Hunger has become such a significant and strategic problem in Sub-Saharan Africa (SSA) that it can no longer be evaded. With the majority of Africans living in rural areas, rural and urban population rapidly increasing, cereal and livestock production stagnant or falling, nearly 200 million people living with food insecurity, child malnutrition doubling, poverty increasing, and economic growth lagging behind other developing regions, a new development strategy is urgently needed for this region. To drive out hunger, agriculture needs to be the core component of poverty alleviation programs in SSA. But agriculture alone will not end hunger. Seasonal migration and rural nonfarm activity are also important to the livelihood strategies of rural people. And HIV/AIDS has taken the life of an estimated 7 million agricultural workers since 1985, and is projected to reduce the agricultural labor force by another quarter or so by 2020 in some African countries. Therefore, linkages with other sectors such as health and the nonfarm economy are essential for success.

On November 26-27, 2001 the International Food Policy Research Institute (IFPRI) hosted a workshop for USAID titled "Future Opportunities for Rural Africa." The workshop reviewed key issues that will affect the future of agriculture in Africa, including trade and market liberalization, technology development and dissemination, public infrastructure and human capital, equitable growth, and environmental degradation. Recognizing that past investments in agricultural development in SSA have had mixed and often disappointing results, emphasis was given to identifying some of the more promising approaches for achieving successful agricultural growth in the future that could benefit the poor and protect the environment.

Managing Trade and Market Liberalization

The trade and market liberalization reforms undertaken as part of structural adjustment programs in recent years have improved market performance in many African countries, yet the results have proved disappointing in terms of agricultural growth, export performance and poverty reduction. It is now recognized that these reforms were necessary but not sufficient to generate greater supply response and competitiveness in export markets, and they did little to ensure that small scale farmers, particularly those living in areas more remote from roads and markets, could benefit. Problems with quality standards, timing, and assuring adequate supply are penalizing local products in both domestic and international markets. More emphasis is therefore now needed on market development, including strengthening institutions responsible for standards and quality control, enforcement of contracts, market information, product promotion, etc; strengthening market support services (e.g. credit and other financial services, transport, refrigeration and storage); improving rural infrastructure, especially roads and telecommunications; and reinforcing policy makers' commitment to market reforms. Interventions that lower market transaction costs and provide producers with additional risk reduction mechanisms to supplement or replace traditional risk sharing mechanisms like social capital and informal safety nets will also be necessary. Non-governmental organizations (NGOs), community-based organizations (CBOs) and the private sector could play a greater role in facilitating the development of effective marketing institutions, particularly in remote areas.

There is concern that market constraints will limit possibilities for agricultural led growth in Africa unless additional market and policy reforms are made. African farmers must become more competitive in export markets if they are to gain market share. Africa's traditional export crops like coffee and tea have lost their competitive edge to other regions, in large part because of lack of technological change in recent decades and because of poor quality. These are problems that could be reversed with the right policy reforms. New niche markets for high value products and eco-friendly commodities exist, but require organized marketing and assured quality at international standards. Success will again depend on strengthening marketing institutions and investing in the right kinds of infrastructure.

In the global context, one of the greatest challenges facing Sub-Saharan Africa is getting developed countries to acknowledge the role that changing their own domestic agricultural policies can play in facilitating the entry of African nations into global markets. Until subsidies for agricultural production and trade barriers in developed countries are reduced, African countries will not be able to effectively participate in global agricultural markets. African countries will also have to struggle to compete against subsidized imports in their own domestic markets. SSA countries need to be effective participants in the WTO negotiations, and they badly need technical and institutional support for this purpose.

The greatest market opportunities for future agricultural growth are likely to be increasing domestic markets. Rapid urbanization will lead to greater commercialization of African agriculture (at present only 25-30 percent of production is marketed) and to greater demand for higher value crops and livestock products and processed foods. Because of agricultural growth linkages, any acceleration of agricultural growth rates should also lead to expansion of domestic markets beyond that created by urbanization alone, including within rural areas. The development of regional economic arrangements within Sub-Saharan Africa such as ECOWAS and SADC may also offer new opportunities for marketing and trade in agricultural products. But again success will depend on strengthening marketing institutions and infrastructure to reduce marketing costs and improve quality standards.

