Governments and international aid agencies are transforming how food aid is procured and disbursed in the developing world. Agencies including the World Food Program now source some food aid within the region where it will be disbursed (for example, purchasing maize in Uganda for disbursal in other parts of East Africa). The 2014 Farm Bill included critical reforms to food aid funding to support these changes and to increase flexibility and cut response time in periods of crisis.
As these changes have been taking shape, governments in Sub-Saharan Africa have been adapting as well, shifting their domestic agricultural policies and investments towards support for small farmer agriculture through targeted subsidies for mineral fertilizer and hybrid seed. These policies could impact the incidence of chronic and acute food insecurity in Sub-Saharan Africa.
A critical question now is how new domestic agricultural programs being implemented in Sub-Saharan Africa might alter future need for international food aid assistance.
This post is the first of a series focusing on how specific kinds of investments in the agricultural productivity of the poor in the developing world could promote global food security. Will input subsidies to small farmers make a genuine difference in Sub-Saharan Africa? Could they change the likelihood of emergency episodes of acute food insecurity in the future?
Over the past eight years, Zambia, Tanzania, Nigeria, Mozambique, Ghana, and Malawi are among the countries in Sub-Saharan Africa that have introduced large-scale subsidies for maize hybrid seed and mineral fertilizer, programs targeted at small farmers. The objective is to address persistently low yields, resulting at least in part from inadequate use of fertilizers for staple cereals production. Though the use of mineral fertilizers can bring near-term improvements in yields and household food security while replenishing soil nutrients critical for future productivity gains, farmers in Sub-Saharan Africa have made scant use of these inputs. According to the Food and Agriculture Organization, per hectare fertilizer application in Sub-Saharan Africa is only about 10 percent of the norm for agriculture in Asia.
Recent farm input subsidy programs in Sub-Saharan Africa are often referred to as “smart subsidy programs,” emphasizing the fact that, unlike earlier subsidy programs in the region, these new strategies are intended to be market friendly, using vouchers to target small farmers, and operating through existing networks of agricultural-input dealers. The stated general goals of these programs are to boost small farmer agricultural productivity as well as to improve household and national food security.
These domestic programs pursue a strategy to improve food security similar to existing United States foreign aid funded programs – namely, investing in and improving production and incomes in the small farm sector, including the U.S. Food For Peace Title II development programs and Food for Progress programs.
Where small farmers can be successfully targeted by subsidies and in years in which agro climactic conditions prove adequate, providing fertilizer can offer a more cost-effective and reliable way to improve food security than shipping in food aid, as imported fertilizer is likely to produce more food locally than could be brought in for the same cost in a conventional food aid relief program. One kilo of mineral fertilizer applied during the growing season can produce between two and five kilos of maize. Transport costs in interior Africa remain prohibitively high, accounting for between 50 and 75 percent of final retail prices in Malawi, Rwanda, and Uganda according to a recent report in The Economist.
“Smart subsidy” programs have been criticized for their high opportunity costs, lack of exit strategies, and potential to crowd out private input supply networks. Because a centerpiece of these programs involves governments guaranteeing farmers a low price for mineral fertilizer, the costs for an agency will fluctuate along with the volatile costs of mineral fertilizer (which are of course tied to the high and volatile international price of energy). And like conventional food aid programs, fertilizer subsidy programs are susceptible to corruption at national and local levels in the targeted regions.
Current research is looking into the effects of these programs on child nutritional outcomes and food security. Preliminary findings will be discussed in an upcoming post on Policy Matters.
Obviously, such investments in the agricultural sector will not eliminate the need for efficient, well-funded programs to deal with food security crises. But these programs may prove to be part of a portfolio of responses to chronic and acute food insecurity. As more countries in Sub-Saharan Africa implement subsidy programs targeting small farmers it will be important to carefully assess how these programs change the likelihood that a country or region will require international assistance for chronic or acute food insecurity crises.