This background paper was prepared by SPAAR in collaboration with the GCA Secretariat.

Executive Summary of Proposed key actions

As they enter the 21st century, agriculture remains the dominant sector for most African countries. Despite some recovery and growth in the 1990's, agricultural production has not kept up with population growth. Political and natural calamities, as well as policy and institutional weaknesses, have inhibited increased investment, technological change and growth. Without substantial improvement in agricultural productivity and sound natural resource management, most African nations are unlikely to experience sustained development and rural African populations will be unable to improve their well-being in the foreseeable future. However, increased agricultural productivity in Africa cannot be achieved without advances in technology development, capacity building and an improved environment for farmers, processors and market agents.

In spite of the prevailing constraints, there is an emerging sense of hope about the continents capability to not only recover, but to launch a sustained development process. This renewed hope is partly based on Africa's huge but still underutilized and poorly managed natural resource endowments, as well as its potential to develop vibrant local and regional markets and to become a sizable player in the 21st century global economy.

The challenge is for countries to reassess their rural developmental priorities, consolidate the policy and institutional reforms that promote community-based development, encourage the active participation of the private sector in agricultural development, and mobilize and allocate sufficient resources to the rural sector to develop both infrastructure and support services. Past efforts either ignored or paid insufficient attention to key issues, including in particular: a) low and declining soil fertility in Africa, the most significant cause of low productivity; and b) the absence of policy and financial incentives and instruments to induce profitable value-adding opportunities to agricultural products. What is needed, therefore, is an action-oriented strategy that simultaneously addresses policy, institutional, investment, and technical/technological constraints facing African agriculture on these two fronts. The elements of such strategy must include:

	Extending and deepening policy reforms to achieve macroeconomic stability and openness.
	Introducing sanitary and quality standards for food production, processing, handling, distribution and marketing, as well as inputs such as seeds, fertilizers and pesticides.
	Reducing tariffs and quotas of both African and OECD countries.
	Reforming regulatory systems and developing the capacity of relevant public sector institutions to provide the transparent, efficient, consistent and credible services needed for the effective promotion of private sector development, including local processing and value-adding industries.
	Formulating a community-based and decentralized national sector policy framework whereby priorities for rural investments are identified as part of a national network of services and infrastructure that specifies the roles and responsibilities of various actors in the delivery of such services as research, extension and finance.
	Improving security of land tenure to encourage efficient land use and small-holder investment.
	Allowing service providers to charge adequate fees to cover their operating and maintenance costs, as well as some or all capital expenditures.
	Investing in, and strengthening the capacity of, demand-driven and coordinated agricultural research and extension services.
	Developing water control systems, focusing on technologies for rainfed agriculture, prioritizing the use of small-scale irrigation, and improving the design and management of large-scale irrigation systems.
	Strengthening land and water management through integrated approaches at watershed and river basin levels.
	Supporting capacity building in the private and public sectors to address market constraints through collaboration with trading partners.
	Planning and executing soil recapitalization initiatives through public investment in productivity-enhancing inputs, including the promotion of small-scale enterprises for the manufacture and distribution of indigenous and imported mineral, organic and inorganic fertilizers.
	Implementing innovative policies to encourage local and foreign private sector actors to enter into strategic alliances and develop the vertically integrated production, processing and marketing enterprises needed to make the agricultural sector more profitable and competitive.

Why focus on raising productivity and competitiveness of agriculture and agribusinesses?

Improving productivity and competitiveness can contribute to four critical goals:

Reducing poverty
Lessening risk and vulnerability
Promoting widely-shared growth
Reversing environmental degradation.

Reducing poverty. Agriculture provides the main source of livelihood for about 70 percent of people in Africa. Poverty is concentrated in rural areas. Rural people have significantly less access to basic services, such as health care, education, electricity, and communications services, than people living in towns and cities. As an example, only about 32 percent of rural residents in Africa have access to clean water, compared with 74 percent of urban dwellers. As a result, rural residents experience higher infant and maternal mortality rates, lower life-expectancies and lower levels of literacy than people in urban areas. Raising the productivity of agriculture can directly improve the incomes of the people who depend on agriculture for their livelihood.

Lessening risk and vulnerability. Rural Africans face multiple risks every day--from climatic shocks and seasonal food shortages, commodity price fluctuations, macroeconomic shocks, HIV/AIDS and other epidemics, natural disasters, conflict, and political interference and corruption, any of which can overwhelm coping mechanisms and undermine the livelihoods and well-being of entire communities. Food insecurity is a particular risk, and concerns about survival take precedence over all other issues. Today, more than 180 million people in Africa one-third of the total population do not have enough to eat for a healthy life. In 1997, two thirds of all African countries were producing less food per person than a decade earlier. For the region as a whole, per capita food production was 6 percent lower in 1997 than in 198991. Food insecurity is particularly severe in central, eastern and southern Africa, where 44 percent of the subregions 340 million people are undernourished. A number of countries persistently face the risk of famine. In eastern and western Africa, 42 percent of children under five are stunted (low height for age), and about 36 percent are underweight. Women also suffer from high rates of undernourishment. Unlike in other regions of the world, the situation in Africa is getting worse, not better. Countries with a large proportion of undernourished people face exceptional development challenges.

Promoting widely-shared growth. In addition to raising incomes of agriculturalists, enhancing the productivity of agriculture helps to increase the welfare of people who are not producers by bringing down the price of food. African families on average spend almost two-thirds of their total household income on food, so lowering food prices frees substantial resources that families can use for other purposes. Moreover, the increased income from expanded agricultural output stimulates development of nonfarm enterprises, as farmers spend their extra income on a wide variety of goods and services, such as clothing, kerosene, processed foods, health care, transportation, and construction supplies and services. For the most part, small, labor-intensive enterprises produce these goods and services, raising employment and incomes still further. In turn, higher employment boosts demand for food, which keeps prices steady in the face of higher supply.

