Africa must develop its agricultural sector to reduce rising poverty
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    Africa must develop its agricultural sector to reduce rising poverty

    Monday, 14 September 2020
    This is an opinion article by an external contributor. The views belong to the writer.

    Data from the Sustainable Development Goals (SDGs) of the United Nations reveals that out of the 736 million people living in extreme poverty in the world, Sub-Saharan Africa (SSA) and South Asia host more than 80% of the extreme poor who are considered to live on less than US$ 1.90 a day.

    A recent World Bank report, suggests that SSA is home to the largest population of the poorest people in the world – the population of the extreme poor in SSA increased from 278 million in 1990 to 413 million in 2015. Conversely, in South Asia, the population of the extreme poor dropped from half a billion in 1990 to 216 million in 2015. Clearly depicting the headway South Asia is making in reducing poverty in the region.

    Compared to the 20th century where about 80% of the world’s population lived in extreme poverty, poverty levels have declined in recent times. With global poverty rate declining by 1 percentage point every year from 1990 to 2015, SSA recorded an upswing in poverty rate within the same period.

    This chronic economic condition has a tremendous impact on the standard of living in SSA – highlights from a joint report published in 2019, by the Food and Agriculture Organization (FAO), International Fund for Agricultural Development (IFAD), United Nations Children’s Fund (UNICEF), World Food Programme (WFP) and the World Health Organization (WHO) shows that 22.8% of the SSA’s population is undernourished with the region accommodating 90% of the 260 million hungry people in Africa yet SSA has 200m hectares of arable land – this land area is larger than the cultivated land in United States and almost 50% of the world’s cultivated land.

    Also in South Asia, where about 57% of the total land area is used for agricultural activities, the region has 22% of the world’s undernourished people and a Global Hunger Index score of 30.5 – making South Asia, the world’s hungriest region.

    Relying on Agriculture Development to Mollify Poverty in SSA and South Asia

    To alleviate the high-level of poverty in SSA and South Asia, it is imperative to develop the agriculture sector in these two regions. Contemporary research has shown that in low-income economies, growth in agriculture is two or three times more effective in reducing poverty than growth in other sectors.

    In SSA, where the population is 950 million, thus 13% of the world’s total, according to the OECD-FAO Agriculture Outlook 2016-2025, agriculture accounts for 23% of SSA’S Gross Domestic Product (GDP) and employs more than 60% of the total population, making growth in agriculture eleven times more effective in reducing poverty than non-agricultural growth.

    Similarly, in South Asia, where the region’s population is 1.8 billion, representing 25% of the world’s total, agriculture plays a significant role, contributing 18% of GDP and serving as a source of livelihood for 60% of the population. However, the impact of agriculture in South Asia varies from one country to the other, especially as the importation of food continues to soar – the importation of food and agricultural products increased from $5 billion in 1990 to $24 billion in 2010 .

    Africa is a net importer of food as the continent had a food import bill of US$ 35 billion in 2015 – this value is estimated to increase to $110 billion by 2025. Out of the 15 foods that account for the most food imports, 5 are staple commodities: soybeans, rice, wheat, sugar and beef. To assuage poverty in SSA via growth in agriculture, sufficient investments should be channeled to the sector – According to PricewaterhouseCoopers, growth in agriculture in SSA is a function of three major factors: farmland expansion, yield growth and reduction in post-harvest losses.

    Although SSA has a large percentage of uncultivated land, between one-half and two-thirds of these lands are located under forest cover, conflict zones and in the hinterlands where inputs and output markets are difficult to access. To prepare these uncultivated lands for top-notch agriculture with the capacity to reduce poverty, it essential for governments and relevant stakeholders to make adequate investments to improve infrastructure: road networks, ports, electricity networks, storage facilities, irrigation etc.

    Conclusion

    While the challenges associated with the agriculture sector of SSA and South Asia are similar; the latter is making progress in improving agriculture productivity – although three-fifths of South Asia’s agricultural lands are rain-fed, the region has some of the oldest and largest irrigation facilities in the world, with an estimated 40% of the entire agricultural lands being irrigated.

    Even though efficient irrigation facilities on farmlands can improve agricultural productivity by at least 50% in SSA, only 6% of the entire croplands, representing close to 13m hectares in the area are irrigated. This is partly because the water system in SSA is heavily overburdened with high demand from urban communities, pollution of water bodies, drought and mismanagement of water resources – it will cost more than US$ 65 billion to extend irrigation facilities to 15% of the total cultivated area.

    In SSA, a decline in crop yield is partially attributed to the low usage of fertilizer. In spite of the fact that the region has a large deficit of soil nutrients, the application of fertilizer on farmlands account for only 3% of the global fertilizer consumption.

    Comparatively, the price of fertilizer in SSA is far more expensive than in any other region. This is as a result of several factors; most farmers do not know the benefits of fertilizers, farmers lack credit to purchase fertilizers and the cost of producing, transporting, stocking and distributing fertilizer to farmers in rural areas is high for fertilizer manufacturers, making it impossible to benefit from economies of scale.

    To foster agricultural productivity, the price of fertilizer should be subsidized – although the contribution of fertilizer subsidies in National food security strategies has been controversial, relevant stakeholders should improve on the design and model implementation of fertilizer subsidies to increase the effectiveness of these policies.

    Also, Governments and other relevant stakeholders in South Asia and SSA should prioritise the mechanisation of the entire food value chain. Adequate investments should be channelled into designing and developing technologies that do not only improve the production of agricultural products but also reduces postharvest losses and improves the processing of raw materials into high-quality finished products. For instance, the post-harvest loss for all grains in SSA is US$ 4 billion per year – this amount exceeds the value of food aid SSA has received in the last decade.

    This situation is quite the same in South Asia, where annual postharvest losses for fruits and vegetables is estimated at 30% in India, which is worth US$ 32.7 billion, 35% in Nepal, 50% in Bhutan, 42.5% in Bangladesh and 60% in Afghanistan. Additionally, Ghana and Ivory Coast produce two-thirds of the World’s cocoa output but account for only $6 billion of the chocolate market that is worth over $100 billion worldwide. This is because for many decades these two West-African countries have been exporting cocoa beans without processing the commodity into finished goods.

    Alexander Ayertey Odonkor