23 December 2009

Africa: Smallholder Agriculture Transforms Lives of Poor

Photo: Faatimah Hendricks/AllAfrica
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Africa's failure to transform its agriculture sector as rapidly as the rest of the developing world has left an abiding legacy of poverty and hunger. A huge increase in the number of people living in absolute poverty underscores the need for urgent attention to measures that could promote agricultural growth in Sub-Saharan Africa.

Smallholders and pastoralists practicing traditional agriculture comprise 80 percent of all farm holdings in Sub-Saharan Africa. Although its contribution to gross domestic product (GDP) is declining, agriculture remains an important economic sector in Africa, contributing around 25 per cent of GDP, compared with the world average of less than seven per cent.

The sector provides jobs for 70 percent of the labour force as well as a livelihood for more than 65 per cent of the population. Apart from which, it is a major source of raw materials as well as a market for finished products.

The population of the sub-Saharan Africa region is projected to grow from some 770 million in 2005 to about two billion in 2050. Despite urban migration, the absolute number of rural dwellers will continue to grow.

Producing more food for a growing population while at the same time combating poverty and hunger are the main challenges facing African agriculture in the coming decades. The risks that come with climate change make this task even more daunting.

The dominance of smallholder agriculture on the continent means that short- and medium-term agricultural growth and poverty reduction prospects will be closely linked with successful transformation of this sector.

Given the urgent need to transform African agriculture, the sluggish performance of the sector over the past few decades is disconcerting.

Growth rates in the sector across sub-Saharan Africa have been a modest 3.3 percent a year since 2000. Only a handful of countries   Ethiopia, Mali, Mozambique, Nigeria, Senegal and The Gambia   have surpassed the Comprehensive Africa Agriculture Development Programme (CAADP) threshold of 6 percent agricultural growth in recent years.

Crop output has been increasing, but this is largely driven by the expansion of cultivated land rather than productivity gains. For instance, between 1990 and 2006 the area under cultivation increased by more than 10 percent annually while cereal yields over the same period were largely stagnant, averaging around 1.2 tonnes per hectare in the region, compared to 3 tonnes per hectare in the developing world as a whole.

Foremost amongst the factors that undermine smallholder agriculture is the gross undercapitalization of the sector. Investment in key areas such as research, infrastructure development, mechanization, irrigation, value chain development and human capital development lags behind that in other developing regions and has actually declined over the past decade.

For instance public spending on agricultural research and development in the region between 1981 and 2000 grew at only 0.6 percent a year on average, and actually fell during the 1990s. At the same time, donor support for agricultural research declined from U.S. $6 billion in 1980 to $3 billion in 2006 and World Bank lending to agriculture in general decreased from $8 billion in 1980 to $2 billion in 2004.

Governments have had to rely more on domestic sources – Botswana, Burundi, Ethiopia, Gabon, Malawi and the Sudan already fund more than 60 per cent of agricultural research from domestic sources. But the private sector contributes only two per cent of total agricultural research funding in Africa, ranging from 1.6 per cent in East Africa to about 4.3 per cent in South Africa.

We urgently need to see an increase in government spending to promote agricultural growth and poverty reduction. Expenditure on agricultural research as a percentage of agricultural GDP worldwide is more than 2.5 per cent in developed countries but only 0.6 per cent in developing countries and 0.7 per cent in Africa.

The lack of adequate investment in agriculture has persisted despite numerous continent-wide and regional protocols by African governments and their development partners.

For instance, at the Maputo Summit, African leaders agreed to devote at least 10 per cent of their public expenditure to agriculture, with the aim of attaining agricultural growth rates of about six percent annually. But according to NEPAD, only 19 per cent of African countries have reached the target.

While Burkina Faso, Ethiopia, Malawi, and Mali have surpassed the 10 percent threshold of budgetary spending on agriculture in recent years, nearly of African countries reduced their spending on the sector. As a percentage of agricultural gross domestic product, African agricultural spending was only half that of Asia in 2005.

The benefits of agricultural investments have been well documented. They can have significant positive effects on growth and poverty reduction, given the sector's strong linkages with other sectors.

In many cases government agricultural spending has contributed substantially to agricultural productivity and rural household income, household consumption and poverty reduction. For instance, for each unit of local currency spent on the agricultural sector, on average 10 local currency units are earned by increased agricultural productivity or income, according to studies conducted in several African countries.

In countries such as India and Thailand, public investments in agriculture have substantially reduced rural poverty by stimulating agricultural growth and reducing food prices. Investments in other key facets of the rural economy such as road infrastructure and education have also been shown to have large positive outcomes. These findings suggest that the "how" of agricultural spending can be as important as the "how much".

Changing the face of African agriculture will require a change in mindset, not only on the part of political leadership but also among farmers and civil society in general.

Most African governments have clearly not prioritised agricultural transformation and continue to treat smallholder agriculture as just a way of life for a peasant population, with little to contribute towards economic growth and poverty alleviation. The farmers have also remained poorly organised, and fail to lobby for an adequate share of public resources.

Purposeful and sustained engagement of these stakeholders is required to unlock the potential of smallholder agriculture as the best option for transforming the lives of large numbers of poor households in rural communities across Africa.

Manyewu Mutamba and Leslie Nyagah work with the Economic Governance Programme of the Institute for Democracy in Africa, based in South Africa.


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