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For a Sustained Agricultural Transformation in Africa:
The Central Role of Policy
Kimseyinga Savadogo
PTCI & University of Ouagadougou
10 May 2013*
Introduction
Ladies and gentlemen,
I will start this talk by stating some known, basic truths. Transforming African agriculture is
not a new concept nor a new undertaking. On the eve of the first year of the twenty first century,
both African and non African researchers and policymakers have envisioned a situation of a
profound agricultural transformation in the continent. The concept of a smallholder is not a new
concept either. It has always been there, and much writing has been shed on issues related to
the small farm. That Africa lags behind everywhere else in the world is not a new fact either, it
is deemed to have always been the case, ever since African issues became international issues.
The concept of the role of policies to transform agriculture is not a new concept either, emphasis
has always placed on policy, on enabling policies for achieving such and such goal. It has been
long debated, and African policy analysts have been convened to the many events held at
various places of the world.
The lack of novelty in these various concepts does not mean, however, that the underlying
problems are resolved. Despite commendable recent progresses, African agriculture still lags
behind other regions, and needs to be transformed. Smallhoders remain poor, generally, and
their role and/or future in a transformed agriculture remains subject to questioning in some
circles. The overall picture of the African economy still calls for significant actions to allow
dormant potentials to be enleashed in order to lift this continent past a hurdle of inefficiencies
and ineffectiveness into a land of green growing crops, happy farmers no longer on the sideline
of society but at the center stage of the social development process.
*
Keynote address at the AU ‘Agriculture Policy Exchange and Learning Event’ meeting, Dakar, Sénégal, May 14,
2013.
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Among the four truths mentioned above, this short talk deals with the last, policy.
Historical perspective – where has Africa been on the issue of policy
If we use the main threads that characterize government interventions as indicative of
government policy, policy in the area of agriculture in post-independence Africa went through
essentially three phases.
(i) During the first phase spanning the first two decades of the 1960s-end 1970s, agricultural
policy was essentially characterized by either state neglect (in countries that believed
industrialization was the engine of growth) or state intervention in the areas of production (input
subsidy) and marketing (the establishment of marketing boards, price and trade controls). The
policies during this period earned Africa its bad reputation as pursuing policies deemed to be
unfriendly to agriculture. Indeed, agricultural policies in most African countries have been
qualified as taxing the sector to cater to the needs of urban residents, i.e. those with voices that
counted. Macroeconomic policies during that period were known to be distorted, with heavy
direct and indirect taxation on agriculture. Indirect taxation through overvalued local currencies
and the protection of industries worked to reduce producer prices by 24 percent, on top of the
12 percent reduction caused by direct taxation (WDR 2008). What is paradoxical is that the
poorest countries tended to tax agriculture the most, while rich, industrial countries would
typically offer subsidies to their farmers. Policies during this period and the next led to a buildup
of the so-called Afro-pessimism, as most analysts saw little hope as to what the continent could
offer to itself, let alone to the rest of the world.
(ii) During the second phase roughly spanning the decades 1980s-end 1990s, the dominant
theme of African policy was structural adjustment, a set of measures that stressed
macroeconomic policy (fiscal, monetary and exchange rate policies) and sought to restrict the
intervention of the state in either production activities or marketing in the agricultural (or any)
sector. Although the outcome of this phase was the achievement of macroeconomic stability, it
will remain in history as a lost decade for African agriculture as governments also withdrew
from providing the kind of public goods that would have been key to enhancing productivity
gains and food security. However, despite the negative view that many may have on the two
decades starting with the 1980s, the policy reforms during this period aimed at the improvement
of resource allocation across sectors. The combined effects of these policies have been to reduce
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taxation and restore market forces. The World Bank estimates show that reforms contributed to
cutting the average net taxation of agriculture by over a half, from about 28 percent to 10 percent
between 1980-84 and 2000-2004 (WDR 2008). Overall, the reforms have paved the way for
progress in African agriculture during the mid-1990s to the mid-2000s.
