Roger Thurow - Outrage & Inspire - "From Subsistence to Success"

FROM SUBSISTENCE TO SUCCESS 

Accra, Ghana 

“Today a hoe. Tomorrow a tractor.” 

That’s how Kofi Annan described the ambitions of a group of farmers he had met on a visit to Mali before arriving here to head up the African Green Revolution Forum. 

“I heard their hope for a future,” said the former United Nations secretary general. “To do better year after year.” 

Amid the Forum’s talk of improved seeds, and better fertilizer use, and micro-financing, and building harvest storage facilities and creating markets, another crucial element for transforming African agriculture is gaining prominence: shifting farmer ambitions from merely obtaining sustenance to making profits, from merely living to making a living. 

“Leave behind subsistence farming and run farms as a business, create surpluses,” Annan told the gathering. 

It is one of the strange realities of Africa that all of these subsistence farmers, growing food to feed their families and living on the far margins of any economy, add up to the biggest business in Africa. “For a long time we’ve been taking agriculture as a way of life. But agriculture is the largest business there is in Africa,” said Namanga Ngongi, the president of the Alliance for a Green Revolution in Africa, which itself was formed from an alliance between the Rockefeller Foundation and the Bill & Melinda Gates Foundation. “Agriculture gives employment to 60-70% of the people, 35-40% of a nation’s gross domestic product. Clearly it’s a business. It’s big business. The food crops (mainly grown by the small farmers) are worth something like $200 billion, the cash crops $15-20 billion. We need to support smallholder farmers in the biggest business in Africa.” 

One of the big concerns expressed at the Forum is that without cultivating a business sense along with cultivating crops, the agriculture revolution will quickly lose steam. What good will bumper harvests do, if the farmers don’t know what to do with them? 

“Once a farmer goes from one ton of maize per acre to four tons, there is a surplus. Now, the farmer must think of what to do with that surplus,” said Ngongi. “The farmer must think like a businessman.” 

Where is the market? What is the price? How can I maximize profit from my labor? These questions rarely enter the mind of a farmer who is growing only to feed her family – which she might be able to do if the weather cooperates. 

On the small-holder farms in Africa, the profit motive has been as scarce as a white rhino. Financing, to support any entrepreneurial zeal, has also been rare in the rural areas. Commercial banks have been very reluctant to lend to people with very little collateral and little produce to market. Only in recent years have micro-financing organizations come to the bush bearing small loans so farmers can purchase better seeds and fertilizer. Credit has been the life-blood of farmers everywhere, except in Africa. 

“Like business people everywhere, farmers need money to make money,” noted Annan, chairman of the Alliance for a Green Revolution in Africa. “Until now, they haven’t been able to get it.” 

But with the financing comes an added risk to farmers already depending on rain patterns and mercurial markets. So in addition to thinking like businesspeople, the small farmers of Africa will also need the real tools of the agriculture business, like crop insurance and futures contracts and commodities markets. 

Risk mitigation will help make farming a better business bet. The other tools of a green revolution – scientific advances in seeds and fertilizer and irrigations systems – will help make it a better business. 

All of which – along with recasting farming’s image from something you do to live from day to day into a business that’s about making a living – will also, Ngongi hopes, attract younger people to stay on the farms and entice students to pursue agriculture as a profession. “We need to have youth look at agriculture as a business,” he said. “Then they can be agents of change.”

Comments

[Gracia Clark]

Farmers in Ghana have been producing food for sale in local urban centers since the 1930s. The marketplace system has expanded its capacity as the urban population grew. I would be surprised if a majority of Ghana's farmers were in fact subsistence farmers, choosing their assortment of crops with only family consumption rather than potential sale in mind. It is the market trader who keeps these farmers in the commercial system, aspiring to expand production although not always succeeding. The marketplace system also gives them access to credit in the form of cash advances for inputs and harvesting labor from buyers they know. They also advance goods on credit to the traders when they are plentiful. You are meeting in Accra; there is no reason not to go down to Makola #2/
December 31st market or Malata Market and see the enormous volume of goods these channels already handle every day. Up till now, the market traders have been much more reliable and efficient partners to farmers than the corporate formal sector or the public sector has managed to be. Why not include them in your visions of local business? Of course their performance can be improved for mutual benefit with thoughtful assistance.