Transcript Institutional Innovations for Agricultural Transformation

Institutional Innovations for Agricultural
Transformation in Africa:
Issues Challenges, and Policy Options
Suresh Chandra Babu
Senior Research Fellow, Head of Capacity Strengthening Program
International Food Policy Research Institute (IFPRI)
Washington, DC
Prepared for the African Economic Research Consortium (AERC) Senior Policy Seminar XVII
March 26-27, 2015, Maputo, Mozambique
1
Organization of Presentation
• Introduction
• Conceptual Analysis
• Institutional Innovations Needed in Various
Areas of Agriculture
• Lessons for Implementation
• Knowledge Gaps and Research Needs
2
Achieving African Transformation
Speeding up agricultural transformation requires transformation
of subsectors
• This requires better capacitated, well-functioning institutions
from farm to national levels
Achieving African economic transformation requires:
• Diversification of agricultural production and exports
• Increased competitiveness on global market
• Update of technology use in all sectors
• Increased labor productivity
• Leading to increases in human welfare
Source: ACET, 2014
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Africa’s Transformation Powered by
Agriculture
• Agricultural productivity gains are critical for
Africa’s economic transformation
• Agricultural value chains have the potential to
reduce food prices, create employment, reduce
poverty
• We know that technological innovations are
required to increase agricultural productivity for
smallholders
• In the same light, institutions that support
smallholder farmers must be transformed
4
Definitions of Innovation
• The application of new ideas or practices with the
purpose of creating a positive change (OECD,
2006)
• Institutional innovations involve a change in the
policies, process, system of organizing, and
practices of an institution in an effort to
encourage its improvement and increase impact
(IICA, 2014)
• Applying new ideas, knowledge, or practices in
order to affect positive change in a particular
environment (IICA, 2014)
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Research Questions
This paper seeks to answer the following questions:
• What institutional innovations are needed to support
agricultural transformation?
• What mechanisms of the public sector, private sector, and
NGO community need to change to support policy and
program design and implementation?
• What are the capacity needs of the actors and players in
the institutional innovation process?
• What lessons can be drawn from current institutional
innovations?
• What are the knowledge gaps and research priorities for
enhance the role of institutional innovations in agricultural
transformation?
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The Institutional Innovation Process
• What does it take to get there?
• How do we sketch out the pathways from
untransformed to transformed institutions?
• What are the conditions required for African countries
to become middle income countries?
• What public investment choices are needed?
• What institutional innovations are needed?
• What export promotion strategies are needed? (e.g.
processed food and horticulture)
• Late transformers will still depend on agriculture, so
agricultural innovations are needed for transformation
7
Setting the Stage
• What is the realistic path for agricultural
transformation?
• Labor-intensive manufacturing is needed
• Foreign direct investment is needed
• Costly infrastructure investments (e.g. roads,
electricity) are needed, countries may not be able to
afford this
• Agricultural sector may have comparative advantage
– Export markets for agricultural commodities
– Private sector/non-traditional approaches to value chain
– Agricultural strategy in the context of holistic development
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Setting the Stage
• What understanding is needed?
• Diagnosis and analysis of initial condition of
country sector?
• Application of General Equilibrium models
• Trade-offs between various strategies
• Need evidence on what has worked in the
past
• How can countries go from Point A to Point B?
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Institutional Innovation in Agriculture
These innovations are needed at all levels. Some
examples include:
• Farm level – better engagement with market
systems to improve productivity and income
• Community level – farmer-based organizations
• National level – public sector supports
research and extension
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Conceptual Analysis
To understand institutional innovation in the context of
agricultural transformation we must:
• Fully analyze the historical trends and enabling
environment in the policy process
• Evaluate the outcomes and successes of reformed
institutions
• Identify the challenges and constraints to institutional
innovation and implementation
• Assess the institutional process that facilitates actors
and players to translate policies to programs and
programs to actions
• Analyze the factors affecting policy and institutional
reform
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Conceptual Analysis
• We do not yet know what institutions need to be
transformed and how
• To highlight the transformative power of
