Africa: Getting Markets Right: Food And Sustainable Development - A Roundtable (Part 2)

28 August 2002
analysis

Washington, DC — The International Food Policy Research Institute (IFPRI) which receives its principal funding from 58 governments, private foundations, and international and regional organizations known as the Consultative Group on International Agricultural Research, seeks long-term solutions for ending hunger and poverty.

IFPRI Director-General Per Pinstrup-Andersen who was an active participant in this roundtable will be leaving his post at the end of this week. Joachim von Braun, director of Germany's largest development research institute (the Center for Development Research [ZEF] at the University of Bonn)assumes the post.

AllAfrica's Charles Cobb Jr spoke with Pinstrup-Andersen and other IFPRI experts who stressed that policy more than climate can determine whether there is famine or food security. In the second and last part of his conversation with Pinstrup Anderson and IFPRI researchers Eleni Gabre-Madhin,Kenneth Simler, and Todd Benson, differences among drought-affected countries in Southern Africa, Nepad and the importance of capacity-building is discussed. Excerpts:

Charles Cobb: The Malawi government sold off it's food reserves. Now it's buying them back at high cost with some business folk making great profit. Let me ask the group here, you've been discussing the technical and material needs to begin tackling this problem, but to what extent is policy - the policies of government a cause and a potential solution?

Per Pinstrup-Anderson: I think when we have traumatic problems, the bad policies show up and become more obvious. If the climate is good and the population isn't growing too fast, governments can get by with bad policies. So I think it is on the policy side that we have to push. Climatic changes are going to continue to occur and the policies in these regions have been pretty bad. They haven't really focused on agriculture; they haven't focused on productivity increases; they have not focused on building infrastructure in those countries, and that's showing up.

Eleni Gabre-Madhin: I want to add just a couple of points about the [food] reserve issue. Malawi had 157,000 tons in reserve that it sold off in 2001 and our understanding is that those reserves had been in place for a couple of years and had actually deteriorated in terms of quality and were very costly to store. They were actually above the recommended amount for a country that had for the previous two or three years, experienced good harvests. So it might have been a rational decision at the time to sell it off.

Now had those reserves still been in place, with a deficit of 600,000 tons, a hundred fifty-seven thousand tons would not have got rid of the problem. We still would have a serious problem.

So, to me, the crisis that occurred seems to highlight a couple of more important problems. One is the inability of the government to adequately forecast what its production is going to be. This is a structural, institutional problem, a lack of capacity to know ahead of time that selling those things was probably a bad idea. The second goes back to what I've been addressing: Even if that reserve had still been in place, the real question is: Why do we have to depend on public reserves if there is a viable private sector that could have very quickly brought in food?

Imagine a similar situation happening somewhere in Europe or the U.S. There would have been a very quick response to something as dramatic as a 300 percent increase in prices. That, to my mind, seems to be a more important issue than whether or not this was a governmental failure. What I'm saying, following up on Per, is you have a crisis and then all of a sudden you realize that you made bad decisions and that you do not have very good capacity to respond.

Charles Cobb: Well, my question is really broader than Malawi. How do we weigh the causes of this food problem we've been discussing? Bad policy on the part of government - Angola and the United Nations, for example, have been criticized for slowness in getting food aid to the quartering areas. I am asking you all as experts; are we fundamentally dealing with a problem of poor governance and poor planning, or of poor countries being overwhelmed by poor and uncertain climates?

Kenneth Simler: Just as another example in the region, take Botswana, which never produces enough food to meet its needs - it's a very dry country. But it generally escapes famines, even in bad years.

They do have the great good fortune of sitting on top of a lot of diamonds. But they also have a responsive government. Unlike some other countries in Africa - like Sierra Leone or Congo - they've ploughed that money from diamonds into educating the people - free primary and secondary education - into building a decent infrastructure and developing decent institutions so that they manage to bring in the food that they need on a commercial basis throughout good years and bad. In some ways the problem they've solved is a little bit easier because they know they're not going to have a [food] surplus to sell anywhere. They know that they're always going to be bringing it in.

