Promoting farm investment for sustainable intensification of African agriculture

This report identifies factors that stimulate farmers" investments in sustainable intensification; reviews recent evidence regarding the relative strength of these factors in various settings; and recommends policy and program initiatives likely to encourage investment. The report focuses on input use and capital investment at the farm level and draws on recent productivity studies, especially those conducted by Michigan State University in Burkina Faso, Senegal, Rwanda, and Zimbabwe. Key findings are as follows. (1) It is very difficult to persuade farmers to invest except in vertically integrated cash crop systems that have sure markets, pay well, have existing credit and extension programs, and are linked to or benefit food production. (2) Livestock husbandry is a boon to farm investment. Livestock provide cash income, manure, and an insurance policy. Pastures are waning however, under population pressure and there is need to intensify livestock husbandry through the use of stabling and corralling. (3) Land tenure insecurity, political instability, policy caprice, and wildly fluctuating farm prices dissuade investment. (4) Complementary infrastructure -- wells, culverts, roads -- are crucial. (5) Rural nonfarm businesses are a vital source of funds, especially since the dismantling of public credit programs. Credit programs that target nonfarm enterprise may be as helpful as those targeted to farming per se. An extensive bibliography is appended. (Author abstract, modified)