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Research Roundup on Agriculture and Rural Development in Sub-Sarahan Africa (September 2012)

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Climate change may put food security at risk in Tanzania
Climate change is a serious concern for agriculture and food security in developing countries. Low-income countries are considered the most vulnerable to climate change because they rely on rain-fed agriculture, both as a source of income and consumption. The impact of climate change on food security in Tanzania to 2050 is estimated using representative climate projections in calibrated crop models to predict crop yield changes for major crops in 110 districts in the country, which are then fed into an economy-wide simulation model. When compared to a no-climate-change baseline and considering domestic agricultural production as the principal channel of impact, the estimates suggest domestic food security is likely to deteriorate as a consequence of climate change. However, the decline relative to the baseline path is insufficient to eliminate projected gains in food security over the next four decades. Absolute food security improves with time in all scenarios. And in one scenario (out of four), projected changes in climate are favorable to agricultural production and food security. In turn, impacts across households show considerable variation both by region and by income category.

Arndt, Channing, William Farmer, Kenneth Strzepek, and James Thurlow. 2012. “Climate Change, Agriculture and Food Security in Tanzania.” World Bank Policy Research Working Paper 6188, September.

Farms in Africa don’t have to be bigger to be better
In Africa, strategies to improve agricultural productivity tend to focus on staple crops and smallholder farms. An underlying premise is that small farms are best suited to the African context and that smallholders do not forgo economies of scale. In turn, this premise is supported by evidence that staple cereal yields decline as the scale of production increases. Still, for technical reasons, much of the research on scale and productivity draws on very narrow comparisons, for example, yield differences among plots on the same farm. But can this narrow evidence inform policies that affect farms across geographically diverse settings? To better address this question, the relationship between maize yields and scale is explored using alternative datasets, trading off better information about local settings against geographic heterogeneity. More precise information about the conditions farmers face should improve the reliability of empirical tests that productivity declines with scale. Nevertheless, the inverse productivity hypothesis holds up well when using a variety of data platforms, and data imperfections have fewer practical consequences than previously thought.

Larson, Donald F., Keijiro Otsuka, Tomoya Matsumoto, and Talip Kilic. 2012. “Should African Rural Development Strategies Depend on Smallholder Farms? An Exploration of the Inverse Productivity Hypothesis.” World Bank Policy Research Working Paper 6190, September.

Political and social networks often determine access to credit by small farmers in Ethiopia
In Ethiopian provision of credit is often seen as a key element to increase productivity through more intensive use of fertilizer and seed and to facilitate consumption smoothing. This research explores credit rationing in semi-formal credit markets and its effects on farmers’ resource allocation and crop productivity. Credit rationing—both voluntarily and involuntarily—is widespread in the sampled rural villages, largely because of risk-related factors. Political and social networks emerge as key determinants of access to credit among smallholder, peasant farmers. Significant regional variation emerges as well. In high-potential, surplus producing areas where credit is largely used for agricultural production, eliminating credit constraints is estimated to increase productivity by roughly 11 percentage points. By contrast, in low-productivity, drought prone areas where loans were rarely used to acquire inputs for crop production, the there is no relationship between credit rationing and agricultural productivity. To be effective, efforts to improve agricultural productivity not only need to increase credit supply, but also explore the reasons for credit rationing and the availability of productive opportunities.

Ayalew Ali, Daniel, and Klaus Deininger. 2012. “Causes and Implications of Credit Rationing in Rural Ethiopia: The Importance of Spatial Variation.” World Bank Policy Research Working Paper 6096, June.

Africa’s rice sector must be matched by productivity gains in other crops to ensure wider agricultural success
Rice has become an increasingly important part of African diets and imports of rice have grown. Agronomists point out that large areas in Africa are well suited for rice and are encouraged by field tests of new rice varieties. A review of the recent literature on rice technologies and their impact on productivity, incomes, and poverty, suggests that current conditions in Africa are on par with the conditions that prevailed in Asia as its rice revolution got under way, and that to a degree, a rice revolution has already begun in Africa. Many of the same practices that have proved successful in Asia and in Africa can be applied where yields are currently low. At the same time, Africa’s rice revolution continues to be characterized by a mosaic of successes, situated where the conditions are right for new technologies to take hold. Because diets, markets, and geography are heterogeneous in Africa, the successful transformation of the rice sector will have to be matched by productivity gains in other crops to fully launch Africa’s Green Revolution.

Larson, Donald F. 2011. “Can Africa Replicate Asia's Green Revolution in Rice?” World Bank Policy Research Working Paper 5478, November.

