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Mozambique: Private Investment Not Enough for Green Revolution
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Agencia de Informacao de Mocambique (Maputo)
14 May 2008
Posted to the web 14 May 2008
Maputo
For successful green revolutions in Africa, private investment is not enough, and the state must play a key role, declared the President of the African Development Bank (ADB), Donald Kaberuka, in Maputo on Wednesday.
Speaking at the opening ceremony of the annual meeting of the ADB group, Kaberuka said that, in order to reverse agricultural decline in Africa, there must be both "crowding in of more private investment and a greater role for the state".
"Private investors can probably do their own irrigation", he said, "but they need infrastructure, input and product markets that function, research institutions that deliver and policies that are stable. Only the State is well equipped to provide the latter".
That meant that governments must empower their Agriculture Ministries. In a clear attack on previous policies of the World Bank and the IMF, Kaberuka remarked "in the years of structural adjustment, it seems a lot of capacity in this sector (agriculture) was cut to the minimum".
"If we are to succeed", he insisted, "the role of the state will be crucial, to plan, and to provide the policy environment which supports a smallholder revolution and agribusiness".
In dealing with the current international food crisis, Kaberuka warned against export bans and taxes or quota systems "which are exacerbating the problem".
"There is no better way to worsen the situation than to interfere with supply chains at a delicate stage such as this", he said. "Food security is impossible anywhere without a smooth trading system, and I hope, after the initial action taken by some countries, the barriers can be reduced, or removed altogether".
Swift action was needed to ensure that the poor and vulnerable receive food, and Kaberuka urged donors "to be generous and provide specialised agencies with additional resources". (The UN World Food Programme has warned repeatedly in recent months that, unless it receives more donor funding, it will have to cut rations to the people who depend on it).
"Certainly the world has the means to prevent starvation in the 21st century", exclaimed Kaberuka.
A longer term response was to alleviate "macro-economic stress" by providing the countries concerned with budget and balance of payments support. "Many countries whose import bills have soared had no choice but to adopt measures that are not always fiscally sustainable", he noted.
The ADB Steering Committee was thus proposing to the bank's Governors that they approve "a special appropriation from the surplus account to help the countries affected". He added that the ADB is also considering "restructuring up to 250 million dollars of our agricultural portfolio to make available resources required to accelerate agricultural production, such as the purchasing of fertilisers".
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"There was a time when agriculture went into decline because of a combination of policy biases, including urban bias", said Kaberuka. "But that era of implicit excessive taxation on agriculture and overvalued currencies is long gone. These were powerful disincentives - but now the incentive is there. Rising food prices provide the opportunity, the incentive".
But incentives are not enough, and Kaberuka warned that "the signals are not getting through to the farmer because fertiliser and transport cost have also increased". African farmers could not respond "with fertiliser prices which have jumped from 245 to 1,100 Us dollars a tonne in four months".
Hence the proposal before the ADB Governors for an African Fertiliser Financing Scheme. "There are large gaps between current yields and possibilities, and if market-smart subsidies would close the gap, they should be considered and we are prepared to provide such support", he pledged.
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| Copyright © 2008 Agencia de Informacao de Mocambique. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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