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TESTIMONY OF THE HONORABLE MICHAEL HESS
ASSISTANT ADMINISTRATOR FOR THE BUREAU FOR DEMOCRACY, CONFLICT AND HUMANITARIAN ASSISTANCE
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

BEFORE THE FOREIGN AFFAIRS SUBCOMMITTEE ON AFRICA AND GLOBAL HEALTH
HOUSE OF REPRESENTATIVES
ON JULY 18TH, 2007 CONCERNING
FOOD SECURITY IN AFRICA: THE IMPACT OF AGRICULTURAL DEVELOPMENT

Chairman Payne, Ranking Member, and other members of the House Committee on Foreign Affairs Subcommittee on Africa and Global Health, thank you for the opportunity to appear before you today to discuss the strategic role and impacts of agricultural development on food security in Africa.

The impact of agricultural development on food security in Africa

Food security in Africa cannot be achieved without the development of agriculture that enables the majority of Africans, now dependent on agriculture for their livelihoods, to secure the wealth, nutrition and stability to be productive and responsible members of their community.

Poverty and food insecurity in Africa are among the most significant development challenges of our time. From 1990 to 2005, the overall share of the population that is not meeting minimum daily food requirements decreased from about 52% to around 45%. These rates of progress are not sufficient to meet Millennium Development Goals (MDGs). Current estimates suggest that over 40% of sub-Saharan Africa's (SSA) population survive on less than a dollar a day and can not meet the minimum daily food requirements. The problem is especially acute in rural areas, where the poor are concentrated. These food insecure populations, to a great extent, are dependent on agriculture to change their lives and circumstances.

Fundamentally, the impact of agricultural development on the poverty and food security of individuals and on the transformation of African national economies comes from agriculture's ability to:

a. Put money in the pockets of millions of individuals and create jobs in rural and urban areas;

b. Directly improve the health and well being of society, especially children in formative stages, by ensuring the availability of high quality food and safe food systems;

c. Promote good economic governance among large segments of society; and

d. Improve the care and stewardship of natural resources that directly affects conflict, especially among the poor.

The power of agriculture to influence food security and poverty reduction in Africa is clearly reflected in the experiences of Ghana and Uganda. From 1992 to 2005 poverty in Ghana dropped from 50% to 30% of the population, and hunger dropped from 39% to under 20% of the population, a reduction of 5.3% annually since 1992. Driving this change is sustained improvements in the performance of agriculture, reflected by growth in agriculture total factor productivity (TFP) which grew by 2.5 % per annum between 1990 and 2003.

In Uganda, the share of population living in poverty decreased from 56% in 1992 to 31% in 2005. At the same time agriculture productivity grew at 3 % per annum. Further, rural incomes grew five times faster than urban incomes from 2000 to 2005 providing some early signals that the rural economy is taking off. This take off is laying the foundation for overall growth and economic transformation - which is critical to tackle the root causes of food insecurity and poverty.

At a continent level, agriculture has historically performed poorly. Recent trends show improvement, although the results are mixed and are not yet sufficient to meet either the MDG targets or the targets of African leaders to reduce poverty and hunger, and improve food security. Africa-wide, per capita agricultural production has declined, with the fastest rates of decline in Eastern and Southern Africa. West Africa per capita production trends indicate that it is the only region in Africa that has improved. Further, Africa's share of global agricultural exports has experienced a constant decline since the 1960s, and currently account for 2.1% of global agricultural exports.

But, there are signs that the region's agricultural performance is on the verge of a takeoff. Since 1997, Sub-Saharan Africa's share of the world's traditional agricultural exports has grown slightly from approximately 7% to 11%. Beginning in 2000, agricultural growth rates have improved in many countries, and, as recently as 2005, Sub-Saharan Africa's agricultural GDP grew by 6%. In general, household incomes are on the rise.

Barriers to agricultural development in Africa

African leaders recognize the need to get agriculture moving and the powerful influence it does and must have on food security. Their vision for agriculture is reflected in the Comprehensive African Agricultural Development Program (CAADP) of the African Union's New Partnership for Africa's Development (AU/NEPAD).

