Chris Blattman

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Obama’s pro-poor policy for Africa?

Tanzania’s President gets to be the first African leader to win an audience with Obama. His big pitch? Support for an African green revolution: increased irrigation, improved seeds, better marketing systems, and new infrastructure.

This strikes me as a better formula for aid than simple education and health support. Building schools and clinics are important (and should continue), but economies like Tanzania’s will only support their own social services in the long run if they can ramp up productivity and incomes. Agriculture is one industry with a big domestic market and the potential to export (provided they can produce better goods more cheaply).

A bump in agricultural productivity isn’t going to launch Tanzania into rocket-ship growth, but agricultural assistance does have one virtue: it can help the many and not the few. Small producers can see a bump in incomes (and less volatility) while poor consumers should see cheaper prices.

See the World Development Report in 2008 for more informed opinion than mine.

6 Responses

  1. I agree that agricultural aid has the potential to improve incomes of many smallholders. Hopefully the infrastructure improvements will allow the benefits of improved productivity to accrue to family farms – there are many reasons to think that they will, if Tanzania can preserve property rights.

    Another concern is that American aid will take the form of transplanting American agriculture to Tanzania (in terms of crop varieties). It may make more sense to develop agriculture consistent with the Tanzanian climate – based on crops that have traditionally grown well there. Of course, better roads and marketing organizations would help productivity in either case.

  2. I think a Green Revolution is important (as another commenter mentioned, with consideration for local structures already in place) but that’s not enough to really generate economic growth without investment in processing those crops as well. Africa needs to begin processing more of its agricultural products for export rather than just exporting raw goods.

    This has several benefits: first, processed goods are sold at a MUCH higher price that doesn’t fluctuate as much as raw commodity prices. (Chocolate bars for $1 vs. cocoa beans for pennies is a good example) Also, a new processing industry creates a lot of jobs for Africans, rather than essentially shipping those jobs to a different country. We blogged about this a while ago here: http://thewhitakergroup.us/wordpress/?p=199

    Of course, it will be hard for Africa to take advantage of this while US and EU tariffs on processed goods are so high. President Obama should work with Congress to improve the African Growth and Opportunity Act to allow African processed products into the country duty free like so many other African goods. Rosa Whitaker wrote an op-ed on this and several other recommendations for Obama’s Africa policy, which she thinks is solid so far. http://thewhitakergroup.us/wordpress/?p=725

  3. I am skeptic that in most developing countries a green revolution can benefit many small farmers. The problem is weak property rights. Here is my causal link:

    More agricultural productivity -> More profits from land ownership -> more effort by the elite to concentrate land in their own hands -> more coercion (weak property rights) -> more concentration of land/agriculture in elite -> much benefit for few people, little benefit for many people.

    ps: hi alex!

  4. There are a lot of difficult issues under that umbrella. For instance- improved seeds are a good idea, but private companies are the ones doing this and they have no incentive to produce triple cross hybrids that farmers can productively use second, third and fourth generation seeds from. Given the state of Tanzanian roads distribution of agricultural inputs is also uneconomic, and the firms in sale and distribution of fertilizer and seed control enough market power to affect prices.

    Land tenure is another major issue in Tanzania with smallholders overwhelmingly making up agricultural production. Post structural adjustment Tanzania has few market mechanisms to allow for capital investments by smallholders. So it is likely that American agricultural assistance would, for efficiency reasons, target larger farms with better infrastructure and market access. This would help the minority of farmers, not the many, and could empower specific ethnic groups, although Tanzania has managed to mostly avoid tribalism.

    There is also the sustainability of agricultural inputs issue with whether they can be economically manufactured domestically, which there have been a number of failures with.

    In the end the most productive investments end up being infrastructure, especially dams and roads, which don't clearly produce tax revenue or positive feelings from donors.

  5. Chris, I enjoy your blog and largely agree with most of what you usually write, but I beg to differ on this one. Improved agricultural yields should not be the primary focus of aid.

    Rather, my sense is that removing the transactions costs that impede the market participation of households is more important in the short term than improving productivity. I had articulated my thoughts around the same time last year, when the President Zoellick of the World Bank had announced an increase in World Bank monies for improved productivity:

    http://www.newsobserver.com/559/v-print/story/1049225.html

    Have fun in the field this summer,

    Marc Bellemare
    http://sites.google.com/site/marcfbellemare/Home

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