AU/MIN/AGRI/1

CONFERENCE OF MINISTERS OF AGRICULTURE OF THE AFRICAN UNION
Maputo, Mozambique
1-2 July, 2003

Preparatory Meeting of Experts
1 July 2003

Item 1 of the Provisional Agenda

THE STATE OF FOOD AND AGRICULTURE IN AFRICA 2003

Introduction
Food Security and Agriculture
Agricultural Performance in Africa
Agricultural Trade Performance
Improving Agriculture's Contribution to Poverty Reduction
Food Security and HIV/AIDS in Africa
Response under NEPAD

Annex Table 1: Prevalence of Undernourishment in Africa
Annex Table 2: Net Agricultural Production Growth Rates
Annex Table 3: Real GDP (annual percentage change)
Annex Table 4: Statistical Profiles of African Countries
Annex Table 5: A Comparative Profile of African Countries
Annex Table 6: A Comparative Profile of African Countries (part two)

Introduction

Agriculture dominates the economies of most African countries, providing jobs, income and exports. The sector employs about 60 percent of the population and contributes 20 percent of the continent's export earnings are due to agricultural activities. A stronger performing agricultural sector is fundamental for Africa's overall economic growth. A constantly growing agricultural sector is crucial for addressing hunger, poverty and inequality. More than 70 percent of the total population and the majority of the extreme poor and undernourished live in rural areas. A healthy agriculture sector means more jobs, more income and more food for the poor.

Improving agricultural performance generates income in both rural and urban areas. As incomes increase, households save more and spend more, stimulating growth and investment in other sectors. Agriculture provides tax revenues and supplies a wide range of raw materials to agriculturally-based local manufacturers. Processing agricultural products accounts for two-thirds of manufacturing value-added in most African countries.

FAO has prepared this special report on the State of Food and Agriculture in Africa for the Africa Union Ministerial Meeting on 2 July 2003 and the preparatory meeting of experts on 1 July. The report aims to promote discussion and encourage actions to enhance agriculture's contributions to economic growth and hunger reduction.

Food Security and Agriculture

The principal reasons for placing priority on agricultural development in Africa are: (i) the alarming country level trends in undernourishment; and (ii) the high levels of undernourishment. Table 1 provides undernourishment indicators by sub-region for Africa (Annex Table 1 provides numbers and trends in undernourishment at regional and individual country level). In 1998-2000, more than a quarter of the population of Africa was chronically undernourished (202 million people).

The data in Table 2 present trends in food security and poverty indicators by region, emphasizing the urgency for African countries. The numbers of people living on less than $1 per day is expected to increase by 45 million in Africa between 1999 and 2015, while in the other developing regions, the poverty numbers are expected to decrease by 330 million. Expectations are similar for the numbers of undernourished during this same period, with 6 million more in sub-Saharan Africa and substantial decreases in Asia and Latin America. Finally, the average regional food consumption level in Africa is expected to increase only by 7 percent in the next 15 years to 2360 kcal/person/day compared with 2700 for South Asia, 2980 for Latin America and 3060 for East Asia.

The prevalence of undernourishment in Sub-Saharan Africa has declined only slightly over the past two decades, from 36 percent to 33 percent. FAO projects a decline in the proportion of undernourished in Sub-Saharan Africa to 22 percent by 2015. Unfortunately, as noted in Table 2, the absolute number is expected to increase from 168 million in 1990/92 to 205 million in 2015. In North Africa the prevalence of under-nourishment is projected to fall to 4 percent.

Table 1: Prevalence of Undernourishment in Africa

Source: FAO

Table 2: Food and Hunger Indicators by Region

Source: FAO

During the 1990s, ten African countries reduced the number of undernourished. One important example is Ghana, where the number of undernourished fell from 5.1 million in 1989-91 to 2.2 million in 1998-2000 (Box 1 presents background information on Ghana's achievements). However, at the end of the 1990s, thirty countries had more than 20 percent of their population undernourished and in 18 of these countries, more than 35 percent of the population were chronically hungry.

