Agriculture and Africa’s Structural Transformation Presented to the Wilson Center and USAID Alumni Association panel discussion on Africa: Agriculture, Structural Change and the Urban Imperative by Steven Haggblade Michigan State University May 22, 2013
Outline 1. Structural transformation 2. Agriculture’s role 3. Spatial implications 4. Household transitions
1. Structural transformation Country Income Agriculture ($/person) (% of GDP) USA 46,000 1 Korea 25,000 3 Brazil 9,400 5 China 5,400 12 Nicaragua 2,500 20 Cambodia 1,700 30 Ghana 1,300 36 Ethiopia 800 46
1. Structural transformation Country Income Agriculture ($/person) (% of GDP) USA 46,000 1 Korea 25,000 3 Brazil 9,400 5 China 5,400 12 Nicaragua 2,500 20 Cambodia 1,700 30 Ghana 1,300 36 Ethiopia 800 46
Structural transformation
Structural transformation 1
Structural Engel’s Law transformation 1
Structural Engel’s Law transformation 1
Structural Engel’s Law transformation 1
1. Structural transformation • Productivity gains drive structural transformation. • Two ‐ thirds of Africans work in agriculture. • Agricultural productivity gains offer the most powerful lever for: raising productivity of African workers driving structural transformation and economic growth.
Outline 1. Structural transformation 2. Agricultural productivity drivers 3. Spatial transitions 4. How do households navigate these transitions? 5. Policy implications
Farm productivity
Farm productivity drivers • R&D • Extension • Improved agronomic practices • Worker health and nutrition • Input markets
Farm productivity without markets?
Requirements for agricultural growth Market On-farm + access productivity
Zambia Maize Value Chain, 2006 Live- Mugaiwa Mealie Meal Beer Consumers stock Consumers Consumpton Q=30-60 Q = 600 Q = 50-100 Q = 500 Retailers Subsistence Producers Retailing Q = 500 Brewers Feed Hammer Millers Q = 30-60 companies Q = 500 Mills Processing Q = 50-100 Q = 600 Small Maize retailing traders FRA Large Wholesaling Q = 110 Traders Small Commercial Farming Farms farms Qty = 150 Qty = 250 TMT Channel 2 Channel 1 Channel 3 Channel 4 Channel 5 Small Subsistence Large Animal Brewing Production Commercial Feed
Zambia Maize Value Chain, 2006 Live- Mugaiwa Mealie Meal Beer Consumers stock Consumers Consumpton Q=30-60 Q = 600 Q = 50-100 Q = 500 Retailers Subsistence Producers Retailing Q = 500 Brewers Feed Hammer Millers Q = 30-60 Q = 500 companies Mills Processing Q = 50-100 Q = 600 Small Maize retailing traders FRA Large Wholesaling Q = 110 Traders Small Commercial Farming Farms farms Qty = 150 Qty = 250 TMT Channel 2 Channel 1 Channel 3 Channel 4 Channel 5 Small Subsistence Large Animal Brewing Commercial Production Feed
Zambia Maize Value Chain, 2006 Live- Mugaiwa Mealie Meal Beer Consumers stock Consumers Consumption Q=30-60 Q = 600 Q = 50-100 Q = 500 Retailers Subsistence Producers Retailing Q = 500 Brewers Feed Hammer Millers Q = 30-60 Q = 500 companies Mills Processing Q = 50-100 Q = 600 Small Maize retailing traders FRA Large Wholesaling Q = 110 Traders Small Commercial Farming Farms farms Qty = 150 Qty = 250 TMT Channel 2 Channel 1 Channel 3 Channel 4 Channel 5 Small Subsistence Large Animal Brewing Production Commercial Feed
Zambia Maize Value Chain, 2006 Live- Mugaiwa Mealie Meal Beer Consumers stock Consumers Consumption Q=30-60 Q = 600 Q = 50-100 Q = 500 Retailers Subsistence Producers Retailing Q = 500 Brewers Feed Hammer Millers Q = 30-60 Q = 500 companies Mills Processing Q = 50-100 Q = 600 Small Maize retailing traders FRA Large Wholesaling Q = 110 Traders Small Commercial Farming Farms farms Qty = 150 Qty = 250 TMT Channel 2 Channel 1 Channel 3 Channel 4 Channel 5 Small Subsistence Large Animal Brewing Production Commercial Feed
Nigeria Cassava Value Chain, 2000 Fresh cassava Gari Feed Other* Volume = 17% Volume = 42% 10% 6% Final markets Gari Volume = 25% of total harvest Fresh Feed Indus Cassava Gari Retailers Retailers Retailers trial Distribution Proc ecsso Small ‐ rsP Medium ‐ scale gari Mobile scale processors Feed gari Graters Mftrs Processing 10 5,000 800 plants Commercial Fresh Farming Subsistence Farms Commercial Cassava Production Production Channel 3 Channel 4 Channel 6 Channel 2 Channel 5 Channel 1 Small ‐ scale Medium ‐ scale Industrial Feed Fresh Subsistence Farming Gari Gari markets Marketing Markets
