TLDR: Expect huge growth in African agriculture in the next 20 years.
What’s the Green Revolution? From around 1960 to 2020, some countries were able to 5x their crop yield—from developing country levels all the way to developed country levels.
The Green Revolution happened in countries like China, Indonesia, Pakistan, Malaysia, Philippines, Mexico and South Korea.
This is incredible.
What happened, exactly? And why do some countries like Kenya and Nigeria remain behind?
Let’s start from first principles. Is there anything inherently better or worse about African land that makes this the case?
Sunlight:
The real limitation of land productivity is how much sunlight it gets (that is, how much energy it receives).
Let’s look at an insolation map:
Source: globalsolaratlas.info
Africa gets much more sun than places like Japan or Germany. About 50% more. So it could, theoretically, produce 50% more crops, right?
Ok, so sunlight is not a problem in Africa.
Let’s check if rainfall is a constraint.
No, there’s plenty of rain in Sub-Saharan Africa–the same or more than Europe, excluding Somalia and Namibia.
Note that rain at different latitudes is not quite an apples-to-apples comparison. Near the equator the ground loses more moisture due to evaporation from more sunlight, if it is not mulched. Nevertheless, Sub Saharan Africa doesn't have water as a constraint.
Our readers in Kenya might be interested to see that Kenya is right on the rain/desert border.
Something is weird here:
Why does Japan, a country blanketed in snow much of the year, have 5x higher crop yield than Kenya, a country with nearly year-round sunshine, rain and a warm climate?
China starts with the same productivity as Kenya in 1960 and reaches Germany’s land productivity by 2018. Kenyan crop yield in 2018 still hasn't reached the level of Germany in 1961, ~60 years behind.
And that’s not to pick on Kenya--other countries in Sub Saharan Africa have similar yields or worse.
Why hasn’t the Green Revolution reached Africa?
1. Fertilizer
Green Revolution countries have increased their fertilizer usage–Africa hasn’t:
As a side note, these Green Revolution countries are rather dependent upon imported fertilizer in most cases. Likewise, many African countries don’t have access to natural gas to produce fertilizer on their own. Therefore they depend on imported fertilizer and natural gas, often from Russia, which lays the stage for geopolitical conflict in the future if de-globalization happens. (See Peter Zeihan for more on deglobalization.)
Kenya has just made an agreement to install the first nitrogen fertilizer production plant in East or Central Africa, which would be a huge step forward for Kenyan agriculture. It would use geothermal power
2. Mechanization
Green Revolution countries have increased their Farm Mechanization.
Traditionally, Africans didn’t use draft animals for field work. Cattle and horses are susceptible to sleeping sickness spread by tsetse flies that live in the wet areas meaning beasts of burden were not possible in West, Central and Southeastern Africa. The cattle-rearing regions of Africa are the areas without tsetse flies. And without much water. Thus the only places where draft animals were possible in Africa are often the exact regions without enough water for intensive agriculture:
Because there were few draft animals one could not cultivate much land and there was a surplus of land compared to labor. Thus, land wasn’t a very valuable commodity. The transition to mechanized farming, from human power to machine power is more of a quantum shift than in other parts of the world that had animal power as an intermediate step. Cultural systems, such as communal land, adapted over tens of thousands of years when land was plentiful have not had time to adapt in the last 60 years to the new reality where land is scarce. Source.
Africa could leap frog traditional plowing. In the last few decades a technique called no-till has been developed which avoids plowing and plants seeds directly into the old crop. This is a permaculture technique that most industrial farms in the US use. No-till causes minimal disturbance of the soil, preserving micro organisms and soil moisture while utilizing smaller tractors. So far no-till has not been adopted anywhere in Africa as far as I know.
3. Irrigation
Green Revolution countries have increased their irrigation
Note that the US has less irrigation than Green Revolution countries, but still 10x more than Nigeria and Kenya.
Here’s irrigation at a more granular level where the difference between northern India or northeastern China is very different from irrigation in Africa (2000):
Of note, one entrepreneur we work with who has 3,000 acres under cultivation found that mulching was just as effective as irrigation for their crops, increasing yields by 32% in both cases. There is an opportunity for developing countries to leapfrog technologies that are expensive like irrigation. Instead farmers could potentially move to regenerative agriculture techniques like mulching to supplement irrigation.
However, irrigation pumps are only a small cost of irrigation. Unless there is surface water like a stream (very rare) farmers need to drill a borehole. Thus reducing the cost of a $1000 water pump doesn’t mean much when the borehole costs $10,000. Boreholes in Africa cost the same or more than boreholes in the US, despite generally have 0% import duty on borehole drillers and cheaper labor.