Improving agriculture productivity is not the only source of income growth in Africa. Manufacturing, mining and mineral processing, tourism and many other activities all have potential. However, in Africa today agriculture is very important, contributing an average of 30 percent of total gross domestic product in Sub-Saharan Africa (excluding South Africa), and over 40 percent in one-third of the countries in the region (annex table 1). Agribusinesses, which themselves depend on agricultural growth, are responsible for an additional 20 percent of gross domestic product and about 25 percent of total rural incomes. Raising the productivity and competitiveness of these agricultural and related businesses will profoundly affect the rate of economic growth for the majority of African countries over the next ten to fifteen years.

Reversing environmental degradation. Paying attention to agricultural productivity will help to address environmental degradation by facilitating the technological transformation needed to raise agricultural yields sustainably, and thereby reduce pressure on fragile ecosystems. Environmental and agricultural development agendas need to be addressed jointly given that most natural resources in Africa are managed by the farmers and herders who are trying to make a living from them.

Recent performance of African agriculture

Agricultural productivity per worker for the region as a whole has stagnated during the past ten years at an estimated US$375 per worker (constant 1995 US$). This is 12 percent lower than in1980, when value-added per worker was US$424. Increasing productivity per worker helps to fuel economic growth by generating surplus that can be used for investment in agricultural and nonagricultural activities, it is widely regarded to be the first step in the process of agricultural transformation.

Agricultural yields have also stagnated or fallen for a wide range of crops in many countries. Significantly, yields of the most important food grains, tuber and legumes (maize, millet, sorghum, yams, cassava, groundnuts) in most African countries are no higher today than in 1980. This has made the challenge of attaining food security even more formidable. Low productivity has seriously eroded the competitiveness of African agricultural products on world markets. Together with high domestic transport and transaction costs, low agricultural productivity resulted in the dramatic fall in Africas share of total world agricultural trade, from 8 percent in 1965 to 3 percent in 1996.

The largest trading partner for most African countries is the European Union, which accounts for about 50 percent of exports, and about 50 percent of imports. North America is second, accounting for 9 percent of exports and 7 percent of imports. Because such a large share of African exports is destined for the markets of Europe and North America, reducing trade restrictions with these regions is critical for increasing Africas agricultural exports.

Of course, these regional trends mask considerable country variation in performance. Benin managed to increase agricultural productivity per worker by over 40 percent during 19901998, from about US$400 in 1990 to US$575 in 1998. Average yields of tea in Kenya doubled between 1980 and 1990, helping Kenya to become the worlds largest exporter of tea, ahead of India and Sri Lanka. Yields of cotton in Benin, Togo, Mali, Central Africa Republic, Chad, Senegal and other countries rose between 1980 and 1990, allowing them to become significant exporters of cotton fiber. However, even countries that have been able to increase production and exports of agricultural products during the 1990s have experienced little increase in yields during the decade.

Reasons for poor performance

Africas long history of poor policies and weak institutions explains much of the regions poor performance. In the postcolonial era many African governments enacted policies that discouraged private investment in agriculture. They taxed agriculture heavily to generate resources to invest in industry and urban infrastructure. They maintained overvalued exchange rates to reduce costs of imports for industry, which encouraged food imports and undermined the competitiveness of agricultural exports. They restricted trade, regulated and controlled agricultural prices, failed to protect property rights, and in some instances even restricted the crops small-scale farmers could grow. Public sector institutions dominated agricultural marketing and input supply systems, choking opportunities for individual entrepreneurs, private companies and farmers associations to participate in agricultural and rural development. Moreover, the fact that most African governments were highly centralized discouraged autonomous decision-making and the participation of local communities and non-governmental organizations.

Governments could have made up the shortfall by investing in rural infrastructure, agricultural research, and information and extension systems, as well as rural education, health and nutrition to enhance the productivity of farming and agribusinesses in the medium to long-term, but did not do so. Local governments could not invest even if they wanted to because they received few resources from central government and lacked the authority or access to tax bases to mobilize resources for local needs. The rural development programs that were implemented were often ineffective and unsustainable because beneficiaries were not involved in designing, implementing and maintaining them, and because local institutional capacity was weak.

Low investment in agriculture and rural development is revealed through key statistics. Only about 4.2 percent of land under cultivation in Africa is irrigated. This compares with 13 percent in Latin America and the Caribbean, a region with similar population densities and resource endowments. Fertilizer application is the same today as in 1980. The number of tractors per worker is lower than in any other region, and endemic animal diseases reduce the use of animal draft power. In addition, provision of essential social infrastructure is poor and declining. Public health services are inadequate, and the spread of malaria, HIV/AIDS and other diseases reduces the economic well-being of rural people, as well as threaten their health. Literacy levels are slipping in the face of low public sector budget allocations and the pressures of disease and falling incomes.

Many governments have initiated reforms, with good results

In recent years, a large number of African governments have reformed their macroeconomic, trade and agricultural policies. Inflation and budget deficits are down. The exchange rate overvaluations of the 1970s and 1980s have been largely corrected, and trade policies are progressively being liberalized so as not to discriminate against exports. Institutional measures that controlled prices and supplies of food and export crops, such as marketing boards, price stabilization funds and regulations prohibiting small farmers from growing specific cash crops, have been or are being removed. And many state owned farms and agribusinesses have been privatized. Both small farmers and consumers have benefited. Small farmers have profited from the general improvement in real producer prices (for cash and food crops) and the opportunity to sell cash crops (as with coffee in Uganda and tobacco in Malawi). Consumers in grain-deficit rural areas have benefited from lower food prices, a result of expanded competition in grain marketing and milling from private traders.

