Presentation on theme: "Institutional Innovations for Agricultural Transformation in Africa: Issues Challenges, and Policy Options Suresh Chandra Babu Senior Research Fellow,"— Presentation transcript:
1 Institutional Innovations for Agricultural Transformation in Africa: Issues Challenges, and Policy OptionsSuresh Chandra BabuSenior Research Fellow, Head of Capacity Strengthening ProgramInternational Food Policy Research Institute (IFPRI)Washington, DCPrepared for the African Economic Research Consortium (AERC) Senior Policy Seminar XVIIMarch 26-27, 2015, Maputo, Mozambique
2 Organization of Presentation IntroductionConceptual AnalysisInstitutional Innovations Needed in Various Areas of AgricultureLessons for ImplementationKnowledge Gaps and Research Needs
3 Achieving African Transformation Speeding up agricultural transformation requires transformation of subsectorsThis requires better capacitated, well-functioning institutions from farm to national levelsAchieving African economic transformation requires:Diversification of agricultural production and exportsIncreased competitiveness on global marketUpdate of technology use in all sectorsIncreased labor productivityLeading to increases in human welfareSource: ACET, 2014
4 Africa’s Transformation Powered by Agriculture Agricultural productivity gains are critical for Africa’s economic transformationAgricultural value chains have the potential to reduce food prices, create employment, reduce povertyWe know that technological innovations are required to increase agricultural productivity for smallholdersIn the same light, institutions that support smallholder farmers must be transformed
5 Definitions of Innovation The application of new ideas or practices with the purpose of creating a positive change (OECD, 2006)Institutional innovations involve a change in the policies, process, system of organizing, and practices of an institution in an effort to encourage its improvement and increase impact (IICA, 2014)Applying new ideas, knowledge, or practices in order to affect positive change in a particular environment (IICA, 2014)
6 Research Questions This paper seeks to answer the following questions: What institutional innovations are needed to support agricultural transformation?What mechanisms of the public sector, private sector, and NGO community need to change to support policy and program design and implementation?What are the capacity needs of the actors and players in the institutional innovation process?What lessons can be drawn from current institutional innovations?What are the knowledge gaps and research priorities for enhance the role of institutional innovations in agricultural transformation?
7 The Institutional Innovation Process What does it take to get there?How do we sketch out the pathways from untransformed to transformed institutions?What are the conditions required for African countries to become middle income countries?What public investment choices are needed?What institutional innovations are needed?What export promotion strategies are needed? (e.g. processed food and horticulture)Late transformers will still depend on agriculture, so agricultural innovations are needed for transformation
8 Setting the StageWhat is the realistic path for agricultural transformation?Labor-intensive manufacturing is neededForeign direct investment is neededCostly infrastructure investments (e.g. roads, electricity) are needed, countries may not be able to afford thisAgricultural sector may have comparative advantageExport markets for agricultural commoditiesPrivate sector/non-traditional approaches to value chainAgricultural strategy in the context of holistic development
9 Setting the Stage What understanding is needed? Diagnosis and analysis of initial condition of country sector?Application of General Equilibrium modelsTrade-offs between various strategiesNeed evidence on what has worked in the pastHow can countries go from Point A to Point B?
10 Institutional Innovation in Agriculture These innovations are needed at all levels. Some examples include:Farm level – better engagement with market systems to improve productivity and incomeCommunity level – farmer-based organizationsNational level – public sector supports research and extension
11 Conceptual AnalysisTo understand institutional innovation in the context of agricultural transformation we must:Fully analyze the historical trends and enabling environment in the policy processEvaluate the outcomes and successes of reformed institutionsIdentify the challenges and constraints to institutional innovation and implementationAssess the institutional process that facilitates actors and players to translate policies to programs and programs to actionsAnalyze the factors affecting policy and institutional reform
12 Conceptual AnalysisWe do not yet know what institutions need to be transformed and howTo highlight the transformative power of institutional innovations, we compare the characteristics of the following eight types of institutions before and after innovation:Public sectorResearchExtensionEducationMarkets/TradeCommunity/Farmer Orgs.AgribusinessGovernance
14 Goals of Transformation The goals of Africa’s transformation include goals beyond agriculture including:Dietary transformationExport diversityConvergence of labor and total factor productivityIncreased share of processed agricultural commodities in total exportsIncreased competitiveness of agriculture on world marketModern technology adoptionIncrease agriculture’s contribution to increased incomes and poverty reduction
15 Public Sector Institutions Public sector institutions take center stage in the development and implementation of policies and programs. Institutional innovations are required to:Transform operational processes to translate strategies into policies to meet national goalsImprove allocation of resourcesImplement system to incentivize staff performance and accountabilityMonitoring and evaluation of programsThe next slide illustrates an example of public sector institutional innovation.
16 Outcome-oriented approach Accountability at all levels Ethiopian Agricultural Transformation Agency: A Public Sector Institutional InnovationOutcome-oriented approachAccountability at all levelsIndividuals have responsibilityCapacity – broadly defined as institutional capacityChallenge: Ministry of Agriculture sector reformRwanda – going for whole government system?
