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Key drivers of success for agricultural transformation in Africa

June 11, 2014

No country has been able to sustain a rapid transition out of poverty without raising productivity in its agricultural sector. Agriculture continues to be the predominant source of employment in many regions, accounting for 63 % of rural household income in Africa. Historically, agricultural growth was the precursor to industrial growth in Europe and, more recently, in parts of Asia. However, agricultural growth also has much broader linkages or multipliers and allows poor countries to diversify their economies to sectors where growth may be faster and where labour productivity and wages are typically higher. Where agricultural productivity has grown slowly, as in many parts of sub- Saharan Africa, non-farm activities have also tended to grow slowly.

Placing agriculture at the centre of Africa's socio-economic growth and development agenda is the decision African Heads of State and Government made when they signed up on the Comprehensive Africa Agriculture Development Programme (CAADP) in Maputo, Mozambique in 2003.

Over the last decade, Africa has entered a period of fairly rapid economic and agricultural growth. Macroeconomic stability, improved investment climates, and agricultural incentives have contributed to the improved trends. Rising international agricultural prices and expanding market opportunities within Africa will make farming more profitable and create great opportunities for African agriculture to make up lost ground, especially in domestic and regional markets. Price incentives for producers have improved as a result of unified exchange rates, lower industrial protection, and sharply reduced export taxation. The higher international commodity prices, which are likely to stay, could create growing opportunities for import substitution and regional agricultural trade. Within the context of CAADP, African governments, the regional institutions, and development partners are demonstrating increasing commitment to agricultural and rural development. Most African countries have a comparative advantage in agriculture. Africa has more than half of the world's agriculturally suitable yet unused land, and impressive water resources scarcely tapped.

Research demonstrates (Steven Haggblade and Peter Hazell. 2010) that:

  1. Farm-level production costs in Africa are competitive. Despite significantly lower yields in the African countries, farm-level unit production costs in Mozambique, Nigeria, and Zambia are comparable to or lower than those in the Brazilian Cerrado and in Northeast Thailand, due to very low labour costs and limited use of purchased inputs;
  2. Africa's producers are generally competitive in domestic and regional markets. The competitiveness of Africa's producers at the farm level makes them generally competitive in domestic markets relative to imports. Since domestic and regional markets for many of the targeted commodities are large and rapidly growing, and since significant imports are already taking place, prospects for import substitution are bright, especially for rice, soybeans, sugar, and maize;
  3. In the short- to medium-term, regional markets offer the most promising opportunities.

Consult our multimedia material developed with NEPAD/CAADP
http://tinyurl.com/kxvvdot

The Reader on Agricultural transformation in Africa: Building on successes
http://tinyurl.com/o2s3h7j

Realising the Promise of Agriculture for Africa's Transformation
http://tinyurl.com/oko6pfg