Estimating the Constraints to Agricultural Trade of Developing Countries

Publication Date 31 Jan 2013. Estimating the Constraints to Agricultural Trade of Developing Countries
Evdokia Moïsé, Claire Delpeuch, Silvia Sorescu, Novella Bottini, Arthur Foch
OECD, France
Pages 86

Agricultural trade is widely considered as an important contributor to developing countries‘ economic growth, poverty alleviation and food security. 

This report identifies and analyses some of the most important supply-side constraints to developing countries‘ exports of agricultural products, in order to inform prioritisation and sequencing of domestic policy reforms as well as targeting of donor interventions. The analysis is supplemented by case studies of Aid for Trade programmes supporting agricultural trade expansion in Indonesia, Zambia and Mozambique. 

The report confirms that developing countries‘ agricultural exports are highly responsive to the quality of transport and trade-related infrastructure, while tariffs still have a significant negative impact. The analysis also highlights the importance of complementary policies such as education and political stability on developing countries‘ agricultural trade performance. In the poorest countries of the sample, significant trade expansion could be achieved by easing constraints related to governance and infrastructure quality, as well as by lifting constraints related to the efficient use of existing freshwater resources. 

The case studies illustrate the impact on agricultural exports of constraints related to standards and conformity assessment or access to credit, in particular as regards small and medium agricultural producers, processors and traders. They also show the contribution of donor supported programmes promoting private sector initiatives to poverty reduction through increased employment and the promotion of production adapted to local endowments.

Africa can help feed Africa

October 24, 2012. WASHINGTON –A new World Bank report says that Africa’s farmers can potentially grow enough food to feed the continent and avert future food crises if countries remove cross-border restrictions on the food trade within the region. According to the Bank, the continent would also generate an extra US$20 billion in yearly earnings if African leaders can agree to dismantle trade barriers that blunt more regional dynamism.

According to the new report―Africa Can Help Feed Africa: Removing barriers to regional trade in food staples ― rapid urbanization will challenge the ability of farmers to ship their cereals and other foods to consumers when the nearest trade market is just across a national border. Countries south of the Sahara, for example, could significantly boost their food trade over the next several years to manage the deadly impact of worsening drought, rising food prices, rapid population growth, and volatile weather patterns. 

With many African farmers effectively cut off from the high-yield seeds, and the affordable fertilizers and pesticides needed to expand their crop production, the continent has turned to foreign imports to meet its growing needs in staple foods.

“Africa has the ability to grow and deliver good quality food to put on the dinner tables of the continent’s families,” said Makhtar Diop, World Bank Vice President for Africa. “However, this potential is not being realized because farmers face more trade barriers in getting their food to market than anywhere else in the world. Too often borders get in the way of getting food to homes and communities which are struggling with too little to eat.”

The new report suggests that if the continent’s leaders can embrace more dynamic inter-regional trade, Africa’s farmers, the majority of whom are women, could potentially meet the continent’s rising demand and benefit from a major growth opportunity. It would also create more jobs in services such as distribution, while reducing poverty and cutting back on expensive food imports. Africa’s production of staple foods is worth at least US$50 billion a year.

Moreover, the new report notes that only five percent of all cereals imported by African countries come from other African countries while huge tracts of fertile land, around 400 million hectares, remain uncultivated and yields remain a fraction of those obtained by farmers elsewhere in the world.

A new World Bank report says Africa's farmers can potentially grow enough food to feed the continent and avert future food crises if countries remove cross-border restrictions on the food trade within the region. According to the Bank, the continent would also generate an extra US $20 billion in yearly earnings.

Related:

The report was released on the eve of an African Union (AU) ministerial summit in Addis Ababa on agriculture and trade. The African Union unexpectedly postponed the Joint Conference of Ministers of Agriculture and Ministers of Trade scheduled to take place on 1st and 2nd November in Addis Ababa just four days before it was due to start.

A press release announcing the postponement said new dates will be communicated soon. (Source: ECDPM October 26, 2012: Lost opportunity to build bridges: African Ministers of Agriculture and Trade meeting postponed)

Participants at the meeting
on food safety.

