Subsidies, Public-Private Engagements in Input Supply, Key to Improved Agricultural Productivity in Africa

Africa’s agricultural prospects, by far, surpass any avenues of economic development that the continent holds; including mining and tourism. Still, it has been quite a challenge for Africa to maintain enough farm production levels to sustain its food needs while leaving surpluses for export. This is notwithstanding the fact that almost 60 percent of the world’s uncultivated arable land lies in the continent, and that almost 70 percent of Africa’s population directly depends on agriculture for its upkeep.

One of the reasons for this disparity between potential and actual production, as confirmed by research, is the consistent inadequacy of input supplies to farmers. With an average fertilizer use of 18 Kg/ha, for example, farmers in Sub-Saharan Africa significantly lag behind their peers in Europe (59 Kg/ha). Consequently, Europe, on average, doubles the productivity of Sub-Saharan Africa.

Thankfully, recent advocacy efforts, are starting to yield fruits with governments and other stakeholders in the agricultural industry now investing in farm input supply chains. In this regard, subsidy programmes have had a positive impact in the uptake of improved seeds, fertilizers and other farm innovations like irrigation and greenhouse technologies.

A synthesis report compiled by the Alliance for a Green Revolution in Africa (AGRA), shows that recent efforts by the Kenyan government to distribute subsidized inputs (seeds and inorganic fertilizers) through the National Accelerated Agricultural Inputs Access Programme (NAAIAP) had substantial impacts on maize production and poverty through the effective targeting of resource-poor farmers.

Positive results continue to be recorded in Malawi, as well, with the government offering subsidies through private suppliers for imported and locally blended fertilizers based on demand.

In Tanzania, subsidy programs have reduced the distance travelled by farmers for agricultural inputs to about 2Km with most of the inputs being sourced from within maize and paddy production villages.

But, for most countries, subsidy programmes have proven an expensive affair, and one that cannot be productively sustained. It is for this reason that private sector engagement holds the promise of long-term success in input supply management.

In Nigeria, about 40 percent of fertilizer and seed requirements are produced in the country. But to ensure that the highest number of farmers is reached, the Federal Government of Nigeria engages both public and private sectors in importation and distribution under its Growth Enhancement Support Scheme. This has led to the development of private distribution networks as a base for effective demand and payments, effectively facilitating rapid market expansion by private stakeholders and better access to inputs by the previously underserved farmers.

In Rwanda, the importation and distribution of fertilizers and improved seeds is a function of the private sector. However, subsidies are offered based on a framework contract with the government. An important feature of the subsidy system in Rwanda is the government’s complementary investment in post-harvest handling and storage, irrigation, mechanization and extension services. These efforts have facilitated substantial private sector growth in input distribution activities, ultimately allowing farmers across the country to progress from an unhealthy dependence on subsidies.

Better results, nevertheless, could be achieved through investments in finance. The systemic integration of financial institutions such as banks with subsidy programmes stands to improve access to finance, which still is a significant barrier for the private sector entry to the farm input market. Ultimately, though, even with better access to farm inputs by farmers, farmer education on the proper usage of available resources remains the link to sustainable agricultural productivity. Training farmers on how to combine fertilizer and improved seeds with other farm technologies such as soil sampling and irrigation has been confirmed by past studies [1]to have the biggest influence on output.

That said, with most of these resources still being beyond the reach of Africa’s smallholder farmers, who produce almost three quarters of the food consumed in the continent, subsidies, in all their various forms, will continue to be important tools for delivering agriculture-led economic development for the continent.

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