CAADP is an African vision and framework designed and led by Africans to ensure that agriculture plays its critical role in supporting transformational development, improving food security and increasing the effectiveness of development assistance. CAADP is the most ambitious and comprehensive agricultural reform effort ever undertaken in Africa. It addresses policy and capacity issues across the entire agricultural sector and across the entire African continent.

By establishing CAADP and reinforcing their commitment to it, African governments are addressing a long standing barrier to agricultural development in Africa - lack of African political and financial leadership for agricultural development in Africa.

CAADP offers multiple opportunities for progress on the Monterrey and Paris Declarations. It promotes African mutual accountability and financial and political commitment. African governments committed to provide 10% of their national annual budgets to support agriculture by 2008. It provides a framework that facilitates prioritization of where and what to invest in to achieve the targeted 6% agricultural growth rate under CAADP. It integrates the need to address chronic food insecurity and economic vulnerability into the mainstream development agenda and provides a framework for Africans to unite to assist famine-prone countries tackle the root causes of hunger. It also reflects a commitment of African leaders to put in place a policy framework to support agricultural development.

The G-8 has committed to support CAADP during the Gleneagles, St. Petersburg, and most recently at the Hieligendamm meeting, where the communiqué on Growth and Responsibility in Africa noted that "To improve food security and sustainable use of natural resources, the G8 will support AU/NEPAD's Comprehensive Africa Agricultural Development Programme (CAADP) and promote policy reforms and investments in sustainable agriculture leading to higher productivity, better market access and reduced vulnerabilities in order to support the population in rural areas". Under the leadership of the United States Agency for International Development (USAID), the Initiative to End Hunger in Africa (IEHA) framework is the vehicle through which the U.S. government meets its G-8 commitments to support implementation of CAADP.

CAADP has four pillars. Of particular strategic importance is pillar three which focuses on food security, hunger and emergency assistance to address the needs of the most vulnerable. CAADP integrates this concern for the vulnerable and food security into the core of the agricultural development agenda. The other three pillars promote: sustainable management of land and water resources (pillar one); increasing agricultural trade capacities and infrastructure for agriculture (pillar two); and increasing the use of productivity enhancing technology (pillar four).

The major challenge that the implementation of CAADP faces is increasing the scale and scope of policy reform, capacity building and investment to levels sufficient to achieve the accelerated agricultural growth targets. In 2000, barely 3% of national budgets were allocated to agriculture, and no country in Africa was providing 10% of their budget to support agriculture. In 2003, the average share of national budgets going to agriculture increased to just over 5%.

Key barriers and challenges to increasing the performance and contribution of agriculture in Africa to the reduction of poverty, hunger and food insecurity that CAADP and IEHA need to address include the following:

• Increasing agricultural productivity and growth in the use of agricultural inputs.
• Strengthening policy and institutions to support agriculture.
• Expanding regional economic cooperation to grow market opportunities and access.
• Strengthening the capacity of private sector based agricultural market and trade systems - to link producers and manufacturers to markets and finance.
• Expanding private sector foreign and domestic investment.
• Building the infrastructure to serve agriculture businesses and populations.
• Strengthening the capacity to deal with vulnerabilities to political instability as well as environmental and economic shocks.

Recognizing that countries face different barriers and challenges to develop their agriculture, action plans and investments need to be adapted to local needs. The AU and NEPAD have established a process, coordinated by lead regional economic communities in Africa, to provide evidence-based planning to guide the adaptation and adjustment of the CAADP framework to meet the country specific needs in pursuit of the common objectives of CAADP. This commitment to regional economic integration and coordination, along with evidence-based planning is a major step forward by African leaders in creating the conditions to improve competitiveness and facilitating broad based economic growth.