The damaging consequences of hunger and malnutrition on human productivity are increasingly documented and understood. Recent evidence demonstrates that hunger can have severe negative effects on the growth rates of countries with a high prevalence of undernourishment. FAO's work on the links between hunger and economic growth suggests that for sub-Saharan Africa, the economic cost of hunger and malnutrition, as reflected in lost productivity, illness and death, is high. Over the period 1960 to 1990, countries in the region could have attained an average per-caput GDP level of US$ 2200 by 1990 if undernourishment had been eliminated. Instead, the region's average GDP per capita in 1990 was just US $800 per year

Reducing the incidence of hunger is essential in order to increase agricultural productivity and achieve higher rates of growth. People suffering from hunger are marginalised within the economy, contributing little to output and still less to demand. Investing in reducing hunger is a moral imperative and it also makes economic sense.

Improved agricultural growth is essential if Africa is to reduce poverty and hunger. Agricultural-led development generates economic growth, lowers the burden of food imports and opens the way to expanding exports. Increasing agricultural productivity, expanding exports and producing higher value crops all raise agricultural profitability and the incomes of those involved. Land owners, agricultural workers, input suppliers, retailers and the entire chain of activities servicing agriculture benefit. Labour incomes increase as the unemployed find work and the underemployed find more work.

An important message emerging from Africa's experience is the opportunity for agriculture to improve its contributions to poverty and hunger reduction. A well educated and trained rural population, with access to roads, health care facilities, irrigation and locally appropriate production technologies will produce consistently higher yields. Investments in human welfare and rural infrastructure, together with improved access to local and international markets will lower production costs, raise profits, improve competitiveness and produce greater incomes.

Agricultural Performance in Africa

Africa includes a heterogeneous group of countries with diverse resource endowments and economies. Agricultural conditions vary widely both among and within countries. African countries do share a number of worrisome characteristics and trends, however. Examples include a high degree of production variability, relatively low crop yields and dependency on primary exports with low income elasticity of demand and high price volatility. Relative to other developing regions, Africa's agriculture is undercapitalized, uncompetitive and underperforming.

It should be noted that in addition to showing diversity among countries, agriculture within each country is generally dualistic: a) small scale agriculture - including livestock, fisheries and forestry- ranging from semi-subsistence to small scale commercial; b) large scale agriculture. Indeed, the very performance profile of agriculture is itself dualistic, with the tabulated figures on performance and on the contribution of small scale and large scale agriculture to the region's food supplies, sub-regional and international trade unable to reveal the wide range that exists in reality. For lack of space, the contrasting performance, challenges and opportunities that apply to these sub-sectors cannot be explored in this paper but they should be fully recognised in crafting solutions in future.

Table 3 presents a range of agricultural indicators, highlighting how sub-Saharan Africa falls well below other developing regions in the proportion of area irrigated, value added per worker, fertilizer levels, and productivity growth in both crops and livestock activities. In sub-Saharan Africa less than 4 percent of the cropped area is irrigated; value added per worker in agriculture has to double to equal Latin America; and cereal yields would have to more than double to match South Asia.

Agriculture's relatively weak, and often declining performance is symptomatic of inadequate investments in agricultural infrastructure, in particular water control, rural roads and storage facilities, human capital, research and extension networks, and long-term crisis management. The longer these basic investments are delayed the less competitive agriculture becomes as the costs to produce, process and market agricultural products increase.

The consequences of further delay are dire. Africa is the only region where average food production per person has been declining during the past 40 years, putting large segments of the population at risk of food insecurity and malnutrition (Figure 1). Africa is the only developing region where FAO projects the numbers of undernourished and the numbers of poor to increase by 2015 (Table 2).

