Agricultural capacity: issues and options

Addressing Capacity

1.2 Agricultural capacity: issues and options

A core message in this Report is that improving the productivity and the economic returns of agriculture has immediate effects on poverty and hunger in at least three important ways: a) it increases the productivity and incomes of the majority of Africa's poor, who work primarily in

agriculture; b) it reduces food prices, which affect real incomes and poverty in urban areas;

and, c) it generates important spillovers to the rest of the economy. Yet, countries need capacities of all kinds to make these productivity improvements and secure the required economic returns.

The sector has a big footprint in a number of critical economic processes. Agricultural labor comprised 59% of the total labor force in Africa (FAO, 2011), with agriculture contributing 13% of value added to GDP in 2009, with $322 value added per worker in agriculture (World Bank, 2011a). Growth in agricultural GDP in Africa has been relatively strong in recent decades (4.8% in 2009), and was the highest of the developing regions in 2009. The size of the sector and the positive growth prospects for Africa bode well for improving the contribution of this large footprint to food security and improved livelihoods.

But there are a number of constraints. First and foremost is the capacity to raise productivity.

Agricultural production has somewhat kept pace with population growth (Livingston et al., 2011).

However, in contrast to other regions, this has occurred largely through expansion of the cultivated area rather than increases in land productivity. Extensification reflects the lack of capacity to increase agricultural productivity.

Research shows that for each 10% increase in small-scale agricultural productivity in sub-Saharan Africa, approximately 7 million people are moved above the poverty line (IFPRI, 2006a;

IAASTD, 2009a). Due to the economic multipliers between agriculture and the rural non-farm sector where growth is generally faster and labor productivity and wages are higher, the urban poor benefit along with the rural poor from broad-based agricultural productivity growth (IAC, 2004). GDP growth in agriculture is four

times more effective in raising incomes of extremely poor people than when it originates outside the sector (World Bank, 2007a).

Capacity to raise production while facing sustainability constraints is another area of importance. 'Sustainable agricultural intensification' is likely to be an integral component in efforts to increase production in a sustainable manner among small-scale farmers.

It is a cornerstone in the emerging global hunger and food security initiative 'Feed the Future' that constitutes a 'whole of government' approach in the United States (USG, 2011). Agricultural intensification involves three different ways: (1) increasing yields per hectare; (2) increasing cropping intensity (i.e., two or more crops) per unit of land or other inputs (water); and (3) changes in land use from low-value crops or commodities to those with higher market prices (e.g., from maize to fruits, vegetables and flowers in Kenya). Sustainable agricultural intensification involves producing more output from the same area while reducing negative environmental impacts and increasing natural capital and environmental services (Conway and Waage, 2010; Godfray et al., 2010; Royal Society, 2009).

Characteristics typically attributed to a sustainable production system are that it:

Utilizes crop varieties and livestock breeds with a high ratio of productivity;

Avoids unnecessary use of external inputs;

Harnesses agro-ecological processes such as nutrient cycling, biological nitrogen fixation, allelopathy, predation and parasitism;

Minimizes use of technologies or practices with adverse impacts on environment and human health;

Makes productive use of human capital, in the form of knowledge and capacity to

adapt and innovate, and social capital to resolve common landscape-scale problems; and

Quantifies and minimizes the impacts of system management on externalities such as greenhouse gas emissions, clean water availability, carbon sequestration, conservation of biodiversity, and dispersal of pests, pathogens and weeds (Lele et al., 2010:11-12).

Sustainable intensification requires research on technology and policy and institutional changes.

It involves development of enabling institutional environments to build on strengths, address weaknesses, exploit opportunities and remove threats to achieving sustainable development (Lele et al., 2010).

Capacity to harness the complexities facing the sector and handle policy reforms and implemen-tation processes in a holistic manner is also an area for attention. The multiple potential benefits from increased agricultural productivity in Africa confront six stark realities. First, an array of local conditions constitutes significant hurdles to be overcome. Endemic diseases such as malaria and yellow fever, and the HIV/AIDS pandemic, have weakened Africa's labor force.

Debilitating livestock diseases such as trypanosomiasis have severely limited livestock rearing, animal traction, and mixed cropping in the tropical zones. Africa's meager output gains in recent years have come mainly from area expansion. This extensification, coupled with shortened fallow periods and minimal input use, has led to nutrient mining and declining soil fertility (Cleaver and Schreiber, 1994; Haggblade et al., 2010a). During the past decade, net food imports, measured in constant prices, increased more than 60% in Africa, further widening the food trade deficit, as increases in food

production have been outstripped by rapid population growth (FAO, 2011).

Second, globalization has increased pressure on the agricultural sector as declining commodity prices, rising input costs, low levels of investment and lack of credit take their toll on small-scale farmers, their families and agricultural workers in terms of uncertainty of income, indebtedness, unfulfilled needs, and deteriorating economic and social conditions.

Most agricultural producers are increasingly on the margins of economic, social, and political life.

Productivity enhancement is not so much a technical issue, as one of political, economic and social choices and constraints, and thus an issue of equity (UNDP, 2006a). These equity concerns challenge policy-makers, researchers, practitio-ners and donors to work together to provide not only the technological means, but also the social support needed to encourage and enable uptake of new techniques by those previously lacking skills training, extension services or credit facilities (IAASTD, 2009b).

'Equity modifiers' that involve human capital enhancement may reduce poverty and contribute to broad-based agricultural development. These include targeting small and medium sized family farms as priority beneficiaries for publicly funded agricultural research and extension, marketing, credit and input supplies; setting public investment priorities through participatory processes;

investing in human capital to raise labor productivity and increase opportunities for employment; ensuring that agricultural extension, education, credit and small business assistance programs reach rural women;

undertaking land reform; and actively encouraging the rural non-farm economy (Hazell, 1999; IAASTD, 2009b).

