Strategies and Priorities for African Agriculture Panel Discussion at IFPRI 3 October 2012 by Xinshen Diao, Deputy Division Director, Development Strategy and Governance Division, IFPRI.
2023 Global Report on Food Crises: Joint Analysis for Better Decisions
Strategies and Priorities for African Agriculture
1. Strategies and Priorities for
African Agriculture
– Economywide Perspectives from Country Studies
Edited by Xinshen Diao, James Thurlow, Samuel Benin, and Shenggen Fan
Key Findings and Highlights
IFPRI Policy Seminar
October 3, 2012
Xinshen Diao
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2. Background: Research Motivation
Debates on the role of African agriculture in early
2000s
Calling for evidence-based policies
Calling for an economy-wide approach
Comprehensive Africa Agriculture Development
Programme (CAADP) started in 2003
Targeting 6% annual growth rate in agriculture
Allocating at least 10% of public resources to
agriculture
IFPRI-CAADP agreement
Strengthening analytic support to CAADP process
Emphasizing the role of research in formulating
agricultural development strategies at country level
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3. Background: Recent Developments
Increases in world food prices have made agricultural
growth an imperative for food security
Recent commitment of G-8 and African leaders to the
New Alliance for Food Security and Nutrition
Recent initiative Grow Africa focused on empowering
small scale farmers
More public resources allocated to agriculture:
13 of 32 countries with available data allocated more public
resources to agriculture now than before CAADP
8 countries reached the 10% allocation target
African agriculture grew 3.4% per year over 2001-10
For the first time, agriculture growth was higher than Africa’s
population growth rate of 2.5%
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4. Research Questions
Within the context of the CAADP, what is agriculture’s
potential contribution to future development in
Africa?
What should be the priorities among different
subsectors in agriculture?
Is 6% agricultural growth enough to achieve poverty-
and hunger-reduction goals?
How many resources are required to support the
necessary agricultural growth?
How should limited public resources be prioritized?
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5. Selection of Case Studies: A Typology of African
Countries
Rural poor more than half of poor population Rural poor less than
half of poor
Agriculture more than 30% of Agriculture less than 30%
population
GDP GDP
More-favorable agro-ecological conditions
Coastal Benin Cote d’Ivoire South Africa
Ghana Kenya The Gambia
Tanzania Mauritius
Togo Mozambique
Senegal
Landlocked Burkina Faso Lesotho
Ethiopia Swaziland
Malawi Uganda
Mali Zimbabwe
Mineral Central African Republic Chad Angola
Democratic Republic of the Congo Equatorial Guinea Cameroon
Nigeria Guinea Republic of Congo
Sudan Zambia Botswana
South Sudan
Less-favorable agro-ecological conditions
Burundi Eritrea Cape Verde
Niger Madagascar
Rwanda Mauritania
Namibia
Sources: GDP and poverty data from World Bank. Agro-ecological and geographic classifications from Diao et al. (2007)
6. Key finding 1: Agriculture-led growth has the largest
impact on reducing poverty rates
% change in national poverty rate resulting from a 1%
increase in total GDP growth rate
Uganda
Tanzania
Rwanda
Nigeria
Kenya
Ghana
Ethiopia
-2.5 -2 -1.5 -1 -0.5 0
Nonagriculture-led growth Agriculture-led growth Baseline growth
Source: Authors, based on results reported in the country case studies
Notes: The poverty rate is calculated according to national poverty line. Differences in the definition of national poverty lines
mean that comparison can be made across sectors but not countries. n.a. = not available because the nonagricultural growth
simulation was not run for this country. Malawi, Mozambique, and Zambia are omitted because no baseline elasticity was
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reported
7. Key finding 2: Food staples have stronger growth linkages
Change in total gross domestic product (GDP)
Staple foods Export crops
Country Multiplier Lead sector Multiplier Lead sector
Ethiopia 1.13 All cereals 1.04 All export crops
1.06 Livestock
Kenya 2.39 All cereals 2.62 All export crops
2.68 Horticulture
Malawi 1.11 Maize 1.05 Tobacco
1.78 Nonmaize cereals 1.06 Other export crops
1.27 Roots
Mozambique 1.42 Maize 1.48 Traditional export crops
1.71 Roots 0.83 Biofuel crops
Nigeria 1.28 Maize 0.70 All export crops
1.86 Pulses and oilseeds
Tanzania 1.21 Sorghum and millet 1.15 All export crops
1.70 Livestock
Uganda 1.32 All cereals 0.62 All export crops
1.39 Horticulture
Zambia 1.63 All cereals 0.30 All export crops
1.88 Roots
1.75 Livestock
Source: Authors, based on results reported in the country case studies
Notes: The change is calculated as that caused by a one-unit change in gross domestic product driven by the lead sector
specified. In Kenya case, the multiplier is based on fixed prices and unconstrained resources.
