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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