Why?
There is a cartel between the borehole drilling companies and the government Water Resource Authorities. To obtain drilling approval the driller must pay a kickback to the government authority. Until the corruption is rooted out or someone figures out how to circumvent the WRAs boreholes will remain prohibitively expensive.
4. Green Revolution Countries have improved their seed quality.
Green Revolution countries like Pakistan, Philippines, Mexico, India, Brasil, Vietnam, Indonesia and China make extensive use of improved seeds. Biotech crops that would reduce the need for pesticides and increase nutrition like Vitamin A enhanced rice have been largely banned in Africa:
Some people are against GMOs for ethical reasons. Regardless of your beliefs, the reality is Western countries and Green Revolution countries have brought a gun to a knife fight. (Uganda and Kenya have recently ended the ban of GMO seeds, the president of Kenya citing his background as a scientist in support of the pro-science change. The High Court overturned the end of the GMO ban so GMOs are again illegal and Kenyan crops are again uncompetitive.)
There is even a lack of access to non-GMO improved seeds like hybrid seeds:
5. Roads
Paved roads per agriculture land is also much less in Africa than Green Revolution countries, increasing transport prices. We often think of countries like India and Kenya as about at the same level of development but their road development differs by a factor of 50.
Not only that, but even on the main highways transport is roughly twice the price of Green Revolution countries:
One can imagine that on rural roads the cost of transport is even greater:
Indeed, that is the case. Last-mile collection of produce is by FAR the most expensive part.
Recently, the momentum to build paved roads has increased in Africa, a sign of hope:
But at this growth rate, Kenya won’t reach Pakistan's current road density until 2130. And Kenya is building roads faster than almost any other Sub-Saharan country.
However, poor roads are only a small part of the problem. The largest delays are not caused by roads but by bureaucracy: ports and border points. This reduces the capacity factor for trucks, which are expensive assets.
What can an entrepreneur do about roads? Only the government is allowed to improve roads and the quality of ports, after all.
A Tanzanian honey company we work with makes their own plastic jars at their honey processing plant. Instead of shipping containers of empty jars many times they buy a new mold once. Then the company located as much of the factory in rural areas as possible so that light processing happens at the collection centers, reducing the amount of last mile transport required.
One major difference in the cost of transport between South Africa and Malawi, for instance, is the cost of tires. Is it possible for countries to make their own tires?
6. Poor government policy
Government policy in Africa, while often well-intentioned, discourages farmers from optimal production.
Governments, responding to voter pressure to reduce the costs of food, often fix the price of staple foods. But this has the opposite of the intended effect: if farmers don’t get paid at the market price then they will produce less, which creates a high black market price.
Often governments provide a fertilizer subsidy but this disproportionately helps larger farms (is regressive) as the unit cost to deliver 10,000 bags of fertilizer is less than the unit cost to deliver 10 bags of fertilizer.
Kenya and other countries often ban the export of crops, with the idea that it will keep more for themselves, but if there is a lucrative export market, this prevents farmers from meeting that demand, further reducing production.
In an effort to reduce the cost of food products, governments eliminated (or reduced) import duty on some staples. But doing so means local produce cannot be competitive. Take the Kenyan wheat industry. The whole wheat kernels have 0% import duty preventing any local production. Meanwhile, wheat flour has a 60% import duty which prevents anyone from importing the flour. This has the effect of protecting the local wheat flour cartel and inflates the final cost of wheat flour to end consumers.
If we know how to improve yields, why don’t African farmers do it?
Risk
The African agriculture system and culture is not optimized for production, but rather optimized for reduced risk. Ghana, for example, has experienced 3 major droughts. The first two before colonization did not result in famine as the people relied on drought-tolerant, low-production millet. The third major drought from 1890-1920 caused famines as Ghanaian farmers had transitioned to high-producing, drought-susceptible maize.
The objective of smallholder farmers is not to become rich but rather not to starve, oftentimes.
If they want to become wealthy there are easier ways to do that like get a job, become a politician, be a vegetable broker, etc.
Reverse economies of scale
Typically, economies-of-scale lead to increased efficiency, but aggregating land into larger farms typically doesn’t increase incomes for smallholder farmers. Productivity at 2 hectares is roughly half the productivity of 1 hectare, canceling out any benefit of having a larger farm:
This makes sense. High labor intensity crops like tomatoes can produce more income per acre than broad acre crops like maize. Moreover, without mechanization, increasing the acreage of maize with the same amount of labor reduces land productivity.
