Spurring ag productivity in Africa

Spurring ag productivity in Africa

- USDA details factors affecting ag productivity. - Economic policy changes alone could yield 4.7% improvement. - Report calls for mor

AFRICAN agriculture needs to be productive to feed a growing global population: that much is known. Exactly how to spur that productivity, on the other hand, is an extremely complex question.

A February report from the U.S. Department of Agriculture's Economic Research Service (ERS) suggests that economic policy reform and increased agricultural research are critical to improving agricultural productivity in sub-Saharan Africa (SSA).

Using econometric estimates of a production function for a panel of SSA countries, ERS economists analyzed key elements promoting and inhibiting total factor productivity (TFP) in the region.

The good news is that TFP in SSA has been improving over the past 30 years. ERS found that productivity has grown roughly 1% per year since the 1980s. The bad news, however, is that rates of technology adoption and productivity are still relatively low compared with other developing countries.

After stagnating from 1961 to 1985, TFP improved at that 1% per annum pace through 2008, which was only about half the average for all developing countries during the same time frame.

Before looking at what might drive productivity further, the researchers examined which factors had improved agricultural productivity post-1985. Among the most important developments were investments in agricultural research and economic policy reforms.

Investments in international agricultural research paid huge dividends in increased SSA productivity, according to the report. By 2005, new technologies from the Consultative Group for International Agricultural Research (CGIAR) had been disseminated for use on more than 21% of SSA cropland, with production from those acres up 65%, on average.

ERS estimated that every $1 invested in technical improvements by CGIAR -- an association of public- and private-sector donors supporting a network of 15 international agricultural research centers -- yielded roughly $6 in benefits. Similarly, agricultural research conducted by SSA countries on a national level yielded benefits at a 3:1 ratio for every $1 invested.

 

Policy reform

Among the biggest factors contributing to increased productivity in the region were economic and trade policy reforms. The researchers found that policy development played a major role in incentivizing improved production practices.

"Economic policies, rural infrastructure, farmer education and health, access to extension and credit services, secure land tenure and the presence or absence of peace and security influence farmers' access to new technologies and markets, returns to savings and investments and incentives to allocate resources to the most profitable enterprises," the report points out.

The issue of policy development spills over into multiple areas that potentially affect agricultural productivity. While policies that directly affect farmers' profitability -- trade and macroeconomic policies, for example -- are fairly straightforward, other issues arise related to policy issues such as infrastructure, labor and workforce training, armed conflict and the spread of HIV/AIDS.

In fact, among the key factors inhibiting productivity, the authors listed three that stem directly from the policy arena. Low investments in land improvement and fertilizer use have led to the long-term degradation of soil fertility; property rights and ownership in many SSA countries differ significantly from those in the developed world, discouraging such long-term investments.

Similarly, armed conflict and civil unrest remain a reality in some regions, posing an obvious deterrent to any large-scale agricultural productivity. Likewise, high rates of untreated HIV/AIDS infection pose a "significant constraint" to improving production.

The ERS economists simulated various policy changes in the SSA countries studied and found that, by far, the largest potential for increasing productivity would come via policy reform and increased research investments (Table). By eliminating trade and macroeconomic policies that reduce farmer earnings, for example, the analysis suggests an increase in productivity or output of 4.7%.

 

Hunger trust fund

Last month, the U.N. Food & Agriculture Organization (FAO) launched a new "solidarity trust fund" with the goal of mobilizing financial resources in Africa to strengthen food security in the region.

With an initial $30 million contribution from Equatorial Guinea, the Africa Solidarity Trust Fund is designed to pool resources from Africa's strongest economies and use them elsewhere on the continent to support hunger and nutrition initiatives.

FAO said the fund is intended to complement, rather than supplant, development assistance from overseas donors and will initially focus on "strengthening the resilience of rural families and communities in the face of recurrent droughts and other crises."

The FAO-administered fund will support Africa-led, Africa-owned initiatives that boost agricultural productivity in the region.

Also, in late February, the U.N. World Food Programme (WFP) announced that local farmer cooperatives in Ethiopia began delivering a record volume of maize to the program, enough food to support 1.8 million people for a month. WFP signed forward contracts with 16 cooperatives in Ethiopia to purchase more than 28,000 metric tons of maize last season that will be used for WFP relief distributions in the country.

"Our goal here is to support Ethiopia feeding itself," WFP country director Abdou Dieng said. "Buying food for our Ethiopia operation right here in Ethiopia makes sense in cost-effectiveness and in providing a boost for the local economy by helping small farmers get closer to markets."

 

Simulated impacts of policies to raise agricultural productivity in sub-Saharan Africa

Drivers of agricultural

Simulated

Increase in agricultural

productivity

policy change

productivity or output, %

International agricultural research

Double annual spending in SSA from 2005 levels*

4.1

National agricultural research

Double annual spending from 2005 levels*

3.4

Economic policy reform

Eliminate agricultural, trade and macroeconomic policies that reduce earnings of farmers

4.7

Labor force schooling

Increase average schooling levels of farm laborers to six years

1.3

HIV/AIDS therapies

Provide anti-retroviral therapies to all adult population currently infected with HIV/AIDS virus

2.1

Expansion of irrigation

Double irrigated area (from 5.6m to 11.2m hectares)

2.9

Reduction in armed conflict

Stop significant armed conflict in region

0.5

*Simulations are based on increasing real research and development spending by 7% per year until annual spending is doubled and then maintaining spending at the higher level. Due to lag times for research to affect farmers' productivity, about half the impact is realized after one decade and the full impact after about two decades.

 

Volume:85 Issue:10

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