Nigeria Cassava Value Chain, 2000 Fresh cassava Gari Feed Other* Volume = 17% Volume = 42% 10% 6% Final markets Gari Volume = 25% of total harvest Fresh Feed Indus Cassava Gari Retailers Retailers trial Retailers Distribution Proc ecsso Small ‐ rsP Medium ‐ scale gari Mobile scale Feed processors gari Graters Processing Mftrs 10 5,000 800 plants Commercial Fresh Farming Subsistence Farms Commercial Cassava Production Production Channel 3 Channel 4 Channel 5 Channel 6 Channel 2 Channel 1 Small ‐ scale Medium ‐ scale Industrial Feed Fresh Subsistence Farming Gari Gari Markets markets Marketing
Nigeria Cassava Value Chain, 2000 Fresh cassava Gari Feed Other* Volume = 17% Volume = 42% 10% 6% Final markets Gari Volume = 25% of total harvest Fresh Feed Indus Cassava Gari Retailers Retailers trial Retailers Distribution Proc ecsso Small ‐ rsP Medium ‐ scale gari Mobile scale Feed processors gari Graters Processing Mftrs 10 5,000 800 plants Commercial Fresh Farming Subsistence Farms Commercial Cassava Production Production Channel 3 Channel 4 Channel 5 Channel 6 Channel 2 Channel 1 Small ‐ scale Medium ‐ scale Industrial Feed Fresh Subsistence Farming Gari Gari Markets markets Marketing
Nigeria Cassava Value Chain, 2000 Fresh cassava Gari Feed Other* Volume = 17% Volume = 42% 10% 6% Final markets Gari Volume = 25% of total harvest Fresh Feed Indus Cassava Gari Retailers Retailers trial Retailers Distribution Proc ecsso Small ‐ rsP Medium ‐ scale gari Mobile scale Feed processors gari Graters Processing Mftrs 10 5,000 800 plants Commercial Fresh Farming Subsistence Farms Commercial Cassava Production Production Channel 3 Channel 4 Channel 5 Channel 6 Channel 2 Channel 1 Small ‐ scale Medium ‐ scale Industrial Feed Fresh Subsistence Farming Gari Gari Markets markets Marketing
Marketing efficiency 0 0 0 0 Price trends Wholesale-retail margins 0 5 4 2 0 0 0 2 0 0 ) ) 0 0 0 0 0 3 1 1 = = 5 5 0 0 0 0 i-2 i-2 0 0 p p 5 l: c l: c 1 a a (re 0 (re 0 0 e e 2 n n n n /to /to 0 0 a a 0 h h 1 c c a a w w K K 0 0 0 0 0 0 0 0 0 1 0 0 5 0 0 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 : : : : : : : : : : : : : : : : : : : : : : : : 4 5 6 7 8 9 0 1 2 3 4 5 4 5 6 7 8 9 0 1 2 3 4 5 9 9 9 9 9 9 0 0 0 0 0 0 9 9 9 9 9 9 0 0 0 0 0 0 9 9 9 9 9 9 0 0 0 0 0 0 9 9 9 9 9 9 0 0 0 0 0 0 1 1 1 1 1 1 2 2 2 2 2 2 1 1 1 1 1 1 2 2 2 2 2 2 Year/Month Year/Month Wholesale grain Breakfast meal Vertical margin Linear-trend Linear-trend Linear-trend Source: Jayne et al. (2010)
Poor roads, low volumes, high marketing cost
Marketing productivity drivers • Rural towns • Assembly and wholesale markets • Rural electrification • Roads • Telecommunications • Competition
Marketing productivity drivers • Rural towns • Assembly and wholesale markets • Rural electrification • Roads • Telecommunications • Competition • Open borders
Maize Market Sheds in ESA
African borders
Cross ‐ border trade
Requirements for agricultural growth Market On-farm + access productivity
Technology spills over across AEZ’s
Outline 1. Structural transformation 2. Agricultural productivity drivers 3. Spatial transitions 4. How do households navigate these transitions? 5. Policy implications
Trends in LDC Population Distribution
African population trends Source: UN Urban Projections (http://esa.un.org/unup/
Spatial Distribution of Population, 2005 Rural Urban Total small large* World 51% 25% 24% 100% Developed countries 26% 40% 35% 100% Developing countries 57% 22% 21% 100% Least developed 73% 16% 11% 100% Latin American 23% 37% 40% 100% South-Eastern Asia 56% 29% 15% 100% Sub-Saharan Africa 65% 20% 15% 100% * Large cities include those with population over 500,000. Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2004 Revision and World Urbanization Prospects: The 2005 Revision, http://esa.un.org/unup, Tuesday, September 18, 2007; 11:27:12 AM.
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