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Decline of the agriculture industry in Somalia
Somalia’s economy is agricultural-based, with agriculture contributing to 60.2% of its GDP. Its main exports are livestock such as cattle, sheep and goats and cash crops such as bananas. Since the start of the 1960s, Somalia’s foreign debt has exceeded its export earnings. In 2006, its export earnings were estimated at US$300million whereas, its import spending was estimated to be US$798 million. As of 2011, Somalia’s external debt stands at US$3 billion. Somalia’s export earnings are insufficient to finance the food insecure population of 4 million. The debts of Somalia can be attributed to the decline of food production per capita in the agriculture sector and hence, an increased reliance on food imports and food aid. According to the UN in 2009, 40% of its population requires emergency food aid.

Somalia’s food deficit problem reveals that its agriculture produce is insufficient to meet its domestic market demands; a gap between food production and consumption prevails. Cereals produce amounted up to 300 000 tonnes however, 500 000 tonnes are demanded by the domestic market with 200 000 tonnes falling short. The decrease in Somalia’s food production per capita can be accounted for by several factors. The success rate of crop productions are correlated with the climate and the income of its people depend solely on weather conditions. Crop failures occur when there are droughts, leading to widespread hunger and famine in the country. The drought in 2011 had caused a famine to arise leaving 12 million people in need of humanitarian assistance and 750,000 at risk of death.

The civil war in 1991 had caused the destruction of its agriculture infrastructure and by early 1992; agricultural activities virtually came to a halt then. Today, its subsistence crops produce such as maize and sorghum are produced at below 60% average of pre-war levels. Since the collapse of Mohamed Siad Barre’s regime, Somalia has been without a central government. No state support such as a National Agriculture Research System has been established to oversee the development of the agriculture sector and improve economic conditions in the country. Linkages to agricultural research organisations outside the country are weak. Insufficient access to resources and information relating to new technologies has resulted in low productivity agriculture.

Somalia’s poor infrastructural development marginalises the rural areas, cutting those in the rural areas off from national and regional economies. With a significant 63% (est. 2010) of the population living in rural areas, adequate land routes and transport modes are vital for local farmers to access markets to export their home-grown produce.

The International Monetary Fund (IMF) had intervened in Somalia’s economy in the early 1980s. Its intervention contributed to the worsening of the crisis of Somalia’s agriculture. The economic reforms implemented by IMF destroyed the weak relationship between nomadic herdsmen and small farmers. Also, the Structural Adjustment Program (SAP) between IMF and Somalia had caused Somalia to be over dependent on imported foods. As the imported grains are cheaper, the demand for locally produced grains decreased, affecting the earnings for Somalia. During June 1981, IMF imposed the devaluation of Somalia’s currency. Such measure caused a price increase in farm equipment, fertilizers and inputs. It had a strong impact to the agricultural farmers. As a result, the purchasing power of the people decreased sharply. Besides that, the Bretton Woods institutions also contributed to the problem of agriculture in Somalia. By ‘restructuring of the government expenditure’, Somalia’s expenditure and budget was heavily constrained. They were even deterred by the IMF from using national resources. All these factors led to the decline of the agricultural sector in Somalia.

Moreover, Somalia’s lack of political stability, business environment security and incentives has led to insufficient structural investment. Today, most investments come from the donor community and its biggest donor being the European Union which finances Somalia’s agriculture based economy.