Otsuka 2010). Sectoral dualism is defined as per cent of labour force in agriculture, minus the share of agriculture in GDP (Nielsen 1994). They posit that sectoral dualism, a proxy for the average income difference between sectors, should have a positive impact on inequality, and this later turns negative as the economy develops. GDP per capita and total factor productivity have negative impacts on poverty, but positive relationships with income inequality (Nielsen 1994; Hazell 2010). The model is based on a panel data of 39 African countries1 using an ordinary least squares (OLS) technique to estimate the various parameters. All data except total factor productivity were sourced from the World Development Indicators and the Food and Agricultural Organization of the United Nations (FAO) database, while the total factor productivity was obtained from the United Nations Industrial Development Organization (UNIDO) database. All variables are in logarithmic form. The averages of rural poverty, rural poverty gap, and Gini (2000–2013), share of employment in agriculture, industry, and services as a percentage of total employment (2005–2015), agricultural value added per worker (2010–2015), agricultural value added (2010–2015), adolescent birth per 1000 live births (2000–2015), access to electricity (2000–2012), secondary school enrolment (2000–2013), total factor productivity (1990–2010), and control of corruption (2005–2010) are used (Odusola 2017). The explanatory variables are as indicated in Eq. (B1) below. A sensitivity analysis on the impact of agricultural variables is also employed.

Yi = β 0 + β iXi + µ

(B1)

where Yi is the vector of dependent variables, principal SDGs targets, and indicators—rural poverty, rural poverty gaps and Gini coefficient. Xi stands for the independent variables’ share of agriculture employment in total 1  These countries are: Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cabo Verde, Central African Republic, Chad, Comoros, Congo Republic, Democratic Republic of the Congo, Cote d’Ivore, Ethiopia, Gabon, Ghana, Guinea, Guinea Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Morocco, Mozambique, Namibia, Niger, Nigeria, Senegal, Sierra Leone, South Africa, Sudan, Tanzania, Togo, Uganda, Zambia, and Zimbabwe.

470 

ANNEXES

employment; share of industry employment in total employment; share of services employment in total employment; agricultural value added per worker; agricultural value added; adolescent births per 1000 live births; access to electricity; secondary school enrolment; total factor productivity; and control of corruption. Several sensitivity analyses and robustness checks were conducted on the regression results. A separate model is used for the analysis of drivers of food security in Africa. Continuous availability of and access to food are key to understanding the dynamics of food security. Agricultural productivity is key to explaining availability of food supply, while prices and incomes help to explain access to food. Population growth is a factor that could influence both availability and accessibility of food. A country experiencing a rapidly growing population may be adding pressure to food availability if population growth is faster than the growth of productivity. This could also constrain access to food because of its direct impact on prices. Based on the foregoing, the following equation is formulated:

GHI = β 0 + β1 lp + β 2 lap + β 3 pci + β 4 p + β 5 pop + µ

(B2)

where the Gobal Hunger Index (GHI) is the proxy for food security index, lp is land productivity, lap is labour productivity, pci is per capita income, p is food price variability index, and pop is population growth. Βi are parameter estimates and μ is the error term. The equation is estimated through a semi-logarithmic transformation, where per capita income, labour productivity, and land productivity are in logarithmic form. This panel regression uses data from 2000 to 2015 sourced from FAO database Regional Strategic Analysis and Knowledge Support System (ReSAKSS) and the World Bank’s World Development Indicators. The credibility of a multivariate model is determined by the absence of multi-collinearity bias. To avoid multi-collinearity in Eq. (B1) specified above, the Variance Inflation Factor (VIF), generally defined as (1/(1−R2), is applied.2 The rule of thumb is that a VIF greater than 10 exhibits signs of serious multi-collinearity and should be corrected. Where multi-collinearity bias is found, such models were re-specified to eliminate any biasedness.

2  For detailed description of the processes required for the computation of VIF, see Odusola et al. (2017).

 Annexes 

471

References Estudillo, Jonna P., and Keijiro Otsuka. “Chapter 67 Rural Poverty and Income Dynamics in Southeast Asia.” Handbook of Agricultural Economics 4 (2010): 3435–68. https://doi.org/10.1016/s1574-0072(09)04067-5. Hazell, Peter B.R. “Chapter 68 An Assessment of the Impact of Agricultural Research in South Asia Since the Green Revolution.” Handbook of Agricultural Economics 4 (2010): 3469–3530. https://doi.org/10.1016/ s1574-0072(09)04068-7. Lindert, P.H. and J.G Williamson. Growth, Equity and History. Exploration of Economic History 22, 341–77 (1985). Mellor, John Williams. Agriculture on the Road to Industrialization. Baltimore, MD: Johns Hopkins University Press, 1995. Mellor, John Williams, John P. Lewis, and Valeriana Kallab. “Agriculture on the Road to Industrialization.” Chapter. In Development Strategies Reconsidered. New Brunswick, N.J: Transaction Books, 1996. Nielsen, Francois. “Income Inequality and Industrial Development: Dualism Revisited.” American Sociological Review 59, no. 5 (October 1994): 654. https://doi.org/10.2307/2096442. Odusola, Ayodele F. “Agriculture, Rural Poverty and Income Inequality in SubSaharan Africa.” In Income Inequality Trends in Sub-Saharan Africa: Divergence, Determinants and Consequences. New York, NY: United Nations Development Programme, Regional Bureau for Africa, 2017. Odusola, Ayodele, Yemesrach Workie, and Wilmot Reeves. “Income Inequality and Population Growth in Africa.” In Income Inequality Trends in Sub-Saharan Africa: Divergence, Determinants and Consequences, edited by Fred Mugisha, 203–20. New York, NY: United Nations Development Programme, 2017.

Index1

A Absentee landlords, 18, 243, 243n8, 272, 319, 450 Access to finance, 28, 80–89, 113, 271n43, 296 Accreditation and Certification System, 328 Adverse selection, 74 Afram Plains, 259 Africa Agriculture and Investment Fund, 82, 431 Africa Fertilizer Agribusiness Partnership (AFAP), 408n8 African Agricultural Capital Fund, 82, 431 African Agriculture Fund, 82, 431 African Continental Free Trade Area (ACFTA), 5n2, 50, 106, 271, 274, 297, 430, 451 African Development Bank, 33, 62n8, 417, 431

African Post-Harvest Losses Information System (APHLIS), 91 African Youth Charter, 113 Africa’s magic number, 419 Agencia MATOPIBA, 367n42 Aggregator projects, 289–291, 289n59 Agribusiness, x, xiv, 5, 5n3, 12, 40, 46, 62, 63, 75, 82, 111–114, 150n18, 166, 181–189, 196, 230, 240, 242, 250–254, 257, 272, 273, 283, 284, 292, 293, 293n65, 314, 344, 358, 358n30, 361, 383, 384, 400, 402, 402n3, 416–418, 422, 432, 442, 444, 446, 447, 450 Agribusiness Accelerator Platform, 249 Agribusiness Credit Note, 365n40 Agricultural Activity Guaranteed Programme, 363

 Note: Page numbers followed by ‘n’ refer to notes.