Many governments have also restructured, and are decentralizing resources, power, and taxation authority to lower levels of government. This is helping to improve the accountability of government to citizens, leading to more responsive government services in many places. The relaxation of central control is also opening opportunities for individuals, farmers associations, non-governmental organizations, and other civil society groups to participate for the first time in the political process. As a result, hundreds of new organizations representing a huge variety of interests have emerged in rural Africa. Many are actively participating in designing and implementing development programs. This is improving project quality and sustainability, and is increasing the capacity of communities, non-governmental organizations, and local government to undertake future development programs. And the roots of democracy are deepening in a number of countries.

The reform agenda is not complete

However, a significant number of countries have not yet completed the policy and institutional reform agenda. Tariff and nontariff barriers to regional trade in raw and processed agricultural products and agricultural inputs remain high. The Uruguay Round of trade negotiations has brought a framework for opening agricultural trade, but has achieved little reduction in the enormous trade barriers of OECD countries, an important issue for the immediate future. In many countries, regulations and other measures discourage or prevent new entrants from competing against politically well-connected firms in input, output, and rural financial markets, so market development and competition remains low. Institutions and rules are still inconsistent and nontransparent in many countries, discouraging investment. And, while macroeconomic stability has generally improved, in many countries it remains fragile. All these factors have contributed to the disappointing private sector response to reform. Much greater understanding is needed of the constraints to competition and of ways to overcome them. More also needs to be done to reform government. The better reformers need to consolidate their decentralization measures, while others must move more quickly to decentralize resources, power and taxation authority to lower levels of government. Countries also need to do more to promote the genuine participation of civil society groups in decisionmaking.

A strategy for raising productivity and competitiveness of agriculture and agribusinesses

Africa has vast untapped potential to raise output and exports of both raw and processed agricultural products. Properly used, its natural resources land, water, forests, and biodiversity can contribute significantly to raising incomes and the quality of life of populations. Key elements of a strategy to increase productivity and competitiveness of African agriculture and related businesses include putting into place the policy and institutional framework needed to significantly increase private investment in agriculture and related enterprises; increasing investment in infrastructure and quality of services in rural areas; and targeting public expenditures to areas with high potential payoffs.

It should be noted that rural economies are highly diverse both within and between countries, and strategies must be tailored to suit the particular circumstances that countries face. For example, strategies would differ for countries (and regions within countries) with good agriculture potential compared to those with low potential. Governments must be in charge of designing and implementing strategies to raise the productivity and competitiveness of agriculture. Donors need to support governments efforts by providing financial support and technical assistance.

Reforming policies and institutions to encourage investment

Policies and institutions that encourage investment and entrepreneurial activity are essential to raising the productivity of agriculture and agribusinesses. Key areas of required reforms are outlined below.

	Achieve macroeconomic stability and openness. Macroeconomic policies strongly influence agricultural and rural nonfarm investment and growth. Overvalued exchange rates in particular harm agricultural exports and discourage investment in farms and nonfarm rural enterprises. With globalization, sound macroeconomic management will be an even more important and necessary tool for governments to raise rural incomes.
	Reduce tariffs and quotas of African countries and OECD countries. Reducing trade barriers within Africa would help increase incomes of farmers and businesspeople. African import tariffs average 25 percent, which is three times higher than those of the fast-growing exporters and more than four times the developing country average. Nontariff barriers also remain high across the region. Trade barriers hurt farmers by increasing the costs of their inputs (fertilizers, tractors and the like), and by restricting markets for their outputs. Greater access to OECD country agricultural markets would increase real incomes in Africa by about US$6 per person per year by enabling producers to sell their commodities at higher prices and in greater volumes. African governments can help influence decision-makers within Europe, North America and Japan to open markets to African products. Because so many Africans rely on agriculture for their livelihoods, liberalizing trade would have dynamic multiplier effects for rural areas and for economic growth as a whole.
	Extend and deepen policy reforms. In many African countries, overall supply response, including of the private sector, to policy and institutional reforms has often been disappointing. This has led some to question the value of the reforms themselves. But closer analysis reveals that in many cases African countries continue to implement inappropriate policies and apply rules and regulations with a considerable lack of transparency and impartiality. In effect, rules are made or applied so as to protect politically-connected groups, with deleterious effects on incentives to invest. An example is transportation policy in Malawi. This makes it difficult and expensive for newcomers to break into the transport business by keeping tariffs on spare parts and used vehicles high and fees for licenses elevated, among other measures. As a result, transporting goods from the farm to market costs twice as much in Malawi as in its neighbors. The effect of this policy is to redistribute income from Malawian farmers to owners of transportation firms, which keeps farmers poor and depresses incentives to invest in agriculture. Another example is the rules that in many countries make the importation of fertilizers cumbersome and costly, which reduces the supply of fertilizers and raises their prices. Informal taxes on farm inputs and farm products, often collected at unofficial road blocks, seriously drain the profits of producers and traders. Governments and their development partners need to better understand the multiple constraints that are faced by potential investors and work to address them.
	Make institutions transparent, consistent and credible to promote private sector development. Weak institutions are another major reason why the private sector response to reform has been slow. Studies and surveys of entrepreneurs in Africa confirm that unpredictable changes in rules and policies seriously affect their businesses. Institutional arrangements that foster responsiveness, accountability and the rule of law need to be developed if incentives for private investment are to improve. Areas of special attention include rules that allocate and define property rights (property and bankruptcy laws, intellectual property rights, zoning regulations), and rules that define permissible and nonpermissible forms of cooperation and competition (licensing laws, laws of contract and liability, company and cooperative laws, anti-trust laws).

Increasing infrastructure investment and quality of services in rural areas

Raising the productivity and competitiveness of agriculture and related businesses requires substantial new investments in research and extension, water and land management, rural education and health care, clean water and sanitation systems, and transport, power and telecommunications services. In many countries improving rural peoples access to credit and land is also necessary.

