Working Paper 105 - Smallholder Agriculture in East Africa: Trends, Constraints and Opportunities

Publishing Date 05/05/2010 00:00

Categories: Agriculture & Agro-industries

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Working Paper 105 - Smallholder Agriculture in East Africa: Trends, Constraints and Opportunities (645 kB)

Description Despite the importance of smallholder agriculture in East Africa, the strategic, conceptual and empirical analysis in the context of the crisis, which would guide policymakers and development practitioners in their efforts to revitalise agriculture in the aftermath of the crisis, is sparse. Moreover, recent studies tend to examine specific constraints to smallholders’ activities In contrast; this paper investigates the overall trends, challenges and strategic opportunities for smallholder agriculture. The study aims at helping this important segment of the population to benefit from opportunities emerging from East Africa’s economic growth and increasing regional integration. The analysis has also examined how the recent escalation of food prices and related opportunities can be seized to fully engage East Africa’s agricultural potential. The study combined review of the existing literature and country case studies on these four East African countries. The countries studied were selected based on the size of their economies, the high proportion of smallholder farmers (over 75 percent) and relatively high contribution of agriculture to the GDP. Over 75 percent of the total agricultural outputs in the four countries are produced by smallholder farmers with farm sizes of about 2.5ha on average, producing mainly for home-consumption, and using traditional technologies. Limited commercial and semi-commercial production also occurs. Major crops include cereals, root crops, banana tea, pyrethrum, sisal, cut flowers, coffee, cotton and tobacco. Coffee, cotton, horticulture produce and tea are the main export crops. Cattle and poultry dominated the livestock sub-sector. Other important livestock reared are sheep, pigs and goat. Forestry, horticulture and fishing are also important economic activities in most of the study countries. However, contributions of smallholder farming, and agriculture in general to the region’s rapid growth between 2005 and 2008 have remained limited. Instead, growth was driven by services, in particular, trade. This paper finds that at the national level, weak institutions, restricted access to markets and credit. These factors, including inadequate infrastructure and limited access to land for agricultural purposes have constrained productivity growth of smallholder farming. In general, land expansion using existing techniques carries environmental costs as forests and wildlife areas are encroached on, and fish stocks depleted. Moreover, as increasingly marginal land comes into cultivation, productivity declines. The agricultural growth path therefore needs to combine features of the land-intensive and labour-intensive models that conserve the resource base. Because of the diversity of East Africa’s endowments, growth paths deriving from better cultivation of larger tracts will be optimal in more land-abundant parts of the countries, whereas those associated with high yields and intensive cultivation will suit areas with less abundant land. Where an increase in area per worker is possible (in relatively land-abundant areas), total factor productivity (yield) increases would be less crucial in the near term. The converse applies to areas where land is scarce. In such cases, yield increases are necessary even in the short-term. In East Africa, as elsewhere in Africa, increases in the productivity of land on the scale of the Asian Green Revolution have been elusive, although some progress has been achieved in specific areas, such as the uptake of improved varieties of maize, beans, and cassava. Despite the constraints listed above, over the longer term smallholder agriculture presents numerous opportunities. The potential of agriculture and smallholder farming can be illustrated by the enhanced income generation in several East African agricultural export sub-sectors. In this context, Kenyan horticulture exports often serve as an example of agricultural export success in Africa.  Horticulture constitutes one of the largest earners of foreign exchange in agriculture, with over 50 percent of proceeds being generated by smallholders. Furthermore, the recent large scale land investments in Africa (including East Africa) present opportunities for the transformation of farming in Africa through better irrigation infrastructure, jobs, and technology transfer and food security. However, the environmental impact factor of these new investments needs to be reviewed and factored into the agreements for such investments. This study concludes that concerted efforts of all stakeholders, including governments, NGOs, and development practitioners, are needed to remove the existing bottlenecks to productivity growth in smallholder agriculture and progress with the region’s development agenda. Research reviewed in this study suggests that given the interdependent constraints that amplify each other, several measures need to be implemented jointly for the reforms targeted at the smallholder sub-sector to succeed this time around. In particular, improving land property rights and access to land, increasing access of farmers to credit, providing appropriate incentives for the market mechanism to work, and encouraging farmers’ training so they are more inclined to use modern methods of production, are key. Other ongoing efforts, in particular improving infrastructure, also play an important role, as the recent increase in agricultural productivity in Ethiopia illustrates. Reforms to the smallholder sector need to be complemented by the development of commercial farming to achieve high and sustainable increase in agricultural productivity. The African Development Bank and other development partners also play valuable roles in helping to develop the agricultural sector, including smallholder farming, in East Africa. In addition to funding, the Bank encourages East African countries to adopt preventive measures against food crisis, including through mobilising resources. In the broader development context, the Bank promotes regional integration for enhanced trade and investment flows, supports mechanisms that prevent conflicts, and facilitates their early resolution. Finally, through policy discussion with its RMCs, the Bank identifies the best practices for adoption by individual countries, tailored to their specific circumstances.

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Working Paper 105 - Smallholder Agriculture in East Africa: Trends, Constraints and Opportunities (645 kB)

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