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PROMOTING AGRICULTURAL PRODUCTIVITY AND COMPETITIVENESS IN SUB-SAHARAN AFRICA
Nairobi, Kenya, April 9-10, 1999
GCA/EC/N.2/4/1999
 
I. Introduction
II. Recent trends in performance in African Agriculture
III. Factors affecting productivity and competitiveness
IV. Opportunities for growth and measures to enhance productivity and competitiveness
V. Conclusion
VI. Selected References
VII. Annex I
VIII. Annex II

Cereal Yields by Developing Region

1. Introduction

Failure to give sufficient priority to agriculture and rural development constitutes one of the most serious errors in development strategy committed by a large number of African nations. As a result, this key sector of the economy has been denied the necessary level of long-term public investment that would have allowed it to grow at an adequate rate and thereby contribute to overall economic development. One consequence of this neglect is that by 2000 Africa will be the only region in the world where the number of the poor and the undernourished will still be on the increase. With current trends, it is projected that the number of people facing food insecurity in Africa will reach 300 million by the year 2020. African countries must therefore urgently reassess their development priorities and take appropriate action to slow down and reverse this trend by revitalizing agriculture. This paper attempts to contribute to such a reassessment by identifying the factors that affect agricultural performance and by suggesting some workable approaches and solutions to enhance the productivity and competitiveness of African agriculture.

Significance of agriculture

The agricultural sector is strategic to the long-term growth and development of most countries in Sub-Saharan Africa. In spite of increasing urbanization, the majority of Africas population still live in rural areas, and their livelihood is tied to agriculture. The sector contributes an estimated 35% of the regions GNP, employs more than two thirds of the total labor force and accounts on average for 40% of total foreign exchange earnings. Other than in the few SSA countries where mining is dominant, agriculture is usually the largest contributor to total foreign exchange earnings. It follows, therefore, that agriculture will continue to be the backbone of most African economies.

In Sub-Saharan African countries, the role of agriculture in the overall economy typically includes:

providing adequate and affordable food for the increasing population. An orderly and efficient process of industrialization and urbanization requires the provision of relatively cheap food for the growing industrial labor force;
enlarging the size of the effective market for products of the domestic industrial sector;
providing employment and income to a large percentage of the population, thereby contributing to the reduction of poverty;
supplying raw materials to the growing and diversifying domestic industrial sector;
earning foreign exchange; and
potentially becoming a significant source of domestic savings for investment and capital formation.

There is considerable historical evidence that solid agricultural growth has to precede, or at least accompany, general economic growth. This transformation process still applies today. Africa will not be an exception, and it will not be able to jump this vital step. A broadly-accepted conceptual framework for agricultural and economic transformation identifies four stages. In the first stage, agriculture is adequately nurtured and starts growing and creating new wealth at a rate that allows direct and indirect taxation. This enables investment in other major public assets including infrastructure. In the second stage, agricultural growth becomes a direct contributor to overall economic growth through greater links with industry, improving efficiency of product and factor markets, and continued mobilization of rural resources. In the third stage, agriculture is fully integrated into the market economy. Prices of food and the share of food in urban budgets continue to decline. In the fourth stage, agriculture is part of an industrial economy. Productivity and efficiency of agriculture become major issues, and environmental and other concerns assume greater significance.

As agriculture goes through these stages, its share of GDP diminishes, and the population becomes more urbanized. Some African politicians have unfortunately misinterpreted this as a decline in the importance of agriculture. In reality, agriculture is politically alive, including in industrial economies where farmers and the rural population represent only about 4 percent of the total population, but still command the attention of governments and of financial and industrial interests. Even where agricultures relative importance in the economy has declined, growth in agriculture stimulates growth in non-agricultural GDP, and thus has a significant positive impact on GDP. Moreover, it is also known that increased public investment or increased resource injection into the rural economy has a strong multiplier effect; it results in higher employment opportunities, greater impact on poverty reduction, and a larger increase in GDP growth.

Why focus on productivity and competitiveness?

Africa, it would appear, is only entering the first stage of transformation indicated above. Most countries in Asia and Latin America, on the other hand, have gone beyond this first stage, with some already in the second and the third stages. In the fight against poverty, hunger, malnutrition and unemployment, Africa has to get its agriculture moving and focus squarely on productivity and competitiveness.

As is well-known, most countries of Asia and Latin America have been undergoing a green revolution, with dramatic yield increases. These rapid increases occurred mostly over the last 40 years or so. During this period, Asia and Latin America have seen yields of staple crops more than double (to about 3 tons/ha in Asia, and about 2.6 in Latin America). In Africa, the yield increases of staple crops have been very modest, growing to about 1 ton/ha (see Annex 1 figure 1, and also table 1). This accounts for a significant element of the difference in overall economic growth between Asia and Africa.

Other international comparisons also confirm that Africas agricultural performance lags well behind that of other regions. Table 2 in Annex 1 compares the performance of all of Africa with that of the Peoples Republic of China, with respect to growth of GDP, population and agricultural value added. The comparison clearly shows that increases in value-added in agriculture were low in Africa, while the agricultural value-added growth rates for China were much higher, particularly during the period 1980-92. When the rates for population growth are factored in, the contrast becomes even sharper.

Over the last three decades, and as discussed later in more detail, production increases in agriculture in Africa have largely been through expansion of area rather than through improvements in yield. African countries must endeavor to achieve greater productivity in terms of increases in yield per unit area, as well as per unit of labor. In addition, the costs of production for a unit of produce need to decline. Competitiveness is partly a function of productivity since volume and lower production costs allow for more effective penetration of local and export markets. Competitiveness in terms of efficient and effective supply of local and export markets, however, requires additional capacities and competencies. The quality of produce at the production end is key for meeting and maintaining product quality standards, particularly for niche export markets. The ability to penetrate, maintain and increase market share requires timely access to knowledge and information on market trends and traits, as well as technology to allow cost-effective production, processing and packaging.

Africa has to meet the twin targets of getting its agriculture moving, and at the same time integrating the rural with the industrial economy in order to accelerate overall economic growth, and to increase incomes, employment, and food security.

2. Recent Trends in Performance in African Agriculture

In Sub-Saharan Africa, agricultural performance was disappointing during most of the 1970s and the 1980s. Despite the modest recovery and upturn recorded, in agricultural production in a number of countries during the 1990s, there is no definitive indication that growth will be sustained in the future. Overall, Africas performance in terms of agricultural production and productivity remains inadequate, and the region has failed to make progress on the food security front. In terms of exports, in spite of a small upward trend in cash and export crop production, Africa is neither regaining lost market share in its traditional exports, nor making significant headway with respect to additional non-traditional exports. Production is overly dependent on opening up of new land, and suffers from a lack of new sources of growth. Yields have hardly improved, and food prices continue to rise in many countries. As a consequence, Africa remains food insecure and reliant on external emergency food supplies and commercial food imports for a significant portion of its needs.

To repeat, the production growth that has been achieved in Africa in recent years has been largely a result of expansion of the area under cultivation rather than yield increases. Farm yields are still low as compared to Asia and Latin America. For instance, maize yields between 1993-5 averaged 1.2 t/ha in Africa. Between 1985 and 1995 growth in area under maize averaged 1.3%/yr, while production increased by 0.7%/yr, which meant that yields must have declined at a rate of 0.6%/yr. Yet there have been pockets of relative success, for example maize in Kenya and Zimbabwe, cotton in Mali, and cassava in a number of West African countries. As indicated in Box 1, small-holder maize production in Zimbabwe virtually doubled between 1980 and 1986. The challenge is to replicate this across the whole region of Sub-Saharan Africa.

Box 1. Doubling Small-holder Production in Zimbabwe

An obvious and basic goal of African agriculture is to achieve significant and lasting productivity gains at the level of the average small-holder. Although this continues to be a major challenge throughout Africa, experience in Zimbabwe proves that substantial increases in production and productivity under typical rain-fed agricultural conditions can be achieved at the level of small-holders. In the six year period 1980-86, Zimbabwes small-holders were able to double their production. The principal enabling conditions for such a spectacular result were that:

i) restored peace enabled small-holders to bring back under cultivation land abandoned during the civil war,
ii) the new post-independence government was pro small-holders and ensured that they were provided with adequate resources and agricultural support services,
iii) well-established systems of seed production and distribution in particular for hybrid maize -- as well as fertilizer distribution systems and effective delivery of these inputs to small-holders,
iv) strong research and extension services that from 1980 expanded and extended their focus to cover and be fully responsive to the needs of small-holders,
v) a relatively well-developed network of roads and other physical infrastructure, that facilitated input supply, marketing and production, and
vi) marketing and credit services that became fully accessible to small-holders.

