The Growing Opportunities for African Agricultural Development

ASTI/IFPRI-FARA Conference Working Paper 16

While it would be easy to feel overwhelmed by the many constraints facing African farmers, Brazil and Thailand provide important lessons about how these constraints can be overcome. In these two countries, government played a vital role by establishing an enabling environment characterized by favorable macroeconomic policies, adequate infrastructure, a strong human capital base, reasonably competent government administration, and political stability. This enabling environment allowed the private sector to mobilize its creativity, drive, and resources in ways that have served broader social goals as well as private interests. After decades of state domination, many initiatives under way in Africa are beginning to use similar approaches.

One advantage for African policy is the knowledge from the Thai and Brazilian experiences that agricultural revolutions can be driven by either smallholders or large-scale commercial farmers. Evidence suggests that, on balance, the fruits of those revolutions are more widely shared when smallholders participate, not only through direct effects on employment and land ownership, but also through second-round consumption linkages. Larger smallholder farms will need appropriate labor-saving technologies to emerge as viable commercial farms.

Further grounds for optimism come from the knowledge that if the development of smallholder commercial agriculture begins solidly, the process can be self-reinforcing. As the Thai experience illustrates, those who initially gain in the process (commercial farmers, farmer organizations, and agribusiness firms) will be motivated to lobby for policies and investments that can sustain the commercialization process. As commercialization proceeds, larger private-sector actors will have increasing incentives to invest in infrastructure and in support services for value-chain coordination. This will reduce the burden on government. At the same time, political leaders must continue to play an active role by providing the vision, strategy, consistent implementation, and long-term commitment needed to make agricultural transformation a reality.

The two sections of this paper are complementary. The first section emphasized that agricultural prospects have improved. This was attributed to higher international prices, improved macroeconomic and agricultural policies, improved institutional environments for agriculture and rural development, and greater government commitment to agriculture. The second section looked at two examples of how Africa could capitalize on today’s opportunities, in particular in the Guinea Savannah zone. Both sections emphasize commercialization as an essential part of an agricultural strategy, although the potential for surplus production is higher where populations are sparse and opportunities significant. Both sections also emphasize the immediate opportunities in production for domestic and regional markets. This is due, first of all, to the rapid economic and income growth expected within Africa itself. Second, the current context offers opportunities for import substitution in markets that Africa has lost in the past. Third, the lower phytosanitary constraints in domestic and regional markets make them better bets than global markets at Africa’s current level of infrastructure and institutional development. Doing well in domestic and regional markets could prepare Africa to subsequently conquer global markets.

Opportunities are better today than they have been for decades. Nonetheless, enormous challenges lie ahead: maintaining macroeconomic stability in a challenging global context; further improving agricultural policies and general and agricultural investment climates; making progress in regional integration, in particular reducing barriers to intra-regional trade, standardizing trade and transport protocols, and standardizing and improving phytosanitary regulations; increasing public expenditures for agriculture and especially for agricultural research and technology dissemination; and improving infrastructure, market access, and access to inputs and credit for farmers. This is a daunting list of challenges, but other regions and African countries have shown that progress can be made. The payoffs could be enormous in terms of economic and agricultural growth, food security, and poverty reduction.

Author: 
Hans P. Binswanger-Mkhize, Derek Byerlee, Alex McCalla, Michael Morris, and John Staatz
Published date: 
2012
Publisher: 
International Food Policy Research Institute (IFPRI); and Forum for Agricultural Research in Africa (FARA)
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