Agricultural and Food Policy, Downloads July 2008 - June 2009: 8,

Ba, Moussa Batchily

Staatz, John M.

English

Research Papers in Economics

Page 1
POLICY SYNTHESIS
for USAID - Bureau for Africa
Office of Sustainable Development
Number 13 June 1996
Fostering Agricultural and Food System Transformation in Africa
By
John M. Staatz and Moussa Ba
Food Security II Cooperative Agreement between U.S. Agency for International Development, Global Bureau, Economic Growth Center,
Office of Agriculture and Food Security and Department of Agricultural Economics, Michigan State University 
BACKGROUND: In September 1995,  40 Afri-
can policy makers and researchers met in Abidjan,
Côte d'Ivoire, to examine African experience with
agricultural transformation and identify actions
needed to promote it.  USAID's Office of Sustain-
able Development in the Bureau for Africa
(AFR/SD) sponsored the workshop, in collabora-
tion with the African Development Bank (ADB),
the Institut du Sahel (INSAH), and Michigan State
University (MSU).
The workshop's objectives were to:
--Identify  strategic policies and investments
needed to transform agriculture and the food sys-
tem to stimulate broad-based economic growth.
--Focus on who should do what--identify appro-
priate roles for, and relationships among, public
and private sectors; other elements of civil society, WHY FOCUS ON AGRICULTURAL
such as farmer and trader associations; national TRANSFORMATION? Transforming
and local governments; regional organizations; do- agriculture and the broader food system is essential
nors; and private voluntary and non-governmental if African countries are to:
organizations.  ￿ Reduce widespread  poverty and hunger in the
--Identify an analytic agenda--areas  where  re- face of rapid population growth.
search would have a high payoff in terms of pro- ￿ Promote broad-based economic growth and
viding key information needed to design successful new job opportunities for the swelling labor force. 
transformation strategies. ￿ Protect the environment. 
--Lay the groundwork for  follow-up actions  to
implement the workshop's recommendations.
Participants included senior researchers, policy
makers, and NGO participants from West, East,
and Southern Africa, with a few participants from
North America and Europe.  The Africans came
from 19 different countries and represented 20 dif-
ferent organizations. 
OVERVIEW OF RESULTS: The workshop par-
ticipants identified several elements, discussed in
more detail below,  that need to be incorporated
into future strategies to foster agricultural transfor-
mation in Africa:
￿ Strategies need to focus on transforming the
entire food system, not just farming.
￿ Technologies and policies should be specific to
each agro-ecological zone. 
￿ Good governance, decentralization, and farmer
empowerment are essential for agricultural trans-
formation.
￿ Agricultural transformation requires better
domestic resource mobilization.
￿ Regional integration, rather than national food
self-sufficiency, is the best way to assure broad-
based growth and food security.
￿ Agricultural transformation requires greater
coordination across development actions.
Transforming the food system has been a linchpin
in the development strategy of almost every country
that has achieved broad-based economic growth.
Such a transformation requires agriculture to be-
come increasingly integrated into the world econo-
my.  Farmers  expand their use of science-based in-
puts developed off the farm and exchange more of
their outputs with others. Consumers (including
farmers) increasingly rely on markets for secure,
low-cost supplies of food.  This process fosters
greater specialization and productivity. 
FS II Policy Synthesis No. 13 
Page 2
Increasing productivity growth at the farm-level, Africa  in  fostering  agricultural  transformation  and
however, is not enough.  For economic growth and undertaking policy reform.   Out of the discussions
employment to grow in the rest of the economy, the came  the  following  conclusions  and
real price of food to consumers (a major recommendations:
determinant of wage rates, real incomes, and food
security in poor countries) must fall. Generating the
productivity increases needed to bring about lower
food prices, while still maintaining incentives for
farmers, traders, and processors, requires an
ongoing stream of technological and institutional
changes  throughout the food system.  In addition to
improved farm-level technology, improvements are
needed in input and output markets, factor markets,
tax systems, and market-supporting infrastructure,
such as roads, market facilities, and information
systems. Food System, Not Just Farming.  The constraints
Policy reforms are central to agricultural transfor- both on and off the farm.  In many countries, well
mation. Increasing food-system productivity requires over half of consumers’ cost of food comes from
a combination of decentralized decision making by post-harvest operations and (to a lesser degree)
individual farmers, merchants, and consumers; and purchased inputs.  Improving productivity of input
collective actions to benefit from new cost-reducing and output marketing, storage and processing are
technologies and institutions.  This mix of individual therefore critical to driving down the real cost of
and  collective  actions  is  unlikely  in  economies  where food to consumers.  Competing internationally
the state dominates agricultural production and mar- increasingly means serving niche markets that have
keting.  Nor is it likely in pure laissez-faire systems tight  quality  specifications.    Meeting  both  these
that leave little room for collective action by various challenges  requires  improved  technologies  and
groups in civil society, such as farmer cooperatives institutions (such as contracting procedures) not
or local units of government.  only at the farm level, but throughout the marketing
During the 1980s and 1990s, most African countries
adopted structural adjustment programs in an effort Technologies and Policies Should be Specific to
to stabilize their economies and lay the foundations
