67709 NOVEMBER 2011 Growing Fish to Make Money in Africa ABOUT THE AUTHOR RANDALL BRUMMETT joined the World Bank as Senior Fisheries Specialist in Rural development projects target food security and poverty alleviation. In 2010 after 30 years in Central Cameroon, a project providing extension of integrated farming aquaculture development in Africa and the Near East, 18 of technology to rural/subsistence farmers and to periurban/small-scale them with CGIAR. Randy financed, built, and managed commercial farmers achieved increases in fish pond productivity, number of his own fish farm and provided fish farmers, and net returns from aquaculture. However, gains for consulting services to large- and small-scale farmers, commercial farmers were larger and more sustainable, and at less cost, than nongovernmental organiza- tions, governments, donors, for subsistence farmers. This SmartLesson describes the project and some of and banks. He has published the lessons it provided. over 100 research articles with his many students. APPROVING MANAGER Mark Cackler, Sector Manager, Agriculture and Rural Development, the World Bank. Small-scale rural aquaculture. Background The principal objectives for rural development work under its “development of integrated in Africa are to increase food supplies and to aquaculture-agriculture systems for small-scale create economic opportunities while protecting farmers in the forest margins of Cameroon the environment. Since the 1950s, a number of project� (DFID 2005). organizations have tested a variety of approaches to achieve these objectives. The project used participatory action research (PAR) methods to establish the basic technology In 2000, the WorldFish Center, a member of the for aquaculture on these small-scale farms (see Consultative Group on International Agricultural Figure 1) and a research-extension team (RET), Research (CGIAR), undertook a five-year study in which a locally recruited senior research to better understand what type of farmer and scientist was employed at 25 percent of full farming system should be prioritized for time to guide joint learning exercises research, extension, and policy support in the (participatory research projects) undertaken by periurban and rural zones surrounding the large farmers’ groups and extension agents working urban market of Yaoundé, the capital of together. To estimate the cost-benefit of Cameroon. DFID (the U.K. Department for providing services, the project recorded the International Development) supported the RET operation costs. SMARTLESSONS — NOVEMBER 2011 1 Figure 1: The Farmer-Scientist Research Partnership Approach to PAR Source: Brummett and Jamu, 2011. Three years after the end of the project, we conducted a Five years of RET field work cost $306,000 in salaries, Rapid Rural Appraisal to determine to what extent equipment, and vehicle operation and depreciation. improved production and marketing proved sustainable Calculated on a per active farmer basis, provision of RET over the medium term in the project’s four target areas: services over five years cost $2,850 per rural farmer and $1,240 per periurban farmer. The main reasons it was so 1. Average standing stock at fish-pond harvest rose from much cheaper to provide services to periurban farmers 498 kilograms per hectare (range: 113–905) to 1,609 were lower costs for transportation, better communication, kilograms per hectare (range: 1,062–4,710). and less need for training and support (number of visits). Overall, nearly 80 percent of costs were incurred in providing 2. Cash returns from aquaculture increased from $0.05 to services to rural farmers. Although net returns to cash and $0.25 per square meter of pond. fish production were positive overall, RET services to rural farmers produced only a 23 percent increase in net profit 3. The number of active fish farmers increased from 15 to on an 11 percent increase in productivity, compared with a 192 small-scale farmers. 442 percent increase in net profit on a 253 percent increase in productivity among periurban farmers. 4. Some 600 production ponds produced about 80 tons of fish per year (worth approximately $230,000 farm gate)1 Three years after the end of the project, the difference for the Yaoundé market. between small-scale rural and periurban farmers remained clear. Most fish farmers were continuing to produce fish, Profits and production in periurban areas rose significantly but rural farmers had more or less returned to pre-project more than in rural areas from the adoption of improved production levels, generating crops with an average value aquaculture (see Table 1). Average net aquaculture profits of $57, while small-scale periurban farmers reported per farm among periurban producers rose from $150 to average pond harvest values of $760, somewhat lower than $1,500 over the project period, compared with an increase those observed during the project but still profitable, and from $34 to $213 for farmers in rural areas. Likewise, this despite a general lack of extension support. standing stock at harvest on periurban farms increased from 490 to 2,060 kilograms per hectare, compared with an increase from 560 to 1,200 kilograms per hectare on rural farms. Group dynamics were problematic. At the end of the project, farmers listed “conflict with neighbors� as one of the top three constraints to expansion. The groups disintegrated because of personal feuds among members, exacerbated by the different levels of interest and commitment among the membership. Some of the farmers ended up working alone, with others going off to form their own groups. Incentives for group action were clearly lacking. Regular extension supervision is easier in areas closer to town. 1 Farm gate is the net value of a cultivated product when it leaves the farm, after marketing costs have been subtracted. 