Related:
29-30 October 2012. The African Union (AU) aims to institute a food safety authority as well as a Rapid Alert System for Food and Feed (RASFF), so as to boost trade competence and avert food-borne diseases. This was announced at the opening of a two-day workshop in Kigali.

Prof. Ahmed El Sawalhy, the Director of the AU’s Inter-African Bureau for Animal Resources (AUBAR), which organised the workshop, observed that the establishment of the authority would boost trade and uplift the living standards of Africans, especially those in rural areas.

The workshop attracted food safety specialists and managers from member states and representatives from regional economic communities and the African Union Commission.

Supporting Policy Research to Inform Agricultural Policy in Sub-Sahara Africa and South Asia

6-7 September, 2012. Nairobi, Kenya. Global Development Network. The Global Research Capacity Building Program. One of GDN’s projects is the one on “Supporting Policy Research to Inform Agricultural Policy in Sub-Sahara Africa and South Asia” that is funded by the Bill and Melinda Gates Foundation.

Some 35 participants attended this workshop that included politicians, researchers, donors, media, and policy analysis institutions, universities, NEPAD and a multinational seed company. Following the presentation and discussion of Case Studies two sets of round table discussions were held on the Case Sties presented.

Over the last 12 months, five research teams from leading
African universities have reviewed extensive published and unpublished
research in five areas that affect agriculture in sub-Saharan Africa
in order to bring forth policy issues that are relevant to the region.

On the second day of the workshop, the Policy Briefs were presented and a press conference held on the Briefs with media representatives from various African countries.

• Gates Foundation announced that most of their grants in agriculture would now support smallholder agriculture. Other areas of support would be breed improvement in livestock and poultry (a new area), issues of market failure, data collection and policy analysis, supports a Masters degree in Agric Economics and Policy on-going in Kenya and another planned for francophone countries to be based in Burkina Faso. Gates Foundation is interested in issues of policy research for policy formulation and decision making.
• Syngenta Company is investing US$ 500 m into Africa and will be concentration on South Africa, Kenya, Egypt and Morocco for now. They will support smallhoder farmers. The criteria for country selection are competitiveness in agriculture informed by: infrastructure support, government support in general, macro-economic stability and openness to trade.

1. Agricultural Pricing and Public Procurement.

 
Published on : August 31, 2012

Agriculture plays a major role in the economies of most Sub-Saharan African countries – creating employment, boosting GDP and supporting the livelihoods of many of the region’s poorest households. Yet the region has gone from being a net food exporter to a net food importer over the last four decades. Ensuring an adequate supply offood is a major challenge and governments have employed a range of pricing and procurement measures in an effort to achieve this, with varying degrees of success

2. Irrigation and Water Use Efficiency.

 


Published on : August 31, 2012

3. Improving the Effectiveness, Efficiency and Sustainability of Fertilizer Use.

 


Published on : August 31, 2012

4. Addressing Long Term Challenges to Food Security and Rural Livelihood.

 

Published on : September 3, 2012

5. Managing Agricultural Commercialization for Inclusive Growth.

 

Published on : September 3, 2012

Agricultural Biotechnology Regulation: The opposing world views of slow food versus fast food

April 18, 2012, Iowa, US. Over 110 ag industry leaders, scientists, and experts from around the world attended the Ninth BIGMAP Symposium. The 1 day event, titled "Agricultural Biotechnology Regulation, Trade, and Co-existence" focused on current research and perspectives on the role of regulation in biotechnology and genetically modified agricultural production.

Grant Improving Quality Seed Access in Sub-Saharan Africa

Iowa State University seed scientists are partnering with regional and national organizations in Malawi, Zambia and Nigeria to conduct a pilot study in Africa on enabling better access to improved seed varieties with the help of a new grant from the Bill & Melinda Gates Foundation.

The Seed Policy Enhancement in African Regions (SPEAR) project is funded by a $1.45 million three-year grant. As part of the grant, Iowa State University scientists will work to advance harmonization policies into actionable reality in western and southern Africa. They will improve varietal evaluations and timely releases of candidate seed varieties.Read More

Seed Science Center Director Manjit Misra, AGRA President Namanga Ngongi and Distinguished Fellow David Lambert collaborate on the creation of a seed institute during a visit to AGRA.

