Agricultural development strategies delineate priorities for actions to enhance agricultural and overall development. They are usually put forward by individual countries based on assessments of national needs. Seldom are attempts made to identify strategic priorities for agricultural development that cut across national boundaries. This gap is perhaps not surprising - organizations mandated to develop and implement regional agricultural development programs are rare. Although the gap may be understandable, it is also troubling. This report helps to fill that gap for eastern and central Africa (ECA), focusing on Bulrundi, Democratic Republic of Congo (DRC), Eritrea, Ethiopia, Kenya, Madagascar, Rwanda, Sudan, Tanzania, and Uganda. Recent trends and the current performance of agriculture in these countries expose a region progressively less able to meet the needs of its burgeoning population. With agriculture looming so large in most ECA economies, sluggish growth in agricultural, productivity has translated into sluggish overall growth and generally low per capita income levels. High levels of agricultural importation - particularly of staples - appear to be only partially filling the consumption needs of a population lacking purchasing power, resulting in extensive adult and child malnutrition and towering child mortality rates. Such forces as globalization, market liberalization, privatization, urbanization, HIV/AIDS, population growth, climate change, and the changing proprietary nature of agricultural technology are redefining many of the problems facing agricultural policymakers in ECA, and thus the kinds of policy solutions required. Most of these forces have roots and expressions that extend beyond national boundaries, implying the need for broad perspectives and regional responses. Neighboring countries might gain from cooperating in key areas of agricultural development. This report is motivated by such regional potentials in ECA. The analytical approach is explicitly strategic. First, using geographic information systems methods to identify and depict spatial similarities and differences in the context of agriculture in ECA, the analysis spans all 10 countries in the region, thereby permitting simultaneous focus on both national and regional phenomena. Agricultural development domains representing particular realizations of agricultural potential, access to markets, and population density are used to help highlight differences and similarities in agricultural development priorities and options across the region. Second, using a dynamic economic model of agriculture in ECA, known as a multimarket model, the analysis includes numerous agricultural and non-agricultural subsectors while tracking broader economic conditions in a forward-looking setting. Third, using a model that quantifies the effects of productivity-enhancing investments in agricultural research and development (R&D), known as the Dynamic Research Evaluation for Management (DREAM) model, the analysis explores the potential returns to regional cooperation in agricultural development. To build understanding of the strategic opportunities for agricultural development in ECA, the implications for overall economic growth and poverty reduction of alternative scenarios of agricultural growth are examined using the multimarket model. A central piece of the analysis is a business-as-usual scenario that projects recent trends in agricultural growth into the future. The business-as-usual scenario therefore serves as a base against which to evaluate alternative agricultural development strategies for ECA. Business-as-usual outcomes suggest that in all countries except Sudan and Uganda (assumed to continue to register relatively high growth rates as they recover from civil strife), agricultural gross domestic product (AgGDP) and overall gross domestic product (GDP) would grow at rates below the 3 percent required to keep pace with population growth. Per capita GDP growth rates would therefore stand at below 1 percent in a majority of countries. Kenya's per capita GDP growth to 2015 would be essentially zero: those of Madagascar, Rwanda, and Tanzania would be only marginally higher. Burundi, DRC, Eritrea, and Ethiopia would register negative per capita GDP growth rates. Clearly, with business-as-usual in agriculture, ECA's future would not feature broad-based economic growth. Not a single ECA country would achieve the estimated 6 percent GDP growth rate required to meet the United Nations Millennium Development Goal (MDG) of halving poverty by 2015. Other development goals identified by ECA countries - such as increased food and nutrition security - would also remain beyond reach. The gap between demand and supply of major food crops in ECA would widen. For cereals, the supply shortfall would increase to 6 million metric tons by 2015,50 percent more than that in 2003, and 15 percent of total regional demand. Further analysis with the multimarket model yields numerous insights into the nature of agricultural development that might allow countries to avoid business-as-usual outcomes: • Achieving GDP growth rates required to meet MDG poverty reduction targets would imply threefold increases in agricultural sectoral and subsectoral growth rates. • Whereas growth in export subsectors is often put forward as a pathway out of poverty for countries in ECA, the analysis reveals that the largest poverty reductions would come from growth in subsectors for which demand is greatest within the region - such as staples, livestock products, oilseeds, and fruits and vegetables. Increasing productivity in these subsectors would directly benefit the great majority of ECA's numerous small farmers by easing key resource constraints in the activities to which they devote most of their resources. • When ECA is viewed as a region, milk emerges as the most important commodity, subsector for growth-inducing investment in agriculture, based on simulated cumulative contributions to overall GDP to 2015. Oilseeds, cassava, and fruits and vegetables also rank highly. Viewed together, staples subsectors result in the largest GDP gains, followed by livestock products, fruits and vegetables, and oilseeds. • Priorities for Kenya, Tanzania, and Uganda closely match those of the region. Regional priorities appear to be less relevant for Eritrea, Ethiopia, and Sudan, with cereals and milk being more important in these countries than in the others. Regional priorities appear to have little relevance for Burundi, DRC, Madagascar, and Rwanda. In Burundi and Rwanda, bananas, potatoes, and sweet potatoes are crucial. In DRC, oilseeds and cassava are paramount. In Madagascar, rice is central. • Whereas growth in the cassava and milk subsectors generate the largest aggregate gains, such gains would be concentrated in a handful of countries. Fruits and vegetables, beef, oilseeds, and maize emerge as commodity subsectors in which growth would yield gains that were both large and widespread. • Balanced growth strategies featuring growth in several agricultural subsectors lead to higher overall economic growth than does that featuring growth in a few sectors. • Agricultural productivity growth alone is insufficient to meet MDG poverty reduction targets. Growth in nonagricultural sectors and improvements in market conditions are also required. • Because poverty rates vary geographically within countries, growth strategies that take such differences into account lead to larger reductions in poverty than do those that ignore such variations. • The agricultural development domain characterized by high agricultural potential, low market access, and low population density (HLL; see Table 3.8 for the definitions of the various domains) emerges as the clear priority for efficient, equitable, and sustainable growth in the region. The greatest scope for broad-based benefits from regionally conceived initiatives in agricultural development resides primarily in this domain. That scope appears to be substantial. Agriculture-based growth in the LLL, HHH, and HLH domains is also important and probably offers scope for both poverty reduction and benefits from regional cooperation. But such potential is likely to be more difficult to achieve. Agriculture-based gnowth in the LHH, HHL, LLH, and LHL domains is unlikely to be large enough to warrant major investments in agricultural development. Best-bet growth-enhancing options in these areas probably lie outside agriculture. _ub Using agricultural R&D as an illustration, significant returns to regional cooperation in agricultural development are identified. The analysis therefore suggests that to avoid the bleak growth and poverty outcomes implied by business-as-usual in agriculture, ECA governments must invest in combinations of measures that 1 spur productivity growth, focusing on subsectors with high demand within ECA; 2 strengthen agricultural markets; 3 enhance linkages between agricultural and nonagricultural sectors; and 4 exploit opportunities for regional cooperation.
