Harambe Entrepreneur Alliance – Fourth Annual Symposium, 25 March 2011
Africa’s Turnaround
From Crisis to Opportunity in African Agriculture*
William Masters
Professor of Food Policy, Tufts University
http://nutrition.tufts.edu
http://sites.tufts.edu/willmasters
* Forthcoming in Food and Financial Crises: Impacts on Sub-Saharan Africa,
David R. Lee and Muna B. Ndulo. editors. Wallingford, UK: CAB International, 2011
How much longer?
Cartoon (c) 2002, reproduced with permission by Nicholson from "The Australian" newspaper: www.nicholsoncartoons.com.au
World agriculture is changing rapidly
Monthly average prices for wheat, maize and rice, Jan. 2000-Feb. 2011
Source: FAO Global Information and Early Warning System data (www.fao.org/giews/pricetool),
downloaded Feb 20, 2011. All are monthly export prices, normalized to Jan. 2000=100, for US
No. 2 Hard Red Winter Wheat, US No. 2 Yellow Maize, and Thai 100% Broken Rice.
Africa’s green revolution is here
USDA estimates of average cereal grain yields (mt/ha), 1960-2010
4.5
4.0
Rest-of-World
World
3.5
Southeast Asia
3.0
South Asia
2.5
Sub-Saharan Africa
2.0
1.5
1.0
0.5
0.0
Source: Calculated from USDA , PS&D data (www.fas.usda.gov/psdonline), downloaded 7 Nov 2010. Results shown are each
region’s total production per harvested area in barley, corn, millet, mixed grains, oats, rice, rye, sorghum and wheat.
Three big trends will change the picture
Food policies
Rural
demography
Farm
technologies
Cartoon (c) 2002, reproduced with permission by Nicholson from "The Australian" newspaper: www.nicholsoncartoons.com.au
Rural demography • Food policies • Farm technologies
Rural population growth is a major cause
of Africa’s impoverishment
Land available per farm household (hectares)
Reprinted from Robert Eastwood, Michael Lipton and Andrew Newell (2010), “Farm Size”, chapter 65 in Prabhu
Pingali and Robert Evenson, eds., Handbook of Agricultural Economics, Volume 4, Pages 3323-3397. Elsevier.
Rural demography • Food policies • Farm technologies
Urban growth eventually employs all new workers
Billions
10
World (total)
2.0
Sub-Saharan Africa
1.8
8
Total
1.6
Total
7
Urban
1.4
Urban
1.2
2010
Rural
Source: Calculated from UN World Urbanization Prospects, 2009 Revision ,
released April 2010 at http://esa.un.org/unpd/wup. Downloaded 7 Nov. 2010.
2050
2040
2030
2020
2010
2000
1990
1970
0.0
2050
0
2040
0.2
2030
1
2020
0.4
2000
2
1990
0.6
1980
3
1970
0.8
1960
4
1950
2010
1.0
1960
Rural
5
1950
6
1980
9
2010
Billions
Population by principal residence, 1950-2050
Rural demography • Food policies • Farm technologies
Until cities grow big enough,
new workers have no choice but to be farmers
Rural population by region, 1950-2050
Rural population estimates and projections, 1950-2030
Index
1950=100
400
350
Population
Rising rural populations reduce
land available per farmer
≈1.1 b.
250
≈310 m.
200
150
50
0
≈480 m.
S Asia
300
100
SS Africa
≈1.4 b.
We are here:
SE Asia
Rest of
World
Eventually land available
per farmer rises
Source: Calculated from FAOStat (downloaded 17 March 2009). Rural population estimates and projections are
based on UN Population Projections (2006 revision) and UN Urbanization Prospects (2001 revision).
Rural demography • Food policies • Farm technologies
Africa had the world’s fastest and longest
rural population growth
Rural population growth rates by region, 1950-2030
Rural population growth (decade averages), 1950-2030
2.5%
2.0%
1.5%
1.0%
0.5%
Over 2% annual growth
for 30 years!