1

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 A. Odusola, Africa’s Agricultural Renaissance, https://doi.org/10.1007/978-3-030-65748-2

473

474 

INDEX

Agricultural assets, x, 28 Agricultural Certificate of Deposit, 365n40 Agricultural Commercialization Cluster (ACC), 249n16, 249n17, 251, 253, 255, 256 Agricultural corridors, 231, 443 Agricultural Development Act, 325 Agricultural Development Agency (ADA), 288 Agricultural development-led industrialization policy (ADLI), 243, 245, 246, 250, 270 Agricultural diversification, 19, 271, 282, 313, 316, 379 Agricultural enterprise, 30, 58, 76, 209, 234, 253, 289, 447, 448 Agricultural entrepreneurial tutelage, 416 Agricultural extension services (AES), 46, 173, 230, 244–247, 252, 372, 389, 421, 428, 450 Agricultural frontier, 9, 10, 368 Agricultural growth poles, 411, 411n13, 412 Agricultural management, 8, 234, 398 Agricultural mechanization, 76–78, 333, 334, 368 Agricultural policies, x, xv, 8, 11, 51, 58, 78, 80, 121, 124–126, 129, 179, 231, 232, 262, 273, 276, 316, 318, 343, 352–354, 373, 384–385, 397, 398, 401, 415, 416, 431, 445, 451, 452 Agricultural productivity, x, xiv, 5, 7n7, 8, 8n8, 11, 18, 20, 30, 32, 33, 35, 36, 44, 46, 48, 50, 61–66, 68, 70, 79, 82n28, 83, 96–99, 116, 117, 127, 141, 148–151, 148n15, 153–155, 154n20, 157, 166–169, 171, 172, 175, 179, 185–189, 200,

201, 205, 209–211, 215, 230, 242, 246, 247, 250, 274, 277, 279, 282, 295, 298, 310, 313, 322, 343, 344, 347, 354n21, 359, 359n31, 373, 379, 380, 382, 400, 401, 405–410, 411n13, 429, 430, 434, 440–442, 447, 448, 468, 470 Agricultural revolution, xi, 52, 66, 76, 254, 255, 317, 323, 411–414, 530 Agricultural services, 74, 274, 331 Agricultural subsidies, 102–104 Agricultural taxation, 101, 102n44 Agricultural technology parks, 326 Agricultural trade protection strategy, 105n49 Agricultural Transformation Agency, 249 Agricultural value added in GDP, 21, 63, 103n47, 104, 154, 184, 197, 198, 257, 277, 286, 287, 295, 297, 442, 468–470 Agricultural Zoning Programme, 367n43 Agriculture elasticity of national poverty, 8, 205, 206 elasticity of poverty and income inequality, 204–209 Agriculture and Livestock Plan, 363 Agriculture Development Fund (ADF), 289 Agriculture-development nexus, 28, 151, 226 Agriculture-focused micro-financing scheme, 428 Agriculture-for-development, xii, 7, 8, 12, 21, 24, 95, 143, 208, 314, 429, 432, 446 paradigm, 95 strategy, 8, 21, 314

 INDEX 

Agriculture-led industrialization, ix, x, xiii, 10, 122, 147, 233, 310, 452 Agriculture Orientation Index, 297n71 Agriculture Sector-Wide Approach, 97 Agri-food, 49, 273, 347, 432 Agripenture, 186, 291 Agro-aggregators, 411n13 Agrobusiness, xi, 6, 64, 181–183, 187, 232, 251, 286, 332, 383, 388, 404, 411, 422 Agro-clusters, 411n13 Agro-corridors, 411, 411n13 Agroecological environment, 19 Agroecology, 99–101, 101n43, 110, 172, 184, 216 Agroforestry, 76, 99n39, 100, 101, 368, 414 Agro-incubators, 411n13 Agro-industrial parks, 411n13, 413 Agronomics, 76, 242, 265, 328, 352, 407, 409, 424, 450 AGROPENSA, 367n43 Agro-poles, 411–413, 411n13 Agro-processing, v, xi, 10, 64, 151, 251, 251n20, 290, 300, 334, 404, 418 Algeria, 10, 25, 26, 36, 38, 42, 43, 43n23, 48, 64, 65n10, 70n17, 111n57, 171, 180, 183–185, 205–207, 215, 227n6, 279, 290, 408 Alliance for a Green Revolution in Africa (AGRA), 66, 68–70, 76, 114, 232, 402n2, 417, 418, 430 Alliance for Food Sovereignty in Africa (AFSA), 99n39, 101n43, 232 Allodial title, 269 Amhara, 253 Anchor Borrower’s Programme, 84–85, 428 Anciliarization, 187

475

Annual cropland, 119 Anti-agriculture biases, 7, 8, 398 Anti-natal, 203 Aquaculture, 64, 98, 107, 327n26 Arable land, xiii, 5, 5n1, 18, 43n23, 44, 58, 61, 61n6, 66, 67, 70, 77, 93, 96, 120, 127, 182n14, 208, 224, 228, 229, 240, 259, 269n40, 271n43, 276n44, 285, 291, 294, 310, 315, 319, 328, 346, 351, 356, 360n33, 386, 408, 429, 440 Argentina, xi, xiv, 127, 224, 226, 229, 229n7, 235, 343–356, 373n54, 375n58, 397, 400, 404, 407–409, 412, 414, 422, 425, 429, 431, 433, 441n1, 443, 451 Arsenal Litchis and Riche Terre Cooperative Projects, 282 Arthur Lewis model, 28 Asymmetric power plays, 267 Atomization of landholding, 260 B Backward and forward linkages, 7, 23, 33, 150n18, 196, 200, 243 Beira Agricultural Growth Corridor, 404, 413 Bengal Rent Act of 1859, 319 Bengal Tenancy Act, 319 Benin, S., ix, 6n4, 26, 28, 38n17, 41, 42, 48, 78, 83, 92n37, 106, 117, 169, 170n3, 206, 209n4, 469n1 Bharat Nirman Rural Infrastructure Flagship Programme, 90, 230, 323 Bio-fuel, 105 Biomass energy consumption, 106 Biophysical, 398 Bivariate and multi-variate regressions, 8, 197

476 

INDEX

Blue channel, 315n6, 426 Bolsa Familia, 225n3 Botswana, 10, 28, 37, 48n25, 78, 170n3, 177, 210, 212–214, 407n7, 423n24, 449, 469n1 Brazil, xi, xiv, 77n22, 103n47, 116, 156n21, 224, 225n3, 226, 226n6, 229, 230, 233, 235, 240n3, 290, 317n11, 343n2, 344n4, 346, 346n8, 348, 350, 351, 355–377, 385, 386, 397, 400, 401, 406–409, 412, 414, 422, 425, 426, 429, 431–433, 441n1, 443, 444, 451 Brazilian Agricultural Research Corporation (EMBRAPA), 367, 367n43 Burkina Faso, 6, 18n3, 28, 30n13, 31, 32, 38n17, 78, 82, 82n27, 82n28, 83, 109, 112, 117, 124, 171n3, 177, 203, 205, 207–209, 215, 231, 267, 413, 433, 469 Burundi, 6, 25, 28, 30, 30n13, 32, 36, 38n17, 78, 170, 214, 469n1 C CAADP Multi-Donor Trust Fund, 82, 431 Cabo Verde, 41, 70n17, 77n23, 205, 469n1 Cameroon, 28, 82n27, 111, 111n57, 169, 171n3, 182n13, 183, 225, 227n6, 231, 372, 408, 412, 413, 416, 469n1 The Caribbean States Community (CARICOM), 382n68 Cash cow, 123, 233, 446 Cash croppers, 398 Cautious and guided deregulation, 232 Cayenne Lisa pineapple variety, 385

