Introduction: Challenges to Africa's Agricultural Transformation

Abstract

This special issue of the African Development Review relates to the theme of 2016 African Economic Conference (AEC): ‘Feed Africa: Towards Agro-Allied Industrialization for Inclusive Growth’. Ending poverty and overcoming hunger and food insecurity permanently are clearly an important policy agenda. They are, respectively, the first and second Sustainable Development Goals (SDGs) endorsed in September 2015 by United Nations member states. Similarly, the African Union Agenda 2063 recognized the right of all Africans to be well nourished and to lead healthy and productive lives. Agriculture and industrialization are also at the heart of the African Development Bank's vision and long-term strategy for a prosperous and inclusive Africa. The attainment of food security requires African countries to revisit their agricultural policies and practices, while paving the way for an agro-allied industrial development. Specifically, this special edition of the African Development Review (ADR) includes a number of articles that discuss Africa's agricultural transformation, identify remaining gaps, lessons learnt and generating valuable insights for improved agro-industrialization policies across the continent. The selected articles consist of empirical studies recently conducted in different African countries and cover a broad range of topics pertaining to the challenges and opportunities Africa is facing in its agro-allied industrialization process. They include technological innovation, land reforms, irrigation, climate change, trade, value chains and gender gap in resources access. These topics are key issues as they shape agricultural productivity as well as the inclusiveness and sustainability of Africa's agricultural transformation. In what follows, we discuss the papers that fall under the major themes though the arrangement of the published papers do not follow a similar order. A comprehensive transformation of the agriculture sector in Africa towards agro-allied industrialization requires investments in technology and innovation in order to improve the productivity of land and labor. Adebayo, Kehinde, Adeyemi, Kabir and Philips assess the success of agricultural research programs driven by agricultural innovation system concepts. The authors examine the extent to which such innovative programs in Nigeria have enhanced the livelihoods of rural households, in terms of productivity and both income level and diversification of income portfolios. In Nigeria, an innovation system has radically changed the way farmers communicate with the market and take strategic decisions to develop agribusiness. Investment in water management and intensification of irrigation in Africa has become a priority to reduce Africa's dependence on rain-fed agriculture, increase productivity and enhance resilience to climate change. Nonvide studies the adoption of irrigation in Benin and shows its positive effect on rice yield. The author uses a Heckman selectivity model to determine the factors influencing the adoption of an irrigation scheme, such as age, gender, access to credit or distance from home to irrigation scheme. He highlights the importance of irrigation for crop productivity improvement. He also identifies complementary measures such as institutional support services to the famers in order to develop irrigation and, ultimately, enhance agricultural productivity. Innovation can also facilitate commercialization and enhance farmers’ access to broader markets and financial systems. Katunze, Kuteesa, Mijubi and Mahebe look at the Warehouse Receipt System (WRS) in Uganda and discuss the reasons why the 2004 WRS pilot phase has failed to enhance agricultural commercialization in the country. Focusing on the benefits and challenges met by private stakeholders in the WRS, the authors analyze the market structure and the obstacles that led to poor market and credit performance. They provide key policy implications to encourage agro-allied industrialization, pointing to the government's responsibility in enhancing quality standards, smallholder productivity and collective action capacity. Anyanwu and Kponnou conduct a thorough cross-country comparison and analysis of the food, beverages and tobacco manufacturing value-added activities in selected African countries. Using a panel of African countries over the period 1990–2011, the authors look at the main determinants shaping the agro-manufacturing sector shares in each country, pointing to differences in the performance at the policy and institutional level and in terms of trade openness. The authors also provide policy recommendations to improve agribusiness productivity. A sound institutional and business environment is essential to achieve a sustainable and inclusive agro-industrialization. Regarding agricultural trade, regional integration is a key driver to enhance African farmers’ marketing and export activities as it gives farmers access to additional markets, capital and skills, thereby enabling the agricultural sector to produce in larger quantity and with higher value addition. Gammadigbe looks at the performance of regional integration in West Africa and the extent to which trade and monetary integration contributes to food security and agricultural trade in the region. Using an augmented gravity model, the author highlights the determinants of intra-regional trade in agricultural products and provides some policy recommendations to increase it in the West Africa region. Adopting a green agriculture is crucial to avoid long-run stagnation in crop production and rising cost of inputs and thus, to ensure its sustainability. However, sometimes there is a trade-off between protecting the environment and enhancing agricultural productivity. Some, Mbaye and Barbier look at agricultural strategies aimed at mitigating carbon emission by smallholder farmers in Burkina Faso. The authors simulate three different scenarios to analyze the impact of less polluting crops as an emission reduction strategy on farmers’ production. As it implies a trade-off between environmental and economic objectives such as farmers’ productivity and income, authors discuss policy implications including incentives to compensate smallholders for foregone income. Land reform is also key to raising African farmers’ productivity, expanding agricultural output and moving away from subsistence agriculture. Given the complex and outmoded land rights, customary practice and unregulated regimes across the continent, most of Africa's agricultural land is currently fragmented. Around 80 per cent of African farmers are smallholders, cultivating low-yield staple food crops on small plots with minimal use of inputs. Land reforms could not only increase production scale and enhance security of tenure, they are likely to encourage investment as well as the expansion of adequate insurance and financial instruments suited to the agricultural production cycle. Habyarimana and Nkunzimana analyze the impact of Land Use Consolidation (LUC) programs, defined as a reallocation of parcels to remove effects of fragmentation for agricultural improvement, on food security at household level in Rwanda. Using a dataset of 658 households, the authors studied the effects of LUC on households’ incomes and food consumption. They also analyzed the satisfaction of households in LUC programs, conducting a gender-disaggregated study between female- and male-headed households. Drawing on a panel of 4,355 plots in rural Tanzanian villages, Sipangule analyzes the effects of enlarged versus reduced agricultural land holdings on smallholder farmers’ productivity, employment (through contract farming and out-grower schemes), investment and tenure security. The author highlights the importance of taking a comprehensive impact assessment of agribusiness on local smallholder communities. Agro-allied industrialization is also increasingly associated with rising inequality in the distribution of arable land and risk of expropriation for smallholders. Coker, Akogun, Adebayo, Mohammed, Mwojo, Sanusi and Jimoh offer a detailed analysis of the gender disparities in rice farming in Nigeria, in terms of resource access, utilization, productivity and willingness to undertake agribusiness. They look at the factors influencing farmers’ participation in agribusiness across gender. They indicate that gender disparities in access to resources in agriculture is a critical challenge to the achievement of food security and inclusive growth. Women represent 47 percent of the labor force in Africa's agricultural sector and essentially consist of smallholder farmers working in the informal sector (AfDB, OECD and WEF, 2015). Overall, developing an agro-allied industrialization in Africa requires the advancement of an inclusive growth agenda given that half of the labor force in the continent works in the agriculture sector in rural areas, of which 80 percent are smallholder farmers and a significant share are female workers. Land reform, technological innovation, better tailored and more accessible financing schemes are necessary for small-scale farmers not only to raise productivity but also to enhance their resilience to the growing risks related to climate, market and political shocks. Providing an adequate institutional and business environment as well as supporting trade finance are also key in encouraging private sector participation and investment in the agro-business industry and raising the comparative advantage of exporters in this sector. Ultimately, agro-allied industrialization is expected to diversify national economies in Africa and promote economic growth.