Mali Agricultural Sector Assessment, 2011
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MALI AGRICULTURAL SECTOR ASSESSMENT, 2011 April 2011 Final Version* Michigan State University Food Security Team Department of Agricultural, Food and Resource Economics Contributors: John Staatz, Valerie Kelly, Duncan Boughton, Niama Nango Dembélé, Miriam Sohlberg, Abdrahmane Berthé, Mark Skidmore, Cheick Oumar Diarrah, Abdoul Murekezi, Robert Richardson, Brent Simpson, Sonja Perakis, Amadou Sékou Diallo, Ramziath Adjao, Mariam Sako, Nathalie Me-Nsopé, and Jacob Coulibaly Prepared with for USAID/Mali-AEG under the Food Security III Cooperative Agreement USAID/Mali-funded PROMISAM II Associate Award (Leader Award no. GDG-A-0-02-0000021-00) Associate Award (Associate Award no. 688-09-00006-00) *Minor revisions made in November and December 2011 ACKNOWLEDGEMENTS The Food Security Group at Michigan State University is very grateful for the opportunity to undertake this review of Mali’s Agricultural Sector at a time when agricultural development is even more important for the country’s future than it has been in the past. As a review, it builds primarily on the hard work of others. Indeed, this work could not have been completed without outstanding collaboration from many colleagues in Mali over the course of more than two decades, as well as intellectual and financial support from USAID in Mali and Washington DC. It has been our privilege as a team of students and faculty to bring together analytical contributions from many different sources to inform the design USAID’s Feed The Future programs in support of the Malian government’s agricultural sector development efforts. The authors thank the staff of USAID/Mali’s AEG team for very helpful comments on earlier versions of this document. We also express special thanks to our co-author Miriam Sohlberg for her outstanding editorial help in putting together numerous drafts of this report. iii EXECUTIVE SUMARY The Malian government has identified agricultural development as the main engine of the country’s strategy to promote broad-based economic growth, poverty reduction, and food security. The country is at a critical juncture with respect to that strategy. The rapidly growing and urbanizing population of West Africa, combined with moderate per capita income growth, will create strong demand opportunities over the next 10 years for Malian agriculture. Mali has resources that could allow it to respond to that demand. These include, among others, a rural population that has proved responsive to economic incentives; the rich potential for irrigated agriculture, livestock production, and inland fisheries of the Niger River valley and interior delta; Mali’s comparative advantage in coarse grains production; and a growing horticulture sector. Yet the country also faces major challenges created by increased population pressure on land and water resources, leading to resource degradation; uncertain land tenure conditions, particularly in irrigated areas; an educational system that does a poor job in preparing students for productive jobs in a growing agro-food economy; occasionally unpredictable agricultural policy actions that weaken private-sector incentives to invest in the agrifood system; weak structures for agricultural extension; and the need to adapt to climate change. How Mali responds to these challenges will determine the path of agricultural development in the coming years. Among the possible outcomes are: 1) an uncompetitive agriculture highly dependent on subsidies; 2) a bifurcated structure of large commercial farms and small subsistence farms, and 3) a mixed agricultural sector made up of small and medium-sized family farms and larger commercial operations. Clearly these possible outcomes imply very different levels of food security and poverty reduction. Mali’s growth performance has improved substantially since the economic reforms of the 1980s and 1990s. Over the past two decades, Mali’s annual average growth rate in GDP has been in excess of 4% per year, in sharp contrast to the stagnation of the 1970s and 1980s. Agriculture (including forestry, fisheries, cropping, and livestock), which accounted for 35% of GDP in 2008, has been a major driver of this growth. Yet the year-to-year growth rates of both the overall economy and of agriculture have been highly variable, reflecting the vulnerability of the economy, and agriculture in particular, to the vagaries of weather, policy changes, and external shocks, such as the Ivorian crisis. In October, 2009, the Malian government, its development partners, the private sector, and civil society representatives endorsed the country’s Comprehensive Africa Agricultural Development Program (CAADP) compact, which calls for Mali to accelerate its GDP growth to a sustained rate of over 6% per year and its agricultural growth to over 9% per year. These goals are inspired not only by the desire to meet the (modified) Millennium Development Goal of reducing poverty by half by 2020 but also to achieve the Malian government’s political goals of making the country a regional agricultural powerhouse and ensuring the food security of all Malians. Meeting these ambitious goals will be a daunting challenge, especially in light of Mali’s rapid growth of population and urbanization. Achieving the targets for agriculture-led economic growth will require a much higher and more sustained rate of agricultural growth than the country has ever experienced. The danger is that by setting unrealistic goals, the government and its development partners may set equally unrealistic investment plans that will fall short of success and waste resources; the focus may be to be on achieving short-term, but unsustainable, output targets while failing to invest sufficiently in the building blocks for long-term success. v If accelerated agricultural growth is to substantially reduce poverty and improve food security, the growth strategy will need to focus not only on the overall growth of output, but also on who participates in that growth. Agriculture and the broader food system’s role in generating productive employment for the burgeoning number of young people entering the labor force will be at least equally important to the country as the sector’s capacity to produce food. All this needs to be done in the context of rapidly regionalizing and globalizing markets; climate and market uncertainty; changing roles of the private sector, the public sector and civil society; and increasing demands from the population for accountable performance at both the national and local levels. This study examines the past performance of the Malian agricultural sector from the early1990s to the present in order to assess where and how investments by USAID/Mali and others can best contribute to helping Mali meet its agricultural development goals. While the study identifies some key dynamic actors in particular value chains, it makes no attempt to “pick winners” in the private sector or among local organizations, in terms of particular individuals, organizations, or firms with which USAID/Mali could collaborate, for two reasons. First, we make no claim to have exhaustive knowledge about who all the emerging value-chain leaders are, and these will likely change over time in the types of competitive markets USAID is trying to promote. What USAID/Mali needs, therefore, are processes that help reveal who and where the most dynamic actors, including local “champions”, are at a particular point in time (such as competitive bids among cercles to determine where USAID/Mali will place its projects). Second, the emergence of some of the new large-scale actors raises sensitive questions about their potential market power (e.g., the very concentrated fertilizer and rice import sectors) and political influence (e.g., the ability of politically well-connected firms to acquire development rights to large tracks of land in situations where land rights of farmers are not secure and current occupants of the land are likely to be displaced). Dealing with these issues involves developing a policy environment that encourages competitive markets and a more secure land tenure system, which are both discussed in this report. A major focus of the report is on the performance, constraints, and potential contributions of individual value chains and on the cross-cutting challenges that affect the performance of all value chains in the country. A key conclusion of this study is that for Mali to have a realistic chance of meeting its agricultural development goals, the country and its development partners need an approach that focuses on the cross-cutting challenges as well as key value chains. In order to ensure sustainability of development partners’ actions in the context of the country-led, sector-wide CAADP approach, it will be important to work through existing systems in Mali rather than creating parallel projects or structures that risk duplicating what the private sector, civil society or the Malian government can and should do. The aim should be to focus on key investments in policies, technologies, and institutions that catalyze and “crowd in” rather than “crowd out” Malian government and private-sector investments in these value chains. All programs need to be designed taking into account Mali’s membership in the ECOWAS and WAEMU regional economic communities and the country’s porous borders. The openness of the Malian economy offers important growth possibilities through expanded regional trade, and it also means that attempts to define programs (such as input subsidies or consumer price controls)