Accelerating Africa’s Food Production in Response to Rising Food Prices – Impacts and Requisite Actions

Xinshen Diao, Shenggen Fan, Derek Headey, Michael Johnson, Alejandro Nin Pratt, Bingxin Yu
Regional Strategic Analysis and Knowledge Support System (ReSAKSS)

The Regional Strategic Analysis and Knowledge Support System (ReSAKSS) is an Africa-wide network of regional nodes supporting the Common Market of Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS) and the Southern African Development Community (SADC), in collaboration with the International Food Policy Research Institute (IFPRI) and the Africa-based centers of the Consultative Group on International Agricultural Research (CGIAR), to facilitate the implementation of AU/NEPAD’s Comprehensive Africa Agriculture Development Programme (CAADP). The ReSAKSS nodes offer high-quality analyses to improve policymaking, track progress, document success, and derive lessons for the implementation of the CAADP agenda. The goal of the ReSAKSS Working Paper series is to provide timely access to results of preliminary research and data analysis that relate directly to strengthening ongoing discussions and critical commentaries on the future direction of African agriculture and rural development.

High rates of poverty, hunger, malnutrition and food dependency mean that Africa is exceptionally vulnerable to rising food prices. In better circumstances, Africa’s agricultural sector would respond to rising prices by increasing food supply. Decades of policy neglect, however, mean that such a response is impossible without significant new policy actions on both the production and marketing side of African agriculture. This paper first assesses the likely impacts of two “policy shocks” that embody these kinds of actions: doubling of staples production, and greater “market access” through regional integration and lowering transaction costs. Using an economywide multimarket model and econometric estimated parameters between growth and poverty and between spending and growth for 17 African economies, we assess the impacts of these two shocks on Africa’s food markets and its broader economic development. The model suggests that doubling of staples production significantly increases food security, reduces consumer food prices by roughly 25 percent, reduces producer prices by 10 percent (thus raising farm revenue), accelerates agricultural growth rates, facilitates broader growth processes through new agro-processing and export opportunities, and lifts over 100 million Africans out of poverty. The paper discusses the types of policy actions that would be required to move Africa towards this highly effective development strategy. The first set of actions requires investing around $38 billion or $7.5 billion per year in a well understood package of modern agricultural inputs. The second requires improving and extending transport infrastructure, especially major transport corridors and rural feeder roads. The third requires reducing trade barriers, which still remain much higher in agriculture than in other sectors. All of these actions are technically and financially feasible, but their timely implementation requires urgent initiatives by both national and international policymakers.

Publication date
Source / Citation
Diao, X.; Fan, S.; Headey, D.; Johnson, M.; Nin-Pratt, A. and B. Yu. Accelerating Africa's Food Production in Response to Rising Food Prices - Impacts and Requisite Actions. ReSAKSS Working Paper No.3. 2008.