Johan Swinnen, Visiting Professor at Stanford's Center on Food Security and the Enviroment, comments on Kym Anderson's Global Food Policy and Food Security Symposium paper on "How can trade improve food security in sub-Saharan Africa?".

Food and water security in sub-Saharan Africa remain a challenge despite the region’s abundance of arable land and untapped water resources. In FSE’s final global food policy and food security symposium, water expert John Briscoe drew upon his many years of international field experience (including a 20-year career at the World Bank) to deliver a personal assessment of the issues facing Africa and suggestions for the way forward.

Improvements in infrastructure, agricultural productivity and investment are crucial for tapping Africa’s agricultural and development potential. And middle-income countries, such as Brazil, may have the most lessons to share.

Dams and the quest for water security

“Africa’s infrastructure is lousy,” said Briscoe, an environmental engineer and director of Harvard’s Water Security Initiative. “Crumbling roads, patchy supplies of electricity, and inadequate water storage are some of Africa’s biggest impediments to growth.”

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Africa has the potential to irrigate an additional 20 million hectares of land, but building that infrastructure is expensive and finding funding has become more difficult. Historically, the World Bank and wealthy countries like the United States have helped. But funding dams is now unpopular.

Meanwhile, middle-income countries - such as Brazil, India and China - are building infrastructure for water-enabled growth, and are filling the funding gap left by rich countries. Whereas the World Bank now finances about five dams, the Chinese finance over 300 dams outside of China in the developing world.

Sub-Saharan Africa has benefited from some of these projects, but still contends with an international NGO and donor community resistant to dam development.  

Big is beautiful – the case of Brazil

“Africa must increase its agricultural productivity, and a romantic emphasis on small, local, organic farming is not going to get it there,” said Briscoe.

Sub-Saharan Africa’s agricultural growth rate remains very low. In some countries, yields for staple crops like maize are actually falling. A deficit in knowledge to increase agricultural productivity is part of the problem.

Briscoe shared a telling observation of a Ghanaian CEO of a multinational company: ‘Once the best and the brightest Ghanaians went into engineering. Now they become anthropologists because NGOs dominate the job market and this is the skill they want.’ 

Briscoe pointed to Brazil as a compelling case for greater investment in agriculture and agricultural research. Between 1985 and 2006, Brazilian agricultural production grew by 77 percent.

“Much of this growth did not come from cutting down the Amazon, but by doing things smarter than it did before,” said Briscoe. “Over the last 30 years, through financial crises and changing political parties, Brazil sustained public investment in agricultural research.”

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Additionally, Brazil pioneered the use of “no-till” agriculture, now practiced by over 50 percent of its farmers. The culmination of these activities increased productivity while farming more sustainably.

An important contribution to Brazil’s productivity has been its utilization of genetically modified crops. Brazil chose not to eulogize the “small and organic” philosophy of many NGOs, but embraced new technology. Middle-income countries are currently eight of the 10 largest users of GMOs.

Brazil was also pragmatic when it came to scale. Brazilian farms are large. Thirty percent are large commercial operations producing 76 percent of the country’s output. Many environmentalists and small farmers perceived large agrobusiness as the enemy, but these large enterprises were also the grey geese laying the golden eggs for the country.

Understanding that there are no silver-bullet solutions, the Brazilian government sought innovative ways to support smaller farmers. For example, concessions for a large irrigation project in the Pontal were awarded to agribusiness operators that integrated at least 25 percent of irrigable land to small farmers as part of the company’s production chain.

Sugarcane

“Brazil’s success did not happen over night,” said Briscoe. “African countries must be patient and persistent, particularly with respect to public investment in agricultural research…and pragmatic and realistic about scale.”

Role for foreign investors

In the face of low levels of public investment in agriculture and non-existent or shallow domestic capital markets, there is a role for foreign direct investment (FDI) to play. FDI projects, such as international land deals, can help create implementation capacity by bringing capital and know-how, creating employment and developing infrastructure.

“But it is easier said than done,” said Briscoe. “Foreign investors, including the World Bank's International Finance Corporation (IFC), have struggled in sub-Saharan Africa because farming is a complex business.”

Briscoe noted a shortage of indigenous entrepreneurs, the small size of potential investments, and lack of access to markets have constrained IFC engagement and performance in sub-Saharan Africa.

