Farmers Leading the Way

Focusing on agricultural growth, particularly that of smallholder farmers, can help countries in Africa south of the Sahara achieve broader economic and development objectives, including poverty reduction, says a new open-access book prepared by the United Nations University (UNU-WIDER) and published by Oxford Press.

Growth and Poverty in Sub-Saharan Africa presents case studies from 16 countries in SSA, accounting for nearly three-quarters of the region’s population. The authors broke the countries into groups according to the experiences of the countries.  The first group (those that experienced relatively rapid economic growth and corresponding poverty reduction) included Ethiopia, Ghana, Malawi, Rwanda, and Uganda.  The second group (those that experienced relatively rapid economic growth but limited poverty reduction) is comprised of Burkina Faso, Mozambique, Nigeria, Tanzania, and Zambia. The authors found that a country’s level of successful agricultural growth plays a key role in explaining its improvements (or lack thereof) in both economic growth and welfare gains.

The case of Ethiopia, which is presented in Chapter 3, provides a strong example of the first group of countries. The chapter focuses particularly on the Ethiopian government’s strong emphasis on and investment in agricultural growth and rural infrastructure. The chapter analyzes poverty in the country between 2000 and 2011, using nationally representative household consumption and expenditure surveys. During this period, Ethiopia was plagued with persistent weather shocks, high inflation rates, and a post-election political crisis in 2005; however, the period also witnessed fundamental changes to the country’s economic structure, led by the government’s strategy of Agricultural Development-Led Industrialization (ADLI).

Part of this strategy included investment in rural infrastructure like roads and communications technology. The chapter finds that the length of roads in the country more than doubled between 1993 and 2008, from 19,000km to 44,300km. This helped better link markets throughout the country, reducing travel times (and thus transportation costs) between rural wholesale markets and the main wholesale market in Addis Ababa by an average of 20 percent. Similar growth in mobile phone usage also provided better linkages between farmers and markets. Mobile phone subscriptions exploded between 2003 and 2011, from 50,000 to more than 10 million. This improved communication capacity has given farmers better access to market information and reduced marketing margins, according to the authors.

While overall use of modern agricultural inputs in Ethiopia remains low compared to the global average, the authors do find evidence that modern input use, through distributions from government-led agricultural cooperatives, increased during the study period. Improved varieties of maize and teff seeds were becoming rapidly adopted by 2011, and chemical fertilizer use grew to about 650,000 tons in 2012. The amount of fertilized land dedicated to cereals also doubled during the study period.

Looking at poverty during this same decade (2000-2011), the authors find that the national poverty rate fell significantly from 51.9 percent in 2000 to 44.5 percent in 2005 and finally to 30 percent in 2011. Monetary poverty rates, defined here as the percent of the population whose consumption is below a “basic needs” poverty line, roughly halved from about 50 percent in 2000 to 25 percent in 2011. The authors found that infant mortality rates, child stunting rates, primary school enrollment, and access to electricity and safe water and sanitation facilities also fell during the study period.

The authors point out that Ethiopia remains a poor country with further work to be done; in particular, poverty remains higher in rural areas at 53.7 percent compared to urban areas (40.8 percent). Despite this persistent poverty, however, the Ethiopian government’s emphasis on agricultural growth, particularly for small rural farmers, has led to real, rapid gains in overall development in recent years.

In Chapter 10, the authors present a contrasting scenario, looking at economic growth and poverty reduction in Burkina Faso. They find that while Burkina Faso has experienced fairly significant economic growth over the past two decades, poverty rates have generally remained the same. Indeed, Burkina Faso’s poverty growth elasticity (the rate by which poverty declines for each percent of GDP per capita growth) is only -0.54.

The chapter also finds that the main sources of the country’s recent economic growth – mass migration from the rural agricultural sector to low-wage informal urban sectors and large expansion of cultivated land leading to improvements in food and cotton production – are largely unsustainable. Land is becoming scarcer, and much of the land is becoming infertile due to the overuse of fertilizers in cotton production. As the country’s population continues to grow, an additional 0.3 to 0.5 million people will enter the work force each year. This will stretch informal urban sectors beyond what they can employ, but there has so far been little progress made in increasing industrialization or creating jobs in more formal sectors to absorb the growing labor force.

Finally, agricultural productivity remains low in Burkina Faso, despite expansion of cropped land. Unlike in Ethiopia, the government has not placed emphasis on increasing modernization and the adoption of new technologies, such as irrigation, machinery, and improved seeds. While fertilizer use is high in the cotton sector, that use has been largely improper and unsustainable, as previously mentioned; fertilizer use for other crops remains low.

Burkina Faso’s stagnant agricultural productivity, limits on further land expansion, and massive population growth have caused a steady rise in food prices; increased food prices mean lower purchasing power for a majority of the population, which prevents poverty reduction and can increase non-monetary development challenges like child malnutrition and mortality rates. The authors find that about 6.5 million people in Burkina Faso live below the poverty line today, about 1 million more than in 1994.

These two examples support the book’s message that agriculture-led growth is key to overall economic growth and development in SSA. However, the authors caution that such agricultural growth must be sustainable and properly designed, as poorly designed and targeted policies can waste substantial resources and further hurt the chances for poverty reduction. In addition, policies must take into account each country’s unique societal, economic, political, and agro-ecological conditions, as an intervention that works in one place may not work in another.