Don’t lose the plot – agriculture in the right context

Don’t lose the plot – agriculture in the right context

Here is something you’ve probably not heard regarding agriculture in Africa: African farmers are old. Think about it for a second. Do you know anyone that owns a farm? What is the age of this person? According to the United Nations Development Programme (“UNDP”) dataset, the average Kenyan farmer is 60 years old. In Nigeria, farmers are about 54 years old. Life expectancy at birth in Kenya is 62 years and 53 years in Nigeria, comparing the average age of farmers to life expectancy at birth, it is easy to conclude that African farming has a demographical problem. A new reality television show has been airing in East Africa entitled don’t lose the plot. It follows the lives of four young people (two pairs from Tanzania and Kenya) who have been allotted one acre of land for agricultural production and follows their activities over a nine-month period. The most profitable farmer at the end of the show wins an agricultural investment of $10,000. The show is supported by various institutions including the USAID. The objective of the programme is showcasing to the youth the activities involved in agriculture and perhaps encourage them to join the profession. The show’s producers want farming to be perceived as “cool”. Whether the most appropriate medium to achieve this objective is a reality TV show is to be seen.

A fresh attempt at encouraging young people to engage in the profession and adjust the demographical problem is seemingly laudable. Demography is however not the only nor the biggest problem faced by African governments with regards to agriculture; low productivity is a frequently cited problem in African agriculture. Dercon and Gollin (2014) and Gollin et al (2014) show that agricultural productivity in Africa is only 28% of non-agricultural productivity. In effect, if productivity maximization was the objective of governments, agriculture should receive significantly less resources. In Nigeria, agriculture accounts for about 30% of employed adults, contrast with the United States of America where it only accounts for 1.3% of available jobs. Similarly, across the OECD, only a small percentage of the working populations work in agriculture. The corollary here is that a large part of the Nigerian working population is involved in a very low productivity sector. This point should alarm policy framers.
A recent NOI poll in Nigeria showed that 90% of respondents held the view that “the agriculture sector is one of the most viable means of driving the nation’s economy positively and pulling it out the current recession”. Nigeria is now out of recession but the results of the poll buttress the nationwide view of agriculture and its importance in the economy. Whilst the general population can hold this view about the importance of agriculture, should SSA governments hold a similar view considering existing empirical evidence? Has agricultural policy in SSA already lost the plot?
Agricultural policy in Nigeria like the rest of sub-Saharan Africa has revolved around the following four critical points; food security, poverty alleviation, economic growth and development and a balance of trade. Here is a very important and closely held secret, several studies have reviewed the evidence on the impact of agriculture on growth and development, the evidence is inconclusive on whether governmental focus on agriculture would deliver economic growth and achieve the three other critical objectives of governments. Should these governments continue to enact policy experiments in agriculture despite inconclusive evidence? The simple answer is NO. In Nigeria, there are multiple policies and strategies dealing with different crops, from rice to tomatoes to palm oil to cassava. Each policy and directive centered around the four critical points earlier mentioned. A critical home truth per Dercon and Gollin is that growth in agriculture will not come in isolation but from its interaction with the rest of the economy. A careful assessment of the relative benefits in each context of investing resources in agriculture versus other sectors is essential but largely lacking across the SSA region and more importantly in Nigeria.
The following points remain true about agriculture in Africa; it remains the primary source of livelihoods for many households in sub-Saharan Africa. Most of these households operate their own farms; relatively few people are employed as agricultural wage workers and farm sizes are extremely small in most African production settings, with almost all land holdings under 5 hectares. In the UK, average farm size is 54 hectares, and in the USA, its 169 hectares. With clear and apparent problems in the sector it is understandable that the sector takes up resources from a policy formulation perspective and within public discourse.
So, what is the way forward? Agriculture as private enterprise is profitable when conducted appropriately as is evident from some listed companies on the Nigerian stock exchange. The role of government should be restricted primarily to supporting and promoting private sector investment in Agriculture. Land tenor laws like; the land use act needs urgent revision to help facilitate easy land acquisition for agricultural purposes. More important is how the agricultural production interacts with other sectors of the economy. A concerted effort should be made to encourage industrial growth as this will drive demand for agricultural commodities as a source of inputs. In 60 years, there have been over fifteen different government schemes ranging from Operation Feed the Nation to the National Fadama project and several others in between, showing ineffectiveness of policy initiatives. These policies can be contrasted with the European common agricultural policy that was enacted in 1962 but has evolved along the way and remained coherent. The Nigerian government needs to admit that its agricultural policies need a thorough review and perhaps borrow a leaf from the “Don’t lose the plot” producers by taking a single problem and attempting to solve it. The focus for government agricultural policy should be how to grow private sector investment in agriculture and serve as an input provider for the industrial sector.
Dayo Oduwole

Oduwole is an Investment Banking Professional writing in from Lagos. He writes via: oladayo@cefmr.com

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