Managing Agricultural Development in Africa Lessons of Experiencefor Governments and Azd Donors Uma J

MADIA DISCUSSION PAPER 2 8477 Public Disclosure Authorized Public Disclosure Authorized ~~~-~ Public Disclosure Authorized U w MANAGING = X-<- /AGRICULTURAL_ DEVELOPMENT_IN AFRICA __- Public Disclosure Authorized /~~~~~~~~~~ _. E.)t.t"... u.t t--rnca r-i. t ..-a....-ti- o C3t;an t.........e r- . FE: .;1. 5 f. _ FOREWORD The MADIAstudy and the papers comprising this MADIADiscussion Paper Series are important both for their content and the process of diagnosis and analysis that was used in the conduct of the study. The MADIA research project has been consultative, nonideological,and based on the collection and analysis of a substantial amount of concrete information on specific topics to draw policy lessons; it represents a unique blend of country-oriented analysis with a cross-country perspective. The conclusions of the studies emphasize the fundamental importance of a sound macroeconomicenvironment for ensuring the broad-based development of agriculture, and at the same time stress the need for achieving several difficult balances: among macroeconomic, sectoral, and location-specific factors that determine the growth of agricultural output; between the development of food and export crops; and between the immediate impact and long-run development of human and institutional capital. The papers also highlight the complementarity of and the need to maintain a balance between the private and public sectors; and further the need to recognize that both price and nonprice incentives are critical to achieving sustainable growthin output. The findings of the MADIAstudy presented in the papers were discussed at a symposium of senior Africanand donor policymakers and analysts funded by USAIDin June 1989 at Annapolis, Maryland. The participants recommended that donors and African governments should move expeditiously to implement many of the study's valuable lessons. The symposium also concluded that the process used in carrying out the MADIAstudy must continue if a stronger, more effective consensus among donors and governments is to be achieved on the ways to proceed in resuming broad-based growth in African agriculture. The World Bank is committed to assisting Africancountries in developing long-term strategies of agricultural development and in translating the MADIAfindings into the Bank's operational programs. Stanley Fischer Edward V K. laycox VicePresident Development Economics Vice President and Chief Economist Africa RegionalOffice MADIA DISCUSSION PAPER 2 MANAGING AGRICULTURALDEVELOPMENT IN AFRICA THREE ARTICLES ON LESSONS FROM EXPERIENCE UMA LELE, ED. _ _!U THE WORLD BANK ______ WASHINGTON,D.C.- Copyright © 1989 All rights reserved The International Bank for Reconstruction Manufactured in the United States of America and Development/THE WORLD BANK First printing November 1989 1818 H Street, N.W. Washington. D.C. 20433, U.S.A. MADIADiscussion Papers are circulated to encourage discussion and ment, at the address shown in the copyright notice above. The World Bank comment and to communicate the results of the Bank's work quickly to the encourages dissemination of its work and willnormally give permission development community: citation and the use of these papers should take promptly and, when the reproduction is for noncommercial purposes. with- account of their provisionalcharacter Because of the informalityand to out asking a fee. Permission to photocopy portions for classroom use is not present the results of research with the least possible delay, the manuscript required. though notification of such use having been made willbe has not been prepared in accordance with the procedures appropriate to appreciated. formal printed texts, and the World Bank accepts no responsibility for The complete backlist of publicationsfrom the World Bank is shown in errors. The findings,interpretations, and conclusions expressed in this the annual Indexof Publications,which contains an alphabetical title list and paper are entirely those of the author(s) and should not be attributed in any indexes of subjects, authors, and countries and regions. The latest edition is manner to the World Bank,to its affiliated organizations, or to members of available free of charge from the Publications Sales Unit, Department F The its Board of Executive Directors or the countries they represent. World Bank, 1818 H Street. N.W. Washington, D.C.20433, U.S.A..or from The material in this publication is copyrighted. Requests for permission Publications. The World Bank, 66. avenue d'1ena. 75116 Paris, France. to reproduce portions of it should be sent to Director.Publications Depart- Uma Lele is the manager of AgriculturalPolicy in the AfricaTechnical Department at the World Bank. Library of CongressCataloging-in-Publication Data Lele, UmaJ. Managingagricultural development in Africa:lessons of a quartercentury. (MADIAdiscussion paper; 2) Includesbibliographical references. 