Central Africa, 21, 23, 28, 36, 98, 116, 117, 167, 171, 184, 229, 408 Central African Republic, 18n3, 25, 30, 30n13, 77, 107, 169–171, 423n24, 469n1 Central America Free Trade Agreement, 382n68 Central American Common Market (CACM), 382n68 Cereal yields, 70 Certificate of Agribusiness Credit Rights, 365n40 Certificate of Agribusiness Receivable, 365n40 Certified Agricultural Standards, 234, 328 Chad, 6, 18n3, 25, 30, 30n13, 36, 38n17, 107, 109, 169, 171, 171n5, 184, 469n1 Chanpaca variety, 385 Chemical fertilizers, 11, 245, 247, 277, 321, 322, 407 Chemicals, 52, 67, 251, 321n15, 325, 332, 383, 386, 388, 407, 415 China, xi, xiv, 33–35, 45, 52, 63n9, 74, 77n22, 97, 103n47, 104, 117, 120, 152, 154, 156n21, 225, 226, 227n6, 228, 229, 233–235, 246, 264, 310–317, 317n11, 325–329, 348, 356n24, 356n25, 373, 373n55, 374n56, 382n68, 397, 400, 401, 406, 407, 409, 413, 414, 425, 431, 431n25, 433, 441n1, 443, 444, 451 Classical economists, 143 Clean Development Mechanism (CDM), 100, 100n40 Climate change shocks, 98 Climate mitigation, 100 Climate-resistant animal breeding, 446 Climate Smart Agriculture, xv, 250, 283, 294, 298, 300

 INDEX 

Climatic condition, 20, 114, 174, 240, 242, 330, 368, 386, 447 Cloud computing technology, 328 Cluster farming, 404 “Cocoa Sector Development Strategy I,” 260, 275 COCOBOD, 102, 102n45, 261, 264, 267, 267n38, 272, 275 Collective institutions, 347, 350–354, 407n6 Commercialization of agriculture, 33, 224 Commodity Exchange, 242, 247–248, 254, 255, 420, 423 Common Agricultural Policy (CAP), 104, 176 Common law freehold, 269 The Common Market for Eastern and Southern Africa’s (COMESA), 187, 431 Community-based seed multiplications, 231, 232 Community seed banks, 232 Comparative advantages, x, xiii, xiv, 18–21, 50, 377, 383, 386, 422, 427 Complex cooperative production, 407 Comprehensive Africa Agriculture Development Programme (CAADP), 7, 48, 51, 77, 78, 82, 83, 114, 171, 177, 182, 189, 231, 246, 284, 430, 431 Computable General Equilibrium, 155 Congo River, 5n1, 19 Contingency measures, 105 Contract Farming (CF), 86, 87, 122, 122n63, 231, 254 Cooperative societies, 87, 124, 127, 266, 282, 292, 398, 403, 409, 429 Correlation index, 177, 197–200, 210, 359n31 Costa Rica, xi, 226, 227n6, 229n7, 230, 233, 377–390, 397, 399,

477

400, 406, 407, 422, 428, 433, 441n1, 444, 451 The Council of Scientific and Industrial Research (CSIR), 274 Credit, 29n10, 74n20, 83n34, 84–88, 112, 115, 118, 119, 125, 146, 157, 232, 233, 251, 254, 267, 272, 274, 282, 289n59, 295, 297, 298, 300, 310, 320, 322, 347n10, 352, 360–366, 372, 374, 375, 377, 382, 385n77, 387, 403, 404, 410, 428, 434, 443, 445, 446, 448, 450, 452 Credit guarantee systems, 125, 452 Crop-livestock-forest integration, 368n46 Crop-livestock integration system, 224 Crop management, 11, 99, 323 Customary freehold, 269 Customary land rights, 116 Customary Land Secretariats, 272 Customary tenancies, 269 Cyclones Idai and Kenneth, 109 D Dangote Youth Farming Project, 404, 417 Declaration on Food Security and Agriculture in Africa, 51 Declining terms of trade, 102 Decolonization of land rights, 116 Deep and Comprehensive Free Trade Area (DCFTA), 293 Deforestation, 34, 67, 85n35, 100n41, 100n42, 264, 265n35, 298, 348, 355, 377 De-industrialization, 5, 7, 60, 397 Democratic Republic of the Congo, 32, 38n17, 84, 102, 107, 109, 120, 184, 214, 408, 412, 418, 423n24, 469 Dependency syndrome, 80, 121, 409, 426

478 

INDEX

Determinants of agricultural performance, 58 Diet diversity, 105 Direct Specialty Trade (DST), 247 Downstream, 5n3, 49, 150n18, 182, 183, 187, 189, 273, 350, 389, 406 Dumping, 80, 103, 298, 373, 397 Dutch Diseases, 428 E East African Community (EAC), 50, 51, 187 East and Central Europe, 59 East Asia and Pacific, 30, 92, 188 Eastern Africa, 6, 30 Ecological, ix, xiii, 19, 19n5, 77, 105, 114, 116, 240, 269, 351, 414, 431 Ecological change, 77, 106–110, 431 Economic diversification, 5–6, 11, 20, 23, 30, 33, 49, 90, 105, 152, 157, 182, 183, 185, 225, 289, 382, 398, 400, 405, 406, 412, 441, 446 Economic-social-environmental continuum, 29 Economic-social-environment nexus, 46 Economic sophistication, 213 Economic transformation, x, xi, xiii, xiv, 5, 5n2, 6, 8, 10–12, 19, 21, 22, 29, 41, 44, 49, 59, 60, 63, 101, 114, 121, 127, 129, 141, 142, 142n3, 166, 181–189, 196, 197, 200, 203–205, 225, 230n9, 241, 256, 258–270, 272, 273, 275, 278–280, 285, 292, 313, 325, 326, 329, 330, 343–346, 357–361, 373, 377–381, 382n69, 397, 398, 411n13, 419, 429, 440, 441, 444, 450, 451

Economies of scale, 41, 87, 92, 122n64, 235, 275, 283, 314, 331, 334, 352–354, 367n44, 403, 404, 408, 411–413, 426, 429, 431, 449 Economy-wide approach, 7 Ecotourism and conservation mechanisms, 100 ECOWAS, 68, 187, 271 Educational, 7, 38, 49, 380 E-extension agents, 76 Egypt, 11, 37, 43, 43n23, 48n25, 64, 71, 73, 85, 107, 109, 112, 168, 170, 171n3, 171n4, 180, 183–185, 198, 205, 210, 212, 215, 277, 279, 279n46, 290, 291, 293, 295, 296, 405, 407n7, 408, 423n24 El Niño, 38, 108 Employment, 6, 8, 21, 25, 28, 30, 32, 38, 45, 60, 79, 80, 111, 112, 118, 141, 144, 144n8, 145, 149–153, 150n18, 155, 156, 196–202, 204, 230, 240, 257, 280–282, 286, 287, 296n67, 311, 323, 329, 344, 344n5, 345, 359, 378–380, 388, 399, 401, 418, 444, 468–470 Energy, 12, 20, 38, 46, 47, 49, 63, 76, 83n32, 106, 185, 188, 233, 253, 327n26 Energy-water-food wastage nexus, 12 Engel’s Law, 143, 177 Entrepreneurship, xv, 6, 49, 70, 110, 112, 152, 166, 186, 251, 290, 292, 417–419, 447, 449 Environmental degradation, 7, 29, 99, 315, 414, 443 Environmental ecosystem, 99 Environmental quality and services, 18 Equatorial Guinea, 30, 60n4, 65, 77, 77n23, 109, 170, 170n3 Eswatini, 30, 146, 170, 171n3

