Barriers to trade in food staples in West Africa: an analytical review
Jakob Engel and Marie-Agnès Jouanjean
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,” Josserand (2013, p. 8) 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.
The World Bank is in the process of launching an ambitious three-year research programme, “Integrating Regional Markets in Food Staples in West Africa,” that aims to fill knowledge gaps on trade in food staples in the West African region. It aims to provide a better understanding of the current realities of regional food staples trade in West Africa and explore regional policy responses and institutional modalities to better promote responses to food crises.
Review of current state of knowledge
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 (Rolland, 2011).
At the regional level, there are moreover few non-governmental institutions to promote greater integration. Pannhausen and Untied (2010) 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. Further, as low private sector awareness of the ETLS appears to be a recurring theme throughout the ETLS gap analysis (USAID 2011 in Harris et al 2012), the linkages between RECs, transnational agricultural interest groups and producers and traders is a pertinent area for further analysis.
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 (2008) 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.
Galtier (2012) discriminates among three main causes of food price volatility:
- “Natural instability” stemming from harvest concentration in time and sensitivity to natural hazards such as rainfall, disease and attacks by pests;
- “Imported instability” caused by international price instability being passed on through imports and exports;
- “Endogenous instability” caused by the dysfunction of domestic markets.
Drivers of trade in food staples in Western Africa
In order to circumvent the unreliability of official data in the analysis of food staples trade flows in Western Africa, various studies choose to adopt other methodologies based on the analysis of production and trade basins. Haggblade et al. (2012) combine data on the spatial distribution of rural and urban population, maps of differing food staples zones, crop production data and consumption patterns as described by an array of recent households’ surveys, in order to map major urban food markets as well as principal surplus zones. Accordingly, they are able to identify the geographic extent of major staple food market sheds in West Africa and the major trade corridors linking surplus and deficit areas.
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. 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, as highlighted by Haggblade et al (2012), 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.
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. While Cissoko et al (2012) argue that 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.
A growing literature provides evidence about the nature and the extent of non-tariff barriers in agricultural trade in West Africa. As summarised in Harris et al (2011, 3-4) these include gaps between regional agreements, national legislation and implementation; limited private sector knowledge of free trade protocols; strong incentives for informal trade; non-compliance with existing tariffs; the widespread imposition of non-tariff barriers (NTBs); the non-functioning of the Inter-States Road Transit (ISRT) regime; non-recognition of certificates or origin and noncompliance with truck axle loads; and the challenges of joint membership for members of both ECOWAS and UEMOA.
For example, Ghana imposes bans and restrictions, often for months at a time on unprocessed agricultural times, Burkina Faso imposes seasonal restrictions on maize, and Senegal and Togo mandate escort services for transit goods. Harris et al (2011) argue that this is in part driven by the pace of liberalisation and integration: fears of inadequate protection for local producers has facilitated the proliferation of NTBs in the region.
Compared to other regions in Africa, West Africa benefits from relatively little ongoing research on trade in food staples, though this has been changing. The main projects focused specifically on regional trade in food staples in this area are funded by USAID, under the West Africa Trade Hub (since 2009). The ATP and E-ATP projects under this programme aim to increase value and volume of intra-regional agricultural trade by reducing trade barriers and enhancing linkages among producers, suppliers, distributors and processors as well as improve the efficiency in transactions through improved information systems.
The EU, GIZ, DFID, AFD, CIDA and other donor agencies also all have programmes focused on agriculture, trade and regional integration in the region. The €600m 10th EDF Regional Programme for West Africa (2008-13) is primarily targeted towards deepening regional cooperation, increasing competitiveness, and EPA negotiations support. GIZ’s Support Programme for the ECOWAS Commission has a targeted focus on ETLS implementation. Finally, the World Bank’s $197m ‘West Africa Transport and Transit Facilitation Project’ is improving road and rail infrastructure and implementing transit and transport facilitation measures along the Tema-Ouagadougou-Bamako corridor.
Identifying the impact of domestic policies on food staple price levels and volatility
Nature of the research gap
Following the increase in international food prices and volatility since 2008, various countries in ECOWAS reinstated self-sufficiency objectives in their agricultural policy. However, analyses show that endogenous instability is more significant than imported instability for food staple price volatility in many African countries. But more information is necessary on the importance of endogenous causes of food price volatility.
Relevance to project aims Central to this workstream is understanding the endogenous drivers of food price levels and their volatility in Western Africa in order to address bottlenecks in the development of regional food staples value chains. The project concept note points to various policies being implemented by West African governments (e.g. Nigeria’s decision to increase border taxation on rice). A corollary of this would be to assess potential complementary policies to cushion adverse impacts of trade reforms and in particular to identify what kind of safety net programmes could cushion households most vulnerable to food insecurity, particularly in the case of food price spikes. Having improved analysis and evidence on current policies may provide clearer evidence on potential paths for action.
Cluster 2: The politics of regional and national agricultural trade policy development and implementation
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 (for example Savodogo 2009, Rolland and Alpha 2011), 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.
Relevance to project aims
Understanding the political drivers of greater integration as well as the institutional (and capacity-related) barriers to this process could help improve understanding of potential duplication of efforts within already over-burdened RECs, and as Chambers et al. (2011) argue, “prevent the sort of policy incoherence that can result from overlapping mandates and memberships.”
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.
- Greater focus on implementation – It is not the absence of formal regional trade integration but rather its too superficial and instable implementation, as well as formal and informal nontariff barriers that have prevented the development of regional food staples value chains. Thus, the political and economic factors influencing the level of implementation of regional agreements is of central relevance and should be assessed before further ambitious region-wide commitments are made.
- 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. Modelling the changing nature of demand and how trade and agricultural policy will likely need to respond would therefore be of great utility, particularly in predicting future shortages as well as in recognising which corridors connect surplus agricultural production areas with urban and peri-urban areas.]
- Recognising how regional integration impacts on the distribution of rents – As past World Bank work on trade reforms in East Africa has shown (Aksoy and Onal 2011), the success and sustainability of such reforms differs from country to country and depends on having a degree of consensus among political elites, the private sector and other leading stakeholders. This requires looking at reforms as multi-stage dynamic processes and analysing in detail the incentives different actors are likely to face under different scenarios.
- Focus on recognition rather than harmonisation – 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 (for example in the case of SPS) may be more promising than pressing for regional harmonisation (see Bromley et al 2011).
- A holistic approach to removing barriers –In order for regional integration to be a tool for enhanced food security, both supply and demand side bottlenecks should be identified and addressed jointly. Developing agricultural trade-related services, increase competition and reduce marketing prices, require that agricultural production reaches a minimum threshold. At the same time, producers’ decision to participate to the market depends both on access to higher productivity agricultural production technologies facilitated by an access to extension services and to inputs as well as on access and incentives to participate to output markets, with the profitability of selling agricultural outputs depending on the availability of various value chain logistic services, from post-harvest to transport services.
- Integration of complementary policies – As numerous studies have shown, the food security impact of regional and multilateral trade reforms (including liberalisation and regional integration) depends greatly on how prices are transmitted through the economy (see McCorriston et al 2013). As such, ensuring coherence between agricultural and trade policies and planning in advance how social protection and safety net policies can shield against negative consequences for adversely affected groups and individual is essential
- 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.
- Promoting private sector involvement in R&D – Currently the West African region lags behind others in providing incentives for agricultural research. While donors and foundations are providing much of this support, it still remains very sporadic and the lack of consistent policies or clear promotion of public-private partnerships provides disincentives for private sector actors to engage.