Authors: Jakob Engel and Marie-Agnès Jouanjean
Site of publication: odi.org
Type of publication: report
Date of publication: July 2013
The West African region faces many challenges to exploiting the potential contribution of increased intra-regional trade in food staples to food security. This problem is all the more pressing as the nature of trade and agricultural production in the region is in a process of great flux. “In the medium term,” argues, “population growth, urbanisation and the transformation of West African agriculture will redefine regional trade flows of basic foods -the increase in trade is expected to far outpace the tripling in regional food production.” Addressing these changes will require a better understanding both of the barriers to and drivers of regional trade in food staples.
Regional agricultural trade policies and institutions in West Africa
Both regional economic communities, ECOWAS and UEMOA, have developed comprehensive agricultural and trade policy frameworks with the objective of improving coordination and increasing trade integration between their member states. This process is further advanced in UEMOA, where a surveillance mechanism for macroeconomic convergence has been established, along with a customs union and the abolition of tariffs or quotas on intraregional trade in domestic products.
Non-UEMOA ECOWAS member states agreed in 2006 to join the existing UEMOA Common External Tariff (CET) and a fifth tariff band (at 35 per cent) was added in 2009 at the behest of Nigeria. However, the CET has not yet been adopted throughout the ECOWAS region. However, in practice many countries se the CET as providing insufficient protection for strategic priority commodities, driving unpredictable tariff and non-tariff barriers.
Both ECOWAS and UEMOA have prioritised food security as a policy objective. UEMOA adopted an agricultural policy, the Politique Agricole de l’UEMOA (PAU), in 2002. Based on the principles and priorities of the Comprehensive Africa Agriculture Development Programme (CAADP), ECOWAS adopted the ECOWAS Agricultural Policy (ECOWAP) in 2005 with the main objectives of boosting agricultural productivity and exports, attaining food security in member states and promoting sustainable livelihoods for farmers. The implementation of both the PAU and of ECOWAP has largely been limited to putting in place institutions and regulations, with little analysis thus far to examine the degree of implementation, the impact, or the coherence between both agreements.
Both ECOWAS and UEMOA have prioritised food security as a policy objective
Further, at the regional level there is only limited agricultural planning, and initiatives to reform policies to improve food security (such as the establishment of a regional food stock to overcome short-term seasonal food shortages) have struggled to get off the ground. As such, regional cooperation has generally been sporadic and driven by short-term national interests.
However, at the regional level, there has thus far only been limited agricultural planning and efforts to overcome short-term seasonal food shortages. For example, recent efforts by UEMOA to set up a regional exchange market for sensitive food products have not advanced very rapidly even though the UEMOA members of the Comité permanent Inter-état de Lutte contre la Sécheresse au Sahel (CILSS) are largely in agreement over the initiative. In 2011, G-20 Finance Ministers furthermore commissioned the World Food Programme (WFP) to look into the development of a system to give food deficit countries rapid access to sufficient food for distribution through schemes of targeted assistance, such as safety nets. However, beyond a feasibility study and proposal for a pilot programme it is not clear how much further this has advanced.
There have been some efforts to improve and harmonise regional regulations on seed production and marketing, including through the West Africa Seed Programme implemented by the Agricultural Research Council of Nigeria. Further, ECOWAS members are party to the Abuja Declaration on Fertilisers to increase fertiliser use, harmonise policies and regulations and promote national and regional fertiliser production and intra-regional trade. While West Africa lags behind other African regions in implementation, the 2009 launch of the five-year MIR-Plus project aiming to facilitate the development of a regional agricultural input market has aimed to improve harmonisation across the region.
At the regional level, there are moreover few non-governmental institutions to promote greater integration. Pannhausen and Untied provide an overview of some of the existing organisations, including the Réseau des Organisations Paysannes et des Producteurs Agricoles de L’Afrique de l’Ouest (ROPPA), Réseau des Chambres d’Agriculture de l’Afrique de l’Ouest (RECAO) and Réseau des Opérateurs Economiques du Secteur agroalimentaire de l’Afrique de l’Ouest (ROESAO) and Afrique Verte International. Finally, the Alliance Globale pour l’Initiative Résilience – Sahel (AGIR), first proposed in 2012 aims at uniting the international community around the West African agenda of food security and nutrition. However, little information exists on the role, membership or effectiveness of these.
