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May 31, 2012

Why are African farmers poor even when their products are in big demand?

Blogger Opiyo Oloya asks this very relevant question in a post featured in Uganda's New Vision newspaper, titled Grandma is still poor even as the rich sip her coffee in high places.

Oloya just scratches the surface of this vast, important topic but does well for doing so, as it is one that should be closer to the formulation of many agricultural interventions than it is.

Oloya gives the example of cashew, a much prized nut; far more 'exotic' than peanut, whose international retail price Oloya says is as high as $24/kilo. African countries produce asmuch as 34% of global supply, but their farmers are not the primary beneficiaries of the supply chain.

There is a thriving trade in Indians buying raw cashews in Africa to go and process in their country, before on-selling to Western and other markets, obviously enjoying much bigger mark-ups than the farmers. Coffee is another notorious example.

Oloya further asks, ''If these commodities are so lucrative, why are Africa’s farmers toiling in the hot sun, day in and day out, in a never ending cycle of poverty?''

If anyone had the defintieve answer to this question, they would be a billionare. It has been the subject of countless head-scratching studies, but abiding solutions have proven elusive, for all kinds of reasons.  

Oloya cites 'poitical troubles' at the top of the list of reasons for this state of affairs, mentioning the recent coup in Guinea Bissau, the tiny West African country that depends on cashew export for most of its formal foreign exchange earnings (it is said to now be a major transit point for the shipment of cocaine and other drugs from Latin America to Europe.)

But the reality is that small farmers marketing/pricing probems in most countries are perennial, with political upheaval probably only accounting for the ocassional worsening of their already difficult lot.

The relative lack of production-country processing/value-addition is a reality that applies to cashew, coffee and many other crops. But processing of any significant commercial scale is beyond the scope of most small scale farmers anyway. Even if there were more in-country processing that took place, would that necessarily directly benefit the farmer-producer?

But this is notto nitpick Oloya's commentary. Oloya does well just by pondering the subject, which needs to keep on being raised until some practical answers can be found.

African Agriculture

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