Achieving a Technological Revolution to Increase Agricultural Productivity and Lower Costs of Production

Technological change is fundamental for successful agricultural growth and the average returns to past investments in agricultural research have been impressive, despite the poor performance of many national agricultural research institutions in Africa. Yet despite this evidence, African policy maker and international donors have allowed investment levels in agricultural research to stagnate in recent years. This is part of the reason for stagnating yields and food production, and the loss of competitiveness in traditional African export crops. Reversing this decline will require political persuasion to obtain a new commitment to long-term investment in technology development and dissemination, and significant reform of the publicly funded agricultural research and extension systems to make them more responsive to farmers' needs. At present, too little of the research that is taking place is market or farmer driven.

A renewed commitment to the provision of multi- year financing is essential to provide needed stability in the funding of long-term research programs and projects, and to enable national research institutions (NARIs) to undertake strategic planning and institutional strengthening. But such renewal depends on re-establishing confidence among political leaders in publicly funded agricultural research institutions. Two types of changes are needed. One is to redefine the relationship between NARIs and other public, private and civil society agents that undertake agricultural research and extension. The other is to reform the way public research institutions are funded and managed.

There is growing capacity for research and extension outside NARIs and this offers new opportunities to forge new partnerships between public institutions, universities, private-sector firms, and NGOs to capture synergies and differing comparative advantages. For example, private seed companies and input suppliers are playing larger roles as many countries liberalize and privatize their agricultural input markets. Many of these companies not only develop improved products of their own, including undertaking agricultural research, but also advise farmers about the use of products they sell. Marketing and processing firms are helping to reduce post- harvest losses. NGOs have also become important actors in spreading natural resource management practices regarding soil and water management, watershed development, and social forestry. They have a particular advantage in helping communities take collective action to implement improved natural resource management practices at the landscape level. Partnerships between these different kinds of agents could vary from the public sector contracting out some research and extension work to others who can undertake them more efficiently or perhaps in more pro-poor ways, to joint research undertakings such as might be needed for some kinds of germplasm improvement and biotechnology research. The allocation of research activities amongst different types of agents could also be promoted by establishing competitive grant schemes at the regional and national levels.

New partnerships of these kinds would help improve the performance of NARIs. Additional reforms needed may include: a) increased reliance on user-based financing of some kinds of research to increase the sustainability and accountability to research users; b) forging, strengthening and institutionalizing linkages between researchers and research users in priority setting, conducting research and evaluating results, perhaps through established partnerships with farmers' organizations, trade associations and private firms; c) decentralizing NARIs and providing revenue retention authority to increase institutional autonomy and flexibility and spur competition among individual research units; and d) providing management training and rewarding leadership and commitment to enhance the success of national agricultural research systems.

On its own, the private sector is unlikely to undertake most of the research needed in SSA, including productivity enhancing biotechnology research. There are limited opportunities for private sector firms to recoup their investment costs in Africa specific research. Consequently, the public sector must continue to play a key role, either by undertaking the research itself or by funding others to do it. Publicly funded research is especially needed on post-harvest technologies, soil conservation and improvement, and biotechnology.

Even with potentially successful technologies, input delivery systems and rural credit institutions have traditionally been difficult to develop and have inhibited technology adoption in SSA. Therefore, comprehensive development strategies that look beyond simple technology development to address barriers to adoption are critical.

The lack of rural delivery and credit systems to deliver technologies to farmers is a serious problem. Government run agricultural extension services are degenerating in a number of countries, and devolution of agricultural extension services to NGOs and community-based organizations has not been matched with needed financial resources or with the kinds of capacity building necessary to make this new paradigm operational.

