sub-module ii:the agrarian questions facing africa professor sam moyo 1

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SUB-MODULE II: THE AGRARIAN QUESTIONS FACING AFRICA

Professor Sam Moyo

2

1.0 Neoliberal Agricultural Policy Framework1.1 Agricultural output marketing policies vs protection/subsidies1.1.1 Agricultural commodity markets de-regulation

• Marketing boards (minimalism)- monopolies; storage/distribution services

• Price (de)regulation-stabilisation; pan-territorial;

3

1.2 Agricultural trade liberalisation

• Quantitative restrictions removed• Tarrifs reduced

4

1.3 Agricultural production support policies

• Direct and indirect production subsidies reduced (inputs; exchange rate and forex allocations)

• Research and Extension services privatised or cut

5

1.4 Agricultural development finance

• Credit/ Agricultural banks (interest rates; targeted supply)

• Water and irrigation development• ?

6

1.5 Land tenure reform policies

• Land tenure individualisation and markets• Decentralised land administration• Special investor land grants and leases

7

1.6 Social welfare policies vs demand compression

• Loss of social transfers (free education, etc)• Rural development infrastructures

8

2.0 Performance of African Agriculture2.1 ??2.2 Productivity Question: Agricultural Production Trends2.2.1 Agriculture in aggregate production (crops, livestock, food, other)

-3

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

20

09-1

0*

20

00-1

0*

*

20

09-1

0*

20

00-1

0*

*

20

09-1

0*

20

00-1

0*

*

20

09-1

0*

20

00-1

0*

*

Crops Livestock Food Non food

%

2009-10*: % change by latest; 2000-10**: % p.a growth

Fig. 2.1 Agriculture in aggregate production: Gross per capita index (2004-06= 100)

Source: FAO (2013)

9

2.2.2 Net agricultural production per capita index

0

20

40

60

80

100

120

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Agriculture (World)

Cereals (World)

Agriculture (Africa)

Cereals (Africa)

Fig 2.2.2 Net Agricultural production per capita Index (2004-2006 = 100):1970-2011

Source: FAOSTAT (2013)

10

2.2.3 Cereal production trends2.2.3 (a) Cereal output trends

0

20

40

60

80

100

120

140

160

180

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

mil

lion

tons

Barley

Maize

Millet

Rice

Sorghum

Wheat

Cereals

Fig 2.2.3(a) Cereal production (tonnes) in Africa (1970-2011)

Source: FAOSTAT (2010; 2013)

11

2.2.3 (b) Cereal cropped area

0

20

40

60

80

100

1201

97

0

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

mil

lio

n h

a Maize

Millet

Rice

Sorghum

Wheat

Cereals

Fig 2.2.3 (b) Cereal cropped area (ha) in Africa (1970-2011)

Source: FAOSTAT (2013)

12

2.2.3(c) Cereal yields (tons/ha)

0

500

1000

1500

2000

2500

3000

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

kg

/ha

Maize

Millet

Sorghum

Wheat

Cereals

Rice

Fig. 2.2.3(c) Cereal yields (kg/ha) in Africa (1970-2011)

Source: FAOSTAT (2013)

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2.2.3 (d) Cereal crop yields2.2.3 (e) African crop yields

0

2000

4000

6000

8000

10000

12000

19

61

19

70

19

80

19

90

20

00

20

09

20

10

20

11

kg

/ha

Cereals

Pulses

Roots/tubers

Fibers

Oil crops

Fruit

Vegetables

Tree nuts

Fig 2.2.3 (e) African crop yields (kg/ha), 1961-2011

Source: Dietz (2011); *FAO (2013); **FAOSTAT (2013)

14

2.2.4 Livestock production2.2.4 (a) Livestock production (million tonnes) (1970s/1980s)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

mill

ion

to

ns

Year

Meat

Milk

Poultry Meat

Sheep and Goat Meat

Fig 2.2.4 (a) Livestock production (million tonnes)

Source: FAOSTAT (2013)

15

0

20

40

60

80

100

120

140

160

1801

97

0

19

73

19

76

19

79

19

82

19

85

19

88

19

91

19

94

19

97

20

00

20

03

20

06

20

09

kg

/ca

p/y

r

World

Africa

Fig 2.2.5 Africa Cereal (excl. beer) supply quantity

Source: FAOSTAT (2013)

