Block, Steven (2010). NBER Working Paper No. 16481, October.

Contrary to consensus, this paper argues that agricultural productivity growth in Sub-Saharan Africa has been a “qualified success.”  Though total factor productivity was nearly stagnant between the 1960s and 1980s, it has accelerated since then and particularly in the 2000s, with a net 36% crop output increase between 1960 and 2002. 

As IFAD is well aware, agriculture is of utmost importance in Sub-Saharan Africa, with two-thirds of the population rural and nearly half of the population economically active in agriculture.  While agricultural productivity is obviously important to the welfare of these individuals, it is also important to poor urban residents who devote 60 to 70 percent of their expenditures on food.

Agricultural productivity growth has received heightened attention in recent years under the moniker of a “new Green Revolution,” with the Comprehensive Africa Agriculture Development Program (CAADP) arguing that “High and sustained rates of agricultural growth, largely driven by productivity growth, will be necessary if African countries are to accelerate poverty reduction.  This is because agricultural growth has powerful leverage effects on the rest of the economy…  The poor performance of the agricultural sector explains much of the slow progress towards reducing poverty and hunger in Africa” (3). 

In this paper, Block presents new estimates of cross-country changes in agricultural productivity in Sub-Saharan Africa.   He characterizes those changes as a “qualified success,” explaining that “Total factor productivity growth in African agriculture has accelerated dramatically since the early 1980s.  By the early 2000s, average annual total factor productivity growth in African agriculture was over four times faster than it had been 25 years earlier.  The success is qualified by the finding that much of this acceleration represents a recovery from the substantial decline in TFP growth rates duing the 1960s and early 1970s.  In addition, levels of output per hectare and per worker in African agriculture remain low by global standards.  Among a range of potential explanations for agricultural productivity growth in agriculture, expenditures on agricultural R&D play a dominant role, followed by policy distortions at both the macroeconomic and sectoral levels.  Improvements in the quality of the labor force, as indicated by average years of schooling, have also played a central role in driving productivity growth in African agriculture” (3-4).

The literature examining African agricultural productivity growth dates back to the 1990s.  In 1994, Block first reported a recovery of African agricultural TFP in the 1980s due to R&D and macroeconomic policy reform.   The following year, Thirtle, Hadley, and Townsend found that agricultural protectionism had an important impact on TFP growth over 1971-1986.  Subsequent papers focused on the importance of R&D, population increases, and labor productivity, and the productivity-increasing boost from British over Portuguese colonial institutions.  Nin-Pratt and Yu estimate that TFP growth decreased 2% per year between the mid-1960s and mid-1980s, and then rose by 1.7% per year from 1985 to 2003.  They point out that from the mid-1980s to present, agricultural productivity growth in East and Southern Africa has benefited from the cessation of internal conflict, and that in West Africa has benefited from the devalution of the CFA franc.  Alene looks even more inward, arguing that the improved productivity growth rates averaging 1.8% per year over 1970-2004 were the result of R&D in the 1970s, and that slower growth in the 2000s is a result of less R&D in the 1980s and 1990s.  Fuglie adopts a more critical view, arguing that output gains in the 1990s and 2000s were due primarily to more land coming under cultivation rather than productivity growth.  He does not find a productivity recovery in recent decades.  Block summarizes that “recent estimates of the rate of agricultural TFP growth in Africa differ widely, though there is a general consensus surrounding a decline in productivity during the first two decades following independence and a recovery during the past two decades” (6-7).

Block brings a new methodology to this question.  As per standard practice, he uses agricultural input and output core data from the FAO database with purchasing power parity prices to estimate internationally comparable aggregates of agricultural output.  He departs from standard practice in that he estimates African agriculture specific PPP exchange rates and international commodity prices.

Doing so, Block finds that Sub-Saharan agricultural productivity growth averaged 0.14% per year over 1960-1984 and 1.24% per year over 1985-2002.  However, there has been significant regional variation in productivity growth.  Southern Africa has achieved consistently high productivity growth over 1961-2000.  West African productivity growth rates became positive around 1975 and exceeded those in Southern Africa over 1980-1995.  Sahelian and Middle African countries had negative productivity growth following independence, and rates only became positive in the early and late 1980s respectively.  With the exception of East Africa, all African regions experienced accelerated productivity growth after 1985.

Block also analyzes the drivers of agricultural productivity growth.  He finds that R&D is the most significant contributor to productivity growth, followed by policy distortions.  He estimates that productivity growth would have been 11% higher in the absence of civil wars.  Interestingly, paved roads have had little impact on agricultural productivity growth.

Overall, this paper supports the thesis that African agricultural productivity has experienced a recovery since 1985, and identifies R&D as the most important driver of that recovery.  This is somewhat troubling when matched against current trends in African R&D, and especially the less than impressive productivity growth in the 2000s following underinvestment in R&D in the 1990s.  The policy implication of this work is that consonant with CAADP arguments, more investment in African agricultural R&D is warranted.