But, long experience shows that simply constructing roads, building clinics or installing water pumps is not enough. In the past, more often than not, roads deteriorated, clinics went without health care workers or medicines, and water pumps broke down, never to be repaired. In many cases this occurred because governments and donors decided what and where infrastructure would be built, and what levels and quality of services would be provided. They did not pay careful attention to how resources for operations and maintenance would be generated and reach the remote areas where infrastructure was installed. Nor did they take care to provide local government staff and community members with the skills and support they needed to successfully manage, operate and maintain the systems for which they were made responsible.

These difficult lessons have led to a fundamental rethinking of the respective roles of governments, donors, nongovernmental organizations, communities and the private sector in providing and operating rural services and infrastructure, and of the strategies needed to raise investment in them. In Africa, rural service delivery models are in a period of transition, away from centrally-controlled public sector provision, to more private sector, demand-driven and decentralized models. The new strategies vary by sector, but all share common characteristics:

Create a national sector policy framework that identifies priorities for rural investments as part of a national network of services and infrastructure, and specifies roles and responsibilities of various actors in delivering services. This builds sector coherence by linking rural services with services delivered at other network levels. An example is rural transport. Rural footpaths link to regional roads that join national roads, each of which is managed by a different level of government. A national road transport policy framework specifies priorities for investment, indicates how resources for investment and operations and maintenance will be mobilized, and assigns responsibilities for managing various network levels. It also links provision of infrastructure with development of transport services, including nonmotorized, low-cost forms of transport.

Decentralize resources, power and management responsibility to the lowest level decision-making body capable of delivering the services. This will bring resources and decision-making authority closer to the people that government serves. Well-designed decentralization that improves the functioning of subnational governments can promote citizen participation in development processes, enhance service delivery, and lead to projects that are more relevant, implemented with greater transparency and accountability, and are more sustainable due to a heightened sense of ownership by rural people. But, decentralization must be designed and managed carefully if it is to result in a governmental system that is more efficient and more responsive to the needs of local communities.

To enhance local accountability, fiscal decentralization must be accompanied by policies that allow subnational governments to make budget decisions without interference from the center, and that increase accountability to citizens for taxing and spending decisions. In general this requires giving each level of government the right to hire, pay and discipline staff involved with locally managed and provided services; levy taxes and collect fees for services; and determine the level and mix of services to provide. It also involves reforming electoral processes to allow citizens to choose local government officials, and opening channels for greater citizen information on, and participation in, local government decision-making. Moreover, mechanisms must be included to ensure that people who are normally excluded from decision-making processes are able to participate in planning, designing and monitoring programs and policies. Strong support and oversight from the center may be needed to protect the rights of ethnic minorities, women and other marginalized groups to participate in decision-making and benefit from services.

Strategies for making decentralization successful include:

	Carefully monitoring the reform process. This can be done by conducting user surveys and making the results publicly available.
	Rewarding subnational governments that meet agreed goals with increased access to funding and reduced interference from central government. In Kenyas Small Towns Development Program this approach has led to considerably improved revenue collection and service delivery of local governments.
	Creating opportunities for training, and supporting other measures to build capacity.
	Providing incentives to encourage central government staff to move to provincial, district and local government offices.
	Provide communities with a range of service options depending on the scale and nature of rural infrastructure service. Individuals, communities and investors should be allowed to choose from a range of technical options and decision-making frameworks for rural infrastructure based on management, cost and service level.
	Allow service providers to charge fees adequate to cover their operating and maintenance costs, and some or all capital costs. In the past subsidies for services have gone mainly to the non-poor, and often left service providers with insufficient resources to expand to meet demand from rural households and enterprises.
	Empower communities to take the lead in the delivery of services and infrastructure. Empowering communities to take the lead in designing, preparing and implementing programs helps to promote ownership and sustainability. It also builds capacity for future development undertakings. However, rules of participation must assure that poor and marginalized people have a voice in community fora. Otherwise community elites will appropriate the benefits.
	Adopt approaches that specifically target the needs of women and girls and raise their status. These may include guaranteeing them a role in community decisionmaking bodies and measures to enhance their income generating opportunities. Finding ways to keep girls in school is important. Employing female teachers in rural schools and giving them responsibility for teaching advanced students can help motivate older girls to stay in school by demonstrating the value of education.
	Support measures to increase the access of rural communities to financial services. Despite market liberalization, small farmers and small and medium sized businesses still face problems with regard to access to appropriate credit, savings, insurance and payment services. Constraints to the development of efficient rural financial markets include (a) adverse macroeconomic environments and agricultural and financial sector policies unfavorable to potential rural clients and financiers; (b) weak institutional capacity of rural and microfinance institutions to expand their services due to poor governance and operating systems, low skills, and inadequate physical infrastructure; and (c) weak legal and regulatory frameworks that contribute to unclear property rights and inhibit secured transactions. Several measures are needed. The first is to enact policies allowing rural and microfinance institutions to charge interest rates high enough to cover operating expenses and costs of expansion. The second is to build the capacity of rural and microfinance institutions through training and technical assistance, formal-informal financial sector linkages, and associations or networks of rural and microfinance institutions that can monitor industry performance and standards. The third is to adapt prudential regulations and supervision to the specialized operations of rural and microfinance institutions and improve legal and judicial systems governing secured transactions. Well-designed reforms of measures for secured transactions have resulted in increased supplies of credit and lower interest rates. Benefits of such reforms have been estimated at several percentage points of gross domestic product, while the costs of such legal reforms are usually remarkably low.

Targeting public investments to areas with strong public goods characteristics and that are likely to have high payoffs.

