Africa is rich in both natural and human resources, yet nearly 200 million of its people are undernourished because of inadequate food supplies. Comprehensive strategies are needed across the continent to harness the power of science and technology (S&T) in ways that boost agricultural productivity, profitability, and sustainability -- ultimately ensuring that all Africans have access to enough safe and nutritious food to meet their dietary needs. This report addresses the question of how science and technology can be mobilized to make that promise a reality.
Africa is rapidly urbanizing, and by 2020 almost half the African population will live in urban areas (Rosegrant et al., 2001). This will be an engine for most national market developments. Although peri-urban agriculture can be an important source of food, urban people depend primarily on purchased rather than homegrown foods. They also usually consume less coarse grains, roots and tubers, and more livestock products, fats, fresh horticultural products, and processed and pre-cooked foods. This offers important new opportunities for agricultural diversification into higher value products for African farmers, agro-industry, and food wholesaling and retailing. Marketing chains are also becoming more integrated in urban areas with the rise of supermarkets and convenience shops. Agricultural research will need to address the problems of an increasingly diverse array of crop, tree and livestock activities, and give more attention to post-harvest storage and processing properties, as well as rural to urban markets. The private sector should have an important role to play in these kinds of research.
Modern technologies requiring external inputs only have a chance of adoption when smallholders produce for the market. However, with poorly developed markets and infrastructure, trying to produce for them can be highly risky and economically unattractive. Stifel and colleagues (2003), for instance, found that the incidence of poverty in rural Madagascar increases with remoteness, the yields of major staple crops fall considerably and the use of agricultural inputs declines as one moves farther from markets.
Nevertheless, when markets eventually develop, transport and transaction costs usually decline substantially, which make production for the market more attractive. The difficult and risky start-up phase of market development impedes the transition from subsistence- to market-oriented agriculture. Along similar lines, Omamo and Lynam (2002) argue that subsistence farmers are further constrained by their own learning and production routines.
Market reforms in Africa are seen to have been necessary, but they have not gone far enough to generate greater supply response and competitiveness in export markets (Kherallah et al., 2002). Market liberalization may have removed price distortions, but it did little to benefit most small-scale farmers, especially those living away from roads and markets. Indeed, high transaction costs and the limited development of private trade are forcing many small-scale producers back towards subsistence modes of farming. Without opportunities for export, successes in expanding production frequently result in large price drops because of inelastic domestic demand.
Africa currently imports 25 percent of its food grains. This offers scope for better integration of domestic and intraregional food-grain markets within Africa and expanded intra-African trade, which can place a floor on grain prices. However, such integration is currently constrained by poor regional infrastructure, institutions, market coordination and competition from low-cost and often subsidized imports from OECD countries. Recent research suggests that reducing marketing margins and increasing the productivity of the grains and livestock sectors, in tandem, would have a greater impact on income and food consumption growth in Africa than increased export growth in the traditional and nontraditional export sectors alone (Diao et al., 2003).
Growing competition in export and domestic markets also makes it imperative that African farmers meet more stringent demands for grading and food quality/safety standards and strive to differentiate their products from competitors. Several things are needed: (a) increasing attention to market development (e.g., strengthening institutions responsible for standards and quality control, enforcement of contracts, market information and product promotion); (b) strengthening market-support services (e.g., credit and other financial services, transport, refrigeration and storage); (c) improving rural infrastructure (especially roads, information and communications technology and telecommunications) and (d) reinforcing policymaker commitment to market reforms. Nongovernment organizations (NGOs), producer organizations and the private sector could play a greater role in facilitating the development of effective marketing institutions, particularly in remote areas. Price information systems developed using the Kenya Agricultural Commodity Exchange are innovative examples of best practice in this regard.
With more liberalized markets, farmers and consumers are now exposed to more volatile prices than before, and this is impacting on the vulnerability of the poor and on farmers' willingness to invest in new technology options. Some forms of market mediation - such as efficient and targeted input subsidies, safety net programs, subsidies for provision of environmental services provided by farmers where market failure leads to inferior societal outcomes and market-based risk management interventions (e.g., weather insurance and futures price contracts) - may still be needed. There are new institutional possibilities for these kinds of instruments today.