News Column

Low Agric Productivity Blamed On Poor Sector Support By Govts

May 26, 2014

Peterson Tumwebaze

African governments need to develop the continent's infrastructure, including roads and storage facilities, as well as ensure access to credit and insurance to help support the agriculture sector, especially the smallholder farmers, experts have said.

They said the sector is also plagued by limited access to markets, poor technology, high loan rates and lack of funds to improve output.

"Lending to farmers at an interest rate of 18 per cent or 20 per cent is like lending to cocaine dealers.

"There is no way farmers can make any profits at that rate of interest unless they are producing cocaine," Olusegun Obasanjo, the former Nigerian president said at the just-ended 49th African Development Bank Annual Meetings in Kigali.

Obasanjo, also a member of the Africa Progress Panel, made the remarks during a discussion on the African Progress Report.

He pointed out that farmers can only make profits from agriculture if banks lower lending rates to about 7 per cent. He, however, noted that agriculture should not been taken just as a development project, but as a business.

Viswanathan Shankar, the Standard Chartered Bank Group executive director and chief executive officer for Europe, Middle East, Africa and Americas, said it is important to invest heavily in the agriculture sector to help reduce inequality and create jobs.

The majority of the people in Africa depend on agriculture to earn a living.

Donald Kaberuka, the AfDB president, emphasised the need for increasing agriculture productivity, noting that it will ensure sustainable development and reduce poverty.

"Improving agriculture productivity is not rocket science. People know what to do; the question we must ask is why they are not doing it," he said.

Claire Akamanzi, the Rwanda Development Board chief operating officer, said Rwanda has managed to sustain agricultural growth at about 8 per cent over the last decade because the government invests heavily in the sector and also ensures that small farmers access funding.

According to experts, there has been a growing concern over the past few decades about sub-Saharan Africa's agriculture sector because of low productivity, as well as poor access to market and low prices.

"These challenges affect the financial welfare and food security of smallholder farmers, resulting into poor nutrition levels and wide spread poverty," they said.

Sector players argued that weak input and produce marketing systems and services as well as limited access to affordable credit could greatly affect growthe of the continent, if they are not addressed.

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Source: AllAfrica

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