While there are no shortcuts for Africa, Briscoe insisted optimism and a determination to move faster are needed. Africa must decide whether to follow the prescriptions of the advocacy community or, like Brazil, pursue an opposite strategy.

“Will Africa focus on its real problems, ‘the politics of the belly’?” asked Briscoe. “Or will it succumb again, to the western ‘politics of the mirror’?”

Join us for our final Global Food Policy and Food Security symposium Thursday, May 23. John Briscoe, Gordon McKay Professor of the Practice of Environmental Engineering at Harvard University will lead a lecture on Water and agriculture in a changing Africa: What might be done?. FSE fellow Jennifer Burney will provide commentary.

China is indeed an intriguing potential role model for developing nations in quest of rapid economic growth and successful poverty reduction. It has not only sustained an average annual GDP growth rate of 10 percent between 1980 and 2011, it has also been extraordinarily successful at reducing poverty, taking more than 650 million people out of extreme poverty over the period. These are two extraordinary feats. It is, however, often said that China is a unique case, with few transposable lessons due to its exceptional size and past. With Sub-Saharan Africa (SSA) at a time of economic takeoff and in need of sustained growth and massive poverty reduction, finding out if at least some lessons from the Chinese experience are transposable can be a useful contribution. There are no better researchers to inform us on this than Scott Rozelle and Jikun Huang. So, what they have to say is indeed important. In what follows, let me try to qualify and extend some of the lessons they are proposing.

President Barack Obama’s 2014 budget proposal promises significant food aid reform that will enable the United States to feed about 4 million more people without a significant increase of the current $1.8 billion spent on feeding the world's most hungry. Since the food aid program's inception in 1954, the U.S. has helped feed more than 1 billion people in more than 150 countries, and remains the largest provider of international food aid.

The intention of the reform is to make food aid more efficient, cost effective, and flexible. It aims to use local and regional markets to lower the cost of food and speed its delivery, and calls for the use of cash transfers and electronic food vouchers.

The proposed reforms would also end monetization—the sale of U.S. food abroad to be sold by local NGOs for cash. This practice has been criticized for hurting vulnerable communities by depriving local farmers of the incentives and opportunities to develop their own livelihoods. Several studies, including one by the Government Accountability Office, found monetization to be costly and inefficient—an average of 25 cents per taxpayer dollar spent on food aid is lost.

Barry Riley, a food aid expert and visiting fellow at the Center on Food Security and the Environment, discusses his perspective on the importance of these new reforms, their chances of passage, and the country's current role in international food aid.

Why is local procurement such an important addition to food aid reform?

An increase of funding for local and regional procurement is the most important programmatic element of the proposed reforms. It would help managers working in food security-related development programs to determine for each emergency what commodities are most appropriate and where they can be procured most quickly and inexpensively. Some studies have shown local and regional procurement of food and other cash-based programs can get food to people in critical need 11 to 15 weeks faster at a savings of 25-50 percent. Equally important, local procurement is less likely to disrupt local economic conditions, but rather promote self-sufficiency by increasing demand (often for preferred local staples) and incomes of local producers. The move to 45 percent local (and 55 percent tied) procurement is a BIG step, and one to face strong opposition from American commodity interests and U.S.-flag shippers. 

How difficult is it to ensure vouchers and electronic cash transfers are getting into the hands of people that really need the aid?

Vouchers (and similar urban coupon shops) have been used many times over the past decades as a food transfer mechanism (also sometimes used in food for work programs) enabling the recipient to trade the voucher(s) for foodstuffs when it is most convenient or when they are most needed. Electronic vouchers are new, and how well they work depends on local situations. In places like urban Latin America, Africa and India, it probably could be made to work quite well; the technology is evolving quickly that would enable this sort of transfer mechanism.  

Rural Ethiopia, Burkina Faso, Central African Republic, Malawi – probably not so well. I’m admittedly skeptical that electronic transfers of purchasing power to remote areas would be sufficient in most cases to motivate traders to move food to these hungry areas. Their risks are extremely high and, in my experience in Africa, traders will only deliver food to remote rural areas (inevitably over very bad roads) if they can command prices considerably higher than costs plus a high risk premium.

