AN OVERVIEW OF THE AGRICULTURE SECTOR IN AFRICA

1. AN OVERVIEW OF THE AGRICULTURE SECTOR IN AFRICA T. OLALEKAN WILLIAMS www.thecommonwealth.org

2. PRESENTATION OUTLINE • CURRENT CONTEXT OF AFRICAN AGRICULTURE - Role, Key Challenges, Successes • KEY QUESTIONS • CHANGING ECONOMIC ENVIRONMENT FACING AGRICULTURE • PRIORITY ACTIONS TO STRENGTHEN AGRICULTURAL SECTOR

3. Current Context (Role) • Agriculture in Africa accounts for: • - 35-50% of GDP in Africa • - 70% or more of total employment • Nearly 65% of Africans depend on agriculture • as their primary source of livelihood • Smallholder farmers account for more than • 90% of total agricultural production

4. Current Context: Role (contd.) Upshot • Agriculture is a big sector in Africa • and it does not take a large increase in • agricultural growth to have significant • impact on the national economy and • average incomes

5. Current Context (Key Challenges) • Poorly functioning markets • Limited access to finance • Poorly developed physical and social • infrastructure • Inequitable access to productive resources • Risks associated with adverse weather and • prices and lack of appropriate financial • instruments (e.g. insurance)

6. Current Context (Success Stories) Cotton in West Africa • 9% annual growth in productionand exports • over 40 years (1960-2000) • 200,000 farm households grow cotton, 30% • of Mali’s population

8. Current Context (Success Stories) Horticulture Exports from Kenya • Fruit & Vegetable exports quadrupled in real • terms between 1974-1999, exceeding $150 m • per year and becoming Kenya’s 3rd leading • foreign exchange earner • 100,000 small farmers produce and export • fruits and vegetables • Smallholders earn an average of $188 per year • from export of fruits and vegetables

9. Current Context (Success Stories) Cassava Transformation in Nigeria • Production tripled within a decade (1984-92) • Nigeria surpasses Brazil as world’s leading • cassava producer • 60% of farm households plant improved • varieties • Resulting price fall benefits consumers, • making cassava a powerful anti-poverty • weapon

12. CRITICAL QUESTIONS • Are any of the successes of African agriculture • replicable across wider areas to benefit larger • numbers of people? • How do we generate new thinking, grounded in • national and international realities, to revitalize • African agriculture? • How can new strategies and alliances in favour • of African agriculture be brought about?

13. Changing Economic Environment International Environment • Heavy farm subsidies in OECD countries • Shifting composition of traded goods • Global consolidation in food retailing • Preferential access to markets in EU & USA • - ‘Everything But Arms’ & AGOA

14. High Price of Agricultural Protectionism in Rich Countries • US $1 Billion a day supporting their own • agricultural sectors • Cotton production in West Africa supports • 11 million people. When world prices sunk in • 2001 due to US cotton subsidies, the region • lost US $ 190 million

15. Changing Economic Environment National Environment • Regulatory reforms (e.g. market liberalization) • New policy initiatives in Nigeria • 2000 – Merger of NACB, PBN & FEAP to • form NACRDB • 2003 – Small & Medium Enterprise • Development Agency of Nigeria • (SMEDAN) • 2005 – Pilot Microfinance Scheme

16. Changing Economic Environment National Environment (continued) • Emergence of Supermarkets with fresh food • retailing sections

18. PRIORITY ACTIONS

19. STRENGTHENING AGRIBUSINESS

20. Public Sector’s Role • Tackle market failure to reduce the transaction costs • and risks that inhibit the private sector and restrict • access of farmers and SMEs to markets • Invest in core public goods that build enterprise • competitiveness, e.g. infrastructure, R & E etc. • Reduce, simplify or remove regulations and costs • that create a competitive disadvantage for farmers and • SMEs

21. Public Sector’s Role • Create policies that support pro-poor agriculture. • Policies to reduce inequality to productive assets • and to secure property rights • Fill the agricultural finance gap • Policies to support institutions (e.g. producer • organizations, marketing associations) that will • assist to connect rural poor producers to markets

22. Private Sector’s Role • Development, organization and management of supply • chains – hear and see the market • Investment in market expansion and competitiveness • enhancing measures, e.g. processing facilities • Work with public sector to develop policies • Develop linkages with multinationals and large • domestic companies

23. Civil Society’s Role • Mobilisation and organisation of rural poor producers • Awareness raising to encourage stakeholder acceptance • and adoption of new export requirements • Pilot testing of new ideas and projects with the poor • Advocacy – bring the demands and needs of the poor • to the attention of governments and private sector

24. Organizational structures to strengthen pro-poor agribusiness development • Contract farming involving out-growers and a link- • exporter • Farmer-controlled enterprises • - Linkage independent • - Linkage-dependent • Cross-border agricultural supply chains • Clusters and networks linked with intellectual • property rights

25. Examples of ComSec technical assistance programs to strengthen agribusiness • Commonwealth Secretariat technical assistance to • Nigeria to improve compliance with SPS measures • for non-traditional exports • Commonwealth Secretariat support to The Gambia in • agro-processing • Commonwealth Secretariat-FAO collaborative • technical assistance in Eastern & Southern Africa

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