COAG/2005/INF/9 (Arabic, English and French only)

Table of Contents

1. INTRODUCTION

2. THE COMPANION DOCUMENT

Annex 1: Fertilizers and the CAADP

Annex 2: Total Resource Requirements of CAADP’s Priority Areas (2002-2015) (US$ billion)

1. INTRODUCTION

1. The Comprehensive Africa Agriculture Development Programme: the Comprehensive Africa Agriculture Development Programme (CAADP) is the framework for the development of agriculture in Africa under the New Partnership for Africa’s Development (NEPAD). The CAADP was prepared by FAO in close cooperation with the NEPAD Secretariat at the request of the NEPAD Steering Committee. It deliberately focuses on investments into three mutually reinforcing “pillars” that can make the earliest difference to Africa: (i) extending the area under sustainable land management and reliable water control systems; (ii) improving rural infrastructure and trade-related capacities for improved market access; and (iii) increasing food supply and reducing hunger. In addition, it includes a long-term “pillar” on research and technology adoption to underpin the productivity gains Africa so greatly needs. The CAADP document was endorsed by the Heads of State and Government at the African Union Summit held in Maputo (July 2003) and was published by NEPAD in the same month.

2. The need for a CAADP Companion Document: in their meeting held in FAO headquarters in Rome, June 2002, African Ministers of Agriculture specifically “requested that subsectors of fisheries, livestock and forestry be given adequate attention in the NEPAD efforts”. They reiterated their request made during the June 2003 meeting of African Union Ministers of Agriculture held in Maputo, Mozambique.

3. The NEPAD Steering Committee subsequently requested FAO to assist in preparing the document on fisheries, livestock and forestry, the salient points of which are summarized in this note. Draft documents were prepared, circulated for review and have now been assembled into a companion volume to the existing CAADP; the companion volume will be published after endorsement by the African Union Summit of July 2005. The inclusion of livestock, fisheries and forestry into the CAADP raises the original total investment requirement from US$251 to US$320 billion, by 2015. The increase is equivalent to about US$6 billion annually (see Annex 2).

4. In addition, Annex 1 of this note refers to fertilizers - an important element in raising agricultural production in Africa.

2. THE COMPANION DOCUMENT

2.1 Livestock Subsector

5. The livestock subsector is estimated to account for over 50 percent of the agricultural capital stock in sub-Saharan Africa and is a significant contributor to agricultural GDP. For some countries, the contribution of livestock to agriculture exceeds 50 percent (e.g. over 80 percent in Botswana, Mauritania and Namibia; 70 percent in Lesotho; and 58 percent in the Sudan, the country with the second largest livestock population in Africa). Livestock is also a major source of food, particularly of high-quality protein, minerals, vitamins and micronutrients for the majority of African people. It is estimated that meat, milk and eggs provide about one-fifth of the protein in African diets.

6. Constraints to increasing livestock productivity: due to several constraints in the livestock subsector, production and productivity has failed to keep up with the growing demand and this situation has led to increased import-dependence, at an annual cost of some US$700 million. The CAADP companion document draws attention to constraints that need addressing, ranging from technical issues to policy and institutional factors, such as excessive government regulation, poor facilities for research, weak extension and animal health services, inadequate marketing and rudimentary processing. If the constraints are addressed, total livestock production at the average of 4.2 percent per annum could be achieved by 2015 to meet the needs of the growing population, improve nutrition and progressively eliminate undue food imports. Particularly, improvement in technology development and transfer would contribute a larger percentage of the estimated annual growth. It is expected that appropriately targeted technology for feed production, disease control and breed improvement would result in increased productivity, especially in dairy products.

7. Strategies and priority areas: The companion volume proposes strategies needed in the subsector to meet the challenge of an annual 4.2 percent growth rate. Strategies vary for each zone as follows:

• the greatest opportunity is in the medium rainfall region of the semi-arid and subhumid zones, which have a largely underexploited potential for producing animal feed. Strategy would involve enhancing the input functions of livestock within the crop-livestock systems;
• in the highland zone where high levels of intense crop-livestock complementary production has been achieved, there is still potential for further growth in livestock productivity. Strategies could focus on breed improvement to supply already strong and expanding markets for meat and milk;
• in the arid zones and the drier parts of the semi-arid zones, there is limited potential for expansion and productivity enhancement. Strategies could focus on protection of pastoral livelihoods, preservation of productivity of the rangelands and prevention of land degradation.