Securing the engagement, alignment and commitment of the international development community in assisting Africans to put in place the capacity and investments to enable an efficient, coherent African-led agenda for agricultural development also remains a challenge and barrier to success. Progress is being made, but much remains to be done to fully secure the alignment of International Finance Institutions and foundations along with traditional bilateral donors.

Agency for International Development agricultural development activities in Africa

Since 1998, USAID has provided an estimated $1.35 billion in DA, not including Food for Peace development food aid, to support African agricultural development. Over the past ten years USAID has provided development assistance for African agriculture in 15 to 25 countries each year. In 2007, development assistance to support agriculture is being provided to 20 countries in Africa. USAID also provides support for regional (multi-country) agricultural development programs in East, West and Southern Africa to increase competitiveness and expand economic opportunities including reducing regional trade barriers for inputs and food grains. The Agency also supports global networks and advanced research systems that focus on agriculture in Africa, such as the Consultative Group for International Agricultural Research and the U.S. universities involved through Title XII Programs such as the Collaborative Research Support Program, directly supported from the Washington headquarters. And, through the Food for Peace development programs, managed from Washington, we provide support for African agricultural development in an estimated 16 countries.

The new U.S. Framework for Foreign Assistance recognizes the strategic importance of agriculture in economic development, especially among developing countries. It provides a framework to focus our efforts on agricultural enabling environment and agricultural productivity challenges that can demonstrably contribute to facilitating transformation through broad based, sustained, economic growth and the reduction of poverty.

Our agricultural programs are focused on increasing rural incomes as a primary driver for reducing poverty, stimulating broad based economic growth and increasing the food self-reliance of rural households. To achieve this, USAID works with national governments, private sector groups, nongovernmental organizations, regional organizations, and other development partners to provide and focus agriculture development assistance. Our actions are aimed at: increasing African agricultural productivity, improving the policy environment for smallholder-based agriculture, expanding agricultural trade and integrating the vulnerable - especially the food insecure - into the development process. Our efforts are adapted to the needs of individual countries and local populations.

In 2003, IEHA, an agricultural focused agenda, began implementation. IEHA provides a framework to collaborate with and strengthen key African organizations at the continental, regional, and country levels to lead and manage implementation of the CAADP process. In 2006, IEHA interventions directly assisted nearly 10 million people; helped 520,000 farmers on 850,000 hectares (1.87 million acres) adopt new technology to increase productivity; helped spur $812 million of international trade and $435 million of intra-regional trade; and in countries as diverse as Mozambique and Ghana reduced periods of food shortage for the chronically food insecure from 4 months to 1.3-1.8 months per year.

A significant part of our efforts, strategically, is our support for regional economic integration that helps create the dynamics and opportunities to achieve Africa's growth targets. The small size, economic isolation, and rudimentary infrastructure of many African economies present development challenges not easily surmounted at the national level. With a regional approach, countries can capture economies of scale and scope unavailable to them individually due to their limited access to markets, finance, human capital, and knowledge. They can address cross-border problems caused by epidemics, pollution, and conflict. By working regionally, countries are also held accountable to a larger group of stakeholders for their policy commitments.

USAID-supported policy reforms are improving enabling environments for smallholders and agriculture-based enterprises by removing key constraints and creating real opportunities. Policy improvements such as new commodity grades and standards are making trade more efficient and reliable. Reductions in tariffs and taxes on agricultural inputs are making investment more attractive to producers and others in the value chain, allowing them to take advantage of these opportunities, increase their incomes, and move out of poverty. USAID also supports the enhancement of policies with respect to key public investments like agricultural research, directing scarce resources to those areas where the results will be of most use to poor farmers. Policy efforts fall under three main categories: agricultural markets and standards, food policies, and public investment policies.

USAID agricultural trade-related programs focus on growing sales by smallholders and increasing exports of targeted commodities, especially into regional markets. Opportunities for increased domestic and international trade are being created through trade-policy improvements as well as through technical assistance that links producer and trader groups to business development services, credit, and ultimately to markets, and also helps them meet international quality standards. Increased producer revenues from these profitable new opportunities are raising incomes and reducing poverty.