As a result of all these favorable developments, small-holder production of maize increased from 700,000 tons in 1980 to 1.3 million tons in 1986. These achievements have been maintained as there has not been significant slippage in productivity gain. However, there have been problems of "economic sustainability," particularly as regards price "subsidies" and recovery of hastily expanded bank credits. Retaining high quality research staff and sustaining an efficient and well-staffed extension service are other challenges.

Africa has been losing world market share for many of its agricultural exports. Table 3, Annex 1 demonstrates how Sub-Saharan Africa was performing, in comparison to its international competitors, with respect to one of its major export products, coffee. Africas coffee exports rose from 14.1 million bags in the 1960s to 21.5 million bags in the 1970s, but have since been declining to the extent that annual exports in the 1990s are back to the level of the 1960s. This contrasts sharply with the performance of such competing exporters as Colombia which has doubled its exports, and Indonesia which has nearly quadrupled its export quantities, during the same thirty year period. New entrants such as Vietnam are also rapidly increasing their export volumes.

In general, an overall review of the regions agricultural performance indicates that small-holder farmers are relatively more efficient producers in terms of costs of production as well as savings on foreign exchange. This potential is not, however, being fully exploited as persistent and serious constraints, including conflict, continue to hinder both the production and marketing operations of small-holders in lucrative markets.

2.1 Performance of agriculture in Eastern Africa

Agriculture is important in the economies of the East African countries of Kenya, Ethiopia, Tanzania and Uganda. As in all of Sub-Saharan Africa, East African agriculture is rainfed, and thus vulnerable to adverse climatic conditions. From time to time production has been significantly depressed due to unfavorable weather conditions, and in this regard the devastating drought in Ethiopia during 1984/85 was only the most dramatic episode of a recurring phenomenon.

Kenyas agriculture is relatively more advanced than that of the other countries, with a much stronger research and technology generation and delivery system, considerably higher usage of fertilizers, and a more extensive network of rural infrastructure. Although Kenyas agriculture performed quite well in earlier periods, the rate of growth of agricultural production was rather modest during the 1980s, and more or less stagnant during the first half of the 1990s. This recent poor performance may be significantly explained by the fact that Kenya was relatively slow in undertaking necessary reforms.

Growth of agriculture in the other three countries was poor in the 1970s and well into the 1980s, although recovery was under way by the mid 1980s in Tanzania. The revival of Ugandas agriculture started in the second half of the 1980s, while in Ethiopia reform and recovery did not materialize until the beginning of the 1990s. The earlier setbacks to agricultural growth in Ethiopia and Tanzania can be attributed to the socialist mode of production, distribution and price-setting that governments in the two countries tried to impose. Internal conflicts and political instability were also important factors that severely disrupted production in parts of Ethiopia, and in virtually the whole of Uganda. Overall, inappropriate macro-economic policies, price controls, monopolistic parastatal agricultural marketing and input supply systems, and the sparsity and poor upkeep of roads and other rural infrastructure all contributed to earlier poor performance of agriculture in Uganda, Tanzania and Ethiopia.

In recent years, there has been significant recovery and growth of agriculture in all three countries. To a considerable degree, this is a result of economic reforms--including the liberalization of pricing and marketing--and the relative political stability that has prevailed. However, it is mostly recovery to previously achieved production levels. In fact, with respect to some important cash crops, including sisal, cashew and tobacco in Tanzania, and cotton, tea and sugar in Uganda, production and exports still have not reached the peak levels of the late 1960s. The significant production growth in food crops is due to expansion of cultivated land, and not to gains in yields or productivity. In all three countries productivity and yield per hectare are constrained by very low use of inputs, especially fertilizer. Uganda in particular is reported to have one of the lowest fertilizer usage rates.

Kenya is an important exporter of tea, and small-holder tea production mostly accounts for this success. In Uganda and Tanzania tea exports are reviving, both countries having recently created more favorable conditions for tea production. The increase in cotton production in Uganda and Tanzania is attributed to a number of factors, including the incentives to farmers resulting from competitive markets, improved input supply to cotton farmers by traders and ginners, and acreage expansion.

Livestock production constitutes an important sub-sector of agricultural production in East Africa, contributing traditionally about 19 per cent of the total agricultural output. The small-holder producers operating mixed crops and livestock farms own the largest portion of the cattle population.

For all East African countries, agricultural exports account for more than 50% of foreign exchange earnings, and in the case of Ethiopia and Uganda agricultural products account for more than 90% of their total export earnings. As indicated earlier, the export of such products as sisal, tea, cotton and tobacco has shown strong recovery, although it has not yet reached previous peak levels. Among major export commodities, only coffee managed to more or less maintain its export level for most of the countries. Even with coffee, however, volatility and periodic sharp declines in prices were discouraging to farmers, to the extent that some shifted to other crops, including food crops. While such traditional exports as coffee, cotton and tea still account for the bulk of agricultural exports, there has been a significant effort at export diversification, into such products as fish and horticulture mostly destined for European Union countries, and maize and beans to regional markets. Kenya started these non-traditional exports much earlier than the other countries.

2.2 Performance of agriculture in Southern Africa

The Southern African sub-region shows diverse patterns of economic, agricultural and food security developments, and agricultural growth has been equally variable. In the 1990s only Zimbabwe, Malawi and Namibia improved performance relative to the 1980s, and even these countries experienced temporary setbacks due to the serious subregion-wide droughts of 1992 and 1994-95. Overall, in recent years the performance of the agricultural sector, which was supposed to serve as an engine of growth, has been sluggish.

In Southern Africa, agricultural production trends over the last three decades generally conform to the overall Sub-Saharan Africa norm in that production increases have largely been through area expansion rather than productivity increases. Average annual growth in agricultural output for the sub-region was 1.9% over the last three decades.

Maize is the most important crop in the sub-region, both as a staple food and also as a cash crop for small-holder farmers. The major maize producing countries are South Africa, Zimbabwe, Tanzania, Zambia and Malawi, and for the last two decades these countries have on average maintained 90% self-sufficiency. This has been facilitated by the successful development of local hybrid maize, and by ensuring the efficient delivery of such improved varieties together with other technological packages, particularly in Zimbabwe and South Africa.

With regard to the comparative advantage and competitiveness of agricultural commodities, available data show that the sub-region is more efficient at producing food cereals such as maize and sorghum, and that small-holders are more efficient at producing these than large scale farmers. Similarly, in such commodities as soybeans, cotton, sunflower and groundnuts, small-holders are more efficient producers than commercial farmers.

Intra-regional trade in agricultural products is both low and confined to a few commodities such as oilseeds, livestock and dairy, grain and sugar. South Africa, the economic giant, enjoys huge trade surpluses over other countries in the sub-region. As would be expected intra-regional trade is greater in manufactured products than agricultural commodities. Agricultural exports to the rest of the world include tobacco (Zimbabwe and Malawi), fruit, sugar and nuts (Zimbabwe, South Africa, Mozambique, Malawi), beef (Botswana, Zimbabwe, South Africa) and cut flowers (South Africa and Zimbabwe).

2.3 Performance of agriculture in West and Central Africa

Growth in agricultural production and productivity has, at best, been modest for most West African countries. In line with overall Sub-Saharan Africa trends, most countries in the sub-region continued to have growth rates for agricultural production that were lower than the growth of population, which meant that per capita production was declining. For some countries the production of cash crops, usually for export, grew at higher rates than food crops. Countries such as Liberia and Sierra Leone have seen significant declines in agricultural production largely because of internal conflict.

Ghana, which started undertaking economic reforms as early as 1983 has to date kept its Cocoa Marketing Board functional. Prices and other incentives to farmers were greatly improved as part of its reform program. In particular, the maintenance of competitive exchange rates and accompanying measures to ensure that cocoa farmers received a high share of the export price have helped to keep the flow of cocoa to the formal marketing channel at high levels. The rate of growth of overall agricultural production in Ghana has, however, been rather low in the 1980s with some improvement during the 1990s, and agricultural growth rates have not kept pace with population growth.

Other West African countries adopted reform and liberalization measures of varying intensity and continuity. Nigeria in particular carried out fairly serious reforms between the mid-1980s and the first years of the 1990s. Although there were some reversals in the 1990s, Nigerias reforms, particularly those pertaining to agriculture, were far-reaching. Prices were liberalized and exchange rates were allowed to be largely determined by the market, although this was one of the areas where there was major backtracking by the Abacha government. Marketing boards were dismantled, and the agricultural product market was completely liberalized. These measures, together with relatively more extensive though poorly maintained rural infrastructure, higher fertilizer application, and a larger extension network than other countries in the sub-region all contributed positively to agricultural production in Nigeria. The sectors growth has, however, been at rates below population growth rates for most years.