 INDEX 

Ethiopia, x, 10, 11, 20, 25, 30, 30n13, 36, 38n17, 49, 67, 77, 78, 82, 82n27, 82n28, 83, 101, 108, 111, 117, 120, 124, 125, 125n66, 169, 180, 182n13, 183, 185, 203, 205, 207, 215, 224–226, 227n6, 230–233, 235, 240–256, 265, 267, 272, 278, 292, 354, 397, 401, 403, 408, 409, 413, 420, 422n23, 423, 425, 429, 433, 441n1, 448, 449, 451, 469n1 Ethiopian Agricultural Transformation Agency (EATA), 11, 242, 246n14, 249–256, 249n16, 249n17, 250n19 Ethiopian Commodity Exchange, 112, 247, 248, 255, 256, 427 Ethiopian Soil Information System, 252 EU price supports, 104 Europe and Mediterranean (Euromed), 293 European Union, 35, 35n15, 63, 104, 105n48, 176, 176n10, 188, 278, 284, 293, 295n66, 347, 357, 373, 373n55, 374n56, 382, 389, 451 Exchange rate, 79, 101, 125, 232, 354n21, 355, 428 Excluded or marginalized farmers, 8, 400 Export Processing Zone (EPZ), 124, 187, 271 Extended Pampas region, 356 Extension officers, 68, 186, 367 Extension services, xv, 11, 46, 46n24, 64, 66, 74–76, 74n20, 83, 84, 88, 89, 95, 97, 112, 125, 149, 153, 173, 207, 230, 232, 233, 242, 244–247, 252, 264, 274, 275, 295, 296, 298, 300, 312,

479

313, 316, 326, 330, 333, 352, 352n19, 372, 374, 385, 386, 388, 389, 420–422, 428, 443, 448, 450 F Fallowing system, 61, 440 Family Agriculture Insurance and the Crop Guaranteed Programme, 363n39 Family Farm, 46n24, 346, 362, 362n36, 363, 370, 375 Famine, 9, 9n9, 34, 180, 240, 242 Farmer cooperatives, 68 “Farmer Production Clusters” (FPC), 253 Farmers groups, 87 Farmgate activities, 22 Farming intensification, 224 Farm Input Subsidy Programme, 97 Farm management, 8, 76, 333 Feasibility consolidating farmland, 328 Fertilizers, 7n7, 9n9, 11, 28, 29n10, 36, 48, 49, 52, 58n1, 65–76, 79, 85–87, 92n37, 92n38, 93–96, 98, 100, 102n45, 113, 114, 116, 127, 128, 157, 174, 181, 184, 208, 211, 215, 216, 233, 244, 245, 247, 251, 252, 254, 262, 263, 265, 273–275, 277, 277n45, 284, 287, 295, 312, 315, 315n8, 315n9, 320, 321n15, 322, 325, 326n25, 328, 330, 332, 334, 347–349, 365, 368, 372, 382, 386, 388, 398, 403, 407, 407n7, 408, 408n8, 408n9, 414, 417n19, 425, 427, 429, 433, 441, 442n3, 443, 447–450 Fertilizer utilization-productivity, 92 Financial inclusion, 74

480 

INDEX

Fiscal balances, 79 Fiscal consolidation, 267, 273 Fiscal mechanisms, 100, 101n43 Fiscal paradoxes, 268, 271 Fiscal sustainability, 95, 299 Fisheries, 24, 64, 82, 271, 283, 285, 293, 313, 316, 325n23, 383, 418 Fishing, 19, 20, 285, 383 Fish processing, 64 FOB, 102n45, 267n38, 267n39, 383 The Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN), 415, 416 Food aid, 65, 80, 433 Food imports, 10, 40–42, 51, 64, 104, 125, 283–285, 299 Food prices, 33, 50, 62, 97, 148–151, 166, 175, 176, 176n10, 299, 326, 400, 470 Food security, ix–xiv, 5, 6, 9, 11, 12, 18, 29, 32, 37, 38, 38n18, 40, 43, 47, 48, 50, 52, 58, 62, 64, 67n15, 78, 82, 82n28, 83n33, 88, 90, 97, 98, 103, 105, 107, 110, 111, 122, 152, 166–181, 166n1, 188, 189, 196, 204, 205, 228, 234, 235, 300, 310, 317, 321, 356, 357, 362, 370, 377, 397–399, 402, 405n5, 406, 414, 417, 430, 433, 440, 441, 447, 450, 452, 470 Food Security Fund, 282, 283 Food share in the value of total merchandise imports, 40 Food staples, 25, 27, 98 Food Traceability System, 328 Foreign exchange, xiii, 6, 10, 21, 31, 33, 40, 49, 51, 64, 84, 123, 125, 150, 257, 284, 321, 397, 440 Foreign exchange earnings, xiii, 21, 31, 33, 49, 51, 64, 123, 125, 150, 257, 440

Foreign exchanges, xiii, 6, 10, 21, 31, 33, 40, 49, 51, 64, 84, 123, 125, 150, 257, 284, 321, 397, 440 France, 63 Functional dualism, 146 Fund for Rural Catastrophe, 363 G Gabon, 170, 171n4, 183, 213, 214, 372, 412, 469n1 The Gambia, 30, 41, 60n4, 78, 171n3, 176n10 Gender, 28, 29, 113, 180, 181, 189, 235, 410, 447 Gender inequality, 28, 410 Gender-neutral landholding, 410 General system support, 385 Genetically modified organisms (GMOs), 347n11, 349 Ghana, x, 25, 27n9, 28, 67, 68, 75, 78, 86, 98, 111n57, 112, 124, 125n, 125n67, 169, 171n4, 183, 185–187, 203, 205, 225–227, 231, 248, 257–278, 354, 397, 421, 423n24, 425, 441n1, 449, 451, 469n1 GHG emission, 363, 364, 371, 376 Gini Coefficient Index, 241 Global Agriculture and Food Security Programme (GAFSP), 81, 82, 433 Global Food Security Report, 52 Globalization, 7, 41, 60, 101–106, 121, 147, 178, 189, 397 Glyphosate-resistant soybeans, 348 Good Agricultural Practices, 328 Governance, 7, 40, 47, 50, 58, 78, 83, 87–89, 95, 97, 124, 126, 128, 167, 187, 189, 240, 255, 261, 270, 294, 398, 412, 415, 424, 428, 442, 444, 449, 451

 INDEX 

Great Green Wall, 50 Green channel, 315n6, 426 Green Growth Programme, 386 Greenhouse gas, 67, 67n15, 99, 415 Green Morocco Plan, 286–291, 293, 294, 300 Green revolution (GR), x, xi, xv, 7, 7n7, 34, 35, 40, 41, 44, 46, 74, 92, 98, 99, 114, 115, 117, 126, 145, 149, 152, 153, 157, 181, 189, 224–226, 234, 235, 321, 322, 324–326, 329–331, 347, 399–401, 406, 419, 430, 433, 441, 443, 445, 447, 448, 450, 452 Green Revolution Bank, 430 Green revolution in South Asia, 153 Growth Transformation Plans (GTP), 246 Guangdong Agricultural Pollution Control Project (GAPCP), 315 Guinea Bissau, 10, 25, 30, 171n3, 176n10, 423n24, 469n1 H Harmonized trade rules, 68 Horn of Africa, 38, 59, 59n3, 65, 70, 81, 98, 108, 167 Household incomes, 32, 142, 176, 189, 329 Household Responsibility System (HRS), 229, 311 Human development, 28–30, 38, 110, 166 Human Development Index, 279, 279n47 Hundred Young Farmers, 328 Hunger, ix, xi, xiii, xiv, 4, 5, 9, 10, 33, 34, 37, 39, 48, 78, 171–180, 171n6, 189, 204, 288, 357, 361, 412, 432, 452 Hydroelectric production, 19