Building the Levels of Public Infrastructure and Human Capital Needed for Successful Rural Growth

The level of rural infrastructure in SSA today is a small fraction of the levels that India and other Asian countries had in the 1950s prior to their Green Revolution. Moreover, the majority of Africa's farmers live in areas that have limited access to roads and markets. Without substantial increases in key infrastructure and human capital, it is hard to see how Africa can achieve the kinds of agricultural growth rates required to alleviate hunger, or how most smallholder farmers can participate in that growth. Recent evidence from India and China shows how critical past infrastructure investments were in achieving rapid agricultural growth in those countries, and even today additional investments in roads, telecommunications, agricultural research and education still yield high returns in the form of agricultural growth and rural poverty reduction, even in many poor rainfed farming areas. Similar studies need to be undertaken in Africa to help set future priorities for public investment. Failure to invest more in rural infrastructure will lead to disappointing levels of national agricultural growth and to dualistic development patterns wherein farmers located near roads and markets will benefit from trade and market liberalization reforms and prosper while less fortunate farmers retreat further into subsistence farming.

Even though the returns to rural infrastructure investments are high and they benefit other sectors as well as agriculture, many African countries cannot afford the levels of investment required. New technologies for power generation (e.g. windmills and solar energy) and communications (e.g. satellite phones and TV) offer some low cost alternatives, but basic infrastructure in roads, transportation, water, education and health systems still require substantial investment in bricks and mortar and in the public institutions responsible for their provision. Moreover, with relatively low population densities and low value added per unit area, the possibilities for raising the needed funds at local levels are severely constrained. Central governments will have to provide much of the funding, and they in turn will require increased support from international donors.

There is also need to improve the quality of infrastructure and public services in rural Africa, including their maintenance, to reduce investment costs, and to ensure that the right kinds of infrastructure and services are provided for agricultural growth. Greater devolution of decision making to local governments and community-based organizations is important, both in the design of new investments and in their ownership, management and maintenance. Left to itself, centralized government agencies tend to overbuild rural infrastructure, placing, for example, greater emphasis on building all- weather roads for trucks when unpaved roads suitable for livestock transport may be quite adequate for local communities and cost much less to build and maintain. Co-financing arrangements can be very helpful in achieving local ownership, but are not sufficient. There is also need for clearly defined roles, local capacity, performance incentives, transparency and accountability. Moreover, the capacity for locally driven development is limited unless local systems of public finance are in place and there is adequate capacity to manage development funds.

The public institutions responsible for providing infrastructure and basic public services also need strengthening, at both national and local levels. These institutions have declined in recent years, often victims of excessive zeal to downsize the public sector as part of structural adjustment programs, without adequate differentiation of inappropriate roles that some public agencies had performed (e.g. marketing monopolies) from much needed roles like the provision of rural roads and oversight of liberalized markets. Many public institutions still need to be reengineered to provide revised mandates and management structures, but thy also need increased financial support. New financing arrangements are also appropriate to empower the users of public services (e.g. vouchers, user fees and other cofinancing mechanisms), and new partnerships need to be forged between the public, private and NGO sectors for the provision of some public services. Even where government must pay all or most of a service, this does not mean the public sector necessarily has to supply it. Contracting out arrangements with other parties can be much more cost effective, and may offer better possibilities for involving local people and communities. The types of partnerships desired will vary by sector and function, with many more opportunities to diversify supply arrangements for education and health services, for example, than provision of rural roads and market regulation.

Rural education can be a powerful investment for achieving agriculture productivity growth and reducing poverty, population growth and malnutrition. At the farm- level, non-formal training may be the most effective, including training for farmers and women's organizations to develop technologies and carry out their own agricultural research. There is also a need for formally trained agricultural researchers and extension workers, though investments in training are lost if incentives are not in place to retain trained people. New training modalities such as information technology and distance learning offer additional ways of training larger numbers of people.

Microfinance institutions have been shown to be an effective mechanism for providing needed credit for entrepreneur activities and to smooth the seasonal consumption patterns of the poor. Microfinance schemes that have been built on local knowledge and practice, such as the use of local savings schemes and revolving credit mechanisms, have a good record of success. But microfinance institutions have largely shied away from lending for agriculture, leaving small-scale farmers with limited access to agricultural credit. Given their widespread networks and established relationships with producers, traders also have comparative advantages in delivering rural financial services, though institutions need to be developed for regulating their activities.

