Sustainable Promotion of Agriculture

Agriculture dominates the economy in Burkina Faso. Its average contribution to GDP is around 40 percent, and it accounts for some 60 percent of total export revenue.

For years, Burkina Faso has been ranked low on the bottom places of the UNDP human development index. Reasons for poverty and the low level of development include adverse climatic conditions, infertile soil, the shortage of natural resources, the country's landlocked location and inadequate utilisation and management of existing agricultural potential. The latter varies, depending on the region. In the long term, the degradation of natural resources and soil generally pose a problem to the basis for production; this situation justifies the choice of agriculture in combination with management of natural resources as a priority area.

Agriculture and its downstream industrial sectors offer the greatest development potential for Burkina Faso’s economy and growth benefiting the poor, 80 percent of whom derive their livelihood from agriculture. To harness this potential, promotional measures are required that strengthen the integration of producers, in particular of smallholders, into the market, while also supporting them in ensuring food security and shortening periods of food scarcity.

Support provided by German Development Cooperation (DC) is oriented towards the national poverty reduction strategy (CSLP) and the sectoral strategy for the promotion of rural development (Stratégie de Développement Rural, DSR) elaborated in 2003. It is based on years of experience in the agricultural sector, placing it at the disposal of partners and other donors. In line with the international division of labour, the German contribution complements those of the other donors in the agriculture sector.

Burkina Faso’s core problem is its structural poverty. Major development hurdles are posed by its low educational level, poor health care supply and the insufficient use of available potentials in farming.

International trade restrictions affect all of Burkina Faso’s agricultural products, but cotton in particular. The sector suffers from income shortages resulting from changes in fluctuating exchange rates and is currently experiencing a structural crisis that calls for consistent and continued implementation of reforms that have been initiated and a policy of diversification of agricultural production.

Food security poses a huge problem for smallholder agricultural producers. Farmers cannot consider production for markets until this problem is solved. In ensuring food security, the producers are attempting to diversify their crops in order to prevent the risk of crop failures. While this low-level diversification is vital, it also poses some additional obstacles to market production. Farmers who have already produced goods in a market-oriented manner return to subsistence farming or leave their villages.
Despite the obstacles to development, agriculture and its downstream business sectors contain the greatest development potential for Burkina Faso’s private sector. Expanding the sector will require improved agriculture policy conditions that mobilise productivity reserves, especially on the part of smallholders, and that open up opportunities for diversification and processing of farm products. Government subsidies must take the varied factor endowment (land, workforce, capital) and the producers’ access to the market into account to a greater extent. Measures to promote the investment climate and the private sector must be more strongly oriented towards the poor, and towards women in particular, who so far have been barred from receiving loans due to administrative bureaucracy and inadequate security. In the cotton sector, reforms that were initiated have been continued by creating new institutions that involve the producers in decision-making.

Strategic approaches for support include:

German Development Cooperation is integrated into the framework of Burkina Faso’s poverty reduction strategy and the rural development strategy. The indicators of both strategies, which were targeted for 2015, are also the objectives for the German development cooperation contribution. It aims to improve the income of Burkina Faso’s rural population and improve its food security.

The priority area contributes to broad-based growth by promoting agriculture-based industry. To achieve increases in income for wide segments of the rural population, the promotion of market orientation of production and in particular of processing is first and foremost (value chain approach). The principle of promotion consists of identifying promising potentials for competitive, export-oriented value chains (e.g. cotton, cashews, karité) as well potentials for the local markets (e.g. maize, vegetables, livestock) and mobilising them using investment measures and financing, as well as the necessary advice and process support.

German Development Cooperation will contribute to the following objectives in particular:

• poverty-oriented economic growth
• higher income and employment
• increased private and public investments in the agricultural sector
• increased competitiveness of small and medium-sized enterprises.

The following programme is currently being implemented:

• Agricultural development programme

In addition, the KfW Entwicklungsbank (KfW development bank) is also implementing projects within the framework of financial cooperation.