Table 3: Agricultural Indicators by Region

Source: FAO

Figure 1: Total and per capita food production for Africa

(Index: 1989-91=100)

Source: FAOSTAT

Agricultural growth in Africa requires an increase in agricultural productivity, in particular through investment in water control and other rural infrastructures, a much more dynamic trade sector and adequate incentives to switch to higher value crops, to invest in sustainable practices and to improve incomes of rural households -- both directly as land owners and agricultural workers, and indirectly as input suppliers, marketers, processors, retailers, exporters and food consumers.

The importance of improving productivity is highlighted in Table 4. The data depict a weather- dependent agricultural sector. For the past three decades, all the major agricultural activities display both low growth rates and large variations in production. To a large extent, irregular and unreliable rainfall determines yield levels and the state of food security for the vast majority of Africa's poor. The unpredictable production leads to volatile price changes from season to season, sending confusing signals to both producers and consumers.

The average annual agricultural growth rate for sub-Saharan Africa during 1967 to 1997 was around 2 percent. FAO projections suggest growth rates between 2 percent and 3 percent over the period to 2030. For the same period in North Africa, agricultural growth was 3 percent, with FAO projections pointing to a 2 percent growth rate over the next 30 years. Yield increases provided the main source of production growth in North Africa (between 1961 and 1997), contributing more than 60 percent. In Sub-Saharan Africa , expanding the area in production contributed 40 percent of the growth; cropping intensity and yield increases contributed around 25 percent and 35 percent respectively. Africa's population growth between 1967 and 1997 outpaced agricultural output growth, so that output per caput actually declined over this period.

Table 4: Net Agriculture Production: Average Annual Growth Rates for Africa

Source: FAOSTAT

Food crops cover about 60 percent of total arable area in sub-Saharan Africa. The rural poor and food insecure derive the bulk of their income from the production of staples, or from activities related to staple production. For the continent as a whole, annual per caput production of cereals has fluctuated between 140 kg and 175 kg during the 1990s -- far below the global average of 358 kg. Production growth in cereals for sub-Saharan Africa over the past 30 years was around 2.5 percent per annum, and is expected to stay roughly at this level for the next 30 years.

FAO forecasts that Africa's growth in agricultural output during the next thirty years (1995-97 to 2030), will come mainly from yield increases in North Africa (except for Egypt). Area expansion and cropping intensity will make relatively small contributions. In sub-Saharan Africa, FAO projections indicate that 25 percent of future production gains will come from an increase in arable land and 75 percent will come from a combination of yield increases (62 percent) and cropping intensity (13 percent). Arable land expansion is expected to slow compared to historical rates, yet increases of some 57 million hectares by 2030 are predicted.

The fishery and forestry sectors make important contributions to African economies. FAO projections suggest that per capita fish consumption levels will not grow from their relatively low, 1999 levels (6.8 kg) during the next 15 years. Local wild stocks are close to being fully exploited so imports would have to expand by 46 percent by 2015 to maintain 1999 consumption levels. While aquaculture has expanded rapidly in Africa during the past decade, Egypt accounts for most of the expansion and production. In 1999, Egypt accounted for 80 percent of total African production. Aquaculture contributes less than 1 percent of total fish supplies.

Fishery production (including capture production from inland and marine waters plus aquaculture production) in African countries ranged from 4.9 million to 5.9 million metric tonnes in the 1990-98 period. Since 1994, fishery production has been increasing at an average rate of 3.5 percent per year. Among the five African geographical groupings, West Africa and Southern Africa are the two major contributors to the total fishery production of the continent.

Forestry, too, continues to play a significant role in the formal economy of many countries of the region. Of the 530 million cubic meters of timber produced in the region in 1998, almost 90 percent was used for fuel wood and charcoal. Most trade in fuel wood and charcoal is within national boundaries. Box 2 outlines the recently completed Forestry Outlook Study for Africa, providing a  20 - year perspective and long-term planning framework for development of the sector.