Making Agricultural Growth Equitable

Agricultural growth that involves small-scale farmers can lead to considerable poverty reduction in its own right. But it will not be enough to eliminate poverty and hunger because many of the most vulnerable of the poor have limited access to land and other key resources needed to respond positively to growth opportunities. Labor markets can play an important role here, but are often thin and imperfect in rural Africa. Frequent crises and conflicts and HIV/AIDS are also significant constraints to achieving equitable agricultural growth. Agricultural growth must therefore be accompanied by adequate safety nets to provide targeted assistance to the poor, both in times of crisis (e.g. droughts and conflict) and on a long term basis in the case of the chronically poor.

If agricultural growth is to significantly reduce poverty, then it is imperative that the vast majority of Africa's small- scale farmers share in that growth. Market and trade liberalization policies together with the virtual withdrawal of the public sector from the provision of many key agricultural services have made small farm agricultural development more difficult, especially in areas that have poor access to roads and markets. Even though small-scale farmers are still often the most efficient producers, they are often at a considerable disadvantage in both input and output markets and cannot easily compete against well connected large-scale farmers who buy and sell in much greater quantities and have better information about markets. Small farmers will need to diversify into labor intensive and high value products to improve their comparative advantage and value added per hectare, and they will need to organize to obtain better access to, and better terms in, the market. This will be especially important for export and high value products. They will also need to attain high quality standards for their products. Formation of voluntary farm cooperatives and associations offers one promising avenue. Contract arrangements with marketing agents (e.g. super markets and exporters) are also emerging as another promising approach in some parts of Africa. Policy makers also need to ensure that small farmers are not penalized in their access to public services, that publicly funded agricultural research addresses small farm problems as well as large, and that adequate infrastructure investments are made in the areas where small farms are concentrated.

Land is becoming scarce in many parts of SSA and many farms are becoming too small to provide viable livelihoods. Opportunities for redistributing land are more promising in today's political climate, and are even high on the political agenda in some countries (e.g. Zimbabwe and South Africa). Evolving land lease and sale markets are playing an important and spontaneous redistributive role in many, especially densely populated, communities, but government attempts to leverage such market transactions through market assisted land reform programs have met with only modest success. The integration of HIV/AIDS education into agricultural projects and capitalizing on expert practitioners available in the fields of public health and education could help reduce the spread of HIV/AIDS. Developing institutions, including those for credit, micro finance, management of natural resources and others are particularly difficult in an environment where mortality is very high and there are few incentives to undertake initiatives with a medium to long-term planning horizon. Though HIV/AIDS crosses over socio-economic lines, the asset bases of the poor are most significantly affected when households are affected by HIV/AIDS.

The issue of targeting assistance to the needy is complicated and requires further research to identify who the poor are, where they are located, and their key characteristics. Interventions need to avoid disturbing important safety nets that are already built into social infrastructure. Finding effective mechanisms for improving the social, physical, and natural capital assets of the rural poor requires higher levels of community participation and involvement of stakeholders in project planning and development. NGOs and CBOs have demonstrated considerable success in undertaking poverty-reduction programs, as well as handling and distributing emergency assistance.

Reversing the Degradation of Natural Resources While Also Accommodating Growing Rural Populations

Land degradation and the unsustainable use of natural resources are limiting the potential for agricultural development in Sub-Saharan Africa. Growing populations and continued low levels of input use exacerbate the problem. Finding mechanisms for smallholders to take advantage of existing technologies for sustainable land management is a key issue to resolve. A wide variety of technologies for reducing land degradation and improving yields are available for the various agro-ecological conditions in SSA. The pressing question is how to deliver these technologies to farmers. Government, NGOs, CBOs, the private sector and individuals all have a potential role in the dissemination of information on technologies that will lead to improved land management. In general, strong community based institutions offer the greatest potential for the exchange of information on new technologies. Strengthening farmer organizations and other CBOs will facilitate innovation and adoption of natural resource conservation technologies. NGOs also have significant potential to have a lasting impact on land management through the development and dissemination of land management technologies and by organizing communities for successful collective action.

Additionally, institutional reforms are needed to create better incentives for rural people to sustainably manage their resources. In several Sub-Saharan African countries, the state has become increasingly involved in trying to regulate and manage natural resources, often generating negative environmental consequences and increasing incentives for resource degradation. Community- led initiatives may offer greater promise.