institutional innovations, we compare the
characteristics of the following eight types of
institutions before and after innovation:
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Public sector
Research
Extension
Education
Markets/Trade
Community/Farmer Orgs.
Agribusiness
Governance
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Institutional
Innovation
Agricultural
Transformation
Africa’s Economi
Transformation
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Goals of Transformation
The goals of Africa’s transformation include goals beyond
agriculture including:
• Dietary transformation
• Export diversity
• Convergence of labor and total factor productivity
• Increased share of processed agricultural commodities
in total exports
• Increased competitiveness of agriculture on world
market
• Modern technology adoption
• Increase agriculture’s contribution to increased
incomes and poverty reduction
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Public Sector Institutions
Public sector institutions take center stage in the
development and implementation of policies and
programs. Institutional innovations are required to:
• Transform operational processes to translate
strategies into policies to meet national goals
• Improve allocation of resources
• Implement system to incentivize staff
performance and accountability
• Monitoring and evaluation of programs
The next slide illustrates an example of public
sector institutional innovation.
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Ethiopian Agricultural Transformation Agency: A
Public Sector Institutional Innovation
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•
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Outcome-oriented approach
Accountability at all levels
Individuals have responsibility
Capacity – broadly defined as institutional
capacity
• Challenge: Ministry of Agriculture sector
reform
• Rwanda – going for whole government
system?
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Research Institutions
• Agricultural research systems support the
development and dissemination of
technologies that increase productivity and
efficiency
• Currently, African research systems largely
demand driven and remain focused on staple
crop production
• Poorly capacitated, poorly integrated,
unfocused priorities (You and Johnson, 2008)
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What institutional innovations are needed in
research?
• Innovations of individual and organizational
capacity, as well as system as a whole
• Reform research priority setting
• Innovations in the budgeting process to reform
how spending is allocated so it can be more
effectively used
• To ensure that research is relevant
• Innovations that emphasize and enable
multidisciplinary, cross-institutional research and
collaboration
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Extension Institutions
In the context of agricultural transformation, extension
institutions play a key role in the dissemination of
advanced technologies to smallholders. Innovations
needed include:
• Demand driven or participator approaches to meet
farmer information needs
• Increased connectivity to sub-systems to increase
availability and flow of knowledge
• Broaden the functions of extension to include postharvest storage and marketing, building the capacity of
farmers’ organizations, support rural development
• Innovations in financing of extension services including
fee-for-service and cost-sharing models
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Education Institutions
Transforming traditional agricultural sector requires
adequate human capacity at all levels, therefore
institutional innovations are needed to:
• Locally designed innovations to reduce the brain
drain and address current research challenges
• Regional innovations mobilize local talent and
strengthen local faculties
• Institutional innovations to retain staff through
on-the-job training and mentoring
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Examples of Institutional Innovations in
the Education Sector (1)
1. African Center for Crop Improvement (ACCI)
1. Designed to address the high demand for high
quality plant breeders in agricultural research
2. Participants were from their respective country’s
research institute
3. Housed at University of Kwazulu-Natal
4. Combination of rigorous training and mentorship
from faculty
5. Locally designed innovation
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Examples of Institutional Innovations in
the Education Sector (2)
2. Collaborative Master’s Program in Agricultural and
Applied Economics (CMAAE)
1. Offered through 16 collaborating universities
across Africa
2. Regional innovation created to address the need
to increase the quality of faculty
3. Joint program to work towards shared goal of
filling gaps in teaching
4. Shared facility approach brought in students
from various countries for specific learning goals
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Examples of Institutional Innovations in
the Education Sector (3)
3. Strengthening the Capacity of Agricultural
Research and Development in Africa (SCARDA)
1. Approach to strengthening institutional capacity with
emphasis on filling gaps in individual capacity
