Much of the conversation in media, academic institutions, and policy formation circles today surround the view that large firms are inherently the drivers to sustainable development in Sub-Saharan Africa (to be used interchangeably with Africa). It is this lens that also creates a distorted understanding of the very issues which affect the overwhelming majority of people on the continent. Coming from the view that ‘small is beautiful’ and questioning the assumptions the drive the ideas behind conventional thinking, I want to analyze CAADP policies however use a lens of the small enterprise, sometimes referring to the small holder as the very same character in our narrative. Since leaving East Africa in the summer of 2010, I have continued to study agriculture in Africa particularly through the historical policy, economic, and cultural lens’, less so the ‘aid’ lens (although, this is just as important). And now that my new social enterprise – Capitol Food Ventures – has been working on the ground with entrepreneurs building small food and agriculture businesses in Africa (and building one myself here in the States), it is clear where the resources and policy initiatives are focused. I wanted to bring the Comprehensive Africa Agriculture Development Program (CAADP) back into the conversation, since it is touted as a key policy framework to drive development in Africa and since the new enterprises I am helping to develop are directly (negatively) impacted by these efforts.
Political Map of Africa
Premise of CAADP
The Comprehensive Africa Agriculture Development Program (CAADP) was developed in 2003 to bring together stakeholders from the continental, regional, and national levels to share ideas and strategize about how to effectively develop agriculture within the Sub-Saharan Africa context. It is a commitment of 43 (of the 51 in Sub-Saharan Africa) countries to pursue a higher path of economic growth through agriculture-led development in order to eliminate hunger, reduce poverty and food insecurity, and enable the expansion of exports on the continent. Ultimately, CAADP seeks to add value to various current programs by bringing about fundamental qualitative changes in the way agricultural policies are made and implemented by African countries.
To achieve all these goals, CAADP aims to stimulate agriculture-led development around four technical objectives:
- to extend the area under sustainable land management and reliable water control systems,
- to improve rural infrastructure and trade-related capacities for market access,
- to increase food supply, reducing hunger and improving responses to food emergency crises, and
- to improve agriculture research, technology dissemination, and adoption.
In addition, there are two cross-cutting themes among the four objectives: 1) capacity strengthening for agriculture and agribusiness including academic and professional training, and 2) information for agricultural strategy formulation and implementation. And herein lays the challenge: who is going to represent the concerns of small businesses and small holders in the ‘strategy formulation and implementation’? What systems of sustainable land management and reliable water control systems are they talking about and how are (or were) those systems developed? Why is increasing food supply a key pillar to CAADP when supply is not the issue, but policies and incentives surrounding local food including CAADP’s very own of promoting greater food exports (with the continent being a net importer of food)?
With all the competing views on development in Africa out there, our views are based on the fundamentals of systems thinking. In this analysis in particular, we primarily use just 1 of the 13 habits of systems thinkers – questioning assumptions – to problem solve and move into deep inquiry of the observations around us. Using this approach, we can better understand what is happening around us as part of a larger interconnected system (with its own systems of power, decision making, operating mechanisms, feedback loops, oppression, culture, etc.) as opposed to looking at each component as different, separate, or a collection of parts all with a need to be linked together.
Understanding this approach to our analysis, we believe that the way we express ourselves about Africa have profound meaning in the way we see the outcomes. For example, whereas many believe land in Africa is an underutilized resource, which has largely been mismanaged by its own colonial institutions of authority, we believe that it is not the land but the people we need to be working with to better coordinate and utilize their ideas and resources to help solve the agricultural challenges we face today – globally and in Africa. Our belief is that to date, CAADP has been unable to create its much anticipated impact of fundamentally changing the way agricultural policies are made and implemented and the very root of this policy bungle offers many ways for us to analyze.
But really, how could CAADP generate this impact?