High priority areas for government spending include agricultural research and dissemination, infrastructure (especially rural roads and rural water supply and sanitation), basic education, health and nutrition, improved land and water management, and capacity building to help link farmers and rural entrepreneurs to markets. A study carried out for India shows that investments in research and extension stimulates rural growth more than spending on any other activity, while spending on rural roads has the highest impact on poverty reduction. The study also shows that spending on research and extension has the second highest impact on poverty reduction, while investment in rural roads has the second largest impact on growth. While conditions in Africa are surely different from those in India, these conclusions strongly suggest that carefully selected investments in research and extension and in rural roads will likely generate significant payoffs.

Investing in agricultural research to increase productivity, raise farm incomes and protect the environment

Science, technology and innovation are crucial to raising the productivity of agriculture in Africa and protecting the environment. Investments in agricultural research generate high payoffs in Africa, with a median internal rate of return of 37 percent. However, after increasing from US$250 million in 1961 to US$701 million in 1981, spending for agricultural research in Africa stagnated in the 1980s and 1990s. Simultaneously, in many African countries, budgets that were available went increasingly to fund staff costs rather than operations, which limited the effectiveness of research spending.

Much more needs to be done both to increase funding for research by international and national research centers and make spending more effective in meeting the needs of African farmers. One way of increasing resources is to foster partnerships between the public and private sectors, whose spending on research is growing fast. A model is the highly promising partnership between the Institute for Genome Research in the United States and the Kenya-based International Livestock Research Institute, which have joined together to control East Coast Fever, a disease that kills in the order of one million cows in the region each year. Other ways to sustainably increase resources for research institutions are collecting fees from the distribution of improved seeds and other technologies generated through research, dedicated contributions from government, grants from foundations, support from multilateral and bilateral donors, and contributions from farmers organizations.

To improve effectiveness of spending, more needs to be done to decentralize resources; involve farmers and agribusinesses in decisions on research priorities, funding, execution and evaluation; outsource research activities through competitive grants; bring research closer to and into farmers fields; improve coordination among research institutions; and systematically monitor and evaluate results. Great efforts need to be made to concentrate the research agenda on the needs of women farmers. This will require reaching out to womens community organizations to learn what special constraints women face and then focusing research programs to tackle them. Africa also needs larger, better funded research institutions that can engage effectively in developing and applying biotechnology and form the necessary public-private partnerships to widely share its benefits. Regional and subregional collaborative research programs that coordinate the efforts of national research systems can meet this need. Strengthening linkages of national agricultural research centers with the Consultative Group on International Agricultural Research (CGIAR) is also critical. Funding research involving partnerships between the national centers with the CGIAR would help achieve this.

To facilitate research and commercialization of agro-biotechnology, governments need to pay special attention to the policy and regulatory environment. Research involving genetically engineered crops and livestock is progressing in a number of countries in Africa. But few have in place a proper legal and regulatory framework to manage the introduction of this technologyspanning biosafety, food safety, and intellectual property rights. The Global Environment Facility (GEF) is putting into place a mechanism to assist African countries to comply with the Biosafety Protocol, yet there is a broader challenge of understanding the legal and capacity-building requirements of African countries.

Mainstreaming new institutional arrangements in extension

Beginning in the early 1980s, government support to agricultural extension in Africa was guided by a strong managerial logic which came to be known as the training and visit (T&V) system for agricultural extension. Frontline extension workers visited contact farmers (who comprised about 10 percent of all farmers) every two weeks to deliver technical messages on cultivating and marketing key food and export crops.

In recent years, while commitment to public investments in agricultural productivity has remained strong, commitment to traditional extension programs has waned. Evolving thinking about the institutional design of public programs and disappointment with the high cost and lack of clear impact of the T&V system has led to new approaches in public agricultural service programs. Since the mid-1990s countries have increasingly developed agricultural extension reflecting the principles of:

	Decentralizing resources and responsibilities for extension to local governments and communities. This gives farmers a much bigger role in designing, funding, governing, executing and evaluating extension programs. It also improves responsiveness and accountability of extension agents.
	Outsourcing extension services to non-governmental organizations, private groups or others. This improves efficiency of delivery and improves the accountability of extension agents, especially where a choice of providers is available.
	Sharing costs of extension services among national governments, local government, farmers associations, non-governmental organizations, donors and farmers. The share paid by local governments and farmers rises as the system matures. This makes financing of extension services more sustainable and less dependent on donor and central government whims and pressure.
	Improving linkages among farmers, educators, researchers, extension agents and others. This improves the relevance and impact of research and extension.
	Systematically monitoring and evaluating extension programs. This improves the results orientation of programs.

More work needs to be done to ensure that principles for effective extension are systematically reflected in national programs. Greater decentralization of resources and decision-making authority for field extension services is needed, and more outsourcing of service contracts. Strengthening linkages among research, extension services and farmers is critical to increase the relevance of research and extension and to facilitate quicker adoption of better technologies by farmers. Approaches that better meet the needs of women farmers are also needed. Recruiting and training more women to field extension services would help in reaching women farmers. Using womens associations as contact groups has improved outreach to women in some countries, and is often more effective than working through village associations, which are led by men. In some countries, women extension volunteers selected by their communities to serve as point of contact with extension agents have proved effective in bringing extension services to women farmers.

Box 1 Paying attention to the needs of women farmers could increase Africa's food production

Enhancing soil fertility

One area that has not received adequate attention, in the past, is soil fertility. It is currently the most critical intervention needed in raising yields and agricultural productivity. The extent of this problem is illustrated in Box 2.

