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Press Release 00/07

FAO Regional Conference for Africa:

FAO: AFRICA SHOULD INCREASE PUBLIC INVESTMENT IN AGRICULTURE


Rome, 21 February - African countries should increase public investment in agriculture to promote private sector participation and improve agricultural growth, according to the UN Food and Agriculture Organization (FAO). Judging from the successes of some Asian and a few African countries, governments in Africa should allocate at least 25 percent of the national budget to agricultural and rural development programmes. FAO made the recommendations in a paper prepared for the 21st Regional Conference for Africa, in Yaounde, Cameroon (21-25 February).

Increased public spending could reduce the problems of Africa's small-scale farmers and encourage greater flow of private investment to the rural sector, FAO said. In the near term, agriculture will continue to have the greatest impact on food security and poverty in Africa. The sector will remain the primary engine of economic growth. It produces the bulk of food consumed in sub-Saharan Africa and accounts for 70 percent of total employment.

Between 1961 and 1997, agriculture received less than 10 percent of the national budget in most countries, yet its contribution to gross domestic output was between 30 and 80 percent. "What makes the situation even more disturbing is the fact that direct and indirect transfers of income from agriculture to government and the rest of the economy continue to be significantly larger than the amount of public resources allocated to the sector," FAO said.

Even in countries where significant investments were made to develop public agricultural capital goods, governments often failed to maintain and manage such capital investments as roads and irrigation systems. In addition, public resources were often allocated to a single cereal crop, such as rice, maize or wheat and not enough to traditional crops like roots and tubers, and pulses and oil seeds.

The decline of the agricultural sector and the marginalization of African countries are illustrated by the poor performance of the food and export crop sectors during the last decades, according to the report. Africa significantly lost market share for traditional export crops and had to rely increasingly on food imports and food aid.

Among major export crops, the production share of cocoa fell from 71.6 percent in the 60's to 58.7 percent in the 90s, while the market share dropped from 78.9 to 64.7 percent. For coffee, the production and market shares declined from 25.9 and 28.8 percent in the 60's to 18.6 and 18.5 percent in the 90's.

Between 1961-97 the growth rate of cereal output in sub-Saharan Africa was lower than that in other developing countries.

To significantly enhance agricultural growth and development in Africa, FAO advocated a series of actions be carefully considered, including: a lower tax rate for farmers; making credit available and accessible particularly to small-scale farmers, 80 percent of whom are women. FAO also said that a liberalised exchange rate policy benefits agriculture.

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Note: The report "Public Assistance and Agricultural Development in Africa" is available on Internet at: http://www.fao.org (FAO Regional Conferences 2000); for further information please contact: Erwin Northoff, Media Relations Office, tel: 0039-06-5705 3105, e-mail: Erwin.Northoff@FAO.Org or Paul Fouda Onambele:.Paul.FoudaOnambele@fao.org


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