Sharply increased commodity prices prompted a rush of investors into farmland
Concerns and speculation abound on the rising interest in farmland, but hard facts and solid policy advice are scarce. A report that provides the most comprehensive coverage of the issue argues that globally, non-cultivated, non-forested, non-protected land suitable for rainfed agriculture in low population density areas amount to 445 million hectares. The facts on farmland investment are striking. Compared to an expansion of 4 million hectares per year before 2008, almost 60 million ha worth of deals—more than 70 percent of them in Africa—were announced in 2009. According to official data, almost 10 million ha of large land deals—often involving locals rather than foreigners—were concluded in four African countries alone. Many of these deals produced little and, with gaps in property rights and institutions, and “investors” often targeting countries with weak land governance, locals and vulnerable groups often lost out. Not a single African country achieved even 30 percent of potential yields, so the potential for productivity increases is huge. To realize this potential, countries need to (1) assess agricultural endowments and integrate them into their development strategy, (2) strengthen existing rights and allow voluntary property transfers, and (3) implement transparent processes to negotiate contracts and effective ways of enforcing them.

Deininger, Klaus, and Derek Byerlee, with Jonathan Lindsay, Andrew Norton, Harris Selod, and Mercedes Stickler. 2011. Rising Global Interest in Farmland: Can It Yield Sustainable and Equitable Benefits? Washington, DC: World Bank. Download

Feature Story,"Countries Strengthen Land Governance," Sep.29, 2011.

The land tenure program in Rwanda may be a good model for other countries in Africa
To secure existing rights in the face of increasing global demand for land, many African countries face the challenge of implementing well-sequenced measures to address land tenure quickly and on a large scale. Many doubt that doing so is possible or will have the desired impacts. An impact evaluation of a pilot program in Rwanda—a country that currently regularizes about half a million parcels per month at low cost—provides interesting results in three respects. First, investments in and maintenance of soil conservation measures rose significantly and quickly. This effect was particularly pronounced for female-headed households, suggesting that this group suffers more in an environment of high tenure-insecurity, which the program managed to reduce. Second, the program improved land access for married women (about 76 percent of couples) and prompted better recording of inheritance rights in a gender-neutral way. Third, land market activity declined, suggesting the program did not cause a wave of distress sales or widespread landlessness for vulnerable people. The results suggest that a nationwide roll-out could contribute to rural poverty reduction in Rwanda by improving agricultural productivity and gender equity, and provide a model for improving land tenure in other African countries.

Ayalew Ali, Daniel, Klaus Deininger, and Markus Goldstein. 2011. “Environmental and Gender Impacts of Land Tenure Regularization in Africa: Pilot Evidence from Rwanda.” World Bank Policy Research Working Paper 5765, August.

Supportive policies are as important as new technology for maize productivity in Sub-Saharan Africa
Maize is the most widely grown staple food of Sub-Saharan Africa. Despite past successes, continued investment in maize productivity in this region remains crucial to agricultural growth and food security. Adoption of improved seed has continued to rise gradually, and now represents 44 percent of the maize area in Eastern and Southern Africa (outside South Africa), and 60 percent of the maize area in West and Central Africa. However, use of fertilizer and restorative crop management practices remains relatively low and inefficient. An array of extension models has been tested and a combination of approaches is needed to reach maize producers in heterogeneous agricultural environments. Yield growth overall has been 1 percent over the past half-century, although this figure masks the high variability in maize yields, as well as improvements in resistance to disease and non-biological environmental pressures that would have caused yield decline in the absence of maize breeding progress. Conducive policies are equally, if not more, important for maize productivity in the region than the development of new technology and techniques. For example, currently popular, voucher-based subsidies that “crowd out” the private sector could be fiscally unsustainable.

Smale, Melinda, Derek Byerlee, and Thom Jayne. 2011. “Maize Revolutions in Sub-Saharan Africa.” World Bank Policy Research Working Paper 5659, May.

When do large farm operations make sense?
Higher demand for agricultural products—for food, feed, biofuels production and other uses—has led to an increase in the number and size of large farms. This trend is notable in land-abundant countries in Latin America, Eastern Europe, Southeast Asia (mainly for the production of perennials), and recently, Sub-Saharan Africa. An historical review of the growth of large farms and their impact investigates why owner-operated, small farm structures dominate and how they may evolve with development. The results suggest that assessing the advantages of large operations, along with information about available resources, can help a country formulate an appropriate development strategy and integrate smallholders into the value chain. A review of recent land-acquisition cases suggests that, for investments to provide economic and social benefits, the public sector needs to implement policies that allow contracts to be enforced and help local people negotiate and determine the desirability of investments. The research points to three priority areas (1) recognition of rights to, and proper valuation of, land; (2) impact on the labor market, and technical, as well as economic, viability; and (3) the ability to reallocate land flexibly in case an investment fails.

Deininger, Klaus, and Derek Byerlee. 2011. “The Rise of Large Farms in Land Abundant Countries: Do They Have a Future?” World Bank Policy Research Working Paper 5588, March.

