Planting the Seeds of Africa’s Growth
WEST LAFAYETTE, INDIANA – After decades of bad news, at least three major trends are turning Africa’s way: agricultural policies, rural demography, and farm productivity all promise improved opportunities for farm families across the continent. These trends move too slowly to make headlines, but cumulatively they offer a whole new world of bigger payoffs from public and private investment in agriculture and rural development.
Each country in every year faces a unique set of circumstances. Novelties get the most attention, like the possibility that outside investors might control large areas of farmland. Spatial diversity is also important, because it ensures that each place differs from the aggregate average. For Africa as a whole, however, at least three slow trends have recent turning points that offer game-changing new incentives for entrepreneurs and governments.
The first turning point is political. New data from a World Bank study that compares farm policies around the world since 1955 shows for the first time just how far today’s African governments have gone to reduce the cost to farmers of the export taxes, marketing boards, and other interventions imposed by previous regimes (www.worldbank.org/agdistortions). Africa’s policy-induced price distortions peaked in the late 1970’s, and reforms since then have removed about two-thirds of that burden, greatly facilitating productivity growth and poverty alleviation. Further reforms could yield additional benefits, but much of the handicap imposed on African farmers by post-colonial governments has now been removed.