ISU Seed Science Center, University of Nairobi Establishing African Seed Institute

Iowa State University seed scientists are working with the University of Nairobi and other groups to increase food security and reduce poverty in sub-Saharan Africa with help from a new $4.49 million grant from the Alliance for a Green Revolution in Africa (AGRA). Read more.

Audios and Powerpoints from the 2012 BIGMAP Symposium "Agricultural Biotechnology Regulation, Trade & Co-existence" are now available. 

Jack Bobo, Senior Advisor on Biotechnology, Department of State

Import/Export Opportunities and Challenges. The opposing world views of slow food versus fast food\

L’AFRIQUE AU SALON INTERNATIONAL DE L’AGRICULTURE 2012 À PARIS

25 février au 4 mars 2012. Paris. L’Afrique au SIA 2012- Un rendez-vous annuel toujours haut en couleur. Le Mali, la Côte d’Ivoire, le Cameroun au travers de la CDC pour les bananes et de l’ONCC pour le café et le cacao, Madagascar avec ses entreprises spécialisées dans la vanille, les épices dont le fameux poivre sauvage, étaient présents à l’édition 2012 du Salon international de l’Agriculture de Paris.

SIA 2012 - CommodAfrica door commodafrica

Defragmenting Africa: Removing Barriers to Trade in Africa

February 7, 2012. Washington. With African leaders now calling for a continental free trade area by 2017 to boost trade within the continent, a new World Bank report shows how African countries are losing out on billions of dollars in potential trade earnings every year because of high trade barriers with neighboring countries, and that it is easier for Africa to trade with the rest of the world than with itself.

According to the new report―De-Fragmenting Africa: Deepening Regional Trade Integration

in Goods and Services―regional fragmentation could become even more costly for the continent with new World Bank forecasts suggesting that economic slowdown in the Eurozone could shave Africa’s growth by up to 1.3 percentage points this year. As the authors write, “while uncertainty surrounds the global economy and stagnation is likely to continue in traditional markets in Europe and North America, enormous opportunities for cross-border trade within Africa in food products, basic manufactures and services remain unexploited.”

The reports says this situation deprives the continent of new sources of economic growth, new jobs, and sharply falling poverty, factors which accompanied significant trade integration in East Asia and other regions. The cross-border production networks that have spurred economic dynamism in other regions, especially East Asia, have yet to materialize in Africa.

Obiageli Ezekwesili

“It is clear that Africa is not reaching its potential for regional trade, despite the fact that its benefits are enormous—they create larger markets, help countries diversify their economies, reduce costs, improve productivity and help reduce poverty.” says Obiageli "Oby" Ezekwesili, The World Bank’s Vice President for Africa, and a former Nigerian Minister of Extractive Industries. “Yet trade and non-trade barriers remain significant and fall most heavily and disproportionately on poor traders, most of whom are women. African leaders must now back aspiration with action and work together to align the policies, institutions and investments needed to unblock these barriers and to create a dynamic regional market on a scale worthy of Africa’s one billion people and its roughly $2 trillion economy."

In one notable example of trade barriers, report co-editors Paul Brenton and Gozde Isik of the World Bank describe how the South African supermarket chain Shoprite spends US$20,000 a week on import permits to distribute meat, milk, and plant-based goods to its stores in Zambia alone. For all countries it operates in, approximately 100 (single entry) import permits are applied for every week; this can rise up to 300 per week in peak periods. As a result of these and other requirements, there can be up to 1,600 documents accompanying each truck Shoprite sends with a load that crosses a border in the region.

Paul Brenton is Lead Economist (Trade and Regional Integration) in the Africa Region of the World Bank.

Gözde Isik is an Economist (consultant) in the Africa Poverty Reduction and Economic Management Unit and co-editor of the recently released book De-Fragmenting Africa: Deepening Regional Trade Integration in Goods and Services.

