Last month, the G8 launched a ‘New Alliance for Food Security and Nutrition’. There’s not much new about it: in particular, there’s no new public money, just an attempt to revive the commitments made at L’Aquila in 2009 and subsequently enshrined in the World Bank’s ‘Global Agriculture and Food Security’ trust fund and the US government’s ‘Feed the Future’ program. Instead, the alliance trumpets $3 billion of private investments by 45 companies in African agriculture, in a long overdue recognition Even if only a small amount of the investment is realized, it’s a substantial change from the previous twenty years when there was little investment, either public or private, in African agriculture.
To understand why African agriculture remains a global priority, it’s worth comparing food production in Africa with Asia. Between 1961 and 2008, the area of staple crops harvested in Africa (the two dots on the left) doubled and production tripled. In Asia (the two dots on the right), the area barely increased, but production near quadrupled. The result is that the staple food production in Asia increased by over 50% per person, while its availability in Africa fell slightly, making the continent rely on food imports and food aid. Increasing cereal production in turn allowed Asian countries to diversify their diets, because some of the surplus cereals could be fed to animals. Malnutrition remains widespread in South Asia, but it’s generally a consequence of limited access to food and poor feeding practices, rather than a general shortfall of production.
What explains the superior performance of Asian farmers compared to African ones? The literature on this question could fill books, but I’ll try to reduce it to five questions. The first is geographic: maybe Africa just isn’t suitable for farming? Two are microeconomic: are African farms too small? and has the abundance of land discouraged African farmers from investing in productivity? The other two are macroeconomic: does the structure of African economies (in particular, their reliance on resource exports) hold agriculture back? Or is under-investment (both public and private) to blame?
The geographic explanation makes little sense at the continent-wide level: much of Africa’s land and climate are highly favourable to agriculture, with abundant land and rainfall. Countries like Kenya and Zambia are able to export fruit and vegetables cheaply because their climate provides for free the water, sunlight and warmth that farmers in California’s Central Valley or Holland’s greenhouses have to pay for. Huge areas of Angola, Mozambique, Tanzania and other savannah regions are still undeveloped – like central Brazil 30 years ago. However, the areas of highest population density, namely the mountains of central and east Africa and the western coast, are suffering from increasingly degraded soils and irregular rainfall as forests are cut down and climate change starts to bite. In the absence of technology like roads and irrigation, geography is destiny: a localised drought that can be fatal in countries like Ethiopia and Mozambique where until recently poor roads and a shortage of trucks meant that surpluses in one part of the country co-existed with famine in other parts. Better roads are gradually linking up farmers in Kenya, Uganda, Tanzania at one end of the continent and Malawi, Zambia and Zimbabwe at another, but it’s still more common for African countries to trade with Europe than to trade with each other.
How about the idea that African farms are too small? It makes sense to visitors from Europe and the Americas: the agricultural revolution there was marked by smallholders selling up and getting out, a process that continues to this day. Between 1950 and 2010, the number of corn farmers in the USA fell from over 1 million to 300,000, while their yields went from 3 t/ha to almost 10t/ha. In Ethiopia, the number doubled between 1980 and 2010 and yields are still barely 2 t/ha. To Asian visitors, however, the dense smallholdings that characterize the equatorial belt of Africa would appear familiar: average farm sizes in China and India fell from x ha in 1970 to y ha in 2000. (A sophisticated investigation, with the competing theories behind it, is Eastwood, Lipton and Newell, 2004 – chapter in the Handbook of Agricultural Economics).
