Evans School Policy Analysis & Research Group (EPAR)

While literature on achieving Inclusive Agricultural Transformation (IAT) through input market policies is relatively robust, literature on the effect of output market policies on IAT is rarer. We conduct a selective literature review of output market policies in low- and middle-income countries to assess their influence on IAT and find that outcomes are mixed across all policy areas. We also review indicators used to measure successful IAT,  typologies of market institutions involved in IAT, and agricultural policies and maize yield trends in East Africa. This report details our findings on these connected, yet somewhat disparate elements of IAT to shed more light on a topic that has not been the primary focus of the literature thus far.

Water is a critical input for significantly enhancing smallholder farmer productivity in Sub-Saharan Africa (SSA) where less than 5% of farm land is irrigated, and in India where 42% of farm land is irrigated.  For many years, donors have invested in human-powered treadle pump technologies as a point of entry for smallholder farmers unable to afford motorized pumps. In spite of some successes in treadle pump promotion, however, there is a widespread perception that as soon as smallholder farmers can afford to they quickly transition to motorized diesel- powered pumps. While diesel pumps substantially ease farmers’ workload, they pollute excessively (both in terms of local air quality and greenhouse gas emissions), pump excessive amounts of water, and put farmers at the mercy of cyclical spikes in fuel prices. This brief provides an overview of state-of-the-art alternative energy pumps, including technologies available and implementation lessons learned from China, India, Africa, South America and other regions. Through a literature review, written surveys and phone interviews with water pump producers and non-governmental organizations (NGOs) we evaluate the availability, affordability, and adoption rates of alternative energy technologies in developing countries. Our findings suggest that no single alternative energy water pumping system is a “silver bullet” for rural smallholder irrigation needs. Biofuels may prove a successful short- to intermediate-term solution for farmers who already have access to diesel pumps, but other problems associated with diesel engines, including high maintenance costs and excessive water use remain even when biofuels are used. Solar systems eliminate pollution almost entirely, reduce water consumption, and eliminate the need to purchase fuels. However solar systems are typically prohibitively expensive for smallholder farmers. Wind powered pumping solutions have not proven successful to date, with high costs and irregular wind patterns (either too little or too much wind) proving substantial barriers to widespread adoption.

In the decades following independence in 1960, Côte d’Ivoire stood out as a shining example of economic growth in Sub-Saharan Africa. GDP increased at an annual average of 8.1 percent from 1960 to 1979, led largely by cocoa and coffee exports.  Low export earnings from a fall in world cocoa prices and a heavy public debt burden halted this growth in the 1980s, followed by civil conflict beginning in 1999. Three decades of focus on export crops rather than food crops also left Côte d’Ivoire with a growing food deficit. This literature review examines the state of agriculture in Côte d’Ivoire and the history of government involvement in the agricultural sector. We find that while the country is poised to reemerge from a decade of economic stagnation and civil war after signing the Ouagadougou Political Accord in 2007, the political economy of Côte d’Ivoire is still heavily dependent upon and influenced by the production of cocoa. Cocoa is the top export, and cocoa export taxes provide one of the largest sources of revenue for the Government of Côte d’Ivoire (GoCI). Cocoa is not heavily dependent on fertilizer inputs and growers have increased production by expanding cropland. The small contribution of fertilizer to the production of this essential crop may help explain the GoCI’s low priority on expanding fertilizer production and use. Given that a large part of government revenue comes from the export of cocoa and coffee, the government has chosen to focus resources on crops that increase revenue. Even with the food riots in 2008, the GoCI has not made increasing domestic food production an important focus of agricultural policy.

Agriculture is the most important sector in the Ghanaian economy. In 2008, it accounted for over 32 percent of GDP and employed over half of the labor force. Economic development in Ghana has historically been dependent on the success of agriculture, particularly the main export crop, cocoa. Despite the sector’s importance, Ghanaian farmers have one of the lowest fertilizer application rates in Sub-Saharan Africa. The combination of a dominant agricultural sector, nutrient-poor soils, low fertilizer use among smallholder farmers, and the absence of locally produced inorganic fertilizers has prompted the government of Ghana (GoG) to intervene in the fertilizer market. This literature review examines the state of agriculture in Ghana, the history of the fertilizer market, and the current market structure. We find that the GoG has been a major actor in the inorganic fertilizer market over the past 50 years, from exercising total control of the domestic supply chain in the 1960s and 1970s to more indirect interventions in later years. In recent years, agricultural growth has averaged 5.5 percent as compared to 5.2 percent growth in the rest of the economy.  However, most of this growth has been due to land expansion and favorable weather conditions rather than increased productivity.  Increased fertilizer use among smallholder farmers has the potential to contribute to future agricultural growth and continued economic success.