Until there is mechanization there is not much benefit of having larger farms.
Culture
Smallholder farmers are subsistence farmers. That is, very little of what they grow is for sale:
And what they do sell makes up a small percentage of their total income:
This means that most farmers in developing countries are not professional farmers. They don’t sell much of their crops and they don’t depend on their crops for income.
Politics and Governance
Some Africans I share this data with say the real problem is the politicians who make selfish decisions.
Indeed, Africa governance is quite behind Green Revolution countries. But importantly, Africa’s governments are dividing into two groups: Growing Africa and Stagnating Africa.
Growing Africa (mainly attributable to Kenya and Rwanda) is now just about 25 years behind Green Revolution countries.
More concretely, let’s say you are starting a fruit-processing export company. How much more difficult does the local government make your work as an entrepreneur?
A Kenyan fruit exporter would spend 662 days tied up in red tape vs. only 168 for the same business in Malaysia.
Kenya is far behind, but how far behind?
Malaysia established a special task force in 2007 to improve government systems for better business efficiency…and it seems to have worked.
Education
Let’s look at the root cause of poor governance: people are the ones who elect the politicians (and tolerate rigged elections).
Maybe once enough people receive a certain level of education they will choose better leaders and hold them to account. Indeed, the data suggests better education leads to better economies. In particular, better math and science education seems to lead to higher income. Better agriculture might be the intermediary step.
[Note: it could be argued that 1.) correlation is not causation or 2.) the reverse correlation might be occurring—higher income might cause higher test scores. Those are both partially true. However, that STEM education drives income can be back tested by noting that resource-based economies like Saudi, Kuwait, Bahrain, Botswana and South Africa are outliers.]
Thus a root cause of corrupt politics and thus low agriculture yields might partially be attributed to low quality STEM education.
Kenya has only managed to reach the literacy level of Peru in 1970 or Malaysia in 1990. Kenya has one of the highest literacy rates in Sub-Saharan Africa.
To put this in perspective, at independence in 1964 Kenya had 20% literacy. The voting public of the United States had a literacy rate of nearly 95% in 1789 for the first presidential election. (Voting public was landowning white men, some women and some blacks, at the time.) A lot of the supporting infrastructure (e.g. literacy) needed for good governance and a green revolution has not been present in Africa until very recently, if at all. While Alexander Hamilton could write 51 Federalist Papers on the finer points of good governance to reach the average voter, Jomo Kenyatta could not.
Africa is due for a green revolution.
Kenya is installing the first fertilizer production plant in East Africa, powered by geothermal energy.
Lease-to-own models enable tractor ownership like Hello Tractor
The prices of solar powered irrigation pumps are falling from the likes of Futurepump
Software-first distributors are optimizing farm-to-market transport, reducing costs like East Africa Foods
Roads are improving.
Local pesticides are produced by Kentegra to reduce reliance on imports.
Older farmers with a subsistence mindset are aging out. Young farmers and expats have fresh ideas like Cinch’s mosaic agriculture.
Off-takers, keen on supporting farmers for a long term relationship, rather than extracting as much as they can, are popping up like Good Nature Agro (Zambia) and Agro Supply (Uganda)
European and American investors see Africa as a great opportunity to create the next Berkshire Hathaway like Africa Eats
The US government has revamped its funding with USAID ATI and DFC
We know how to increase yields. A lot of the necessary factors are lining up. But many gaps still remain, waiting for entrepreneurs and entrepreneurial sector actors:
Founder-friendly governments in Africa
Reduced government interference in market prices and regulation of agriculture like sugar, cereals
Funding for CapEx to build processing facilities (generally debt, equity and grant funders all dislike CapEx, but who is going to pay for the processing facilities?)
A success-oriented accelerator for agriculture in Africa (along the lines of Y combinator or Tech Stars, rather than impact-oriented accelerators)
Rural logistics for inputs and offtake
Locally made and serviceable tractors and borehole drillers (everything is imported currently)
Proper drying of cereals to avoid aflatoxin
Storage to avoid feast/famine cycle
Universal access to improved seeds
If you are an entrepreneur or eco-system actor there’s a lot you can do to bring the Green Revolution to Africa.
Fascinating! We all know there are multiple factors affecting such a complex topic. Appreciate the effort to bring all these facets to educate me and others - thank you!
