ALEJANDRO NIN PRATT Research Fellow OUSMANE BADIANE Africa Coordinator

1. RECENT PROGRESS IN THE ROLE OF AGRICULTURAL DEVELOPMENT IN REDUCINGPOVERTY IN AFRICA AND PERSPECTIVES ON THE WAY FORWARD ALEJANDRO NIN PRATT Research Fellow OUSMANE BADIANE Africa Coordinator International Food Policy Research Institute

2. OUTLINE • Why is agriculture important for Africa? • Agriculture’s past performance and lessons to be learned • Success stories behind recent changes • The way forward Page 2

3. IMPORTANCE OF AGRICULTURE Page 3

4. AGRICULTURAL GROWTH AND POVERTY REDUCTION IN AFRICA • Agriculture contributes with a significant share of total production in Africa’s economy • Agricultural growth drives growth in other sectors of the economy • Agriculture plays central role in African exports • Most poverty still concentrated in rural areas • Agricultural growth drives overall income growth in rural areas • Implications: • Agriculture significantly contributes to economic growth • Reduces overall poverty, hunger, and malnutrition more than any other sector Page 4

5. EFFECTS OF AGRICULTURAL GROWTHON OVERALL RURAL INCOMES Incremental income from 1$ additional revenue from agricultural tradables : O. Badiane, based on Delgado et al (1988) Page 5

6. AGRICULTURAL TRADE AND ECONOMIC GROWTH AGR. EXPORT AND DOMESTIC GROWTH AGR. EXPORT AND DOMESTIC GROWTH DOMESTIC GROWTH EXPORT GROWTH 0.04% To 1.83% 1% Growth : O. Badiane Page 6

7. AGRICULTURAL GROWTH AND ECONOMIC GROWTH AGR. GROWTH AND INDUSTRIAL GROWTH INDUST. GROWTH AGRIC. GROWTH 1% To 1.32% 1% Growth : O. Badiane Page 7

8. LOW AGRICULTURAL INCOMES ARE GENERALLY CORRELATED WITH HIGH POVERTY RATES Page 8

9. GHANA: AGRICULTURAL-LED GROWTH IS MORE PRO-POOR Page 9

10. FASTER AGRICULTURAL GROWTH IS KEY TO POVERTY REDUCTION IN AFRICA • The most effective way to reduce poverty is to raise the productivity of resources that poor people depend on for their livelihood • Agricultural land • Agricultural labor • Off-farm rural labor Page 10

11. AGRICULTURE’S PAST PERFORMANCE Page 11

12. TRENDS IN AGRICULTURAL AND GDP GROWTH : M. Johnson Page 12

13. AGRICULTURAL GROWTH IS SPREADING : Badiane and Ulimwengu Page 13

14. SO IS ECONOMIC GROWTH : Badiane and Ulimwengu Page 14

15. TRENDS IN AGRICULTURAL PRODUCTIVITY Page 15

16. SUCCESS STORIES EXPLAINING CHANGE Page 16

17. POLICY CHANGES • “One of the most fundamental shifts in the development strategy for Africa was to view agriculture not as a backward sector but as the engine of growth, an important source of export revenues and the primary means to reduce poverty.” (Kherallah et al. ,2000) Page 17

18. AGRICULTURAL TRADE AND POLICY CHANGES Page 18

19. CASSAVA (Nigeria, Ghana and Southern Africa) New varieties and modern disease fighting research (Nigeria and Ghana and Southern Africa). MAIZE (West Africa) Improved yield and nutritional content of open-pollinating varieties instead of hybrids. SUCCESS IN AGRICULTURE (I) Page 19

20. COTTON (Francophone West Africa) Successful organization and coordination of the production chain with technical innovations (high yield varieties, fertilizer use, access to equipments) RICE (West Africa) The Africa Rice Center (WARDA) produced their first inter-specific hybrids combining hardiness and wed suppression of African species with the high yields of the Asian varieties SUCCESS IN AGRICULTURE (II) Burkina Faso cotton farmers (Brahima Ouedraogo/IRIN) Page 20

21. SMALLHOLDER DAIRYING (Kenya) Decontrol of milk pricing in 1992 + available technology (crossbred cows) spurred a surge in production and commercialization of milk in informal markets. CUT FLOWER EXPORTS (Kenya) Increased from $13 million in 1970 to $155 million in 1999 SUCCESS IN AGRICULTURE (III) credit: Smallholder Dairy Project Page 21

22. INSTITUTIONAL CHANGES • NEW PARTNERSHIP FOR AFRICA’S DEVELOPMENT (NEPAD) • Address challenges facing African continent • COMPREHENSIVE AFRICA AGRICULTURAL DEVELOPMENT PROGRAM (CAADP) • Framework for restoration of agricultural growth, food security, and rural development with key principles and targets: • 6% average annual sector growth • Allocation of 10% of national budgets to agriculture • Exploitation of regional complementarities and cooperation • Accountability, partnerships, regional coordination Page 22

23. THE WAY FORWARD Page 23

24. IMPLICATIONS FOR COUNTRY AGRICULTURAL GROWTHRequired annual agricultural growth rates to meet MDG1 : S. Fan (2007) Page 24

25. REALITY CHECK:Progress against CAADP 10% Budget Goal (2004) : S. Fan (2007) Page 25

26. POVERTY OUTCOMES UNDER CURRENT GROWTH TRENDS(Poverty Headcount, 1$/day, 2005) : S. Fan. 2007 Page 26

27. FOOD AND NUTRITION SECURITY IS POSSIBLE 60 Share of Malnourished Children in SSA 50 40 33 33 30 28 30 Percent 20 17 7 10 0 1997 2015 2025 1997 2015 2025 CURRENT TRENDS ALTERNTIVE SCENARIO : O. Badiane, based on Rosegrant et al (2006) Page 27

28. LESSONS FOR AGRICULTURAL GROWTH AND POVERTY REDUCTION STRATEGIES • Agriculture remains the main engine of poverty reducing growth for the near future • Recent performance is encouraging but still below required levels • What did we learn from success factors behind the recent growth performance? • How should we use this experience to sustain and broaden the recovery process? What should change? What should we bring into the process? Page 28