Why aren’t international food aid organizations more in favor of direct dollar support for local operating costs?

There is (and has long been) opposition among many of the NGOs to the President’s proposal to replace “monetization” with a promise of on-going direct dollar support for the local operating costs of NGO food security-related projects. They believe it will continue to be easier to get Congress to approve money to buy American food commodities to ship overseas than to get approval for dollars to ship overseas, particularly in light of tightening budgets. These NGOs have tended, over the years, to receive a sympathetic ear from Congress.

The proposal shifts oversight of the food aid program from the Agriculture Committees within the U.S. Department of Agriculture (USDA) to the Foreign Affairs/Relations Committees of the State Department’s U.S. Agency for International Development (USAID). What is the likelihood of Congress approving this transfer?

The chance of that happening, in this of all Congresses, is about the same as winning the Power Ball Lottery. Crusty committee chair-people are extremely sensitive to reductions in their empires and the agriculture committees – especially in the Senate – are powerful committees. On top of that, there are so many elements in the overall 2014 federal budget creating heartburn on the Hill that food aid considerations are far, far, far down the line. The best the President is likely to get in the present divided Congress are hearings and a continuing resolution of some sort.

What did you wish to see in the food aid reform proposal that was not addressed in this budget?

Change, if it ever comes, will likely be incremental and halting. I’ll be happy to see any step, however small, in the right direction. The total end of tied procurement would be at the top of my wish list. Even more important, perhaps, iron-clad, multi-year commitments of funding to food security programs intended to overcome long-term institutional impediments to achieving enduring food security in low income food deficit situations…and sticking with such commitments for 15 years.

What role does food aid play in advancing American foreign policy goals?

Most importantly, by being the single largest source of food commodities to the World Food Program in confronting disaster and emergency situations. Food support to American NGOs has been under-evaluated over the past 40 years. I’ll be talking about this later in the book I am writing, but these small projects were all that kept agricultural development (and early food security efforts) going in many small countries during the “dark decades” when international finance institutions and bilateral donors were not financing agricultural development. There are valuable on-the-ground lessons in that NGO food-assisted experience still waiting to be assessed.

Let me add, given what we know about the onset of serious climate change in the decades to come, the need to supply large amounts of food to populations suffering severe food deprivation will probably grow in the future. Where will the food come from and who will pay for those future transfers?

While the U.S. remains the largest provider of food aid, what can the EU and Canada teach the U.S. about food aid policy?

Donors hate to think that other donors have something to teach them. But, of course, they always do. The Canadian and European experience with food aid is best summed up in the way their objective has come to be restated over the past 15 or so years: not “food aid” but “aid for food.” The purpose of assistance intended to improve food security is to improve either, or both, availability and access over the long term (leave nutrition aside for a moment).

European and Canadian assistance can be much more flexible in choosing the instruments – food, cash, technical assistance, training, institutional strengthening, public policy, public-private cooperation, etc. – required to achieve a realistic food security goal which I would describe as pretty good assurance that most people can get their hands on the food they need most of the time. Commodity food aid, in some form – or the promise of its ready availability when needed – will probably need to be part of the total array of inputs required for the several years needed in particular food insecure countries to achieve that “pretty good assurance.” Europe and Canada are closer to understanding this and have become appropriately flexible in concerting resources to get it done. That’s the lesson.

Collier, a distinguished economist and author of the award-winning book “The Bottom Billion”, was direct in his opening remarks.

“Smallholder agriculture has been a persistent productivity disaster for Africa,” said Collier. “Despite a huge land area to population ratio and higher proportion of its labor force engaged in food production, Africa is still not able to feed itself. The smallholder business model of the last 50 years is fundamentally flawed…maybe it is time for a Plan B.”

African agricultural productivity remains astoundingly low and stagnant at about $500 per person per year. His solution: debunk the ‘myth of the efficient peasant’ and rural romanticism and support commercial agriculture and urban growth.

Commercial agriculture reaps economies of scale that provide advantages often beyond reach for smallholder farmers yet are critical to agricultural production in Africa—risk finance, liquidity, technology, logistics, and knowledge of markets. Collier points to the success of Brazil and Thailand—two emerging economies that differ in scale of commercial organization, but have become major agricultural exporting countries.