USAID agricultural productivity support programs are reducing poverty and hunger by enhancing productivity and income at all parts of the agricultural value chain. The programs do so by providing skills and information directly to farmers, processors, and traders, as well as to producer and exporter associations. They also strengthen public and private research and extension systems to deliver new technology. Through our efforts technology is being developed, disseminated and shared among countries and farmers throughout Africa.

USAID is also the lead development agency in support of biotechnology systems development in Africa, providing support to countries to establish bio-safety policy and regulatory systems that enable them to utilize these innovations, strengthening capacity of African scientists and developing new biotechnology applications for African agriculture and priority commodities.

Agriculture is our front line against new diseases, like avian influenza and cassava mosaic virus that threaten livelihoods and trade, as well as human health. We are working to strengthen the surveillance systems and knowledge systems to improve the response to these challenges. USAID-funded international research developed cassava varieties resistant to a virus destroying production across central Africa. Through monitoring of the outbreak and partnering with private voluntary organizations (PVOs) to disseminate improved varieties-we have been able to prevent crop failures and restore production systems that had collapsed.

USAID agricultural programs assisting vulnerable households help to build the capacity of the vulnerable, increase their food self-reliance, and connect them to key development services and processes. The vulnerable are hungry individuals, households, and groups that are unable to meet their basic food needs and are likely to experience continuing or increased difficulty in meeting these needs. They live where highly inadequate or highly variable food availability and food access conditions exist, exacerbated by natural and/or man-made disasters such as conflict. These chronically food-insecure conditions require solutions that will improve and protect the production and market structures and systems that will improve their ability to acquire more income and food for feeding themselves. Our policy reform, market development and productivity enhancing efforts are having significant influence on the vulnerable.

Under the new USAID Food for Peace Strategic Plan for 2006-2010, the Agency has expanded its food security conceptual framework to make explicit the risks (economic, social, health and political risks as well as natural shocks) that impede progress toward improvements in food availability, access and utilization. New P.L. 480 Title II development programs are being aligned to support CAADP goals, especially at the country level with FFP development programs aligned with CAADP country compacts focused on underlying causes of food insecurity.

Focus countries for agricultural development assistance in Africa

The role of agriculture in a national development strategy is highly related to a country's stage of development. The United States Foreign Assistance Framework recognizes that countries are in different stages of the development process and face different challenges.

At present only eight percent of Africa's population lives in middle income countries, where average GDP is almost ten times higher than the average for low income African countries. Agriculture is less important in middle-income countries and on average generates less than ten percent of GDP. Higher average per capita incomes typically correspond to lower poverty rates and greater food security.

In general, agriculture plays a major role in low income countries. In Africa, 90% of the population lives in low income developing countries and many Africans in these low income countries are dependent on subsistence agriculture for their livelihoods.

IEHA, our flagship effort in agriculture, is concentrated on two key low income countries in each of three regions: Uganda and Kenya in East Africa; Mozambique and Zambia in Southern Africa; and Mali and Ghana in West and Central Africa. These countries are leaders in policy reform, public investment, and government commitment to agricultural growth and poverty reduction. They are representative of the key economic and agricultural characteristics of their regions and also have the greatest potential for influencing regional agricultural productivity and economic growth through trade and technology diffusion. In 2007 two hunger hot spot countries - Malawi and Niger -are being added to IEHA.

Looking forward, there are very few countries in Africa that would not qualify as a focus country simply based on need. High levels of poverty and hunger are pervasive. Our agricultural resources are focused on strategic countries committed to using development resources effectively to stimulate agricultural growth, break the cycle of chronic food insecurity and establish the policy, capacity and processes for this to succeed. We are focusing on those developing countries that are taking steps to implement CAADP and participate in the peer review efforts that go with the NEPAD and CAADP processes. In 2007, 10 countries have launched roundtable processes to shape an integrated strategy to implement CAADP and achieve African aspirations of sustained growth and food security.