Transparency and predictability of national agricultural trade policies – impact on food security and food price volatility
Analytical studies of trade and food security in West Africa often approach agricultural trade as a domestic price and supply stabilisation tool in the event of food crises. The mixed results of past regional and multilateral trade liberalisation on incentives to trade and on food security, paired with an increase in international food prices and volatility, supported the decision of various countries in ECOWAS to adopt temporary trade measures and to reinstate self-sufficiency objectives in their agricultural policy. Rolland and Alpha list some of the temporary export restrictions or prohibitions, including Guinea’s export ban on all food to neighbouring countries, Burkina Faso decision to control or restrict exports of local cereals, and Senegal’s prohibition of rice exports.
Since the international food price spikes and food shortages in 2008/09, a wealth of literature has tried to understand the drivers of food price volatility in Africa and the impact of various strategies and policies on price stabilisation and food security. Conclusions about the reality of “imported” instability vary according to analysis and the food products being analysed, and in particular whether studies look at traded or untraded food products.
Prioritising intra-regional trade as an alternative to national self-sufficiency– Given the small size of domestic markets in many West African countries and the great variation in production, focusing on achieving similar objectives at the regional or sub-regional level is more realistically attainable and less likely to result in shortages than pursuing this at the national level
A further strand of literature on agricultural trade looks in greater depth at the political economy behind trade reforms and trade barriers. While not West Africa-specific, of particular relevance in this regard is work on East African cash crops by Aksoy and Onal that examines nine case studies of commodities that were liberalised, and argues that the key variable affecting the sustainability of supply responses was the degree of stakeholder consensus on the distribution of sector-specific rents. In cases where the initial consensus on the distribution of rents was weak, shocks led to reform reversals in some cases or an inability to design necessary support institutions in others.
In one comparative case study we notice Cameroonian, Senegalese and Ghanaian poultry producers to competition from frozen poultry imports. They find that Cameroonian and to a lesser extent Senegalese producers were better able to influence government policy because they faced fewer barriers to collective action and built alliances with consumers before lobbying government.
Drivers of trade in food staples in Western Africa
Analysing regional trade flows within West Africa is challenging. Not only are trade flows poorly reported, with many inconsistencies, but also a non-negligible amount of trade occurs informally and therefore is not recorded in usual databases. This difference between declared and observed trade flows is highlighted by Josserand, who provides detailed trade flow data on livestock, onion, coarse grains (millet, sorghum, maize) and rice along selected corridors linking Benin, Burkina Faso, Côte d’Ivoire, Ghana, Mali, Niger, Nigeria, Senegal, and Togo as part of the USAID Agribusiness and Trade Promotion (ATP) project and the Expanded ATP (EATP) project. He finds that official statistics probably capture on average about one third of actual transactions of livestock in value. His findings are less precise for other analysed food staples, but still highlight that actual trade flows are greater and more diverse than generally recognized.
Using spatial analysis to examine surplus and deficit production areas is particularly relevant to the analysis of trade in food staples in West Africa. Countries in this region appear as natural partners for food staples trade, as different sub-regions have comparative advantages in complementary food staples, with diverse ecosystems yielding a wide range of produce. West Africa is therefore often divided into three agro-ecological zones relating to various farming systems and consumption patterns.
Looking at market price dispersion for both grain and cash crops between and within Nigeria and Niger, they find that ethnic differences can act as a significant intra-national border between markets and suggest that ethnic similarities diminishing international border effects could enhance international market integration
In addition to the north-south movement of particular commodities for export, three basins are identified based on their trade flows in cereals: the West, Central, and East basins. However, surplus food producing zones in Africa, unlike many regions of the world, lie across the border from the markets they serve, with political borders often separating surplus food production zones from deficit markets they would normally serve.
Looking at market price dispersion for both grain and cash crops between and within Nigeria and Niger, they find that ethnic differences can act as a significant intra-national border between markets and suggest that ethnic similarities diminishing international border effects could enhance international market integration. They provide evidence that the primary mechanism behind the internal border effect is related to the role of ethnicity in facilitating access to credit in agricultural markets.