8. Financial resource requirements: The companion document gives broad orders of magnitude: total investment requirements for livestock development are estimated at an annual average of US$1.8 billion (total of approximately US$21 billion over 12 years), of which almost US$16 billion (75 percent) for infrastructure and some US$5.3 billion (25 percent) for policy and institutional development. An amount of US$1.4 billion has already been included under “livestock infrastructure” in Pillar no. 3 of the CAADP (Improving Infrastructure and Trade-related Capacities for Market Access).

2.2 Forestry Subsector

9. Within the vision of NEPAD, forestry can contribute to the economic and social well-being of the African people because of the multiplicity of forest functions. Forestry can particularly enhance agriculture productivity through the protection of biological diversity, watersheds and by arresting land degradation and desertification.

10. Priority areas of intervention: in the light of the above-mentioned vision, the forestry component under CAADP will focus on the following four priority areas: i) improving the policy, legislative and planning framework; ii) strengthening the institutional structures for better implementation of policies and legislation; iii) increasing investment in critical areas, especially for implementing sustainable forest management and enhancing the availability of goods and services; and iv) enhancing complementary investment for the development of industries and supporting infrastructure. Key thrusts would be:

• Policy and legal reforms and improved land use planning: the major thrust here would be to strengthen the policy and legal framework that directly or indirectly has an impact on the sector. A number of countries have initiated changes in their sector policies, but these still need to be pursued vigorously. Specifically, there is a need to consider the cross-sectoral linkages and to address the impact that policies in other sectors have on forests and vice versa and to correct inconsistencies.
  Strengthening the institutional framework: African forestry is characterized by a number of institutional weaknesses. Although many countries have revised forest policies and brought about changes in legislation, in the absence of support efforts to strengthen the institutional framework, these policies and legislation remain ineffective.
• Investing in sustainable forest management: efforts should be directed to enhance the sustainable production of goods and services from forests and trees.
• Improving the efficiency of forest industries and other complementary investments: the focus here would be on enhancing investment in forest industries to create additional capacities to meet future domestic and external demand for forest products. This requires that special attention be paid to upgrading technology to make products competitive in the local and global markets.

11. Resource requirements: Average annual resource requirements for the implementation of the forestry component of the CAADP are estimated at approximately US$3.9 billion of which approximately US$1.00 billion is expected to come from the corporate sector, other private investors, non-governmental organizations, farmers and local communities. Thus, the additional annual investment required would be of approximately US$2.9 billion, which have to be tapped from governments and external development partners.

2.3 Fisheries Subsector

12. In Africa, fisheries are important as a source of livelihood, food and nutrition and as a foreign exchange earner. African fisheries also contribute to economic growth and in some economies quite significantly so. Approximately 2.7 million people engage in fishing activities either on a full-time, part-time or occasional basis, depending on whether the activity is for subsistence or for sale. Average yearly per caput consumption reached approximately 8 kg (live weight equivalent) at the end of the 1990s, contributing an average of approximately 20 percent of the animal protein consumed. Net exports for the whole continent were worth about US$1.7 billion in 2001, exceeding the net foreign exchange income reported for any other African agricultural commodity. The companion volume draws attention to constraints, strategies and resource implications, as summarized below.

13. Constraints to fisheries development: marine fisheries face a number of constraints, of which the most salient are: i) weak institutional framework, including inadequate supplies of the human and financial resources; ii) poor and ineffective fisheries management, including lack of zoning and enforcement of legislation, stock enhancement, poor public education, spotty resource allocation, poor access control, and conflict among users (including between industrial and artisanal fleets); and iii) lack of human and financial resources, especially for public institutions. For Inland Capture Fisheries predominant constraints relate to over-exploitation of available resources and poor and ineffective management. An immediate objective is to avoid the collapse of stocks and the related costs of stock rehabilitation. For Aquaculture Development constraints vary from region to region and according to the level of aquaculture development. These include: i) availability of enough water in some major producing countries, e.g. Egypt; ii) inappropriate technologies and poor extension services for the dissemination of aquaculture (aquaculture is relatively new in many countries); iii) preservation problems and poor transport infrastructure; and iv) lack of comprehensive aquaculture policies or appropriate aquaculture legislation for sustained growth.