Support for agricultural development in focus countries

IEHA's strategic objective is to rapidly increase agricultural growth and rural incomes in Sub-Saharan Africa to reduce both poverty and hunger by harnessing the power of new agricultural production and processing technologies; improving the efficiency of agricultural trade and market systems; building the capacity of community and producer-based organizations; and integrating vulnerable groups and countries into sustainable development processes.

IEHA's focus is on smallholders in rural areas who are poor but have the capacity to improve their situation. Programs that target smallholder-based agricultural growth give the hungry access to food by both raising their incomes and reducing the price of food. Increased rural income also has positive effects on poverty throughout the economy, which is especially significant in Africa because three-quarters of the continent's malnourished children are found in households that depend on small farms for their livelihoods.

IEHA invests in several key areas and subsectors to enhance agricultural sector productivity. Key subsectors include maize, rice, cassava, cotton, coffee, and horticulture. In general IEHA allocates 35 percent of its resources to scientific and technological applications, which are raising the productivity of farms and firms and increasing the stability and volume of the food supply. Agricultural technology also improves product quality, relieves pressure on natural resources, reduces post-harvest losses, helps producers respond to markets, helps entrepreneurs develop profitable enterprises, raises farm incomes, and lowers the price of food to consumers.

To help improve the policy environment, IEHA devotes around 20 percent of its resources to developing human capital and institutions, which are fundamental to sustaining agricultural growth. In the public sector, Africans must shape and lead policy and research, and in the private sector, they must organize to advocate for improved policies and must lead producer and other organizations that connect their members with markets and services.

With regard to increasing agricultural trade and private sector development, IEHA allocates 25 percent of its funds to increasing the efficiency of agricultural trade and market systems, which are improving African competitiveness in export and domestic markets, are connecting African farmers to consumers, and are integrating African countries into global markets. More effective market systems add value to products and processes, deliver high-quality, safe products, and reduce costs for consumers. The remaining 20 percent of the resources are dedicated to assisting vulnerable populations.

Food Aid and Food Security

In addition to the initiatives already underway, the Administration is requesting authority under PL 480 to use up to 25 percent of appropriated Title II food aid funds for the local or regional purchase and distribution of food in those situations where speedy food delivery is critical to saving beneficiary lives. The purchase of food in Africa could also help sustain local production, improve incomes, and stimulate trade linkages -- all which can reduce the root causes of food insecurity, malnutrition and cycles of famine, and allow us to use our food aid budget more effectively. While the House Foreign Affairs Committee version of the 2007 farm bill proposes to require that at least $40 million of International Disaster and Famine Assistance be devoted to famine relief and prevention, those funds are required for other critical disaster and humanitarian relief needs. We require this authority in P.L. 480 Title II.

The House Foreign Affairs Committee farm bill includes a non-waivable minimum for Title II non-emergency food aid. We strongly oppose this provision. The requirement of $600 million in Title II for non-emergency programs -- $250 million above current levels -- would result in an equivalent decrease in emergency food aid. Emergency food aid saves countless lives each year. While non-emergency food aid programs have an important long-term impact, they should not be increased by putting at risk the lives of people affected by emergencies and the flexibility of the US government to respond to emergencies.

Concluding remarks

Agriculture can and does play a strategically important role in promoting food security. USAID is playing a lead role, globally and locally, in working with African leaders and the development community to build the necessary coalitions and alliances. Through a united approach combining AFR, EGAT and FFP resources, our development and technical assistance have made important contributions to addressing food security.

Fundamentally, the challenge of food security and agricultural development in Africa must first and foremost be addressed by Africa's leaders. Their vision and aspirations reflected in CAADP are an important stride forward. It is important that we and others provide credible support for these African-led efforts, including the strengthening of the regional food market and trade systems that will play such a large role in securing African food security. Our role is to assist in strengthening the agricultural enabling environment and in tackling the fundamental development challenges related to increased productivity and investment, while making sure that citizens understand that they and their governments must take responsibility for their future, as this is the key to development.