Agricultural transformation in Africa: The myths, key issues, and the new pathway

August 8, 2017

By George Boateng

Agriculture is the heartbeat of Africa. The continent’s major agricultural advantages include an abundance of natural resources, a young and growing labor force, and a rising middle class, in addition to a surge in urbanization. The Continent has an estimated 600 million hectares of uncultivated arable land, roughly 65 percent of the global total. Its tropical and sub-tropical climates enable the cultivation of a wide variety of agricultural produce with minimal technological dependence. Africa also boasts large regional markets, even if the markets lack major industry players. Approximately 80 percent of agricultural land in Sub-Saharan Africa (SSA) is owned by farmers who cultivate small-based plots of land on which they grow subsistence crops or two cash crops, directly employing 175 million people.

Despite its advantageous agricultural landscape, Africa struggles to translate these advantages into economic transformation. The problem is multifaceted. For one, arable land for large scale farming is difficult to acquire, and even when available, has insufficient legal rights of ownership. Poor infrastructure, especially in roads and electricity, renders agribusinesses unprofitable, and thus uncompetitive. Additionally, the youth appear disinterested in agriculture; while 60 percent of Africa’s population is under the age of 24, the average age of farmers in the continent remains 60. SSA still cannot feed itself, as evidenced by its growing food import bill of over $35 billion a year (excluding fish). Rethinking is needed to change the agricultural landscape in Africa.

At the forefront of the efforts to transform Africa’s agriculture is modernization of the sector to help lift farmers’ incomes, make farming attractive to the youth, and increase employment. The myth that a modern agriculture sector will mean that the consumption of manufactured goods and services outpaces the consumption of food, leading to a reduction in agriculture-related employment, must be dispelled. Modernization will actually lead to an increase in agriculture-related jobs. Modernizing agriculture will allow for the full development of agricultural value chains in Africa, in turn producing more agriculture-related jobs; thus, there are likely to be employment gains from modernization. Moreover, modern farming operations would make farming more attractive to Africa’s burgeoning youth population, as would the off-farm agricultural value-chain activities such as processing and exports. Aside from boosting employment rates generally, modernized farming would also specifically address the issue of widespread unemployment among educated youth.

The African Center for Economic Transformation (ACET) defines agricultural transformation as a process that leads to higher productivity on farms, commercially orients farming, and strengthens the link between farming and other sectors of the economy. An upcoming groundbreaking report on “Transforming Africa’s Agriculture” by ACET supports sweeping structural transformation in agriculture on the continent. It is set to change the narrative on agriculture and open conceivable pathways for a new policy discourse. The upcoming report on Transforming Africa’s Agriculture takes a critical examination of the following key areas:

I. Secure Land Tenure

First, securing land tenure and easing access to land is vital to increasing investment in the agricultural sector and improving famers’ access to financial resources, as there is abundance of uncultivated arable land in Africa. Secure land tenures will create vibrant land markets that can shift land and labor resources from lower to higher productivity activity.

II. Increase Productivity

Second, productivity increases will go a long way in reducing SSA’s food import bill and releasing labor from farm to industry, especially to export-led manufacturing. Agricultural advancement also necessitates the use of improved technology both on and off the farm, as well as the incorporation of environmentally-sustainable management practices that will lead to a green revolution in Africa.

III. Strengthen Business Models

The third aspect will be moving from a subsistence economy to a commercially-oriented modern business model that yields strong financial returns. Predominant reliance on manpower is labor-intensive and stifling to agricultural transformation in developing countries. Instead, Africa must look to agricultural mechanization. This transformation is not biased towards large-scale farms alone, but rather advocates for unlocking the potential of smallholder commercial farms.

IV. Focus on Agribusiness

The fourth aspect focuses on agribusiness as the center of transformation. Here, value addition through light manufacturing should drive the industrialization plan. This agenda should support the manufacture of inputs on one hand and a vibrant agro-processing drive at the tail end.

V. Promote Index Insurance

The fifth aspect should be looking at ways to insure farmers against daunting risks in the sector through index insurance. Unlike conventional agricultural insurance, which indemnifies policyholders for provable production losses arising from multiple risks, index insurance pays policyholders based on the observed values such as rainfall, which are highly associated with losses. Such insurance changes would help to attract investment from the private sector, increase access to finance, and improve the overall welfare outcomes of farmers on the continent.

VI. Enhance the Irrigation Sector

The sixth aspect is a critical examination of the irrigation sector in Africa. In SSA, nearly 80 percent of farms depend on rain for irrigation, and more than 78 percent of irrigation land is irrigated from surface water, against almost 20 percent of water from groundwater. Developing ground water knowledge, and understanding how it can be used to supplement surface water, is necessary to address droughts.

VII. Incorporate Rural Development Strategies

Lastly, there must be a holistic approach that incorporates rural development strategies into the agricultural landscape of Africa. In rural areas of Africa, agriculture is a primary occupation. As such, rural development in the form of public-private partnerships, developing instruments for financing, and concentrating on environmental sustainability to hasten transformation are key. These changes should be introduced in such a way that expands employment opportunities for the African youth, while also looking critically towards addressing issues that guarantee that these strategies are able to cope with climate vulnerabilities in agriculture.

The vision of a transformed African agriculture includes higher productivity on farms so that growers can produce enough food for both consumption and sale in regional and global markets. This will release labor, especially the youth, into on and off-farm value-addition activities in agriculture to improve welfare outcomes and eradicate poverty. We must start today to implement these positive changes. If African governments and policymakers do not implement these measures to enhance Africa’s agricultural landscape and utilize its natural advantages, the continent will remain uncompetitive and disadvantaged economically.

George Boateng is a research analyst at the African Center for Economic Transformation (ACET), a member of the Southern Voices Network for Peacebuilding. He was previously a Southern Voices Network Scholar at the Wilson Center.

Original post at the Wilson Center

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