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The Crucial Role of Agriculture in Morocco’s Future

Why Supporting both Small and Large Farms Makes Sense

At MAC, we recently had the opportunity to speak with about 30 American high school students on their way to study in Morocco for six weeks. One of the topics that generated a lot of discussion is how the economy is going to generate the number of jobs needed for the large number of young people entering the market every year. One of the answers they didn’t expect was to invest more in the agricultural sector.

Although much has been written about the unemployment rate among university graduates and the high numbers of Moroccans who do not finish secondary school, the statistics are even more dire when one looks at rural areas. Until farm families are able to increase productivity and become more profitable, educating children beyond the mandatory primary school level is a luxury. The challenge is great: more than 95 percent of youth now have access to primary school education, but “less than 15 percent of first grade students are likely to graduate from high school,” according to USAID.

Much of the educational gap can be attributed to the difficult economic conditions in rural and overcrowded urban areas – communities that do not have a sufficiently strong local economy to sustain jobs for parents and young people that allow for savings and re-investment in household goods, services, and education. Another issue in rural areas is the cultural constraint that favors males over females in terms of access to education and advancement.

King Mohammed VI outlined these challenges in a keynote speech in August 2013, when he “emphasized the role of education as a leverage for social and economic inclusion and outlined the goals still to be done and the resources to be mobilized to achieve them,” according to the World Bank. He called on the government, private sector, NGO community, and international donors to support Morocco’s drive for educational reform, which is a key ingredient for economic progress.

Maroc Plan Vert

Maroc Plan Vert

But educational reform will not play a major role in rural areas until the agricultural sector is more efficient and profitable. That sector’s success is a national priority because it is a major force in the economy. Depending on the annual rainfall, farming can make up more than 15 percent of GDP while employing upwards of 40 percent of the labor force. In order to improve the agricultural sector’s performance, the government launched Plan Maroc Vert (PMV), or Green Morocco Plan, in 2008, to support both small and large farms in becoming more efficient and market oriented. The PMV’s goal is to increase agricultural production and diversity, and reduce rural poverty and rural-urban inequality. Reducing poverty will enable more rural youth to pursue education beyond the primary level.

Earlier this year, Hafez Ghanem, senior fellow in the Global Economy and Development Program at the Brookings Institution, authored a working paper “Agriculture and Rural Development for Inclusive Growth and Food Security in Morocco.” In it, he argues that supporting small family farmers “needs to be complemented by the introduction of new social safety net programs based on cash transfers, and by building new inclusive economic institutions that represent small farmers and ensure that they have a voice in the policymaking process.”

This is no small task under any conditions so why should supporting small farmers become a national priority? First of all, the sheer numbers, as there are more rural workers than urban. If farms cannot sustain families, more unskilled workers will go into urban areas that do not have the services to support them. “Rural poverty in Morocco is about three times higher than urban poverty, and the majority of rural poor depend directly or indirectly on agriculture for their livelihood,” the paper noted.

In addition, food security for all Moroccans is directly related to the health of the agricultural sector. Morocco imports three times the world average of imported cereals and “spends about 20 percent of its export revenues on food imports, which is about four times higher than the world average.” With a stronger and more diversified and efficient agricultural sector, Morocco would be less dependent on high-cost imports and have greater control over food security for its growing population.

Family farming is a core concern of the PMV, since “The vast majority of agriculture in Morocco is under family farming,” nearly 70 percent of the farms are less than 5 hectares, and large modern farm earns about nine times more than the average family farm. What is important about PMV is that it “tries to balance the desire to develop modern agriculture with the need to support family farmers,” an essential outcome to promote rural employment, add value to the agricultural job market, and provide incomes that sustain families on the farms.

