Policies and Productivity Growth in African Agriculture

ASTI/IFPRI-FARA Conference Working Paper 19

Despite some recent improvement, agricultural productivity growth in SSA continues to lag behind just about every other region of the world. While there are important data challenges in measuring trends in agricultural productivity, most studies agree that agricultural TFP in SSA was stagnant or declining in the 1960s and 1970s but turned positive around the mid-1980s. West Africa seems to have had the strongest productivity growth in the region in recent decades, especially Benin, Côte d’Ivoire (until civil war disrupted growth after 2002), Ghana, and Nigeria, although the data on Nigeria are problematic. Kenya in East Africa has also done reasonably well in sustaining a modest rate of long-term productivity growth. Angola and Mozambique have shown rapid productivity gains since peace was restored to these countries in the 1990s, but this mainly reflects a recovery of productivity losses incurred during their long civil wars.

A number of factors appear to have contributed to the renewal of agricultural productivity growth observed in recent decades. One driver is the accumulation of knowledge capital from national and international investments in agricultural research, which are gradually delivering improved technologies to farmers. We estimate that for large and mid-sized African countries, agricultural R&D has generated high returns, on the order of $3–5 in benefits for every dollar spent on R&D. But due to economies of size in research systems, returns to research declines with the size of a country’s agricultural sector, and for very small African countries building comprehensive national agricultural R&D capacity may not be economically viable. For these countries, tying into regional and international agricultural research networks and maintaining a policy environment that is receptive to technologies developed elsewhere seems to be critical. In fact, the CGIAR system of international agricultural research centers has played an important role in raising agricultural productivity growth in SSA. Our results suggest that spending by the CGIAR in the region has generated an internal rate of return of around 58 percent per year, or about $5.3 in benefits for every dollar spent on research. Moreover, we find that national and international agricultural research in SSA are complementary: countries that have a stronger national system are better able to deliver new technologies emanating from the international centers to farmers. Despite their achievements, agricultural research systems in SSA remain relatively weak and underfunded.

In addition to investing in agricultural research, strengthening the broader enabling environment for farmers to access technology, markets, and the necessary support services has helped raise agricultural productivity in SSA. Our results found that policy reforms that reduced net taxation of agriculture stimulated new technology adoption and productivity growth, as did higher levels of labor force schooling. The spread of HIV/AIDS and widespread civil strife in several countries, on the other hand, have posed significant constraints to agricultural development in Africa.

Looking forward, there is reason for cautious optimism about prospects for productivity growth in agriculture in SSA. During the past decade, both the CGIAR and national governments have increased spending on agricultural research, the incidence of civil unrest has fallen, and greater availability of anti-retroviral therapy and other measures have reduced the scourge of AIDS. If momentum on policy reform can be sustained, that too will continue to be a source of renewed growth for African agriculture.

Author: 
Keith O. Fuglie and Nicholas Rada
Published date: 
2011
Publisher: 
International Food Policy Research Institute (IFPRI); and Forum for Agricultural Research in Africa (FARA)
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