Byerlee, a renowned economist and director of the 2008 World Development Report, agreed with Collier that commercial agriculture is likely Africa’s future, but that market-oriented smallholder farmers will play the lead role.

“We have much to learn from emerging business models,” said Byerlee. “Smallholders and agribusiness have complementary assets that can contribute to commercial agriculture, and states and investors must help facilitate smallholder inclusion in these models.”

Byerlee noted that the choice between small-scale or large-scale production models depend on transaction costs and type of commodity, and are context specific. Small- to medium scale production is best suited to most types of products in Africa especially food staples and many labor intensive products (e.g, diary). This follows the example of Thailand that not only has succeeded in food production but alone exports more than the value of all sub-Saharan Africa. Value chains that require stronger coordination with processing and shipping (e.g., sugar and palm oil), demand market standards (e.g, export horticulture) or are taking pioneering risks (e.g., new crops in new areas) may be better suited for large-scale production. Benefits may still be large if they create good jobs—a major challenge for Africa’s future.

Where to invest in Africa’s future?

"Young Africans are voting with their feet in droves to leave smallholder agriculture because it is impoverishing and boring, “ said Collier. “The economic tragedy for Africa is that cities haven’t been the engines of economic opportunity and wage employment.”

Collier argued investments in cities over agriculture are needed to prepare for an urban future and must be done quickly due to one dangerous fact—climate change.

“Climate change is the train coming down the tracks and it is already happening in Africa,” warned Collier. “The continuing deterioration of African agriculture is already set in stone. The last 50 years of carbon emissions are going to continue to devastate Africa’s climate over the next 50 years.”

Collier fears climate change will shift Africa’s competitive advantage in agriculture to Northern Eurasia and North America. Therefore, limited investment dollars must shift to cities which are more climate resilient. Byerlee disagrees.

“There is overwhelming and convincing evidence that agricultural growth is important for poverty reduction and food security,” said Byerlee. “Look at the Green Revolution in Asia and the institutional reforms in China in the early 1980s.”

The 2008 World Development Report also found GDP growth from agriculture benefits the income of the poor two to four times more than GDP growth from non-agriculture. So why isn’t this working for sub-Saharan Africa?

Byerlee points to Africa’s history of poor macroeconomic policies that have disadvantaged African farmers. Smallholder farmers have traditionally been taxed at high levels (as much as 50 percent 20 years ago before liberalization programs started kicking in). Rates have come down dramatically to 15-20 percent, but are still significantly higher than other countries.

“African states must level the playing field,” said Byerlee.

Many of these macropolicies are slowing changing, and that makes Collier and Byerlee hopeful.

“After four decades in sub-Saharan Africa I feel optimistic about Africa’s food systems and future,” said Byerlee. “I see exciting opportunities in terms of market growth, private interest, and improved policies.”

Yields in Africa are low, but there is room for significant improvement. The continent is home to potentially 240 million hectares of uncultivated land and less then 20 percent of irrigation potential has been tapped.

African agricultural systems are transforming rapidly in response to rising rates of income growth, urbanization, and shifts in demand for high value and processed food, and feed for livestock. Higher food prices are incentivizing farmers to enter the market and increasing farmer income. Regional markets now accounting for only 5-10% of trade have much potential to expand, and Byerlee projects the value of African urban food markets to quadruple over the next 20 years.

Renewed investment in Africa is another reason for optimism. After decades of declining support donor agencies are refocusing their efforts on supporting agricultural development in Africa. Private sector investment, ranging from local to foreign investors, is also increasing. Collier spoke of the value pioneer commercial investors are bringing to unused and underutilized, but arable lands in Africa. These larger investors are better able to internalize the benefits of infrastructure supply while creating jobs and opening new markets.

The spur in foreign investment has drawn some fire from opponents worried about ‘land grabbing’. Collier and Byerlee both pointed out the need to differentiate between commercial investors and land speculators. The latter are being scrutinized, and for good reason.

Land speculators are leasing huge tracts of land over long time horizons and banking on the land’s option value if there is a big spike in food prices. This takes potentially arable land out of near-term production and out of the hands of local communities. Byerlee suggests governments impose controls on how rapidly the land is developed as one way of managing this problem.

What will a successful African food system look like in 2050?

"African peasantry as we know it today will not be preserved," projects Collier.