South Sudan

Agricultural potential, rural roads, and farm competitiveness in South Sudan

Attachments

EXECUTIVE SUMMARY

  1. South Sudan has a huge but largely unrealized agricultural potential. Favorable soil, water, and climatic conditions render more than 70 percent of its total land area suitable for crop production.
    However, less than 4 percent of the total land area is currently cultivated and the country continues to experience recurrent episodes of acute food insecurity. Limited use of productivity-enhancing technologies, capacity constraints, non-tariff barriers, high labor costs and poor infrastructure hinder progress and also constrain production, productivity and the competitiveness of South Sudan’s agriculture relative to its neighbors. This report presents information to guide planners and decision makers not only in addressing both short- and medium-term food security needs but also in positioning South Sudan’s agriculture sector to effectively compete with its neighbors.

  2. Most analytical work conducted by the World Bank in the agriculture sector in South Sudan has so far focused on how to provide immediate responses to food security emergencies and price spikes. This includes the Bank’s input to the Government’s Development Plan and several agricultural value chain studies funded under the Multi- Donor Trust Fund for Southern Sudan. This analytical work is different in that it has a longer-term and forward looking perspective. Such an outlook is equally important at this time as it helps ensure that ongoing immediate responses are coherent and in sync with the overriding objective of agricultural policy which is to lower food costs, reduce poverty and increase the sector’s competitiveness at lowest costs.

  3. The report assesses agricultural potential in South Sudan and the possibility of increasing agricultural production through increases in cropped area and per capita yield improvements.
    It highlights the importance and contribution of rural roads to improving agriculture production in South Sudan, identifies road networks that are necessary to accelerate expansion of cultivated land in areas that are considered to have high agricultural potential and provides estimates of the budgetary requirements for road investments in those areas. The report also assesses the implications of infrastructure investments on agricultural competitiveness and the scope for reducing production costs in South Sudan to enable producers to compete with food imports, especially from Uganda.

  4. The value (realized agricultural potential) of total agricultural production in South Sudan was estimated at US$808 million in 2009. Seventy-five percent (US$608 million) of this value accrues from the crop sector, while the rest is attributed to the livestock and fisheries sectors. The average value of household production is US$628, of which US$473 is realized from crops. Average value of production per ha is US$299 compared to US$665 in Uganda, US$917 in Ethiopia, and $1,405 in Kenya in 2009.

  5. Increasing cropland from the current 4 percent of total land area (2.7 million ha) to 10 percent of total land area (6.3 million ha) under a modest cropland expansion scenario would lead to a 2.4-fold increase in the value of total agricultural output relative to the current level (i.e., to approximately US$2 billion versus the current US$808 million). If coupled with a 50 percent increase in per capita yields, this cropland expansion would lead to a 3.5-fold increase in the value of total agriculture output (i.e., to US$2.8 billion) and would also increase the value of crop production per ha from US$227 to US$340. If per capita yields double, the value of total agriculture production under a modest cropland expansion scenario would increase to US$3.7 billion, and would outstrip the current value of agricultural production in neighboring Uganda. Increasing productivity threefold would increase the value of agricultural production to US$5.5 billion.

  6. Investments to improve rural connectivity would not only have to first target areas identified as having high agricultural potential, but would also have to adopt a pragmatic approach towards the quality (type) of the roads given severe budget constraints and competing development needs, as well as the low capacity of the local construction industry. A pragmatic approach implies construction of lower quality roads (with lower unit costs) and larger boundaries for assessing roads coverage. This would reduce the capital requirement for rural roads from US$5 billion to US$2 billion and accelerate the achievement of rural connectivity. Full paving investments would be deferred to the future. These investments in roads have to be accompanied by other measures geared towards reducing transport prices, including the promotion of competition among transport service producers and abolishment of various non-tariff barriers to trade, both internal and at cross-border points if they are to translate into reduced food prices, improved food security and competitiveness. If investments in roads reduced current transport prices by half (from US$0.65 per ton-km to US$0.32 per ton-km), maize prices in Juba would fall from the current US$689 to US$628 per ton, or by 9 percent if other factors remain constant. If transport prices decline from US$0.65 to US$0.33 per ton-km, or by 49 percent, the derived sorghum prices in many markets would fall by 30 percent.

  7. Improved rural connectivity, especially if combined with good transport policy and regulations, will be transformative, but in and of itself will not be sufficient to sustain the competitiveness of South Sudanese farmers. Neighboring countries still have lower production costs and will benefit from better roads by providing more affordable prices to South Sudanese consumers, especially in urban areas. Complementary productivity-enhancing investments and market-supportive regulations are therefore required to improve the competitiveness of South Sudan’s agriculture. In the short term, removing bottlenecks to using the available seed varieties in the East Africa region would increase access to improved germplasm, and would help narrow the current yield gap. Investments in mechanization to reduce drudgery and high costs associated with cropping would also allow South Sudanese farmers to increase production at relatively lower costs. Support for adaptive agricultural research would allow release of new and superior seed varieties and would also help overcome other constraints (e.g., pests and diseases) to yield increases. Advisory services will be essential to maximize farm returns from the use of improved inputs, including mechanization and the development of irrigation. For all of these public investments, it is important to ensure that they “crowd in” private investment rather than discouraging it.