Long relegated to the back burner, African agriculture — a sector that is critical for poverty reduction — is experiencing steady productivity decline and loss of labor. This must be reversed.
On the issue of agricultural productivity I know Norman Borlaug spent some time in Africa after his major work in South Asia was done. According to his fellow Green Revolutionary, M.S Swaminathan, Borlaug mentioned that amongst the African farmers he was allowed to work with there was eagerness to go modern but the lack of market size meant adopting those practices was pointless.
Akinwumi Adesina has also discussed the importance of growing Africa's value added sector not only for export but also for domestic consumption as well. Stagnant per capita GDP is a major barrier to reducing poverty and stabilizing the economies of Africa.
Really well researched, insightful and nuanced article, as ever. I haven't seen anything written, including in the Ivorian press (which covers the cocoa sector very poorly) on the potential impact of these current record world cocoa prices. Your headline of ''boom'' implies the record prices will really lead to boom times on the ground. We'll see in the new cocoa season, when I suspect we'll see a record minimum guaranteed price announced on 1 Oct, and a major boost to government income. The 1999/2000 cocoa liberalisation in Cote d'Ivoire is understudied and led to some of the lowest farmgate prices ever seen (plus massive corruption). I would note that the ''recently announced'' idea of processing 50% of cocoa beans dates back to before the Ouattara era, though it has been repeatedly restated. To be fair, progress has been made, and depending on the year, the country is generally the world's no. 1 for semi-processed cocoa (for technical reasons not necessarily something that creates many factory jobs, cashew is better for that).
Separately, I always think Cote d'Ivoire merits more attention as a country that has done more than most to build an economy on agriculture, hence world number one for cocoa and cashew, and high up there for cotton, rubber and palm oil. Local rice production has been steadily rising though still far short of the target of self-sufficiency. The abundance and variety of foods available at markets in the interior is notable. And overall the Ivorian economic story since 2011 has some remarkable elements (growth, roads, electricity coverage, schools).
Excellent article, but I want to make one comment: Tariff escalation, although raised often, is not really an issue for African exporters with regard to the EU and UK. The vast majority of African countries get duty-free access on all goods - e.g. Ghana, Cote D'Ivoire and Cameroon face zero tariffs on any processed cocoa products or chocolate.
An exception is that Nigeria face some (reduced) tariffs in the EU (though they get zero tariffs on cocoa paste and cocoa butter in the UK market), but this is a choice made by the Nigeria government to refuse to sign a trade agreement with the EU.
Is the nature of land ownership also part of the problem? Like, from what I understand, a lot of land is owned by communal ownership instead of having individual property rights.
Ken, you make the point that "the existence of the COCOBOD is not the problem". I beg to differ. You should research the history on how and why it was setup to operate the way it does now. Ghana's COCOBOD takes a huge portion of what ought to go to farmers as a source to fund education for wards of farmers etc (the original idea) and has now morphed into a way of funding infrastructure for farm producing areas and buying fertilizers for farmers. That has created a case where we have had several corruption cases infolving fertilizer purchases and road contracts. The worse part of it is the COCOBOD, in Ghana, is used as a way to borrow foreign currency to help country manage its FX currency and literally has become a tool of the ministry of finance. The recent debt crisis in Ghana, banks almost ceased COCOBOD funds because of its liabilities. If it were a pure regulator, it would have done better which is really what Ivory Coast has. Ghana's cocoa sector is not liberalized as that of Ivory Coast. A lot of folks are getting out mainly because as the younger families realize, not worth the returns when government claims part of your share of profits to supposed provide collective services one can find in the marketplace. The setup of COCOBOD is a big problem that keeps a lid on the entire sector. It has become a political management tool for ruling parties
If many Africans are moving from agriculture to artisanal mining, what is the problem exactly? I'd imagine artisanal mining is worse than sweatshops but better than subsistence agriculture. Why not encourage more artisanal mining with subsidised small business loans and export subsidies to build up forex reserves?
"EU will ban the importation of commodities like cocoa, palm oil, rubber, soy, coffee, and wood unless traders can demonstrate that their production didn’t contribute to deforestation or degradation of forests."
Really...
The EU pretending to care about the environment in someone else's back yard, are they?
The sand eels are caught by plough trawling, a particularly damaging method involving dragging a chain along the bottom in front of the net, causing massive damage to the ecology.
The sand eels are mostly used as pig food, at one time the Dutch burned them as power station fuel.
I liked this a lot, but, going through the link on food imports, they seem to take up 13% of imports rather than 13% of GDP. Still significant but should be smaller.
Good to see this being discussed/thought about. I've taught about the politics of African agriculture - especially cocoa prices/production, but my sense is that in recent years it's been relegated to 'development' rather than 'politics'. This is a change from when I was student and it was a major debate in the study of political, aided by the 'peasant' debates but not just confined to the marxist / political economy scholars. Good to see the debate being reclaimed by political science.
