Escalating food prices in 2007-2008, climate change and land grabbing have woken the world up to the extraordinary challenge of feeding 9 billion people by 2050. Indeed, following several world summits, policymakers are now convinced of the need for a significant increase in public investment in agriculture. Even the private sector is scaling up its investment in the sector (Financial Times, 27 January 2010). In Africa, an Alliance for the Green Revolution in Africa (AGRA), led by former UN Secretary General Kofi Annan, has taken root.
Has the pendulum swung back too far?
Is it really in every country's interest to raise its agricultural production? As long as food is tradable, global and household food security do not imply national food self-sufficiency. Economists at the International Growth Center (ICG) sponsored by DFID are warning against an 'Agriculture first' approach in sub-Saharan Africa (SSA). In their view, over emphasis on agriculture in general, and smallholder agriculture in particular, will not produce the required growth and poverty reduction in all but possibly landlocked SSA.
Whether agriculture can act as an engine of growth hinges critically on food being non-tradable. Rising agricultural productivity then translates into lower food prices, thereby increasing real incomes and demand for locally produced goods and services, and thus growth outside agriculture. Given increased market integration across and within countries, they very much doubt whether these traditional intersectoral growth linkages still hold.
According to this view, agricultural development in Africa is also likely to bypass most of the poorer smallholders. Economies of scale in processing, marketing and transport favour large scale farming. To promote growth and reduce poverty, governments are thus advised to focus attention elsewhere. In particular, the promotion of extractive industries is believed to hold much more promise for growth in mineral rich countries. And coastal Africa is better positioned to grow its way out of poverty through manufactured exports, the argument goes. When it comes to agriculture, a more sympathetic view of large-scale farming is called for.
What do the numbers say?
Have African food economies indeed become so open as to undermine agriculture's traditionally strong intersectoral linkages? On the contrary, the series of recent studies examining African food market integration during the 2000s confirms...