By Kevin M. Cleaver
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Additional info for A strategy to develop agriculture in Sub-Saharan Africa and a focus for the World Bank, Volumes 23-203
Traders and agro-business will lend to farmers. Institutions such as cooperative credit banks, and commercial banking establishments will lend directly to small and medium farmers only if ways are found of reducing transactions costs (perhaps by more lending to groups or briefly subsidizing these costs), mobilizing rural savings (to create a local stake in banking services), and managing risk of default due to climate or commercial crisis (guarantee funds can help). Page 9 Continued protectionism and the subsidy of agriculture and livestock products in industrial countries is expected.
There has been a tendency of governments and donors to focus their policy work on macro-economic policy reform, changes in agricultural price, trade, and tax policy. Much weaker efforts have been made in other areas of agricultural policy reform such as land tenure, cooperative law, regulations of financial institutions, the regulatory framework for forest and natural resource management, improved public expenditure programs. Even less pro-active assistance to the private and cooperative sectors has been provided.
The reasons for these deficiencies are complex. In some countries there has been, until recently, widespread land abundance combined with labor and capital scarcity. Many of the new technologies offered to African farmers increased output per unit of land by requiring additional labor and capital input (in the form of purchased inputs and equipment). This was the reverse of what was needed from the perspective of the African farmer who had generally little capital and labor, but could open new land.
A strategy to develop agriculture in Sub-Saharan Africa and a focus for the World Bank, Volumes 23-203 by Kevin M. Cleaver