|Photo: Harvesting a cereal crop in Ethiopia (ILRI / Flickr)|
Economic development is not just about growth. It’s about transformation. Development should see changes in structures as countries move from being agrarian and rural to industrial and urban, while productivity should rise — especially for sectors such as agriculture that lag behind national averages. This has long been appreciated, but the ideas have come back into debates over African development with a vengeance in recent years. It is not for nothing that K Y Amoako called his highly active think tank the African Centre for Economic Transformation (ACET).
Africa is growing again, so much so that a new wave of Afro-optimism has emerged. But is Africa transforming? Too often behind the impressive growth the motors seem to be oil and mineral extraction, higher prices for farm exports, and property booms. It is far from clear that productivity is rising in ways that promise sustained growth, still less growth spread broadly that will deliver reductions in poverty.
The concerns were discussed last month in Nairobi at a meeting convened jointly by ACET and the International Food Policy Research Institute (IFPRI). A strong driver of growth and development is manufacturing, according to evidence (pdf) from OECD countries and emerging Asia. Manufacturing, it seems, is the sector where learning takes place and where labour productivity can rise rapidly. Indeed, factories in low income countries typically show faster growth in labour productivity than similar plants in richer countries with higher labour productivity. So productivity tends to converge in industry, whereas similar convergence is notably absent when economies as a whole are considered. Not for nothing, then, do influential thinkers like Dani Rodrik see manufacturing as the escalator that raises up economies in developing countries.
For Africa, the bad news is that investment in manufacturing has been low for decades and productivity may actually have fallen over the last few decades (pdf). This is not the place to discuss Africa’s travails with manufacturing, still less to rehearse the exaggerated pessimism that China might have blocked every other country’s chance of getting into assembly — although the Jeremiahs have to explain why China’s shoe factories are moving to Addis.
Transformation and agricultureSo what does this mean for Africa’s agriculture? It is easy to be seduced by the ladder of manufacturing, by dreams of structural change, so that serious consideration of agriculture gets ditched. Yes, it is true that both empirically and normatively agriculture will get smaller and less important with development — relative to other sectors, and smaller absolutely in employment — but that doesn’t mean that this will be achieved by ignoring farming. On the contrary, one of development’s great paradoxes is that the quickest way to get out of agriculture is to raise agricultural productivity. That this will almost certainly produce the most equitable and benign transformation — it remains the case that agricultural growth reduces poverty more than any other sector in most low income countries — is a massive bonus.
A longstanding misunderstanding is that smallholder agriculture — African agriculture is overwhelmingly carried out on small family farms — is marked by stagnation in yields per hectare and returns to labour, if not outright involution, as increasing numbers of farmers try to support themselves on ever-smaller patches of overworked soil so that productivity actually falls. This simply isn’t true. Not for agriculture: it is two decades since Martin & Mitra found that total factor productivity in most countries across the world grew faster in agriculture than in other sectors. Taking the partial measure of labour productivity —arguably the most important measure since it so closely relates to incomes and wages — productivity of farm labour has typically been faster in agriculture than in other sectors over the last half-century.
Source: Compiled from Table 2 of Christiaensen, Luc, Lionel Demery & and Jesper Kuhl, 2010, ‘The (Evolving) Role of Agriculture in Poverty Reduction. An Empirical Perspective’, Working Paper No. 2010/36, Helsinki: UNU Wider
So what do we know abou the growth of productivity in African agriculture in the last two decades? A lot less than we might, since the data are so sketchy. But to the extent that official statistics on agricultural output, area cultivated and the economically active population can be trusted — give or take some generous margins of error — productivity in African agriculture is rising, and by more than the graph above might suggest. Cereal yields have risen, albeit from low levels. Here is what the numbers show for the ten New Alliance countries, plus the main (UN) regions and the continent as a whole.
Source: Compiled from FAOSTAT data
Over the last two decades, cereals yields are up by around 30% for the continent as a whole and for most regions: moreover, in half the New Alliance countries, the gains have been 50% or more.
Similar increases have been seen for labour productivity:
Source: Compiled from FAOSTAT data
So what? Implications for future studyWe know too little about what drives such increases, where they take place, for which crops, in which regions, and for which farmers. The national stats, still less the continental aggregates, hide as much as they reveal. We know from studies of districts and villages that local booms in production take place. What we don’t know is how generalised these are, how much they are either islands of success in an otherwise little-changing sea, or harbingers of dynamism that will transmit increasingly across the countryside.
So we need to be able to track such change better. Studies are constantly made, but the challenge is draw their insights together in narratives that will be both more reliable and influential with policy-makers.
If our understanding of change on the farm is sketchy, then all the more so for changes in supply chains. What do we know of labour productivity in trading, processing, transport and storage? Next to nothing, other than case studies and anecdotal accounts that suggest some very large changes in the few chains where there has been some observation.
Getting better understanding is shackled by the enormous diversity seen across the continent, and indeed, within any given country. Geographical diversity has long been appreciated, with distinctions typically made by the quality and abundance of land and water, and physical access to cities and ports. Returning to debates is an awareness of the diversity within communities of small farmers; where great differences can be seen across smallholders in their circumstances — above all the land and water they command, and the labour, skills and capital they can deploy.
Geographical and social distinctions make it that much more difficult to build a sharp narrative about agricultural development; but the variations do at least help explain why experiences differ so markedly.
We need to understand these changes better, and their development implications, if in the debates over transformation, smallholder agriculture is not be marginalised. It may not take that much to accelerate higher productivity on small farms. If in the last two decades, some smallholders have made progress in the teeth of discouraging rural investment climates, under-investment in rural public goods, and low farm prices; then what might be achieved in an environment that is more supportive and with better prices for output? Not only will that deliver direct development benefits, but also it will make possible the long-awaited structural transformations to an urban and industrial Africa.