Harmonisation of Sectoral Policies in Food and Agriculture

Food and agriculture-related activities are the backbone of most African economies, contributing significantly to GDP and employment. Increased globalization in agricultural trade and growing concerns about food security make it important to consider the production chain as a continuum from primary agricultural production through processing to trade. Efficient operation of such a food supply chain requires considerable coordination among institutions and people, both within and across countries and regions. There is thus a clear case for a regional approach to food and agriculture.

In recent years, some countries have experienced strong agricultural growth, but for the continent as a whole growth in food and agricultural activities has been neither high nor sustained enough to spur overall growth or poverty reduction in rural areas.

Contributing to the weak performance of the food and agriculture sector are poor land quality, extreme climatic conditions—with erratic rainfall, droughts, and water scarcity—and endemic livestock diseases. Human-induced land degradation is severe in Africa, where about 30% of agricultural land is degraded. Policies and institutional factors also explain much of the poor performance of African agriculture. Rural public investment has typically been low, and high explicit and implicit taxes have been imposed on the agricultural sector (World Bank 2000, chapter 6).

To date the reform agenda in food and agriculture has focused mainly on price reforms.

Other areas still require attention. There are many obstacles to trade in food and agriculture that must be removed. These include bureaucratic red tape and harassment, protective non-tariff barriers, and legal and institutional inadequacies. Both input and output markets must be enlarged to stabilize prices, reduce transaction costs, and increase competition. Lack of credit, land scarcity, insufficient input supplies, and poor infrastructure still limit private entry in the market.

International market access is a potentially pivotal factor in African agricultural development.

However, African agriculture has long remained isolated from major global markets, in part because of domestic policies and institutional deficiencies such as persistently overvalued real exchange rates. Even more important, however, have been the policies of high-income  countries, which have limited access to their markets. Large transfers to farmers in developed countries have imposed significant welfare costs on developing countries.

Achieving growth and food security will require a sustained flow of investment. Areas with potentially high payoffs are agricultural research, extension, and education. Investments are also needed to reverse the process of environmental degradation and to improve marketing structure and infrastructures. Both the public and the private sector ought to contribute to investment in agriculture. Resources for increased public investment can be freed by ending the urban bias of economic policies. Public-private partnerships can be stimulated through public investment that improves the environment for the private sector.