Around the Institute

TransFarm Africa’s Initiative to Tap into Agricultural Potential

June 29, 2011  • Matt Styslinger

As posted by The World Watch Institute

According to Joe Guinan—director of the TransFarm Africa Initiative at the Aspen Institute—agriculture is the largest contributor to gross domestic product (GDP), national income, and domestic consumption in sub-Saharan Africa. Agriculture is also the region’s biggest source of hard currency, savings, and tax revenues, and the main provider of industrial raw materials. Even so, according to Guinan, “agriculture has delivered little real benefit for most African farmers and consumers. Per capita food output in sub-Saharan Africa is about 19 percent of 1970 levels. Imports have soared—even in commodities Africa can easily produce—making the continent a net importer of food. As a consequence, agriculture in sub-Saharan Africa generates $2 per day or less in income for the vast majority of the hundreds of millions of people it directly supports.”

“But the picture is not entirely bleak,” explains Guinan. “The very statistics that underscore Africa’s agricultural underdevelopment can also be read as a source of optimism for the future.” TransFarm Africa (TFA) is an initiative to advance what the Aspen Institute sees as African agriculture’s untapped potential. By supporting equitable and sustainable commercial agriculture along development corridors, TFA aims to “measurably improve the income of smallholder farmers—particularly women—and integrate them into a dynamic, internationally competitive food economy, leading to increased food production and greater overall food security in Africa,” says Guinan.

“The size of the challenge and the opportunity is enormous,” says Guinan. “On its current course, Africa is headed for a vast humanitarian crisis. With 12 percent of the world’s population, sub-Saharan Africa is home to 44 percent of its hungry people and has the lowest caloric intake of any region in the world.” Guinan warns that population growth, resource depletion, and climate change will put further stress on Africa’s food systems. “The projections show that without intervention on an unprecedented scale, Africa will be home to 75 percent of the world’s hungry by 2025.”

Guinan explains that until recently, economists and development experts believed that Africa should bypass agricultural development and focus on other economic sectors, such as manufacturing and services. “African governments and donor countries and institutions have shown a relative lack of interest in agriculture,” he says. “Africa’s lack of functioning food markets has hampered broader economic development and continues to keep Africa on the sidelines of the global economy.”

Guinan believes that the breadth and nature of TFA’s success will depend on the response of international capital markets, the donor community, African governments, and—above all—Africa’s agricultural entrepreneurs. TFA, according to Guinan, is a demonstration project to show that it is possible for the development of Africa’s agriculture to produce both commercial and social returns—what he refers to as TFA’s double bottom line. “The goal is to send a signal to capital markets that there can be profit in commercial businesses that incorporate smallholder agriculture in Africa,” he says. “At the same time, TFA has an overarching social objective of improving small-farmer incomes. The most important indicator [of success] for TFA will be small farmer income. A strong upward trend will signify that the expected outcomes—access to markets, access to capital, increased productivity, and increased capacity in the value chain—are on track.”

TFA integrates two major components: investment and removal of barriers. Guinan believes that farmers themselves are the best qualified to identify the barriers they face—operating their businesses, growing, processing, or distributing food around Africa and overseas. “In the past, policy interventions to promote market-led development have been overly broad and have failed to identify and dismantle the specific barriers impeding market success,” explains Guinan. “By contrast, developed-country businesses have for years been able to bring highly specific concerns to relevant policy agencies in their countries and have those agencies respond in a targeted manner.”

TFA’s Removing the Barriers program focuses on interconnecting development initiatives along “development corridors”—allowing farmers and businesses along the corridors to support each other and benefit from each other’s success. “The development corridors are trade and transport routes that, with the right support, hold the potential to connect Africa’s landlocked countries into regional and international markets and bring farmers into a system that can move food and inputs and create new commercial opportunities,” Guinan says. “This consists of using existing roads and railroads linking mines and other investments with regional markets and ports to bring farmers into a system that can move food, goods, services and information and create new commercial opportunities.”

TFA targets what it calls the “missing middle” of African agriculture—growth-oriented, mid-scale commercial farms and agribusinesses.  Guinan says that through this approach small-scale farmers will benefit from becoming suppliers, customers, partners, or employees of mid-scale farms. He believes that TFA’s target constituency “will become a primary engine for the emergence of agriculture as Africa’s new source of economic dynamism over the next decade.” Guinan says that TFA’s market-led approach to supporting small-scale farmers is sustainable, while many government and aid-funded initiatives have failed or faded away. “When the donor support dries up, the farmers return to survival mode and are no better positioned to meet the basic needs of their families,” he says. “This has been the tragic outcome of millions of dollars in donor aid programs.”

According to Guinan, the onset of the current food crisis has put the world on notice that the future global food market will be a volatile one—and small-scale farmers will need to be able to cope with the volatility if they are going to prosper. “Small farmers, whose greatest asset is their own labor,” he explains, “will withdraw to subsistence strategies if they cannot count on a broad market for their harvests—further reducing the food supply. The World Bank is warning that another 44 million people have already fallen into poverty as a result of rising food prices since last summer.”

In the past, according to Guinan, African farmers have often dealt with the need to produce more food by expanding production onto new land, often clearing forests and further stressing depleted soils. “One way or another, Africa’s agricultural resources will be brought into production in the face of growing global demand for food,” Guinan warns. “The question is whether Africans themselves will share in the benefits.”

What strategies for supporting small-scale farmers do you think is sustainable and will tie poor farming communities into a dynamic, strengthening market? Tell us in the comments!

Matt Styslinger is a research intern with the Nourishing the Planet project.