African agricultural development has fluctuated between periods of optimism and pessimism over the past century. Recent decades saw stagnation but since the 1990s growth has improved. Statistics show rising production values, yields, and incomes across much of Africa. Studies find smallholder farmers gradually intensifying crops for markets through own initiative more than public programs. Consensus exists that rural investment in infrastructure, education, and technology can help but big challenges remain in improving factor markets. Initiatives experimenting with subsidies, contracts, and rural finance show potential to reduce risks and transaction costs, leveraging private capital, but more learning is needed from diverse country experiences. While agricultural progress provides cautious optimism, Africa's greater long term challenge may be developing manufacturing and urban

1. African agricultural development:
lessons and challenges
SteveWiggins
Overseas Development Institute

3. Outline
͙3͙years History͙…͙optimism & pessimism
Performance since 1990: what do we
know?
Policy: less discord, but a big challenge

4. HISTORY
FLUCTUATING PERCEPTIONSOF AFRICAN
AGRICULTURE

5. Optimism: vent for surplus
1880s - 1930

6. Ecological pessimism:
Machakos, Kenya 1930s

7. Machakos redeemed, 1991

8. Sahel
1968-73
• Desertification???

9. Africa’s dreadful ͙97͙s
80
90
100
110
120
130
140 1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
GrossProdnFoodPerCapIndex1961/63=
100,3yearmovingav.
Africa
South America
Asia

10. Explaining failure of 70s & 80s
• Variable rainfall, Infertile
soil
• Disease
• Distance
• Neo-Malthusianism & Eco-
Doom
Geography
&
environment

11. 'Only to feed her growing population at
the present level of per capita food
consumption, Africa would thus need to
increase her food production at a rate of,
say, 3.2 per cent per year for several
decades in succession. This is of course an
impossible challenge for her to meet.'
• (Platteau 1990: 290-1)
Hostage to fortune

12. Explaining failure of 70s & 80s
• Land tenure
• Institutions: finance, risk
Geography (2):
exceptionalism
• Dependency
• Squeeze on peasants
• [Cash crops vs food crops]
External
conditions,
internal
structures

13. Explaining failure of 70s & 80s
•Public marketing
boards
•Negative protection
•Urban bias
Policy
failings

14. Exportables
-60%
-50%
0%
-10%
-20%
-30%
-40%
10%
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
NetRateofAssistancetoAgriculture
Africa: net rate of assistance to agriculture
All agriculture

15. 1990s
Agriculture lost to sight!
Ideas & lessons → ag lost to sight
• Poverty traps?
• Owing to:
• HighT costs?
• Government failure?
• Real costs?
(Factor)
Market
failings

16. BUTTIMESCHANGE …
…OPTIMISM RETURNS

17. Africa, SS, economic growth 1996 to 2008
79 to 95:
0% per cap growth
96 to 08:
3.2% per cap.

18. -0.50
-0.40
0.00
-0.10
-0.20
-0.30
0.10
Average NRA for 1970/85 compared to 2000s
1970 to 85 200 to 2010

19. 60
85
2000Jan
2001Jan
2002Jan
2003Jan
2004Jan
2005Jan
2006Jan
2007Jan
2008Jan
2009Jan
2010Jan
2011Jan
2012Jan
2013Jan
2014Jan
IndexdeflatedbyUSGDPdeflator
160
Commodity Food and Beverage Price Index, 2005 =
100, includes Food and Beverage Price Indices
135
Commodity Agricultural Raw Materials Index, 2005 =
100, includes Timber, Cotton, Wool, Rubber, and
Hides Price Indices
110

20. Abundant land!

21. Agriculture back on agenda
Maputo Declaration 2003
CAADP ex 2003
AGRA
Regional Economic Integration

22. RECENT PERFORMANCE
(A) REGIONAL & COUNTRY STATS

23. 1.0
0.5
0.0
-0.5
1.5
4.0
3.5
3.0
2.5
2.0
AFRICA
EAST
MIDDLE
NORTH
SOUTH
WEST
AverageAnnualGrowthRate,%
Africa, Growth Agricultural Production, 1990/11
Ag PIN Ag PIN per cap

24. 60
50
40
30
20
10
70
600
400
200
800
1,000
1,200
Increase,%
AvValueProdnCultivatedLand,US$/ha,
constant04/06value
1990/92
2009/11
Increase, %
- -
Africa Eastern Middle Northern Southern Western