(iii) The third phase started with the new era of the twenty-first century, where agricultural
policy is in the making and promises to be more complete, avoiding the mistakes that
characterized past periods. This era started with a document, the Comprehensive Africa
Agriculture Development Program, CAADP. CAADP was adopted by the African Heads of
States in 2003 in Maputo, and this was an affirmation of their commitment to putting agriculture
first in the development process from then on. CAADP is now the reference framework of
agricultural policy making in SSA countries, through a set of principles that both entail
discipline and performance. The key CAADP principles say that each member country should
allocate 10 percent of budget expenditure to agriculture, pursue a six percent annual agricultural
growth rate, strive to achieve the first millennium development goal of slashing 1992 poverty
incidence level by half in 2015. The significance of CAADP for the continent is that it puts
structure around actions after macroeconomic reforms have paved the way for growth. With
the advent of the NEPAD’s CAADP, the long held Afro-pessimism started to give way to
optimism, in particular when the effects of almost two decades of reforms were shown to be
promising based on data analysis. For the first time of its post-independence period, Africa has
registered a steady growth in both GDP and agricultural production (Figure 1 below). Structural
changes also included the reversal of total factor productivity growth, from negative figures (2 percent) in the 1960-1980 period, to a strong positive figure (1.7 percent) over the 1983-2003
period (Badiane, 2008). Cash crop production rose from 19 million tons in 1980 to 38 million
tons in 2006, while food crops increased more than threefold from 59 to 219 million tons over
the same period (ECOWAS, 2010). In fact, Afro-optimism is justified as the Economist recently
published that over the last ten years six out of the world’s ten fastest growing economies were
in SSA (Economist 2011, 6 January).
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Figure 1— GDP and agricultural growth in Sub-Saharan
Africa, 1980–2011
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Annual growth, %
8
6
4
2
0
1980
1985
1990
1995
2000
2005
2010
-2
-4
Agriculture, value added (annual % growth)
GDP growth (annual %)
Linear (GDP growth (annual %))
Throughout the history of agricultural policymaking in Africa, a recurring and still unresolved
issue however is the place of the smallholder in agricultural development. The debate on the
smallholder went from sentimental visions (small is beautiful type, the small are more efficient
than the large, the small are poor and deserve our attention) to a dismissal of any positive role
of the small farm in the future of agriculture in Africa. Later, we will contrast this to the views
held and adopted elsewhere in the world, especially in Asia.
Policy represents a vision, and Africa has not had, in the past, a clear vision on the role of the
agricultural sector in the continent’s overall development. Until recently therefore, the continent
has failed to develop a clear set of policies that would adapt dynamically through time in
response of the evolution of both internal and external factors. Rather, the continent has gone
through what I would call a discrete type approach, whereby the view of agriculture and what
needs to be done during one particular period can be totally reversed the next period. That is,
Africa failed to build its policy from an adaptive approach and rather pursued a chaotic
approach.
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The critical role of policies
Policy is a set of guidelines that build on conceptual relationships between economic variables
with the aim to achieve intended results. For example to achieve sustained agricultural
productivity (a desired result), we know that agricultural technology is important but without
roads, the additional production will fail to reach markets, and the resulting glut will cause
lower profitability for farmers and create disincentives for any further desire to sustain the
initial increase in production. Thus a good policy of agricultural productivity will treat
technology and roads as joint actions necessary to achieve the desired goal.
Policy will work if it is backed by a vision, the vision itself being operationalized by periodic
plans, such as investment plans. Policy provides a country with the ability to respond to the
needs identified in the national agriculture and food security investment plans. Policy will work
by providing incentives to the different agents involved in the agriculture sector: farmers,
traders, processors. The response of the different agents to the incentives set into motion will
work so as to make planners achieve their objectives and goals, without coercion. Not only
will the objectives be attained, but they will be so in a timely manner. Policies are the key
building blocks that will help accelerate implementation of plans.
For policy to be useful once formulated, it has to be implemented. Implementation is a key
phase and may depend on the origin of policy. The ease of implementation may depend on the
origin of the policy. The origin of policies is in turn closely related to ownership, a key concept
we will revisit below as it may be an impediment to success. In a normal situation, policies
formulated by those in charge of implementation are more likely to be implemented than
policies forced upon decision makers.
Policy can bring about what initially did not exist. Take the case of Brazil. It is usually thought
that Brazil is a country of big farms, the latifundia. Yet, through policy, this country has
managed to develop a thriving smallholder agriculture. In Brazil, there are about 4 million of
small farms, making up 85 percent of all farms (International Forum 2010). The creation of the
Ministry of Agricultural Development to cater to the needs of the small farm did not affect, in
any way the interest of the large-scale farms, which are represented by the Ministry of
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Agriculture. By developing specific policy targeting the small farm, the Brazilian Government
under President Lula instituted credit facilitation, the reconstruction of broad scale extension
service for farmers, mechanisms for hedging against price and crop risks, as well as the
promotion of the sale of produce by smallholder. For example, the national Petroleum Company
had committed to buying at least 30 percent of its feedstock used for biodiesel from family
farms. The novelty of the Brazilian approach is that it not only boosts the production of small
farms, but further sustains the initial boost by facilitating market access.