Agricultural Trade Performance

Increasing trade and market opportunities locally, regionally and internationally contribute to agriculture's ability to grow, expand incomes and reduce poverty and food insecurity. Trade often introduces new, more productive and more sustainable production technologies, processing systems and related services. Trade provides opportunities to produce higher value products. For many producers, expanding agricultural trade opportunities locally and within the region is an important first step for taking advantage of potential new access international markets. However, according to a recent paper,¹ trade continues to be marked by overwhelming dependence on traditional overseas markets in industrial countries, although (admittedly from a low base), there has been substantial growth in intra-regional trade within Africa. If we exclude unrecorded, often informal-sector, trade across the porous borders, on average, only 10 percent of exports of countries belonging to each African Regional Economic Organisation are destined within itself. Due to greater economic complementarity (South Africa, Zimbabwe and Mauritius being significantly industrialised), the Southern Africa Development Community (SADC) shows the highest intra-community trade, with 31 percent of exports and 17 percent of imports being traded among its membership. Intra-community exports and imports for ECOWAS are just under 20 percent while for CENSAD, the ratios are about 12 percent (exports) and about 10 percent (imports).

Apart from what is often claimed to be a significant informal manufacturing sector, which may well dominate post-harvest processing in the region, at present, a characteristic of too many African countries is a relatively undiversified economy with little industry and manufacturing and exports dominated by one or two raw commodities. Often a single, primary agricultural commodity is the major source of export earnings, creating a source of uncertainty because of their low income elasticity of demand and their declining and volatile terms of trade. Figure 2 lists several African countries highly dependent on a single agricultural commodity for their export revenues. Overall, Africa's agricultural sector accounts for about 20 percent of total merchandise exports, declining from more than 50 percent in the 1960s (Figure 3).

Over the past 30 years, agricultural imports have outstripped agricultural exports, making the region a net agricultural importer since 1980 (Figure 4). Indeed, as population growth in Africa outpaces food production, imports and food aid are required to make up the difference (Figure 5). In the mid-1990s, out of the world total of 32 million victims of disasters receiving relief assistance from the World Food Programme (WFP), 21.5 million were living in Africa. In 2000 Africa received 2.8 million tonnes of food aid, which is more than a quarter of the world total. In 2001, the number of people suffering from food emergencies ranged between 23 and 28 million. Box 3 provides background information on recent food emergencies in Africa.

Figure 2: Dependence on a Single Agricultural Export Product 1999-2001:
Percentage of Merchandise Export Earnings

Source: FAOSTAT

Figure 3: Agricultural Export and Import Values and Share in Total Merchandise Trade

Source: FAOSTAT

Figure 4: Agricultural Trade Africa: Surplus to Deficit

Source: FAOSTAT

Figure 5: Cereal Production and Trade

Source: FAOSTAT

Improving Agriculture's Contribution to Poverty Reduction

As more data and studies become available on how economies sustain growth and promote more equal income distribution, the evidence demonstrates that agricultural growth has a stronger impact on poverty reduction than growth in other sectors and that agricultural growth has beneficial impacts on both rural and urban poverty. Growth in urban-based sectors does not have same reciprocal beneficial impacts on rural poverty, but urban, peri-urban agriculture and family type agroprocessing in cities are important factors for reducing poverty.

Past experience points to macroeconomic policies as the largest source of disincentives to agricultural growth. The macroeconomic framework has improved in many countries, yet the agenda is incomplete in many others. Price transmission from both domestic and world markets to the farm gate need improvement. It is essential that producers gain from opportunities. In many cases, the decline in international prices of some traditional crops such as cereals requires enhanced incentives for alternative high-value crops and activities.

Commitment to agriculture and rural development is a prerequisite for successful agricultural and rural development, implying that public spending decisions as well as policies should be examined and any bias against the sector should be removed. Addressing the enormous deficiencies of the region in terms of rural infrastructure, in particular water control, rural roads and storage facilities, is an essential step towards expanded investment in the agricultural and rural sectors.

