Africa joins Asia and the U.S. in passing the worst of the global economic crisis. The winds of economic dynamism seem to be blowing at the back of the African continent as a whole. That is according to William A. Masters, a professor of Agricultural Economics at Purdue University.
After decades of bad news, at least three major trends are turning Africa’s way: agricultural policies, rural demography, and farm productivity all promise improved opportunities for farm families across the continent. These trends move too slowly to make headlines, but cumulatively they offer a whole new world of bigger payoffs from public and private investment in agriculture and rural development.
Each country in every year faces a unique set of circumstances. Novelties get the most attention, like the possibility that outside investors might control large areas of farmland. Spatial diversity is also important, because it ensures that each place differs from the aggregate average. For Africa as a whole, however, at least three slow trends have recent turning points that offer game-changing new incentives for entrepreneurs and governments.
The first turning point is political. New data from a World Bank study that compares farm policies around the world since 1955 shows for the first time just how far today’s African governments have gone to reduce the cost to farmers of the export taxes, marketing boards, and other interventions imposed by previous regimes (www.worldbank.org/agdistortions). Africa’s policy-induced price distortions peaked in the late 1970’s, and reforms since then have removed about two-thirds of that burden, greatly facilitating productivity growth and poverty alleviation. Further reforms could yield additional benefits, but much of the handicap imposed on African farmers by post-colonial governments has now been removed.
The second transition is demographic. Census data compiled in recent revisions of United Nations population projections reveal the slowly unfolding implications of African history. African households obtained access to modern medicine much later and more suddenly than people in other regions. The resulting improvement in child survival rates and population growth during the 1970’s and 1980’s were faster than those seen earlier in Asia or Latin America.
Africa’s towns and cities have been growing at some of the world’s fastest rates, but their absolute size is so small that they can absorb only a fraction of all new workers. Consequently, Africa’s rural population has been growing faster and for longer than any other in human history, with a correspondingly rapid and prolonged decline in per-capita endowments of land and other natural resources. Moreover, post-independence improvements in child survival triggered a rise in child dependency rates, which also reached historically unprecedented levels in the 1970’s and 1980’s.
Africa’s demographic burdens began to lighten in the 1990’s, thanks to gradual reduction in fertility rates and continued urbanization. As seen earlier in Asia, the slowdown in rural population growth and the reduced burden of childcare creates a window of opportunity for new investment to bring larger year-on-year increases in output per capita.
The third turning point in this sequence is technological: national estimates of cereal crop productivity show how, after decades of stagnation during the Asian green revolution, African yields have grown steadily over the past decade, so that estimated cereal grain output per capita now equals that of South Asia.
The start of this turnaround could be associated with the other two trends, as the cumulative result of more favorable policies and increased labor per hectare, but it could also reflect the gradual spread of improved crop varieties that resulted from earlier investment in agricultural technology. The inflow of foreign aid to boost agricultural production did not rise until after the world food crisis of the 1970’s, and it peaked in the late 1980’s, yielding payoffs some years later.
Masters does sound a cautious tone even with the good news. The reason is that African agriculture still has some hurdles and challenges. For the farmers there:
- Depleted soil nutrients.
- Falling soil moisture.
- Rising temperatures .
- Worsening disease pressures.
These challenges can be dealt with effectively with improvement in farm policy due to importation and implementation of technology. Land reform that has property rights as the main foundation to ownership and the rule of law, which is backed up with an independent and competent judiciary. Again this is no easy task, especially in places that might be war torn, but these policies will be the main driver of improvement in Africa’s agriculture.