Namibia is in much the same situation. They have resources that some of the other countries in the region don't have, but they don't have a favorable climate like the Malawians. And they didn't always have a favorable infrastructure like Zimbabwe started with in 1980. Botswana doesn't have the coastline that Mozambique has. So I think there is a lot of room for policy improvements to make it through these bad years, because they [the bad years] are going to keep happening.

Per Pinstrup-Anderson:My answer to your question should be a very clear one. With good governance - which would include priorities reflecting the fact that a very large share of the economy in Africa is in agriculture and that's where the poverty is - with good governance, no bad climate would be able to cause starvation and hunger in Africa.

It is a matter, in the ultimate sense, of governments deciding to put priority on dealing with poverty. That means dealing with agriculture, because that's where the poor people are. As long as governments only put priority on this in their rhetoric and not in their actions, Africa will not solve its hunger problem.

Climate contributes, but it is a matter of bad governance, inappropriate priorities in how they spend their money. As I recall, something like four to five percent or so of their public expenditures goes to agriculture. And agriculture occupies probably 85 to 90 percent of the population, depending on which country you're in.

There is an urban bias. There is a bias toward investing in things other than poverty reduction and agriculture. These governments will go to the world food conference, the world food summit, as they did a couple of weeks ago and make all kinds of promises to deal with these problems. They also did that six years ago. They said the same things and very little has happened.

Outside of China, we've got more hungry people today than we did six years ago or ten years ago. The ultimate responsibility is with the governments of Africa, not with God who decides on the climate.

Charles Cobb: You're painting a very bleak picture.

Per Pinstrup-Anderson:I think it's a very optimistic picture because it's just a matter of changing human behavior. It's much easier to change human behavior than changing climate!

Todd Benson: What they're saying is absolutely correct. At the end of the day, human capacity is always going to be limiting. The situation is getting increasingly worse. Of 400-500 people a colleague has been training in food security issues in Malawi over the past decade, 20 percent have been lost, primarily to HIV/Aids. So that capacity issue is always going to be a problem. But that gets back to the whole debate between a planned economy and a market economy. With that [low and uncertain] level of capacity you need to throw some of it over into the market and let the markets perform adequately to assure the food security.

There's a big lake in the middle of Malawi; why can't they irrigate? It's the same reason why farmers can't employ these proven agricultural technologies. It doesn't make sense from an economic standpoint.

If you get the markets performing correctly, you put in place these infrastructure investments that would allow Malawian farmers to reliably use the market as their food security in part. They have their granaries in their fields, but they also know they have a reliable market to go to to get the maize that they need in years of shortfall. You are significantly advancing the livelihood security of the entire population there.

Irrigation won't work unless it can be judged to be a profitable enterprise for the farmers to engage in. And currently it doesn't make sense on a bottom line cost-benefit analysis. So the way that the economy works in the rural areas really needs to be transformed for sustainable livelihoods.

Charles Cobb: Do you see that actually happening? You say it is easier to change human behavior than the climate. At the same time you've said that leaders come to conferences and say the same things, make the same promises as before. So are you seeing something now that says, 'Yes' they're going to do what you suggest in Malawi, or what you think is needed in Mozambique, or what you're concerned about in Ethiopia or Malawi?

Eleni Gabre-Madhin: I think there is room for optimism when you look at Nepad. I think that Nepad - the New Partnership for African Development - is primarily putting the onus on governance and on African ownership and leadership. So, if I may be optimistic, I think there is a very serious commitment to Nepad, and I think people view Nepad as Africa's last chance, in some sense, to prove that it is serious about this.

So I think one shouldn't paint the picture as too bleak. There are emerging some very key leaders - Mbeki, Obasanjo, Museveni and others, who really have committed to this very seriously. Nepad is focusing on governance. It includes the other areas, and I'm not an expert of Nepad, but my observation of Nepad is that it is really trying to put some checks and balances into the system in a way that hasn't been done before. To me, that's good and important.

