Africa owns 60% of the world’s uncultivated land suited for crop production, but accounts for 30% of the world’s malnourished and only 3% of global agricultural exports. If there is one thing global agricultural policy experts Paul Collier and Derek Byerlee can agree on, it’s that Africa’s food system is struggling.Their different views on the causes and investment solutions to put Africa on a more prosperous and food secure path made for a provocative discussion at a symposium hosted last week by Stanford University’s Center on Food Security and the Environment.

Collier, a distinguished economist and author of the award-winning book “The Bottom Billion”, was direct in his opening remarks.

“Smallholder agriculture has been a persistent productivity disaster for Africa,” said Collier. “Despite a huge land area to population ratio and higher proportion of its labor force engaged in food production, Africa is still not able to feed itself. The smallholder business model of the last 50 years is fundamentally flawed…maybe it is time for a Plan B.”

African agricultural productivity remains astoundingly low and stagnant at about $500 per person per year. His solution: debunk the ‘myth of the efficient peasant’ and rural romanticism and support commercial agriculture and urban growth.

Commercial agriculture reaps economies of scale that provide advantages often beyond reach for smallholder farmers yet are critical to agricultural production in Africa—risk finance, liquidity, technology, logistics, and knowledge of markets. Collier points to the success of Brazil and Thailand—two emerging economies that differ in scale of commercial organization, but have become major agricultural exporting countries.

Byerlee, a renowned economist and director of the 2008 World Development Report, agreed with Collier that commercial agriculture is likely Africa’s future, but that market-oriented smallholder farmers will play the lead role.

“We have much to learn from emerging business models,” said Byerlee. “Smallholders and agribusiness have complementary assets that can contribute to commercial agriculture, and states and investors must help facilitate smallholder inclusion in these models.”

Byerlee noted that the choice between small-scale or large-scale production models depend on transaction costs and type of commodity, and are context specific. Small- to medium scale production is best suited to most types of products in Africa especially food staples and many labor intensive products (e.g, diary). This follows the example of Thailand that not only has succeeded in food production but alone exports more than the value of all sub-Saharan Africa. Value chains that require stronger coordination with processing and shipping (e.g., sugar and palm oil), demand market standards (e.g, export horticulture) or are taking pioneering risks (e.g., new crops in new areas) may be better suited for large-scale production. Benefits may still be large if they create good jobs—a major challenge for Africa’s future.

Where to invest in Africa’s future?

"Young Africans are voting with their feet in droves to leave smallholder agriculture because it is impoverishing and boring, “ said Collier. “The economic tragedy for Africa is that cities haven’t been the engines of economic opportunity and wage employment.”

Collier argued investments in cities over agriculture are needed to prepare for an urban future and must be done quickly due to one dangerous fact—climate change.

“Climate change is the train coming down the tracks and it is already happening in Africa,” warned Collier. “The continuing deterioration of African agriculture is already set in stone. The last 50 years of carbon emissions are going to continue to devastate Africa’s climate over the next 50 years.”

Collier fears climate change will shift Africa’s competitive advantage in agriculture to Northern Eurasia and North America. Therefore, limited investment dollars must shift to cities which are more climate resilient. Byerlee disagrees.

“There is overwhelming and convincing evidence that agricultural growth is important for poverty reduction and food security,” said Byerlee. “Look at the Green Revolution in Asia and the institutional reforms in China in the early 1980s.”

The 2008 World Development Report also found GDP growth from agriculture benefits the income of the poor two to four times more than GDP growth from non-agriculture. So why isn’t this working for sub-Saharan Africa?

Byerlee points to Africa’s history of poor macroeconomic policies that have disadvantaged African farmers. Smallholder farmers have traditionally been taxed at high levels (as much as 50 percent 20 years ago before liberalization programs started kicking in). Rates have come down dramatically to 15-20 percent, but are still significantly higher than other countries.

“African states must level the playing field,” said Byerlee.

Many of these macropolicies are slowing changing, and that makes Collier and Byerlee hopeful.

“After four decades in sub-Saharan Africa I feel optimistic about Africa’s food systems and future,” said Byerlee. “I see exciting opportunities in terms of market growth, private interest, and improved policies.”

Yields in Africa are low, but there is room for significant improvement. The continent is home to potentially 240 million hectares of uncultivated land and less then 20 percent of irrigation potential has been tapped.

African agricultural systems are transforming rapidly in response to rising rates of income growth, urbanization, and shifts in demand for high value and processed food, and feed for livestock. Higher food prices are incentivizing farmers to enter the market and increasing farmer income. Regional markets now accounting for only 5-10% of trade have much potential to expand, and Byerlee projects the value of African urban food markets to quadruple over the next 20 years.

Renewed investment in Africa is another reason for optimism. After decades of declining support donor agencies are refocusing their efforts on supporting agricultural development in Africa. Private sector investment, ranging from local to foreign investors, is also increasing. Collier spoke of the value pioneer commercial investors are bringing to unused and underutilized, but arable lands in Africa. These larger investors are better able to internalize the benefits of infrastructure supply while creating jobs and opening new markets.

The spur in foreign investment has drawn some fire from opponents worried about ‘land grabbing’. Collier and Byerlee both pointed out the need to differentiate between commercial investors and land speculators. The latter are being scrutinized, and for good reason.

Land speculators are leasing huge tracts of land over long time horizons and banking on the land’s option value if there is a big spike in food prices. This takes potentially arable land out of near-term production and out of the hands of local communities. Byerlee suggests governments impose controls on how rapidly the land is developed as one way of managing this problem.

What will a successful African food system look like in 2050?

"African peasantry as we know it today will not be preserved," projects Collier.

North Korea has conducted its third underground nuclear test. Shorenstein APARC Korea experts weigh in on the event, which is drawing criticism from Beijing to Washington, DC.