There is increasing evidence that relieving population pressure is critical to reducing natural resource degradation. The induced innovation paradigm (i.e. more people less erosion) does not hold in many cases. Developing non- farm activities may be a key livelihood strategy for reducing the negative effects of population on the environment - particularly in population dense areas where access to land is limited. In addition, effective livelihood strategies for less favored areas that incorporate natural resource management are urgently needed; however, they must be linked to the comparative advantages of these marginal areas.

New and emerging technologies such as geographic information systems (GIS) and biotechnology also offer opportunities for better management of natural resources. Remote sensing and GIS tools allow for empirical analyses of land use change over time and in a spatial context. Biotechnology research has shown that high value commodities for export and food crops can potentially reduce external input needs. For many regions of SSA that are dependent upon one or two staple crops that suffer from pests and diseases, new crops that offer resistance have enormous potential implications for food security and rural livelihoods in general. As food security and incomes improve, farmers will be more likely to invest in natural resource management technologies.

Emerging markets for ecosystem services have the potential to generate additional income from the sustainable use of natural resources (e.g. ecotourism and the sale of non-timber forest products) or with productive activities that are likely to simultaneously improve land quality while facilitating the preservation of existing natural resources (e.g. carbon sequestration through tree planting). However, developing markets for ecosystem services will present many of the challenges that more traditional markets face, including requiring access to roads and other infrastructure, institutional requirements of third party verification, and establishing financial systems to pay farmers for ecosystem services (particularly in the case of carbon sequestration).

USAID's Initiative to End Hunger in Africa

The implementation of USAID's Initiative to End Hunger in Africa revolves around three key questions:

WHAT COUNTRIES SHOULD BE THE FOCUS OF USAID EFFORTS?

USAID used several criteria including agricultural economic structure and performance, enabling environment, and strategic importance to select nine priority countries to focus its agricultural initiative efforts. This first selection resulted in equal distribution of countries across regions with Uganda, Kenya, and Tanzania from east and central Africa; Nigeria, Mali, and Ghana from west Africa; and South Africa, Mozambique, and Malawi from southern Africa. The program will further embrace sub-regional challenges such as increasing the efficiency of intra-regional trade; developing a framework to borrow and share knowledge, capacity, technology, and infrastructure; and creating information systems to access global markets and knowledge systems. Through these means, it is hoped to obtain significant spillover benefits to sur rounding countries in each subregion.

• What products and commodities have the potential to drive agricultural growth and reduce hunger?

USAID plans to select a basket of goods and services (crop, livestock, and environmental products) for investment according to their perceived ability to drive agricultural growth. This basket needs to include dominant commodities for local consumption and export, options for diversification, and new products that will enable Africa to be competitive. However, several factors could affect the investment performance of this commodity basket. These include consumer demand, productivity increases, value added potential, share of population engaged in production and consumption of various products, and profitability.

• What approaches and interventions will have the greatest impact on smallholder-based agricultural growth and rural incomes?

Six potential areas for USAID intervention are technology applications, agricultural markets and trade systems, community-based organizations, human and institutional development, addressing the market and service needs of vulnerable groups, and sustainable environmental growth.

USAID will also place considerable importance on monitoring and evaluating the impact of their initiative. Key indicators will include agricultural growth rates, the number of poor and insecure people, the condition of natural resources, and the levels of complementary resources invested by African governments and other international donors. Appropriate indicators will need to be identified and benchmarked at an early stage.

The workshop was seen as the first step in mapping out a comprehensive new agricultural strategy for Africa. In early 2002, USAID will hold several consultations at the sub- regional and country level in order to facilitate dialogue. After the initial consultations are completed, the information gathered will be compiled and placed in the public domain. This information will then be used to evaluate the potential impact of different options in the spheres of agricultural technology, infrastructure and public services, trade, markets, etc. on the rural poor in Sub-Saharan Africa. This will point the way for USAID and other donors to make major investments for propelling agricultural growth and reducing poverty in Sub-Saharan Africa.

To order a workshop summary paper, please fill out an online order form, email ifpri-ept@cgiar.org or send requests to Environment and Production Technology Division, IFPRI, 2033 K Street, N.W., Washington, D.C. 20006, U.S.A.