25. 70
60
50
40
30
20
10
4,000
3,000
2,000
1,000
5,000
6,000
7,000
Increaseseen1990/92to2009/11,%
ValueperEAPAg,Int$cont04/06 Growth of agricultural labour productivity,Africa,
1990/92 to 2009/11
1990/92
2009/11
Change
- -
Africa Eastern Middle Northern Southern Western

26. MICRO STUDIES

27. Returns good, Incomes rising͙…
2,500
2,000
1,500
1,000
500
0
3,000
3,500
Tef Wheat Chickpeas Lentils Onion Tomato Green
pepper
Lume,Gross Margin, US$/ha

28. Drivers of change often
private & internal
Often initiative from SF & traders
Public —Gov’t & NGO — can help, but not
always necessary
Stimulus often from domestic markets, not exports
Domestic marketing demands less stringent

29. Cautious
Commercialisation
• Small areas switched to crops for
market
• SF rarely sacrifice food crops
• SF intensify
•  fertiliser,  (sometimes)
improved seed & agro-
chemicals
•  hired labour
• Biggest Step? Irrigation
Gradual,
marginal
changes

30. Active Labour, Land
markets …
•2010: 82 days
•2012: 138 days
2010 2012
Lume: > 90%
households
hired labour:
days annual
household:
% households
renting in land
13% 45%
200 340US$ per hectare

31. But stickyCapital Mkts
• NOT: credit from Banks,
advances from input dealers,
traders or processors
Working K
from SF
savings
• BUT may
• slow process
• limit degree
• restrict which households
participate
Lack of
credit not
a barrier

32. In sum:
Progress, if not dramatic
transformation

33. POLICY: WHATTO DO?

34. No secrets: consensus
Rural Investment Climate
• Doesn’t have to be perfect! [Rodrik]

35. Ghana ex 1983:
Fast agri growth
Fast falling poverty
0
1
2
3
5
4
-3 .1% year
1961/62
1962/64
1964/66
1966/68
1968/70
1970/72
1972/74
1974/76
1976/78
1978/80
1980/82
1982/84
1984/86
1986/88
1988/90
1990/92
1992/94
1994/96
1996/98
1998/00
2000/02
2002/04
2004/06
2006/08
Agriculturegrossprod:BillUS$2000
2.6 % year
5.1 % year
1974 1982
20
30
40
50
60
70
1991/1992 1998/1999 2006
PovertyIncidence(%)
Poverty,rural
Poverty,cocoa
producers
30.3
17.3
3000
2500
2000
1500
1000
500
0
35
30
25
20
15
10
5
0
Kcal/day/cap
MalnutritionPrevalence(%)
U5 Underweight (DHS)
Food supply (kcal/capita/day) (kcal)

36. Consensus
• Bullet slide 22RputrVaelrPduabnlaicGoods
• Roads, power, irrigation, etc.
• Education, Health,Water
• Research & Extension
36

37. Big Challenge
Failings in rural markets: solutions?
State intervention?
e.g. Fert Sub
Institutional
Innovation e.g.
Contracts,Co-ops,
etc.
37

38. Public direction: Malawi’s fert.subs
-
0.50
1.5
1.00
1.0
1.50
2.00
2.50
3.00
3.5
0.0
0.5
2.0
2.5
3.0
2001/2002
2002/2003
2003/2004
2004/2005
2005/2006
2006/2007
2007/2008
2008/2009
2009/2010
2011/2012
2012/2013
Yield,tonne/ha
Production,Mtonnes
Marketing Years, May to April
Production
Yield t/ha

39. (Private) Subs
• OneAcre Fund
 130k SF
 Kenya, Rwanda
 Seed, Fert, Insurance,
Mktg
 Lean admin
 US$50 per SF?

40. Institutional innovation …
… levering in private capital
• ContractingLowerT-costs
• Underwriting rural
banking
Reduce risk
• Patient capital, challenge
funds
Initial learning,
high K costs

41. Conclusions (1)
Reality & perceptions on
the move … sense of
proportion:
Asia’s great lesson for Africa
not always appreciated

42. Conclusions (2)
• Africa diverse: much to
learn from
• Initiatives …͙not͙
documented, still less
evaluated
• Need library of working
models
Learning!

43. Conclusions (3)
• Progress being made
• Elephant traps avoided?
• Demand surging
• Factor market initiatives
• SF enterprise
Reasons
for
cautious
optimism
Africa’s greater challenge?
manufacturing & the urban
economy