Megatrends Driving Agricultural Transformation in Africa
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1 Megatrends Driving Agricultural Transformation in Africa Challenges and Opportunities T. S. Jayne, Milu Muyanga, Felix Kwame Yeboah, Ayala Wineman, Lulama Traub Presentation at USAID/Kenya Nairobi, Kenya 12 September, 2017
2 Format 1. Five megatrends affecting agri-food systems in the region 2. Conclusions and policy implications 3. Reflections on partnership
3 Format 1. Five megatrends affecting agri-food systems in the region
4 Five inter-related trends 4
5 Five inter-related trends Rapid population growth 5
6 Five inter-related trends Rapid population growth Rapid growth in food demand 6
7 Five inter-related trends Rapid population growth Labor force exit from farming Rapid growth in food demand 7
8 Five inter-related trends Rise of investor farmers / changing farm sizes Rapid population growth Labor force exit from farming Rapid growth in food demand 8
9 Five inter-related trends Rising land scarcity Rise of investor farmers / changing farm sizes Rapid population growth Labor force exit from farming Rapid growth in food demand 9
10 Five inter-related trends Rising land scarcity Rise of investor farmers / changing farm and market structure Rapid population growth Labor force exit from farming Rapid growth in food demand 10
11 Africa s rapid population growth 12 Billions of people Sub-Saharan Africa Rest of world
12 Sub-Saharan Africa: only region of world where rural population continues to rise past Total Rural Population (millions) China India 2015 Sub-Saharan Africa Other South Asia South-East Asia Source: UN
13 Five inter-related trends Rising land scarcity Rise of investor farmers / changing farm and market structure Rapid population growth Labor force exit from farming Rapid growth in food demand 13
14 SSA Total Food Imports from 7 to 40 billion USD ( ) (intra SSA trade from 1 to 10 billion USD) USD Billions SSA Imports from non-ssa SSA's imports from SSA
15 Source: authors derivation from TradeMap 2017 and FAOSTAT,
16 Net cereal exports, Sub-Saharan Africa Sub-saharan Africa Year MAIZE WHEAT RICE TOTAL Source: FAOSTAT, 2016
17 Net cereal exports, East Africa Region East Africa Year Maize Wheat Rice Total NX Source: FAOSTAT, 2016
18 Relationship between % of rural population on degrading agricultural land and pop density Roughly 28% of rural population in SSA live on degrading agricultural land. 43 million additional people living on DAL between
19 Five inter-related trends Rising land scarcity Rise of investor farmers / changing farm and market structure Rapid population growth Labor force exit from farming Rapid growth in food demand 19
20 Employment trends
21 Changes in the share of total jobs in farming, non-farm and off-farm agrifood systems, among the working age population (15 64 years) Farming 80.0 % of total FTE jobs Ghana ( ) Nigeria ( ) Rwanda ( ) Tanzania ( ) Uganda ( ) Zambia ( ) Base year End year Non-farm outside Agrifood system 80.0 % of total FTE jobs Ghana ( ) Nigeria ( ) Rwanda ( ) Tanzania ( ) Uganda ( ) Zambia ( ) Base year End year Off-farm within Agrifood System 80.0 % of total FTE jobs Ghana ( ) Nigeria ( ) Rwanda ( ) Base year Tanzania ( ) End year Uganda ( ) Zambia ( ) 21
22 Five inter-related trends Rising land scarcity Rise of investor farmers / changing farm and market structure Rapid population growth Labor force exit from farming Rapid growth in food demand 22
23 Changes in farm structure in Kenya ( ) Farm size category Number of farms % growth in number of farms % of total cultivated area ha 1,692,343 2,640, ha 525, , ha 93,871 17, over 10 ha 92,498 19, *** Total 2,404,075 3,008, Source: Kenya National Bureau of Statistics
24 Changes in farm structure in Tanzania ( ), National Panel Surveys Number of farms (% of total) % growth in number of farms between initial and latest year % of total operated land on farms between ha Farm size ha 5,454,961 (92.8) 6,151,035 (91.4) ha 300,511 (5.1) 406,947 (6.0) ha 77,668 (1.3) 109,960 (1.6) ha 45,700 (0.7) 64,588 (0.9) Total 5,878,840 (100%) 6,732,530 (100%) Share of farmland on farms ha from 38% to 44% in 4 years
25 Changes in farm structure in Ghana ( ) Ghana Number of farms % growth in number of farms % of total cultivated area ha 1,458,540 1,582, ha 578, , ha 116, , ha 38, , ha 18,980 37, >100 ha -- 1, Total 2,211,900 3,057, % Source: Ghana GLSS Surveys, 1992, 2013, Jayne et al., 2016, using data from Ghana GLSS Surveys I and IV.