One aspect I am wondering is related to socio/economic development and development of the overall economy of the impacted countries. The green revolution will impact smallhold farmers, where living and farming is currently 'one thing'. This will change, as increasing yields is not only 'per ha' but also 'per worker'. Many will (have to) change from living and working on their (subsistence) farm to commuting to work, a large impact on the way of living. Any insights on this macro effect?
Thanks for reading, Jeroen and great to hear from you :-)
Generally smallholder farmers benefit slightly from green revolutions, but not as much as the rest of the economy. Some enterprising smallholders are able to save up enough to lease more land, get more machinery and increase profits. But generally people move to cities. In China people preferred working in the harsh conditions of factories because it was *less* harsh than farm life.
Likely this will happen again. In other countries as mechanization increased factories started making simple tractors in-country that could be used on farms. Early on in development countries like South Korea were protectionist to protect industry and farmers would buy locally made tractors as manufacturing developed. And before the 20th century, even the US had its own green revolution with related protectionist policies to protect manufacturing---that is what the US civil war was about. The south wanted low tariffs to cheaply export crops and cheaply import machines from England, while the north wanted to protect their fledgling factories and wanted high tariffs.
The smallholder farmers don't necessarily win in the green revolutions. Smallholders that learn the skill of operating tractors will win, but ones that only know how to pick by hand and don't upgrade their skills might lose. Cinch which I mentioned at the end of the article lets farmers have their cake and eat it too and you might be interested in their model.
One factor you missed is supply chain. By the time the green revolution hit the US and Europe, there was already a infrastructure of trucks to get the grain to the silos and the fruits and veg to the trains, and trains to get the food to the then-still-growing cities.
Even if there roads were perfect, today there are not food/ag logistics companies to get the food from farm to aggregator, and that doesn't exist as today the aggregators are too few and far between for the amount of food that is grown and sold.
Oh, thats a good point. Hence your investment in TRUK. I don't have data on the amount of trucks in different countries. I'll look for that. Also miles of road per Ha of arable land might be interesting too.
Fascinating! We all know there are multiple factors affecting such a complex topic. Appreciate the effort to bring all these facets to educate me and others - thank you!
Yes, and probably many factors I failed to include which hopefully readers will educate me on in the comments.
Thanks for reading!
Great article Kyle, very comprehensive.
One aspect I am wondering is related to socio/economic development and development of the overall economy of the impacted countries. The green revolution will impact smallhold farmers, where living and farming is currently 'one thing'. This will change, as increasing yields is not only 'per ha' but also 'per worker'. Many will (have to) change from living and working on their (subsistence) farm to commuting to work, a large impact on the way of living. Any insights on this macro effect?
Thanks for reading, Jeroen and great to hear from you :-)
Generally smallholder farmers benefit slightly from green revolutions, but not as much as the rest of the economy. Some enterprising smallholders are able to save up enough to lease more land, get more machinery and increase profits. But generally people move to cities. In China people preferred working in the harsh conditions of factories because it was *less* harsh than farm life.
Likely this will happen again. In other countries as mechanization increased factories started making simple tractors in-country that could be used on farms. Early on in development countries like South Korea were protectionist to protect industry and farmers would buy locally made tractors as manufacturing developed. And before the 20th century, even the US had its own green revolution with related protectionist policies to protect manufacturing---that is what the US civil war was about. The south wanted low tariffs to cheaply export crops and cheaply import machines from England, while the north wanted to protect their fledgling factories and wanted high tariffs.
The smallholder farmers don't necessarily win in the green revolutions. Smallholders that learn the skill of operating tractors will win, but ones that only know how to pick by hand and don't upgrade their skills might lose. Cinch which I mentioned at the end of the article lets farmers have their cake and eat it too and you might be interested in their model.
One factor you missed is supply chain. By the time the green revolution hit the US and Europe, there was already a infrastructure of trucks to get the grain to the silos and the fruits and veg to the trains, and trains to get the food to the then-still-growing cities.
Even if there roads were perfect, today there are not food/ag logistics companies to get the food from farm to aggregator, and that doesn't exist as today the aggregators are too few and far between for the amount of food that is grown and sold.
Oh, thats a good point. Hence your investment in TRUK. I don't have data on the amount of trucks in different countries. I'll look for that. Also miles of road per Ha of arable land might be interesting too.
Great article Kyle, very interesting data and brings together all your varied work very nicely!
Thanks for reading. What do you think I'm most wrong about?
Also for anyone reading Toby is the founder of a very nice surface water pump designed with Africa in mind https://futurepump.com/