Policy reforms, including liberalization of markets and pricing, were carried out in several franc zone countries in West and Central Africa. The devaluation of the CFA franc in early 1994 had a beneficial impact on exports, as it significantly redressed the long-standing loss of competitiveness of products from CFA zone countries. Côte dIvoires export of coffee and cocoa rebounded strongly, due to the favorable impact of the devaluation and accompanying macroeconomic reform measures. Cameroon, too, has recorded improvements, though not as pronounced as that of Côte dIvoire. In Burkina Faso and Mali, cotton production and deliveries grew significantly in the post-devaluation period. Senegals agricultural performance did not follow this trend, as production fluctuated mainly due to unfavorable weather.

3. Factors Affecting Productivity and Competitiveness

Major factors affecting the performance of African agriculture include the policy environment, institutions, land tenure, technology, infrastructure, credit and marketing, and labor.

3.1 The governance and economic policy environment

Political instability, conflict, poor governance, and inappropriate macro-economic policies all obviously have direct and significant impact on agricultural production and productivity. As African nations gain in political maturity, and political systems come under increasing pressure to be more accountable to the citizenry, issues of economic development will gain in significance and will require more room on the political agenda. The general public is now more aware of the relationship between the political process, effective policies, and good governance. The governance of a country will sooner or later affect the extent of political and social stability of that country. Generally, a well-established democratic society is expected to be relatively stable socially and politically. In contrast, as the experience of some African countries attests, civilian or military dictatorships and de facto one party political systems have failed to deliver either sustainable economic growth, or social and political stability.

Conflict and instability will, at a minimum, adversely affect both input supply and produce marketing by disrupting delivery channels, raising transport costs, and otherwise increasing transaction time and costs. In most internal conflicts, combatants are drawn from productive activities, including farming, while conflict-induced dislocation and mass migration of populations considerably disrupts economic activities, including agricultural production and marketing. In extreme but recurring cases, wars and civil conflict force productive farming communities to migrate to refugee camps where they become dependent on relief supplies, usually from the international community, for their very survival.

Some African countries are chronically prone to food insecurity with sizeable populations experiencing malnutrition and starvation as a direct consequence of extended internal conflict. Other countries have seen traditional agricultural exports decline precipitously during protracted conflict. This was the case with Uganda, whose coffee and cotton exports declined sharply during the late seventies and early eighties, and Angola, the second largest African coffee exporter prior to its civil war, which saw its coffee exports totally collapse. Instability and civil war in one country often also have spill-over effects on neighboring countries, particularly where the exports of such neighbors have to transit through the country engulfed in internal conflict. This was the case for Zimbabwe and Malawi, whose export costs and competitiveness were negatively affected by the Mozambican civil war during the 1980s. The apartheid era in South Africa had similar effects of economic destabilization on neighboring or frontline countries.

The system of governance also has implications for productivity and competitiveness. Poor governance inhibits and discourages production and trade. Corruption, and the absence of equitable, well-established governance structures create an unpredictable, costly and even hostile environment for economic actors including farmers, traders, and processors of agricultural products. Complex regulatory systems, licensing and permit-issuing procedures create opportunities for rent-seeking and result in delays and general bureaucratic inefficiencies. These further increase the cost of doing business, while the lack of a transparent and impartial judicial system adds to uncertainty. Competitiveness is negatively affected by such an environment, and institutions that promote standards and quality control may also suffer.

The importance of a stable and predictable macro-economic policy environment to overall economic growth is well known. An adverse policy environment can be, and in the past has been, a major constraint to the performance of agriculture. As described already, many African countries have been undertaking economic reform programs during the latter part of the 1980s and the 1990s. In most cases, these were externally inspired. Some of the common features of the reforms relating to agriculture include exchange control deregulation and currency devaluation, liberalization of domestic markets and prices, foreign trade liberalization, and reduction of fiscal deficits. Privatization of state marketing boards, and downsizing and streamlining of public institutions were among other related reform measures.

Although reform programs were initiated throughout the region, the content of programs and the consistency of implementation varied from country to country. Moreover, as policy reforms were not accompanied by parallel structural and institutional changes, the desired result of strong and sustained economic growth is yet to be achieved. In agriculture too, significant and sustainable improvements in production and productivity have yet to materialize.

3.2. Institutions serving farmers and agriculture

There is now broad consensus that economic recovery and growth are much more likely to be significant and sustainable where policy reform is accompanied by the strengthening and restructuring of relevant institutions. Weaknesses in the structure and capacities of rural and related institutions are part of the reason why economic policy reforms have failed to achieve the desired increase in aggregate agricultural output in many African countries.

Agricultural institutions in Africa have been in transition for a long time. This transition has coincided with, and been affected by, other equally deep changes at the national level. Of relevance to the agriculture and rural sector are:

i) a scientific transition from expatriate to indigenous agricultural research scientists of equivalent qualification;

ii) a political transition, with respect to preferred farm constituency, from a focus on commercial farms to a more small-holder-oriented approach in dual agrarian societies; and

iii) more recently, an institutional transition from mainly public to both public and private institutional forms, and to new forms of public-private-civil society partnerships.

In most of Sub-Saharan Africa, policies, plans and decisions on budgets and personnel deployment for the agricultural sector are all centralized at the level of national ministries. Decentralization of such functions is rarely seen. At the same time farmers organizations are either non-existent, or weak and ineffective, and agricultural organizations in Africa do not operate as well-integrated systems.

A significant component of new democratic and participatory governments would be the decentralization of services and devolution of power to local authorities and other legitimate traditional structures. The chief obstacle to the decentralization of government functions is political. Policy makers and senior civil servants may be averse to decentralization since this is interpreted as a loss of power and control, particularly over budgets and staff. They need to understand that the empowerment of rural peoples requires meaningful decentralization and the strengthening of rural institutions, particularly those providing local governance, and administering justice and property rights pertaining to land, water and other natural resources. Strong local institutional structures could eventually be the effective protectors of the economic and political interests of rural people.

Putting small-holders at the center of the system of agricultural development institutions is a concept that could drive institutional transformation, and influence the allocation and distribution of public resources. Putting farmers at the center means collective action by service organizations in making products and providing services for farmers. But why are small-holders politically insignificant in countries where they are the majority of the population? Such questions can no longer be ignored, at least not by those interested in broad based development.

Potential solutions could be in at least two areas. The balkanization of small-holders and their limited capacity for collective action have created a political and institutional vacuum in rural areas. The lack of viable and voluntary farmer associations has therefore to be addressed within the context of the broader debate on democracy in Africa. That debate has to shift from the narrow focus on multi-party politics and urban-based civil society organizations to encompass what Africa needs most-- rural participatory democracy. In this regard small-holder farmers need to organize themselves in a manner that demands accountability from the state and the state bureaucracy. If farmers were to develop the ability to organize on a special interest basis, such as commodity-based associations, co-operatives or unions, these organizations could serve as defenders of farmers interests. They may at the same time become foundations for broader social and economic development institutions. The strengthening of such inclusive rural institutions may have the additional benefit of weakening tribal and ethnic-based associations. The most important quality of traditional institutions may well be the ability to govern a common pool of resources.

The second requirement is that of inducing public organizations to understand and work in the economic interests of small-holders. Government policies on agriculture are ambiguous in terms of commitment to small-holder agriculture, since most government rhetoric is in favor of agriculture and small-holders, while policies, institutions and resource allocations favor non-agricultural sectors and larger farms. The absence of effective farmer organizations has led to top-down farmer support and delivery systems. Public sector agricultural organizations do not feel compelled or see the need to build effective coalitions with small-holder farmers. These organizations need to be more demand-driven, responsive and accountable to farmers and rural institutions.

Agricultural service organizations need to examine their operational relationships, while research, extension and other services and institutions need to be adequately decentralized to allow decision making as close to the beneficiaries as possible. These institutions have to be effectively inter-linked, and need to develop a common vision and agenda for their farmer clients. They should adopt new strategies and policies that empower small-holders to have a voice in planning and setting objectives, in impact reviews, in priority-setting of research programs, and in restructuring service institutions to meet their needs. If and when they adopt such an approach of inclusiveness, responsiveness and accountability, agricultural institutions will be more likely to be guided by the needs of the rural majority.