From a policy perspective, African states face severe barriers to entry for their agricultural products in the United States and in the EU. These powerful sovereign states, including fellow OECD partners and large corporations (including MNC’s), do not just exert tariff pressure – they have coyly adopted more regulatory hurdles requiring increased paperwork, which requires increased staffing by African businesses, and health and safety codes (storage, cooling, packaging, etc.) that prevent African businesses from entering their markets. These increased costs are born by the small African firm, with little help from the public sector – so no, this is not ‘an even playing field’. The only firms that are capable of handling these pressures are larger corporations and MNC’s who have internal systems to manage the workload. Ultimately, CAADP focuses on these larger corporations who employ discriminatory policy towards small African businesses and who can benefit directly from state policy.
Until recently farming was the most heavily subsidized industry in the world, with farmer support in OECD countries totaling around US$280 billion or 19% of agriculture expenditures. There has been a gradual reduction in OECD subsidies, as a result of continuing pressure from the WTO, although subsidies in emerging economies have been increasing in recent years according to KPMG. However, developed countries heavily rely on border protection through tariffs and tariff-rate quotas (TRQs). Tariff-rate quotas essentially hinder imports from coming into the country unless the importing country can meet a minimum volume threshold (which in the case of many of the countries in Sub-Saharan Africa is very difficult). Other countries use administered prices, target prices and intervention purchases to maintain certain domestic price levels (see OECD Agriculture Policies 2011 report, p.50) further alienating small scale African firms.
In the field, small holders account for 56% of the world’s total agricultural production but 98% of the total # of farms, in contrast to large corporations who only sometimes utilize local farmers for their supply chains (via outgrower schemes, however, even these farmers are large in comparison to the small holders we are talking about; from our definition, a small holder is any farmer who cultivates less than 25 acres or 10 hectares – see below for a graph of the overwhelming levels of our agricultural production coming from small farms). And that’s just the challenge: 500 million small holders are in the field. Representation of this massive body is at best splintered into agricultural cooperatives who might be able to send a representative to community meetings, but rarely at policy formation events in cities or even unable to connect to larger discussion and debate about their own fate via online forums.
Graph: Agricultural Holdings
For the supply base, production quantities are rarely enough for more than subsistence trade at the local level and often times catered to local tastes and preferences which offer a much lower margin to the farmer. In addition, most production is channeled through some network of middlemen, traders, and transporters, ultimately leaving little leverage to the small farmer, especially when there are so many producing similar goods. The inherent driver here is the demand for which goods are produced and purchased – most transaction arrangements fall in to the category of an elusive ‘market’ as opposed to more established relationships between buyers and sellers of food products. In general, the continent is a net importer of agricultural goods, however, East Africa is the only region with net positive trade in terms of value. See also the chart below for Africa’s food import and export trends (current values):
However this is not the full story. The supply base is spread out into a vast network of distant villages – most of Sub-Saharan Africa (except for the cattle belts and forests) is primed for agriculture use. Yet this land is also being infringed upon by two factors: foreign investors with little regard for local peasant rights (according to Oxfam, in 2009, of the 42 million hectares of land that investors expressed interest in, 75% was in Sub-Saharan Africa) and climate change shifting rain patterns and underlying water sources. So if the supply base is this challenging of an environment to address, as a politician, what is the incentive to invest resources further in agriculture?
Table 1: Share of Africa’s Food Trade (2004-2007 averages)
We believe that African policy makers must not only target local small scale stakeholders (and not large corporations or MNC’s) such as small businesses, small holders, and community leaders, because they are more likely to understand the needs in their local communities, but also find ways of building platforms that they can participate in the dialog – to have a seat at the table, so to speak – so they can speak (see my thoughts on dialog here). By providing local stakeholders with access to adequate capital, technology, and other means of production necessary for value creating processes, these small businesses can create solutions via small enterprises within their communities addressing local needs and helping to generate a local multiplier effect that will improve the agriculture growth prospects throughout Africa (think: inside out, not outside in).
It is these beliefs that formulate the premise of this paper: why are currently generated policies so skewed in favor of large corporations (multi-national corporations – MNC’s) to further exacerbate the power dynamics rooted in these societies? Although it may be easy to answer this question with the ‘power card’, we want to look at it more critically to find points of intervention that we might feasibly take in order to shift the focus towards smaller enterprise. Let’s first look at the assumptions inherent in CAADP.