Increasing rice production in Africa–less hurdles, more opportunities
Increasing rice productivity in Africa will require a combination of adequate irrigation, chemical fertilizers, and labor. Until recently, donors and governments have been reluctant to invest in large-scale irrigation in Sub-Saharan Africa because of high investment costs, declining rice prices, and the failures of large-scale government-led gravity irrigation projects in Asia over 20 years ago. Today the conditions for growing irrigated rice have improved, the price of rice has risen, and reforms by African countries have changed the institutional and policy environment for growing rice in large irrigation schemes. Data from a variety of large-scale irrigation schemes in Burkina Faso, Mali, Mozambique, Niger, Senegal, and Uganda, suggest the potential for increasing rice productivity is now more attractive. Hurdles remain where chemical fertilizer is expensive, as in Uganda and Mozambique. The problem is further aggravated by limited access to water because of complementarities between fertilizer and irrigation. But in studied schemes in four countries in West Africa’s Sahel region, water access is generally good and where there is institutional support for chemical fertilizer, rice farmers achieved attractive yields. In places where wage rates are high, mechanization can help. And improved access to credit can facilitate the purchase of fertilizer or the hiring of labor.

Nakano, Yuko, Ibrahim Bamba, Aliou Diagne, Keijiro Otsuka, and Kei Kajisa. 2010. “The Possibility of a Rice Green Revolution in Large-Scale Irrigation Schemes in Sub-Saharan Africa.” World Bank Policy Research Working Paper 5560, February.

Climate change increases vulnerability to poverty in Tanzania
Climate models focusing on the impact of greenhouse gas emissions predict that climate volatility may increase in the future. This increased climate volatility is likely to reduce agricultural productivity in many regions through more frequent yield-diminishing climate extremes, such as droughts or heat waves. Crop production models suggest Tanzanian agriculture is particularly sensitive to the type of climate change forecast for this part of Africa. Impacts on the production of staple grains alone could plunge 90,000 additional people (0.26 percent of the current population) into poverty by the early 21st century. As future climate extremes grow more intense, marginal households are likely to slide into poverty. The largest increase in poverty predicted by climate and economic models was 880,000 people in the last 30 years of the 20th century, while the largest observed poverty increase in the first 30 years of the 21st century equals 1.17 million people (3.4 percent of the population).

Ahmed, Syud Amer, Noah S. Diffenbaugh, Thomas W. Hertel, David Lobell, Navin Ramankutty, Pedram Rowhani, and Ana R. Rios. 2009. “Climate Volatility and Poverty Vulnerability in Tanzania.” World Bank Policy Research Working Paper 5117, November.

Distortions in agricultural price and trade policies continues to unfold in Sub-Saharan Africa
Almost 70 percent of 400 million poor Africans live in rural areas and depend on farming for their livelihoods. While that rural share was even higher in the past, it means policies affecting the incentives for farmers to produce and sell farm products remain a major influence on the extent of poverty there. Sectoral, trade, and exchange rate policies in the region have changed greatly since the 1950s, and there have been substantial reforms since the 1980s. Nonetheless, numerous price distortions in this region remain, others have been added in recent years, and there has also been some backsliding, such as in Zimbabwe. This book traces the evolution of distortions to agricultural incentives caused by price and trade policies in the Arab Republic of Egypt plus 20 countries that account for 90 percent of Sub-Saharan Africa’s population, farm households, agricultural output, and overall GDP. The case studies identify policy biases against agricultural production that still remain and to what extent some farmers now being protected from import competition. The new empirical indicators in these country studies provide a strong evidence-based foundation for assessing the successes and failures of the past and for evaluating policy options going forward.

Anderson, Kym, and William Masters, eds. 2009. Distortions to Agricultural Incentives in Africa. Washington, DC: World Bank. Download

Connecting the dots between trade, vulnerable places, and vulnerable people
Some argue that trade liberalization has led to raising incomes and greater environmental protection in developing countries, while others claim it generates neither poverty reduction nor sustainability. The detailed case studies in this book demonstrate neither interpretation is universally correct, given how much depends on specific policies and institutions that determine “on-the-ground” outcomes. Drawing on six case studies set in fragile ecologies and conducted by local scholars, researchers at the World Bank and the World Wildlife Fund trace how local policies and practices influence the ways in which international trade affects local livelihoods and the natural resources upon which the poor depend. The studies underscore the importance of evaluating trade through the lens of environmental and social vulnerability and the linkages between poverty reduction and environmental protection. Lessons drawn can help shape policies that mitigate incentives to use natural resources in unsustainable ways, including incentives linked to international trade.

Cook, Jonathan A., Owen Cylke, Donald F. Larson, John D. Nash, and Pamela Stedman-Edwards, eds. 2009. Vulnerable Places, Vulnerable People: Trade Liberalization, Rural Poverty and the Environment. Edward Elgar: Cheltenham, UK: and Northampton, MA, USA.

Larson, Donald F., and John Nash. “Resource Management and the Effects of Trade on Vulnerable Places and People: Lessons from Six Case Studies.” Policy Research Working Paper 5258, March.

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