In many countries, the share of public spending on agriculture does not reflect the importance of agriculture in the economy. In fact, at the regional level, the trends in lending to agriculture are declining. In Sub-Saharan Africa, national government expenditure on agriculture as a share of total expenditure declined from around 6.3 percent in 1990/91 to 4.6 percent by the end of the decade. International assistance is also in decline. Data in Table 5 shows how external assistance (concessional) to agriculture from international sources declined by 36 percent during the 1990s. Both national governments and international donors need to examine the reasons for this decline and the need to reverse it. Development assistance, investments and related resources for rural Africa are required at both international and national levels if agriculture is to prosper and contribute to growth.

Table 5: External Assistance to Agriculture*

*: External assistance to agriculture refers to FAO's Broad definition of concessional lending to agriculture.

Food Security and HIV/AIDS in Africa

An issue for special attention is HIV/AIDS and its links to food security. In its assessment of the Southern Africa crisis in September 2002, the Special Envoy of the United Nations for Humanitarian Needs in Southern Africa highlighted the HIV/AIDS pandemic as a fundamental, underlying cause of vulnerability in the region that represented the single largest threat to its people and societies and as a contributing factor to acute vulnerability.² Similarly, a recent SADC food security Ministerial Brief states that HIV/AIDS directly contributes to, and is compounded by, food insecurity, and indicates that HIV/AIDS food insecurity linkages may be many and long-lasting.³ The implications of HIV/AIDS for food security are interwoven with aspects of governance, social sector performance, a functioning private sector, and macro-economic performance.⁴

Worldwide, trends are alarming, as shown in Table 6. However, around 70 percent of the 42 million people worldwide with HIV live in Africa, where AIDS is now the leading cause of death. The food security implications of the epidemic are likely to be most pronounced in sub-Saharan Africa, where the adverse impact is being compared in importance to that of recurrent droughts and other factors.

Table 6: Regional HIV/AIDS Statistics and Features, end of 2002

Source: adapted from UNAIDS (2002): AIDS Epidemic Update, December 2002

The linkages between HIV/AIDS and food security are bi-directional. Poverty-induced malnutrition is likely to lead to an earlier onset of AIDS, due to an increased susceptibility to opportunistic infections. The epidemic impoverishes households through loss of labour in agriculture and other livelihood activities; increased cost of health care and funerals; diminished capacity to care for children and other vulnerable individuals; and erosion of the asset base. Governments and donors need to adopt a development-oriented approach in addressing its effects on food security with a long horizon rather than merely a disaster relief approach. Clearly, there is need for governments to find new and innovative ways of linking short- and long-term responses and to increase their commitment to addressing the structural vulnerabilities that underlie acute crisis situations. There must be balance in funding for short-term, food-based responses and longer-term non-food based interventions.

Food security interventions should be carried out with an "HIV/AIDS lens" and be complemented with HIV-specific interventions if they are to contribute to reducing HIV infection and to mitigating the impact of the epidemic. As HIV infection spreads and more people fall ill and die, the impact on food security is likely to increase and outweigh the relative importance of other factors. A food security response to the epidemic, linking short- and long-term interventions is imperative. Such a response needs to address food production, food access and nutritional aspects.

Food security policies and programmes need to be adjusted to enhance resilience to HIV/AIDS as a new element among household, community and national shocks, which requires different mechanisms from those used in the past. Increased morbidity and mortality have reduced resilience to shocks communities were once able to cope with. Measures to address the long-term, structural factors fuelling the double crisis of food insecurity and HIV/AIDS range from reform of a wide range of policies; ensuring sustainable access to affordable agricultural inputs; addressing gender inequalities; prioritising human capacity and institution building for rural service delivery; focusing on long-term labour shortages created by the epidemic; effective participation of the vulnerable in policy improvement; and attention to the needs of Africa's nearly 14 million orphans in need of care, food and livelihood-building prospects.

