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May 17, 2008

Africa can adapt Brazilian, Thai successes with commercial agriculture

Poverty in Africa is predominantly rural. Of all Africans who are poor, nearly two-thirds live in rural areas. For the foreseeable future therefore, reducing poverty in Africa will depend largely on stimulating rural growth. The most powerful engine of rural growth is agricultural growth, because agriculture has important forward and backward linkages to the local economy on both the production and the consumption sides.

A powerful driver of agricultural growth is the development of commercial agriculture. The global experience suggests that there are a number of pathways along which commercial agriculture can develop. Successful models range from highly diversified systems made up of smallholders who are deeply involved in commercial production to more specialized systems made up of large-scale mechanized farmers who produce exclusively for the market.

During the past 30 years, the international competitiveness of many traditional African export crops has eroded significantly. Yet over the same period, two landlocked agricultural regions in the developing world have developed at a rapid pace and conquered important world markets:
(1) the Northeast Region of Thailand, and (2) the Cerrado region of Brazil. The challenges faced by these two regions were somewhat different. The Northeast of Thailand is characterized by relatively abundant but highly unreliable rainfall, combined with poor soils and a high population density. The Cerrado in contrast is characterized by its remoteness, problematic soils prone to acidification and toxicities, as well as low population density.

Defying all predictions, both regions managed to overcome widespread pessimism about their economic development potential to become world-class exporters. The paths along which commercial agriculture developed were very different in the two regions, however. In Northeast Thailand, where smallholder production systems dominate, export success was led by cassava chips, soybeans, and sugar. In the Cerrado, where large-scale mechanized production systems dominate, Brazil became a world export leader in soybeans, sugar, and cotton.

Perceptions similar to the ones that fueled pessimism 30 years ago in Thailand and Brazil are fueling pessimism in Africa today. Yet the success achieved by Thailand and Brazil suggests that the pessimism expressed today about Africa’s commercial agriculture development prospects may be exaggerated. A major study carried out by FAO in 2001 identified the vast Guinea savannah zone, which is currently dominated by cereals-root crops mixed farming systems, as one of the zones in Africa with the highest potential for development. While other zones in Africa also have significant development potential, none has been as little developed relative to its potential.

The Guinea savannah shares a number of similarities with the Northeast Region of Thailand and the Brazilian Cerrado, suggesting that there may be important opportunities for learning from the Thai and Brazilian experiences and building on their technological advances. At the same time, it is important to retain a sense of perspective. While the Cerrado in Brazil and the Northeast Region of Thailand share important agro-climatic features with the Guinea savannah of Africa, significant differences exist in terms of history, culture, social systems, political structures, and institutions.

These differences make it unlikely that any development model, however successful, can be transferred directly from one country to another. Still, by carefully examining successful experiences such as those realized in Thailand and Brazil and drawing lessons that may have applicability elsewhere, it may be possible to dispel the profound pessimism that currently pervades so much thinking about African agriculture and generate insights that can help in the design of policies, programs, and supporting investments needed to stimulate the emergence of successful commercial agriculture in Africa.

World Bank

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