Agricultural Aid, Agricultural Productivity and Poverty Reduction in West Africa


abstract for ACRIA 7

by

Kwabena Gyimah-Brempong

Department of Economics

University of South Florida

4202 E. Fowler Ave, Tampa, FL 33620

 

Poverty rates in Africa tends to be very high.  Indeed World Bank and UN statistics indicates that poverty rates in Sub-Saharan Africa are the highest among all regions of the developing world.  Even though poverty rates in Sub-Saharan Africa has declined over the last three decades, about half the population still lives in extreme poverty.  A disproportionately large share of the poor lives in rural areas and derives its livelihood, directly or indirectly from agriculture.  Unfortunately, agricultural productivity in Africa is very low and has been growing at very slow pace to the extent that per capita production fell in the 1980s and 1990s thus further increasing poverty.

 

Agriculture employs about 60% of the labor force in Africa, yet makes up no more than 33% of GDP on average.  Productivity in agricultural sector in Africa tends to be very low and is growing slowly, if at all. Indeed agricultural productivity in African agriculture is the lowest around the world.  For example while grain yield per hectare of land averages about 3 tons around the world, it is barely over one ton in African countries.  This low productivity may the major cause of poverty in African countries.  Given that the majority of poor Africans derive their livelihoods from agriculture, the major pathway through which poverty can be decreased is through increase productivity in the sector.  

 

Low productivity in the agricultural sector in Africa is generally the result of continued use of antiquated technology---low yielding seeds, lack of mechanization, low use of fertilizer, lack of irrigation, post-harvest losses---and farmer education.  Modern technologies and inputs are generally not now produced in African countries but are imported.  Because of low income, most of these new technologies to African countries are imported.

 

African countries receive large amounts of agricultural aid.  Although a large quantity of this aid is food aid, a relatively large share of agricultural aid is non-food aid that is intended to increase the productivity and efficiency of the agricultural sector.  To what extent does non-food aid positively affect the productivity of the agricultural sector in African countries?  If non-food agricultural aid has significantly positive effect on agricultural production in African countries, which component of agricultural---aid for research and development, extensions, inputs, etc. is effective in increasing productivity?   Unfortunately very few studies have investigated the effectiveness of non-food agricultural aid on agricultural output in African countries, yet such studies have important policy implications.

 

This paper uses panel data over the 1980 to 2012 period to investigate the effects of non-food agricultural aid on agricultural productivity and poverty reduction in West African countries.  In addition to investigating the effects of total non-food agricultural aid on agricultural productivity and poverty in West African countries, the paper also investigates the effects of various components of agricultural aid on agricultural productivity.  Controlling for several covariates, the paper finds that total non-food agricultural food aid has statistically significant positive effects on agricultural productivity and reduce poverty in West African countries.  In addition, the paper finds that various components of non-food agricultural aid, especially aid for research and development, education and extension services, and inputs, do have significant positive effects on agricultural productivity and poverty reduction in West African countries.

 

The results of this paper confirm the positive effects of aid on poverty reduction in low income countries.  The results also suggest that agricultural aid, if properly channeled can lead to increases in agricultural productivity and output and thus not only decrease poverty among rural dwellers but also lead to food security in the West African sub-region.  The results of this paper have important policy implication for poverty reduction and food security.


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