Friday, November 27, 2015 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

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 2 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 3 IMPORTANCE OF AGRICULTURE

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 4 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 5 Incremental income from 1$ additional revenue from agricultural tradables EFFECTS OF AGRICULTURAL GROWTH ON OVERALL RURAL INCOMES : O. Badiane, based on Delgado et al (1988)

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 6 AGRICULTURAL TRADE AND ECONOMIC GROWTH AGR. EXPORT AND DOMESTIC GROWTH EXPORT GROWTH DOMESTIC GROWTH 1% Growth 0.04% To 1.83% AGR. EXPORT AND DOMESTIC GROWTH : O. Badiane

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 7 AGRICULTURAL GROWTH AND ECONOMIC GROWTH AGRIC. GROWTH INDUST. GROWTH 1% Growth 1% To 1.32% AGR. GROWTH AND INDUSTRIAL GROWTH : O. Badiane

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 8 LOW AGRICULTURAL INCOMES ARE GENERALLY CORRELATED WITH HIGH POVERTY RATES

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 9 GHANA: AGRICULTURAL-LED GROWTH IS MORE PRO-POOR

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 10 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 11 AGRICULTURE’S PAST PERFORMANCE

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 12 TRENDS IN AGRICULTURAL AND GDP GROWTH : M. Johnson

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 13 AGRICULTURAL GROWTH IS SPREADING : Badiane and Ulimwengu

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 14 SO IS ECONOMIC GROWTH : Badiane and Ulimwengu

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 15 TRENDS IN AGRICULTURAL PRODUCTIVITY

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 16 SUCCESS STORIES EXPLAINING CHANGE

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 17 POLICY CHANGES “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)

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 18 AGRICULTURAL TRADE AND POLICY CHANGES

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 19 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 open- pollinating varieties instead of hybrids.

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 20 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) 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 Burkina Faso cotton farmers (Brahima Ouedraogo/IRIN)Brahima Ouedraogo/IRIN

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 21 SUCCESS IN AGRICULTURE (III) SMALLHOLDER DAIRYING (Kenya) Decontrol of milk pricing in available technology (crossbred cows) spurred a surge in production and commercialization of milk in informal markets. CUT FLOWER EXPORTS (Kenya) Increased from $13 million in 1970 to $155 million in 1999 credit: Smallholder Dairy Project

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 22 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 23 THE WAY FORWARD

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 24 IMPLICATIONS FOR COUNTRY AGRICULTURAL GROWTH Required annual agricultural growth rates to meet MDG1 : S. Fan (2007)

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 25 REALITY CHECK: Progress against CAADP 10% Budget Goal (2004) : S. Fan (2007)

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 26 POVERTY OUTCOMES UNDER CURRENT GROWTH TRENDS (Poverty Headcount, 1$/day, 2005) : S. Fan. 2007

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 27 FOOD AND NUTRITION SECURITY IS POSSIBLE Share of Malnourished Children in SSA Percent CURRENT TRENDSALTERNTIVE SCENARIO : O. Badiane, based on Rosegrant et al (2006)

SOURCE: INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Page 28 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?