481

I Import dependency ratio, 287 Import Substitution Industrialization Strategy, 263, 357, 374 Inclusive development, xiv, 12, 38, 117, 129, 189, 196–216, 225, 300, 311, 326, 330, 355, 362, 374, 394, 398–400, 412, 441, 452, 468 Inclusive economic growth, 6, 9, 33, 58, 242 Inclusive growth, 8, 10, 18, 33, 89, 90, 112, 297, 314, 356, 358 Income disparity, 6–8, 29, 32, 142, 142n3, 150, 397, 400, 429, 440, 468 Income inequality, ix, xv, 8, 11, 18, 21, 25, 27, 28, 51, 95, 105n49, 117, 118, 118n59, 118n60, 120, 152, 155, 156, 183, 184, 196, 197, 201, 202, 204–209, 211–216, 225, 234, 241, 242n6, 249n17, 268, 279, 285, 344, 361, 375, 376, 389, 410, 429, 443, 468, 469 Indemnity-based approach, 101 Index-based approach, 101 India, xi, xvi, 33–35, 35n15, 49, 52, 63n9, 74, 77n22, 90, 95, 97, 102, 117, 150n17, 152–154, 154n20, 156n21, 197, 225, 226, 227n6, 229, 230, 233, 245, 317–325, 356n25, 397, 407–409, 413, 414, 423–425, 429, 433, 441n1, 444, 451 Indirect tax, 101 Industrial advancement, 22 Industrial growth, 6, 29, 146 Industrial output, 12, 51, 151, 154, 452 Industrial sector, 28, 29, 142, 149, 150, 196, 200, 202, 314, 378, 405, 468

482 

INDEX

Inequality, ix, xv, 8, 10, 11, 18, 21, 25, 27, 28, 32–34, 45, 48, 51, 67, 103, 104, 105n49, 117, 118, 118n59, 118n60, 120, 125, 126, 128, 144–146, 144n8, 144n9, 151–156, 176n9, 183, 184, 196–198, 201–209, 211–216, 243, 270, 272, 273, 279, 291, 297, 300, 310, 311, 320, 345, 346, 346n8, 375, 376, 376n59, 381, 381n66, 389, 400–402, 409, 410, 440, 442, 446, 447, 469 Inequality–reducing power of agriculture, 155, 204, 205, 215 Informal activities, 49, 60, 127 Innovation governance system, 58 Inoculants, 349 Inputs-farmgate-outputs ecosystem, 58, 89, 155, 402, 419 Input subsidies programmes, 65, 97 Input Voucher System (IVS), 249, 251, 254 Integrated Apiculture Value Chain Project, 249 Integrated circuit card, 315, 315n8 Integrated Irrigation Infrastructure Management Project (IIIMP), 73 Integrated Shallow Ground Water Irrigation Development, 253 International community, 5, 10, 125, 235, 312, 323, 412, 430, 432, 433 International Fertilizer Association (IFA), 408n8 International Fertilizer Development Center (IFDC), 408n8 International Institute for Tropical Agriculture (IITA), 75, 408n8, 417, 418, 430

International Plant Nutrition Institute (IPNI), 408n8 International Potash Institute (IPI), 408n8 Internet channel, 315n6, 426 Intra-African trade, 78 Inverted U-shaped development-­ inequality relationship, 202 IR8, 322, 322n16 Irrigation, 5, 7n7, 11, 19, 20, 36, 44, 48, 49, 52, 58n1, 66, 70, 71, 73, 74, 76, 79, 82n28, 88, 90n36, 95, 97, 98, 114, 125, 127, 128, 150n18, 152, 174, 184, 186, 207, 209, 215, 233, 245, 247, 263, 271n43, 273, 274, 287, 289–292, 289n58, 294, 295, 312, 320–324, 322n17, 326, 326n25, 328, 331, 334, 348, 349, 366, 368, 371, 375, 375n57, 379, 385, 386, 388, 389, 398, 408, 409, 409n11, 413, 414, 427, 428, 441, 442n3, 443 K Kalambo Youth Agripreneur, 418 Kenya, 10, 28, 30n13, 67, 69, 78, 78n24, 82, 82n27, 83n33, 84, 86, 98, 100n42, 108, 111n57, 112, 113, 116, 122, 124, 125, 125n66, 169, 176n10, 179, 182n13, 183, 184, 185n16, 186, 187, 231, 251, 251n20, 274, 408, 414, 418, 421, 423n24, 449, 469n1 Kibwezi Hortipreneur Youth Group, 418 Korean miracle, 329 Kuznets’ hypothesis, 151

 INDEX 

L Labour-abundant, 196 Labour abundant sector, 5 Labour productivity, 11, 38, 48, 85, 86, 155, 173, 198, 201, 209–211, 215, 216, 259, 262, 290, 443, 470 Labour scarce sector, 5 Lake Nasser, 20 Lake Tanganyika, 20 Lake Victoria, 20 Lake Volta, 20 Land degradation, 106, 106n51, 264 expansion, 61, 106, 440 legal system, 118 market system, 118 ownership, 112, 117–119, 118n60, 174, 229, 242, 282n51, 298, 320, 443 productivity, 6n4, 11, 173, 209, 211, 212, 216, 244, 262, 290, 295, 443, 470 tenure system, 29n10, 77, 97, 100, 116, 119, 229, 269, 270, 270n42, 271n43, 273, 319, 345, 356, 449 use zoning, 328 Land-ceiling legislation, 117 Land Reform Law, 119 L’Aquila Food Security Initiative, 81, 433 Latin America and the Caribbean (LAC), 18n2, 30, 37–39, 59, 61, 71, 82n27, 224, 227n6, 228, 230n9, 280, 350, 440 Leasehold, 269 Least Developed Countries (LDCs), x, 21, 33, 82, 89, 104, 105, 123, 157, 248, 432 Lending rates, 79, 84–86, 281, 352, 410, 445

483

Lesotho, 28, 60n4, 155, 170n3, 180, 198, 469n1 Lewis, W. Arthur, 5, 28, 60, 141, 141n1, 142, 142n3, 144n7, 145, 146, 197n1, 202 Liberalization, 80, 121, 125, 153, 289n58, 298, 353, 354, 373 Libya, 10, 65n10, 170, 171n3 Livestock, 98, 99n39, 107, 149, 153, 156, 207, 208, 215, 224, 240, 249, 250, 271, 271n43, 278, 283, 284n54, 285, 285n55, 289, 312, 313, 316, 325n23, 327n26, 347, 347n12, 348n14, 353n20, 361n34, 363, 364, 368, 376, 379, 383, 414, 415, 428, 443, 449 Local Buying Agents, 87 Logistics, 5n3, 10, 50, 92, 182–184, 187, 292, 300, 359, 377, 442 Low Carbon Agriculture Programme, 363, 364, 371, 377 Low Income Countries (LICs), 7, 49, 50, 96, 153, 154, 156, 176, 177, 433, 449 Low productivity farming, 31 M Madagascar, 25, 30, 32, 38n17, 65, 70n17, 78, 82n27, 84, 86, 117, 170, 171n5, 411, 446, 469n1 Madagascar’s growth poles, 411 Malabo Declaration on Accelerated Agricultural Growth and Transformation, 51 Mali, 6, 11, 18n3, 28, 30n13, 31, 38n17, 71, 73, 74, 77n23, 78, 82n27, 83, 109, 169, 182n13, 183, 231, 232, 269n1, 411, 412, 423n24 Malnourishment, 9, 109, 204, 397

