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Agricultural Development and Food Security in Sub-Saharan Africa

Agricultural Development and Food Security in Sub-Saharan Africa. Building a Case for More Support (WELDEGHABER KIDANE). THE PROBLEM. almost 33 percent - close to 200 million people, undernourished Nearly half live on less than $1 a day - lower than three decades ago

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Agricultural Development and Food Security in Sub-Saharan Africa

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  1. Agricultural Development and Food Security in Sub-Saharan Africa Building a Case for More Support (WELDEGHABER KIDANE)

  2. THE PROBLEM • almost 33 percent - close to 200 million people, undernourished • Nearly half live on less than $1 a day - lower than three decades ago • Number almost doubled since the 60s • highest increase of number of poor observed in SSA - rose by 72 million during the last decade • Poor performance of agriculture lies at the heart of the problem.

  3. PROBLEM Cont... • food crises and famines, easily triggered by lightest of droughts, floods, pests, economic downturns or conflicts. • only continent where hunger is projected to worsen unless drastic measures are taken agricultural exports have fallen while imports of food have surged • food aid interventions common feature of African news headlines

  4. Structural Adjustments • implemented 1980s - 1990s to redress policies that taxed agriculture heavily • Impact Mixed • Liberalization removed deliberate price discriminations • provided (in theory) incentives efficient resource allocation • Terms of trade for agriculture deteriorated - input prices grew faster than output prices • Privatization accompanied by stringent budget regimes  led to collapse of agriculture services • decreasing public support + weak private sector  undue dependence on food imports and food aid

  5. Context & Objective of Study • In July 2003, AU resolved, to allocate 10% of budget • translating commitment into political action not easy due to • Objective of study: to provide sound arguments for ministers Maputo Declaration is just

  6. Components of the study • Background Document • Country case studies 10 countries: Chad, DR Congo, Ethiopia, Ghana, Kenya, Malawi, Mali, Nigeria, Tanzania and Zambia; • Main Reportg: Outlining Boarder policy and strategy options for Africa • Two regional workshops in partnership with AU/NEPAD Sec and RECS

  7. KEY ISSUES • Can agriculture in SSA be an engine for broad-based economic growth? • What should be the role of the public and private sectors? • What would be the optimum level of government engagement

  8. Structure of the Main Report • Introduction • Food security and nutrition in SSA • Strategic options for poverty and food insecurity reduction • Agr performance in SSA • Constraints and Opportunites • Success stories in and outside SSA – lessons learned • Where do we go from here

  9. CONSTRAINTS TO SUSTAINABLE AGR. DEVELOPMENT IN SSA

  10. CONSTRAINTS TO SUSTAINABLE AGR. DEVELOPMENT IN SSA • Political unrest and armed conflicts • Non-conducive policy environment and poor institutional framework • Policies failed • Limitation to expanding cultivated area • Limitations to improved productivity

  11. Political unrest and armed conflicts Worst performers in terms of daily per capita calorie intake during the period 1990 to 2002 were Burundi, Democratic Republic of the Congo, Guinea-Bissau, Eritrea and Liberia. Conflicts impact through: Diversion of budgets and human resources to defence and internal-security Associated risk undermines private investment both domestic and foreign markets and other services are disrupted infrastructure and private property are destroyed, and so on Agr. most affected.

  12. political unrest and armed conflictsCont... • Agriculture is often one of the most affected sectors  Farmers most affected • Rural populations are displaced - fields unattended, with drastic consequences • Social ties and capital are dislocated

  13. Non-conducive policy environment and poor institutional framework • Inadequate political commitment and action • Weak institutional capacity and structure for policy programme/project development and implementation • Policies not favouring agriculture and rural development • Unstable macroeconomic environment • Legislative framework either weak, missing or not properly enforced • undermines private sector involvement and investment.

  14. Why past policies including SAPs did not work • For some reforms under SAP not been fully applied • Others attribute failures to poor governance • Strong executive, largely inefficient and often corrupt and weak civil society organizations • Macroeconomic stabilization policies broadly enforced but expenditures on defence, internal security, diplomacy etc. are protected • public contracts awarded or managed in a non-competitive way • At times markets destabilized by deliberate misinformation and unconvincing promises

  15. Why policies failed .. • Sudden public sector retreat following sweeping reforms in the 1980s and early 1990s • downsizing of all public institutions - unable to maintain a critical mass of professionals • loss of most experienced and competent staff to internal and external competitors who offered better conditions of service • "brain-drain" of African -highly qualified Africans left the continent for the West • 1960 to 1975 an estimated 27,000 • 40 000 between 1975 and 1984 • 60,000 between 1985 and 1990 • average of 20,000 annually since the 1990s.

