There has been an increased attention towards improving agricultural production in Africa and other developing countries and this is likely to continue. Agriculture in developing countries, and Africa, is unique in that, while farming remains the predominant source of food and livelihood for most rural households through smallholder farming, these farmers are the poorest, often lacking the necessary resources that are required for them to produce beyond subsistence level and practice rain-fed farming, which leaves them vulnerable to the detrimental impacts of climate change. Consequently, these smallholder farmers experience low productivity, low incomes, and high levels of poverty and food insecurity.
The challenges are ongoing and getting worse!
For decades, African smallholder farmers face daunting challenges, and these have not changed, and may in fact be becoming more severe. These farmers lack access to inputs, modern technology, transport infrastructure, market information, credit, insurance, and markets; constraints which lead to poor levels of production, incomes, and development, and consequently; high levels of food insecurity and poverty. To make things worse, the adverse impacts of climate change – such as erratic rainfall, increased temperatures, increased frequencies of droughts and floods, are making smallholder agricultural production increasingly challenging, unpredictable, and unbeneficial. It goes without saying, that this sector of African agriculture needs help.
What has been done so far?
To date, various interventions have been implemented to improve the performance and profitability of African smallholder farmers in different ways. Some interventions have focused on improving the soil fertility , for example using conservation farming, others have focused on improving water availability through water harvesting and small irrigation projects, and others have focused on research and biotechnology in the development of improved seed, herbicides, and fertilizers, and others have focused on assisting farmers to create market linkages and also, technological innovations that improve access to market information and access to finances. However, the smallholder farmer does not appear to be improving and moving from the status quo, with low productivity, incomes, and poverty still prevailing. Given the limited impact of these initiatives, the search for alternative and or additional, complementary ways to uplift smallholder agriculture leads to the current controversial question, “Could agricultural subsidies be the missing link for smallholder farmers?”
For agricultural subsidies!
It is widely accepted that because agriculture, arguably the most important part of any economy as food producers, is also one of the most fragile industries that is vulnerable to weather and price fluctuations, hence, farmers need support or incentives to remain in and or stimulate increased production.
In many countries, especially in developed economies and in the world’s large agricultural producers, governments provide support to farmers in the form of agricultural subsidies, despite the criticism that subsidies come at a cost to these economies. Notwithstanding this cost criticism, these countries’ experiences show that agricultural subsidies have a positive impact on agricultural production and food security of a nation.
For example, in the USA, which is amongst the largest global producers and exporters of corn, soybeans, sugarcane and potatoes, the government uses subsidies such as price supports to producers and landowners, and insurance programs to support its farmers. In the European Union, the government supports farmer incomes through direct payments, and uses market measures and rural development measures to support farmers.
In China, which is among the largest producers of rice, soyabeans, sorghum and wheat, the government uses market price support to incentivize production and support farmer incomes. In India, which is amongst the largest producers of wheat, pulses, milk, fruit, spices and rice the government uses input subsidies and direct payments to farmers. From these nations’ experiences, it seems that, indeed agricultural subsidies can play a significant role in raising agricultural output and protecting farmers against price fluctuations, hence keeping them in production for longer.
On the African continent, subsidies have previously been less popular but have started resurfacing in recent years. In countries such as Malawi, Zambia, Ghana, Tanzania, and Nigeria, governments are using subsidies to support their farmers. The agricultural subsidies, mainly in the form of input subsidies are often targeted at smallholder farmers, the main food producers in these economies.
The main justification for the input subsidies, encompassing mainly seed and fertilizer subsidies, is that, subsidies provide the resource-poor smallholder farmers with some of the most important missing pieces that these farmers need to produce optimally, hence, ensuring increased agricultural production, and, household and national food security. It has been cited that these subsidies produced positive results, though limited and of lower magnitude compared to developed countries, by improving fertilizer use, production levels and household food security. The next question would then be, how can African countries ensure that subsidies yield greater returns from smallholder farmers?
Given that the challenges facing small-holder farmers are many and crosscutting, focusing only on input subsidies is not enough. Increasing benefits from agricultural subsidies in African countries will require that agricultural subsidy programs be adjusted more to suit the needs of the farmer, lessons which can be learnt from countries with successful subsidy programs. If the subsidy program could go beyond providing seed and fertilizer inputs and assist with modern mechanization, power, and irrigation water supply like the Indian subsidy program, this would greatly increase the performance of the farmers.
Mechanization is a key input in developed countries” agriculture, making agriculture more efficient and productive. Secondly, to ensure sustainability, the program could also include a rural development component like the EU Common Agricultural Policy (CAP) program and a component of conservation and environmental management. African environments are already vulnerable, and degraded with poor soil health, high rates of deforestation, poor watershed management amongst others, therefore, halting environmental degradation is also critical in the success of agricultural production. The rural development component would help to address other challenges such as market and infrastructural development such as roads, and storage facilities.
A compelling case
The continuous failure of African smallholder farmers to increase productivity to meet their own and the region’s food demands, even with all the interventions that continue to be implemented across the region, suggest that more assistance is needed.
If any improvements are to be made, it may be time for governments and policy makers to consider the introduction and or re-introduction of agricultural subsidies in this region, borrowing valuable lessons from other countries such as the EU, USA, China and India, that have successful subsidy programs in place. The new subsidy programs could incorporate not just inputs, but mechanization, irrigation, and rural development, all of which are lacking in the African smallholder sector. Hence, there is a compelling case for agricultural subsidies, as these subsidies could be the bridging gap that take smallholder farming to more profitable, and viable levels of production required to meet the regions food needs and their own.