3.3 Security of land tenure

Annex 2 provides a more detailed presentation of issues relating to land tenure.

Land tenure is increasing in significance in Africa, and for some countries it is likely to emerge as the most serious agrarian issue in the 21st century. There is a well-established relationship between tenure security and the readiness and commitment of farmers to the conservation, improvement and proper management of land and other natural resources. Farmers with secure rights to land will make necessary improvements and take measures to conserve soils and maintain the fertility of the land, all of which will positively influence production and productivity.

Security of tenure refers to the right to use, transfer, exclude or include others in the exercise of such rights, as well as the authority to enforce the foregoing rights. To the farmer, the right to bequeath land is a fundamental issues. There are four categories of tenure systems: open access, communal, private, and state. In Africa, indigenous customary land tenure is the most common system. Interference by governments which in effect undermines the traditional right of rural communities over land usually leads to tenurial insecurity, and diminished commitment and responsibility for the conservation, management and proper upkeep of land, trees, and other natural resources. It may in time become one of the root causes for civil conflict. Experience indicates that traditional tenure systems are dynamic, and that they evolve and adjust to social, economic, and political change. Indigenous tenure systems do not hinder investment aimed at land improvement, commercialization and intensification of agriculture so as to raise productivity.

Traditional communal tenure systems can ensure security of tenure if communities have full legal rights and authority over land. Governments can reinforce such authority by scrupulously respecting these rights, and where necessary enacting laws recognizing traditional tenure systems. They can further strengthen local autonomy and authority in the actual administration and distribution or allocation of land, and can also decentralize the power of adjudication and resolution of land-related disputes to local or traditional courts. Necessary reforms to tenure are most acceptable and lasting when carried out within the framework of traditional tenure systems.

A related and politically challenging issue is the overall distribution of land among different categories of farmers, including for example land allocation between commercial farmers and small-holders. Another and even more intractable problem is how to fairly allocate public resources and support services between high-potential areas (with good soil and relatively favorable climate conditions) and low-potential regions.

3.4. Technology to transform traditional agriculture

Research and development (R&D), and industrial know-how and capacity are needed for the manufacture of embodied technology such as machinery, seeds, fertilizers, chemicals, and materials. Disembodied technology, or the knowledge, techniques and management practices that increase productivity, is largely transmitted through extension and advisory services. In agriculture, machinery, seeds, fertilizer, chemicals and techniques used to cultivate crops all influence yields and productivity. Technological endowments and financial and economic capacities vary greatly among countries, as can be seen by the degree of fertilizer consumption, the number of extension workers available to farmers, and the number and caliber of tertiary and research institutions available in each country.

There are considerable differences in fertilizer consumption among African countries. More striking, however, is the contrast in fertilizer usage rates between Africa and the rest of the world. In recent years fertilizer usage has averaged about 20 kilograms of product per hectare in Sub-Saharan Africa compared with a world average of 95 kilograms. Because of low levels of fertilization, African farmers in general and small-holders in particular have been mining soils without adequate nutrient replacement. As farming systems have changed from shifting cultivation to annual cropping throughout most of Africa, soil mining and the degradation of soil fertility has become a serious, if not the most serious, constraint to increased crop production.

There is considerable potential for increasing average farm yields and incomes of small-holders through expanded production and use of chemical fertilizers. But for this, small-holder farmers need to get adequate supplies of the right type of fertilizers at costs that that will be compensated by the productivity gains. In addition, farmers need to have timely access to complementary inputs, including seeds of high quality improved varieties, agrochemicals, and information. Farmers must also be assured of access to markets for their products, and producer prices high enough to cover costs and leave sufficient profits. Suppliers of fertilizers that hitherto targeted distribution strategies toward large scale commercial farmers are recognizing that a large potential demand for fertilizer exists if strong and reliable channels are created to supply small-holders. This may lead them to experiment with new organizational innovations to increase fertilizer availability in remote rural areas.

Economic and agricultural policy reforms are significantly altering the factors that shape farm-level fertilizer demand and supply, through the removal of price controls, introduction of new technologies and quality improvements in inputs, and privatization of fertilizer importation, manufacture, and distribution activities. However, several constraints continue to affect both supply and demand. Farmer demand for fertilizer is limited by persistent droughts, poor infrastructure, lack of access to organized commercial markets for agricultural commodities, and the inability to obtain credit at reasonable interest rates. On the supply side, problems include antiquated plant, equipment, and machinery, shortage of granulation and storage capacity, restrictive fertilizer regulations, inadequate transport, and cumbersome import and export procedures. Despite these constraints, there are opportunities for expanding growth and improving the delivery of this critical input. Removing the constraints and exploiting the opportunities for expanded fertilizer usage will directly and favorably impact on farm-level productivity.

3.5 Investment in physical infrastructure and social services

The adequacy of investment in infrastructure, and the efficiency of essential infrastructure are crucial factors determining both the productivity and competitiveness of agriculture. Compared to other developing regions, much of rural Sub-Saharan Africa is characterized by dispersed rural populations and low population densities, which make the provision of infrastructure to rural Africa even more challenging.

In spite of recurring droughts, African countries have not developed innovative and locally appropriate means of small-scale irrigation that supports rain-fed agriculture. The irrigation infrastructure in Africa is thin and covers only about 4-6% of arable land. The role of irrigation in a future agricultural revolution can be significant in terms of productivity increases, and in diversifying production to higher value products. Realization of the considerable potential that exists for expanding irrigation is impeded by a number of factors. For large-scale irrigation schemes that may involve relocation, the cost is prohibitively high compared to the value of the production, particularly if staple food crops are to be grown in these schemes. This probably explains why, in a number of countries, most of the land under irrigation is on commercial farms where high value crops are grown. Irrigation-related constraints are compounded by lack of local trained irrigation engineers which necessitates the recruitment of outside experts at high cost. The human capacity deficit is also encountered with respect to experts in water management as well as farmers themselves, most of whom have not been exposed to irrigated production. All of these affect the extent and the efficiency with which water is used in irrigation schemes in the region.

Roads, transport and communication, storage and processing facilities are among the major areas of required physical infrastructure in which public as well as private investment need to be greatly increased. Currently, neither governments nor farmers and the private sector are investing anywhere near what is needed in these areas. For example, to achieve rural road density equivalent to that of India at independence, in 1947, Sub-Saharan African countries have to make additional investments that will raise rural road density approximately-five fold. Unless rural road coverage is increased significantly, farmers will face serious constraints in getting necessary inputs and supplies, as well as delivering their produce to markets. Similarly, traders will be unable to reach out to rural areas if appropriate rural infrastructure is not in place.

The availability, upkeep and efficiency of rural as well as main artery roads and railways, transport and telecommunications, ports and storage facilities, and regulations pertaining to transport, customs and transit are all critical factors that determine the competitiveness of exports, including agricultural exports. In cross-border or intra-regional trade and export operations, bureaucratic procedures and the rent-seeking involved can be costly and time-consuming and thereby negatively impact competitiveness. With respect to ocean freight and insurance, studies show that Sub-Saharan African countries are charged relatively higher rates, which again diminishes the competitiveness of African exports. For perishable and other high value products that have to be air freighted, the limited frequency of flights and the high air cargo rates charged place African products at significant competitive disadvantage

Investing in, expanding and strengthening schools, health centers, and other social services in rural towns and villages have multiple benefits. The establishment and growth of these and other social institutions will help facilitate the creation of income-generating activities, including enterprises geared to the processing of agricultural products, and small-scale industries producing or repairing farm implements or catering to the input and consumption requirements of farmers and other rural people. More fundamental are the direct benefits in terms of the skill, health and well-being of the rural population that investment in education and health and other social services provide. Delivery of such social services will thus favorably influence productivity, enhance the income-earning opportunities of farmers and other rural groups, and generally contribute to poverty reduction.

In rural areas education should go beyond the tutoring of school-age children and take up the challenges of adult education and the training of farmers. Health services may similarly have expanded functions including in such areas as child and maternal care, creating awareness and helping in organizing communities to combat HIV/AIDS and other sexually transmitted diseases, and propagating measures relating to improved sanitation. The provision of safe and clean water is another priority social service. Progressive expansion of social services, and local opportunities for income earning and employment in rural communities create conditions conducive to the retention of educated young people. To the extent that rural areas do not receive their fair share of social services, the exodus to urban areas will continue, the lack of new income-generating opportunities will depress incomes, and the training and self-improvement of farmers as well as their rights to social services, will have been denied. Most of these will adversely impact on agricultural production and productivity.