On the issue of agricultural productivity I know Norman Borlaug spent some time in Africa after his major work in South Asia was done. According to his fellow Green Revolutionary, M.S Swaminathan, Borlaug mentioned that amongst the African farmers he was allowed to work with there was eagerness to go modern but the lack of market size meant adopting those practices was pointless.
Akinwumi Adesina has also discussed the importance of growing Africa's value added sector not only for export but also for domestic consumption as well. Stagnant per capita GDP is a major barrier to reducing poverty and stabilizing the economies of Africa.
Really well researched, insightful and nuanced article, as ever. I haven't seen anything written, including in the Ivorian press (which covers the cocoa sector very poorly) on the potential impact of these current record world cocoa prices. Your headline of ''boom'' implies the record prices will really lead to boom times on the ground. We'll see in the new cocoa season, when I suspect we'll see a record minimum guaranteed price announced on 1 Oct, and a major boost to government income. The 1999/2000 cocoa liberalisation in Cote d'Ivoire is understudied and led to some of the lowest farmgate prices ever seen (plus massive corruption). I would note that the ''recently announced'' idea of processing 50% of cocoa beans dates back to before the Ouattara era, though it has been repeatedly restated. To be fair, progress has been made, and depending on the year, the country is generally the world's no. 1 for semi-processed cocoa (for technical reasons not necessarily something that creates many factory jobs, cashew is better for that).
Separately, I always think Cote d'Ivoire merits more attention as a country that has done more than most to build an economy on agriculture, hence world number one for cocoa and cashew, and high up there for cotton, rubber and palm oil. Local rice production has been steadily rising though still far short of the target of self-sufficiency. The abundance and variety of foods available at markets in the interior is notable. And overall the Ivorian economic story since 2011 has some remarkable elements (growth, roads, electricity coverage, schools).
Excellent article, but I want to make one comment: Tariff escalation, although raised often, is not really an issue for African exporters with regard to the EU and UK. The vast majority of African countries get duty-free access on all goods - e.g. Ghana, Cote D'Ivoire and Cameroon face zero tariffs on any processed cocoa products or chocolate.
An exception is that Nigeria face some (reduced) tariffs in the EU (though they get zero tariffs on cocoa paste and cocoa butter in the UK market), but this is a choice made by the Nigeria government to refuse to sign a trade agreement with the EU.
Is the nature of land ownership also part of the problem? Like, from what I understand, a lot of land is owned by communal ownership instead of having individual property rights.
Ken, you make the point that "the existence of the COCOBOD is not the problem". I beg to differ. You should research the history on how and why it was setup to operate the way it does now. Ghana's COCOBOD takes a huge portion of what ought to go to farmers as a source to fund education for wards of farmers etc (the original idea) and has now morphed into a way of funding infrastructure for farm producing areas and buying fertilizers for farmers. That has created a case where we have had several corruption cases infolving fertilizer purchases and road contracts. The worse part of it is the COCOBOD, in Ghana, is used as a way to borrow foreign currency to help country manage its FX currency and literally has become a tool of the ministry of finance. The recent debt crisis in Ghana, banks almost ceased COCOBOD funds because of its liabilities. If it were a pure regulator, it would have done better which is really what Ivory Coast has. Ghana's cocoa sector is not liberalized as that of Ivory Coast. A lot of folks are getting out mainly because as the younger families realize, not worth the returns when government claims part of your share of profits to supposed provide collective services one can find in the marketplace. The setup of COCOBOD is a big problem that keeps a lid on the entire sector. It has become a political management tool for ruling parties
If many Africans are moving from agriculture to artisanal mining, what is the problem exactly? I'd imagine artisanal mining is worse than sweatshops but better than subsistence agriculture. Why not encourage more artisanal mining with subsidised small business loans and export subsidies to build up forex reserves?
The last the graph is unlabelled.
Also why doesn't a state investment fund in a cocoa exporting West African country, or a group of them, just buy Barry Callebaut AG?
Thanks Ken
"EU will ban the importation of commodities like cocoa, palm oil, rubber, soy, coffee, and wood unless traders can demonstrate that their production didn’t contribute to deforestation or degradation of forests."
Really...
The EU pretending to care about the environment in someone else's back yard, are they?
But not if it's in their interests not to.
https://www.euronews.com/green/2024/04/16/brussels-picks-fight-over-uk-ban-on-sand-eel-fishing
https://www.bluemarinefoundation.com/2024/01/31/sandeel-fishing-banned-on-uk-side-of-north-sea/
The sand eels are caught by plough trawling, a particularly damaging method involving dragging a chain along the bottom in front of the net, causing massive damage to the ecology.
The sand eels are mostly used as pig food, at one time the Dutch burned them as power station fuel.
I liked this a lot, but, going through the link on food imports, they seem to take up 13% of imports rather than 13% of GDP. Still significant but should be smaller.
Good to see this being discussed/thought about. I've taught about the politics of African agriculture - especially cocoa prices/production, but my sense is that in recent years it's been relegated to 'development' rather than 'politics'. This is a change from when I was student and it was a major debate in the study of political, aided by the 'peasant' debates but not just confined to the marxist / political economy scholars. Good to see the debate being reclaimed by political science.