Box 2. Low Soil Fertility: The Key Constraint

83% of soils in Africa have fertility limitations caused by the type of soils and depletion. About 96% of African countries show negative balances of nutrients in excess of 40 Kg NPK/ha/year. Annually, Africa is losing about 4.4 million tons of nitrogen, 0.5 million tons of phosphorus, and 3 million tons of potassium (7.9 million tons aggregate). While total annual fertilizer use is only: 0.8 million tons of nitrogen, 0.26 million tons of phosphorus, and 0.2 million tons of potassium (1.26 million tons aggregate).   Inadequate replenishment of removed nutrients and continued loss of organic matter are the most important constraints to productive agriculture. Lightly degraded soils in SSA are estimated at 20.4 million hectares, moderately degraded 18.8 million hectares, and severely degraded at 6.6 million hectares. This nutrient depletion is associated also with soil erosion.

Enhancing soil fertility will require actions to increase supply and reduce costs of soil nutrients, investments to correct soils structural deficiencies (adding lime, phosphates and other nutrients as appropriate), better cropping techniques to limit erosion and improve soil structures, and planting and maintaining trees to restrict erosion and preserve watersheds (these have the added benefit of sequestering carbon which reduces risks of global warming).

An important multicountry initiative for land management is the ongoing Soil Fertility Initiative. This program is designed to reverse soil degradation and recapitalize soils and thus address a major constraint to raising yields in Africa. To increase the impact of the initiative a Soil Fertility Competitive Fund has been proposed. The fund would support specific activities to enhance soil fertility (such as use of fallow, compost, fertilizers and manure, and nitrogen-fixing crops), and to improve efficiency of plants nutrient uptake through crop husbandry and managed nutrient application. It would also invest in broader, long-term programs to improve land and water management, such as treating watersheds. Finally, it would provide technical assistance to develop policies and institutions that encourage farmers to invest in soil conservation, create systems for information generation and sharing, and strengthen community-based, non-governmental, and farmers organizations. The World Bank will administer the Soil Fertility Competitive Fund. Contributors will include African governments, bilateral and multilateral donors, the fertilizer industry, private foundations, non-governmental organizations, and agribusinesses and trade associations. The initiative is expected to generate significant benefits by bringing about a substantial increase in agricultural yields. African governments can benefit from both the Integrated Land and Water Management Program and Soil Fertility Initiative by demonstrating their commitment to the programs objectives and principles.

Improving land and water management through integrated approaches

The steady decline of Africas natural resources are a concern not only of the continent, but the entire world. Sustainable natural resources management requires a strong role for users, an integrated and holistic approach, and more effective collaboration between national, regional, and international institutions involved in land and water management. Many African governments and their development partners are implementing programs to improve land and water management, but the efforts are often not coordinated, leading to duplication of effort and uneven spread of resources. The GEF, in partnership with concerned African institutions, United Nations agencies, regional banks, and bilateral and multilateral institutions, is supporting a pilot project to promote holistic and integrated land and water management approaches, called the Integrated Land and Water Management Action Program for Africa. The program is intended to help integrate or coordinate the numerous ongoing programs in Africa dealing with these issues, build capacity in African countries for policy and institutional analysis, strengthen partnerships for management of shared resources, and support the design and preparation of projects, by financing studies, policy and institutional analysis, and consultations with stakeholders. The program will comprise two phases: a demonstration phase with expedited program development and implementation rules, and an expansion phase emphasizing development and implementation of scaled-up activities.

Several countries are already preparing activities to be supported by the program. Madagascar and South Africa have each prepared activities, while Ethiopia and Sudan are planning a joint effort to manage land and water resources of the AtbaraAngereb watersheds. Riparian states of the Limpopo river basin (Zimbabwe, Botswana, Mozambique and South Africa) are jointly planning to address environmental issues of water pollution, habitat loss, and land degradation of the river basins resources with support of the program.

Improving water control systems to raise yields and reduce risks of crop failure

In Africa, over 95 percent of cultivated land is watered with rainfall. A significant amount of this land is in arid or semiarid areas where rainfall is unreliable, and crop failures are common. Yet, providing water at critical stages of plant development (such as the flowering stage of maize) can dramatically reduce risks of crop shortfalls. Increasing yields on rainfed lands by just 10 percent would have far greater impact on total agricultural output than doubling the area under irrigation, even though productivity on irrigated lands is two to four times that on rainfed lands. Moreover, such improvements would benefit mainly poor farmers living on marginal lands. This suggests that increasing the availability of water for supplemental irrigation in rainfed areas could make a big contribution to reducing poverty and increasing security of Africas rural poor.

Expanding irrigated agriculture also offers considerable potential. However, many large irrigation schemes built in the past have neither generated adequate economic rates of return nor benefited poor small holders. On average, irrigation systems in Africa have cost US$8,300 per hectare to construct, more than three times the average of constructing systems in South Asia (US$2,500), largely due to poor contracting practices which have awarded deals to high cost builders. Large schemes have often been poorly managed, providing water at highly subsidized rates that encourages misallocation of water resources and fails to generate resources for operation and maintenance. This has led to deterioration of water distribution systems and a decline in irrigation services. It has also resulted in environmental damage of waterlogging, salinization, contaminated runoff, land erosion and land degradation, and in the rise of water-related diseases such as bilharzia and malaria. Furthermore, people benefiting from large-scale irrigation have often been farmers with political connections, not the poor who find themselves pushed off land that suddenly becomes much more valuable. Women are particularly vulnerable to eviction as they often have insecure property rights to farmland. Carefully-designed large-scale irrigation can help raise agricultural output and reduce rural poverty in Africa. But the past and continuing problems plaguing the systems must be addressed to assure they achieve acceptable economic rates of return, benefit the poor and do not harm the environment.

In the future, much more attention must be paid to designing irrigation and water control systems within a holistic watershed approach, taking into account the many competing demands for water, including drinking water, power generation, and industrial and environmental uses. Legal and institutional frameworks for sustainable water management are needed. Water boards comprised of stakeholders from the various groups can be given responsibility for mediating competing claims for water, setting an agenda for future allocations, and advising on key policy issues that affect water distribution among users.