2. Meant to directly improve the organization and
management of national research institutions
3. Strengthened existing capacity within the institutions
4. Provides adequate opportunities for mutual learning
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Market and Trade Institutions
• There is a need for institutions that support the
integration and participation of smallholders in
markets
• Value chains are important mechanism to drive
agricultural transformation
– Example, Nigeria’s Agricultural Transformation Agenda
specifically supports commodity value chain development,
such as rice and cocoa
• Market institution such as Ethiopia Commodity
Exchange
– Formed to generate market information
– Increase transparency of prices, grades, and qualities
– Promote self-regulation of the system
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Community Institutions and Farmers
Organizations
• Farmers organizations play a critical role in
agricultural transformation through their ability
to empower smallholders by:
– Increasing access to production information and
knowledge
– Increasing access to extension services, inputs, and
markets
– Highlighting local problems and helping identify
solutions
• Ostrom (1994) found that resources are used
more effectively when managed at the
community level
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Agribusiness Institutions
• The development of agribusinesses and value chains
for high value commodities can drive transformation
and take advantage of growing demand for processing
and exporting these goods
• Institutional innovations in agribusiness could lead to
direct transformation benefits in terms of growth and
poverty
• Innovations are needed in input supply, advisory
services, processing, quality control, distribution, and
marketing
• Need to build innovation capacity at all levels, so that
farmers have higher entrepreneurial and managerial
skills
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Examples of Institutional Innovations in
Agribusiness
1.
Horticulture in Kenya
1.
2.
2.
Poultry in Mozambique
1.
2.
3.
Took advantage of available natural resources, low cost of skilled
labor, and existing infrastructure needed for export of commodity
Additional institutional innovations are needed to overcome food
safety regulation, increasing wages, changing consumer preferences
Currently, most countries are unable to respond to import
substitution opportunities
Innovations are needed to support smallholders, who make up
majority of poultry producers to capture local demand
Horticulture in Ghana
1.
2.
3.
A majority of fruits and vegetables are still imported in Ghana
Although foreign investments in pineapple industry have been very
active, this has not been effectively translated to other commodities
Institutional innovations needed to balance opportunity to export
with growing domestic needs
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Institutional Governance
• Issues of good governance can be applied to all of
the types of institutions mentioned above
• Characteristics of reformed governance within
institutions includes:
– Leadership and commitment to short-term and longterm goals
– Improved coordination of all actors and players
– Openness in policy dialogue to ensure policies and
programs are evidence-based and informed
– Effective monitoring and evaluation systems
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Challenges to Implementation of Institutional
Innovations
• Several institutional innovations have been attempted,
including CAADP at the regional level. The success of
CAADP is driven by:
– Leadership at AU and country levels
– Ability of national government to mobilize resources
– Capacity of national government to provide strategic direction
to programs to reach CAADP targets
• Successful experiments have yet to be scaled up in country
or across countries due to differences
• Currently, limited cross-country knowledge sharing and
availability of funding also inhibit scaling up
• Capacity constraints at all levels constrain the
implementation of institutional innovations
– Need to strengthen the capacity of policy makers to anticipate,
recognize, and respond to institutional challenges
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Challenges to Implementation of Institutional
Innovations
• Institutional innovations often do not get implemented due to a
lack of good governance
– Institutional innovators must be recognized to play a legitimate role in
agricultural transformation
– Leadership needed to provide strategic direction
– Coordination and cohesive alignment to broader sector goals
• Political economy often constrain the implementation of
agricultural reforms
• Conflicts erodes the capacity to innovate at all levels
• Regulatory system innovation are needed to make African
agriculture competitive on the world market (e.g. food safety,
animal and plant health, environmental, input use regulations)
• Regional harmonization of policies and programs (e.g. SACD,
ECOWAS, COMESA)
• On the next slide, Table 2 presents a typology for the institutional
innovations that are needed at different levels at different times
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System Components
Public Sector Institutions

