Let Nations Like Uganda feed Africa, The Rest Should Find Something Else To Do

By Soko Directory Team / Published August 2, 2022 | 9:58 am




KEY POINTS

Climate shocks effects on agricultural productivity manifest themselves both directly and indirectly through unprecedented rainfall patterns, droughts, flooding, and geographical redistribution of pests and diseases


Farmers

KEY TAKEAWAYS


According to recent data, 72 percent of Uganda’s land is arable, compared to Kenya's 48 percent, Tanzania's 45 percent, Ghana's 65 percent, Malawi's 60 percent, Burkina Faso's 44 percent, and Mozambique's 53 percent.


By Leo Kemboi and Emmanuel wa-Kyendo

The recent food crisis caused by Russia’s invasion of Ukraine and COVID19 supply chain shocks has led people back to discussing the African food problem. Africa’s real food problem is a demand-side problem.

African households, both rural and urban, are relatively poor. Their low incomes restrict the access they have to food markets. For the African rural household, food problems comprise both climate shocks and market shocks. Climate shocks affect both the supply of food and the source of income for rural households.

Market shocks that result in increased prices also make it more difficult for both rural and urban households to access food. Many discussions, however, don’t sufficiently address the matter because they are framed largely as a supply-side problem.

Pundits lament that African farmers do not grow enough food. In practice, the selection of crops that African farmers grow faces intense global competition. Furthermore, variations in national productivity are great. Many international institutions that work on food and agriculture are focused on supply-side solutions of different flavors.

In joining the majority of African nations in tackling the food problem, international institutions including the African Development Bank (AfDB), the Africa Export-Import Bank (AFREXIM), and the Alliance for a Green Revolution in Africa (AGRA) have proposed supply-side interventions to resolve Africa’s food problem. The AfDB is a multilateral financing institution. AFREXIM is a pan-African multilateral trade finance institution. AGRA is a promoter of technology and financing solutions for Africa’s productivity problem.

At the nation-state level, proposals for African food sovereignty comprise another set of supply-side solutions that usually import substitution by another name. Ultimately, the food security problem in Africa can be best resolved by demand-side interventions that raise productivity, incomes, and jobs.

Food Problem

To evaluate the food systems and their dynamism in East Africa, it is important to understand the nature of food production, which can be classified into homestead production where production is on a small scale, and labor-intensive while large-scale production is capital intensive and application of more scientific methods.

Smallholder farming is practiced by a sizeable portion of East African households, who primarily grow cereals that are highly competitive on a global scale. Low incomes per unit are a result of stagnant productivity in countries like Kenya and the surrounding region over the past 20 years.

Small-scale farmers automatically experience income shocks and food shocks when weather shocks cause the yield per unit to decrease. On the other hand, because there are no market alternatives available to them, middle-class and higher-income earners only experience access issues.

The assessment of that food systems problem and how it affects the food market in sub-Saharan Africa can be defined through a variety of factors; economics, environmental, innovations, political factors, and the degree of urbanization.

Historically, it is unheard of for any country to have attained self-sufficiency in all different categories of food. How income causes problems in the food system is something that is not always obvious in the public affairs field. Households plug into the food market using income, which determines largely whether they face food shocks or not.

If a household deals in the livestock economy, income earned from the sale of livestock allows families to use that income to buy food, and this explains why there are famines whenever the rangeland economy is affected by weather as is currently happening in the Horn of Africa and parts of Uganda like Karamoja and northern Kenya.

The second factor that shapes the food system is the environment which includes climate change and natural resources. A large portion of Horn of Africa nations’ agriculture is rain-fed and vulnerable to weather shocks, which have been made worse by climate change, and this has been exacerbated by the fact that the climate shocks in the recent past have been frequent.

Climate shocks effects on agricultural productivity manifest themselves both directly and indirectly through unprecedented rainfall patterns, droughts, flooding, and geographical redistribution of pests and diseases.

The unfavorable effect of temperature and rain variance on agricultural production results in uncertainty in food sufficiency in the region. Floods and droughts are harmful to agricultural production that cause food problems in the region that is highly dependent on rainfed agriculture.

In terms of natural resources, the proportion of total land that is suitable for agriculture determines the type of food system a country has. Agricultural land refers to the share of land area that is arable, under permanent crops, and under permanent pastures. According to data from the World Bank, Uganda has 72 percent of its land used for agriculture, compared to Kenya’s 48 percent, Tanzania’s 45 percent, Ghana’s 65 percent, Malawi’s 60 percent, Burkina Faso’s 44 percent, and Mozambique’s 53 percent. This means that already the food system is constrained by the natural conditions that a country already found itself in. The degree to which agriculture can be mechanized is determined by additional natural resource factors like water availability. Because Uganda and Tanzania have more water resources than Kenya, they have a comparative advantage over Kenya when growing crops that require a lot of water. If Kenya makes investments in capital-intensive irrigation systems, it may be able to compete.