3.6 Credit and marketing

Farmers need access to credit for long-term land improvement and capital expenditure purposes as well as to meet short-term seasonal needs. Private rural-based and small-town businesses engaged in the processing of agricultural products, and in transport and input-supply operations also require credit for long-term investment and working capital. Currently, both farmers and agriculture-related small and medium enterprises have considerable difficulties with respect to credit, but the problem is much more acute for farmers. Formal financial intermediation is usually weak and in some cases virtually non-existent in rural Africa. Banks and other credit institutions rarely go beyond provincial towns. As a result, there are neither formal mechanisms for savings mobilization, nor systems that provide credit and other bank services to borrowers at the village and small town level. There are no institutional mechanisms for encouraging farmers to save. As a result, there are no formal structures for channeling rural savings to finance farm-level, and other broader rural investment projects or programs.

Public sector development banks, which were established to provide credit for such key sectors as agriculture and industry, have in most instances failed. This was due to poor management, excessive political interference, and a dismal record of credit recovery. In any event, such banks never really brought their operations to the level of small-holders as their focus was mostly on commercial and cash crop farmers and other well-connected groups. Private commercial banks never managed to extend their branches into rural areas. In fact, it may very well be that in recent years the better organized commercial banks have further concentrated their operations in the main urban areas. To the extent they were active, government-owned commercial banks did not give high priority to extending operations to the rural sector. In any case, such banks have been, or are currently poised to be, privatized. Except in a few rare cases, government-owned commercial banks also accumulated large amounts of bad debt over the years. In the process of privatization, governments are in many cases assuming the bad debts of commercial banks and segregating and consolidating urban bank branches for sale, while leaving the provincial/rural branches under government control possibly for eventual liquidation.

Multipurpose savings and loan cooperatives could have partly filled the financial intermediation gap in rural Africa. In some Asian countries, village level savings and loan co-operatives have existed for decades. In Africa, however, such schemes have either not succeeded well where they were tried, or have not been introduced at all. Micro-credit schemes, which could play a supportive role in rural finance, have not yet been promoted widely. Thus to meet their credit needs, farmers and other rural groups are essentially left with money-lenders and other sources of informal finance, which are generally inadequate.

Marketing-related problems are major disincentives that discouraged small-holders from raising their production and productivity. The poor state of transport and communication, particularly in rural areas, stands out as one of the principal obstacles to agricultural marketing in Africa. Rural roads are either non-existent, or not serviceable because of poor upkeep and maintenance. In addition, lack of adequate proper storage capacity contributes to post-harvest losses, thus negating any gains in production and productivity.

Marketing chains and channels in Africa are such that only a few local traders reach down to villages and small towns. Because of the formidable financial and infrastructural obstacles traders themselves face, and also because of limited competition, such local traders usually offer low and non-attractive prices to farmers. The discredited marketing board system in most cases provided seasonal credit to farmers, which could be deducted from sales proceeds at the time the harvest was brought to market. Private traders however may not have access to such loanable funds. Even if they have money to advance, they may be constrained from doing so because they lack assurance that loans can be collected at harvest time, as there is no guarantee that the indebted farmer will sell produce only to the trader who advanced the credit.

The competitiveness of agricultural products is heavily influenced by the strength and efficiency of the marketing chain, and by the availability and smooth functioning of the whole system of transport, communication, transit, port-handling and shipping. The number and intricacy of transactions related to contracts, export finance, insurance and guarantees intimately affect the competitiveness of products. It is needless to add that for virtually all African countries, these transport and transaction-related operations are notoriously inefficient and excessively expensive, and thus put Africas exports, including agricultural exports, at a competitive disadvantage.

3.7. Labor and skills

Small-holders basically depend on themselves and family members for farming operations. Medium and large commercial farmers require farm labor. Even small-holders may need extra labor if they engage in intensive farming. As is well-known, in most African countries, very rudimentary implements and technology are used in farming operations. In many places even animal-drawn implements are not in wide use, and operations are thus performed with hand-held tools. Labor shortages, particularly during peak seasonal operations such as harvesting, can be a major constraint. This is partly a reflection of problems related to the mobility of labor. Both casual observation and empirical studies confirm that agricultural labor commands much lower wages than labor deployed in other sectors of the economy. There is thus little incentive to acquire or improve skills, and young and active rural workers find it more attractive to seek employment in non-agricultural sectors. All of these impact unfavorably on productivity.

An important feature of African agriculture is the very significant participation of women. Even where men are engaged in farming, many operations including weeding, harvesting and gathering are done by women. This is in addition to their responsibilities for such household chores as fetching wood and water and cooking and caring for their families. In many countries, although women form a large percentage of all farmers, extension and other agricultural services are not geared to adequately address their general and special needs. For example it is well-known that with respect to access to land, credit and other services, women farmers face additional hurdles and discriminatory treatment. The complex and burdensome tasks women face, as well as their extra difficulties in acquiring assets and other factors and inputs of production all add up as further constraints on women farmers seeking to improve their production and productivity.

4. Opportunities for Growth and Measures to Enhance Productivity and Competitiveness

Sub-Saharan Africa covers nine major agro-ecological zones. This diverse environment lends itself to a variety of potential sources of growth and development, and it will be the responsibility of countries to determine what products and production possibilities to focus on. However, for countries where agriculture is a significant activity, the opportunities for growth may broadly be identified to be in three areas: food crops, domestic industrial crops, and export crops.

The emerging maize and cassava green revolution

With population growth and urbanization, there is a growing demand for staple food crops and livestock products. Africa has prospects for a green revolution based on maize in Eastern and Southern Africa, and cassava and possibly maize in West Africa. Because maize is one of Africas most important staple foods, and because at least a dozen countries have developed significant production, input delivery and marketing capabilities, maize has been transformed from a food only to both a food and cash crop. In Eastern and Southern Africa, the needs of small-holders were met through technological advances in mid-altitude crops, as well as improvements in production, storage and processing. In West African tropical zones open pollinated varieties of maize have seen rapid growth over the last two decades.

Cassava is gaining or regaining in importance in West Africa, where improved varieties now offer greater yields as well as pest and disease resistance. In addition, cassava is becoming an important manufacturing commodity. Sorghum and millet continue to be important staple crops in various regions of Africa. Their prospects for cash returns and industrial demand are, however, not as high as those of maize and cassava.

Cash crops for domestic and export markets

A significant challenge is to find ways of enhancing the earnings of farmers and agriculture-based businesses by improving the production, marketing and processing of food, medium-value industrial, and high-value export commodities. African farmers have historically produced a variety of commodities for export; such traditional exports should continue to receive adequate attention from both farmers and governments. In addition, new and non-traditional exports, including horticulture and other processed or unprocessed high-value agricultural products, provide new export opportunities. There are several cash crops and other farm products that are key raw materials for domestic industry, including cotton, oil-bearing crops, dairy, meat and other livestock products. Countries should actively promote and support the diversification into, and expanded production and export of, such non-traditional products.

A high value-to-weight ratio tends to be associated with greater risks in marketing products destined for specialized clientele. Such arrangements usually lead to contractual relations and vertically integrated forms of organization. Similarly, the absence of substitute domestic demand for some export commodities makes it risky to produce outside a marketing structure that can handle them. Items such as cut flowers and vegetables that are exported mostly to Europe tend to be characterized by economies of scale in marketing, as are other perishables that require a chain of cold storage facilities for storage and handling. With greater investment in appropriate marketing and processing infrastructure, however, Africa has tremendous potential to expand its share of European markets for fresh vegetables, cut flowers, herbs, and organically farmed products.

Established commercial farming operations are in most cases able to diversify and continually shift from non-viable to viable alternatives. Small-holders have experienced severe limitations in diversifying production due to lack of access to information and technology, and because of limited skills in dealing with higher competitive markets. High-value production often requires quite specific and strict processing, handling and quality standards. Experiences from Africa and elsewhere suggest that any institutional innovations to overcome these handicaps, such as contract farming and vertically integrated co-operatives, are more likely to succeed if they involve substantial farmer participation in ownership and management. Cotton schemes in West Africa that have a higher degree of participation of farmers in decision making are good examples in this regard.

The performance of African agriculture and the opportunities for growth, clearly demonstrate the need for serious and concerted action, first and foremost by African countries. Measures and policies need to both remove constraints and exploit opportunities for reinvigorating Africas agriculture. At the country level, key actors include governments, farmers and the private sector. But to improve the chances of success and to ensure optimum results, such country-level action needs to be complemented by adequate and timely supportive measures from Africas development partners.