1. Agriculture-Economicaspects-Africa, Eastern. 2. Agricultureand state-Africa, Eastern.3. Managing AgriculturalDevelopment in Africa(Organization) I. Title. II. Series. HD2117LA45 1989 338.1'867 89-22723 ISBN0-8213-1318-5 Contents Introduction ManagingAgricultural Development in Africa: Lessons of Experience for Governmentsand Aid Donors...... .......... 5 Uma Lele Sources of Growthin East AfricanAgriculture .......................... 9 Uma Lele The Development of National AgriculturalResearch Capacity: India'sExperience with the Rockefeller Foundationand Its Significance for Africa.......................................... 29 Uma Lele and Arthur A. Goldsmith Introduction All three of these articles were originally published in journals, but it was felt that their contribution to the completeness of the study warranted inclusion in this MADIADiscussion Paper Series. They are therefore being reprinted in one volume. Together the articles serve to illuminate the main issues identified and addressed by the MADIAproject, to illustrate the benefits of cross-country analysis, which is a significant aspect of the MADIAresearch process, and to show the importance of the agricultural sector for broad- based growth in Africa. 5 Managing Agricultural Development in Africa Lessons of experiencefor governments and azd donors Uma J. Lele Throughout most of Sub-Saharan Africa, agriculture, formerly the preserve of one of These differencesin countries'performance agriculture is in crisis. Frequent droughts, the largest European settlements in Sub- reflect their differingmacroeconomic policy growing expenditures on food imports, and Saharan Africa, was much more advanced environments and agricultural policies. Both fallingexport earnings have been cutting into than Malawi's or Tanzania's. In both Kenya Kenya and Malawihave maintaineda macroe- living standards and growth prospects. The and Malawi, population growth has put conomic policy environment that broadly effects have been pervasive, not only on intense pressure on agriculturalland, and the favored agriculture and allowedthem to adjust incomes of agricultural producers, who in- structure of land holding has been dualistic, better than Tanzania to the severe external clude most of Africa's poor, but also on with a few large and many very small farms. shocks all three East African countries have supplies of food and raw materials for In Tanzania, land has been abundant in most faced. These shocks included substantial industry, on employment, savings, govern- areas and the possibilities for agricultural terms-of-trade losses on agriculturalexports. ment revenues, and on the demand for goods productionmore diverse. Unlike Tanzania, Kenya and Malawi have and services produced outside agriculture. Since independence, the three countries avoided prolonged overvaluation of their Yet policy changes and planning for the have followeddifferent policy paths with very currencies, and thus implicit taxation of resumption of growth in agriculture are different outcomes for agriculture. Kenya, agriculture, and their budgetary deficits and hampered by a pervasive lack of country- which has achieved the fastest growth of inflation rates have been smaller and more specific information. Reform efforts all too agriculturaloutput, has given smalUholdersa stable than Tanzania's. Their shares of often try to apply general remedies to Africa's leading role in its development strategy. It government expenditures in GDP have been diverse problems. has thereby achieved the greatest success in smaller than Tanzania's, but they have Prompted by these concerns, the Bank in reconcilinggrowth with equity, and in devel- devoted larger shares of their government 1985 launched a cross-country comparative oping both foodcrops (especially maize) and budgets to agriculture and infrastructure. study, Managing Agricultural Development export crops (tea, coffee, and horticultural As to agriculturalpolicies, Kenya avoided in Africa (Madia).The study analyzed devel- crops). Malawi achieved substantial growth explidt taxation of its smallholdersby passing opments in agriculture in Kenya, Malawi, and in high-valueagricultural exports (especially on international price changes to tea and Tanzania, in East Africa, and Cameroon, tobacco, tea, and sugar) until 1983, but coffee producers. Malawi, by contrast, re- Nigeria, and Senegal, in West Africa, since largely from estates; smallholder production sponded to new opportunities for exporting independence and drew lessons for future grew little or not at all in per capita terms. tobacco in the mid-1960s and 1970s by polides and programs (see box).

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