The Open Secret of African Agricultural Transformation - Part 2

About two years ago, I wrote an article based on a classic interview between the McKinsey Quarterly and Nobel Prize winning economist Robert Solow. In that article I shared some of my sentiments on what I dubbed the "open secret" of African agricultural transformation. I advocated for fewer distortions in agricultural markets arguing that competition was healthy for African sectors and firms to grow, particularly in the agriculture sector. This article builds up on that article in the light of our ever-changing natural, socioeconomic and technological environment.

One of the issue I did not bring up in the first article, which I feel I must emphasize now is around the dynamics of agricultural protectionism not only in Africa but also in the developing world. I will not spend much time on this highly debated and researched topic, but I will mention that:

There is reliable evidence based on the work of world renowned scholars that 'reducing distortions to agricultural market incentives not only in Africa but also in the developed world will results in better welfare outcomes, i.e. better food access and less food wastage' for the world at large.

In my earlier article I started by reflecting on the question:

What really determines the differences in productivity between sectors and firms?

Based on the work on productivity done over three decades ago, the view of Prof Solow in the aforementioned article was that what determined the differences in productivity across sectors and firms was not technology or capital accumulation but rather, it was management, organizational behavior- how decisions are made and how tasks are allocated. This is a very crucial finding in the field of management and a useful reminder that sectors are made up of firms and firms are made up of people. Machines provided an opportunity for firms to create a competitive edge during the industrial revolution, but what was more important in determining differences in productivity between firms and sectors was not the machines themselves, but the decisions people made - for instance to leverage the machine or 'robot' effect. In other words, regardless the advances in mechanization, firms remained highly differentiated by their management philosophies rather than their 'machines'.

Well, three decades later, there are emerging views that the future could possibly be taking a new twist. Shelly Palmer’s article on the Five Jobs That Robots Will Take First shows us that there are high chances of automating many routine tasks that include decision making at middle management level in the coming decades. Actually middle management is number one on Palmer’s list of the five jobs that robots or “technologies, such as machine learning algorithms running on purpose-built computer platforms that have been trained to perform tasks that currently require humans to perform” are likely going to take over. Such developments will tweak the view we have about management and productivity based on what we learnt in the 1990s. What is becoming evident is that, advances in technology might provide space for 'robots' to participate in management and hence in shaping organisational behaviour. A people-robot nexus or space of interaction might grow in the management field and become very crucial in shaping organisational behaviour and hence productivity outcomes. To simplify, what the word technology meant 30 years ago could be slightly different from what it means today and who knows what it will mean tomorrow!

So back to the future of African agriculture. The other clarification I would like to make on my first article is that African agriculture productivity needs to be interrogated at the different levels of the value chain. The productivity dynamics at the farm level and firm level might be slightly different but collectively define the sector, country and regional level. The principles of firm and sector productivity, economic growth and structural transformation as well as the changes that are taking place for instance in the people-technology nexus will all have a strong bearing on the future of African agriculture. For now, the obvious thing is:

There is little, if not no hope for sub-Saharan African agriculture as long as African governments maintain a 'business-as-usual' approach.

Join me in my next article as I continue to discuss the ‘Open Secret of African Agricultural Transformation'.