26 Changes in farm structure in Zambia ( ) Farm size category Number of farms % growth in number of farms % of total cultivated area ha 638, , ha 159, , ha 20, , ha 2,352 53, % ha -- 13,839 na Total 820,341 1,399, Source: Zambia MAL Crop Forecast Surveys, 2001 and 2012
27 Characteristics of emergent farmers
28 Rise of the medium-scale farmers
29 Rise of the medium-scale farmers
30 Rise of the medium-scale farmers
31 Type 1: Urban-based investor farmer Mode of entry to medium-scale farming status: acquire farm using non-farm income Zambia Kenya (n=164) (n=180) % of cases % men Year of birth Years of education of head Have held a job other than farmer (%) Formerly /currently employed by the public sector (%) Current landholding size (ha) % of land currently under cultivation Decade when land was acquired 1969 or earlier or later Source: MSU, UP, and ReNAPRI Retrospective Life History Surveys, 2015
32 Type 2: Rural-based elite farmer Mode of entry into medium-scale farming status: expansion of rural elite Zambia Kenya (n=118) (n=120) % of cases % men Year of birth Years of education of head Have held a job other than as a farmer (%) Landholding size when operator started own household (ha) Current landholding size (ha) % of land currently under cultivation Decade when land was acquired 1969 or earlier or later Source: MSU, UP, and ReNAPRI Retrospective Life History Surveys, 2015
33 % of National Landholdings held by Urban Households 35% 32.7% 30% 26.8% 25% 22.0% 22.0% 20% 18.3% 16.8% 15% 10% 11.2% 10.9% 11.8% 5% 0% / /2014 Ghana Kenya Malawi Rwanda Tanzania Zambia Source: Demographic and Health Surveys, various years between
34 % of National Landholdings held by Urban Households 35% 32.7% 30% 26.8% 25% 22.0% 22.0% 20% 18.3% 16.8% 15% 10% 11.2% 10.9% 11.8% 5% 0% / Source: 2013/2014 DHS Ghana Kenya Malawi Rwanda Tanzania Zambia
35 GINI coefficients in farm landholding Period Movement in Gini coefficient: Ghana (cult. area) 1992 à à 0.70 Kenya (cult. area) 1994 à à 0.55 Tanzania (landholdings) 2008 à à 0.69 Zambia (landholding) 2001 à à 0.49 Source: Jayne et al (JIA) 35
36 Nominal value of tractor imports to Sub-Saharan Africa (excluding South Africa), $600,000 $500,000 Nominal value of imports in 000 US$ $400,000 $300,000 $200,000 $100,000 $ Sub-Saharan Africa Southern Africa North Eastern Africa Western Africa Linear (Sub-Saharan Africa) Source: vanderwesthuisen, forthcoming 36
37 Nominal value of tractor imports in selective Sub-Saharan African countries ( ) $100,000 $90,000 Value of Imports: US$ Thousand $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $ Ghana Nigeria Kenya Tanzania Zambia Linear (Ghana) Linear (Nigeria) Linear (Kenya) Linear (Tanzania) Linear (Zambia) Source: vanderwesthuisen, forthcoming, based on Trade Map data 37
38 Five inter-related trends Rising land scarcity Rise of investor farmers / changing farm and market structure Rapid population growth Labor force exit from farming Rapid growth in food demand 38
39 Output and factor price indices, northern Tanzania Price index (2008/9=100) Agricultural wage (TSH/day) Land rental rate (TSH/ha) Maize (TSH/kg) /9 2010/ /13 39
40 Output and factor price indices, western Tanzania 300 Adjusted price (2008/9=100) Agricultural wage (TSH/day) Land rental rate (TSH/ha) Maize (TSH/kg) /9 2010/ /13 40
41 Output and factor price indices, rural Malawi, Price index (2004=100) Rental rate (MWK/ha) Agricultural wage (MWK/day) MWK/kg urea MWK/kg maize Sources: IHS for land and wages; FEWSNET for urea and maize
42 Five inter-related trends Rising land scarcity Rise of investor farmers / changing farm and market structure Rapid population growth Labor force exit from farming Rapid growth in food demand 42
43 Conclusions 1. Performance of agriculture will continue to exert major influence on job growth and income growth in overall economy 2. Agricultural productivity growth will be the cornerstone of any comprehensive youth livelihoods strategy: Ag productivity growth influences pace of labor force exit out of farming Labor productivity in broader economy
44 Share of labor force in farming is declining most rapidly where agricultural productivity growth is highest Annual % change in share of labor force engaged in farming Nigeria Kenya Uganda Tanzania Ghana Mali Malawi Zambia Average annual TFP growth in agriculture(%) Trend line Rwanda Source: Yeboah and Jayne, 2016
45 Non-farm labor productivity growth linked to lagged agricultural productivity growth Av. annual labor productivity growth in non-agriculture (%) Zambia Zambia1 Bostwana Nigeria1 Mauritius Nigeria Mauritius1 South Africa1 Ghana1 South Africa Ethiopia Ghana Kenya Kenya1 Senegal1 Senegal Bostwana1 Ethiopia1 Tanzania1 Tanzania Malawi Malawi Average annual agricultural total factor productivity growth (%) Trend line
46 Conclusions (cont.) 3. Important changes in the distribution of farm sizes Decline in share of farmland under 5 hectare farms Rise of medium-scale farms Rising inequality of farmland distribution Growing land scarcity driven by middle/high income urban people seeking to acquire land not just for farming speculation, housing/properties, farming Rise of new towns converting formerly remote land into valued property
47 Conclusions (cont.) 3. Ag sector policies must anticipate and respond to rising land prices, decline of inheritance, market as increasingly important mode of acquiring land Resources needed for youth to succeed in farming (access to land, finance) Distinguish between trying to keep youth in agriculture vs. giving youth viable choices
48 Bottom line conclusions Economic transformation in SSA will require: Enlightened policies à evidence à research Strengthen educational system Strengthen African public institutions, including agricultural policy institutes Process matters Governments hold the key!
49 Thank You 49
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