8. Key finding 3: Food staple growth is more pro-poor
% change in national poverty rate from a 1% increase in GDP growth rate
Staple foods Export crops
Country Poverty-growth Lead sector Poverty-growth Lead sector
elasticity elasticity
Ethiopia -1.40 All cereals -1.16 All export crops
Kenya -2.13 All food crops -1.90 All export crops
Malawi -0.74 Maize -0.62 Tobacco
-0.85 Horticulture -0.57 Other export crops
Mozambique -0.73 Maize -0.29 Traditional export
-0.65 All cereals -0.43 crops
Biofuel crops
Nigeria -1.01 All cereals -0.81 All export crops
-0.92 Roots
Rwanda -2.39 Maize -1.81 Coffee
-2.59 Pulses -1.63 Tea
Tanzania -1.09 Maize -1.00 All export crops
Uganda -1.07 Roots -0.64 All export crops
-1.38 Horticulture
Zambia -0.27 All cereals -0.25 All export crops
-0.33 Roots
Source: Authors, based on results reported in the country case studies
Notes: Ghana is not shown because detailed sector elasticity was not calculated for this country
9. Key finding 4: Returns to public investment in staple
sectors is high – An example from Rwanda
Ratio of GDP/investment Ratio of AgGDP/investment
Grains 2.75 2.73
Maize 7.02 6.59
Rice 1.41 1.22
Roots and tubers 5.03 4.65
Cassava 5.48 4.61
Potatoes 5.88 5.66
Sweet potatoes 2.53 2.22
Other staple crops
Pulses 9.09 8.21
Bananas 5.35 4.94
Oilseeds 5.89 4.73
Export crops 1.02 1.24
Coffee 1.01 1.74
Tea 1.95 2.52
Livestock 2.02 1.90
Agriculture total 3.19 3.11
Sources: Authors’ calculation using the DCGE model results combined with the public investment data from Rwanda, MINAGRI
(2007)
Note: Returns are measured as increases in GDP or agricultural GDP over time discounted to the current value (10% of
discount rate) and costs are measured by planned public investment 2006-15 at the base-year price combined with recurrent
spending over time discounted to the current value (10% of discount rate)
10. Lessons for African Development Strategies
Broad growth is crucial
Agriculture remains a key development sector in all studied
countries despite the diversity in their agro-ecological conditions and
economic structure
Broad-based growth provides opportunities to majority of farmers
any narrowly defined single agricultural subsector is unlikely to
generate enough economy-wide growth or to significantly
reduce national poverty
The composition of agricultural growth matters
The poverty impact of an agricultural subsector’s growth should be
at the top of the agenda in an agricultural strategy
Need to consider how subsectors are linked to the rest of economy
in setting priorities
Targeting investments in the relatively large agricultural sector is
essential to have agriculture as an engine of economy-wide growth
Market opportunities must be considered when setting up priorities
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11. Research Beyond This Book
Better integration of investment analysis into the
economy-wide framework
Detailed investment data at the country level is needed for
better econometric analyses – Efforts through ReSAKSS and
country SAKSSs
Necessary not only to identify net aggregate impacts but also to
specify impact pathways - need to know not only “what” but also
“why” in order to prioritize public investment
Understanding how investments interact with each other is
crucial
Looking beyond poverty (e.g. agriculture-nutrition link)
Incorporating risk and social protection
Monitoring and evaluation – a proposal for Agriculture
Transformation Index (ATI)
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Hinweis der Redaktion
On 17 February 2012 Ministers responsible for agriculture from seven African countries (Ethiopia, Ghana, Rwanda, Burkina Faso, Kenya and Mozambique and Tanzania) gathered in Dares-Salaam to discuss strategies for development and investment in the sector under a new regional body called - "Grow Africa".
Investment includes irrigation (mainly for rice, high value horticulture, coffee and tea), marshland development (mainly for rice), terracing, and livestock-related, which can be defined as sector specific. Investment as rural road, R&E, rural financing, and agricultural institution cannot be sector specific, which is assumed proportionally to sector specific investment. Recurrent spending is also assumed to be proportional to sector specific investment. Fertilizer and seed subsidies are sector specific and are treated as part of recurrent spending.For each dollar of public investment in agriculture, it generates 3.19 additional dollar GDP in q=which 3.11 dollar is increases in agricultural GDP.
Extending the methodology and analysis:Better integration of investment analysis in the economywide framework – detail investment data at the country level needed for the econometric analysis; – econometrics usually estimates net aggregate impacts without identifying specific impact pathways, i.e., we need to know not only what but also why in order to prioritizing public investment– Understanding how investments interact with each other is crucialBetter modeling farm and household behaviorCapturing distributional effectsLooking beyond income (e.g., nutrition outcome)Incorporating risk and social protection