Agriculture

 Some countries improving but agricultural growth remains below 6% target and below economic growth. More needed on investment, resilience, policy reform and trade.

Key commitments

Africa:  African governments have committed to raise the share of their national budget allocated to agriculture to 10%, and through the Comprehensive Africa Agriculture Development Programme (CAADP) Framework have called for annual agricultural growth rates of 6%. They have committed to increase food and agricultural trade within Africa and harmonise fertiliser policies to reduce procurement costs. In 2009, the African Union (AU) acknowledged the CAADP as the overarching framework for agricultural development and investment.

Development partners: Development partners have made commitments to increase volumes and improve the quality of agricultural assistance. They have recognised the link between agricultural productivity and food security, and under the 2009 L’Aquila Food Security Initiative (AFSI) committed to mobilise US$20 billion over three years for agricultural development and food security (see also Topic 9). The G-20 Multi-Year Action Plan on Development adopted at Seoul commissioned work on food price volatility and responsible agricultural investment. The Cannes G-20 Summit reaffirmed the importance to agriculture of a distortion-free, open and transparent trading system, and endorsed an Action Plan on Food Price Volatility and Increasing Agricultural Production and Productivity.

What has been done to deliver on these commitments?

Africa: Progress towards the 10% Maputo target has not been even and monitoring is hindered by poor data. Available data suggests that the declining trend in agricultural expenditure was partially reversed in Africa as a whole after 2003, recovering to 6.4% in 2003-2009, nearly the same as in 1990-95, but still well below the target. For sub-Saharan Africa (SSA) the share was higher but continued to decline, from over 14% in 1990-95 to 9% in 2003-2009. However this conceals considerable regional variation, with West and East Africa above the 10% target and other regions below. At national level only 8 countries met or surpassed the target between 2006 and 2008. However, regional policies to foster agricultural growth, trade and food security have been established, linked to CAADP, and by April 2012 30 countries had signed CAADP Compacts, 23 had developed national investment plans and 3 had agreed financing plans and annual review mechanisms. ECOWAS and COMESA have moved to harmonise fertiliser regulatory frameworks and trade policy. Countries have made progress in reforming the legal and regulatory framework and eliminating tariffs and taxes (65% and 75% of countries did not have tariffs and taxes respectively on fertilisers in 2008). However Africa is under-investing in agricultural research and development: in 2008, SSA’s regional average government budget allocation to public agricultural research was 0.61% of agricultural GDP, well below the NEPAD target of at least 1%.

Development partners: Agricultural assistance (including forestry and fisheries) to Africa increased by over 9% between 2009 and 2010, and has increased from 4% of total assistance to Africa in 2002 (US$ 829 million) to 5.5% in 2010 (US$ 3.001 billion), a real-terms increase of 242%. Around half of the final AFSI pledges of US$ 22 billion had been disbursed by early 2012. The rest is on track to be delivered by the end of the AFSI period. Around US$6 billion represents new funding (see also Trade and diversification).

Following the inter-agency report to the G-20 in mid-2011 on proposed Principles for Responsible Agricultural Investment, the Committee on World Food Security launched a process of regional consultations to achieve endorsement by 2012. Following the Cannes Summit, an inter-agency report on improving global sustainable agricultural productivity growth was prepared with recommendations which will be discussed by the G-20. There have been important changes in OECD country agricultural policies. Total levels of support provided to agriculture reached an average of US$374 billion in 2008-10. The share provided in the most market distorting form (market price support plus inputs subsidies) has fallen from 90% to 59%. However, there is considerable scope for further reductions together with removal of more trade-distorting instruments.

What results have been achieved?

Growth: With the exception of two years, agricultural growth has been onsistently slower than the economy overall for the past decade. Growth levels have remained significantly below the 6% target: 3.5% for Africa as a whole over 2003-2010, and 3.1% for SSA over the same period. Only eight countries met or exceeded the target. Average growth performance has improved little over this period: two regions witnessed an improvement of over 1% in growth rates, while two regions experienced actual declines.
Productivity: Production increases have been heavily dependent on expansion of cultivated land. African yields per hectare for cereals are among the lowest in the world; they rose marginally from 1.13t/ha in 1980 to 1.42t/ha in 2008, compared to over 5 t/ha in high income countries. Average fertiliser consumption in most African countries has remained between 5kg/ha and 10 kg/ha since 1990, less than 10% of the world average and well below the Abuja 50 kg/ha target. Only four countries exceeded this target in 2008.
Access to land and environmental sustainability: Land under cultivation increased from around 180 million ha in 1989-91 to 220 million ha in 2007, but this has not kept pace with population growth over the period. Only 6% of arable land is irrigated and only 4 million ha have been brought under irrigation in the last 40 years (see also Topic 3). It has been estimated that as much as 70% of Africa’s cultivable land is uncultivated. International investors are leasing or purchasing large areas of land for biofuels, food crops and forestry development - between 2007 and 2011 deals covering a total of over 45 million ha were recorded.
Trade and diversification: Although some countries have diversified into high added-value products, most trade is in bulk agricultural commodities. Africa’s share of the global agricultural export market remains low and is concentrated in a small number of countries. SSA’s share of global trade in agricultural products has fallen from 3.4% in 2000-2001 to 3.0% in 2006-7. SSA is the only developing country region that has not regained the market share lost since the 1980s.

 What are the future priority actions?

(in addition to actions to address food security in Topic 9)

Africa
Accelerate CAADP implementation, including by:
• Increasing public investment, particularly in irrigation, rural infrastructure and research and development;
• Continuing policy and institutional reform, particularly to create a predictable policy framework that fosters responsible private investment, in particular in the leasing or purchasing of land by international investors;
• Accelerating efforts to improve agricultural productivity, with special attention to women and smallholders.

Development partners
• Intensify efforts to reduce trade-distorting subsidies, increase African producers’ access to markets and reduce or remove barriers to trade at national, regional and global levels (see also Trade and diversification);
• Deliver existing AFSI commitments and make new commitments, backed by detailed plans, to deliver sustained assistance beyond 2012;
• Promote responsible investment in agriculture in line with recognised international principles, and with special attention to women and smallholders.