Government's support to smallholder farmers in Africa.
African agriculture is a very dynamic sector with millions of stakeholders who are mainly smallholder farmers.
It is mentioned many times that over 40% of smallholder farmers in our continent are subsistence farmers (peasants), which means that they practice farming for self-consumption. The producer is the consumer.
Being a consultant in agribusiness, I am always confronted with questions that are very hard to answer.
And my questions today are:
What is the value of a subsistence farmer to the country?
Should subsistence farmers be benefiting from government subsidies?
Trying to answer these two questions already makes me feel controversial because everyone has become used to sympathizing with farmers. However, I personally believe that the value of subsistence farmers is sometimes overrated. Tell me, what is the significance of a business that only benefits the owner? I know that this may sound too harsh, but a farm that only feeds the farmer is not helpful to the country.
Now, here comes my next point.
African governments and Kenya in particular usually give agricultural subsidies to smallholder farmers to help reduce the risks endured from the weather, commodities brokers, and disruptions in demand. These subsidies are mostly in the form of subsidized inputs and farm services like mechanization.
For instance, the government of Kenya has set aside $ 30 million to cushion two hundred thousand smallholder farmers from the effects of COVID-19 mainly using subsidized inputs like fertilizer, pesticides, etc.
Should subsistence farmers benefit from this support? In my view, NO!
Because a subsidy should be a benefit given to an individual or a business to cushion against some type of burden, and it is often considered to be in the overall interest of the public to achieve a greater economic efficiency of a country.
Therefore, as the government disburses the goodies to farmers, only farmers who are in serious farm businesses should be considered, for the greater benefit of the country. Unfortunately. I am not sure how to accurately differentiate subsistence farmers from entrepreneurial farming.
Public money should not be spent on a business that only creates value to the owner!!!