484 

INDEX

Malnutrition, xiii, 5, 10, 34, 37–39, 48, 59, 78, 97, 108, 168, 172, 178, 181, 207n3, 288, 440 Malthusian trap, xi, 9, 10, 34–37, 51, 52, 179, 189, 224, 313, 313n2, 317, 413 Marginalized populations, 176, 213, 272 Market-clearing wage rates, 141 Marketing boards, 90, 101, 102n44, 123, 208, 261, 264 Market integration, 65, 103, 122n64 Maternal mortality, 40 MauBank SME Development Scheme, 281 Mauritius, xi, 25, 63, 70, 78, 111n57, 117, 122, 171n4, 180, 185, 210, 212, 213, 224–226, 230, 231, 233, 276–285, 282n51, 292, 295–297, 397, 399, 401, 408, 416n17, 441n1, 450, 451 Mechanization Promotion Law, 331 Medium Scale Agricultural Producer Support Programme, 363 MERCOSUR, 373, 373n54 Mfarm, 113 Middle Atlas Central Project Area, 288n57 Millennium Development Goals (MDGs), 34, 41, 257 Mono-crop, 11, 278, 298 Monopsony, 264 Moral hazard, 85, 88, 363n38, 375 Morbidity, 38, 173 Morocco, xi, 36, 37, 48n25, 64, 65n10, 70n17, 77n23, 78, 111n57, 170, 171n3, 171n4, 180, 185, 187, 205, 210, 215, 224–226, 227n6, 230, 231, 233, 235, 277, 279n46, 285–301, 285n55, 293n65, 295n66, 296n67, 354, 397, 401, 403, 407n7, 409, 412, 413, 422n23, 429, 441n1, 451, 469n1

Mortality rates, 38, 172n7 Mozambique, 6, 25, 38n17, 69, 77n23, 82n27, 84, 109, 117, 155, 170n3, 176n10, 227n6, 231, 267, 283, 372, 404, 412, 413, 423n24, 425, 469n1 Multifactor productivity (MFP), 213, 214 Multiple tax burdens, 102n45 N Namibia, 18n3, 28, 60n4, 77, 78, 169, 177, 213, 214, 469n1 National Agricultural Research System (SNPA), 367n42 National Agricultural Technology Institute, 352 National Cocoa Rehabilitation Project, 260 National Determined Contribution, 283 National Family Farm Strengthening Programme (PRONAF), 364 National Food and Agriculture Quality Services, 347 National Food Supply Company, 370 National Health Registry for Agricultural Producers (RENSPA), 347, 347n12 National Plan of Action, 283 National Policy on RenovaBio, 372 National poverty, 8, 34, 198, 205, 206, 208, 210, 214, 287, 288, 314 National Programme for Strengthening Family Farming, 363 National Programme for the Production and Use of Biodiesel, 372 The National Rural Credit System, 365 Natural resources management, 443

 INDEX 

Neoclassical, 141, 143–146 Neoclassical model approach, 143 Nepal, 30, 82n28 New Agricultural Movement, 328 New Rice for Africa (NERICA), 62n8, 431n25 New Rural Campaign, 34, 311 New Village Movement (Saemaul Undong), 230, 329–332, 334 Niger, 28 Nigeria, 11, 20, 28, 36, 38n17, 43, 43n23, 60n4, 63, 64, 67, 75–76, 77n23, 84–86, 88, 95, 96, 109, 111n57, 122–125, 125n67, 156, 169, 180, 182n13, 183–185, 185n16, 203, 231, 245, 248, 261, 272, 275, 404, 408, 409, 412, 413, 417, 418, 421, 422n23, 428, 469n1 Nigeria Incentive-based Risk-sharing System for Agricultural Lending (NIRSAL), 84 Nigerian Agricultural Credit Guaranteed Scheme (NACGS), 410, 410n12 Non-competitive primary commodity export market structures, 105 Non-tariff barriers, 80, 101–106, 128, 315, 432, 441n2 North Savannah Ecological Zone, 259 No-till farming, 343, 348, 349, 351, 364, 372, 400, 407, 443 O ODA net disbursement, 41, 442 Off-farm activities, 8, 235, 262, 310, 325, 410, 434 Off-farm enterprises, 228 Off-farm infrastructure, 208, 215, 331 One District One Factory In, 270 One-stop shops, xv, 188, 250, 284, 300, 329, 422

485

One Stop Shops and Service Centres (OSSSCs), 253 On-farm storage, 76, 91, 426 Ordinary least squares (OLS), 197, 469 Organic agriculture, 67, 364, 386, 400 Oromia, 253 Orthodox Marxian, 141, 143, 145 Out-grower farming, 409 Out-grower firms, 86, 87, 409, 417n19 Overgrazing, 106 Overnutrition, 39, 40 P Panchayats, 318 Payment for ecotourism, 100 Payment for environmental services (PES), 100, 101 Peasant-capitalist economy, 145 People-prosperity-planet linkages, 46 Perennial cropland, 119 Pest-and disease-free production, 63 Phytosanitary measures, 349, 364, 385 Pingtung Agricultural Biotechnology Park (PABP), 327, 327n26 Plan National d’Economie d’Eau d’Irrigation (PNEEI), 290 The planet, xiii, 8, 12, 20, 46, 115, 317 Plant disease warnings, 328 Policy of Guaranteed Minimum Prices, 370 Political economy, xiv, xv, 8–12, 40, 58, 120–127, 129, 230, 233, 235, 261n31, 263, 265, 268, 397–400 Political-financial-public support, 233 Pollution, 34, 52, 106, 128, 376, 388, 413, 452 Pool of reservoir of labour, 197

486 

INDEX

Population abatement, 12, 51 Population growth, 9, 9n9, 12, 34–36, 40, 48, 51, 128, 179, 180, 189, 313n2, 317, 452, 470 Populist economists, 143 Post-harvest losses, 90–92, 204, 426, 429 Post-harvest management, 48, 76, 88, 334, 386, 405n5, 422, 426, 428, 429, 448 Post-natal services, 203 Poverty, ix–xi, xiii, xv, 4–11, 7n5, 18, 21, 25, 27–30, 32–34, 38, 45, 47, 48, 51, 60, 64, 65, 67n15, 77, 78, 87, 92, 94, 97, 98, 102, 103, 105, 110, 111, 115, 117, 118, 118n59, 125, 126, 142, 144–146, 148, 151–157, 154n20, 156n21, 176, 176n9, 183, 196–198, 200–216, 224, 225, 234, 241, 242n6, 249n17, 257, 257n22, 262, 263, 266–268, 270, 273, 279, 279n46, 285, 287–289, 297, 298, 310, 312, 314, 317, 321–323, 323n20, 325, 329, 344–346, 345n7, 355, 357, 361, 375, 376, 378, 389, 397, 399–403, 405, 409, 410, 412, 429, 440, 442, 443, 446, 447, 452, 468, 469 Poverty gap, 200–204, 210, 356n23, 469 Poverty-reducing power of growth, 27 Power-cognisant narrative, 126 Price fluctuations, 105 Price leader, 58 Price setter, 58 Primary commodity prices, 98, 248 Primary processing of agricultural products, 76 Primary products, 105n49, 189

Private sector, xii, 10, 20, 21, 75–77, 82, 88, 89, 103, 105, 115, 124, 129, 153, 187, 188, 232, 235, 254–257, 262, 264, 270, 274, 275, 291, 294, 321, 323, 324, 327, 354, 372, 377, 386, 398, 402, 404, 407–409, 411, 416–418, 426–428, 445, 446, 450, 451 Producer prices, 102 Producer Support Estimate (PSE), 80, 346, 353, 355, 373, 435 Productive capacity, 80, 83, 118, 125, 187, 433 Productivity, 5, 18, 60, 141, 166, 196, 224, 241, 310, 343, 400, 440 Product standards, 105 Programme for Africa’s Seed Systems (PASS), 68–70, 68n16, 232 Programme for the Modernization of Agriculture and Conservation of Natural Resources, 371, 377 Programme Oasis Sud and the Plan Maroc Vert, 299 Programme of Support to Rural Insurance Premium, 363 The Project for the Promotion of Rural Entrepreneurship II, 113 Property rights, 117, 381, 404, 445 Pro-poor, xiv, 25, 67, 128, 153, 155 Proportionality principle, 90 Public good, 40, 117, 230, 310, 367n45, 400, 427, 434 Public health, 38, 96, 320 Public-private partnerships, 187, 247, 248, 273, 276, 288, 377, 402, 403, 405, 413, 426, 427, 445 Public-private-social entrepreneurs, 404 Pull-off transformation strategy, 231, 401