For the case of Africa, innovative policy is critical to the continent’s current desire to make
agriculture a real backbone of its development. Because Africa comprises of multiple small
sized nations, regional and continental policies are useful and these are the ways to go to avoid
the errors in the past, when isolated, national policies created a situation where synergies were
ignored.
Some major challenges facing Africa in policy setting
Although Africa could do the same as elsewhere, there are still many challenges the continent
faces in setting a successful policy. Here, we overview some that we consider as major
challenges.
1) The multiplicity of policies and policy sources stemming from the multilayered
international or regional frameworks countries operate through; one example is the
coexistence of WAEMU and ECOWAS for the Francophone countries of West
Africa.
A long term solution is that over time, the less useful organization will
disappear on its own, unless policy choices do away with it before. To take an
example in Europe, who nowadays remembers BENELUX? The Europe wide
integration has done away with an entity that was useful at some point in time.
2) Ownership, which means all elements of ownership, including financing ownership:
Often, writers refer to the foreseen changes in agriculture in Africa as an event
bringing ‘real African ownership’. Ownership is then seen as one key hindrance to
policy implementation. And ownership cannot be secured if the financing of policies
is of the resort of other parties, with decision makers in Africa lying comfortably (a
misnomer) on the seat of implementers.
3) Capacity for formulating and implementing policies. Foreign borne policy making
has been, in the past, a weak point of policy making in Africa. The continent has to
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make sure it has secured internal capacity before venturing into a policy making
exercise that requires inexistent capacity. After all, Africa should draw lessons from
Indonesia: young people sent by their government to receive good training in
economics at prestigious US Universities such as Berkeley, later became the artisans
of policy setting in Indonesia.
4) Linguistic fragmentation: Things that do not appear as a hindrance elsewhere
become a source of impediment in Africa. After, English and French people have
coexisted since long, even if they eventually went through long lasting wars from
time to time. Today, the Anglophone-Francophone issue is seen as a major source
of fragmentation between African countries sharing the same borders. I think this
situation is unfortunate, a false problem transformed into a real one and therefore
introducing real problems that were not supposed to be there. As a matter of fact,
those who fight over the English and the French languages often share the same
native languages, across borders.
5) Financial-currency fragmentation: the existence of many national currencies, often
non-convertible, used to cause big problems. The monetary reforms of the structural
adjustment period have done away with some of the difficulties, but nothing could
be as easy as a unified monetary zone.
The need for a new approach
The challenges noted above should not keep Africa from moving ahead towards a novel
approach to policy making.
Policy should target the small-farmers and aim at enhancing productivity and profitability using
evidence based approaches rather than rhetoric. This in turn calls for:
o Investing in key public goods for the rural sector, including roads and irrigation
infrastructure
o Creating a new market economy in rural areas by linking agriculture to agro-processing
and other demand creating activities
o Endowing farmers with skills, thus transforming agriculture into a profession (it is
amazing how one does not include rural farmers when referring to the private sector in
our countries)
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Policy should emphasize the development of African markets for African agricultural products.
If this demand issue is not resolved, then technological development and productivity gains are
no longer sustainable. This is because regional markets will allow economies of scale in
production to emerge, cutting down cost, and making agricultural products available for
alternative uses including livestock feeding.
The way policy is being formulated at the regional level meets some of these expectations. For
example ECOWAP, the regional agricultural policy for West Africa, clearly states that its vision
is to have “a modern and sustainable agriculture based on effective and efficient family farms
and the promotion of agricultural enterprises through the private sector” (ECOWAS, 2010). An
approach emphasizing the family or the small farm is key. As we know, 85 percent of the 470
million farms in the world with available data at the beginning of the 2000s were comprised of
smallholders, the crushing majority of which were located in Asia (87 percent). Africa accounts
for only 8 percent of smallholders in the world, but they make up 80 percent of Africa’s farm
population. Asia, unlike Africa, has built its agricultural success from these millions of
smallholders.
