Policy Partnership for African Agriculture

Akin Adesina

Vice President

AGRA

Africa’s food crisis: root cause is low productivity in the staple food crop sector

Source: FAOSTAT (2001)

1961 1966 1971 1976 1981 1986 1991 1996 2001

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1

2

3

4

5

6

China S.Asia SS Africa

Cere

al Y

ield

s t

/ha

1. African governments commit to the CAADP goal to attain 6% agricultural growth

2. Governments pledge 10% of national budgets to agriculture

3. A structural solution is needed to raise agricultural productivity growth in the staple food crop sector

4. African Heads of State call for an African Green Revolution

Africa’s Plan to Turn the Food Crisis Around: Home Grown Solutions

The Sahelian DrylandsArea: 1.2m km2

Population: 38m

Millet & sorghum belt: 23m ha

Humid Forest ZoneArea: 5.8m km2

Population: 168m

Cassava belt: 18m ha

NERICA potential: 2m ha

Moist Savanna and

Woodland ZonesArea: 4.4m km2

Population: 157m

Maize belt: 32m ha

CA potential: 7m ha

Africa is very different from Asia: A uniquely African Green Revolution is needed

Advances in crop improvement could trigger the Africa Green Revolution….BUT

1995-97 2002-04

Source: IFDC

Soil nutrient mining is undermining agricultural productivity growth!

AGRA supports the CAADP agenda: a partnership to help Africa feed itself

An Africa-led dynamic partnership working across Africa to help millions of small-scale farming families lift themselves out of poverty and hunger

l l l l l l l l

2007 2008 2009 2010 2011 2012 2013 2014

Seeds Program ($150 m)

Investm

ents

AGRA brings solutions-driven approaches that support CAADP growth target in Africa

Soil Health ($180m)

Market Access

Policy Program

Water Resources

Agricultural Extension

Green Revolution will help achieve CAADP goal in Africa

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• Limited use of GR technologies

• Limited level of public investments

• African farmers are very poor

• Structural adjustment has failed

• Markets alone are not enough

• Need stronger public sector role

• 2003: Maputo Declaration

• 2004: Kofi Annan calls for a unique African Green Revolution

• 2006: AGRA launched

• 2006: Paris Declaration

• 2007/8: WDR 2008 focus on agriculture

Achieving the African green revolution will require comprehensive investments in technology, infrastructure, markets and policy

While challenges persist.. ...there is positive trends afoot

Policies have often failed:

Challenges in the past

• Lack of country ownership of policy agenda

• Weak policy analytical capacity at country levels

• Poorly financed national policy institutions

• Supply-driven policy work - low demand by policy makers

• Lack of coordination on policy efforts

What is needed now

• Build local capacity for evidence-based policy development

• Strengthen policy centers of excellence

• National

• Regional

• Stimulate demand-driven policy research

• Inclusive policy dialogue processes

• Move from policy research to policy action

• Strong sector policies to stimulate rapid agricultural growth and reduce food insecurity

• A framework for comprehensive policy support to achieve CAADP pillar goals and the African Green revolution

New opportunities to coordinate policy

support for agriculture

• CAADP endorsement by African governments• integrative framework for African agricultural growth

• Paris declaration/Accra HL meeting• country ownership

• Need for donor harmonization

• Food Crisis slows economic growth• need appropriate policy responses

• Green Revolution for Africa (AGRA)• need for proactive policies in support of farmers

• Regional trade critical for addressing growth• Need for stronger regional policies to spur agricultural trade

How to achieve policy alignment

• Support countries to develop National Green Revolution (GR) strategies and align with CAADP

• Support National Policy Hubs (NPH) to:• develop enabling policy frameworks for achieving green revolution

• Provide policy analytical support for CAADP roundtable processes

• lead national agricultural expenditure reviews to meet GR-CAADP goals

• Build data and statistical systems for evidence-based policies

• NPHs become institutionalized national platforms for policy initiatives in support of the GR/CAADP agenda

• Provide strategic support for ReSAKSS and link these with the National Policy Hubs

• Develop comprehensive Country Policy Engagement Frameworks (CPEF) to promote CAADP and GR goals

• Link Macro-economic policy think tanks and NPHs• Coordinated financing by donors

Policy strategies to achieve a green revolution

“What African agriculture needs today is a policy revolution” – Kofi A.