  16. Weak Research Capacity • Some basic figures on agricultural research inMozambique and Brazil • Total number of staff in recently established Mozambican Institute for Agricultural Research (IIAM) 902 people - Only 2 percent of those are researchers hold MSc and PhD degrees. • Brazilian Agricultural Research Corporation (EMBRAPA); a public corporation • has 37 research centres and 3 service centres, • present in almost all 24 Brazilian states • 8,169 employees - 2 221 are researchers with master’s degrees and 53% with doctoral degrees • Average salary US$1 700 per month

  17. Limitations to area expansion – (a) Land Tenure System • Insufficient security with communal and government ownership to encourage private sector investment • Local chiefs custodians of land  distribution arbitrary • not favour external investors with capital and know-how • infringes on rights to access of community members when powerful private investors exert pressure or bribe local leaders • women's access not always guaranteed - forfeit upon divorce or in the event of death of husband. • system does not allow for a land market  land fragmentation and inefficient utilization

  18. Limit to area expansion – (b) Physical Availability • Per capita land availability dwindling • Population pressure and lack of alternative employment opportunities, • land degradation and desertification • Most countries are land-constrained - Burundi, Ethiopia, Kenya and Rwanda - yet recent production increases in some of these countries attributed to area expansion • marginal, grazing and forest lands being switched to crop production, with adverse effect on sustainable livelihoods and the environment. • opportunities exist for area expansion in some SSA, provided: • infrastructure is established to facilitate access • measures put in place to protect land from erosion and degradation

  19. Other Limitation to Area Expansion – (d) Mech. Power • Low traction power . agriculture dominated by a hoe culture • modest increase in trend in tractor use remains still very low • more than 5 percent per annum between 1961 and 1973 • Only 2 percent and 1 percent 1973-1994 and 1995-2002, respectively

  20. Limitation to area Expansion – (e) Labour • Farmers engaged in off-farm income-generating activities • The HIV/AIDS pandemic, especially in Southern and East Africa,

  21. (a) Limitation to Increased Productivity - Water • Recurrent droughts and increasing (7 countries in 19980/90 to 13 1991/03) • Investment in water harvesting and Irrigation still inadequate • Irrigated agriculture not increasing 2.1% excluding Sudan and South Africa, and 2.8 if SA included; • FAO estimates availability of sufficient water to develop ca 42.5 million ha under full irrigation • Only significant (>10%) in five countries; 25 countries <2% • Potential high e.g. Eth 3.7 million Ha (2%)

  22. Irrigation Africa Vs Other Regions of the World

  23. (b) Soil Fertility • Low input and low output technology • Average cereal yield 1.3 to 1.4 tonnes per hectare • ranges from 0.2 in Botswana to 4 tonnes per hectare in Mauritius • Fertilizer application lowest in the world; yet soils are generally poor • Average fertilizer use 35 Kg/ha in the 1980s; declined to 26 Kg/ha in the 1990s • Reasons: increased price, subsidy elimination and access to credit • Southeast Asia and Latin America, increased from 50Kg and 100Kg to 150 and 200 Kg, respectively

  24. Soil Fertility Mgmt.

  25. © Weak Research, Credit and Extension Services • Understaffed and under equipped research and extension services; • Poor research/extension/farmer linkages • improved varieties account for 70% to 90% yield increase in Asia and the Near East: only for 28% in Africa • Credit services have failed • regional cooperation in research not promoted (economies of scale)

  26. Yield Comparison

  27. (d) Marketing & Market Access • Transaction cost very high : a ton of maize USA (11,000Km) to Mombassa US$45 to US$48; Mombassa/Mbrara in Uganda (1,500Km) ranges from US$ 125 to US$140. • rural transport costs e.g. Ghana and Zimbabwe 2-3 higher than in Asia – Pak, Indonesia and Srilanka • Road connectivity less than 2.4Km/1000 population; less than 40% are paved • Market failures the norms  • weak and colluding private traders monopsony • lack of information