17 Research Institutions Agricultural research systems support the development and dissemination of technologies that increase productivity and efficiencyCurrently, African research systems largely demand driven and remain focused on staple crop productionPoorly capacitated, poorly integrated, unfocused priorities (You and Johnson, 2008)
18 What institutional innovations are needed in research? Innovations of individual and organizational capacity, as well as system as a wholeReform research priority settingInnovations in the budgeting process to reform how spending is allocated so it can be more effectively usedTo ensure that research is relevantInnovations that emphasize and enable multidisciplinary, cross-institutional research and collaboration
19 Extension Institutions In the context of agricultural transformation, extension institutions play a key role in the dissemination of advanced technologies to smallholders. Innovations needed include:Demand driven or participator approaches to meet farmer information needsIncreased connectivity to sub-systems to increase availability and flow of knowledgeBroaden the functions of extension to include post-harvest storage and marketing, building the capacity of farmers’ organizations, support rural developmentInnovations in financing of extension services including fee-for-service and cost-sharing models
20 Education Institutions Transforming traditional agricultural sector requires adequate human capacity at all levels, therefore institutional innovations are needed to:Locally designed innovations to reduce the brain drain and address current research challengesRegional innovations mobilize local talent and strengthen local facultiesInstitutional innovations to retain staff through on-the-job training and mentoring
21 Examples of Institutional Innovations in the Education Sector (1) African Center for Crop Improvement (ACCI)Designed to address the high demand for high quality plant breeders in agricultural researchParticipants were from their respective country’s research instituteHoused at University of Kwazulu-NatalCombination of rigorous training and mentorship from facultyLocally designed innovation
22 Examples of Institutional Innovations in the Education Sector (2) Collaborative Master’s Program in Agricultural and Applied Economics (CMAAE)Offered through 16 collaborating universities across AfricaRegional innovation created to address the need to increase the quality of facultyJoint program to work towards shared goal of filling gaps in teachingShared facility approach brought in students from various countries for specific learning goals
23 Examples of Institutional Innovations in the Education Sector (3) Strengthening the Capacity of Agricultural Research and Development in Africa (SCARDA)Approach to strengthening institutional capacity with emphasis on filling gaps in individual capacityMeant to directly improve the organization and management of national research institutionsStrengthened existing capacity within the institutionsProvides adequate opportunities for mutual learning
24 Market and Trade Institutions There is a need for institutions that support the integration and participation of smallholders in marketsValue chains are important mechanism to drive agricultural transformationExample, Nigeria’s Agricultural Transformation Agenda specifically supports commodity value chain development, such as rice and cocoaMarket institution such as Ethiopia Commodity ExchangeFormed to generate market informationIncrease transparency of prices, grades, and qualitiesPromote self-regulation of the system
25 Community Institutions and Farmers Organizations Farmers organizations play a critical role in agricultural transformation through their ability to empower smallholders by:Increasing access to production information and knowledgeIncreasing access to extension services, inputs, and marketsHighlighting local problems and helping identify solutionsOstrom (1994) found that resources are used more effectively when managed at the community level
26 Agribusiness Institutions The development of agribusinesses and value chains for high value commodities can drive transformation and take advantage of growing demand for processing and exporting these goodsInstitutional innovations in agribusiness could lead to direct transformation benefits in terms of growth and povertyInnovations are needed in input supply, advisory services, processing, quality control, distribution, and marketingNeed to build innovation capacity at all levels, so that farmers have higher entrepreneurial and managerial skills
27 Examples of Institutional Innovations in Agribusiness Horticulture in KenyaTook advantage of available natural resources, low cost of skilled labor, and existing infrastructure needed for export of commodityAdditional institutional innovations are needed to overcome food safety regulation, increasing wages, changing consumer preferencesPoultry in MozambiqueCurrently, most countries are unable to respond to import substitution opportunitiesInnovations are needed to support smallholders, who make up majority of poultry producers to capture local demandHorticulture in GhanaA majority of fruits and vegetables are still imported in GhanaAlthough foreign investments in pineapple industry have been very active, this has not been effectively translated to other commoditiesInstitutional innovations needed to balance opportunity to export with growing domestic needs
28 Institutional Governance Issues of good governance can be applied to all of the types of institutions mentioned aboveCharacteristics of reformed governance within institutions includes:Leadership and commitment to short-term and long-term goalsImproved coordination of all actors and playersOpenness in policy dialogue to ensure policies and programs are evidence-based and informedEffective monitoring and evaluation systems
29 Challenges to Implementation of Institutional Innovations Several institutional innovations have been attempted, including CAADP at the regional level. The success of CAADP is driven by:Leadership at AU and country levelsAbility of national government to mobilize resourcesCapacity of national government to provide strategic direction to programs to reach CAADP targetsSuccessful experiments have yet to be scaled up in country or across countries due to differencesCurrently, limited cross-country knowledge sharing and availability of funding also inhibit scaling upCapacity constraints at all levels constrain the implementation of institutional innovationsNeed to strengthen the capacity of policy makers to anticipate, recognize, and respond to institutional challenges