The paradoxical relationship between low productivity and excessively low incomes makes up the third factor. In the East African region, some minor improvements to the seed and animal breeding systems have been made but have been slowed by required resources. This is constrained by the correlation between those innovations and the amount of capital that each nation’s agricultural sector can amass and deploy to improve productivity.

The fourth factor that is important is the political factors that affect food systems, including public policies, conflicts, and general governance of the economy. To illustrate this, public policies in Kenya on food are built around guaranteeing high income to producers at the expense of the consumers. This kind of food regime has made Kenyan food expensive in comparative terms to other countries. For example, the benefit incidence of the fertilizer subsidy in Kenya is appropriated by suppliers and big farmers while small-scale farmers are not able to appropriate the same benefit. The subsidy is smaller and has not been able to cover all farmers.  This is a market distortion generated by political action.

The fifth factor that shapes the food system is demographic, which includes the degree of urbanization. Some of the factors such as the rural-urban dimension affect incomes and preferences (which include tastes). The urban folk in East Africa consume more rice, wheat, and its derivatives relatively compared to rural areas.

In joining the majority of African nations in tackling the food problem from the supply side, some international organizations have proposed some supply-side interventions.

African Food Sovereignty

One of the principles that have impacted food security on the continent, is the idea of African food sovereignty.

Sovereignty is an idea that is difficult to argue against. In Africa, an argument that runs against state sovereignty is a political loser for it can be construed to be an argument for Africa’s perennial bogeyman – colonialism. Yet, the term sovereignty hides bad policy ideas from scrutiny.

Food sovereignty is the idea that a country should be fully sufficient in the production of its food basket and that anything less is tantamount to a breach of sovereignty. Essentially, Africa should produce its coffee, tea, rice, and chicken. The phrase makes it seem the smart, obvious, and foundational approach to food policy.

In other words, the need to import agricultural products is an unacceptable vulnerability. Other states may use the so-called over-reliance on, say, grain imports to starve the importing country for political purposes. Market shocks are anxiety-inducing events that tend to cause a clamor for security-oriented policy responses. Anxiety is the domain of the populist.

Economist and prominent theorist of the classical school David Ricardo proposed that comparative advantage is the principal argument for international trade. That is, countries specialize in the production of one good or a set of goods – say agricultural products – because they can produce it more efficiently than any other nation can. Countries then trade those goods in which they have a comparative advantage for the goods in which they have no comparative advantage.

The principle reveals that countries that produce goods for which they lack a comparative advantage incur the opportunity cost of foregone revenues from specialization.

By the principle of comparative advantage, consumers get the cheapest goods at the highest quality possible. International trade allows Kenyan consumers to purchase Ugandan bananas and Malaysian palm oil. Absent specialization or trade, consumers would have a limited choice between pricey, possibly lower-quality goods. Bye-bye palm oil.

Furthermore, a country that tries to produce all the goods represented in its food basket must forego the use of land, labor, and capital for the production of other goods. If African countries must engage land, labor and capital in pursuit of African food sovereignty, they must incur the opportunity cost of foregone revenues from specialization in the production of other goods.

Kenya cannot meet its demand for bananas at the same quality and price that Uganda can. Uganda has an abundance of water and rich soils that Kenya does not.

Policies of food sovereignty also assume that access is a matter of food supply. The Russian invasion of Ukraine has caused a sharp drop in the supply of specific grains. Curiously, only the poorest consumers of this grain have felt the sharp increase in prices. Not-so-curiously, the wealthier consumers are relatively less affected. But this is not the way that the problem is framed in Africa’s policy-making centers.

Rather, policies seek to correct the lack of supply through interventions that will increase domestic supply. These policies would go further by restricting foreign supply. The effect is that domestic suppliers are subsidized at the expense of domestic taxpayers and domestic consumers. In other words, African food sovereignty is an import substitution in all but name.

In truth, food access is a demand-side problem. More precisely, food access is an income problem. This means that it is not the abundance of food that determines whether consumers get it but the levels of income. The Russian invasion of Ukraine and other food crises of the present and past have had greater effects on poorer households the world over because those households are too poor to continue purchasing food at high prices.

In the short term, African nation states should respond to food crises with cash transfers to the most affected. A country like Kenya can reach its affected population with precise transfers through tools like MPESA.

In the long term, lowering barriers to trade and instituting policies that are conducive to structural transformation and economic growth would result in rising incomes that would then allow those consumers to access the foods they can afford. African food sovereignty is a vehicle for state rents waiting to happen.

Africa’s food security problem can be resolved primarily through interventions that raise African household productivity and incomes. When smallholder farmers encounter climate-related shocks, crop failures result in less food and lower incomes. They have fewer crops to sell and little money with which to buy food.

Spending a bulk of their incomes on food, African urban households are also vulnerable to international food market shocks. Supply-side solutions alone will not overcome the problem that African households are too poor to purchase food.

Leo Kemboi and Emmanuel wa-Kyendo are researchers at the Institute of Economic Affairs think-tank in Nairobi.




About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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