Awakening Africa’s sleeping agricultural giant
Hans Binswanger is the former senior adviser to the World Bank on rural development in Africa. He is currently an independent agriculture and development consultant based in South Africa. The opinions expressed are his own.
The World Bank’s recent study of the prospects of commercial agriculture in Africa focused primarily on the Guinea Savannahs that cover some 600 million hectares, of which about 400 million can be used for agriculture. Less than 10 percent of this area is currently cropped, making it one of the largest underused agricultural land reserves in the world.
During the past four decades, two similar, backward, landlocked, and largely rain-fed agricultural regions developed rapidly and became international agricultural powerhouses: The Cerrado of Brazil and Northeast Thailand. The difficult agro-ecological conditions, remoteness, and poverty levels of the two regions were successfully overcome, and the same should happen in the Guinea Savannahs.
The study found that farm level production costs in Africa are competitive, with family farmers generally having lower costs than commercial farmers. African farmers are also generally competitive in domestic and regional markets, but not competitive in international markets. Logistics costs are much higher than in Brazil and Thailand on account of inadequate transport, processing and marketing infrastructure; lack of competition in vehicle import and trucking industries; cumbersome transport regulations; and the need to pay bribes at border cross¬ings and police checkpoints.
In addition to resolving these problems, awakening of this sleeping giant requires appropriate agricultural policy regimes, greater state leadership and greater development expenditures for family farmers, greater involvement of local governments, communities, and the private sector.
Despite recent efforts, mainly by foreign investors, to launch large-scale agribusinesses in Africa, the study found no evidence that the large-scale farming model is either necessary or even particularly promising for Africa. The apparently successful settler farms of eastern and southern Africa were nurtured by streams of preferential policies, subsidies, and supporting investments.
Nevertheless, large-scale farming, along with other alternatives, may be considered in Africa in three circumstances:
- When economies of scale are present in processing of perishable crops, as in “plantation crops” (sugar, oil palm, tea, bananas and other horticultural crops for export). The alternative to plantations is contract farming that is widely practiced across the world. Note that plantations in the Philippines and Indonesia have lost competitiveness to family farmers in Thailand.
- When Africa’s producers must compete in overseas markets that have stringent quality requirements and demand traceability back to the farm. While this may be difficult in to do via contract in farming, it is the predominant mode for the rapidly growing exports of high value commodities in China.
- When land must be developed in areas with few people. Three solutions are possible: Immigration, as in the Guinea Savannas of West Africa, machine hire from private contractors or larger farmers, as is practiced all over the World, or large scale commercial farming.
If large scale farming is used to solve any of these problems, politically difficult problems are likely to arise in land allocation to commercial farms. Virtually all areas are claimed by some individuals or groups or used in some way. For investors, the alternative to direct involvement in farming are investments in seed and other input sectors, storage, processing and marketing, often involving contract farming.
Much of the technology that family farmers will need is already on the shelf, such as improved seeds, mechanization via animal draft or tractors, low on no till technology, fertilizers and pesticides. But dissemination requires better services and marketing facilities. Low input technologies have little potential in areas of medium to high soil fertility and are more applicable to low fertility environments. Since the main market opportunities for African farmers in the medium term will be in domestic and regional markets, organic farming will primarily have potential in niche markets in the developed world.
In the longer run African agriculture faces a daunting science and technology challenge to maintain and increase its competitiveness and to deal with climate change: It has more environments, more crops, more pests and more diseases than any other continent and will need to find its own technological solutions rather than rely on borrowing.
This will require much larger expenditures on science, research, and science education. Genetically modified organisms will be an important part of the solutions to the multiplicity of stressors in African agriculture. It would be better if European stakeholders were to limit their opposition to GM organisms to Europe, rather than impose their preferences on poor and hungry Africans.