Rising incomes in the region are also impacting agricultural production and are influencing dietary habits in West Africa, in particular in urban areas, with a shift towards an increasing preference for variety. The increasing demand for meat, poultry, and dairy products is likely to have a non-negligible impact on coarse grain demand, prices and direction of trade through increased demand for animal feeds.
In order to fulfil this increasing demand for food, due to increases in population and changes in diets, the region will not only have to address supply-driven food security issues and the constraints to an increase in productivity and production, but also the demand-driven necessity to increase the capacity of intermediaries, including truckers, wholesalers and retailers.
Non-tariff barriers (NTBs) to trade in food staples
Successful regional integration experiences elsewhere in the world highlight that tackling tariff barriers is a necessary but not sufficient to enhance trade. NTBs, whether protectionist in intent or not, raise trade costs and inhibit regional trade. Western Africa is no exception and efforts to facilitate trade in the region must also aim to address NTBs. The impact of NTBs in West Africa is less harmful to agricultural trade than they are outside of the region, the prevalence of particularly non-formal measures is large and widely discussed in the literature. Therefore, even if NTBs are less important in Western Africa than in other regions of the world, they remain difficult to address.
Ethnic differences can act as a significant intra-national border between markets and suggest that ethnic similarities diminishing international border effects could enhance international market integration. They provide evidence that the primary mechanism behind the internal border effect is related to the role of ethnicity in facilitating access to credit in agricultural markets
One of the overarching problems in this regard is the prevalence of informal practices that exacerbate transport and shipping costs. There are numerous studies that point to the widespread nature of bribery in the region.
Assessing progress in and barriers to the implementation of ECOWAP and the PAU
Both the ECOWAP and the PAU are intended to support greater harmonisation of agricultural policies and increased cooperation and regional coordination. However, numerous sources discuss the incomplete implementation of the two regional agricultural policies, and no evaluation of either the extent of their implementation or their impact has been conducted thus far. It is unclear who has benefited and what the impact on investment, production and trade has been.
There has also been no comprehensive assessment of the compatibility and coherence between the two agricultural frameworks, between these and formal domestic policies, and with the ETLS. Thus, it is central to understand first how compatible regional and domestic legal frameworks are. Secondly, it would be important to determine what the political and institutional barriers to their implementation within selected countries are.
The World Bank’s focus on examining regional trade in food staples in the West African region is highly timely and contributes to a growing body of work that is, however, still rather small considering the size of the region in terms of population and product diversity. In addition to the research priorities identified in the previous section, tentative recommendations emerging from this review include the following:
- Prioritising intra-regional trade as an alternative to national self-sufficiency– Given the small size of domestic markets in many West African countries and the great variation in production, focusing on achieving similar objectives at the regional or sub-regional level is more realistically attainable and less likely to result in shortages than pursuing this at the national level.
- Cross-border planning and integration of prioritised food staple value chains. A corollary of this is that countries will need support (including from donors) to identify barriers and foster value chain development for key food staples. This approach will require coordination at the regional level, as prioritised value chains should aim for some degree of complementarity with those of neighbouring countries.
- Focus on environmental and demographic trends – It is important to address changing climatic and demographic trends that will inevitably affect both the supply and demand for food staples. Urban consumers have long been the drivers of agricultural policy formulation with the aim to provide cheap food to large cities. With the increase in urban population, this trend is unlikely to change. Yet, policies will have to both enable an increase in supply as well as to support better connections to surplus areas in order to continue to supply domestic food to urban areas rather than fully relying on imports to address the increase in demand.
- Focus on recognition rather than harmonization. Addressing the prevalence of NTBs should be a priority, but in many cases taking smaller steps to mitigate their impact may be more easily feasible than large-scale reforms. For example, moving towards mutual recognition may be more promising than pressing for regional harmonisation.
- Better data – While significant efforts have been made in recent years, particularly led and financed by donors, to improve the collection and quality of data on prices, food production and other key variables in this area, we still face substantial data gaps that limit the ability to devise evidence based trade and agricultural policies.
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