16

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

'000

US$

Maize import

Agricult.Products,Total imports

Cereals imports)

Maize exports

Agricult.Products,Total exports

Cereals exports

Fig 2.3.1 Africa agricultural products, cereals and maize trade (‘000 US$)

Source: FAOSTAT (2013)

17

2.3.2 Volume of cereal trade (imports/exports)

0

10

20

30

40

50

60

70

1999 2007 2008 2009

mil

lio

n to

ns

Imports

Exports

Fig.2. 3.2: Volume of cereal trade in Africa

Source: FAO (2013)

18

2.3.4 Cereal food aid shipments to Africa

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

800000019

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

1220

13

Ton

nes

Africa

Eastern Africa

Middle Africa

Northern Africa

Southern Africa

Western Africa

Fig 2.3.4 Cereal food aid shipments to Africa

Source: FAOSTAT (2013)

19

2.4 Agricultural Investments and Sustainability?

0

0.5

1

1.5

2

2.5

3

3.52

00

2

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

mil

lio

n to

ns Nitrogen Fertilizers

(N total nutrients)

Phosphate Fertilizers (P205 total nutrients)

Potash Fertilizers (K20 total nutrients)

Fig.2.4.1 (a) Fertiliser consumption in nutrients (tonnes) in Africa

Source: FAOSTAT (2013)

20

2.4.2 Capital and investment in agriculture: Gross Capital Stock (constant 2005 prices) (USD million)

0

100000

200000

300000

400000

500000

600000

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

Land Development

Livestock (Fixed Assets)

Machinery & Equipment

Plantation Crops

Capital Stock + (Total)

Source: FAOSTAT (2013)

21

2.4.2 (b) Capital and investment in agriculture: Agricultural capital stock (constant 2005 prices)

0

100000

200000

300000

400000

500000

600000

1980 1990 2000 2007

US

$ M

illi

on

s North Africa

West Africa

Central Africa

East africa

Southern Africa

Africa

Fig 2.4.2 (b) Capital and investment in agriculture: Agricultural capital stock (constant 2005 prices)

Source: FAO (2013)

22

3.0 Effects of Agricultural liberalisation 3.1 Slow growth and rising poverty

• Economic liberalization since 1980s generally slowed growth, poverty reduction + increased inequality + vulnerability in most countries

• Slower growth (except 2003-2008)• Policy prescriptions, often imposed, have reduced

policy space• Less growth, revenue due to liberalization (tax

competition) reduced fiscal means• Reduced policy + fiscal space adverse effects for

poverty + destitution

23

3.2 Declining terms of trade

• International terms of trade have moved against developing countries

• 1. Primary commodities vs manufactures • 2. Tropical vs. temperate agriculture• 3. South vs North manufactured Xs• Generic manufactures vs monopolistic

manufactures protected by IPRs?• -Immisering growth?

24

3.3 Negative capital flows and high costs

• Converse of advocates’ claims:• K flows not from K rich to K poor Except E Asia

early + mid-1990s• Costs of funds not lower• Some old sources of volatility + instability

reduced, but new sources introduced

25

3.4 Not enough food and Price vulnerability

• Poverty line mainly defined as money income to avoid hunger, but huge discrepancies between poverty + hunger measures

• FAO: 963m. hungry world-wide – up by 142m. since 1990-92• Higher food prices: more hungry• MDG1? Poverty down, hunger up since 1990!!! (Not lack of food)• Before price spike, 1.4bn chronically hungry, 2+bn more

undernourished ; 18,000 kids die daily for poor nutrition• More food price volatility, levels• 2007-8 food prices spiked, then declined • Food prices rose again in 2010 until mid-2011à more hunger à

more poverty

26

3.4(b) Drivers of food crisis: fundamentals vs financialisation

• Fundamentals include agribusiness concentration, subsidies, e.g. bio-fuels

• Futures, options financial asset class • Most investment strategies pro-cyclical

27

4.0 Some Case Studies: Mexico Maize

• The Mexico experience with maize by Alejandro

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