Response under NEPAD

Document AU/MIN/AGRI/2 on responding to the food security and agricultural challenges and Document AU/MIN/AGRI/3 presenting the Action Plan for agriculture of the New Partnership for Africa's Development (NEPAD) offer a basis for discussion of what Africa can do to respond to the sombre situation portrayed by this status report. The actions proposed in those documents come in the context of the Comprehensive Africa Agriculture Development Programme (CAADP) prepared by the NEPAD Secretariat with FAO assistance⁵. NEPAD draws the attention of member governments to a wide range of actions to revitalize African agriculture and provides a framework for harmonised and collaborative responsive action. Five specific opportunities for improving Africa's agriculture outlined by NEPAD are presented: (1) extend the area under sustainable land management and reliable water control systems; (2) improve rural infrastructure and trade-related capacities for market access; (3) increase food supply and reduce hunger; (4) improve agricultural research, technology dissemination and adoption; (5) improve responses to disasters and emergencies.

NEPAD's overall vision for agriculture seeks to maximise the contribution of Africa's largest economic sector to achieve a self-reliant and productive Africa that can play its full part on the world stage. Box 4 highlights some important impediments to African agricultural renewal identified in the NEPAD study: the NEPAD agriculture programme offers some of the solutions to the issues highlighted. Furthermore, a broad look at responses to Africa's food security and agriculture crisis is presented in document AU/MIN/AGRI/3 (Item 3 of the Agenda). In essence, NEPAD aims for agriculture to deliver broad based economic advancement, to which other economic sectors, such as petroleum, minerals and tourism, may also contribute in significant ways, but cannot achieve on the same mass scale as agriculture. The NEPAD goal for the sector is an agricultural-led development that eliminates hunger, and reduces poverty and food insecurity, opening the way for export expansion. The vision for agriculture is that the continent should, by the year 2015:

• Reach 15 percent of irrigated arable land;
• Increase by US$92 billion the investments in rural roads, trade-related capacities for improved market access, and provide for some US$37 billion in continuing operation and maintenance;
• Attain food security (in terms of both availability and affordability and ensuring access of the poor to adequate food and nutrition);
• Improve the productivity of agriculture to attain an average annual growth rate of 6 percent, with particular attention to small-scale farmers, especially focusing on women;
• Have dynamic agricultural markets among nations and between regions;
• Have farmers integrated into the market economy including better access to markets, with Africa to become a net exporter of agricultural products;
• Achieve more equitable distribution of wealth;
• Be a strategic player in agricultural science and technology development; and
• Practice environmentally sound production methods and have a culture of sustainable management of the natural resource base (including biological resources for food and agriculture) to avoid their degradation.

¹ Creation of a Common African Market for Agricultural Products: Issues, Choices and the Way Forward. Draft manuscript. Interim Commission of the African Union, Addis Ababa, May 2003.
² T. Morris, Special Envoy of the Secretary-General for Humanitarian Needs in Southern Africa: Report of the First Mission to Lesotho, Malawi, Mozambique, Swaziland, Zimbabwe and Zambia, dated 24 September 2002.
³ SADC Food Security Ministerial Brief: 28 Feb 2003.
⁴ T. Morris, Special Envoy of the Secretary-General for Humanitarian Needs in Southern Africa: Report of the First Mission to Lesotho, Malawi, Mozambique, Swaziland, Zimbabwe and Zambia, dated 24 September 2002.
⁵ New Partnership For Africa's Development (NEPAD), Comprehensive Africa Agriculture Development Programme, November 2002 (Draft).
⁶ FAO, State of the World's Forests 2003.
⁷ IFAD Strategy for rural poverty reduction in Western and Central Africa: http://www.ifad.org/operations/regional/2002/pa/pa.htm