2 SMARTLESSONS — NOVEMBER 2011 Lessons Learned local crop production, the many years of projects aimed at improving the efficiency of African artisanal farming Lesson 1: Farmers who are making money will keep systems have largely failed to produce significant economic producing. growth. They have improved productivity and efficiency. But without markets that can turn these changes into cash Increased productivity and number of fish farmers were that can be reinvested in hired labor, purchased inputs, and typical of small-scale aquaculture projects carried out in expansion, significant increases in rural wealth are unlikely Africa over the last five decades. Also typical was that, within (Winkelmann 1998). three years of project closure, many of these farms had returned to their original low productivity, making marginal Most projects have relied on local (village) markets to contributions to both food security and income (Moehl et al. consume excess production. Many of these markets are 2006). In the absence of technical assistance, communications, cash-poor and rely heavily on barter, increasing social marketing, and logistics, only those farmers in areas of capital (of particular importance in African societies with higher market access generated earnings of sufficient little or no social security system) but doing little toward magnitude to keep them interested in aquaculture. alleviating poverty. With no significant cash-flow being generated by the farm, there is no money to reinvest, bank, The rural poor can be given opportunities to improve their or spend to create economic activity. livelihoods and food security, albeit at significantly higher costs to the extension service than those farmers with greater resources and access to markets. With such support, however, rural farmers can benefit from new technology. For example, impact assessment of a 15-year participatory research intervention, similar to that reported here and aimed at very low-income farmers in Malawi, increased production efficiency and durability in times of drought and showed a benefit/cost ratio of 1.4 and an internal rate of return of 15 percent (Dey et al. 2010), with 60 percent of the benefits accruing to consumers through higher fish availability at lower prices. Lesson 2: Breaking the cycle of poverty requires economic growth, which requires markets. Sustainably putting more cash in the hands of the rural poor so they can break out of the cycle of poverty requires The limited on-farm resource base keeps rural aquacul- economic growth, the second major objective of ture productivity low. aquaculture. Despite having at least temporarily increased SMARTLESSONS — NOVEMBER 2011 3 Lesson 3: Constraints to the creation of businesses in the lowest income groups, produce larger and more rural Africa are more easily overcome by larger-scale equitable gains to the gross domestic product (GDP) than investments. in other sectors (World Bank 2008). Generally speaking, economic growth depends on the Conclusion establishment of viable businesses (Delgado et al. 1998). However, the proximate constraints to business in rural Africa Either of the major objectives for aquaculture—food are substantial: poor infrastructure, unskilled labor, high security and economic growth—can be achieved. However, transport and input costs, and low access to technical different target populations require different approaches. expertise. Calculating the minimum investment size at which a business can be profitable should be considered common In much of Africa, where up to 80 percent of the population practice, so as to avoid investing in production systems that is composed of low-income, small-scale farmers, achieving cannot make enough money to justify the necessary food security will require a concentrated effort on the rural management (Kuyvenhoven and Ruben 2002). poor, possibly by supporting extension, especially marketing. This may appear expensive and has to be viewed as a long- Lesson 4: Genuine poverty reduction depends not only term investment, but it can be worthwhile, if affordable. on generation of wealth but also on distribution of wealth. If we want to target economic expansion and job creation, we need to support the growth of rural businesses of a The current African political and economic climate may sufficient scale to produce adequate profits to achieve be more easily surmountable by larger-scale fish farms. sustainability in the absence of long-term subsidies. Large farms generate large incomes, but the distribution of wealth is crucial to the rate at which income growth by By targeting assistance at farmers and value-chain investors is translated into national poverty reduction. A stakeholders with the capacity to achieve sustainable scale, 1 percent increase in gross national income (GNI) in