Third, Africa is a region particularly vulnerable to climate change - because of limited adaptive capacity (IPCC, 2007a). Analysis of long-term trends (1900- 2005) indicates rising tempera-tures in Africa as a whole as well as decreased precipitation (IAASTD, 2009a). Longer and more intense droughts have been observed since the 1970s, particularly in the tropics and subtropics (IPCC, 2007b). By 2050, Africa may be 0.5-2°C warmer and drier, with 10% less rainfall exacerbated by higher evaporation (Nyong, 2005). Changes in rainfall and temperature patterns are likely to negatively affect water availability and growing conditions, reducing food production and security, as well as hydroelectricity production. Biodiversity and ecosystems are likely to be severely affected (IAASTD, 2009a).

Fourth, countries in protracted crisis have special requirements in terms of interventions by the development community. Of 22 countries currently in protracted crises, 17 are in Africa.

Protracted crisis situations are characterized by recurrent natural disasters and/or conflict, long-term food crises, breakdown of livelihoods and insufficient institutional capacity. The aid architecture needs to better address both immediate needs and the structural causes of protracted crises (FAO, 2011:12):

Food assistance helps build the basis for long-term food security;

Improving food security in protracted crises requires going beyond short-term responses in order to protect and promote people's livelihoods over the longer term;

Agricultural and rural-based livelihoods are critical to the groups most affected by protracted crises, but they are not

p r o p e r l y r e f l e c t e d i n a i d f l o w s . Agriculture accounts for one-third of protracted crisis countries' gross domestic product and two-thirds of their employment. Yet agriculture accounts for only 4% of humanitarian aid received by countries in protracted crisis and 3% of development aid;

Broader social protection measures help countries cope with protracted crises and lay the foundation for long-term recovery; and

Supporting institutions is key to addressing protracted crises.

Fifth, there is need for Africa to invest in infrastructure to ensure better connectivity to markets. The importance of leveraging efforts and resources to enhance the enabling environment for infrastructure development and bridge the investment gap in the agricultural sector cannot be over-emphasized. Indeed, infrastructure has been recognized by both the G20 multi-year action plan and the Comprehen-sive Africa Agriculture Development Programme (CAADP) as one of the key pillars for achieving inclusive, sustainable and resilient growth. While African countries can bridge their infrastructure gap through further strengthening their investment frameworks, there is the need for development partners to take decisive actions that have a strong leverage effect on infrastruc-ture investment on the continent. Financiers currently provide only half of the US$93 billion that the continent needs every year for new physical infrastructure and operations and maintenance. Bridging the remaining gap requires a bigger public-sector role as the primary financier and infrastructure service provider; attracting the private sector to contribute its expertise and capital; and, identifying how official development assistance

can help leverage private investment in infrastructure and also strengthen the enabling environment, including the appropriate investment policy frameworks and institutional capacity on which hard infrastructure depends.

African countries need to assess and diagnose public sector capacity bottlenecks that hamper infrastructure investment. In this regard, there is a clear need for more capacity building for undertaking public-private partnerships (PPPs).

Sixth, the African continent continues to experience increasing urbanisation rates (between 3% and 5% annually). This imposes severe pressure on urban food supply with consequent rise in urban poverty. As is discussed in Chapter 3, there is an apparent lack of political will to promote African urban agriculture over the years reflected in weak or absent policy frameworks; and resulting in an enormous capacity deficit. Policy makers and planners need systematic information for planning and managing capacity development centered on urban agriculture. Such a focus on urban agriculture will unlock its potential to address the growing urban demand for food and to alleviate urban poverty. To fully reali e thez potential of urban agriculture and deal with existing challenges, however, requires developing capacities at various levels. For example, African states must understand the i m p l i c a t i o n s o f t h e r a p i d l y s h i f t i n g socioeconomic and demographic profiles of their cities. Furthermore, African states must be able to balance the need to preserve physical aesthetics of urban spaces as cities attract foreign capital, with the need to ensure food security through urban agriculture. Additionally, efforts to promote urban agriculture should be accompanied by an attempt to mitigate the negative impacts of changes in urban ecological systems, including public health threats that

urban farming may cause. Thus, African cities will require the capacity to develop and implement policies and funding instruments that foster ecologically sound urban agriculture, including appropriate land tenure reforms (Arku et al., 2011).

Political economy issues, choice of crops, changing needs and changing food habits with globalization, land degradation, land renting and sale to foreign companies on a large scale amongst others, do contribute to food insecurity in Africa. However, given the difficulty of discussing all these factors in detail, this Report focuses on and argues that food insecurity can be explained by factors which include poor policy choices by governments, maldistribution of food supplies, lack of rains and drought, lack of proper storage facilities, and the recent attempts in the international community to promote biofuels.

Efforts to overcome food insecurity will be realized through improvement in storage facilities, infrastructure, and the promotion of b i o t e c h n o l o g y . P a r t i c u l a r l y c a p a c i t y development efforts as embodied in the provision of extension services, training and educating personnel for agriculture sector, entrepreneurial, and marketing skills, are crucial to attaining food security in Africa. Countries like Ethiopia, Ghana, Malawi, Tanzania, and Zambia have experienced huge improvements in food production and the agriculture sector as a whole through capacity development measures and government support and investment in research and extension services. However, at the same time, extensive investments both in infrastruc-ture and institutional capacity development as well as increased investment in modern technology and a determined effort to build up public research capacity will be needed to sustain the food security currently enjoyed by these countries (Swedish FAO Committee, 2009;