africa’s unfolding agri-food system transformation...7 unmistakable signs of agri-food system...

T.S.JayneandHolgerKray

WorldBankSeniorLeadershipTechnicalMeeting25January,2018

Paris,France

AFRICA’SUNFOLDINGAGRI-FOODSYSTEMTRANSFORMATION

7UNMISTAKABLESIGNSOFAGRI-FOODSYSTEMTRANSFORMATIONINSSA

1. Majorgrowthinpercapitaincomes

2

• 35%growthininflation-adjustedrealp.c.incomesinSSA,2000-2014

– Doubling inmanycountries

• Povertyratesfallingfortheregion

– %ofpeoplelivingonlessthan$1.90adaydeclinedfrom54%in

1990to41%in2013(Barrettetal.,2017)

3

RISINGREALINCOMES

7UNMISTAKABLESIGNSOFAGRI-FOODSYSTEMTRANSFORMATIONINSSA

1. Majorgrowthinpercapitaincomes

2. Impressiveagriculturalgrowthrates

4

Annualinflation-adjustedagriculturalgrowthrates,2000-2016:

• Sub-SaharanAfrica: +4.62%

• LatinAmerica: +2.49%

• EastAsia: +3.07%

• SouthAsia: +2.96%

• World: +2.75%

5

IMPRESSIVEAGRICULTURALGROWTH

AGRICULTURALVALUEADDEDANNUALGROWTHRATES2000-2016(constantlocalcurrencyunits)

6Source: World Development Indicators, 2017

%growthra

te

7Source:IFADRuralDevelopmentReport,2016;WorldDevelopmentIndicatorsdatabase,2016.

RELATIONSHIPBETWEENAGRICULTURALGROWTHANDPOVERTYREDUCTION

7UNMISTAKABLESIGNSOFAGRI-FOODSYSTEMTRANSFORMATIONINSSA

1. Majorgrowthinpercapitaincomes

2. Impressiveagriculturalgrowthrates

3. RiseofcommercializedAfricaninvestorfarmers

8

Farmsize Numberoffarms(%oftotal)%growthin

numberoffarmsbetweeninitialand

latestyear

%oftotaloperatedlandonfarmsbetween0-100

ha

2008 2012 2008 2012

0– 5ha 5,454,961(92.8) 6,151,035(91.4) 12.8 62.4 56.3

5– 10ha 300,511(5.1) 406,947(6.0) 35.4 15.9 18.0

10– 20ha 77,668(1.3) 109,960(1.6) 41.6 7.9 9.7

20– 100ha 45,700(0.7) 64,588(0.9) 41.3 13.8 16.0

Total 5,878,840(100%) 6,732,530(100%) 14.5 100.0 100.0

- 6.1%

+6.1%

CHANGESINFARMSTRUCTUREINTANZANIA(2008-2012)LSMS/NATIONALPANELSURVEYS

Source:GhanaGLSSSurveys,1992,2013

GhanaNumberoffarms %growthinnumber

offarms %oftotalcultivatedarea

1992 2013 1992 2013

0-2ha 1,458,540 1,582,034 8.5 25.1 14.2

2-5ha 578,890 998,651 72.5 35.6 31.3

5-10ha 116,800 320,411 174.3 17.2 22.8

10-20ha 38,690 117,722 204.3 11.0 16.1

20-100ha 18,980 37,421 97.2 11.1 12.2

>100ha -- 1,740 - -- 3.5

Total 2,211,900 3,057,978 38.3 100 100

51%oftotalfarm-land

CHANGESINFARMSTRUCTUREINGHANA(1992-2013)

11Source:NPS2009,2011,2013,2015

MEDIUMSCALEFARMS’SHAREOFTOTALCROPVALUEINTANZANIA–14%TO30%IN6YEARS

7UNMISTAKABLESIGNSOFAGRI-FOODSYSTEMTRANSFORMATIONINSSA

1. Majorgrowthinpercapitaincomes

2. Impressiveagriculturalgrowthrates

3. RiseofcommercializedAfricaninvestorfarmers

4. RapidinvestmentinagriculturalvaluechainsbyAfricanentrepreneurs

12

• 800% increase in the volumes and value of food marketed through

rural-to-urban value chains since 2000 (Tschirley et al, 2017)

• Underlying drivers:

– rapidly rising urban demand

– high global food prices

– agricultural sectoral reforms of 1990s

13

RAPIDINVESTMENTINAGRICULTURALVALUECHAINSBYAFRICANENTREPRENEURS

7UNMISTAKABLESIGNSOFAGRI-FOODSYSTEMTRANSFORMATIONINSSA

1. Majorgrowthinpercapitaincomes

2. Impressiveagriculturalgrowthrates

3. RiseofcommercializedAfricaninvestorfarmers

4. RapidinvestmentinagriculturalvaluechainsbyAfricanentrepreneurs

5. Diversificationofthelaborforceintooff-farmactivities

14

RAPIDDECLINEINSHAREOFLABORFORCEINFARMING(INFULL-TIMEEQUVALENTS)

Source:Yeboah andJayne(2018)

Source:Yeboah andJayne(2018)

FARMINGISTHESINGLELARGESTEMPLOYERINMOSTCOUNTRIESDESPITEDECLININGJOBSHARE

Source:YeboahandJayne(2018)

MAJORITYOFOFF-FARMAGRI-FOODSYSTEMJOBSINCOMMERCE,MUCHLESSINAGRO-PROCESSING

7UNMISTAKABLESIGNSOFAGRI-FOODSYSTEMTRANSFORMATIONINSSA

1. Majorgrowthinpercapitaincomes

2. Impressiveagriculturalgrowthrates

3. RiseofcommercializedAfricaninvestorfarmers

4. RapidinvestmentinagriculturalvaluechainsbyAfricanentrepreneurs

5. Diversificationofthelaborforceintooff-farmactivities

6. Greatervibrancyofagriculturalfactorsmarkets

18

Inherited 33.17%

Gifted 10.33%

Purchased 29.63%

Borrowed 11.09%

Rented 9.63%

Other(squatting/clearedland/allocated) 6.16%

Observations 4,291

Inherited/gifted38.34%

Purchased36.46%

Borrowed6.90%

Rented7.00%

Othermodeofacquisition11.30%

PERCENTOFTOTALFARMLANDAREA

Source:LSMS/NationalPanelSurvey2014/15

PERCENTOFPLOTS

19

MODEOFACQUISITIONOFALLFARMPLOTSINTANZANIA

20

Source:VanderWesthuisenetal,2018,basedonTradeMapdatabase

NOMINALVALUEOFTRACTORIMPORTSTOSUB-SAHARANAFRICA(EXCL.SOUTHAFRICA),2001-2015

21

Source:VanderWesthuisenetal.,2018,basedonNPS/LSMSsurveys

%OFFARMHOUSEHOLDSRENTINGTRACTORSERVICESINTANZANIA,2009VS2015

22Source:VanderWesthuisen,2018,basedonLSMS/NPSsurveys

%OFFARMHOUSEHOLDSRENTINGTRACTORSERVICESINTANZANIA,2009VS2015

23Source:LSMS2009,2011,2013,2015

MEANLANDPRICESINTANZANIA:+53.9%INREALTERMSIN6YEARS

Sources:LSMS-ISAandIHSforlandandwages;FEWSNETforureaandmaize

OUTPUTANDFACTORPRICEINDICES,RURALMALAWI,2004-2013

7UNMISTAKABLESIGNSOFAGRI-FOODSYSTEMTRANSFORMATIONINSSA

1. Majorgrowthinpercapitaincomes

2. Impressiveagriculturalgrowthrates

3. RiseofcommercializedAfricaninvestorfarmers

4. RapidinvestmentinagriculturalvaluechainsbyAfricanentrepreneurs

5. Diversificationofthelaborforceintooff-farmactivities

6. Greatervibrancyofagriculturalfactorsmarkets

7. ImprovedmarketaccessconditionsforAfricanfarmers

25

Source:SitkoandJayne,2014

FARMERREPORTEDNUMBERSOFTRADERSBUYINGMAIZEINTHEIRVILLAGE,2014

27

Distancefromfarmto:

Percentileoffarmhouseholddistribution

Mean 10th 25th 50th 75th 95th

-------------- kmdistance--------------

Nearestdistricttown(km)

37.1 6.0 13.0 30.0 58.0 94.0

Pointofmaizesaletotrader(km)