Minister of Agriculture and Fisheries Aziz Akkanouch

Minister of Agriculture and Fisheries Aziz Akhannouch

The focus on small farms relies on government financing, although farmer stakeholders contribute as well. The overall program consists of 545 projects costing about $2.5 billion over ten years, targeting 950,000 farmers in remote and difficult areas. Enhancing existing production; introducing higher value alternatives; and diversifying activities that contribute to farm incomes are the main components of the plan. In order to strengthen co-ops and other entities serving farmers, there are special provisions covering the role of associations/aggregators that participate in the program.

Plan Maroc Vert demonstrates the commitment of Morocco to its agricultural sector as an income generator, employer, force for stability, and national engine for growth. Lessons learned from other countries are providing examples of how to give farmers tools to access domestic and international markets, encourage greater access to financing schemes that promote productivity, and enhance the roles of producer organizations and cooperatives in affecting decisions that impact their sector. This commitment in large part influenced the decision of the Millennium Challenge Corporation to focus its first compact with Morocco on agricultural development – enhancing the capacity of small farmers to generate value-added production to help raise them out of poverty.

PMV is a worthy program that has the potential to change the face of agriculture in Morocco. As importantly, its success will enable thousands of young Moroccans who live and work on family farms to have the resources and access to education and training that will give them opportunities that seemed remote and inaccessible just a generation ago.

Reports to Results: Dealing With Youth Unemployment in Africa

http://www.fairobserver.com/region/africa/reports-to-results-dealing-with-youth-unemployment-in-africa-57014/

How should Africa deal with millions of young people entering the job market each year?

With more than 290 million people between the ages of 10-24, Africa is the youngest continent in the world. Youths constitute about 60% of Africa’s entire population, yet their participation in the formal economy is greatly limited. “Although the youth population constitutes two-fifths of the continent’s working-age population, they make up three-fifths of the unemployed,” according to Foresight Africa. In 2011, 82% of African workers were working poor, more than twice the world average. In southern Africa, 51% of young women and 43% of young men are unemployed.

Youth Unemployment in Africa

Three major factors coalesced to garner this attention. First, the people factor: Demographics of growing young populations are forcing policymakers to address employment issues that will not be solved by public sector hiring. Second, people are more educated, yet they find fewer opportunities due to the mismatch between education and available and prospective jobs — supply does not even approach demand. Finally, governments are generally ill-equipped in terms of expertise or management, or both, to address employment issues when it means upsetting those who control much of the economic activity of a country.

The future of Africa needs action now

The future of Africa needs action now

These trends occur within a shifting global marketplace dominated by spiking commodity demands, increased competition in semi-skilled production and technologies, and great pressure for opening up the labor force through higher private sector investment. Although sub-Saharan Africa faces similar problems as the rest of Africa and many emerging economies, others are unique to the continent, such as the potential superstar role of the agricultural sector.

While the overall macroeconomic indicators are up and generating optimism, this is based on the continued expansion of African economies, largely due to exploitation of commodities and expansion of telecommunications infrastructure. Yet the picture is far bleaker, if factoring in actual improvements in the quality of life of most Africans.

According to a McKinsey update on the continent:

Africa is harnessing its natural wealth, and … sectors across the economy are growing rapidly. These sectors include agriculture, manufacturing, and local services such as retail, banking, and transportation and communications, in addition to the natural resources sector, which was the largest single contributor to growth … Income inequality, however, remains unacceptably high and is falling in only about half of Africa’s countries; hundreds of millions remain trapped in poverty. Africa’s growth needs to be inclusive if it is to improve human welfare and ensure increasing social and political stability.”

People are more educated, yet they find fewer opportunities due to the mismatch between education and available and prospective jobs — supply does not even approach demand.

The International Labour Organization (ILO) reflects this theme of inclusive growth in a number of its publications, and calls for “job-rich growth” that does not ignore the youth, women and unskilled in terms of economic opportunities. “High levels of youth unemployment, poor structural and labour market transformation call for more employment-friendly policies to promote a job-rich growth in Africa’s development strategy.” Its Global Employment Trends 2014 report stated:

“Employment growth remains weak, unemployment continues to rise, especially among young people, and large numbers of discouraged potential workers are still outside the labour market … As a result, the demographic change characterised by a growing young population is considered to be a burden on the economy rather than an asset due [to] the scarce job opportunities in the region and [the] necessary conditions required to absorb and employ this growing young population [that] are absent.”

