HOPE FOR AFRICAN FARMERS

Africa accounts for 60 per cent of
the world's arable, uncultivated
land, according to a report
published by McKinsey Global
Institute in 2010. The FAO has
shown that cereal yields in Africa
are currently less than 50 per
cent of those in Asia or South
America. Such low productivity is
largely attributable to the current
state of smallholder farming. It is
estimated that about 75 per cent
of all farmland in Africa is less
than 4.94 acres in size.
Nearly 70 per cent of the African
population lives in rural areas
where they depend exclusively
on agriculture as farmers or
labourers for their livelihoods. A
large percentage of these are
women. A World Bank report
published in 2011 estimated that
the global food price spikes in
2008 pushed 44 million people
below the poverty line, most of
them in developing countries.
According to Oxfam
International, poor people in
developing countries spend
50-80 per cent of their income
on food. More than 90 per cent
of Africans who live on less than
$1.25 (Sh105) a day also happen
to own and live on small farms.
As the green revolution in Asia
showed, the potential of
smallholder development can be
realised. But conditions have
changed. Now smallholders face
higher transaction costs and
have to cope with the fact that
agricultural research is biased
towards large-scale production.
This raises newchallenges in
small farm development. On the
other hand, higher prices of
staple foods present
opportunities for farmers. India
and China have similar
proportions of small farms as
Africa, but have achieved
significantly higher productivity.
Despite the success of
smallholder farmers in Asia, who
fuelled the green revolution,
there is skepticism that East
Africa's smallholders can
replicate this model and deliver
agricultural transformation and
improve livelihoods among rural
smallholder farmer. It is argued
that for agricultural growth to
gain traction, Africa's agricultural
and labour productivity will have
to increase massively, requiring
vast proportions of smallholder
farmers to move out of the farm.
High productivity of modern
agriculture is associated with
high technology, intense capital
input and market linkages, and
hence higher capacity to
compete aggressively in factor
markets, including land, labour
and capital.
However, these factors are not
appropriate for the smallholder
farm model. While there is a
strong poverty-based case for
trying to assist smallholder
farmers, the agenda for African
agricultural growth should be to
introduce commercial agriculture
on a competitive basis. Why is it
that with all our research,
technology and innovation,
managerial capability and
investment capacity, we are
unable to make even a modest
contribution to the pervasive
problem of poverty, hunger and
malnutrition in the smallholder
farm families in sub Saharan
Africa? We must learn from past
successes and failures.
Doing more of the same by
refurbishing the solutions of the
past - development aid, NGOs,
training and visit, farmer field
schools, international agricultural
research organisations - is vital
and has a critical role to play, but
has not addressed the problem
of low productivity, hunger and
poverty. Paul Collier has argued
that having the single most
important sector of Africa's
economies almost exclusively
managed by reluctant micro-
entrepreneurs - smallholder
farmers - is a recipefor continued
divergence from global
agricultural productivity.
But in the logic of the timeless
wisdom of CK Prahalad, we must
stop thinking of smallholder
farmers as victims or a burden
and start recognising them as
resilient and creative
entrepreneurs and
valueconscious consumers. What
would be the defining
characteristics of agriculture over
the next half century if Africa
were to converge on the
performance of Asia and Latin
America? I argue for a focus on
small and medium-sized
enterprises agribusiness.
But harnessing Africa's
agricultural potential requires
talented managers and
entrepreneurs that can attract
capital, apply technical expertise
to develop profitable SME
agribusinesses. Moreover,
serving SME agribusiness will
demand innovations in
technology, services and
business models.
Africa's large youth population
provides a ready pool from
which to develop talented
entrepreneurs and managers
who will drive the growth of
agriculture. Those of us in the
research, education, policy,
development and business
community can make this a
reality by using our resources to
build the capabilities of the
African SME agribusiness sector
to generate economic growth
and achieve food and nutritional
security.
The writer is the director of East
African Institute and associate
professor at Aga Khan University.