OXFAM ISSUE BRIEFING MAY 2016

HOT, HUNGRY AND STARVED OF

INVESTMENT
Supporting smallholders to build a climate-resilient agricultural
sector in southern Africa

As the African Development Bank meets in southern Africa, one of

the strongest and most sustained El Nio events on record
turbocharged by climate change is causing severe drought, failed
harvests and a hunger crisis across the region. This is being made
worse by record high temperatures as a result of global warming.
Women farmers are on the front line of climate change, yet are also
the regions first line of defence against food insecurity. With
smallholder agriculture being critical to both food security and
inclusive growth, governments supported by donors and
international organizations must urgently implement plans to
better support smallholder farmers and increase resilience. This
paper outlines the current situation in the region and presents
recommendations to help work towards this.

www.oxfam.org
WHAT IS AT STAKE LESSONS FROM
EL NIO
One of the strongest and most sustained El Nio events on record
exacerbated by climate change is causing severe drought, failed
harvests and a hunger crisis in southern Africa and Ethiopia. This El Nio
is being made worse by record high temperatures as a result of global
warming, with 2014 being the hottest year on record until 2015 exceeded
it. The trend is continuing, with 2016 set to be the hottest year yet.

The scale of the crisis is overwhelming many governments as they are

not receiving the support that they need. In March 2016, the Southern
African Development Community (SADC) declared a regional
emergency, in addition to disaster declarations from Lesotho, Swaziland,
Zimbabwe, Mozambique, Malawi and many provinces of South Africa.
Zambia is not likely to declare a state of disaster, despite moving to
restrict maize exports in the face of price increases.1 Up to 49 million
people could be at risk of hunger by the end of this year2 and the
emergency is expected to continue to get worse before the 2017 harvest.
The impacts stretch beyond food security to economic and social shocks.
In Zambia, for example, the difference in food production between
regions is causing migration and price volatility.

The crisis shows what happens when we fail to invest adequately in a

strong smallholder-led agricultural sector starting with women farmers
who are on the front line of climate change impacts, yet are also the
regions first line of defence against food insecurity.

THE NEED TO BUILD LONG-TERM

RESILIENCE
Right now, the priority must be to respond to the immediate humanitarian
crisis in order to save lives and livelihoods that is imperative. But
beyond that, governments, supported by donors, regional and
international organizations, must help communities build their own
resilience to better prepare for, and cope with these crises. This is
important because:
These types of weather shocks are no longer one-off events that
occur every twenty or thirty years they are starting to happen with
much more regularity. Record temperatures, drought and
unpredictable growing seasons are becoming the new normal this is
what the future looks like under climate change.3
The southern Africa region is already chronically vulnerable, with
many of the regions small-scale producers constantly in danger of
slipping back into hunger.

2
 Early outside help cannot be relied upon. The El Nio response has
demonstrated the challenge of mobilizing the international community
to respond in time. The drought and related food crisis were signalled
in advance, yet donors dragged their feet, ignoring the call for early
intervention despite the evidence that it saves both lives and money.
Failure to stem the crisis increases the burden on the worlds
humanitarian system which is becoming ever more strained by an
unprecedented number of global emergencies.

Box 1: Key facts

Why agriculture is key to food security and inclusive growth

In sub-Saharan Africa, GDP growth due to agriculture is estimated to be
up to 11 times more effective in reducing poverty than growth in any
other sector.
Rain-fed agriculture provides livelihoods for 70 percent of sub-Saharan
Africas population, and contributes nearly one quarter of GDP.
Yet agriculture only receives 2 percent of government spending in
SADC countries. In addition, the quality of investment is poor as it is
heavy on subsidies and light on investment into the key drivers of a
resilient agriculture sector such as extension services, sustainable land
and water management, market access, and research and
development.
The agricultural sector is most at risk of climate change: it bears over 80
percent of all economic losses caused by drought.

The central role of women

Women farmers dominate smallholder agriculture across Africa.
They supply over half of the agricultural labour in Zambia, and make up
over 60 percent of the agricultural labour force in Mozambique and
Lesotho.
Yet in many SADC countries, women own or manage less than a
quarter of agricultural land and water.
Women have access to less than 10 percent of the formal agricultural
credit offered to small-scale farmers in Africa.
The FAO estimates that if women had equal access to land and other
productive resources, total farm yields would increase by 2030
percent.

