In Africa, agriculture is big business. The sector accounts for 30-40% of the continent’s GDP, and almost 60% of export earnings. Two thirds of Africa’s population depend on agriculture for their livelihood. But the continent’s potential as a cost-effective food producer – not just for Africa, but the world – has barely been realised.
Farmers in Africa are still recovering from decades of neglect. African governments spend on average 3-4% of national budgets on agriculture. The proportion of aid allocated to agriculture fell from 17% in 1980 to 3% in 2005. In the 1960s, Africa was a net exporter of food. Fifty years later, the continent imports a quarter of its food at the cost of US$50 billion a year. As agricultural output and infrastructure has failed to keep up with population growth, cyclical food insecurity has become an all too common occurrence.
In 2011, agriculture is once again the hot topic in international development. And rightly so. A plethora of international agencies – from the Bill and Melinda Gates Foundation to the UK Department for International Development – have revived calls for an African “green revolution”. Agricultural development, it is argued, is the linchpin for effective poverty reduction, and a stimulus to economic growth. But the policies devised to realise these ambitions are confused, and ultimately inappropriate.
The approach by governments and donors in Africa has been to promote self-sufficiency in food production. “It’s time for Africa to produce its own food and attain self-sufficiency in food production” says Kofi Annan, former UN Secretary-General and chair of the Alliance for a Green Revolution in Africa. While this is a reasonable goal it implies a real lack of ambition. In policy terms, governments and donors need to think bigger. Much bigger.
The current agenda, which urges smallholder farmers to grow staple crops as a prerequisite for self-sufficiency, will fail to reduce poverty significantly in Africa. A lack of food is only one dimension of poverty. More often than not, poverty is not a lack of food, but a lack of money to buy food, and essential services such as health and education. Africa needs food security – a reliable and stable supply of food – not necessarily food self-sufficiency. These are distinct concepts that are routinely conflated.
Governments and donors must recognise that the opportunities for Africa’s agricultural sector are far higher than a narrow agenda of poverty reduction. Agriculture is Africa’s most important potential competitive advantage in the global economy. It represents the only viable opportunity to rebalance the continent’s lopsided balance of trade. Africa’s share of world trade has declined from about 6% in 1960, to 2% today. If Africa’s farmers – both small and large – are to seize this opportunity they must think, and act, commercially. This means producing what the market demands.
Policy makers must separate agricultural ambitions and investments – cleanly and unambiguously – from other measures to reduce poverty in rural areas. Both are necessary, but require distinct interventions. Efforts to reduce poverty in rural areas – provision of medicines to combat disease or help to set up non-farming business, for example – should not be confused with agricultural policy, which should be geared towards making farmers more commercial, competitive and ultimately, profitable. The two are inevitably linked, but in terms of policy they should be treated separately.
A vibrant commercial agricultural sector will create rural employment, raise rural incomes and improve macroeconomic prospects. The notion that growing cash crops, or food for export, undermines local food security is wrong. Firstly, income from the sale of high value crops can be used to purchase food. Secondly, productive and profitable commercial agricultural sectors help stimulate better and more productive food production for the local market. The challenge for policy makers is to create links between the commercial farming sector and small scale local food producers.
The experience of Kenya’s smallholder horticultural farmers is instructive. Contracted by large-scale producers and export companies, smallholders produce two thirds of the country’s fruits and vegetables grown for export. They coordinate supply and share resources, meeting the strictest international standards and production deadlines. In order to do so, the farmers are flexible and dynamic, loyal to no single crop and growing only what the market demands. Typically, farmers earn six time more income from horticulture than they would maize, the country’s staple. The extra income is used to pay for school fees, medical expenses, and, of course, food. All of this has been achieved with zero government subsidy.
The experience of Kenya’s horticulture farmers is not immediately replicable across the continent. But their lesson is clear. In the words of Dr Stephen Mbithi, the Chief Executive of the Fresh Produce Exporters Association of Kenya: “Until agriculture is commercially viable, there will always be hunger in Africa”.