• Full Book English | French
• Introduction
• Part 1. Facilitating Cross-border Trade in Goods and Services
• Part 2. Removing Non-tariff Barriers to Trade
• Part 3. Integrating Services Markets

Related: 14/02 Interview with Marcelo Giugale World Bank’s Director of Economic Policy and Poverty Reduction Programs for Africa
“Imagine the benefits of allowing African doctors, nurses, teacher, engineers and lawyers to practice anywhere in the continent, but responsibility for making this happen lies with countries first and foremost,” says Marcelo Giugale, the World Bank’s Africa Director for Poverty Reduction and Economic Management. “The final prize is clear: helping Africans trade goods and services with each other. Few contributions carry more development power than that.” 

In a superb special World Bank video produced for the new report, women traders on the border with the Democratic Republic of Congo (DRC) and neighboring countries in the Great Lakes region describe how they routinely encounter violence, threats, demands for bribes, and sexual harassment, at the hands of the large numbers of customs and other government officials at the border. As one egg and sugar trader from Goma says on the video: “I buy my eggs in Rwanda; as soon as I cross to Congo I give one egg to every official who asks me. Some days I give away more than 30 eggs!”

Congo Film w/ English Subtitles Original 

COLEACP at Fruit Logistica 2012

FRUIT LOGISTICA 2012 Ghana

8 to 10 February. Berlin. This trade fair was characterized by the presence of the industry's key decision-makers as well as by excellent reviews from exhibitors and trade visitors who praised the commercial results achieved at the exhibition. The event also registered a record number of exhibiting companies, 2537 in all. More than 56,000 trade visitors from 139 countries were in Berlin to view the full spectrum of products and services across the entire fresh produce value chain. Around 80% of the visitors at this year's exhibition came from outside Germany.

COLEACP, PIP and EDES teams facilitated contacts between ACP exporter and EU importer Members at the Fruit Logistica 2012. You will find more information on the COLEACP entry on the « Fruit Logistica Virtual Market Place »

Federation of Associations of Ghanaian Exporters. Ghana is focusing on the extremely tasty pineapples that it grows and harvests all year round. "Many Europeans are not aware of this. We are at FRUIT LOGISTICA to make this fact known", says Antony Sikpa, President of the Federation of Associations of Ghanaian Exporters. Ghana is represented with four exporters, whose produce, in addition to pineapples, includes papayas and mangos.

FRUIT LOGISTICA 2012 Mairitius
(with a breadfruit)

Mozfoods S.A., Mozambique: "This was our first appearance at FRUIT LOGISTICA and it was very valuable for our business. We had a chance to meet with our customers and build new contacts with prospective buyers in Europe. The current demand clearly exceeds our production capacities". Carlos Henriques, Chief Executive Officer.
Enterprise Mauritius: "We are very satisfied with our first appearance at FRUIT LOGISTICA.  The trade fair is an excellent platform for maintaining existing contacts and finding new customers. We had visitors from Brazil, China, Britain, France and the Middle East at our stand. In the coming months, we will see what specific orders will arise from this". Yogesh O. Amoroo, Business Development Officer

Related: Extract from Agricultural Innovation in Sub-Saharan Africa: experiences from multiple-stakeholder approaches

Ghana’s pineapple industry. This case study concerns the rehabilitation of the pineapple industry after loss of valuable export markets to Europe as new country producers provided sweeter varieties favoured by consumers. Pineapples now account for more than 50 percent of Ghana’s total horticultural exports and the crop is a source of income and employment for 15,000 people. Increased production has led to significant poverty reduction in pineapple-growing areas with farmers reporting a 10 percent increase in income (World Bank, 2006), largely due to increased production and higher prices for the commodity.

Lessons learned for scaling up. The strong commitment of all stakeholders – donors, national partners, NGOs, Government, exporters, importers, individual farmers and research institutes – has played an important role in the success achieved in the pineapple industry. Linkage with export markets has clearly been a driving factor. However the emergence of large-scale farmers and processors has made them the major beneficiaries at the expense of smallholder farmers.Meeting this challenge will require additional support to raise their production levels.