Annan, Dublin 2008

Green Revolution

in Africa

1. Country-specific GR strategies

2. New policies to stimulate GR technology

uptake

3. Strengthen policy analytical

capabilities

4. New institutional pathways to policy development and implementation

5. Mapping of Bread Basket

Areas

100M farmers removed from poverty through

greater access to GR technologies in 5 years 14

1. Development of coherent and comprehensive country-specific GR strategies is critical to spark national GR

The old model The new model

Donor priorities

Agriculture

Ministry Plans

No Green

Revolution

Country-driven,

specific strategy

Government priorities

and expenditure

Stakeholder

alignment

Green Revolution

•Creates real local ownership

•Mobilizes public investment

•Aligns donors priorities

•Creates framework to assess progress

Paris Declaration

15

Roles for National Policy Hubs

• Identify national breadbasket areas where GR can be achieved with CAADP investment targets

Link to ReSAKSS

• Create a critical mass of public good investments to launch the GR at country levels

Link to ReSAKSS

• Develop national data systems to support evidence-based policy development in support of the GR

Link to ReSAKSS

• Identify and advocate market and regional trade policies to expand markets and growth

Link to ReSAKSS

• Identify and advocate for input policies to rapidly expand access of farmers to GR technologies

• Develop national-level M&E systems for tracking investments for GR Link to ReSAKSS

2. Immediate support is required to develop new policies that stimulate uptake of GR approaches and technologies

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Examples of Challenges Target positive results

• Accelerate uptake of technologies

• Expanded benefits to women farmers

• Expanded food security and higher incomes

•Need multiple policy entry points

•Need country-specific policy interventions

• Demand constraints• Supply constraints

Seeds and Fertilizer

• Systems biased against women• Under-developed land markets

Land and Property Rights

• Weather and market risks • Correlated risk of default

Risk Management

• Limited lending to agriculture• Limited access to finance for

the value chain actors

Credit and Finance

• Poorly developed markets• Limited value addition

Markets and Trade Policy

3. Strengthening policy analytical capacity in target countries is important to sustain a local enabling environment

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Current situation

•Limited capacity to develop analyses and adjust policies accordingly

•Over-reliance on external advisors

•Reduced ability to push back on donor driven interests

•Limited local ownership of the policy process

Goals•Create local capacity to address current and emerging policy challenges

•Provide platform for evidence-based policy analysis and decision making

•Provide credible local entry point for engaging policymakers on GR

4. Development of new institutional pathways to policy development and implementation

For a Green Revolution to occur, multiple

stakeholders must be aligned in intention and action

Improve dialogue

Mobilize support needed for investment

Develop pro-poor policies

Government

Donors

Private sectorPolicy

Analysts

Farmers

5. Bread Basket Areas (BBAs) are high priority targets for sparkingGR at country and regional levels

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Identify high potential BBAs

within and across countries

Articulate investment levels necessary

to tap the potential of BBAs

Define gap in investments and a

plan on how it can be closed

Comprehensive

GR investment and

delivery strategies

at national levels

Trigger new

investments

in low

potential

areas for

equity

Policy Revolution: smart subsidies and public goods investments are needed to jump start the African Green

Revolution to achieve the CAADP goal

Time

Share of

spend

Subsidies

Public and Private

Investment

“Poverty will not be a national endowment of Malawi. We must feed ourselves. I will not suffer the indignity of begging for food”

His Excellency Dr Bingu wa Mutharika, President of Malawi,

explaining his country’s farmer support programs at an

international forum in Oslo

Malawi’s success with home-grown policies offers new opportunity

How are these strategies made operational?

1. Country

GR

strategies

2. New policy

development

3. Develop

policy

analytical

capability

4. New

institutional

pathways

5. BBAs

A. Creation of in-

country Policy Hubs

B. Expanding Post-

Graduate training

C. Innovative

financing to unlock

new capital for Ag

D. National and

regional GR Policy

Forums

E. Commissioning

policy studies

No/Limited role

Partial/Potential role

Core role

A. Creation of in-country policy hubs

Role of the hubs

• Support implementation of the national GR strategy and policy framework

• Advocate for evidence-based policy improvements

• Provide core research support to Government and stakeholders

• Align expenditure and investment towards critical GR needs

Location considerations

• Determine on a country by country basis via comprehensive study of options.