Source:ChapotoandJayne,2014,basedon2014CropForecastSurvey,n=13,859farmhouseholds

MARKETACCESSCONDITIONS,ZAMBIA,2014

28

Distancefromfarmto:

Percentileoffarmhouseholddistribution

Mean 10th 25th 50th 75th 95th

-------------- kmdistance--------------

Nearestdistricttown(km)

37.1 6.0 13.0 30.0 58.0 94.0

Pointofmaizesaletotrader(km)

6.8 0.0 0.0 0.0 2.0 58.0

Source:ChapotoandJayne,2014,basedon2014CropForecastSurvey,n=13,859farmhouseholds

MARKETACCESSCONDITIONS,ZAMBIA,2014

29Source:ChamberlinandJayne,2012

CHANGEINFARMHOUSEHOLDS’DISTANCETOSERVICESINRURALKENYA,1997-2010

1. Futureaggrowthneededfromhighervalueperhectareandperlaborer,notjustareaexpansion

30

MAJORCHALLENGESTOBETACKLED

31

AFRICA’SAGRICULTURALGROWTHSTILLRELIESMAINLYONCROPLANDEXPANSION,NOTENOUGHONPRODUCTIVITYGROWTH

Source:EconomicResearchService,https://www.ers.usda.gov/data-products/international-agricultural-productivity/

1. Futureaggrowthneededfromhighervalueperhectareandperlaborer,notjustareaexpansion

2. Land/soildegradation– willmakecontinuedagriculturaltransformationmoredifficultunless

addressed

• Proximatecauses:lowadoptionof“climatesmart”and“sustainable”landmanagement

practices

• Underlyingculprits– ineffectivenationalagR&Dandextensionsystems

3. The“employmentchallenge”:eachyear,roughly17millionyoungAfricansenterworkingage

32

MAJORCHALLENGESTOBETACKLED

62%<25yearsold

LOOMINGEMPLOYMENTCHALLENGEINSSA

YOUTHLIVELIHOODSOPTIONS

62%<25years

40%Non-farm

60%Farming

Pulledoutofagriculture• Injobswithhighbarrierstoentry• Post-secondaryeducation• Investedinskills

80%

YOUTHLIVELIHOODSOPTIONS

62%<25years

40%Non-farm

60%Farming

10%Successfulnon-farm

30%Strugglingnon-farm

10%Successfulfarming

50%Strugglingfarm

70%Successfulnon-farm

30%Successfulfarming

Policies• Inclusiveeconomic

growth• Infrastructure• R&D• Education

– Post-secondary

Policies• R&D/ext.• Landaccess• Finance• Infrastructureand

investmentsalongvaluechain– Irrigation– Roads– Electricity

STRUCTURALTRANSFORMATIONPATHWAY

1. Africa’slaborforcediversifyingawayfromsubsistencefarming

2. Shareoflaborforceinnon-farmemploymentupsharplysince2000

3. Governancehasimproved,albeitunevenly.Daysofhyperinflation,blackmarketexchangerates

andmacroturmoillargelyover.

4. GreaterproportionofyoungAfricansacquiringsecondaryanduniversityeducations

5. PercapitaGDPincreasedbetween2000and2014by35%inrealterms.SSAhasbeenworld’s

second-fastestgrowingeconomy,exceededonlybyAsia

6. +4.6%inflation-adjustedp.a.aggrowthbetween2000-2016(WB,2017)vs.worldavg.of2.75%

7. Womenhavebecomeconsiderablymoreactiveinlabormarketsandbetterabletoholdstocksof

wealthontheirown

8. Povertyratesdeclinedsignificantlysince2000

9. Nutritionalindicatorsalsoshowgradualbutclearimprovement

36

SUMMARY:UNMISTAKABLEPROGRESSINSSA

T.S.JayneandHolgerKray

WorldBankSeniorLeadershipTechnicalMeeting25January,2018

Paris,France

AFRICA’SUNFOLDINGAGRI-FOODSYSTEMTRANSFORMATION

38

Source:UN2013

SUBSAHARANAFRICA:ONLYREGIONOFTHEWORLDWHERERURALPOPULATIONCONTINUESTORISEPAST2050

Source:YeboahandJayne(2018)

AGRICULTURALEMPLOYMENTSHAREINTOTALNUMBEROFJOBSANDINFULL-TIMEEQUIVALENTS(FTE)