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

Format

1. Fivemegatrendsaffectingagri-foodsystemsintheregion

2. Conclusionsandpolicyimplications

3. Reflectionsonpartnership

Format

1. Fivemegatrendsaffectingagri-foodsystemsintheregion

Fiveinter-relatedtrends

4

Fiveinter-relatedtrends

Rapidpopulationgrowth

5

Fiveinter-relatedtrends

Rapidpopulationgrowth

Rapidgrowthinfood

demand6

Fiveinter-relatedtrends

Rapidpopulationgrowth

Laborforceexitfrom

farming

Rapidgrowthinfood

demand7

Fiveinter-relatedtrends

Rapidpopulationgrowth

Laborforceexitfrom

farming

Rapidgrowthinfood

demand

Riseof‘investorfarmers’/

changingfarmsizes

8

Fiveinter-relatedtrends

Rapidpopulationgrowth

Risinglandscarcity

Laborforceexitfrom

farming

Rapidgrowthinfood

demand

Riseof‘investorfarmers’/

changingfarmsizes

9

Fiveinter-relatedtrends

Rapidpopulationgrowth

Risinglandscarcity

Laborforceexitfromfarming

Rapidgrowthinfood

demand

Riseof‘investor’farmers/

changingfarmandmarketstructure

10

Africa’srapidpopulationgrowth

6.17.2 6.8

0.92

2.1 3.8

0

2

4

6

8

10

12

2015 2050 2100

Billion

sofp

eople

Sub-SaharanAfrica Restofworld

Sub-SaharanAfrica:onlyregionofworldwhereruralpopulationcontinuestorisepast2050

12Source:UN2013

ChinaIndia

OtherSouthAsia

South-EastAsia

Sub-SaharanAfrica

0

100

200

300

400

500

600

700

800

900

100019

5019

5519

6019

6519

7019

7519

8019

8519

9019

9520

0020

0520

1020

1520

2020

2520

3020

3520

4020

4520

50

TotalRuralPopulation(millions)

Fiveinter-relatedtrends

Rapidpopulationgrowth

Risinglandscarcity

Laborforceexitfromfarming

Rapidgrowthinfood

demand

Riseof‘investor’farmers/

changingfarmandmarketstructure

13

SSATotalFoodImports from7to40billionUSD(2001-2015)(intraSSAtradefrom1to10billionUSD)

0

5

10

15

20

25

30

35

40

45

50

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

USDBillion

s

SSAImportsfromnon-SSA SSA'simportsfromSSA

15Source: authors’ derivation from TradeMap 2017 and FAOSTAT, 2017

Netcerealexports,Sub-SaharanAfrica

0-3

0-1

010

-20M

illio

ns o

f Ton

nes

1980 1985 1990 1995 2000 2005 2010 2015Year

MAIZE RICEWHEAT TOTAL

Sub-saharan Africa

Source:FAOSTAT,2016

Netcerealexports,EastAfricaRegion

Source:FAOSTAT,2016

0-1

0-5

Mill

ions

of T

onne

s

1980 1985 1990 1995 2000 2005 2010 2015Year

Maize RiceWheat Total NX

East Africa

Relationshipbetween%ofruralpopulationondegradingagriculturallandandpopdensity

18

• Roughly 28% of rural population in SSA live on degrading agricultural land.

• 43 million additional people living on DAL between 2000-2010

Fiveinter-relatedtrends

Rapidpopulationgrowth

Risinglandscarcity

Laborforceexitfromfarming

Rapidgrowthinfood

demand

Riseof‘investor’farmers/

changingfarmandmarketstructure

19

Employment trends

Changes in the share of total jobs in farming, non-farm and off-farm agri-food systems, among the working age population (15–64 years)

21

0.0

20.0

40.0

60.0

80.0

Ghana(2006-2013)

Nigeria(2004-2013)

Rwanda(2006-2011)

Tanzania(2009-2012)

Uganda(2006-2012)

Zambia(2006-2012)

%of

totalFTEjob

s

Farming

Baseyear Endyear

0.0

20.0

40.0

60.0

80.0

Ghana(2006-2013)

Nigeria(2004-2013)

Rwanda(2006-2011)

Tanzania(2009-2012)

Uganda(2006-2012)

Zambia(2006-2012)

%of

totalFTEjob

s

Non-farmoutsideAgrifoodsystem

Baseyear Endyear

0.0

20.0

40.0

60.0

80.0

Ghana(2006-2013)

Nigeria(2004-2013)

Rwanda(2006-2011)

Tanzania(2009-2012)

Uganda(2006-2012)

Zambia(2006-2012)