for long-term economic growth.  Advocates of the
reforms see clear, positive effects on African
agriculture and the broader economy.   Many
African analysts remain skeptical, doubting the
macro-economic numbers that underlie these evalu-
ations.  These analysts also often express concern
that  the reforms, although leading to short-term
improvements in macro-economic aggregates, are
not inducing the long-term investments needed to
foster sustainable productivity growth and
widespread food security.  The workshop fostered a
structured debate among Africans on these issues.
DETAILS OF RESULTS: Participants reviewed
10 background studies commissioned for the
workshop and debated issues of policy, technology
development, and financing.  The studies, based on
original research by African scholars, analyzed the
experience of various countries and regions of
1
Strategies to Promote Agricultural Transfor-
mation:  The case studies demonstrated that macro
policy reforms have had positive effects on
agriculture in some parts of Africa.  The impact of
such reforms, however, has been slower and less
dramatic than the authors of the reforms had
hoped.  The following actions could speed up the
agricultural transformation process.
Strategies Should Focus on Transforming the
to assuring sustainable growth and food security lie
and processing sectors as well.
Each Agro-ecological Zone.  African agriculture
is tremendously diverse; Africa-wide strategies for
agricultural transformation (e.g., based on an
Asian-style Green Revolution) are unlikely to be
successful.  As a first step at disaggregation, the
workshop participants identified 6 broad agro
ecological zones within which similar constraints
often hinder agricultural transformation:  the arid/
semi-arid zone, the subhumid areas, the humid
tropics, the medium and high-altitude areas, the
The debate built on results of earlier meetings of African
1
scholars to discuss these challenges, including a 1993 symposium on
agricultural transformation, also sponsored by AFR/SD, and a meeting
in late 1994 in Senegal, organized by IFPRI as part of its “2020" study. 
The Abidjan workshop extended the work of these earlier consultations
by:
￿  disaggregating from Africa-wide generalizations and identifying
specific constraints and opportunities facing different parts of the con-
tinent.
￿  moving beyond just identifying long-run challenges to focus on
specific short- and medium-run actions that African countries and
donors can take that are consistent with long-run transformation.  
FS II Policy Synthesis No. 13 
Page 3
Mediterranean zone, and the veldt.  Within these Regional Integration, Rather than National
zones, further disaggregation is necessary, based on
local socio-political and agro-ecological conditions.
Developing appropriate disaggregation and specific
strategies for each zone is a key challenge for
national agricultural research systems (NARS).  A
disaggregated, agro-ecological approach to agricul-
tural transformation therefore implies the need to
strengthen NARS (typically the weak link in the
research system in Africa), as international and
regional research systems are unlikely to carry out
the disaggregated research needed to tailor
innovations to local areas.
Good Governance, Decentralization, and Farmer
Empowerment are Keys to Agricultural Trans- ficiency.
formation.  Evidence is clear that farmers and
traders  will invest to increase production when they Agricultural Transformation Requires Greater
see a clear connection between such investments and
future income.  But arbitrary enforcement of rules,
corruption, lack of information, and ponderous and
inefficient state enterprises often rob food-system
participants of the incentives to make the invest-
ments needed to foster agricultural transformation.
Where transformation has proceeded, it has most
often been in areas where farmers and traders have
“voice” in the system, where rules of the market are
transparent, and where many economic decisions are
delegated down to the level of local governments,
individuals, and professional organizations. 
Agricultural Transformation Requires Better
Domestic Resource Mobilization.  The challenge of
transforming African economies is so large that it
cannot be financed primarily by donors. Particularly
in an era of declining foreign development
assistance, African countries need to develop more
effective ways to mobilize domestic resources, as
well as attract private resources from outside of
Africa.  Better governance, decentralization, and
farmer empowerment will clearly help.  Improving
domestic capital and risk markets is essential, par-
ticularly linking these markets more effectively to in-
ternational markets.  The workshop participants dis-
cussed several innovative approaches that have been
used by some African countries to attract foreign in-
vestors through joint ventures and contract farming.
The greatest challenge lies in improving capital
availability for domestic food crop production, as
such production is often perceived as less “bank-
able” due to thin output markets and less secure Analytic Agenda:  What Do We Still Need to
credit recovery mechanisms. Know?  The workshop attempted to identify
Food Self-Sufficiency, is the Best Way to Assure
Broad-based Growth and Food Security.  The
workshop participants endorsed regional integra-
tion, based on local comparative advantage and
trade, as an important element of an agricultural
transformation strategy.  The participants felt there
were many unexploited opportunities for greater
regional specialization and trade within Africa.
Exploiting these requires improved transportation
and handling facilities, reduction of transaction
costs, better information, and lowering of trade
barriers among African countries.  Many of these
barriers were erected as part of costly attempts to
assure food security through national food self-suf-
Coordination Across Development Actions. Agri-
cultural transformation involves greater integration
of the food system into the broader economy.  To
facilitate that integration, greater coordination
