Transcript Slide 1

RECENT PROGRESS IN THE ROLE OF
AGRICULTURAL DEVELOPMENT IN REDUCING
POVERTY IN AFRICA AND
PERSPECTIVES ON THE WAY FORWARD
ALEJANDRO NIN PRATT
Research Fellow
OUSMANE BADIANE
Africa Coordinator
International Food Policy Research Institute
Tuesday, July 21, 2015
OUTLINE
• Why is agriculture important for Africa?
• Agriculture’s past performance and
lessons to be learned
• Success stories behind recent changes
• The way forward
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 2
IMPORTANCE OF AGRICULTURE
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 3
AGRICULTURAL GROWTH AND POVERTY
REDUCTION IN AFRICA
• Agriculture contributes with a significant share of total
production in Africa’s economy
• Agricultural growth drives growth in other sectors of the
economy
• Agriculture plays central role in African exports
• Most poverty still concentrated in rural areas
• Agricultural growth drives overall income growth in rural
areas
• Implications:
• Agriculture significantly contributes to economic growth
• Reduces overall poverty, hunger, and malnutrition more than any
other sector
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 4
EFFECTS OF AGRICULTURAL GROWTH
ON OVERALL RURAL INCOMES
3
2.5
2
1.5
1
0.5
0
Niger
Senegal
Zambia
Burkina
Faso
Incremental income from 1$ additional revenue from agricultural tradables
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
: O. Badiane, based on Delgado et al (1988)
Page 5
AGRICULTURAL TRADE AND ECONOMIC GROWTH
AGR. EXPORT AND DOMESTIC GROWTH
AGR. EXPORT AND DOMESTIC GROWTH
EXPORT
GROWTH
DOMESTIC
GROWTH
1%
Growth
0.04%
To
1.83%
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
: O. Badiane
Page 6
AGRICULTURAL GROWTH AND ECONOMIC GROWTH
AGR. GROWTH AND INDUSTRIAL GROWTH
AGRIC.
GROWTH
INDUST.
GROWTH
1%
Growth
1%
To
1.32%
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
: O. Badiane
Page 7
Congo, DR
Ethiopia
Tanzania
Burundi
Rwanda
Madagascar
$400
Uganda
Kenya
Per Capita Ag GDP (US$/person), 2002
LOW AGRICULTURAL INCOMES ARE GENERALLY
CORRELATED WITH HIGH POVERTY RATES
$350
$300
R2 = 70%
$250
$200
$150
$100
$50
$0
20
40
60
80
100
National Poverty Rates (various years)
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 8
GHANA: AGRICULTURAL-LED GROWTH IS MORE
PRO-POOR
National poverty rate
(with GDP growth rate of 5.7%)
35
33
31
29
27
25
23
21
19
17
2003
2005
2007
2009
Ag-led grow th
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
2011
2013
2015
Nonag-led grow th
Page 9
FASTER AGRICULTURAL GROWTH IS KEY TO
POVERTY REDUCTION IN AFRICA
• The most effective way to reduce poverty is to raise
the productivity of resources that poor people depend
on for their livelihood
• Agricultural land
• Agricultural labor
• Off-farm rural labor
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 10
AGRICULTURE’S PAST PERFORMANCE
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 11
TRENDS IN AGRICULTURAL AND GDP GROWTH
Agriculture, value added (annual % grow th)
Percent (%)
GDP grow th (annual %)
9
6
3
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
: M. Johnson
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
-3
1980
0
Page 12
AGRICULTURAL GROWTH IS SPREADING
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
: Badiane and Ulimwengu
Page 13
SO IS ECONOMIC GROWTH
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
: Badiane and Ulimwengu
Page 14
TRENDS IN AGRICULTURAL PRODUCTIVITY
2.5
Value of Ag
Inputs
TFP
1.5
1.0
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
2003
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
0.5
1970
Index (1970=1)
2.0
Page 15
SUCCESS STORIES EXPLAINING
CHANGE
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 16
POLICY CHANGES
Agriculture, value added (annual % grow th)
GDP grow th (annual %)
Percent (%)
9
6
3
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
-3
1980
0
2.5
Value of Ag
Inputs
2.0
Index (1970=1)
• “One of the most
fundamental shifts in the
development strategy for
Africa was to view
agriculture not as a
backward sector but as
the engine of growth, an
important source of export
revenues and the primary
means to reduce poverty.”