Under 1.3% annually,
and falling
SS Africa
Below
0.0% zero = more land/farmer
S Asia
-0.5%
SE Asia
-1.0%
-1.5%
Rest of
World
Source: Calculated from FAOStat (downloaded 17 March 2009). Rural population estimates and projections
are based on UN Population Projections (2006 revision) and UN Urbanization Prospects (2001 revision).
Rural demography • Food policies • Farm technologies
Africa also had the world’s fastest
urban population growth
Urban
population
growth
rates
by region,
1950-2030
Urban
population
growth
(decade
averages),
1950-2030
6.0%
5.0%
From >5% annually
…to <4%
4.0%
3.0%
2.0%
1.0%
SS Africa
S Asia
SE Asia
Rest of World
Zero
0.0%= no change
Source: Calculated from FAOStat (downloaded 17 March 2009). Rural population estimates and projections
are based on UN Population Projections (2006 revision) and UN Urbanization Prospects (2001 revision).
Rural demography • Food policies • Farm technologies
Africa’s long baby boom is finally
entering the workforce
dependency
rates (ages
and 65+),
ChildTotal
and elderly
dependency
rates0-14
by region
(0-151950-2030
and 65+), 1950-2030
50
Africa had the world’s most severe
demographic burden (>45% )
now a demographic gift
45
40
SS Africa
S Asia
35
SE Asia
Rest of World
30
Source: Calculated from UN Population Projections, 2008 revision (March 2009), at http://esa.un.org/unpp.
Rural demography • Food policies • Farm technologies
Conclusions #1:
Africa’s demographic turnaround
• Africa is just now emerging from the world’s most extreme
demographic transition, which involved:
– The world’s fastest rural population growth
> 2,0 % for 30 years, 1960s-1980s
– The world’s fastest urban population growth
> 4,5 % for 50 years, 1950s-1990s
– The worst dependency rates (children or the elderly)
> 45 % for 60 years, 1950 – 2010
• These pressures are now easing, steadily opening new
windows of opportunity
Rural demography • Food policies • Farm technologies
Demography is not destiny:
Leadership matters!
Rural demography • Food policies • Farm technologies
Agricultural policy in Africa: 16 country studies*
*Plus five for cotton only
Rural demography • Food policies • Farm technologies
Methodology:
Price distortions due to stroke of the pen policies
• Nominal Rate of Assistance:
tariff-equivalent gap between
internal and foreign prices:
• Sometimes this is actually a tariff:
• Usually we observe only prices and
must infer marketing costs:
NRA 
Pd  Pf
Pf
NRA  t
Pd  (1  m* )  E *  Pf
Rural demography • Food policies • Farm technologies
Results: Heavy taxation of farmers and trade,
followed by major reforms
This gap is
anti-trade
bias
Importable products
All farm products
This level
is net
anti-farm bias
Exportable products
Source: K.Anderson and W. Masters (eds), Distortions to Agricultural Incentives in Africa.
Washington, DC: The World Bank, 2009.
Rural demography • Food policies • Farm technologies
Individual countries follow varied paths
Countries’ total NRA for all tradable farm products, 1955-2004
Rural demography • Food policies • Farm technologies
Our common methodology allows
comparison across all kinds of countries
No. of
countries
Africa
16
Percentage of world
Pop.
GDP
Ag.GDP
10
1
6
Asia
12
51
11
37
LAC
8
7
5
8
ECA
13
6
3
6
HIC
19
14
75
33
Total
68
91
95
90
Rural demography • Food policies • Farm technologies
The global context is becoming more favorable,
as other countries limit their subsidies
Average NRAs for all products by year, with 95% confidence bands
ASIA (excl. Japan)
ECA
Less antifarm bias
-1
0
1
2
AFRICA
1960
1970
1980
1990
2000
LAC
-1
0
1
2
HIC
Less profarm bias
1960
1970
1980
1990
2000
1960
1970
1980
1990
2000
All Primary Products (incl. Nontradables)
Source: W.A. Masters and A. Garcia (2009), “Agricultural Price Distortion and Stabilization: Stylized Facts and Hypothesis Tests,”
in K. Anderson, ed., Political Economy of Distortions to Agricultural Incentives. Washington, DC: World Bank.