among various public and private actions is needed.
Strengthening input and output markets will help
achieve this coordination.  The workshop
participants also identified two areas where public
decision-making by Africans needs greater coordin-
ation:
￿ Policy reforms across countries.  In the  pre-
sence of regional trade and capital flows, policy
reforms in one country spill over onto its neighbors.
This has posed problems when one country (e.g.,
Zambia) is reforming its economy faster than its
neighbors (e.g., Zimbabwe and South Africa). The
slower-reforming countries may flood the faster
reformer with subsidized agricultural exports,
thereby undercutting incentives for local producers.
￿ Across various ministries.  Agricultural trans-
formation depends not only on decisions by the
Ministry of Agriculture.  Transportation, trade, and
macro-economic policies often have more effect on
farmer and trader incentives than do agricultural
sectoral policy.  Yet often there is little coor-
dination of policies made among various ministries.
Mechanisms, such as the authority recently granted
the Ghanaian Ministry of Agriculture to coordinate
the budget requests of five other ministries having a
strong impact on agriculture, need to be explored
by other countries in Africa. 
FS II Policy Synthesis No. 13 
Page 4
critical areas where more information is needed to
design effective agricultural transformation strate-
gies.  Six priority questions emerged:
1. What are the best ways to foster and support
producer and village organizations as tools for
mobilizing local participation and resources in
making policies, carrying out investments, and in-
creasing accountability of governments, firms, and
other development organizations?  Most agree that
greater local participation and empowerment are
needed.  The challenge is to find the best ways to
support them.
2. What strategy should be used to allocate public
investment between “high-potential” areas and more
marginal zones, if the goal is to foster broad-based
development?  Many of the poor live in areas where
very heavy investments are needed to increase agri-
cultural productivity.  How much public investment
should be made in these areas  versus more
environmentally favored zones?
3. What institutional innovations will allow appro-
priate public and collective action to strengthen
agricultural production and marketing, given the
very tight budget constraints facing most African
states?  For private markets to work well, some
collective action is needed.  The challenge is to
identify what needs to be done collectively, who
should provide different types of services (national
government? local government? business
associations?) and how to finance such actions.
4. How can investments more effectively promote
agricultural transformation?  Specifically, what
tools can attract non-traditional sources of invest-
ment (particularly foreign investment) to African
food systems?  How can investments across sectors
be coordinated more effectively to avoid duplication
and capture synergies?  What are the impacts of
different ways of coordinating production and
distribution of agricultural products (for example,
contract farming vs. reliance on spot markets) on
domestic resource mobilization and re-investment in
the food system?
5. What would be effective guidelines for the ADB
and other regional and international organizations to
increase the level and productivity of their
investments in fostering agricultural transformation?
6. What are effective models to assure sustainable
financing for restructured and “reinvigorated”
NARS?  How can the articulation between the
NARS and other levels of the international agri-
cultural research system be improved?  
Follow-up Actions:  To stimulate follow-up
actions from the workshop, MSU and INSAH are:
￿ Developing a series of workshop reports in
French and English that will be widely diffused
throughout Africa (synthesis report, policy
bulletins, and workshop proceedings);
￿ Helping the ADB develop follow-up programs.
These include diffusing the workshop results to
finance and planning ministries (where the ADB
has special entre), developing guidelines to improve
the impact of ADB lending on agricultural trans-
formation, and helping coordinate actions and out-
reach across various regions of Africa.
In addition, the African workshop participants have
launched several follow-up initiatives of their own.
In December 1995, CILSS (a regional organization
of Sahelian countries) initiated a regional strategic
planning activity to develop policies and strategic
investments to promote agricultural transformation
in the Sahel. Several of the Abidjan workshop par-
ticipants lead this effort.  Several participants from
Southern Africa have prepared proposals to the
ADB for follow-up actions within their region.
The United Nations Industrial Development Organ-
ization (UNIDO) also has based its new 10-year
“Alliance for Africa’s Industrialization” (part of
the new U.N. Special Initiative on Africa) on ideas
from the workshop, and named a key workshop
participant, Dr. Kandeh Yumkella, to lead its pro-
gram.
*Funding for this workshop was provided by the Food Security and
Productivity Unit of the Productive Sector Growth and Environment
Division, Office of Sustainable Development, Bureau for Africa,
USAID (AFR/SD/PSGE/FSP) in collaboration with the African
Development Bank and the Institut du Sahel.  The workshop was con-
ducted under the Food Security II Cooperative Agreement Between
AID/Global Bureau, Office of Agriculture and Food Security, and the
Department of Agricultural Economics at Michigan State University.
The views expressed in this document are exclusively those of the
author.
John Staatz is professor of Agricultural Economics, Michigan State
University (MSU).  Moussa Ba is Regional Technical Coordinator,
Institut du Sahel (INSAH).
This paper is a summary of the workshop on Agricultural
Transformation in Sub-Saharan Africa, held in Abidjan, Cote d’Ivoire,
September 26-29, 1995.

Fostering Agricultural and Food System Transformation in Africa

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