Less than 14% of the working-age population is in paid employment, which limits the growth of a consuming middle-class. When combined with the low contributions of manufacturing and agriculture to national gross domestic products (GDP), this challenging outlook calls for proactive partnerships among stakeholders to advance the employment landscape.

Africa’s Unique Opportunities

There are at least six major targets in improving youth employment in sub-Saharan Africa:

1) Relevant and widespread education and training at all levels

2) An integrated ecosystem to support entrepreneurs, including financing, mentoring/training, access to markets, protective and supportive regulatory regime, and available infrastructure

3) Pro-business policies by governments, so investments in infrastructure, services, commercial law and related regulations are timely and transparent

4) Sustainable programs built around competitive advantages and cultural acceptance

5) A stable political environment that does not exclude new entrants or restrict sectors based on existing power relationships

6) A mindset about labor that values work as a path to a career and provides the means to acquire additional skills to progress

All eyes on agriculture in Africa

All eyes on agriculture in Africa

The African Development Bank (AfDB), among others, is very active in building programs that target many of these concerns. In a series of papers, it has tracked programs aimed at building youth employment in sub-Saharan Africa that provide important models for member countries. There are several variations, for example, of entrepreneur promotion efforts that address financing, training and mentoring issues, but lack sufficient scale to generate the number of jobs needed to dent the growing employment deficit.

One theme focused on by the AfDB, and others, is the importance of reviving and building the competitiveness of the agricultural sector. Nowhere in the world is there as much underutilized arable land as in Africa. Significantly, the least skilled and literate populations are in the rural areas. With the ever increasing demand for food, experts believe the agricultural sector offers benefits to feed locals and supply overseas demand.

Shantayanan Devarajan, chief economist for the World Bank’s Africa Region, articulated this need for understanding the roles of the formal and informal labor forces: “The challenge of youth employment in Africa, therefore, is not just to create more wage and salary jobs — important as this may be — but to increase the productivity, and hence earnings of the majority of young people who will be employed in informal farms and household enterprises.” He emphasized that:

“…because most Africans will work in informal farms and household enterprises, the challenge of increasing their productivity needs to be met by first, increasing their basic skills, which they can then take with them when they move to the new enterprises; and second, creating jobs in the formal sector by improving the economy’s competitiveness, so that this sector can absorb more qualified workers into a productive workforce.”

According to Busani Bafana, writing for Africa Renewal: “Despite the negative perceptions, the agricultural sector employs as much as 60% of Africa’s labour force … and accounts for only 25% of the continent’s gross domestic product (GDP).” He cites experts who see agriculture as an important engine of growth, if the government and private sector act together to build the supply chain and distribution infrastructure that will turn today’s deficits into jobs and income. As importantly, it is a sector that can absorb large numbers of youth and women in productive jobs.

Turning Good Intentions into Results

The broad consensus among the private sector, international donor community and host governments about the need to aggressively pursue youth employment policies is an opportunity. Such an initiative could scale-up existing effective programs and help absorb the 10-12 million annual new entrants to the job market in sub-Saharan Africa. By implementing a broad strategy that incorporates rural as well as more traditional manufacturing options, utilizing technology across all sectors to improve productivity, and including women and youth in employment programs that increase their skills and employability, Africa has a viable and realistic opportunity to diminish its employment deficit and build a strong middle-class.

Moreover, if the countries of sub-Saharan Africa can understand the regional and local benefits that can be obtained from labor mobility, resource sharing, better distribution and power infrastructure, and streamlined business procedures, the task of generating worthwhile jobs becomes less onerous and reflects the deep commitment needed to propel Africa forward.

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