Per Pinstrup-Anderson: Mozambique has done extremely well since the end of the civil war. Ghana has changed its priorities much more toward agriculture. For a period of time they were doing well. They've run into international market problems. Uganda is trying to do the right thing. Ethiopia has done the right thing on the technology side, and they've had good weather, and they now have a surplus of grain. They haven't managed to get the markets and infrastructure to work, so the bottom fell out of the market.

Yes. Several governments are trying, and I don't want to say that there isn't a single leader in Africa who is trying to do the right thing. But I'm saying, when you look at the African continent, particularly when you see some of the leaders traveling around in other African countries with the kind of entourage that you saw recently when the Libyan leader went to Malawi, you just start wondering whether they are really serious.

Charles Cobb: We're not just talking about a Mozambiqan problem or a Malawi problem, but a regional problem. To what extent do you see regional cooperation and to what extent are solutions dependent on regional cooperation?

Kenneth Simler:You have to look at it regionally. I think the SADC (Southern African Development Community) grouping has really done very well. I remember being very pessimistic some years ago thinking about the differences in countries, some far left socialist, some capitalist; it started out twenty-five years ago as quite a mixture of countries and ideologies.But I think they haven't tried to tackle too much. They haven't tried to plunge into being a complete common market but they've got cooperation in areas such as transportation and research. I think it is a well-functioning body to address some of these issues.

Charles Cobb: Thinking of solutions, you say that 80 or 90 percent engages in agriculture. Why should countries have that percentage of their population engaged in agriculture anyway? Subsistence agriculture for the most part. And is it really possible to find solutions to food security problems, if such a huge percentage of your population is dependent on what is fundamentally small, mostly subsistence farming? The United States being a case in point, where the small family farm is essentially disappearing.

Todd Benson: In the case of Malawi, it's clear that subsistence agriculture only provides a partially effective safety net for most of the population. They have a customary land tenure system, which means that most people will have access to land. But the amount of land that they have access to is very, very small. They don't have the capital to really make it productive. They engage in farming for want of better alternatives.

You would think if you could commercialize agriculture much more strongly, build in the market orientation, you would have higher productivity and release great swaths of the population into other activities. However, it's a catch 22, because those other activities don't exist. The most highly trained people in Malawi are unemployed in the cities.

I don't know. It's easy to be pessimistic for the next generation, because there definitely has to be this difficult transition period in moving toward a more productive agriculture, but an agriculture that requires far fewer people. And what do the dispossessed do?

Kenneth Simler: One of the things I found really striking when I first came to Malawi was how many other things people are doing. Everybody is doing some agriculture but there's also some trading, there's the ganyu work, there's some wage labor opportunities here and there, a real interesting portfolio of activities that households put together to survive. And not just to survive, but often to move up and get to a point where they can use their profits and perhaps open a little shop.

But one of the big, driving things that keeps people in agriculture is how costly it is to buy food from someone else. It makes sense to grow enough food for your family. Forget about trying to produce a surplus, because you're not going to get much money for it because the value isn't there. But if you didn't produce that, what would it cost you to buy it? Progress can be made by raising productivity and opening up the markets internally and throughout the region, and by reducing transaction costs so that people can afford to focus more on nonfarm work which will mean more migration to the cities probably, which is part of the economic transformation that other countries have gone through. I don't see it happening in the near future, but as long as you have 80 percent involved in agriculture, that's not a good sign.

Todd Benson: Just a quick point. This emphasis on markets is, in part, confronting the reality that the markets that are currently in place are failing in providing sufficient income to the farmer and failing in providing sufficient food when they are facing food deficits. In the rest of the world you do have in place markets that provide both the income and the material requirements of the farmers. It doesn't seem to be such a stretch to assume you could put in place similar market systems in Africa.

Roundtable Part 1

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