Rural demography • Food policies • Farm technologies
Africa is not yet at the income levels
associated with costly farm subsidies
National average NRAs by real income per capita, with 95% confidence bands
Tradables
0.0
-0.5
NRA
0.5
1.0
1.5
All Primary Products
-1.0
≈$5,000/yr
6
(≈$400/yr)
8
10
6
Income per capita (log)
All Primary Products
Exportables
8
(≈$3,000/yr)
10
(≈$22,000/yr)
Importables
Source: Author’s calculations, from data available at www.worldbank.org/agdistortions. Each line shows
data from 66 countries in each year from 1961 to 2005 (n=2520), smoothed with confidence intervals using
Stata’s lpolyci at bandwidth 1 and degree 4. Income per capita is expressed in US$ at 2000 PPP prices.
Rural demography • Food policies • Farm technologies
Conclusions #2:
Africa’s food-policy turnaround
• Policy reforms have finally cut Africa’s heavy colonial
and post-colonial taxation of farmers
– The average burden per farmer reached US$134 in the ‘70s
• Further reduction is possible and desirable
– The average burden per farmer was US$41 in 2000-04,
– …more than all public investment or foreign aid to the sector
• Later, the challenge will be to limit subsidies
– As incomes rise, political pressures shift rapidly
Rural demography • Food policies • Farm technologies
What’s behind Africa’s green revolution?
USDA estimates of average cereal grain yields (mt/ha), 1960-2010
4.5
4.0
Rest-of-World
World
3.5
Southeast Asia
3.0
South Asia
2.5
Sub-Saharan Africa
2.0
1.5
1.0
0.5
0.0
Source: Calculated from USDA , PS&D data (www.fas.usda.gov/psdonline), downloaded 7 Nov 2010. Results shown are each
region’s total production per harvested area in barley, corn, millet, mixed grains, oats, rice, rye, sorghum and wheat.
Rural demography • Food policies • Farm technologies
African agriculture is really distinctive
Source: Reprinted from W.A. Masters, “Paying for Prosperity: How and Why to Invest in Agricultural
Research and Development in Africa” (2005), Journal of International Affairs, 58(2): 35-64.
Rural demography • Food policies • Farm technologies
Appropriate new technologies have only
recently been developed and disseminated
Source: Reprinted from W.A. Masters, “Paying for Prosperity: How and Why to Invest in Agricultural
Research and Development in Africa” (2005), Journal of International Affairs, 58(2): 35-64.
Rural demography • Food policies • Farm technologies
Conclusions:
Three turnarounds in African agriculture
• Rural demography
– Slowdown in rural and urban population growth
– Reduction in the dependency rate (children or elderly)
• Food policies
– Many reforms done
– More challenges ahead
• Farm technologies
– Yields and output are rising
– Technological transformation is finally under way
Rural demography • Food policies • Farm technologies
Postscript:
What role for foreigners in Africa’s turnaround?
ODA commitments to Africa in selected sectors and total, 1973-2006
(real US dollars per capita)
20
40
Health
Food Aid
Total ODA (right axis)
Agriculture
Debt Relief
15
30
10
20
5
10
-
1975
1980
1985
1990
1995
2000
2005
Source: Author's calculations, from OECD Development Assistance Committee (2008), Bilateral ODA
commitments by Purpose (www.oecd.org/dac), deflated by OECD deflator (2005=100) and divided by
midyear population estimates for Sub-Saharan Africa from the U.S. Census Bureau, International Database.
Reproduced from W.A. Masters (2008), “Beyond the Food Crisis: Trade, Aid and
Innovation in African Agriculture.” African Technology Development Forum 5(1): 3-15.
Foreign aid to African
agriculture had dropped
to US$1 per African
(vs. US$4 for health,
and US$38 in total).
From such a small base,
rapid growth is possible