North Korea conducted an underground nuclear test on Tuesday, prompting President Barack Obama to call the detonation of a miniature nuclear device a “highly provocative act” that threatens U.S. security and international peace. It is the third nuclear test by Pyongyang since 2006 and is escalating concern that the isolated Stalinist state is now closer to building a bomb small enough to be fitted on a missile capable of striking the United States and its allies. The test was conducted hours before Obama’s annual State of the Union speech.

North Korea’s official Korean Central News Agency said the test was conducted, “in a safe and perfect way … with the use of a smaller and light A-bomb, unlike the previous ones, yet with great explosive power.” The statement said the nuclear device did not impose “any negative impact” on the environment.

North Korea said the atomic test was merely its “first response” to what it called U.S. threats and said there would be unspecified “second and third measures of greater intensity” if the United States remains hostile to the North. Washington had led the call for more U.N. sanctions against Pyongyang after the North launched its first rocket and put a satellite into obit in December. While the North said the launch was for its civilian space program, the Obama administration believes it was part of a covert program to develop ballistic missiles that can carry nuclear warheads.

We ask two Stanford experts on North Korea to weigh in: David Straub, the associate director of the Korean Studies Program at the Walter H. Shorenstein Asia-Pacific Research Center (APARC), and Nick Hansen, an affiliate of the Center for International Security and Cooperation who is an expert in foreign weapons systems.   

Q. Why conduct the test now?

Straub: Since the two previous North Korean nuclear tests took place on American holidays and the North Korean themselves have announced that their moves are "targeted" at the United States, many observers have concluded that the this test was especially timed to coincide with President Obama's State of the Union address. It is also possible that, as others have speculated, the North Koreans also took into account that Feb. 16 is the birthday of North Korean leader Kim Jong Un's father, Kim Jong Il, the man who is said to have instructed North Koreans to proceed with the nuclear weapons and missile programs. Others have speculated that the North Korean leadership wanted to test the device before the Feb. 25 transition in South Korea from the current president Lee Myung-bak, to the president-elect, Park Geun-hye. The timing could be intended to punish Lee, whom the North Koreans say they despise, while, the argument goes, making it a little easier for Park to reach out to the North before her inauguration.

Q. What message is North Korea’s young and relatively new president, Kim Jong Un, trying to send to the world with this test?

Hansen: Kim seems to be saying: I’m going to do what I say I’m going to do – and nobody is going to dissuade me. The North said they were going to launch a satellite, and by God they did. They said they were going to touch off a nuclear test after that, and by God they did. Now we have to wait and see what’s next.

Straub:  The North Koreans themselves are saying that the test is a response to the military threat posed to it by the United States and to U.S.-led UN sanctions imposed on North Korea after its rocket test in December. The North Koreans have complex motivations for pursuing nuclear weapons. Many North Koreans may actually believe that having nuclear weapons will defend them against the United States. But the fact of the matter is that the United States and South Korea have never attacked North Korea over the decades, while the North Koreans have repeatedly attacked South Korean and American targets, most recently killing 50 South Koreans in 2010. North Korea's top leaders see nuclear weapons and missiles as a panacea. Fearful of opening up to the outside world because of the lies they have told their people, Pyongyang wants to believe that it will eventually maneuver the United States and the international community as a whole into accepting its possession of nuclear weapons and forcing the removal of sanctions against it. That won't happen, but even if it did, it would not resolve Pyongyang's basic problems, which stem from the totalitarian nature and history of its regime.

Q. What concerns you most in the wake of this test?

Hansen:  The thing I’m worried about now is that they also said they’re going to launch more satellites and long-range missiles. They displayed one in the military parade of 2010, an intermediate-range missile that can probably go 2,000 miles. When you think about that, 2,000 miles, or maybe a little bit longer, it puts just about every U.S. base in Asia under its threat, including Guam, Okinawa, Taiwan and everything in Japan. It’s a threat if they could put a warhead on it. The KN-08 is a bigger, three-stage rocket and is more of a threat, with the potential of hitting at least Alaska, Hawaii and maybe the U.S. West Coast. But remember, the North has tested neither.

Q. The test was in defiance of Pyongyang’s chief ally, Beijing, which had urged Kim not to risk confrontation and said the North would “pay a heavy price” if it proceeded with a test. How will China respond?

Straub: China is key in dealing with the North. China provides North Korea with most of its external support, including vital food and energy supplies. Chinese leaders are certainly not happy with their North Korean counterparts, as China would prefer peace and stability in the region, so it can focus on its own economic development. But Chinese leaders are fearful that putting a great deal of pressure on North Korea might result in chaos, with unpredictable and possibly very dangerous repercussions for China and the region. Thus, before North Korean nuclear and rocket tests, typically the Chinese press Pyongyang not to proceed. But immediately after a test, the Chinese begin to urge "all parties" to exercise restraint. In the United Nations, where China has a veto on the Security Council, it reluctantly agrees to the minimum condemnations of and sanctions against North Korea. After the dust settles, however, China doesn't seriously implement the sanctions. In fact, since North Korea conducted its first nuclear test in 2006, Chinese trade with North Korea has dramatically increased as a result of a PRC government decision to support North Korea. China may agree to a stronger resolution this time, but ultimately this pattern will almost certainly repeat itself.

Q. The North Koreans have said the test poses no risks to the environment or its people. Is this accurate?

Hansen: It takes a while for the particles that are released from the test to get released from the cracks in the rock and get into the atmosphere. My guess is that because of this very hard rock, they probably don’t have much of a radiation release problem. It probably will just seep through naturally and should not be of any danger. Engineers seem to have done a good job from a security and safety standpoint; the way the tunnels make right-handle turns and then there are the blast doors and piles of dirt to soak up any release.

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