The number of smallholders in Asia was policy induced, through land reform leading to the
fragmentation of land ownership. Starting with imperfect credit markets and farmers being
victims of money lenders, governments intervened to both make credit cheaper and accessible
to smallholders. The Grameen Bank concept in Bangladesh is the model of a microfinancial
institution built for the poor. Access to credit made access to physical capital possible. In the
1990s, as industrial factories lured farmers for employment in a context where agriculture in
Asia was very labor intensive, governments intervened by facilitating access of farmers to
equipment suited to farming conditions (Fan and Chan-Kang, 2005). Other actions taken by
governments included heavy investment in rural infrastructure, especially irrigation. Farmers
were encouraged to use fertilizer. Governments also invested in human capital (education, but
also placed emphasis on health issues including rural access to clean water) and furthermore
initiated the policies that ensured that farmers would reap the benefits from the accumulated
human capital: these included measures to reduce the gaps between urban and rural incomes,
and at the same time advisory services were targeting illiterate rural residents not to migrate
into cities, as they would just increase the number of unemployed people (Ukawa, 1995). In
addition to all these strategies, the Asian governments used constraining measures to force the
adults provided education to remain in the rural areas (Gillis, Dwight, Roemer, and Snodgrass,
1995). The argument used by these governments was that the tremendous investment in
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education and health would be a waste and socially counter-productive if the beneficiaries were
allowed to migrate into any chosen sector. This qualified rural labor became the crux of the
productivity gains in Asia witnessed later. The results of the policies were generally positive :
while Japan did not record any significant gain in production, it recorded tremendous gains in
labor productivity. Countries like China, South Korea, Thailand and India recorded strong
growth rates of the volume of the agricultural outputs, mostly through land productivity
improvement. The Japanese case is worth noting. The Japanese agricultural labor productivity
is 90 times higher than that of the Chinese farmers and 76 times higher than that of India. In
addition to the techniques of intensification implemented by the other countries, the Japanese
government initiated a policy of welfare transfer from consumers to agricultural producers (Fan
and Chan-Kang 2005). This policy consisted in protecting the local farmers from international
competition by isolating the local market. But as a whole, and unlike African countries, the
Asian countries all experienced strong positive agricultural labor productivity gains up to the
years 1990.
With inspiration from these successes, the next steps in African agriculture policy should
concentrate in making policies coherent among themselves and spatially. Geographic
coordination of policies is essential. Minimizing duplication through the existence of multiple
regional overlapping entities, creating consistent regional frameworks will be key. Regional
frameworks should assure that regional and Africa wide markets are developed. I remember a
report written twenty years ago for UNDP on the issue of food security, and which illustrated,
through a dream, the beautiful world two traders were living in in a projection through time:
one of the trader had taken the new opportunity that emerged from the new Trans-African road
linking East to West Africa, as well as the liberalization of trade throughout the region, to move
commodities by truck between West and East Africa and was sharing this experience with his
fellow who ignored all about this novelty. This was a dream, but the United States is a practical
case where the whole space is crisscrossed with roads allowing agricultural commodities to
move by truck from South to North or West to East, over distances of thousands of kilometers.
As a way of inspiration, we should again look to China. By emphasizing its small-scale farm
economy, the Chinese government has harnessed a huge potential that may have been
considered as inessential before the turn-around was initiated. The intention is not to describe
the policy process engaged in China here. We need only mention that the whole system was
well thought of, comprising (see Yang Qiulin, 2010):
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1) Well-designed investment plans aimed at: (i) improving the basic agricultural
production conditions; (ii) improving farmers’ basic living condition; (iii)pushing
forward for innovations in agricultural technology aimed at improving agricultural
productivity; (iv)enhancing the quality and employability of the rural labor force
2) Design of a national financing plan assuring that the main policy lines of Government
are followed, being affordable and using both national private, public and farmers’ own
sources of funding, as well as some international funding.
The behavior of China’s aggregate data is just interesting to see (figure 2).
China's GDP Growth 2001-2012 (%)
14.2
12.7
11.3
10.1
8.3
2001
10.1
9.6
9.1
2002
10.4
9.2
9.2
8.2
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Ladies, Gentlemen,
Strengthening policy systems is critical to achieving the goals and targets of national
agriculture and food security investment plans
Based on the above record, it appears that strengthening policy systems is critical for Africa’s
agriculture to move forward. Systems should be strengthened at the continental and regional
levels, and national policies should align with these pan-territorial systems. Policy system
strengthening is essential at both the design phase and the implementation phase.
Ladies and gentlemen,
Such as, I believe, the way Africa should go from now on : using evidence based, vision induced
policy, to harness the potential of the agricultural sector, which still has a lot to offer to this
region of the world. Indeed, the African continent remains the only region of the world where
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the available land to active ratio still allows further land expansion. Coupled with technology,
education and many other ingredients that well tuned policies should set in motion, the
continent can deliver along and above the positively sloped line that we have seen above. To
claim the twenty-first century as Africa is envisioned to, policy will be the central ingredient.
Thank you.