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How can we help smallholder farmers seize opportunities in Africa?

Simeon Ehui's picture
 
Photo by: Dasan Bobo/World Bank

Agriculture is at the heart of addressing poverty in Africa. I was reminded of that during my recent trip to Addis Ababa, Ethiopia, where different stakeholders had gathered to explore how to transform smallholder agriculture for growth. The recent End Poverty Day activities in Africa, which focused largely on agriculture, was also a reminder of how central the sector is to ending poverty and boosting prosperity.  Indeed, the different stakeholders I work with on a daily basis—which includes African governments, development partners, civil societies, the private sector and farmers—all agree: Agriculture is important to the future of Africa.

Much more than in any other region, agriculture is a major driver of African economies, typically representing 30-40% of GDP and 65-70% of labor force. Despite the fact that Africa is the most rapidly urbanizing region, agriculture will remain the dominant sector for many years in most African countries. The poverty impact from agricultural growth is higher relative to other sectors. Agriculture is important for growth, poverty and food.

It’s true that Africa’s agricultural transformation will be a complex, multi-sectoral agenda that requires different enabling factors, from sufficient financing and the right policies to the implementation of climate-smart agriculture. It’s also true that success depends on one crucial factor: the engagement of smallholder farmers. In short, Africa’s agricultural transformation will need smallholders to succeed.

Smallholder farmers continue to dominate African agriculture although some countries--for example, Ghana, Tanzania and Zambia--are experiencing a rise of medium-scale farms of between five and 100 hectares as part of the region’s broader economic transformation. Smallholder farmers still control the largest areas for production.  They employ 70% of the work force, farm most of the land, and are home to most of the poor – so the most obvious way to make agricultural growth pro-poor is to engage with huge numbers of small farms.

However, smallholder farmers face two major challenges today. One is that they are at a major disadvantage in linking to modern value chains because of their low volumes of sales, poor market information and contacts, and limited ability to meet the high standard requirements of many high value markets. Because of their small size and reach, they are perceived to be high cost and high risk farmers by private agrodealers and financial institutions.

So how can people working in the agriculture sector support smallholder farmers?

First, there is need to provide supportive incentives and policy reforms for farmers and agribusinesses. For example, modern inputs and credit remain out of reach for many smallholders. Farmers could benefit from a package of inputs and credit. The issue of land tenure policy reform is critical. Between 10-45% of businesses describe access to land as major constraint.  There is need to build institutions that help farmers--including youth and women-- access land and engage in profitable commercial agriculture.
 
Work also needs to be done on scaling up investments in infrastructure and technology, particular technology that helps farmers produce more food. Neglecting to invest in agricultural research and the creation of many small, underfunded research institutions has caused setbacks that will need to be addressed. Africa also needs investments to develop agricultural education at all levels. Finally, Africa’s aging infrastructure cannot launch or sustain internationally competitive commercial agriculture without investment, especially in irrigation, roads, energy, and logistics, especially port infrastructure.

We also need to strengthen institutions to make markets work better for smallholder farmers. Some of these institutions would provide critical services such as access to finance, market intelligence, marketing and business development services—all things that the private sector currently has few incentives to provide. Finally, we need to focus on improving coordination and leveraging partnerships among the different key players including but not limited to multilateral and bilateral development finance partners, the private sector, the Consultative Group on International Agricultural Research and African national and regional institutions.

The challenges facing agriculture are great but we have reasons to be optimistic. Agriculture’s value added increased by 5.1% between 2000 and 2013. There’s no limit to what agriculture can achieve—in terms of feeding Africa, creating jobs, and helping to end poverty and boost prosperity. We have to work hard to make sure that smallholder farmers will be part of the work to meet Africa’s growing food and beverage markets –which are expected to top $1 trillion in value by 2030.