(Kherallah et al. ,2000)
TFP
1.5
1.0
2003
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
1970
0.5
1996-2005
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 17
AGRICULTURAL TRADE AND POLICY
CHANGES
Exports (X)
Imports (M )
14,000
Trade (X+M )
Period of
policy
change
12,000
Mill. $
10,000
8,000
6,000
4,000
2,000
0
1968
1973
1978
1983
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
1988
1993
1998
2003
Page 18
SUCCESS IN AGRICULTURE (I)
• CASSAVA (Nigeria, Ghana
and Southern Africa)
• New varieties and modern
disease fighting research
(Nigeria and Ghana and
Southern Africa).
• MAIZE (West Africa)
• Improved yield and
nutritional content of openpollinating varieties instead
of hybrids.
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 19
SUCCESS IN AGRICULTURE (II)
• COTTON (Francophone
West Africa)
• Successful organization and
coordination of the production
chain with technical innovations
(high yield varieties, fertilizer
use, access to equipments)
• RICE (West Africa)
Burkina Faso cotton farmers (Brahima Ouedraogo/IRIN)
• The Africa Rice Center
(WARDA) produced their first
inter-specific hybrids combining
hardiness and wed suppression
of African species with the high
yields of the Asian varieties
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 20
SUCCESS IN AGRICULTURE (III)
• SMALLHOLDER
DAIRYING (Kenya)
• Decontrol of milk pricing in
1992 + available technology
(crossbred cows) spurred a
surge in production and
commercialization of milk in
informal markets.
credit: Smallholder Dairy Project
• CUT FLOWER EXPORTS
(Kenya)
• Increased from $13 million
in 1970 to $155 million in
1999
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 21
INSTITUTIONAL CHANGES
• NEW PARTNERSHIP FOR AFRICA’S DEVELOPMENT (NEPAD)
• Address challenges facing African continent
• COMPREHENSIVE AFRICA AGRICULTURAL DEVELOPMENT
PROGRAM (CAADP)
• Framework for restoration of agricultural growth, food security,
and rural development with key principles and targets:
•
•
•
•
6% average annual sector growth
Allocation of 10% of national budgets to agriculture
Exploitation of regional complementarities and cooperation
Accountability, partnerships, regional coordination
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 22
THE WAY FORWARD
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 23
Zimbabwe
Burundi
GuineaMadagascar
Kenya
Niger
Lesotho
Togo
Cote d'Ivoire
Central
Chad
Namibia
Zambia
Benin
Guinea
Gambia
Malawi
Senegal
Swaziland
Nigeria
Mali
Burkina
Tanzania
Mauritania
Ethiopia
Cameroon
Uganda
Ghana
Mozambique
Required annual Ag Growth Rate (%)
IMPLICATIONS FOR COUNTRY AGRICULTURAL GROWTH
Required annual agricultural growth rates to meet MDG1
18
15
12
9
6
3
0
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
: S. Fan (2007)
Page 24
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
: S. Fan (2007)
Page 25
Rwanda
Guinea-Bissau
Ghana
Niger
Burundi
Togo
Tanzania
Burkina Faso
Swaziland
Zambia
Central African Republic
Senegal
Nigeria
Benin
Mozambique
Cameroon
Malawi
Ethiopia
Kenya
Uganda
Mauritania
Cote d'Ivoire
Zimbabwe
Lesotho
Gambia
Chad
Mali
Namibia
Madagascar
Guinea
Percent of Ag to Total Spending (%)
REALITY CHECK:
Progress against CAADP 10% Budget Goal (2004)
25
20
15
10
5
0
Percent (%)
POVERTY OUTCOMES UNDER CURRENT GROWTH TRENDS
(Poverty Headcount, 1$/day, 2005)
60
Current
50
MDG target
40
30
20
10
0
1990
1995
2000
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
2005
: S. Fan. 2007
2010
2015
Page 26
FOOD AND NUTRITION SECURITY IS POSSIBLE
60
Share of Malnourished Children in SSA
Percent
50
40
33
30
30
33
28
20
17
7
10
0
1997
2015
2025
CURRENT TRENDS
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
1997
2015
2025
ALTERNTIVE SCENARIO
: O. Badiane, based on Rosegrant et al (2006)
Page 27
LESSONS FOR AGRICULTURAL GROWTH AND
POVERTY REDUCTION STRATEGIES
• Agriculture remains the main engine of poverty reducing
growth for the near future
• Recent performance is encouraging but still below
required levels
• What did we learn from success factors behind the recent
growth performance?
• How should we use this experience to sustain and
broaden the recovery process? What should change?
What should we bring into the process?
SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Page 28