(This policy bulletin is an extract from Fixing famine: How technology and incentives can help feed Africa written by Jasson Urbach & Daniel Sacks )
Obstacles to increased technology use and productivity
A number of obstacles are preventing the spread of agricultural technology across Africa. Many of these barriers can be solved in the short term, though some are of a more long-term, systemic nature. This section explains the problems, and the next section suggests policy solutions for each.
Opposition to GMOs
Hybrid seeds have been incredibly successful in both Malawi and Kenya, and genetically modified seeds have even greater potential to improve agriculture across Africa. However, only a small minority of African countries currently allow the use of genetically modified seeds despite the seeds’ productivity gains and record of safety.
African governments seem to be swayed by the lobbying of European governments, who dismiss the use of biotechnology under the precautionary principle, whereby “any possible risk associated with the introduction of a new technology is avoided, until a full understanding of its impact on health and the environment is available.”
Unfortunately for African farmers and consumers, European governments have exported this principle to Africa.
Sub-Saharan African countries that ban the use of GM seeds or the import of commercially produced GM crops substantially decrease the welfare of their citizens and unnecessarily perpetuate hunger throughout their countries.
Accessing credit is a huge problem for smallholder farmers across Africa.
For example, in Malawi, most people cannot formally borrow any money, and can access only an average of $3 informally. Similarly, 38 per cent of Kenyans are classified as “financially excluded” because they do not have access to financial services and products.
Without access to credit, smallholder farmers’ ability to invest in their farms is incredibly limited, as an overwhelming portion of their incomes gets spent on food for themselves and their families. Little money remains to invest or to save.
Without credit, farmers cannot take advantage of opportunities to improve the quality and quantity of their output. Credit enables farmers to buy more fertiliser, better seeds, or invest in capital improvements like irrigation or greenhouse technology.
When access to credit is constrained or is very expensive, these investments are not made, and farmers spend less on inputs.
When farmers own only a small piece of land, these differences matter a great deal, as their output is already limited by the size of their plot.
A variety of obstacles prevents farmers from accessing the formal financial system. Many rural farmers do not have a bank or financial institution nearby. When farmers can access banks, they often cannot receive loans because they do not have assets to post as collateral or because the assets they own are not accepted as collateral. When farmers are able to receive loans, they fear risking assets that are vital to their livelihoods, such as the land required as collateral.
The banks may also fear loaning money to smallscale farmers because of the perceived risk.
Source: This policy bulletin may be republished without prior consent but with acknowledgement to the authors. The views expressed in the article are the authors' and are not necessarily shared by the members of the Foundation.