2015 ReSAKSS Conference – Day 2 - David Tschirley
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Transcript of 2015 ReSAKSS Conference – Day 2 - David Tschirley
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Agribusiness in Africa: Prospects and challenges for
contributing to industrialization and economic transformation
David Tschirley, Thomas Reardon, Jason Snyder, Claire Ijumba
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The Diet Transformation(opportunities and challenges)
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The Diet Transformation(opportunities and challenges)
First proliferation, then consolidation
of firms
(The J curve)
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The Diet Transformation(opportunities and challenges)
First proliferation, then consolidation
of firms
(The J curve)
Global employment
deindustrialization
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Urbanization and income growth in Africa are driving a Diet Transformation
Fresh produce
Prepared foods
Processed packaged foodsAnimal protein
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Urbanization and income growth in Africa are driving a Diet Transformation
Fresh produce
Prepared foods
Processed packaged foodsAnimal protein
Vast increase in
demand through
markets
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… which will (need to) drive other transformations …
… large farms …… and small farms
Science applied to…
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Agribusiness orientation at large scale…
… and small scale
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Reaching consumers through modern retail …
… and improved traditional retail
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… all of which will be heavily influenced by public policy and investment
Private Investment
PublicPolicy
PublicInvestment
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Implications for …
• Nutrition• Energy and water use• Market opportunities
• 7x to 8x growth in market demand next 30 years• 7% annual
• Rising value added over time
• Employment and skill needs• Public policy
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Three questions• Can African firms capture most of this market
growth?• If so, what kind (size) of firm is likely to do so?
• The J curve
• What level of employment might this generate?• Global employment deindustrialization
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#1: Imports, or local / regional?• Data from inventory of processed foods• Three cities each in Tanzania and Mozambique• Categories:
• Milled grains including rice• Dairy• Juices• Poultry
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#1: Imports, or local / regional? (2)
Share of all processed products by place of manufacture
Country of sale
Place of Mfr Mozambique Tanzania
Local 0.14 0.60
Regional 0.00 0.12
International 0.86 0.27Note: South Africa considered “International”
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#2: What kind of local / regional firm?
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#2: What kind of local / regional firm?
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#2: What kind of local / regional firm?
First proliferation, then consolidation
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#2: What kind of local / regional firm?
Many small firms
Rapid entry of small firms
Fewer, larger firms
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#2: What kind of local / regional firm?
High labor:output ratio
Low labor:output ratio
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#2: What kind of local / regional firm?
High labor:output ratio
Low labor:output ratio
Policies and programs to
promote
competitiveness of
small- and medium firms
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#3: Global employment deindustrialization
• Countries reaching peak manufacturing employment at
• Much lower levels of pc income• Much lower share of mfg employment in total
employment• Driven by automation
• IT• Robotics• Big Data
Ever smarter and more capable machines
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#3: Global employment deindustrialization
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Mostly OECD, 1960s and 70s
#3: Global employment deindustrialization
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Mostly OECD, 1960s and 70s
Mostly SSA, LAC, 1970s and later
#3: Global employment deindustrialization
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What policy stance?• Promote labor intensive mfg wherever possible
• Business environment• Including industrial policy
• Openness to trade• Especially regional
• Investment in transport and communications• Investment in human skills
• Labor must be productive, not just cheap
• Realize that much employment will be in informal services
• Legal protection of workers• Investment in skills• Infrastructure to reduce costs of operation
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What policy stance? (2)• Unlink social benefits from employment
• Expanded public provision of a basic package of benefits for all
All this requires more fiscal revenue that is well-spent ... requires effective public institutions