%of

totalFTEjob

s

Off-farmwithinAgrifoodSystem

Baseyear Endyear

Fiveinter-relatedtrends

Rapidpopulationgrowth

Risinglandscarcity

Laborforceexitfromfarming

Rapidgrowthinfood

demand

Riseof‘investor’farmers/

changingfarmandmarketstructure

22

Farmsizecategory

Numberoffarms %growthinnumberoffarms

%oftotalcultivatedarea

1994 2006 1994 2006

0– 2ha 1,692,343 2,640,020 56 29.2 46.4

2– 5ha 525,363 332,011 -36.8 32.3 23.5

5– 10ha 93,871 17,451 -81.4 21.4 2.1

over10ha 92,498 19,493 -78.9*** 24.5 28

Total 2,404,075 3,008,975 100 100

Changes in farm structure in Kenya (1994-2006)

Source: Kenya National Bureau of Statistics

Farmsize

Numberoffarms(%oftotal) %growthinnumberoffarmsbetweeninitialandlatestyear

%oftotaloperatedlandonfarmsbetween

0-100ha

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

Changes in farm structure in Tanzania (2008-2012), National Panel Surveys

Share of farmland on farms 5-100 ha from 38% to 44% in 4 years

Source: Ghana GLSS Surveys, 1992, 2013, Jayne et al., 2016, using data from Ghana GLSS Surveys I and IV.

Changes in farm structure in Ghana (1992-2013)

GhanaNumberoffarms

%growthinnumberoffarms

%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

51.1%

Farmsizecategory

Numberoffarms %growthinnumberoffarms

%oftotalcultivatedarea

2001 2012 2001 2012

0– 2ha 638,118 748,771 17.3 34.1 16.2

2– 5ha 159,039 418,544 163.2 45 31.7

5– 10ha 20,832 165,129 692.6 14.3 25.0

10– 20ha 2,352 53,454 2272.7 6.6 15.0

20– 100ha -- 13,839 na -- 12.1

Total 820,341 1,399,737 100 100

52.1%

Source: Zambia MAL Crop Forecast Surveys, 2001 and 2012

Changes in farm structure in Zambia (2001-2012)

Characteristicsof“emergentfarmers”

Riseofthemedium-scalefarmers

Riseofthemedium-scalefarmers

Riseofthemedium-scalefarmers

Type 1: Urban-based investor farmer Modeofentrytomedium-scalefarming

status:acquirefarmusingnon-farmincomeZambia Kenya(n=164) (n=180)

%ofcases 58 60%men 91.4 80Yearofbirth 1960 1947Yearsofeducationofhead 11 12.7Haveheldajobotherthanfarmer(%) 100 83.3Formerly/currentlyemployedbythepublicsector(%) 59.6 56.7

Currentlandholdingsize(ha) 74.9 50.1%oflandcurrentlyundercultivation 24.7 46.6Decadewhenlandwasacquired1969orearlier 1.1 61970-79 5.1 181980-89 7.4 201990-99 23.8 322000orlater 63.4 25

Source: MSU, UP, and ReNAPRI Retrospective Life History Surveys, 2015

Type 2: Rural-based ‘elite’ farmerModeofentryintomedium-scale

farmingstatus:expansionofruraleliteZambia Kenya(n=118) (n=120)

%ofcases 42 40%men 92.9 82.5Yearofbirth 1966 1945Yearsofeducationofhead 8.2 7.5Haveheldajobotherthanasafarmer(%) 32.9 17.5Landholdingsizewhenoperatorstartedownhousehold(ha) 10.7 16.2

Currentlandholdingsize(ha) 38.2 32.7%oflandcurrentlyundercultivation 46.9 54.1Decadewhenlandwasacquired1969orearlier 3.9 291970-79 6.7 241980-89 14.8 201990-99 32.2 182000orlater 42.0 9

Source: MSU, UP, and ReNAPRI Retrospective Life History Surveys, 2015

% of National Landholdings held by Urban Households

26.8%

22.0%

11.2%

18.3%

10.9% 11.8%

32.7%

16.8%

22.0%

0%

5%

10%

15%

20%

25%

30%

35%

2008 2009 2004 2010 2010 2004/2005 2010 2007 2013/2014

Ghana Kenya Malawi Rwanda Tanzania Zambia

Source: Demographic and Health Surveys, various years between 2004-2014.

% of National Landholdings held by Urban Households

Source: DHS

26.8%

22.0%

11.2%

18.3%

10.9% 11.8%

32.7%

16.8%

22.0%

0%

5%

10%

15%

20%

25%

30%

35%

2008 2009 2004 2010 2010 2004/2005 2010 2007 2013/2014

Ghana Kenya Malawi Rwanda Tanzania Zambia

GINIcoefficientsinfarmlandholding

35

Period MovementinGinicoefficient:

Ghana(cult.area) 1992à 2013 0.54à 0.70

Kenya(cult.area) 1994à 2006 0.51à 0.55

Tanzania(landholdings) 2008à 2012 0.63à 0.69

Zambia(landholding) 2001à 2012 0.42à 0.49

Source:Jayneetal.2014(JIA)