Developing low-cost measures that reduce risks of crop failures in rainfed agricultural areas is a priority for Africa. In general, small-scale irrigation is a more promising alternative, as the initial investment requirements, maintenance of systems, and management of water sharing are all within the capacity and scope of farmers groups and/or local community organizations. Some promising technologies include microirrigation, surface storage, water harvesting, water conservation, rainwater catchment and storage, and recession agriculture. Where groundwater resources are available, low-cost technologies such as treadle pumps, simple bucket and drop lines, and small portable pump sets have proved popular among farmers. These technologies are supplied mainly by the private sector, supported by a network of small local maintenance and construction workshops. Farmers pay the full costs of operating their pumps, so they tend to use water productively, which reduces the impact of irrigation on downstream water users and the environment. Still, groundwater is a common property resource that farmers in a particular area could collectively seriously deplete. Decision-makers need to be aware of this risk and, in participation with groundwater users, develop mechanisms to assure that groundwater exploitation is sustainable. Looking forward, much more research on measures to supplement water in rainfed areas is needed. This research needs to be carried out with farmers to ensure that approaches suit their preferences and own techniques. Water control research also needs to be better linked to research on crops.

With regard to large-scale irrigation schemes, advances are needed to improve their design, management and operation. Worldwide experience shows that irrigation systems function best and are most sustainable when beneficiary farmers own and operate the systems themselves with minimal interference from government. However, government will have a role in establishing and enforcing rules to ensure that the poor and women are able to fully benefit from irrigation schemes. One way of doing this is to reserve a minimum proportion of positions on water users associations for women and members of particularly disadvantaged groups.

Vertical integration: the production, processing and marketing continuum

A requirement for successful agriculture is access to secure and profitable markets. The adoption of productivity-enhancing technologies becomes attractive to farmers only if they are assured of rewarding market outlets. Contracts that link farmers into vertically integrated agricultural systems is one means of ensuring a secure market. Such vertical integration provides farmers (small and large) with know-how, inputs and remunerative markets. The typical integrated system involves contract farming, and out-grower and processor agreements, as well as marketing via cooperative or private sector trade channels. Many of the success stories in African agriculture include some of these elements. In such arrangements, the technology and marketing agents are the same or are closely linked. The producers are provided with knowledge, inputs and market services. The cost of these services are recovered from the farmers without reducing the profitability of their operations. This results in a win-win situation for all partners. The benefits are maximized for the country when most of the processing and value-adding operations are done locally.

Success stories of African agriculture

Over the years, including in the 1990s, there have been significant and encouraging successes in African agriculture. Such successes resulted from the adoption of some of the more important policy and institutional recommendations already indicated. These include: supportive macroeconomic policy, appropriate research and extension messages, access to credit and input supply (improved seeds, fertilizers, pesticides), adequate irrigation, efficient infrastructure, and secure and profitable market. Taking appropriate lessons from these success stories is the way to move forward to achieve improved productivity and competitiveness in African agriculture. Examples of these successes are summarized in Box 3.

Box 3. Success Stories of African Agriculture

Although the performance of African agriculture has not been as good as in other regions, there have been substantial achievements in a number of African countries and in diverse agroecological zones. These achievements vary from pockets of success in most countries, to large scale developments in particular sub-sectors of agriculture in a few cases. Five major success stories are briefly presented, along with mention of others:

Tea in Kenya

Kenya has registered such remarkable performance in tea production and export that it now ranks as the number one global tea exporter ahead of India and Sri Lanka. The area under tea cultivation increased from 21,448 ha in 1963 to 100,000 ha by 1993, with large estates constituting 31,300 ha and producing 99,374 tons while smallholders produced 112,059 tons from 68,700 ha. In three decades the area of large estates increased only by 1.7 times, while yields have increased between three and six-fold. Smallholder production increased from 312 tons in 1963 to 112,059 tons in 1993, and the area under cultivation expanded from 3,527 ha in 1963 to 68,700 ha in 1993. The average yield of tea on large estates increased from 0.9 ton/ha in 1963 to 3.2 ton/ha in 1993. Smallholder yields increased from 88 kg/ha in 1963 to 1.8 ton/ha in 1993, a 20-fold increase. The national average yield for the same period increased from 0.8 ton/ha to 2.3 ton/ha. As a result, the Kenya tea industry became a major success that could compete in international markets. As an earner of foreign exchange, exported tea became second only to tourism, and first agricultural commodity. These achievements are attributed to: (i) good physical conditions for tea growing; (ii) favorable institutional setup consisting of large-scale tea company estates and smallholders supported by the Kenya Tea Development Authority with input supply, processing and marketing; (iii) a sustained flow of innovative technologies from the grower-supported Tea Foundation of Kenya; and (iv) most important, higher return on investment (Noor 1998).

Cotton in West Africa

The cotton industry and associated coarse grain crops (maize and, to lesser extent, sorghum) in Francophone West Africa, saw rapid extensive development in a number of countries, including Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Cote dIvoire, Mali, and Senegal. Cotton production over the entire zone doubled in the first decade after independence, and has more than tripled in 25 years. Moreover, the regions share of world cotton exports increased from 4% to 9% between 1979-1981 and 1992-1993. The improvement in productivity was impressive. Yields increased from 500 kg/ha to 1100 kg/ha for the same period. In some countries, average yield reached over 1300 kg/ha. Fiber extraction rates have also increased from 35% in the early 1960s to over 40% by 1988. These yields compare well with the yields of rainfed cotton worldwide and are well above those of the rest of Sub-Saharan Africa. There was also a dramatic increase in both the cultivated area and the productivity of maize, which is an associated crop in most of these countries. This increased productivity and competitiveness can be attributed to: (i) favorable agroecology for cotton and maize; (iii) vertical integration of the industry, including input supply, technological innovations, processing, and marketing (Bosc and Freud, 1994).