Ministry of Agriculture

Ministries of allied sectors

Mulistakeholder platforms
Research Institutions
Public research systems
Private research systems
Research by NGOs /FBOs
Participatory research by farmers
(Lynam, 2012)
Extension and Advisory Services
Public Extension system
Private extension
NGOs based extension
Farmers field schools
ICT based extension services (Davies and Heemskerk, 2012)
Education

Formal university education

Vocational and skill development program

On-line education of farmers
(Maguire, 2012)
Markets and Trade Institutions

Markets for inputs

Markets for outputs

Value chains
Community and Farmers’ Organizations:

Commodity based farmer organizations (traditional)

Market – oriented farmers organizations

Innovation oriented farmers organizations

Service oriented producer foundations
(Ekboir, 2012)
Agribusiness Institutions
Post-harvest/processing agribusinesses
Marketing agribusinesses
Specialized agribusiness value chains
Input supply
Advisory services
Governance Institutions
*Applies to all individual organizations listed above
Needed Institutional Innovation
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Agricultural Transformation Indicators
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Transformation of operational processes
Innovations in process of allocation of resources
Innovations of staff evaluation and incentives to increase
performance
Innovations in monitoring and evaluation of programs
Innovations in regulatory systems for land, inputs, etc.
Innovations to match the national strategies
Innovations in management and delivery of research outputs
Innovations in funding mechanisms
Coordination and harmonizing the research efforts
Innovation in funding mechanisms
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Increased pluralistic activities
Improved public-private partnerships
Demand driven- farmer participatory programs
Financial sustainability
Innovations in advisory approaches
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Working towards relevant, well managed institutions
Vocational training highly connected to the employers needs
Innovations in curriculum and methods of teaching
Increase the quality of teachers through innovation capacity
development programs
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Streamlined, more effective and efficient processes
Effective allocation of resources for impact
Greater staff performance and accountability
Decentralized activities
Informed monitoring and evaluation for program feedback
Effective regulatory systems
Effective coordination of demand for and supply of research
Increased participation of farmers and other clients
Sustainable funding
Research effectively used by farmers
Effective coordination at the global, regional and national
levels
Decentralized activities
Farmer monitoring and accountability
Multiple actors competing
Knowledge accessibility through ICTs
Increased collaboration with public sector, research and
extension
Dynamic curriculum to meet the changing needs
Sustainable funding
No political interference
Improved interaction with stakeholders
Gender sensitive and gender-balanced education
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Increased participation in value chain, especially by
smallholders
Improved connectivity within and beyond value chain
Effective farmers organizations for a specific value chain
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Increased coordinating leadership
Capacity development- life-long learning of members
Better environment for organizational innovation
Improved financing of the farmer organizations
Improved structures to serve farmers / members
Help organize smallholders into formal value chains for high value
crops
Build innovation capacity at all levels to scale up isolated efforts
Lack of agribusiness curriculum in agricultural universities

Increased innovative, managerial, and entrepreneurial capacity
at all levels
Increased individual and organizational capacity for
agribusiness development and management
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Innovations to ensure that the value chains remains inclusive,
particularly to smallholders
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Strengthen individual farmer capacity to abide by value chain
standards
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Innovations for connecting value chain to larger food system

Innovations to organize farmers
Developing organizational capabilities for innovation
Increase innovative linkages with governments, donors, research,
extension, and education
Brokering innovations, promoting coordination with members and the
markets
Improved management of the farmer organizations
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Innovations to increase accountability and commitment of key
players
Lack of transparency
Closed off policy dialogue
Innovations for evidence-based programming and
decisionmaking
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Systematic pursuance of long term vision and goals
High level commitment of leaders
Better inter-sectoral – macro coordination
Effective coordination and mobilization of key players and
entities
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Openness for debate and dialogue
Policy and program continuity
Knowledge and Research Gaps
• Key policy issues for agricultural transformation still remain to be
researched further in the context of institutional innovation
• Further research is needed to understand how to take advantage of
current trends in Africa, such as yield increases, land expansion,
growth in agribusiness, youth employment, etc.
• Future programming should balance demands for increased
agricultural production with effective allocation of natural resources
• Future climate changes will require a realignment of production mix
and increasing adoption of climate resilient food production
• Increased knowledge sharing should be utilized to share evidence
on what works and why in different contexts
• The role of local think tanks for evidence-based knowledge sharing
cannot be overemphasized
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