• Options include:− Independent unit

within Government (typically Ministries of Finance and Agriculture)

− Embedded within a existing institution

− Create a new entity where necessary

Required resources

General Staffing• Director•Program Officers

In-country advisory board to ensure connection at highest levels in Government and industry.

B. Expand Training of the Next Generation of Policy Analysts in Africa

Scale up Masters’ Program in Agricultural and Applied Economics for Africa (CMAAE)

Current situation

•Launched program in East and Southern Africa

•Implemented in 16 public universities in 12 countries

•Goal: train 400 + policy analysts in ESA

•Cost-effective and world-class training in Africa

•Great demand now to expand to West and Central Africa

Specific goal

Develop applied economic graduates with strong skills in policy analysis and policy implementation across Africa

Broad goals

•Strengthen local policy making environment across the continent

•Build capacity for evidence-based policy research and analysis

•Promote agricultural development

C. Africa needs financing support to achieve CAADP goal

•Need to leverage domestic financial markets to work for the GR

•Existing AGRA initiatives on unlocking private financing are promising

– Equity Bank in Kenya– Standard Bank in 4 target countries

Current challenge Potential solutions

Figure 1: Agriculture, Rural Development, and Total ARD ODA: Africa 1974 -2005

(Millions of 2005 Constant $US)

0

1000

2000

3000

4000

5000

6000

1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004

Years 1974 - 2005

Millio

ns $

US

ARD Total

Agriculture

Rural Development

• Overall ODA for agriculture has decreased in the last decade

Agriculture, rural development and total

ARD ODA for Africa, 1974-2005

• Global Fund to scale up public financing for GR at country levels

• Partnerships with Governments to scale up innovative financing for GR from commercial banks

Required agricultural growth and expenditure

to meet MDG 1 in African

• Agricultural growth rates• 7.5% - 8.5%

• Agricultural expenditure growth rates• 21% - 24%

• Annual agriculture expenditures• $ 32 Billion - $ 39 billion

Source: Fan et al., 2008.

• Excess liquidity exists in financial markets

• Need to reduce risk of lending to agriculture

• Loan guarantees with commercial banks

• Successes in Kenya and Tanzania

– Kenya: $5 million loan guarantee leverages $50 million from the Equity Bank

– AGRA working with partners to launch a $200 million facility for 4 African countries

AGRA launches innovative financing models to leverage commercial banks

D. Facilitate national and regional GR policy forums

• Rally in-country stakeholders to develop and execute a common GR strategy

• Focus on the critical bottlenecks within countries

• Occur every 6 months

National roundtable discussions

• Regional forums for senior Government officials (PS, Chief Economist of Ag etc.)

• Opportunity to engage with peers to share GR strategies, policies and experiences

• Occur annually

Inter-governmental forums

• Hosted by respective regional economic institutions (e.g., COMESA, SADC, ECOWAS, ECA, NEPAD/CAADP)

• Focus on regional policy and trade issues

• Occur every 6 months

Regional economic forums

31

E. Policy studies to inform evidence-based policy development and implementation at national levels

Need strong, Africa-relevant case-studies to inform policy dialogue

Examples:

• Seed policies and harmonization

• Fertilizer policy best-practices

• Land policy best practices

• National public expenditure reviews/investment strategies

• Food security policies

• Market and trade policies

•Policies are not informed by robust understanding of best practices

•Paucity of data limits development of evidence-based policies by analysts

•Governments are under pressure to implement policies without sound analysis of alternative options

Current situation

Asia green revolution was triggered by global financing:

African agriculture needs a Global Fund to succeed

Policy Partnership for African Agriculture

• Move towards an African Consensus on the policy agenda

• National policy institutions lead the policy agenda

• GR policy work will be aligned with CAADP goals and targets

• Stronger and more analytically-driven policy inputs into the CAADP roundtable processes

• Comprehensive support for building a coherent “policy ecosystem” at national and regional levels

• Strong policy support for Regional Econ. Communities

• Strong partnership between AGRA, NEPAD-CAADP, World Bank, IFPRI and others partners at national levels

• Coherent and comprehensive framework for policy support to Africa

AGRA-NEPAD-IFPRI-WB

Policy Partnership for African Agriculture:

The time is now!