Attaining Inclusive Growth for Africa Requires Policies that Favor the Agriculture Sector -Report

African governments and policy makers have been urged to rethink more of the policies within the agriculture sector to raise productivity through appropriate land reforms accompanied by improvements in physical infrastructure and increased crop yields.

“Agriculture does not need to compete with other sectors of the economy. Agriculture actually stimulates the other sectors. It is the most selfless sector. When it grows all the other sectors grow better. If the farmer is rich the others are rich if they are poor, everyone is poor,” says Dr. Ousmane Badiane, Director for Africa, International Food Policy Research Institute (IFPRI).

“However, they do compete in terms of the attention from the government, the investment by the government, the policies put in place. That is where they compete. Government need to think of the impact of the policies they have for the agriculture sector.  They need to deepen, the qualities of policies, how coherent they are how consistent they are and how continually sustained them are so that farmers are helped to create wealth-including credit, banking services, and insurance products,” he adds.

Speaking exclusively to Soko Directory after the launch of the AGRA’s 2016 African Agriculture Status Report (AASR), “Progress towards an Agriculture Transformation of Sub-Saharan Africa,” he noted that there is a limit to the way agriculture growth can be arrived currently at 6 percent.

With the current drop in commodity prices in Africa, the slowdown of the world economy, and the stalled economic growth in several sub-Saharan African countries, Prof. Thomas Jayne, Michigan University says African governments need to be competitive in lowering the cost of production.

“African governments must be more competitive to lower cost. If the governments can help farmers help the farmers to lower cost they will continue to more competitive even when the commodity prices come down.”

“African governments must invest more in infrastructure because a lot of cost is felt when it comes to transportation.”

“Only one third of the African governments have achieved the CAADP commitment to commit 10 percent of their budgets to farming. The remaining 35 countries must match their commitments to actual implementation for transformation to be seen and felt,” he added.

Only 13 African countries have met  that goal  including Senegal, Ethiopia, Mali, Burkina Faso and Niger., the report noted. If others followed suit, public funding for agriculture across Africa would rise from $12 billion – the amount allocated in 2014 – to $40 billion, it added.

The AGRA report notes that even if they didn’t hit the 10 percent targets, early adopters of the CAADP goals have seen productivity on existing farmlands rise by 5.9 to 6.7 percent per year. This boost in turn helped spur a 4.3 percent average annual increase in overall GDP. Those later to the game achieved anywhere from a 3 to 5.7 percent growth in farm productivity and a 2.4 to 3.5 percent increase in GDP.

The report provides an in-depth and unsparing review of an incredibly active ten-year period for African agriculture—one AGRA frames as a prelude for potentially big things to come. The analysis serves as a curtain raiser for this week’s African Green Revolution Forum (AGRF) in Nairobi.

Read: Africa Eyes Science and Innovation to Unlocking its Agriculture Potential 

“The last ten years have made a strong case for agriculture as the surest path to producing sustainable economic growth that is felt in all sectors of society—and particularly among poor Africans,” said AGRA President Agnes Kalibata. “The track record is far from perfect,” she added. “Many governments face significant budget constraints and far too many farming families continue to lack basic inputs, like improved seeds or fertilizers. But the evidence is clear. When we invest in our farmers and in the all the things they need to succeed, good things happen across the economy.”

The report finds that “after decades of stagnation, much of Africa has enjoyed sustained agriculture productivity growth since 2005, and as a result, poverty rates have declined in places like Ghana, Rwanda, Ethiopia and Burkina Faso. The report notes that agriculture has had its biggest impact in countries that moved quickly to embrace the African Union’s Comprehensive African Agriculture Development Programme or CAADP, which was created in 2003. A key component of CAADP was its call for African governments to allocate 10 percent of national budgets to agriculture and to aim for six percent annual growth in the sector.

The AGRA report notes that even if they didn’t hit the 10 percent targets, early adopters of the CAADP goals have seen productivity on existing farmlands rise by 5.9 to 6.7 percent per year. This boost in turn helped spur a 4.3 percent average annual increase in overall GDP. Those later to the game achieved anywhere from a 3 to 5.7 percent growth in farm productivity and a 2.4 to 3.5 percent increase in GDP.

Meanwhile, countries that sat on the sidelines saw farm productivity rise by less than 3 percent and GDP rise by only 2.2 percent.

The trend is similar for declines in malnutrition, with countries that have embraced the CAADP process experiencing annual declines ranging from 2.4 to 5.7 percent, while those who have not averages only a 1.2 percent decline.

“Agriculture development is very uneven across the continent,” said Thomas S. Jayne, a professor of agricultural, food, and resource economics at Michigan State University and a co-author of the report. “Where there is the right mix of interventions, we see it delivering considerable economic opportunities and addressing fundamental development milestones, like improving nutrition. But where it is neglected, agriculture continues to be a barrier to generating more sustainable and equitable economic growth in sub-Saharan Africa.”

Overall, the 2016 AASR digs deep into a wide array of trends affecting African agriculture, some worrisome and others indicative of opportunities transform a sector that has consistently been long on potential and short on achievement. Among the reports key findings:

• While public investments in agriculture have grown, public funding should be four times what it is now
• Broad-based agricultural growth is going to generate long-term employment and wealth; the industry must grow beyond what happens in the fields.
• Realizing the promise of African agriculture will not be cheap.
• African farms must bridge the gap between the yields they now achieve and the amount their crops actually could deliver.
• Urban and rural Africa are increasingly connected by agriculture.
• Obtaining financing for production improvements remains a major challenge for rural Africans

• Investments allocated to agricultural research and extension services have fallen precisely when they are needed most.
• Africa has the world’s largest population of people under 20 years old and they could provide the intellectual capital to power major growth in the agriculture sector.  Ultimately, Africa in 2016 is a continent making notable progress toward realizing its agriculture potential, but one that still has long way to way to go.

Former AGRA President Dr Namanga Ngongi, who chairs the Board of Trustees for the African Fertilizer and Agribusiness Partnership, said the report should set the stage for a productive meeting when political leaders and agriculture experts converge on Nairobi later this week.

“My hope is that this incisive analysis of the current state of African agriculture will stimulate a more profound and impassioned debate about the kinds of investments and initiatives now required to make transformation of this sector a reality,” Ngongi said.