Assumptions of CAADP
Implicit in the CAADP policy are biases that cross densely populated urban centers and financially impoverished rural areas, stagnant agriculturalists with roaming pastoralists, elite power brokers and the peasant power-less, and large multi-national firms over local small businesses. The language that describes how Africa’s nation states are to address the demanding challenges of poverty, economic development, and governance is caught up in corporate rhetoric that distances itself from the very individuals it is trying to help. In the case of CAADP, four assumptions are rooted at the center of this idea and drive policy towards a larger ‘scale’ that is unreachable and impracticable by a majority of its intended beneficiaries (i.e. small enterprises and small holder farmers). The assumptions are that:
- agriculture development will drive economic development,
- greater financial investment in the smallholder farmer specifically will help alleviate poverty,
- by working together, nation states can effectively address the economic challenges before them, and
- production is the primary agriculture issue to address; that by producing more food, African nations will become economically efficient, even self-sufficient.
When the governing documents of CAADP are analyzed more critically, we find that these assumptions are made clear in many ways. For instance, by increasing country level budgets to an arbitrary 10% of expenditure, policy makers are assuming that this investment will yield similar outcomes as the economic levers of monetary or fiscal policy might (again, arguably), and that agriculture sector growth of 6% would ensue. What is clear is that the 10 years since have proven that increased inputs of financial capital do not translate to sector growth – the quality and effectiveness of where that money goes matters. It is also presumed that the concept of working together (embedded in African proverbs such as “if you want to go fast, go alone; but if you want to go far, go together”) will somehow address the underlying cultural norms preventing leaders from being held accountable for their actions, and therefore prevent real issues of power and transparency from emerging; documented cases exist where leaders are publicly found reminding colleagues that it is not ‘African to tell on your fellow brothers.’ Furthermore, increasing the production of agricultural goods within Africa will not generate a sustainable impact on African economies with such high demand for goods from abroad. That is, simply increasing the supply of food will not create the multilateral dialogue and rectify the unresponsive institutions needed to support smallholder economic empowerment.
Anything good about CAADP?
This policy is not all doom and gloom, for instance it is the agriculture research and development spending which can better support more local responses to natural resource management, pest and disease controls, and climate change challenges facing the continent. And the precedent established to gather and coordinate country agriculture plans is now in place with a structure for stakeholders to work within and be guided by. The key principles of leadership, ownership, inclusiveness, partnership and outcome based planning are to be applauded. I do not, however, believe that drawing the connection between CAADP policies and the countries profiled as ‘successes’ (Ghana, Ethiopia, and Burkina Faso) in ONE’s “Ripe for Change” report are appropriate; they all happen to be historically rich with their agricultural industries (and their policies) which require all-together different analysis broadening our scope without solely looking through the lens of CAADP. Meaning, Ghana’s cocoa industry and Ethiopia’s diversity of crop production and famine experience color their internal agriculture policies in different ways. Both draw different types of attention: in Ghana’s case, COCOBOD (the largest public institution there) facilitates blatant corruption with its people (while it is difficult to find literature on this, I have heard directly from residents in country); and Ethiopia has much stronger social contract links between its government and citizenry as opposed to relations with corporate and private sector players whose aim it is to shape agriculture via the CAADP compact (in addition, Ethiopia has for some reason decreased its public expenditure in agriculture once it signed onto CAADP, possibly looking for external finance to supplement that change).
Framework for Analysis
Our aim in this analysis is to challenge CAADP’s implicit policy assumptions as biased towards large firms. To do this, for each assumption we will:
- identify what the conventional view is,
- identify why the assumption is not necessarily sound, and
- synthesize our analysis into a new assumption that is more feasible and that supports small enterprise (e.g. “Agriculture drives economic development” becomes, “economic development in dense urban areas drives agriculture development”)
*Analysis on CAADP’s assumptions will follow in subsequent posts under the series “A Primer on African Agriculture Policy”. I look forward to hearing your feedback, comments, and diatribes as they relate to agriculture policy in Africa and on our very own critical analysis.