Abstract
The creation of a union is often rationalized on grounds of moving the equilibrium toward the first best solution whenever independent policies generate spillovers. This arises as a common agenda can significantly reduce the scope of free-riding behavior among member countries. In addition, cross-border externalities arising out of higher levels of market integration entails countries to agree on policy coordination. The present study explores the extent and magnitude of agricultural production spillover that might validate the adoption of a common agriculture agenda among African countries. Overall, our results suggest the presence of positive and significant agricultural production spillover. No evidence of beggar-thy-neighbor or negative spillover policies was found; on average, each country received 2.5 percent growth as a result of spillover. Our results also suggest that convergence dynamics is much stronger when spillover is accounted for, which provides a rationale for a common agenda such as CAADP.
Highlights
The majority of poor people in Africa lives in rural areas and depends directly or indirectly on agriculture for their livelihoods
Our results suggest that convergence dynamics is much stronger when spillover is accounted for, which provides a rationale for a common agenda such as Comprehensive Africa Agriculture Development Programme (CAADP)
The results confirm the potential for convergence of percapita agricultural growth among Sub-Saharan countries
Summary
The majority of poor people in Africa lives in rural areas and depends directly or indirectly on agriculture for their livelihoods. To sustain high productivity growth in agriculture in the future, African countries in general and Sub-Saharan countries in particular will need well designed and better coordinated policies to improve the productivity of smallholder farmers who constitute the backbone of agricultural sector in Africa. Such common policy agenda should cover market and trade opportunities at domestic, regional, and international levels by providing appropriate incentives including infrastructure for improved market access. The PRSP rhetoric on the importance of agriculture was, not matched by increased investments in the sector (by both governments and donors)—agricultural research and development, extension services, and rural infrastructure development were widely neglected
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