Sources: M. Mutamba et al. (2015). Beyond Good Intentions: Agricultural policy in the SADC
region. http://policy-practice.oxfam.org.uk/publications/beyond-good-intentions-agricultural-
policy-in-the-sadc-region-565759; World Bank. (2016). High and Dry: Climate change, water
and the economy. http://www.worldbank.org/en/topic/water/publication/high-and-dry-climate-
change-water-and-the-economy; FAO. (2011). The State of Food and Agriculture. 201011.
http://www.fao.org/docrep/013/i2050e/i2050e.pdf. Share of public spending on agriculture in
SADC countries is for 2014, available on p210 of: ReSAKSS. (2014). Beyond A Middle
Income Africa. http://www.resakss.org/sites/default/files/pdfs/ReSAKSS_AW_ATOR_
2014_WEB.pdf

3
AGRICULTURAL TRANSFORMATION TO
DATE A DECADE OF GOOD
INTENTIONS
Governments have made well-meaning commitments at African Union
(AU) and SADC level to prioritize the agricultural sector for support and
government funding. For example, the AU Malabo Declaration in 2014
reaffirmed an earlier commitment for African governments to spend at
least 10 percent of their public budgets on agricultural development. This
is based on the recognition that agriculture remains a critical driver of
inclusive growth, given the dominance of smallholder producers and the
importance of agriculture to GDP in many countries. Central to the
transformation of agriculture in the region is the need to urgently reverse
the undercapitalization of smallholder farming. Increasing governments
budgetary allocation to the sector is key as public spending is
recognized as the most direct and effective instruments that governments
can use to promote agricultural growth and poverty reduction in the
African context.

Despite these commitments, governments have not walked the talk

only one SADC country, Malawi, has consistently met the 10 percent
budgetary allocation target. A failure by governments to translate high
level political commitments into any form of implementation largely
explains the failure to tackle the barriers that smallholders and women
farmers face. Implementation also depends on smallholder and women
producers being organized, engaged and vocal at national and regional
level as unorganized, small-scale producers are a soft target for budget
cuts. This has been a challenge with the widely dispersed nature of
smallholders in the region.

Box 2: From Maputo to Malabo: timeline of commitments

2003 AU Maputo Declaration launches the Comprehensive Africa

Agriculture Development Programme (CAADP). Each country in Africa
commits to invest a minimum of 10 percent of its budget in agriculture by
2015, with the aim of driving agricultural growth rates of 6 percent per year.
2003 SADC countries reaffirm the AU Maputo Declaration
commitments and integrate them into a 15 year SADC Regional Indicative
Strategic Development Plan (RISDP). SADC countries also agree
complementary measures to address the challenges faced by women and
smallholder farmers.
2014 AU Malabo Declaration renews the 10 percent spending
commitments and extends the period for achieving them to 2025.
2015 SADC countries reaffirm the AU Malabo Declaration and extend
the RISDP to a 20152020 plan.

4
THE IMPORTANCE OF QUALITY
INVESTMENTS
While Malawi has consistently met the 10 percent target, and other
countries like Zambia and Zimbabwe have reported meeting it on
occasion, these countries focus a significant amount of their spending on
politically popular subsidies for low-value, climate-vulnerable maize. In
recent years, Zambia has spent approximately 80 percent of its
agricultural budget on subsidies for maize inputs and maize price
support.4 Malawis Farm Input Subsidy Programme (FISP) has been
known to consume roughly 70 percent of Malawis agricultural budget,
squeezing funding for other agricultural departments. The degree to
which these subsidies have reached and benefited the most vulnerable
has been disputed.5 Evidence suggests that smallholder farmers
especially women remain living in poverty and reliant on repeated
annual subsidies, becoming locked into producing low-value grains and
only a few becoming prosperous.6 This means that there is slow progress
in making farming into a business. While the Malawian FISP has
increased access to drought-tolerant maize varieties,7 there are more
effective ways of promoting this important technology.