14. Strategies and priority areas: the CAADP companion volume calls for the fisheries subsector to pursue the overall objective of increasing its role not only as a source of economic growth and foreign exchange earnings, but also as a source of livelihood, food and improved nutrition. Three main broad strategies prioritized for future investments are:

• fishery equipment and infrastructure improvement: these include improvement of vessels, gear and shore-based plants for marine capture fisheries. It seems likely that these improvements can be funded by commercial banks guaranteed by sector assets and future earnings, if steps are taken to ensure future profitability of the industry. Expansion of fishing ports and beach landing centres would need public funding;
• development of a vibrant commercial aquaculture: It is most likely that interest in profit-oriented aquaculture will continue to grow rapidly and shape the future of aquaculture in Africa. The interest can be realized only if governments establish a conducive policy environment for private investments;
• fishery policy and institutional framework: There is a need to adopt policies clearly aiming at sustainable fisheries in the context of functional marine ecosystems. This requires improved governance that ensures: i) a fisheries legal system; and ii) an effective fisheries management system.

15. Financial resource requirements: total funding requirements are estimated at US$2.7 billion for 12 years or an average of US$225 million per year. Policy and institutional development would be funded entirely by the public sector (approximately US$300 million or US$25 million per year); fishery equipment and infrastructure would need about US$1.2 billion for 12 years or US$120 million per year and be primarily funded through public sources, but with some private sector involvement. Aquaculture development (also US$1.2 billion) is expected to be entirely funded through private sources, except for policy and institutional aspects of the subsector.

Annex 1: Fertilizers and the CAADP

While not specifically requested by African Ministers for inclusion in the CAADP companion volume, fertilizer use is considered a fundamental need if Africa is to achieve increased productivity in the crop sector. For this reason, FAO has taken many opportunities to draw attention to the need for increasing the use of fertilizers and for assessing the feasibility of increasing production of this input within Africa. Some key dimensions highlighted include:

1. Addressing the fertilizer challenge in the context of food security would require that an effective demand for fertilizer is created. A precondition for creating fertilizer demand is that fertilizer use must be profitable. This requires that: i) farmers receive a larger share of the commodity value paid by consumers; ii) farmers receive higher farm incomes to purchase inputs; iii) farmers have improved knowledge on the efficient use of mineral and organic fertilizers; and iv) rural input credit programmes are established and accessible. In addition, policies should be developed to facilitate fertilizer trade and this would include rural input systems for assured product availability, e.g. agrodealers linked to fertilizer suppliers and commodity traders.
    
2. Despite the low African soil fertility status and consequent low fertilizer nutrient recovery, each tonne of nitrogen fertilizer would produce at least an additional 5 tonnes of maize or rice. Such an increased production would help to contain rising imports in Sub-Saharan Africa that reached in 2002, some 2.5 million tonnes of maize and 6 million tonnes of rice.
    
3. Assured improvement in crop yields after fertilizer use is a motivation for food insecure small farmers in many African countries to use this input: such yield improvement is more assured and risk is minimized with the introduction of small scale irrigation. Irrigation makes use of fertilizers worthwhile and in turn fertilizer application is imperative to increase yields and thereby ensure the profitability of investments in water control, so making this a first priority in NEPAD-CAADP projects.
    
4. Africa imports most of the fertilizers it uses and their prices depend on international demand and supply. The ability to lower fertilizer costs varies from country to country in Africa. African fertilizer import costs were about US$394 million in 2003, but farmers may have paid double this amount. in order to attain food security for half the hungry in Africa in 2015 through increased domestic production, would require the quantity of fertilizer to increase by about 3 percent/year. The cost of the fertilizer itself would remain a small fraction of the total bill because much of the cost comes from shipping to distant inland destinations in Africa over poor infrastructure, distribution to rural areas, the cost of capital to finance supplies, and the significant business risks facing fertilizer importers and dealers as they seek to develop domestic demand.
    
5. Achieving the established NEPAD-CAADP goal for food security would require a fertilizer development programme with the following proposed components and investment cost:

• implementation and expansion of 22 national soil fertility action plans (including on established sites of the Special Programme for Food Security) to improve land husbandry, during five years,
• establishment of national access to existing national and regional fertilizer market and trade information systems (through existing subregional economic cooperation agreements) at US$1.2 million;
• improved efficiency in procurement and development of rural markets for downstream distribution of inputs in collaboration with commodity traders within the framework of ongoing national special programmes for food security at US$432 million over five years;
• increased fertilizer manufacturing capacity to meet increased effective demand, estimated investment cost at US$558 million;
• establishment of a fertilizer trade credit fund at an estimated cost of US$100-175 million; and
• re-opening of the NAFCON-Nigeria production facilities to permit increased nitrogen fertilizer availability for at least the West African market (which can be accomplished within 18 months).

Annex 2: Total Resource Requirements of CAADP’s Priority Areas (2002-2015)
(US$ billion)

¹ Short-term period covers 2004-2005 for livestock, forestry and fisheries investments