(The Monitor)

The creation of agricultural enterprises represents one of the most effective ways to stimulate rural development. Economic change entails the transformation of knowledge into goods and services through business enterprises. In this respect, creating links between knowledge and business development is the most important challenge facing agricultural renewal in African countries.

The current economic crisis, rising food prices, and the threat of climate change reinforce the urgency to find lasting solutions to Africa’s agricultural challenges. As most of the population derives income from farming, so agricultural development is intricately linked to overall economic development.

Agriculture and economic development
Much of our understanding of the link between agriculture and economic development tends to use a linear approach. It is seen as a source of inputs into the other sectors. Resources, skills and capital are presumed to flow from agriculture to industry.

But this linear view is being replaced by a more sophisticated outlook, which suggests continuing interactions between it and other sectors in ways that are mutually reinforcing. Indeed, the relationship is interactive and associated with uncertainties that defy causal association.

Over the last 30 years, yields and poverty have remained stagnant, so prioritising agricultural development could return significant, interconnected benefits. It is widely acknowledged that institutions play an important role in shaping the pace and direction of technological innovation, in particular, and economic development, in general.

Emerging evidence supports the importance of entrepreneurial leadership in promoting agricultural innovation as a matter of urgency and not waiting until the requisite institutions are in place. This is not to argue that institutions and policies do not matter. To the contrary, they do and should be the focus of leadership. What is important is that the focus should be on innovation.

Science, technology and engineering
Though faced with enormous technological challenges, African countries have access to a larger pool of scientific and technical knowledge. They can utilise the knowledge and know-how that has been amassed globally in their efforts to improve their access to and use of technology.
Advocates of scientific and technical research in developing countries have found champions in the innovation platforms of nanotechnology, biotechnology, information and communication technology (ICT), and geographic information systems (GIS). Through these four platform technologies, Africa has the opportunity to promote its agenda concurrent with advances made in the industrialised world.

Agricultural innovation systems
Agriculture is treated like other sectors, each with their own distinctive institutions and with little regard for their relationship with the rest of the economy. But these approaches conceal important linkages.

A more realistic view is to treat economies as “systems of innovation.” The process of technological innovation involves interactions among a wide range of actors in society.
Government, private sector, universities and research institutions are important parts of a larger system of knowledge and interactions that allows pursuit of common goals in agricultural innovation.

In many countries, the state still plays a key role in directing productive activities but the private sector is an increasingly important player in adapting existing knowledge and applying it to new areas.

Enabling infrastructure
Unlike other regions, Africa’s poor infrastructure represents a unique opportunity to adopt new approaches in the design and implementation of infrastructure facilities. One most neglected aspect of infrastructure investments is their role in stimulating technological innovation.
Roads, water facilities, airports, seaports, railways, telecommunications networks, and energy systems represent just a portion of the web of national and regional infrastructure necessary for food security, agricultural innovation, and agriculture-based economic development.
Countries and regions must create strategies that recognise how each area is linked to the next, and investments must, in many cases, pool regional resources and cross international borders.

Transport infrastructure is critical to move inputs to farms and products to market; irrigation is essential for increasing yields and crop quality; energy is a vital input, particularly for value-added food processing; and telecoms are critical for farming, market, and weather information.

Alone, however, none of these investments will produce sustainable innovation or growth in agriculture. National and regional investment strategies will be needed to pool resources, share risks, and attract the private actors to substantial investments in such ventures.

Human capacity
Education and human capacity building in Africa have many well-publicised problems. Many school systems focus little on teaching students to maximise the opportunities available to them in their own communities; and rather, tend to prioritise skills less applicable to village life and encourage children to aspire to join the waves of young people moving to urban areas.
For some, this leads to success, but for many more, it leads to unfulfilled aspirations. There are missed opportunities to learn crucial skills that will allow them to be more productive and have a better standard of living in their villages. It also results in nations passing over a chance to increase agricultural productivity, self-sufficiency, and human resources among their populations.

The creation of agricultural enterprises represents one of the most effective ways to stimulate rural development. Economic change entails the transformation of knowledge into goods and services through business enterprises. In this respect, creating links between knowledge and business development is the most important challenge facing agricultural renewal in African countries.

The development of small and medium-sized enterprises (SMEs) has been an integral part of the development of all industrialised economies. This holds true in Africa.

Building these enterprises requires development of pools of capital for investment; of local operational, repair, and maintenance expertise; and of a regulatory environment that allows small businesses to flourish. Africa must review its incentive structures to promote these objectives.

A range of government policy structures is suitable for creating and sustaining enterprises. Policy makers also need to ensure that educational systems provide adequate technical training. They need to support agribusiness and technology incubators, export processing zones, and production networks as well as sharpen the associated skills through agribusiness education.

Governing innovation
Regional integration is a key component of enabling agricultural innovation because it dismantles three barriers to development: weak national economies; a dependence on importing high-value or finished goods; and a reliance on a small range of low-value primary exports, mainly agriculture and natural resources.
These difficulties become more extreme when farmers have to get their crops across international borders to reach markets where sales are profitable.The inability to sell crops, or being forced to sell them at a loss because of high transport costs, prevents farmers from making investments that would increase the quantity and quality of their production.
Since any increase will not add to their own well-being, and the excess crops may go to waste. This is a problem where national governments and regional cooperation offer the best solution.

Looking ahead
A new vision for Africa’s agricultural transformation should be guided by new concepts that define the continent as a learning society. This shift will entail placing policy emphasis on emerging opportunities such as renewing infrastructure, building human capabilities, stimulating agribusiness development, and increasing participation in the global economy.

The author is a professor at Harvard University who delivered a public lecture in Kampala recently. This article is derived from his book from which he based his lecture.

(Source: The Monitor)

“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”