Lessons suggest that productivity and food security could be boosted

further if governments pitch their ambition beyond maize input subsidy
schemes and consider diversification and more strategic investments
which are specifically targeted at women and smallholders, such as
water management, research and development, market access and
extension services.

LARGE-SCALE PRIVATE INVESTMENT

CANNOT REPLACE PUBLIC SPENDING
Governments and donor agencies are increasingly turning to the private
sector, to provide investment at scale to drive an agricultural
transformation. Instead of committing ODA funds to help governments
achieve the 10 percent target, donors have shifted their focus, to
supporting very large public-private partnerships (PPPs) such as GROW
Africa and the New Alliance for Food Security and Nutrition. At best,
these mega-PPPs might support large-scale private investment thereby
diverting attention away from much needed public spending on
agriculture. At worst, attempts to change policies to favour private
investment risk: 1) promoting unsustainable, environmentally and
ecologically damaging solutions and results, 2) marginalising
smallholders, 3) increasing vulnerability for rural communities and 4)
entrenching inequality

5
However, this does not mean the private sector does not have a role to
play they do. Governments should incentivize responsible models of
private investment that are pro-smallholder, pro-women, and which
nurture, rather than undermine smallholder production, local markets and
small- and medium-sized enterprises. Supporting investment from
smallholders themselves, as well as cooperative groups should be
central to this vision.

Box 3: What is needed following COP21 in Paris? A focus on Africa,

agriculture and adaptation

In Paris, the world came together to agree a landmark climate deal, with
the goal of limiting global warming to 1.5C (we are currently on a
pathway to 2.7C).
The United Nations Environment Programme (UNEP) warns that the
developing world will face costs of adapting to climate change of up to
$500bn a year by 2050. Oxfam estimates that costs could be as high as
$790bn per year.
Maize, sorghum and millet will become more difficult to grow. One study
found that within the next decade many maize-growing areas in
southern Africa will be unsuitable for this staple crop on which
communities depend.
COP22 will take place in Morocco in November 2016. The Moroccan
environment minister, Hakima El Haite, has indicated that this will be the
Triple A COP, focusing on Africa, adaptation and agriculture.
Climate finance to help developing countries adapt to the impacts of
climate change was the unfinished business of Paris. Question marks
remain over how contributing countries will scale up funding to meet
escalating needs.
Total adaptation finance currently only amounts to $3 a year for each
poor farmer in the developing world.

Sources: UNEP adaptation gap reports. http://web.unep.org/adaptationgapreport/content

/adaptation-gap-reports; Oxfam GB. (2015). Delays in Cutting Emissions Set to Cost
Developing Countries Hundreds of Billions of Dollars More. http://www.oxfam.org.uk/media-
centre/press-releases/2015/11/delays-in-cutting-emissions-set-to-cost-developing-countries-
hundreds-of-billions-of-dollars-more; U. Rippke et al. (2016). Timescales of transformational
climate change adaptation in sub-Saharan African agriculture. Nature Climate Change.
http://www.nature.com/nclimate/journal/vaop/ncurrent/full/nclimate2947.html

6
THE EL NIO FOOD CRISIS MUST MARK
A DECISIVE SHIFT
The regional emergency has focused efforts and spurred SADC, national
governments and the international community to develop a longer-term
resilience strategy for the region as part of the response. It is clear that
we cannot continue with business as usual.

Climate change is already forcing a fundamental transformation of

agriculture across southern Africa, with the key staple food maize at
risk. Governments must get out in front of this growing threat and
manage the change. This means supporting smallholders to adapt what
they farm and the practices and technologies they use. But it also means
building their resilience more generally.

If governments are serious about preventing this crisis from happening

again, a step change in ambition is needed to address the structural
issues which keep women and smallholder farmers in a state of chronic
vulnerability. This means a renewed push to tackle barriers to land,
water, markets and finance (e.g. insecure tenure regimes and
underinvestment in irrigation).