4.1 The role of government and the public sector

African governments and public sector agencies have a central role to play in rebuilding Africas agriculture and wealth. Their first key task is to provide direction and political commitment to agriculture and rural development, thus creating a conducive policy environment. As indicated previously, most African governments have initiated reforms aimed at macroeconomic stabilization and the liberalization of price and trade regimes. Specific sectoral reforms including decontrol of agricultural pricing, dismantling of parastatals, and accompanying market liberalization measures, have been undertaken in a number of countries.

The seriousness and consistency with which reform programs have been implemented varies among countries. However, even where policy reforms were carried out with due diligence, the expected supply response, in the form of significant and sustained increases in agricultural production and export, has rarely been realized. Achievement of macroeconomic stability, and the re-establishment and reinforcement of incentive systems through price and trade liberalization are essential and necessary policy reforms. However, they are not sufficient to bring about strong and sustained supply response from the agricultural sector. Additional and critical measures need to be taken to trigger tangible long-term growth in agricultural production, and significant and durable improvements in production and competitiveness. These additional measures are in the areas of institutional reform and strengthening, improving the structures and functioning of agricultural support and delivery systems, and raising investment in infrastructure and essential social services. The first and most overriding requirement is to ensure the political and macroeconomic policy stability and good governance that are fundamental for maintaining a sound and hospitable environment for investment and economic activity.

Land policies

The land policy issue is key to increased agricultural productivity. Each and every African nation has unresolved issues regarding land reform and land tenure security. This is a major bottleneck, as access to land and security of tenure are central to both agricultural productivity and the conservation of natural resources, Governments should put this issue high up on the policy radar screen because the level of land conflicts is now rising higher than previously. The theory that Africa is land abundant is fast fading. Land tenure systems have to respect both traditional or customary land laws, as well as provide solid security to bequeath and transfer tenurial rights. This way land will have a higher economic value, and this will lead to greater long-term investment and increased productivity. Because land tenure is a continent-wide issue, regional and sub-regional co-ordination and cooperation, particularly with regard to policy analysis and tenure reform, will be useful.

Capacity in policy analysis and reform

Policies are central to greater competitiveness of agriculture both at home and in world markets. Policies guiding agricultural development are still generally partial and ill-informed. Furthermore, the fact that policy reforms undertaken over the last decade or two have been incomplete means that they had positive impact on very few sub-sectors. Policy analysis should focus on overall agricultural development strategies as well as on public sector investment programs, and on key policy and institutional issues. Policy work should also give attention to how regional integration could foster increased intra-regional trade, and provide a strategy for regaining lost international markets. It is necessary to develop capacity, and also pool and utilize existing capacity, for agricultural policy analysis. Box 2 summarizes on-going attempts to create African networks for agricultural policy analysis in three sub-regions.

Research and technological innovation for small-holder development

Traditional forms of organizing research and extension services have failed to meet the needs of small-holders, and governments need to question both the effectiveness of these institutions and whether in their current form they can drive an African green revolution. Technology and new knowledge are major forces in development, and institutions need to be reformed so that they are at the cutting edge of knowledge needed for transforming traditional agriculture into a highly productive and competitive industry.

Some examples of success can be found in Africa, and as mentioned earlier, maize in Zimbabwe, horticulture in Kenya, and cotton in Mali, provide important examples. These limited but promising areas of success contain the seeds and ingredients for broad based growth in production and productivity, and need to be replicated and expanded. The broad lessons from these success stories would appear to be that:

governments have to provide political leadership and financial support;
research and extension workers have to be dedicated, able to work as a team, and collaborate closely with farmers;
farmers need to organize and actively participate in decision-making; and
close public/private collaboration and partnership are required.

Investment in social and physical infrastructure

African governments and donors need to give serious attention to the building and repair of Africas infrastructure, if agricultural productivity and competitiveness are to be substantially raised and a green revolution achieved. Roads, transport, telecommunications and irrigation, shipping and handling, storage and marketing infrastructure are all important. Attempts at vertically integrating farmers with processors and domestic industry are dependent on the adequacy and efficiency of such infrastructure. The private sector has an increasing role to play in this area both on its own or via appropriate public/private partnerships. Schools, health centers, and other social services should receive equal attention. The strength of such social services is as relevant as the provision of infrastructure and support services for the productivity of agriculture and for balanced rural development.

Box 2. Agricultural Policy Analysis Network

With a view of strengthening African capacity in the analysis and formulation of agricultural policies and development strategies, proposals have been made and considerable preparatory work done for the establishment of agricultural policy analysis networks. These proposals were discussed at previous GCA meetings and other relevant forums, including meetings of the Conference of Ministers of Agriculture for West and Central Africa, and the Conference of Ministers of Agriculture for Eastern and Southern Africa. All the forums have given their endorsement and encouragement to the initiative. On the basis of further work in which key stake-holders such as ministers of agriculture in each sub-region, farmers associations, research institutes, the private sector, universities and donors were involved, three networks have been launched. These are:

1. the Agricultural Policy Research Network for West and Central Africa (APNWCA);
2. the Eastern and Central Africa Program for Agricultural Policy Analysis (ECAPAPA); and
3. the Food, Agricultural and Natural Resources Policy Network for Southern Africa.

The objectives of all three networks are broadly similar and their main focus is on:

1. applied policy research;
2. building and strengthening capacity for research and policy analysis;
3. facilitation of networking among researchers and institutions; and
4. disseminating information on research results, best practices, data and other relevant materials.

It is anticipated that the work programs and activities of the networks will concentrate on a few themes that are considered priority issues for early research and analysis. Agricultural transformation, technology generation, and natural resources management including land tenure, trade, and poverty and food security, are among the priority themes expected to be taken up.

Currently, for West and Central Africa, the office of the Coordinator General of the Conference of Ministers of Agriculture is taking the lead role in promoting the early start-up of the network. In Eastern Africa, the network is being promoted and supported by ASARECA, which is the sub-regional association of national agricultural research institutes, and in Southern Africa, the Agricultural Economics Department of the University of Zimbabwe is entrusted with leading the effort toward formal establishment of the network.

The next step is to help the networks to be formally established and commence operations. For this, adoption of appropriate by-laws or other legal instruments governing the establishment, structure, financing and administration of each network will be one requirement. The final approval of the relevant conference of ministers will also be appropriate and necessary. Finally financial, material and in-kind support from all stake-holders, including in particular from African governments and donors will enable the networks to be fully operational.

4.2 Role of farmers, farmers associations and the private sector

African governments should support and encourage the establishment of farmers groups, including commodity associations, unions, co-operatives, and savings and loan organizations. These will provide the basis for effective partnerships with government organizations. Farmers associations could become effective promoters of their members interests, as well as strong lobbies strengthening their countrys position in international trade negotiations. In its relations with farmers associations, the state should play a supportive but neutral role. Governments should avoid partisan approaches of encouraging only those groups that are subordinate to ruling political parties, while crushing or ignoring those with diverging view points. State institutions such as extension services should adopt new responsibilities for building the capacity of emerging farmer groups. Extension services should acquire skills and concepts of organizational development needed to assist the growth of farmers and community based organizations and structures. Where governmental departments are accountable to such community and national structures, the service is more demand-driven and the processes of institutional transformation have some guidance.

The private sector plays a vital role in credit and marketing, supply of inputs and essential consumer goods, and further processing of agricultural products. To facilitate the effectiveness of private business in carrying out these diverse functions, regulatory and infrastructural bottlenecks have to be overcome. Additionally, transactions that are costly both in time and money need to be addressed. For all these reasons, there needs to be close collaboration between governments and the private sector so as to facilitate the private sectors constructive and useful role in providing essential services and links between the farmer and input and product markets.

4.3 Cooperation at the sub-regional level

It may appear that agriculture is mostly a local and national issue, and that there is little scope for sub-regional collaboration. In fact, there are ample opportunities for such collaboration. First, if aspects of agricultural research and technology development and adaptation can be carried out at sub-regional levels with subsequent replication at relevant national locations, there could be considerable saving of resources; it would also allow the pooling of scarce scientific and technical manpower. The control and eradication of crop pests and livestock epidemics, which have potential to spread across borders will be facilitated where there are well-established sub-regional frameworks for collaboration. The use and sharing of water from trans-boundary rivers, be it for irrigation or other purposes will need to be based on sub-regional agreements among all riparian states.