governments can maximize the returns on their aquaculture economies with high inequality (Gini coefficients2 of development investments. Options for creative, positive, about 0.6) reduces poverty by only 1.5 percent per year. and pro-poor interventions include: With more equitable distribution of wealth (Gini coefficients of about 0.2), the same increase can reduce • Access to credit so investors can afford a meaningfully poverty by twice as much (Lustig et al. 2002). profitable production system; By inference, if investing in the economy is dominated by • Appropriate technical assistance at small and medium the upper 20 percent of the population, at least twice as enterprise (SME) production scales; much income growth is needed to significantly reduce poverty than if investment is driven by investments made • Reduction of arbitrary tariffs and simplification of permitting; by the lowest 20 percent of the population. In other words, very large-scale (industrial) systems have relatively • Assistance with market access and information. less economic impact and tend to concentrate wealth more than would a larger number of smaller-scale Among these, the cheapest and quickest way to help rural investments. Furthermore, such investments in agriculture farming communities out of poverty may be to provide (which includes aquaculture), particularly when made by direct technical assistance to SME investors who want to build commercially viable farms (Brummett et al. 2004). Research should focus on profitable farming systems, and extension agents should be trained in technologies that can be adapted to the calculated minimum profitable investment and then scaled up as the business grows. Groups have often been promoted as a means to overcome the lack of individual capital assets among the rural poor, but to be sustainable, groups need clear objectives and transparent management, neither of which is easy to achieve. If these and other social constraints to development can be dealt with in the shorter term, continuing to provide support to those farmers with at least enough assets to enter aquaculture at a minimally profitable scale may, in the shorter term, succeed in capitalizing and intensifying these small ventures, creating employment opportunities, lowering the cost of fish, and extending the benefits of Farmers sharing experiences. aquaculture to the larger community. 2 The Gini coefficient measures inequality in a population. It ranges from a minimum value of zero, when all individuals are equal, to a theoretical maximum of one in an infinite population in which every individual except one has an income of zero. 4 SMARTLESSONS — NOVEMBER 2011 References Brummett, R. E., and D. M. Jamu. 2011. From researcher to farmer: partnerships in integrated aquaculture-agriculture systems in Malawi and Cameroon. International Journal of Agricultural Sustainability 9 (1):282–89. Brummett, R. E., V. Pouomogne, and A. G. Coche, 2004. Aquaculture extension in Sub- Saharan Africa. Extension Circular 1002, Food and Agriculture Organization of the United Nations, Rome. Brummett, R. E., J. Lazard, and J. Moehl. 2008. African aquaculture: realizing the potential. Food Policy 33:371–85. Delgado, C. L., J. Hopkins, and V. A. Kelly. 1998. Agricultural growth linkages in Sub- Saharan Africa. Research Report 107, International Food Policy Research Institute, Washington, D.C. Dey, M. M., F. J. Paraguas, P. Kambewa, and D. E. Pemsl. 2010. The impact of integrated aquaculture–agriculture on small-scale farms in Southern Malawi. Agricultural Economics 41 (2010):67–79. DFID. 2005. Development of integrated aquaculture-agriculture systems for small- scale farmers in the forest margins of Cameroon. Paper file reference NRE 9800 605/522/003/8. http://www.dfid.gov.uk/r4d/SearchResearchDatabase.asp?projectID=2765. Kuyvenhoven, A., and R. Ruben. 2002. Economic conditions for sustainable agricultural intensification; in N. Uphoff, ed. Agroecological Innovations; Increasing Food Production with Participatory Development. London: Earthscan Publications, Ltd. 58– 70. Lustig, N, O. Arias, and J. Rigolini. 2002. Poverty reduction and economic growth; a two-way causality. Sustainable Development Department Technical Paper POV-111, Inter-American Development Bank, Washington, D.C. Moehl, J., R. E. Brummett, B. M. Kalende, and A. Coche. 2006. Guiding principles for promoting aquaculture in Africa: Benchmarks for sustainable development. CIFA (Committee for the Inland Fisheries of Africa) Occasional Paper 28, Food and Agriculture Organization of the United Nations, Accra, Ghana. Winkelmann, D. L. 1998. CGIAR Activities and Goals: Tracing the Connections. Issues in Agriculture Series. The Consultative Group on International Agricultural Research, World Bank, Washington, D.C. World Bank. 2007. Agriculture for Development. World Development Report 2008. World Bank, Washington, D.C. DISCLAIMER SmartLessons is an awards program to share lessons learned in development-oriented advisory services and investment operations. The findings, interpretations, and conclusions expressed in this paper are those of the author(s) and do not necessarily reflect the views of IFC or its partner organizations, the Executive Directors of The World Bank or the governments they represent. 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