General Agriculture in High-Rainfall Regions in Ethiopia

In 1993 Sasakawa Global 2000 and the national extension system, using technologies already developed by agricultural research, initiated farm demonstrations in the best agricultural areas with adequate rainfall. The strategy included seeds of high-yielding varieties of maize and wheat, improved agronomic practices, and inorganic fertilizers. The program started with 167 farmers in two regions. Maize yields averaged 5.1 ton/ha and wheat 2.8 ton/ha, compared to initial yields of less than 1.0 ton/ha for most cereals. In 1994, sorghum and teff were added and the number of participants increased to 1,600 farmers. Maize yields in 1994 averaged 5.4 ton/ha, wheat 2.8 ton/ha, sorghum 4,5 ton/ha, and teff 1.5 ton/ha. The media reported these results and former US President Jimmy Carter of Global 2000 and the Ethiopian Prime Minister visited the demonstration sites. Policy-makers took keen interest and the funded program was expanded to 35,000 participating farmers in 1995, and then to 350,000 in 1996. Total food production (cereals and pulses) in 1996-97, an excellent rainfall year, increased from the average of 5.4-7.4 million tons to 10.4 million tons. Additional technologies were introduced in subsequent years to improve the productivity of crops and livestock. By 1999, almost 4 million farmers were participating. Secondary problems such as commodity price collapse and lack of marketing infrastructure are now being addressed. These achievements can be attributed to: (i) the pre-existing and introduced technologies for most commodities; (ii) participatory and well-conceived demonstrations; (iii) involvement of fertilizer and seed agencies; and (iv) the up-scaling by the government (Georgis, Kidane et. al, 2001).

New Rice for Africa (NERICA)

The West Africa Rice Development Association (WARDA), using molecular biology and conventional breeding, has developed new rice varieties that combine the ruggedness of African rice with and the productivity of Asian rice. By the mid-1990s, WARDA started on-farm testing NERICA under rainfed conditions, with farmers participating as partners. Farmers in Guinea, with technical backstopping by WARDA scientists and funding by the World Bank, led the way in adopting these varieties and the related technical packages. By 2000 about 20,000 farmers grew rice on 5000 acres, using the new varieties. The most important characteristics of these varieties are: early maturity (3 months), pest, disease and water stress tolerance, reduced weeding requirements, and high yields. This promising technology needs to be up-scaled in all rice producing countries in Africa. The success achieved to date was due to: (i) scientific innovation; (ii) participation of farmers in variety selection; (iii) partnership between government, WARDA and donors (www.dorstmediaworks.com).

Soil Fertility Recapitalization in Western Kenya

The soils of Western Kenya are poor in phosphorus (P) and have widespread deficiencies of nitrogen (N) and potassium (K). In 1997 the Kenya Agricultural Research Institute (KARI), the Kenya Forestry Research Institute (KEFRI) and the International Centre for Research in Agroforestry (ICRAF), with the support of several donors initiated, wide-scale on-farm testing and dissemination of promising integrated soil fertility management technologies through community-based village committees. These technologies included improved fallow with leguminous trees and shrubs, biomass transfer of Tithonia diversifolia and their integration with rock phosphate. Additional technologies included soil conservation and crop intensification. As a result, maize yields increased 4 to 6 times. Over 12,000 farmers in 16 districts of Western Kenya are now adopting and adapting the technologies to their conditions. In addition, high-value trees and crops were introduced. This technology is now spreading to neighboring countries. However, further up-scaling is still needed in order to benefit all areas with similar constraints. The success of this initiative can be attributed to: (i) available technologies; (ii) availability of rock phosphate deposits in Northern Tanzania; and (iii) partnership among farmers, national and international research institutions and donors.

Other Success Stories in Africa

There are other agricultural successes that are well documented. These include horticultural crops in Kenya, maize in Southern Africa as well as in several countries elsewhere, beans and potatoes in the East African Highlands, irrigated wheat in Sudan, and cassava in West Africa.

Capacity building to support market development

Studies suggest that farmers and entrepreneurs in Africa quickly respond to market opportunities. Small farmers in Malawi, for example, invested in fertilizers, seeds, driers and other equipment to produce tobacco once they were given the opportunity to grow a crop they believed would be profitable. Farmers also readily pay for extension advice if they think they can profit from the information. But in African countries little investment has been made in developing the capacities needed to support markets. In the public sector, improved capacity is needed to monitor and certify food safety; to apply quality norms for seeds, fertilizers, pesticides, food production, processing and handling; and to operate market information systems that can provide farmers with accurate information on input and product prices and marketing outlets. While the public sector can finance these activities, it need not actually carry them out. Often, the private sector can deliver them more efficiently and effectively than can government. Outside the public sector, the capacity of organizations that can link farmers to markets (producers organizations, the private sector, nongovernmental organizations, business networks) needs to be built. Governments and donors can support non-governmental organizations working with communities and farmers to create and strengthen such organizations until they are able to function through the support of their members alone.

Conclusions

Africa has vast potential to raise the productivity and competitiveness of agriculture. Its land, water, forests, and unmatched biodiversity are rich resources that, properly used, can contribute greatly to improve the living standards of populations. But African governments must put into place the policies and institutions that encourage private sector investment. They must rethink the roles of all actors in development, including national, regional and local governments, communities, nongovernmental organizations, the private sector and donors. They must target investments to where they will have high payoffs, such as rural infrastructure; research and dissemination; health, education and nutrition; improved land and water management; and capacity building to support development of efficient markets. They must pay special attention to the needs of women and girls, who provide up to 70 percent of agriculture labor in some countries. This is a big agenda, but it can and indeed must be achieved.

Annex table 1 Agricultural share of GDP in 1999 and annual average percentage agricultural growth, 199099

Source: World Bank World Development Indicators database

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