Agreements on sub-regional food security mechanisms will be cost-effective as they enable each country to hold smaller overall reserves, while also allowing mutual support among countries in times of need. For this and for smooth flows of trade in and export of agricultural products, regional cooperation and harmonization of policies are key requirements. To repeat once more, the operating efficiency and adequacy of sub-regional transport networks, cross-border transit and shipping systems, are all critical determinants of the competitiveness of exports. In this respect it should be noted that land-locked countries that have to transit one or more borders in the process of shipping their export products to foreign destinations have to bear additional costs due to the red-tape involved time wasted, and bribery demanded by customs and other transit officers at the border-crossing points.

Sub-regional frameworks or structures may also be used for analyzing and studying trade policy issues and for the formulation of joint negotiating positions at multilateral trade forums including the WTO. The agricultural policy networks briefly described in this paper are also being organized on sub-regional basis. Moreover, economic policy harmonization and coordination among neighboring countries linked in sub-regional groupings will strongly reinforce the investment environment of the whole neighborhood. Joint arrangements to maintain sub-regional security and stability will also be to the mutual advantage of all as, among other things, it improves the sub-regions overall investment environment. Regular consultation on various forms of collaboration as well as the sharing of experience will be obviously facilitated by further strengthening the two Conferences of Ministers of Agriculture (for West and Central Africa, and for Eastern and Southern Africa).

4.4 Support from Africas development partners

The agricultural sector has in the past been the target of considerable external assistance, although in recent years this has declined for a variety of reasons. A significant portion of the assistance was for donor-driven priority areas, programs or projects, and co-ordination and priority setting by African countries was either lacking or undermined. All concerned parties now appear to be ready for a new African country-led partnership.

Rural development and agriculture is one of the areas of intervention by Africas external partners where potentially the most positive and tangible results could be achieved in terms of poverty reduction and broad-based growth. For optimal results, it is of course necessary that African countries themselves take the lead in undertaking policy and institutional reforms, as well as in formulating and implementing coherent and thorough agricultural development strategies. The support and co-operation of partner countries and organizations will be needed both in the form of continued consessional assistance and in trade and investment.

Continuation of external assistance

The main focus of reforms in Africa in the 1980s and 1990s has been principally on various aspects of macroeconomic and trade policies. As increasingly advocated in many forums, and as repeatedly underlined in this paper, the key reforms and development issues that need to be addressed much more systematically and seriously are institutional and structural reforms and the provision of adequate investment in infrastructure. Research and technology development, extension and delivery systems, institutional strengthening and capacity-building are all crucial to achieve tangible and lasting production gains. The urgency and necessity of expanding and maintaining rural infrastructure cannot be over-emphasized. These are all critical areas that must be addressed on a priority basis for resumed and sustained agricultural growth. Development partners ought to continue to provide assistance for the revitalization of Africas agricultural sector. They should in particular give adequate support to African governments seriously taking up the new and more challenging areas of structural and institutional reforms, and investment in rural and related infrastructure.

Trade and investment

As regards trade, the objectives to be pursued by African countries will be oriented towards maintaining and improving their market share in traditional agricultural exports, while diversifying into newer and where possible higher-value exports products. External partners can be helpful by maintaining preferential market access for such exports. In this respect, industrial countries should refrain from imposing or increasing import tariffs on processed agricultural products. The partnership on trade should encourage the export of goods that have more domestic value-added. Non-tariff barriers disguised as stricter quality, sanitary, phytosanitary and related quality requirements, as well as insistence on "fair labor" standards, will inhibit the growth of African exports and Africas partners should make every effort not to resort to the imposition of these kinds of barriers. These cautions regarding trade lead to another dimension of the trade relationship between Africa and some of its developed country partners, that of food-aid and commercial imports into Africa.

As is well-known, subsidized agricultural products originating from developed countries may get imported into African countries at relatively lower prices. This will undercut domestic producers in Africa and thus depress rural incomes, undermine the competitiveness of African produce, weaken overall efforts to improve domestic food security. Food aid, while necessary to save lives and meet the needs of food-deficit areas, may at the same time depress food prices which in turn will affect incomes and the overall economic well-being of farmers in non-affected areas.

Partner countries and organizations have also ample opportunity to encourage and promote investment in Africas agriculture and the various sectors related to agricultural processing and marketing and essential infrastructure. The benefits that will accrue to African agriculture from enhanced investment co-operation between African countries and external partners are obvious. Increased foreign investment participation in the production and supply of such critical inputs as fertilizers, chemicals and seeds as well as investment directed at processing and marketing of agricultural crops will have tangible positive impact on both productivity and competitiveness. The marketing and technological know-how that usually accompanies foreign direct investment can facilitate entry into new export areas or expansion of or increased earnings from existing markets. The production, certification and distribution of improved breeds and seeds could also be avenues for fruitful foreign collaboration. It should however be noted that a growing controversy surrounds claims of multinationals on intellectual property rights in relation to seeds; genetically-engineered seeds are also causing concern as regards their potentially adverse environmental consequences.

Foreign investment participation in such essential infrastructure as roads, railways, power generation, telecommunication will also bring about clear improvements in efficiency and costs in these areas, all of which will translate to improvements in the competitiveness and productivity of agriculture.

While there is little doubt as to the desirability of foreign private participation in agriculture-related investment, it is another question whether such participation will be easily forthcoming. It is not necessary to go into the full details of how African countries and their donor partners can facilitate, encourage and promote such direct investment. As has been amplified herein and elsewhere, African countries will have to take joint action (within appropriate sub-regional groupings) and individual measures to create, maintain and reinforce an attractive and conducive political and economic environment for investment. On their side, donors can encourage and

facilitate foreign investment in African agriculture by providing additional guarantees, by arranging for their relevant public agencies to participate in equity holdings of and long-term loans to such foreign ventures, and by providing preferential market to the products of such ventures.

Conclusion

Growth in productivity and competitiveness is a prime requirement for overall economic growth and for fuller integration into the global economy. Achieving improvements in agricultural productivity and competitiveness are not only critical for maintaining and enhancing a countrys share in agricultural export markets but for the essential and fundamental goal of moving closer to food security. Despite Africas past disappointing record with respect to growth in agricultural production, productivity and competitiveness, there are possibilities and opportunities for resumed growth. Concerted action is needed to reverse the past trends and to realize the potentialaction by key stakeholders in each African country, as well as by the international community. The most fundamental prerequisite for growth in production and productivity in agriculture is to address and resolve internal and cross-border conflicts, which have become endemic in parts of Africa. However peace, stability and participatory governance are necessary but not sufficient conditions for the resumed growth in agriculture. Parallel actions are required in the areas of sound economic policies, the affirmation of property rights including security of tenure, the reform and strengthening of rural and other relevant institutions, and the expansion and upgrading of infrastructure in order to ensure adequate and sustainable growth in agricultural production, productivity and competitiveness.

Selected References

Block, Steven and C. Peter Timmer, 1997, Agriculture and Economic Growth in Africa: Progress and Issues, USAID research report, Washington, DC.

Byerlee, Derek and Carl K. Eicher, eds., 1997, Africas Emerging Maize Revolution, Lynne Rienner, Boulder, Colorado.

Delgado, Christopher L., 1998. Sources of Growth in Smallholder Agriculture in Sub-Saharan Africa: The Role of Vertical Integration of Smallholders with Processors and Marketers of High-Valued Items. Paper presented at the Inter-Conference Symposium of the International Association of Agricultural Economists, Badplaas, South Africa, August 10-16.

FAO, 1996, World Food Summit: Technical Background Documents 6-11, Rome, Italy

Jaffee, Steven and John Morton, eds., 1995, Marketing Africas HighValue Foods, World Bank, Kendall/Hunt Publishing Co., Dubuque, Iowa.

Migot-Adholla, S., P. Hazell, B. Blorel and F. Place, 1991. Indigenous Land Rights Systems in Sub-Saharan Africa: A Constraint on Productivity; The World Bank Economic Review, 5:1, pp 155-175.

Rukuni, Mandivamba, 1996, A Framework for Crafting Demand-Driven National Agricultural Research Institutions in Southern Africa. Staff Paper No. 96-76, Department of Agricultural Economics, Michigan State University, East Lansing, Michigan.

Spencer, Dunstan S., 1996, Infrastructure and Technology Constraints to Agricultural Development in the Humid and Subhumid Tropics of Africa, in African Development Bank, African Development Review, Abidjan, Cote dIvoire

UNCTAD, 1998, Trade and Development Report 1998, New York and Geneva

World Bank, 1998, World Development Report 1998/99, Washington, DC.