 INDEX 

Q Quality control procedures, 68 Quality assurance, 234, 328 R Race-to-the-bottom games, 298, 406 Radical land-to-the tiller reform, 330 Rainfed agriculture, 11, 18, 19, 99–101, 106, 107, 171 Rain-fed cultivation, 31 R&D, 49, 77, 78, 92n37, 124, 125, 128, 153, 173, 177, 231, 233, 272, 274, 312, 327, 349, 350, 360, 367n45, 374, 385, 386, 389, 419, 426, 432, 433, 444, 448 Recreational agricultural zones, 326 Registrable ownership, 116 Regressions, 8, 175, 197, 205, 211, 470 The Republic of the Congo, 30, 36, 77, 78, 333 Resettlement, 74, 319 Resilient food system strategies, 110 Resource allocation, 5, 7, 8, 89, 143, 144n9, 149, 197, 367 Revenue Rules (1980), 320 Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 319 Risk-sharing loan facilities, 88 Risk-sharing strategies, 101 River Niger, 5n1, 19, 417n19 River Nile, 5n1, 19 Rules-of-origin principles, 106 Rural credit markets, 118 Rural duality, 122 Rural dwellers, 6, 8, 9, 21, 22, 24, 30, 31, 51, 116–118, 122n63, 123n65, 146, 151, 153, 207, 225, 311, 318, 320, 348, 354, 440

487

The Rural Environment Registry, 371, 400 Rural poverty, 6–8, 30–32, 65, 67n15, 151, 155–157, 197, 200–207, 210, 213, 215, 288, 310, 322, 323n20, 345n7, 346, 355, 402, 412, 429, 440, 469 Rural transformation, 5, 7, 22, 30, 122, 321, 323, 324 Rural-urban migration, 34, 121, 151, 154, 228, 231, 268, 288 Rurbanomics, 182, 187 Rwanda, 25, 28, 30, 30n13, 32, 36, 38n17, 60, 77n23, 82, 82n27, 82n28, 111n57, 112, 117, 124, 125, 155, 156, 170n3, 187, 203, 205, 207, 207n3, 227n6, 235, 417, 417n18, 423n24, 433, 449, 450 S Sahel, 38, 50, 59, 65, 70, 71, 81, 98, 108, 109 Sanitary and phytosanitary standards (SPS), 105 São Tomé and Príncipe, 28, 41, 60n4, 84, 171n3 Savannah Ecological Zone, 271n44 Scalability failures, 114 Science-based innovations, 62 Sectoral dualism, 156, 202, 204, 295n68, 296n67, 469 Sectoral duality, 32, 156, 202, 204, 296n67, 469 Secure tenancy, 229 Seedlings, 9n9, 11, 28, 36, 50, 65, 68, 69, 79, 127, 152, 157, 174, 184, 215, 235, 250, 260, 262, 263, 312, 321, 324, 348, 409, 417n19, 429, 433, 442n3, 443, 446, 447, 449 Selecting targeted beneficiaries, 68

488 

INDEX

Senegal, 32, 75, 77n23, 78, 82n27, 83, 86, 113, 171n4, 176n10, 182n13, 183, 186, 203, 205, 207, 231, 232, 413, 421, 425, 469n1 Services sector, 23, 50, 60, 197, 198, 204, 241, 258, 279, 286, 287, 329, 344, 357, 359, 359n31, 378, 380 Seychelles, 70n17, 213, 214, 227n6, 277, 407n7 Shambani, 112 Sheltered Farming Scheme, 282 Sierra Leone, 6, 30, 30n13, 38n17, 77n23, 84, 109, 171n3, 171n5, 176n10, 227n6, 469n1 Silo bags, 349 Sky channel, 315n6, 426 Small and medium farm holders, 8, 116, 266, 400 Small-and medium-scale farmers, 8, 68, 398, 402 Small Farmers Welfare Fund, 281, 281n49 Small Holding Project, 282 Small Island Developing State (SIDS), 276, 283 Small Landlords and Big Tenants, 117, 229, 326, 327 Social equity, 92 Social infrastructure, 74 Social protection, 40, 153, 168, 203, 210, 211, 213, 216, 225, 230, 312, 313, 403, 429, 444 Social services, 29, 74, 230, 427 Soil fertility mapping, 11 Soil management, 11, 428 Soil-water-plant relationships, 96, 452 Somalia, 25, 176n10 Songhai agriculture-based circular economy, 11 Songhai Initiative, 106

Songtaab-Yalgree, 112 Sources of growth, 25 South Africa, 23, 25, 28, 30, 37, 41, 43, 43n23, 48, 48n25, 63, 64, 67, 70n17, 74, 78, 88, 103n47, 111, 117, 123, 146, 155, 168, 171n3, 171n4, 180, 182n13, 183, 185, 205, 213–215, 274, 295, 351, 397, 401, 407n7, 408, 416n17, 417, 421, 423, 423n24, 429, 469n1 Southern Africa, 23, 28, 36, 38, 49n49, 98, 108, 116, 146, 147, 156, 170, 184, 185, 229, 408, 431 Southern African Development Community, 283 Southern Agricultural Growth Corridor, 404, 413 Southern Nations, Nationalities, and Peoples’ Region (SNNP), 253 South Korea, xi, 33, 45, 74, 104, 120, 152, 225, 226, 227n6, 230, 233–235, 329–334, 397, 399–401, 406–409, 426, 433, 441n1, 451 South Sudan, 30, 107 Sowing Pool (SP), 352, 354, 404, 412, 443 Spark Programme, 311, 316 Special Agricultural Zones (SAZs), xv, 326, 411–413 Special economic zones, 124, 187, 230, 234, 326, 411n13, 413 Special support measure (SSM), 433 Sri Lanka, 92n38, 95, 102, 227n6 Staple croppers, 398 Starter Pack, 92, 93, 95, 233, 405 State-driven voucher, 66 State of West Bengal’s, 319 Structural Adjustment Programmes (SAP), 81, 89, 92, 92n37, 103,

 INDEX 

115, 124, 125, 125n67, 233, 264, 288, 300, 365 Structural economic transformation, x, xiii, xiv, 5n2, 6, 10, 11, 19, 21, 22, 29, 41, 44, 59, 60, 63, 127, 182, 183, 186, 197, 200, 203–205, 225, 241, 258–270, 272, 273, 278–280, 285, 313, 325, 329, 343–346, 357–361, 377–381, 397, 398, 440, 441 Structuralist, 141, 143, 146, 147 Structuralist macroeconomists school, 143 Stunted growth, 38 Subsidy, 11, 65, 67, 67n11, 68, 77, 80, 83, 83n33, 85, 88, 92, 92n37, 93, 95–98, 102–105, 120, 122–125, 127, 128, 208, 263, 274, 275, 281, 289, 293, 295, 315n8, 321, 325, 328, 331, 346, 363, 368, 373, 383, 384, 397, 409, 410, 410n12, 432, 441n2, 446, 450 Subsistence, 31, 48, 103, 141–143, 142n3, 149, 197, 202, 234, 240, 242, 252, 290, 291, 403, 404, 413, 419, 430, 433, 446, 450 Subsistent, 11, 49, 147, 186, 291, 292, 298, 402, 403, 419, 420n20 Sudan, 10, 30n13, 38n17, 44, 50, 107, 171, 171n5, 176n10, 469n1 Sufficiently and rapidly to become an important engine of, 105 Supply chain, xi, 91, 387, 389, 420, 421 Support Service to Rural Finance, 113 Supra-monopolist institutions of government, 398 Sustainable agriculture, 8, 24, 46, 49, 58, 63–64, 74, 97, 101, 106, 110, 115, 226, 277, 294, 299, 315, 325, 343, 349, 367n42, 414, 424

