Finding food for Africa

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But if politicians are allowed to interfere in the free market, and especially in property rights, we may also end up an aid-dependent country. The US Department of Agriculture’s Economic Research Service (ERS) estimates that 882 million people in the world are food insecure. Of these, 390 million (44%) live in Sub-Saharan Africa (SSA).

Due to political uncertainty and adverse weather conditions, among other factors, production in the region has been on average 16% below trend values since 1990. The largest shortfall, 78% below trend, occurred in Zimbabwe, while various other SSA countries had a shortfall of 50% or more. The combination of slow production growth and high population growth (3%+) has resulted in very little to no growth in per capita grain production in the region.

The hungriest place in the world
From 2009 to 2010 food security improved, as the number of food insecure people dropped by 11%. However, ERS estimates that if the status quo is maintained, more than 500 million people in SSA will be food insecure by 2020. This means more than half the population won’t have enough to eat. SSA’s position relative to other regions will also deteriorate.

By 2020 it will account for 59% of the total global number of food-insecure people.Food aid is currently critical. In 2008 the region received 4 million tons, nearly 67% of total global food aid. But although food aid gives short-term relief to hungry people, in most cases the long-term effect is negative. Developed countries use food aid as a method of “legalised dumping” to balance oversupplied local markets due to high subsidies.

When world prices increase, food aid decreases. Food aid and its “monetisation” – where donated food is sold on local markets to pay for the distribution of the aid – has caused tremendous damage to emerging industries in African countries. Local agricultural sectors have learnt to distrust the statement: “We are Americans, we are here to help you”.

How to alleviate food shortages
According to the ERS, capital inflows into SSA can help alleviate the problem. If capital inflows double by 2020, the extra capital available for imports may marginally lower the number of food-insecure people. But capital inflows depend on global economic conditions. During the 2008/9 financial crisis, they decreased sharply in SSA. Higher local food production will also improve the situation.

If SSA can boost grain yields by 50% by 2020, it would significantly improve the region’s food security. Historically, food production was increased by increasing the area under cultivation. But due to the growing population and urbanisation, land has become scarce in many parts of SSA. Higher food production in future will therefore depend on higher yields. Unfortunately, most food producers are small-scale farmers with between 1ha and 5ha. It’s very difficult for them to achieve optimal efficiency and to use modern production technology.

The South African perspective
In contrast to the situation in other SSA countries, agriculture in South Africa has managed to increase production in spite of adverse climatic and other conditions. However, this has resulted in overproduction in some areas. The maize industry is a good example of this. Despite this, South Africa remains a nett food exporter. In 2009 we exported food valued at R49 billion and imported products valued at R37 billion.

South Africa has the knowledge and infrastructure to produce enough food for our own needs and also contribute to SSA food security. Although our northern neighbours have agricultural potential, the chances of a substantial increase in production in these countries are slim. For South Africa’s agricultural sector, this means that large markets are opening in neighbouring countries. SSA countries are already important export destinations for South Africa. In 2009, half our exports went to the EU, 32% to our SSA neighbours and the rest to Asia. The SSA is a huge importer of food. Its annual dairy imports are roughly equal to South Africa’s total production.

If our commercial farmers get the right support from government, they can provide employment, earn foreign currency and ensure local food security in future. But if politicians get involved in the free market and in property rights, South Africa may suffer the same fate as sub-Saharan Africa.

Dr Koos Coetzee is an agricultural economist at the MPO. All opinions expressed are his own and do not reflect MPO policy.  

 

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