Annex 1
Figure 1


Annex 1
Table 1

Cereal Crops yield (kg/ha)


Annex 1
Table 2

Macroeconomic and Agricultural Indicators in Sub-Saharan African Countries and China

(Average annual growth rate in %)

Sub-Saharan Africa
China
Indicators
1965-80
1970-80
1980-92
1965-80
1970-80
1980-92
Population
2.7
2.8
3.0
2.1
1.8
1.4
GDP
5.3
3.6
1.8
6.4
5.2
9.1
Agriculture Value Added
1.9
1.6
1.7
3.0
2.6
5.4

Source: Mahmood H. Khan and Mohsin S. Khan, "Agricultural Growth in Sub-Saharan African Countries and China" IMF Paper on Policy Analysis and Assessment 1995

Annex 1
Table 3

Exports of Coffee (in millions of bags)

1960-65
1970-75
1980-85
1990-95
Africa
14.1
21.5
18.0
14.3
Colombia
5.9
7.8
11.5
13.0
Indonesia
1.6
2.2
4.9
6.0
Vietnam
--
--
0.7
3.5

Source: Inter-African Coffee Organization: Performance of African Coffee Sector and Possible Strategies for the Future, (1997: paper prepared for GCA)


Annex 1
Figure 2


Annex 2

Security of land tenure

Land tenure rights of people is an issue that is assuming greater and greater significance in Africa, and for a number of countries this issue will almost certainly be the most burning agrarian issue in the 21st Century. African governments have to appreciate that transforming agrarian systems into urban-industrial economies invariably requires fundamental changes in many institutions, including those of land tenure. The distribution and ownership of land are a major factors that influence this transition from one form of social and political order to another. There is growing evidence that agricultural growth and efficient management of natural resources are dependent on the political, legal, and administrative capabilities of rural communities to determine their own future and to protect their land and land-based natural resources and other economic interests. The absence of this power (or lack of democracy) is translated into insecure tenure rights, abuse of common property and resources, disenfranchisement of rural people, particularly women, and the breakdown or weakening of rural economic institutions. The management of the environment and the effectiveness of community-based natural resources management are all dependent on clearly defined land rights and support systems for rural communities.

Colonial and African governments alike have shown little respect or understanding of the land tenure systems that traditionally existed in Africa. Governments need to appreciate that land tenure institutions are usually unique and develop over time to suit the local needs. Moreover, land tenure institutions are rooted in value systems and grounded in religious, social, political and cultural antecedents. Within Africa, the interest of governments in tenure is based in the colonial and post-colonial belief that indigenous or traditional tenure systems are incompatible with Western or 'modern' systems of government, and the associated economic institutions. In order to examine this question and its implications, it is helpful first to discuss the concept of tenure security and then describe the various generic tenure systems, their possible evolution, and relevance to development.

Various types of tenure (including the "registered title") can be secure or insecure depending on social, legal and administrative institutions in a given society. Security of tenure is associated with four sets of rights. The basket of rights, therefore, indicates the relative security of a tenure system depending on secured rights from the following four perspectives:

  • use rights: these are rights to grow crops, trees, make permanent improvement, harvest trees and fruits, and so on;
  • transfer rights: these are rights to transfer land or use rights, i.e., rights to sell, give, mortgage, lease, rent or bequeath;
  • exclusion and inclusion rights: these are rights by an individual, group or community to exclude others from the rights discussed above; and
  • enforcement rights: these refer to the legal, institutional and administrative provisions to guarantee rights.

The four major categories of property rights define uses that are legitimately viewed as exclusive and also define who has these exclusive rights. Tenure systems can be categorized on the basis of those who enjoy exclusive rights and all tenure systems fall into four broad categories: open access, communal, private and state. In these tenure systems, exclusivity (to an individual or a group) therefore defines the degree of tenure security. Under communal tenure, exclusive rights are assigned to a group. Individual or family rights are also assigned under most traditional tenure systems.

Keen students of African tenure systems have argued that indigenous African land right systems have been incorrectly represented by most foreign anthropologists, and colonial administrators, as well as some nationalist ideologues who view these systems as static polar contrasts to western property right systems. Private property rights are the most prevalent form of tenure in industrialized western countries. As alluded to earlier, however, private land rights are not more sacred than community rights. In fact private land rights may be viewed as a creation of the state. Where private property rights are not viewed as legitimate, or not generally viewed as working in the communitys interest, or where they are simply not enforced adequately, de jure private property becomes de facto open access.

The majority of Africans hold their land under indigenous customary land tenure systems irrespective of the formal legal position under national law. Most African governments, however, are perpetuating the colonial legacy of designating traditional land as state land and this is the single most important constraint to tenure security in Africa. Most governments accept the de facto prevalence of customary tenure, while at the same time maintaining de jure state ownership, which in turn allows bureaucrats, politicians and influential people to exercise privilege and authority over traditional land and rural communities. Some governments have attempted to replace customary tenure with state-imposed and guaranteed individual rights (registered titles). This change, it is assumed, is more compatible with the intensification and commercialization of agriculture. There is mounting evidence, however that land tilting and registration programs have generally not yielded positive benefits. Moreover, formal title did not necessarily mean an increase in tenure security. The general experience has been that due to weaknesses of government institutions in Africa, state imposed individualized tenurial systems do not necessarily offer greater security for African land users. There is, on the other hand, growing evidence that indigenous tenure systems are dynamic and evolve with changing social, economic and political circumstances. There is strong evidence that customary tenure rights evolve towards more inalienable individual rights as population pressure increases and as agriculture becomes more commercialized.

Land tenure and economic efficiency

The most important characteristic of tenure security under indigenous systems is the ability to bequeath land. Detailed studies of tenure systems in several African countries confirm that indigenous systems do not hinder productivity or investment. Moreover, land registration has not necessarily led to tenure security. Government intervention, therefore, makes sense only after establishing causes of tenure insecurity, and also bottlenecks to rural development. As productivity of land and natural resources increases, as agriculture becomes more commercialized and as population densities grow, then appropriate registration efforts may bear positive results. The same may apply where land grabbing by powerful elites is a threat that needs to be checked. Recent research work also demonstrates that the high productivity increases achieved by small-holders in some countries had and still have less to do with individual tenure, but rather that the removal of prohibitions and other bottlenecks for small-holders were more important than land tenure changes.

Guidelines for tenure reforms

Land tenure is a complex issue that should be allowed to develop or evolve with changing socio-economic and cultural conditions of a given community. Traditional or customary tenure systems offer as much security as any other system provided that communities have legal ownership and authority over their land and natural resources. Governments can strengthen this tenure system by supporting and empowering local communities. Governments have to fully understand traditional and indigenous tenure systems before making radical attempts to alter them for whatever reason, be it ideological or purely political. These tenure systems have survived years of neglect, abuse and exploitation both under colonial rule and in the post-independence era. Above all, these tenure systems require support to strengthen local institutions and empower local communities in administering tenure, including the ability of the tenure system to evolve over time. Tenure security in terms of exclusive rights of groups and individuals, can be a major basis of political and social power and status. When such rights are overly subordinated to the state, it follows that the political rights of rural people are diminished, and that democratic processes and institutions are undermined. This then is a major cause of tenure insecurity, with resultant negative impact on agricultural productivity and the management of natural resources, particularly on communally held land.

Land tenure reforms, therefore, should be guided by the need first to respect the existing tenure system and customary laws that govern them. Second, governments can enact laws that recognize traditional tenure, conferring legal and institutional authority to local governments and traditional courts in land tenure administration. Such laws must provide guidelines in which local authorities operate but allow flexibility that is necessary due to location-specific differences. Third is the need to provide modern instruments of administration and technical back up for the village-based or local courts and/or land boards so as to maintain due process and assist in conflict resolution. Fourth, local courts and land administrators should be allowed to confirm and protect land rights as defined by the community. These rights should be interpreted by statutory laws so that the full basket of rights discussed earlier are enjoyed under traditional systems of tenure, including those rights with economic implications such as transfer rights. Fifth, only courts of law should be final arbiters on land disputes and political and bureaucratic structures should be restricted to technical back-up and policy development.

In summary, "traditional freehold rights" should be conferred for arable and residential land, and administered through customary local courts, with technical back-up from the state and higher courts of law. Communities should have power to reform the tenure system as population increases or decreases, and as commercialization of agriculture advances. Land tenure reforms in Africa must allow market and business transactions which are sanctioned by local communities and traditional authorities. National laws and technical back-up services should be provided to rural administrators to ensure the tenure security that is necessary for long-term investment, productivity and economic growth.


Highlights
2004 Policy Forum - Migration and Development in Africa
TICAD Asia-Africa Trade and Investment Conference (AATIC) - Tokyo, Japan - November 1 and 2, 2004
Annual Reports
 
   
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