Market Opportunities for African Agriculture - International Food ...

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increases by 2.5 percent in the same period. Consumers gain, however, from a fall in food prices and total food consumption increases by 15 percent per capita, (a 1.2 percent per capita annual growth rate). Income growth rates are small even with accelerated productivity growth in all of these agricultural sectors, (traditional and non-traditional exports, grain, and livestock): annual growth rates of real per capita GDP and per capita agricultural incomes are only 0.32 and 0.71 percent, respectively. When high growth across agricultural sectors is combined with a more efficient transport sector, both total GDP and agricultural GDP increase sharply: total GDP per capita grows at 0.62 percent and agricultural real income grows at 1.5 percent annually. The time to double an African farmer’s income shortens to 25 years, instead of more than 50 years as in the first case. Reducing transaction costs through investment in transport sector, eliminating trade (domestic and regional) barriers and improving market efficiency appear to be critical for achieving African agricultural income growth. At least as important as increased agricultural productivity and lowering market costs, however, is increased productivity and output of the non-agricultural sectors. Since domestic demand of cereal and livestock products far exceed internationally traded quantities, increased market demand for food crops and livestock products also reflects the growth in the incomes generated from non-food agricultural and non-agricultural activities. Some of the growth in non-agricultural productivity can be spurred by growth linkages, including those deriving from additional farm household spending of higher agricultural income. Simulation results suggest that, combined with non-agricultural productivity growth, per capita agricultural real income can grow at 2.97 percent annually, which implies that the time to double an African farmer’s income shortens to 13 years. Agricultural can thus indeed serve as an engine of income growth when it is linked to the economy-wide growth (Figure 3). 60
Figure 3—Impact of TFP growth on agricultural real income 3.5 3.0 2.5 2.0 1.5 1.0 0.5 -0.5 % 0.21 0.37 Source: IFPRI CGE simulations. per capita annual growth 5. CONCLUSIONS 45 This paper has addressed two major questions. First, how constraining will demand be for future agricultural growth in Africa? Second, under realistic scenarios of productivity growth, which agricultural sub-sectors (e.g., traditional exports, nontraditional exports, cereals, and livestock) have the best potential for raising real incomes and increasing food consumption? Our analysis suggests that demand need not constrain rapid agricultural growth, particularly for non-traditional exports. Given small current levels of production and a minute share of world trade, non-traditional export agriculture (including fish in some countries) offers perhaps the most promising opportunities for growth. Nonetheless, to a large extent, non-traditional exports consist of numerous products that are targeted to niche markets. Some countries have achieved notable success (e.g., Kenya’s horticultural 0.18 0.0 Nontraditional Traditional Grains Grain&livestock All agr Agr+transportation Agr+nonagr 45 This chapter was written by Xinshen Diao and Paul Dorosh. 61 0.76 1.48 2.97
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DSGD DISCUSSION PAPER NO. 1 MARKET
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ACKNOWLEDGEMENTS We wish to thank t
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LIST OF TABLES Table 1: Some basic
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LIST OF FIGURES Figure 1: Monthly a
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imports 25 percent of its food grai
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MARKET OPPORTUNITIES FOR AFRICAN AG
Page 15 and 16:
Table 1—Some basic facts about Su
Page 17 and 18:
We begin with a review of broad tre
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Table 2—World and Sub-Saharan cou
Page 21 and 22: Table 3—Composition of exports fr
Page 23 and 24: This is mainly because of a signifi
Page 25 and 26: Staples Non-traditional Traditional
Page 27 and 28: impact on export earnings and incom
Page 29 and 30: ooms of the 1970s, but the trends f
Page 31 and 32: produced by smallholders, resulting
Page 33 and 34: Table 7—Export of fish and fisher
Page 35 and 36: Table 8—Summary of food safety re
Page 37 and 38: flowers and foliage to the EU. The
Page 39 and 40: The emergence and growth of the Ken
Page 41 and 42: SUMMARY Currently, the agricultural
Page 43 and 44: Table 12—Sub-Saharan African majo
Page 45 and 46: Besides the demand-side constraint,
Page 47 and 48: percent. However, because rapid gro
Page 49 and 50: pace, by 4.15 percent per year thro
Page 51 and 52: equivalent to 9 to 11 percent of ma
Page 53 and 54: esult in increased imports of lives
Page 55 and 56: this study is to evaluate African c
Page 57 and 58: In this scenario, where non-traditi
Page 59 and 60: more employment opportunities for u
Page 61 and 62: of SSA (4 percent). No additional p
Page 63 and 64: d. Combining high growth livestock
Page 65 and 66: output (Table 20). Because the chan
Page 67 and 68: This increase in TFP in the transpo
Page 69 and 70: scenarios, we find that some countr
Page 71: Per capita annual growth of cereal
Page 75 and 76: too long to make a significant cont
Page 77 and 78: particularly important, and better
Page 79 and 80: Franco, M., and R. Godoy. 1993. “
Page 87 and 88: Appendix I Table 7—Baseline Proje
Page 89 and 90: Appendix I Table 9—Projected annu
Page 91 and 92: Appendix I Table 11—Projected ann
Page 93 and 94: Appendix I Table 13—Agricultural
Page 99 and 100: Appendix II Table 1—Agricultural
Page 101 and 102: and in 1998 Mozambique contributed
Page 103 and 104: from 56.5 percent in 1981-83 to 40.
Page 105 and 106: Uganda has distinct competitive adv
Page 107 and 108: Victoria and their Natural Carrying
Page 109 and 110: Macroeconomic Policies In 1991, tax
Page 111 and 112: Appendix II Table 4—Agricultural
Page 113 and 114: inappropriate seeds and fertilizers
Page 115 and 116: i.e. upgrading equipments and labor
Page 117 and 118: 9. Ghana 10. Guinea 11. Guinea-Biss
Page 119: 21. Sugar 22. Processed food produc
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