Agriculture and Rural Development
"No agricultural development without agricultural credit, because farmers are the first investors"
Interview with Jean-Luc François, Head of AFD’s Agriculture, Rural Development and Biodiversity Division. With a new food crises looming in the Sahel, Jean-Luc François tells us about the challenges of the fight against hunger, how to leverage action to meet the current challenges and the tools implemented by AFD and its teams to reduce food insecurity in poor countries.
What challenge does the fight against hunger pose today?
Food security today concerns the entire planet. Global turmoil on agricultural markets and the decisions taken in Brussels, Washington or Beijing have an impact on the housewife’s shopping basket in Dakar, Ouagadougou or Niamey, because she buys imported products or local production whose prices are influenced by prices on international markets. At the global level, there are a whole host of problematic issues between Northern and Southern countries and among Southern countries, Sub-Saharan Africa is a really specific case.
To address this situation, our priority at AFD is agriculture and food security in the broad sense, but in Sub-Saharan Africa where both the potential and needs are enormous. The paradox of Sub-Saharan Africa is that it is the area of the world which has the most available land, the most water and an abundant labor force, but its food deficit is worsening. This phenomenon needs to be remedied, first because of the deficit in the trade balance: why import rice in Côte d’Ivoire or Nigeria when they can produce it? Second, the scale of population dynamics means there is a need to create jobs and agriculture is a highly labor-intensive sector.
CHAPTERING (the interview is only available in French)
What causes food crises in Africa?
There are two types of cause: natural causes and causes related to development strategies. The Sahelian band suffers from frequent rainfall deficits, which have major impacts on livestock and crops.
But there are other parts of Africa where for decades there has been a lack of policies to give farmers and investors incentives to see agriculture as a means to earn a living.
This year, there has been quite a major crisis in the Horn of Africa, which was initially due to natural causes, but it has been exacerbated by political turmoil. However, from a long-term perspective and in a stabilized environment, this region could well develop irrigation and new crop-growing practices that respect livestock farming traditions.
A crisis is currently looming in Niger and in six other West African countries. This is combined with the difficulties related to security in the Sahel, which will make it more difficult to come to the assistance of populations.
There is then a problem of population density, because the demographic transition has not yet occurred in these countries. Urbanization creates customers for farmers.
Finally, there are aspects related to migrations, which is why the food security issue must be addressed at the sub-regional level in West Africa.
If we do not take action, the food crisis may be exacerbated by growing desertification and the increase in the African population.
Does the fight for food security only concern agriculture?
If we the think in general terms, the real problem is poverty.
In certain rich countries, there are poor people who do not have enough to eat or who eat badly. The planet probably produces enough to feed its inhabitants. If we focus on Africa, the poor are in rural areas. We need to invest in agriculture. By producing more, we can feed urban dwellers without worsening the deficit in the trade balance and the rural poor can increase their incomes and therefore no longer suffer from hunger.
In short, and from the perspective of Africa, hunger continues to be an agricultural problem. We therefore need to invest in agriculture.
What does investing in agriculture mean?
At AFD, we believe that the first investor is the farmer. He is the one who makes the investment, first through his work and, as soon as he can afford to, by reinvesting his profits or by calling on financing institutions, microfinance or agricultural credit. Helping industries to buy this farmer’s produce at a fair price and share the added value equitably helps the farmer to invest. This is what AFD does by financing companies that act as intermediaries between the farmer and the market in sectors which organize contracts between industries and farmers and by developing the capacities of local banks to lend to the agriculture sector. But the private sector cannot do everything. Governments must also invest, for example in rural roads, irrigation, training and, generally speaking, in ways to improve the functioning of markets and the flow of trade between cities and rural areas. This is another area of AFD’s operations.
a farming family in Cambodia, © Eric Beugnot, AFD
What different operational means does AFD have?
One of the cornerstones of AFD’s action in West Africa is its support to agro-industrial sectors. This makes it possible to organize balanced relations between farmers, the agro-industry and markets through a system of rules and contracts. We should bear in mind that these export crops, such as the cotton or rubber industries that we support, do not prevent farmers from growing food crops. They can even use the income they earn from their exports to improve their subsistence farms.
Another major area for AFD’s operations is the support to rural local authorities. Public expenditure and wealth are today concentrated in African cities. Equipping rural areas requires a real political will. We therefore need to support decentralization, by giving responsibilities to local elected officials and giving them the means to invest (in transport, infrastructure, etc.). The aim is to make rural regions attractive and competitive. There are two additional aspects: the preservation of natural heritage and land tenure security.
One of AFD’s noteworthy advantages is that it has a range of financial tools which allow it to finance both public investment and private investment and to do so at financial conditions (grants or loans with different levels of subsidy) which are tailored to the type of project and the level of development of the country. AFD has further increased the complementarity of financial tools by contributing to the creation of an investment fund entirely dedicated to food-based agricultural sectors in Africa.