AN OVERVIEW OF THE AGRICULTURE SECTOR IN AFRICA T. OLALEKAN WILLIAMS www.thecommonwealth.org
Feb 08, 2016
AN OVERVIEW OF THE AGRICULTURE SECTOR
IN AFRICA
T. OLALEKAN WILLIAMS
www.thecommonwealth.org
PRESENTATION OUTLINE• CURRENT CONTEXT OF AFRICAN AGRICULTURE
- Role, Key Challenges, Successes
• CHANGING ECONOMIC ENVIRONMENT FACING AGRICULTURE
• KEY QUESTIONS
• PRIORITY ACTIONS TO STRENGTHEN AGRICULTURAL SECTOR
Current Context (Role)
• Agriculture in Africa accounts for: - 35-50% of GDP in Africa- 70% or more of total employment
• Nearly 65% of Africans depend on agriculture as their primary source of livelihood
• Smallholder farmers account for more than 90% of total agricultural production
Current Context: Role (contd.)
• Agriculture is a big sector in Africa and it does not take a large increase in agricultural growth to have significant impact on the national economy and average incomes
Upshot
Current Context (Key Challenges)
• Poorly functioning markets
• Limited access to finance
• Poorly developed physical and social infrastructure
• Inequitable access to productive resources
• Risks associated with adverse weather and prices and lack of appropriate financial instruments (e.g. insurance)
Current Context (Success Stories)
Cotton in West Africa
- 9% annual growth in production and exports over 40 years (1960-2000)
- 200,000 farm households grow cotton, 30% of Mali’s population
Current Context (Success Stories)
Horticulture Exports from Kenya - Fruit & Vegetable exports quadrupled in real terms between 1974-1999, exceeding $150 m per year and becoming Kenya’s 3rd leading foreign exchange earner
- 100,000 small farmers produce and export fruits and vegetables
- Smallholders earn an average of $188 per year from export of fruits and vegetables
Current Context (Success Stories)
Cassava Transformation in Nigeria
- Production tripled within a decade (1984-92) - Nigeria surpasses Brazil as world’s leading cassava producer
- 60% of farm households plant improved varieties
- Resulting price fall benefits consumers, making cassava a powerful anti-poverty weapon
CRITICAL QUESTIONS
• Are any of the successes of African agriculture replicable across wider areas to benefit larger numbers of people?
• How do we generate new thinking, grounded in national and international realities, to revitalize African agriculture?
• How can new strategies and alliances in favour of African agriculture be brought about?
Changing Economic Environment
International Environment
• Heavy farm subsidies in OECD countries
• Shifting composition of traded goods
• Global consolidation in food retailing • Preferential access to markets in EU & USA - ‘Everything But Arms’ & AGOA
High Price of Agricultural Protectionism in Rich Countries
- US $1 Billion a day supporting their own agricultural sectors
- Cotton production in West Africa supports 11 million people. When world prices sunk in 2001 due to US cotton subsidies, the region lost US $ 190 million
Changing Economic Environment
National Environment• Regulatory reforms (e.g. market liberalization)
• New policy initiatives in Nigeria
2000 – Merger of NACB, PBN & FEAP to form NACRDB
2003 – Small & Medium Enterprise Development Agency of Nigeria (SMEDAN)
2005 – Pilot Microfinance Scheme
Changing Economic Environment
National Environment (continued)
• Emergence of Supermarkets with fresh food retailing sections
PRIORITY ACTIONS
STRENGTHENING AGRIBUSINESS
Public Sector’s Role
• Tackle market failure to reduce the transaction costs and risks that inhibit the private sector and restrict access of farmers and SMEs to markets
• Invest in core public goods that build enterprise competitiveness, e.g. infrastructure, R & E etc.
• Reduce, simplify or remove regulations and costs that create a competitive disadvantage for farmers and SMEs
Public Sector’s Role
• Create policies that support pro-poor agriculture. Policies to reduce inequality to productive assets and to secure property rights
• Fill the agricultural finance gap
• Policies to support institutions (e.g. producer organizations, marketing associations) that will assist to connect rural poor producers to markets
Private Sector’s Role
• Development, organization and management of supply chains – hear and see the market
• Investment in market expansion and competitiveness enhancing measures, e.g. processing facilities
• Work with public sector to develop policies
• Develop linkages with multinationals and large domestic companies
Civil Society’s Role
• Mobilisation and organisation of rural poor producers
• Awareness raising to encourage stakeholder acceptance and adoption of new export requirements
• Pilot testing of new ideas and projects with the poor
• Advocacy – bring the demands and needs of the poor to the attention of governments and private sector
Organizational structures to strengthen pro-poor agribusiness
development
• Contract farming involving out-growers and a link- exporter
• Farmer-controlled enterprises - Linkage independent - Linkage-dependent
• Cross-border agricultural supply chains
• Clusters and networks linked with intellectual property rights
Examples of ComSec technical assistance programs to strengthen
agribusiness
• Commonwealth Secretariat technical assistance to Nigeria to improve compliance with SPS measures for non-traditional exports
• Commonwealth Secretariat support to The Gambia in agro-processing
• Commonwealth Secretariat-FAO collaborative technical assistance in Eastern & Southern Africa
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