Could this trend be a result of population pressure in Asia forcing farmers to intensify? Not necessarily: the population of Africa grew by 250% between 1961 and 2010 (from 290 million to 1 billion), that of Asia only by 150% (from 1.7 billion to 4.2 billion). So the population pressure in Africa should have forced greater intensification. However, whereas densely populated Asian countries had little room to increase farm sizes, farmers in Africa were able to expand onto new land, often land that hadn’t been cultivated before. In the last half-century, Côte d’Ivoire and Nigeria have lost almost all their forest to small rice and cocoa farms. If land is cheap and seeds/fertilizer expensive or unavailable, it makes sense for farmers to use their abundant family labour to clear bush to make new farms. Only in the last ten years, as population pressure and soil erosion became inescapable, have farmers in highland Ethiopia and Rwanda developed terracing techniques that have been widespread in Java and much of China for centuries.
Relatively low population density helps explain why land in Africa was cheap compared with Asia. It doesn’t explain why fertilizer was expensive. For this we need to turn to macroeconomics, in particular exchange rate policy. There seems to have been a near-consensus among development economists in the 1950s and 1960s that agricultural development was a dead end and countries should tax the agricultural sector and invest in industry. This worked well fine in Taiwan and South Korea, where the government maintained artifically cheap exchange rates (as China has done more recently) and generated an industrial revolution while maintaining self-sufficiency in food, but it was a complete flop in Ghana, where cocoa production actually fell between 1960 and 1980as farmers left the sector in droves. Instead of pursuing export-led growth, most African countries maintained overvalued exchange rates and imported cheap food and fuel to feed their growing urban populations. In some countries, like Ghana, this was a matter of policy; in resource exporters like Nigeria and more recently Angola and DRC, it was a consequence of ‘Dutch disease’, in which high resource prices drive the exchange rate up and make all non-oil sectors uncompetitive. Unfortunately, the investment boom in African mining, oil and gas will make this problem worse in many countries – so it shouldn’t be a surprise that the resurgence of African agriculture has been concentrated in countries with limited natural resources, like Malawi, Kenya and Ethiopia. (Liberia, where I live, suffers from a different kind of Dutch disease, in which high rates of aid and remittances reduce the incentive for Liberians to eat home-grown food, because it’s often cheaper to buy imported rice).
The strong headwinds of overvalued exchange rates and resource-led growth, combined with poor infrastructure, help explain why the heavy public investments in agriculture that characterized Africa in the 1970s and 80s didn’t work. Fertilizer subsidies were captured by better-off farmers, integrated rural development schemes languished when there were no roads or markets for villages to trade their newly-created surpluses. In the structural adjustment era, fertilizer subsidies and agricultural aid programs were cut back drastically, in the hope this would: but the damage had been done, and it has taken twenty years for food prices to rise to the level in which investment was finally profitable again. There is a worrying tendency for these investments to be concentrated in ‘land grabs’ and large plantations, but as the business climate continues to improve in Africa, I’m confident that private investors will eventually find their way into the smallholder sector where most of the food is grown and people are employed.
To sum up, therefore: Africa’s geography is not inherently hostile to agriculture, but in the absence of infrastructure to trade surpluses or a local labour market to soak up unemployed resources, a local drought or flood has devastating consequences. The Green Revolution failed in Africa because a combination of government policy and a top-heavy resource sector made agriculture unprofitable. As a result, farmers failed to invest in productivity-enhancing technologies like seed, fertilizer and irrigation, finding it cheaper to cut down forest and move to new land when their own soil became too degraded. There was heavy public investment in the sector in the 70s and 80s, but almost no private investment; now that private investment has restarted, it is skewed towards large farms, ‘land grabs’ and inappropriate or premature technologies like GMOs. My hope, however, is that public (or Chinese) investment in roads, markets, ports and storage is creating the conditions for a genuine smallholder revolution. It helps that governments have learnt the lessons from failed policy experiments in the past, while farmers and agricultural advisers know a lot more about agro-ecological and low-input techniques that allow them to increase yields without over-using fertilizer or irrigation that have caused such environmental problems elsewhere. In a future post, I hope to outline some agricultural initiatives I’m aware of that demonstrate that a smallholder-led green revolution is not a vain activist’s dream, but is beginning to happen all around us.