  28. (e) Deteriorating Terms of Trade – Barter Terms of • Farmers face low farm gate output and high input prices (barter terms of trade) • Believed input prices escalated quicker than output prices after SAP - currency realignments, subsidy removal, tax reform and other changes • Deterioration of relative prices between inputs and consumer goods e.g. Ethiopia, price of food increased by 12% - 1995 to 2000, price of fertilizer (DAP) increased by 76% and 8X for maize. • Deteriorating terms of trade more pronounced in the 1980s

  29. Deteriorating International Terms of Trade for SSA main exports • Slump of price of Arabica in 1986-1987, resulted in a 40 percent fall in Ethiopia's terms of trade led to 6 percent drop in Ethiopia's real income • Imports about 15 percent of Ethiopia's national expenditure, • Better for. food prices  reduction only ca 4 percent in US-dollar terms 1995 to 2004 • same period, price of beverages - main exports - by 35 percent • price index for all commodities increased by nearly 50%

  30. Terms of trade between agricultural commodities and manufactured products

  31. (f) Unstable and uncertain input and output prices • Year-to-year and price variations high, with adverse effects on farmer incomes. • variation largely explained by lack of storage facilities and absence of public sector price-stabilization measures such, e.g. consumption credits and price support. • No mechanism put in place to ensure minimum farm gate prices after SAP • agricultural demand rigid; prices are unstable small change in the supplied quantity results in large differences in price. • “Smallholders ... much more vulnerable to global price volatility • poor targeting and programme or project aid food aid increases supply faster than demand  downward pressure on prices • vicious circle of low income-low purchasing power of inputs andlow input application-low output-low income needs to be broken.

  32. (g) Declining trend in public support to agriculture • agriculture given a relatively low importance on the political agenda of most SSA countries • Evidence from case studies, 1990- 2001  budgetary allocation low and declined from ca 5 percent in 1990/91 to 3.5 percent in 2001/02 • Highest proportional decline in Malawi  from around 7% to only 4.2%

  33. (h) Decline in official foreign aid for agricultural development • Decline in domestic public expenditure coupled by decrease in foreign development assistance and private sector investment in agr. • Globally OECD development aid in agriculture, rural development first increased from US$1 billion in 1960 to more than US$30 billion in 1991, but decreased to less than US$20 billion in 2000. • Aid to agr US$4.8 billion in 1989; slightly above US$2.5 billion after 1997  insignificant vis-a-vis. US$240 billion budget for CAADP • Asian tsunami showed public opinion in developed countries much more easily mobilized for emergency aid through spectacular media reports 

  34. SUCCESS STORIES WITHIN AND OUTSIDE AFRICA • Africa: • Tea in Kenya;produces about 16 percent of the world's black tea • ranks second after Sri Lanka in tea exports, and third after India and Sri Lanka in production. • smallholder sector accounted 62% in 2000 • Rice in Mali and Guinea • Cassava in Central and West Africa • Common Factors to Success: Direct Public Sector Support Conducive macroeconomic environment Peace and stability

  35. Success outside Africa • Vietnam: • a significant exporter of coffee, rice, tea, cashew nuts and forestry products, generating US$2.8 billion of export earnings. • Food production increased by 1.3 million tonnes annually • Diversification from food into industrial products • India: • Food-grain production increased from 50.8 million tonnes in 1950 to 176.3 million tonnes in 1990 and 206 million tonnes at the turn of the Century. • Self-sufficient with substantial reserve and exporting appreciable quantities of wheat and rice. • Reasons for Success • Improving the functioning of agricultural markets, through the stabilization of agricultural prices; • Public investment on research, infrastructure, water control and extension services • Economic incentives to facilitate increase in agricultural labour productivity

  36. Is support to agriculture a profitable investment? • Answer is yes; • E.g. Malawi 2002-2003 - total cost of importing cereals (aid and commercial imports), amounted to 788 539 tonnes at MK 15.6 billion • If the money was invested in domestic production, then the net production gain would have ranged between 2,489,276 and 4,200,992

  37. Conclusion “food insecurity in Africa can be explained by the fact that some decision-makers believe that there will always be ‘cold’ money available in case of food emergency, and that it is better to invest their ‘hot’ money into other activities”. Prime Minister of Uganda

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