This is part one of a three-part post on agriculture economic development. After the better part of a year working for Negros Women for Tomorrow Foundation (NWTF), a microfinance institution in the Philippines, I decided to head west again – specifically, to West Africa. In late 2010, I moved to Read more…
I have explained how the agriculture supply chain works and talked about the state of the agriculture sector in Ghana. It is time to talk about the specific challenges of agriculture in the West African context and explain a bit more about how my work fits into this picture. I am working on the USAID-funded ADVANCE project, which seeks to improve the agriculture value chain and increase competitiveness in domestic, regional, and global markets. There are two specific challenges for Ghana: achieving food self-sufficiency, and becoming competitive in the global marketplace. The first is largely achievable for most crops. The latter is achievable for some crops (and already achieved, in the case of cocoa and certain fruits) and impossible (or near-impossible) for others. I'll explain why in a minute. ADVANCE employs what is called a "market facilitation approach" to agriculture sector development. For the last half-century, aid and development in agriculture in Africa has focused on providing technical assistance and giving things away for free. Building warehouses and processing facilities, subsidizing the cost of seed and fertilizer, offering low-interest loans, and providing cost-sharing for mechanization purchases have had the adverse impact of decreasing industry competitiveness and making private sector investment unattractive (can't compete against the government and Big Aid). There has been a long parade of agriculture development projects that treat Africa like an academic petri dish, without much understanding of the crippling effects hand-outs have on the competitiveness of an industry. To be fair, the cards are stacked against developing countries when it comes to agriculture. The United States and Europe exhibit socialist tendencies by heavily subsidizing their agriculture industries, while at the same time demanding that the recipients of World Bank and IMF loans (read: poor countries) undergo "Structural Adjustment Programs." SAPs, as they are called, call for the wholesale adoption of neoliberal trade policies, including dropping all import tariffs, removing government subsidies, and allowing foreign imports. The hypocrisy is a little mind-blowing, but you can type "Food Aid" and "Africa" into Google and find all the information you need. (more…)
In less than two weeks, I'll be moving to Ghana to work as a consultant with an organization called Technoserve. It is my first time to visit West Africa and am excited to learn about the region. Technoserve works to strengthen the economies of the countries it serves by making the industries more efficient and profitable. Founded in the 1970's, Technoserve began in Sub-Saharan Africa and has since expanded to Latin America and India. Most projects involve agriculture, since the majority of the world's poor are subsistence farmers, though some focus on tourism, energy, and other sectors. The CEO, Bruce McNamer, explains Technoserve's approach to economic development in a recent article from the McKinsey Quarterly:
There are significant possibilities in Africa to unlock value in different industry sectors, and these possibilities will grow over time. Success, however, will require the government and business to adopt a strategy based on an analytical and market-oriented approach, customized for the sector and focused on helping enterprises and people make money. While ultimately reliant on commercial incentives and viability, this strategy will probably require up-front, subsidized investments to seed the market, as well the coordination of stakeholders and interventions across the value chain. (more…)