30 Challenges to Implementation of Institutional Innovations Institutional innovations often do not get implemented due to a lack of good governanceInstitutional innovators must be recognized to play a legitimate role in agricultural transformationLeadership needed to provide strategic directionCoordination and cohesive alignment to broader sector goalsPolitical economy often constrain the implementation of agricultural reformsConflicts erodes the capacity to innovate at all levelsRegulatory system innovation are needed to make African agriculture competitive on the world market (e.g. food safety, animal and plant health, environmental, input use regulations)Regional harmonization of policies and programs (e.g. SACD, ECOWAS, COMESA)On the next slide, Table 2 presents a typology for the institutional innovations that are needed at different levels at different times
31 Needed Institutional Innovation Agricultural Transformation Indicators System ComponentsNeeded Institutional InnovationAgricultural Transformation IndicatorsPublic Sector InstitutionsMinistry of AgricultureMinistries of allied sectorsMulistakeholder platformsTransformation of operational processesInnovations in process of allocation of resourcesInnovations of staff evaluation and incentives to increase performanceInnovations in monitoring and evaluation of programsInnovations in regulatory systems for land, inputs, etc.Streamlined, more effective and efficient processesEffective allocation of resources for impactGreater staff performance and accountabilityDecentralized activitiesInformed monitoring and evaluation for program feedbackEffective regulatory systemsResearch InstitutionsPublic research systemsPrivate research systemsResearch by NGOs /FBOsParticipatory research by farmers(Lynam, 2012)Innovations to match the national strategiesInnovations in management and delivery of research outputsInnovations in funding mechanismsCoordination and harmonizing the research effortsInnovation in funding mechanismsEffective coordination of demand for and supply of researchIncreased participation of farmers and other clientsSustainable fundingResearch effectively used by farmersEffective coordination at the global, regional and national levelsExtension and Advisory ServicesPublic Extension systemPrivate extensionNGOs based extensionFarmers field schoolsICT based extension services (Davies and Heemskerk, 2012)Increased pluralistic activitiesImproved public-private partnershipsDemand driven- farmer participatory programsFinancial sustainabilityInnovations in advisory approachesFarmer monitoring and accountabilityMultiple actors competingKnowledge accessibility through ICTsEducationFormal university educationVocational and skill development programOn-line education of farmers(Maguire, 2012)Working towards relevant, well managed institutionsVocational training highly connected to the employers needsInnovations in curriculum and methods of teachingIncrease the quality of teachers through innovation capacity development programsIncreased collaboration with public sector, research and extensionDynamic curriculum to meet the changing needsNo political interferenceImproved interaction with stakeholdersGender sensitive and gender-balanced educationMarkets and Trade InstitutionsMarkets for inputsMarkets for outputsValue chainsInnovations to ensure that the value chains remains inclusive, particularly to smallholdersStrengthen individual farmer capacity to abide by value chain standardsInnovations for connecting value chain to larger food systemInnovations to organize farmersIncreased participation in value chain, especially by smallholdersImproved connectivity within and beyond value chainEffective farmers organizations for a specific value chainCommunity and Farmers’ Organizations:Commodity based farmer organizations (traditional)Market – oriented farmers organizationsInnovation oriented farmers organizationsService oriented producer foundations(Ekboir, 2012)Developing organizational capabilities for innovationIncrease innovative linkages with governments, donors, research, extension, and educationBrokering innovations, promoting coordination with members and the marketsImproved management of the farmer organizationsIncreased coordinating leadershipCapacity development- life-long learning of membersBetter environment for organizational innovationImproved financing of the farmer organizationsImproved structures to serve farmers / membersAgribusiness InstitutionsPost-harvest/processing agribusinessesMarketing agribusinessesSpecialized agribusiness value chainsInput supplyAdvisory servicesHelp organize smallholders into formal value chains for high value cropsBuild innovation capacity at all levels to scale up isolated effortsLack of agribusiness curriculum in agricultural universitiesIncreased innovative, managerial, and entrepreneurial capacity at all levelsIncreased individual and organizational capacity for agribusiness development and managementGovernance Institutions*Applies to all individual organizations listed aboveInnovations to increase accountability and commitment of key playersLack of transparencyClosed off policy dialogueInnovations for evidence-based programming and decisionmakingSystematic pursuance of long term vision and goalsHigh level commitment of leadersBetter inter-sectoral – macro coordinationEffective coordination and mobilization of key players and entitiesOpenness for debate and dialoguePolicy and program continuityMonitoring, evaluation, and learning
32 Knowledge and Research Gaps Key policy issues for agricultural transformation still remain to be researched further in the context of institutional innovationFurther research is needed to understand how to take advantage of current trends in Africa, such as yield increases, land expansion, growth in agribusiness, youth employment, etc.Future programming should balance demands for increased agricultural production with effective allocation of natural resourcesFuture climate changes will require a realignment of production mix and increasing adoption of climate resilient food productionIncreased knowledge sharing should be utilized to share evidence on what works and why in different contextsThe role of local think tanks for evidence-based knowledge sharing cannot be overemphasized