NominalvalueoftractorimportstoSub-SaharanAfrica(excludingSouthAfrica),2001-2015

36

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

2001 2003 2005 2007 2009 2011 2013 2015

Nom

inal

val

ue o

f im

ports

in ‘0

00 U

S$

Sub-Saharan Africa Southern Africa North Eastern AfricaWestern Africa Linear (Sub-Saharan Africa)

Source: vanderWesthuisen, forthcoming

Nominal value of tractor imports in selective Sub-Saharan African countries (2001-2015)

37

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

2001 2003 2005 2007 2009 2011 2013 2015

Valu

e of

Impo

rts: U

S$ T

hous

and

Ghana Nigeria Kenya Tanzania Zambia

Linear (Ghana) Linear (Nigeria) Linear (Kenya) Linear (Tanzania) Linear (Zambia)

Source: vanderWesthuisen, forthcoming, based on Trade Map data

Fiveinter-relatedtrends

Rapidpopulationgrowth

Risinglandscarcity

Laborforceexitfromfarming

Rapidgrowthinfood

demand

Riseof‘investor’farmers/

changingfarmandmarketstructure

38

Outputandfactorpriceindices,northernTanzania

39

80

90

100

110

120

130

140

150

160

170

180

2008/9 2010/11 2012/13

Priceinde

x(200

8/9=10

0)

Agriculturalwage(TSH/day)

Landrentalrate(TSH/ha)

Maize(TSH/kg)

Outputandfactorpriceindices,westernTanzania

40

60

100

140

180

220

260

300

2008/9 2010/11 2012/13

Adjusted

pric

e(200

8/9=10

0)

Agriculturalwage(TSH/day)

Landrentalrate(TSH/ha)

Maize(TSH/kg)

Outputandfactorpriceindices,ruralMalawi,2004-2013

0

50

100

150

200

250

300

350

400

450

2004 2005 2010 2013

Priceinde

x(2004=100)

Rentalrate(MWK/ha)

Agriculturalwage(MWK/day)

MWK/kgurea

MWK/kgmaize

Sources:IHSforlandandwages;FEWSNETforureaandmaize

Fiveinter-relatedtrends

Rapidpopulationgrowth

Risinglandscarcity

Laborforceexitfromfarming

Rapidgrowthinfood

demand

Riseof‘investor’farmers/

changingfarmandmarketstructure

42

Conclusions

1. Performanceofagriculturewillcontinuetoexertmajorinfluenceonjobgrowthandincomegrowthinoveralleconomy

2. Agriculturalproductivitygrowthwillbethecornerstoneofanycomprehensiveyouthlivelihoodsstrategy:

– Agproductivitygrowthinfluences

• paceoflaborforceexitoutoffarming

• Laborproductivityinbroadereconomy

Shareoflaborforceinfarmingisdecliningmostrapidlywhereagriculturalproductivitygrowthishighest

Ghana

Kenya

Malawi

Mali

Nigeria

Rwanda

TanzaniaUganda

Zambia-2.0

0-1

.00

0.00

1.00

2.00

Annu

al %

cha

nge

in s

hare

of l

abor

forc

e en

gage

d in

farm

ing

-2 0 2 4 6 8Average annual TFP growth in agriculture(%)

Trend line

Source: Yeboah and Jayne, 2016

Bostwana

EthiopiaGhana Kenya

Malawi

Mauritius

Nigeria

Senegal

Tanzania

South Africa

Zambia

Bostwana1 Ethiopia1

Ghana1

Kenya1

Malawi1

Mauritius1

Nigeria1

Senegal1 Tanzania1

South Africa1

Zambia1-4

-20

24

6Av

. ann

ual l

abor

pro

duct

ivity

gro

wth

in n

on-a

gric

ultu

re (%

)

-2 0 2 4Average annual agricultural total factor productivity growth (%)

Trend line

Non-farmlaborproductivitygrowthlinkedtolaggedagriculturalproductivitygrowth

Conclusions(cont.)

3. Importantchangesinthedistributionoffarmsizes

• Declineinshareoffarmlandunder5hectarefarms

• Riseofmedium-scalefarms

• Risinginequalityoffarmlanddistribution

• Growinglandscarcitydrivenbymiddle/highincomeurbanpeopleseekingtoacquireland– notjustforfarming

• speculation,housing/properties,farming• Riseofnewtownsconvertingformerlyremotelandinto

valuedproperty

Conclusions(cont.)

3. Agsectorpoliciesmustanticipateandrespondto

• risinglandprices,declineofinheritance,marketasincreasinglyimportantmodeofacquiringland

• Resourcesneededforyouthtosucceedinfarming(accesstoland,finance)

• Distinguishbetween“tryingtokeepyouthinagriculture”vs.“givingyouthviablechoices”

Bottomlineconclusions

EconomictransformationinSSAwillrequire:– Enlightenedpoliciesà evidenceà research

– Strengtheneducationalsystem

– StrengthenAfricanpublicinstitutions,includingagriculturalpolicyinstitutes

– Processmatters

Governmentsholdthekey!

ThankYou

49