INCLUSIVE AND SUSTAINABLE

AGRICULTURAL TRANSFORMATION
FROM THE BOTTOM UP
Recommendations for the African
Development Bank
1. Invest in infrastructure for small-scale producers and
processors, especially women

Reverse the chronic underinvestment to date in small-scale farming. The

needs of small-scale producers the women and men who form the
backbone of the sector have been sidelined, meaning that their
substantial potential has not yet been harnessed. The kind of infrastructure
that benefits smallholder farmers include public goods like irrigation and
water conservation schemes (so that small-scale farmers have access to
water without relying on erratic rain); warehouse storage to reduce post-
harvest waste, roads, off-grid renewable energy (which can save womens
labour and power agri-business); and appropriate technology for value-
addition. Other public goods that the African Development Bank should
prioritize are agricultural research and development, extension services
and social safety nets. It must ensure meaningful participation from
smallholder and womens groups, so that investments made can be tailored
to their needs. This may also require building capacity so that these groups
can effectively organize and engage.

7
2. Resist the attraction of large-scale PPPs

The mega-PPP model represents an unproven and high-risk approach to

agricultural development, with the poorest communities rather than the
project partners often bearing the brunt of the risks associated in
relation to land rights, environmental degradation or restricted access to
natural resources such as water. Rather than prioritizing mega-PPPs with
companies based in rich countries, which tend to promote gender-blind
investments in cash crops for export, both donors and national
governments should put in place tried and tested policies and
investments that are proven to deliver for small-scale women producers
and small and medium-sized enterprises.

3. Champion funds for adapting to climate change

An urgent debate is needed on how agriculture in sub-Saharan Africa

can adapt to the changing climate and its associated impacts on food
and water. These are huge issues that require thought leadership to drive
debates and policy shifts, as well as significant levels of funding. The
African Development Bank can help to mobilize this funding and
champion the adaptation finance agenda. Its commitment last year to
triple its climate finance by 2020 with half dedicated to adaptation is a
good start, and the bank should encourage others to follow its lead.8

Recommendations for national governments:

1. Tailor public spending to help women and smallholder farmers
diversify away from maize and enter high-value chains

Adopt national budgets that are responsive to the needs of smallholders,

especially women. Beyond input subsidy programmes for maize,
governments should look at how they can provide opportunities for
smallholders, especially women, to invest in more diverse, rewarding,
less land-intensive enterprises such as irrigated horticulture, dairy and
small livestock (e.g. goat and poultry production). This will enable
smallholders to diversify away from producing staple grains like maize,
which offer low returns due to their vulnerability to climate change and
government market interference.

2. Strengthen land tenure rights for smallholders and women

Secure land tenure rights, particularly under customary tenure systems,

remain essential for smallholder farmers to invest in land with confidence.
It also makes it easier for smallholders particularly women to access
the finance that they need to invest, as they can use their land to seek a
loan from banks. In addition, lack of secure tenure places farmers at risk
of dispossession of land in the name of large-scale investment schemes.

While the specifics of such tenure arrangements should be left to

individual countries, the SADC bloc should develop tenure guidelines and
implement measures to fully protect customary and womens rights to
land and other productive resources, such as water. The internationally
agreed Voluntary Guidelines on the Responsible Governance of Tenure

8
of Land, Fisheries and Forests (VGGTs), the African Union Land Policy
Framework and the principles espoused in Free, Prior and Informed
Consent (FPIC) adopted by the World Bank, among others, offer useful
examples to guide these policies.

3. Promote responsible private sector investment in smallholder

and women farmers

Smallholder agriculture is usually rated as a high-risk investment by the

private sector. This is due to the high cost of dealing with numerous small
farms, limited participation by smallholders in formal markets, and
uncertain land tenure arrangements. Governments should work with
smallholder groups to make them investment ready and promote the
right kind of investment i.e. models that do not displace smallholder
producers from their land and encourage partnership and empowerment.
Steps to ensure this can include:
Supporting the formation of cooperatives;
Removing additional taxation on smallholder activities or sales; and
Providing loan guarantees or co-financing for smallholder-led
enterprises.

Governments can also incentivize sourcing locally from smallholder

women farmers. In Ghana, local sourcing partnerships between the
private sector, government and smallholder farmers have transformed
the livelihoods of farmers producing crops such as sorghum and
cassava, used in beer brewing. However, when linking smallholders into
private sector supply chains, care should be taken to avoid new forms of
dependency or exploitation. A strong government role in regulating
contracts and effectively monitoring the conduct of agribusiness can help
in this regard.