489

Sustainable development, xv, 5, 22, 29, 39, 44, 45, 50, 51, 58, 99, 114, 127, 166, 181, 205, 401, 402, 415, 416, 419 Sustainable Development Goals (SDGs), x, 5, 8, 22, 24, 33, 37, 38, 40, 44–52, 64, 115, 121, 157, 172, 196, 400, 405, 413, 417, 432, 441 Sustainable Green Revolution (SGR), x, xi, xv, 46, 52, 126, 189, 399, 400, 445, 447, 448, 450, 452 T Taiwan, xi, 33, 97, 117, 120, 150n17, 225, 226, 229, 230, 233–235, 325–329, 331, 399, 400, 407–409, 408n10, 409n11, 426, 427, 431, 433, 441n1, 443, 451 Taiwan Agriculture Land Information Service, 327 Taiwan Orchid Plantation Park, 327 Tank-Fed Vayalagam Agricultural Development Programme, 323 Tanzania, 30n13, 38n17, 67, 68, 82, 82n27, 82n28, 84, 100n42, 117, 156, 169, 170, 177, 180, 185, 227n6, 245, 404, 413, 416n17, 418, 421, 425, 433, 469n1 Tariff and non-tariff barriers, 80, 101, 103n46, 432 Tariff barriers, 101–106 Tariff escalation, 105, 105n49, 432 Tariff peaks, 105, 432 Technical Centre for Agricultural and Rural Cooperation (CTA), 417, 418 Technical change, 11, 145, 147, 149, 184, 209, 210, 265, 265n35, 290, 291, 366, 442 Technical efficiency, 187 Technological diffusion, 74, 388

490 

INDEX

Technologies, 5n1, 6n4, 7, 7n7, 8, 9n9, 48, 67, 70, 74n20, 75, 79, 82n28, 88, 91, 97, 99, 103, 105, 111, 114, 115, 128, 144, 145, 150, 152, 157, 181, 185, 186, 186n17, 224, 225, 233, 235, 251, 253, 256, 263, 265, 265n34, 268, 275, 277, 279–281, 285, 291, 294, 296, 300, 310–312, 314, 315, 321, 326, 328, 330, 330n27, 347–350, 352, 354, 361, 364, 366–368, 367n43, 372, 373, 386, 386n80, 387, 389, 403, 406, 407n6, 416, 421, 422, 426–428, 430, 431, 431n25, 443, 445–448, 450, 451 Technology-policy-practice nexus, 115 Teff, 231, 240, 250, 251, 254 Tenancy markets, 120 Terms of trade, 48, 89, 101, 102, 182, 389 Tigray, 244n11, 244n13, 253 Togo, 18n3, 28, 30n13, 38n17, 78, 169, 176n10, 215, 412, 416, 469n1 Tongil, 330 Total factor productivity (TFP), 11, 209, 210, 212–214, 227, 228, 359, 360, 368, 369, 379, 380, 429, 469, 470 Township and Village Enterprises Scheme, 311 Trade-distorting export subsidies, 105 Trade protectionism, 80 Traditional mixed-cropping, 298 Traditional skin, 270 Traditional stool, 270 Transferability of land rights, 119 Transmission mechanism, xiv, 141, 148–152, 196, 215

Transportation, 19, 67n14, 209, 424 Transport costs, 92, 103, 185, 283, 284 Traceability, 247, 247n15, 248, 328, 349, 420 U Uganda, 20, 25, 30, 32, 36, 60n4, 69, 78, 82–84, 82n27, 86, 100n42, 108, 113, 116, 169, 170, 177, 179, 205, 231, 232, 414, 418, 422n23, 449, 450, 469n1 Uganda Organic Standard, 414 Undercapitalization, 7, 44, 103, 120, 125 Undernourishment, 167–169, 172, 173, 175, 177–180, 241, 361 Undernutrition, 39, 40, 174, 180, 288 United Kingdom, 63, 77 United Nations Framework Convention on Climate Change (UNFCCC), 100n41 United States, 35, 35n15, 63, 104, 105n48, 235, 315n9, 348, 351, 373, 382, 382n68, 389 United States-Central America-­ Dominican Republic (DR-CAFTA), 382n68 Upstream, 5n3, 49, 150n18, 182, 183, 187, 189, 273, 350, 389, 406 Urban bias, 23, 24, 122 Urban dwellers, 32, 97, 123, 331 Urbanization, 22, 24, 40, 89, 97, 121, 154, 156, 176, 178, 189, 258, 258n24, 260n29, 269, 272, 314, 315, 315n7, 330, 414 US-Morocco Free Trade Agreement (FTA), 293

 INDEX 

V Value chains, 4–6, 9, 10, 27, 29, 33, 58, 62, 82n28, 91, 103, 112, 124, 128, 157, 166, 182, 185–188, 196, 208, 209, 215, 230–232, 234, 242, 249, 253, 255, 261–263, 261n31, 265, 270–274, 289–291, 289n59, 294, 326, 350, 397, 402, 402n3, 404, 411, 416, 418, 422, 426, 442, 443, 445, 447 Value chains approach, 91 Variable rate seeding and application (VRA), 349n16 Vayalagam programme, 322 Vegetable City, 314, 316, 426 Vietnam, 74, 118, 119, 156n21, 227n6, 229, 240n3, 333, 348, 451 Village development committees, 68 Village voucher committees, 68 Virtuous relationship, 149, 186 W Wages, 8, 38, 79, 92, 94, 120, 141–143, 142n3, 145, 148, 149, 151, 196, 202, 204, 260n29, 264, 267, 323, 333, 401, 410, 429 Wasting, 38, 39, 39n19, 170, 170n3, 172n7, 173, 288 Water management, 11, 52, 62, 73, 78, 97, 117, 152, 289, 321, 322, 324, 331, 414, 429, 446 Watershed services, 100 Water-soil-food system, 35 West Africa, 21, 28, 36, 116, 168, 185, 266, 275, 408 West Bengal Bargadar Act (1950), 319 West Bengal Estate Acquisition Act (1952), 319–320

491

West Bengal Landholding Revenue Act (1979), 320 West Bengal Land Reforms Act (1955), 320 Western Rift Mountain Project, 288n58 White Revolution, 330, 330n27 Within-sector labour productivity growth, 201, 259 World Trade Organization (WTO), 105, 106, 224, 373, 432 Y Yield gap, xiii, 20, 182n14, 240 Young Producers and Agricultural Professionals of Togo (REJEPPAT), 416 Youth, xi, xv, 11, 22, 23, 37, 63, 76, 79, 90, 110–114, 128, 183, 184, 184n15, 196, 226, 230, 254, 259, 263, 268, 275, 299–301, 328, 399, 400, 402, 404, 410, 411, 413, 415–419, 423, 427, 431, 432, 434, 440, 442, 445, 450, 451 Youth Venture Capital, 113 Z Zambia, 10, 30, 38n17, 41, 67–69, 77, 78, 83, 86, 98, 102, 112, 117, 124, 125n66, 170, 171n3, 171n5, 177, 182n13, 183, 185n16, 213, 231, 232, 449, 469n1 Zimbabwe, 10, 18n3, 30, 32, 36, 65, 67, 77, 78, 109, 122, 123, 171n3, 227n6, 230, 232, 267, 416n17, 423n24, 469n1 Zimbabwe Seed Sovereignty Programme, 232