4. Invest in sustainable agriculture that is resilient to climate

change

Sub-Saharan Africa is one of the most vulnerable regions to climate

change due to a low capacity to anticipate and manage shocks and a
high dependency on rain-fed agriculture. Climate change threatens to
derail and even reverse the gains made so far in supporting women and
smallholder farmers.

Governments should invest and build capacity to manage climate risks.

Providing services like climate information systems to disseminate
weather forecasts to farmers and investing in climate risk insurance are
critical to help smallholders become more resilient to climate change.
Governments should make the most of international climate funds like
the Green Climate Fund to improve the resilience of smallholder farmers
especially women by prioritizing their access to funds. Given the
interdependency in the region, governments should be encouraged to
work through SADC to take a regional approach to shoring up food
production in the face of climate shocks.

9
NOTES
1 SADC. (15 May 2016). SADC Regional Situation Update on El Nio-Induced Drought.
Retrieved 20 May 2016, from http://www.sadc.int/files/1714/6347/5407
/SADC_Regional_Situation_Update_1_El_nino_induced_Drought_as_at_15__May_
2016_Circulation_FINAL.pdf
2 OCHA. (14 April 2016). El Nio: Overview of impact, projected humanitarian needs
and response. Retrieved 20 May 2016, from http://reliefweb.int/report/world/el-ni-o-
overview-impact-projected-humanitarian-needs-and-response-14-april-2016. NB The
southern Africa region includes DRC.
3 J. Magrath. (2015). Entering Uncharted Waters: El Nio and the threat to food
security. Retrieved 20 May 2016, from http://policy-
practice.oxfam.org.uk/publications/entering-uncharted-waters-el-nio-and-the-threat-to-
food-security-578822
4 A.N. Kuteya et al. (2016). An In-depth Analysis of Zambia's Agricultural Budget:
Distributional effects and opportunity cost. Retrieved 20 May 2016, from
http://www.iapri.org.zm/news/item/773-our
5 A.R. Dorward and E. Chirwa. (2011). The Malawi Agricultural Subsidy Programme:
2005-6 to 2008-9. International Journal of Agricultural Sustainability, 9(1): 23247.
6 A.N. Kuteya et al. (2016). Op. cit.
7 M. Fisher et al. (2015). Drought Tolerant Maize for Farmer Adaptation to Drought in
Sub-Saharan Africa: Determinants of adoption in eastern and southern Africa.
Retrieved 20 May 2016, from http://link.springer.com/article/10.1007/s10584-015-
1459-2
8 African Development Bank Group. (2015). African Development Bank to Triple Annual
Climate Financing to Nearly $5 billion by 2020. Retrieved 20 May 2016, from
http://www.afdb.org/en/news-and-events/article/african-development-bank-to-triple-
annual-climate-financing-to-nearly-5-billion-by-2020-14798/).

10
11
 Oxfam International May 2016

This paper was written by Kiri Hanks. Oxfam acknowledges the assistance of Dailes
Judge, Robin Willoughby, Debbie Hillier and Tigere Chagutah in its production. It is part
of a series of papers written to inform public debate on development and humanitarian
policy issues.

For further information on the issues raised in this paper please email
[email protected]

This publication is copyright but the text may be used free of charge for the purposes of
advocacy, campaigning, education, and research, provided that the source is
acknowledged in full. The copyright holder requests that all such use be registered with
them for impact assessment purposes. For copying in any other circumstances, or for re-
use in other publications, or for translation or adaptation, permission must be secured
and a fee may be charged. Email [email protected].

The information in this publication is correct at the time of going to press.

Published by Oxfam GB for Oxfam International under

ISBN 978-0-85598-733-6 in May 2016.
Oxfam GB, Oxfam House, John Smith Drive, Cowley, Oxford, OX4 2JY, UK.

OXFAM
Oxfam is an international confederation of 20 organizations networked together in more
than 90 countries, as part of a global movement for change, to build a future free from the
injustice of poverty. Please write to any of the agencies for further information, or visit
www.oxfam.org.

www.oxfam.org
12