A HEALTHY FARM POLICY IN A
GLOBALIZED WORLD
Ousmane Badiane
Africa Coordinator
International Food Policy Research Institute
AFRICA AND
GLOBAL AGRICULTURAL POLICIES
AFRICA’S VULNERABILITY
HIGH LEVEL OF TRADE OPENNESS
FOOD IMPORT DEPENDENCY
AG FOREX DEPENCY
AGRICULTURE, GROWTH, AND POVERTY NEXUS
LOW SHOCK ABSORPTION CAPACITY
THE US FARM BILL AND
GLOBAL AGRICULTURAL POLICIES
LESSONS FROM URUGUAY AND DOHA
US AND EU POLICIES DETERMINE CURRENT/FUTURE TRADING POLICIES
THEYT “JUSTIFY” RISING PROTECTIONISM IN EMERGING ECONOMIES
THEY HAVE DEMONSTRATION EFFECT ON DEVELOPING COUNTRIES
THEY ARE A MAIN FACTOR IN GLOBAL MARKET DISTORTIONS
THEY HAVE FARREACHING IMPACT ON AFRICAN ECONOMIES
EFFECTS OF
GLOBAL AGRICULTURAL POLICIES
GOING BEYOND MARKET ACCESS
DEMAND EROSION AND SUBSTITUTION
WORLD MARKET PRICE DECLINE
WORLD PRICE VOLATILITY
DISTORTED WORLD PRICE PATTERNS
IMPACT ON RESOURCE ALLOCATION, EFFICIENCY, AND GROWTH
AGRICULTURAL TRADE
AND RURAL GROWTH IN AFRICA
3
2.5
2
1.5
1
0.5
0
Niger
Senegal
Zambia
Burkina
Faso
Incremental income from 1$ additional revenue from agricultural tradables
Source: C. Delgado et al (1998)
EXPORT PRICES AND POVERTY
IMPACT OF 1% FALL COTTON EXPORT PRICE
ON INCOME & POVERTY IN BENIN
P2
3.50
3.00
2.50
P1
2.00
P0
1.50
1.00
0.50
INC
0.00
-0.50
Based on Minot et al (2002)
IMPORT TAXES
ON AFRICAN AGRICULTURAL EXPORTS
250
RICE (2X)
200
OLSD
150
RICE
SUGAR
DAIRY
LV
FIBER
LV
WHT
OLSD
100
50
0
EU
N. AMR
Lowest
JAPAN
Average
ASIA
L. AMR
Highest
Source: GTAP Data Base; weighted average MFN rates (%)
SUBSIDIES ON EXPORTS TO AFRICA
(PERCENT)
60
50
40
30
20
10
0
RICE
O.GRAINS
EU
SUGAR
N. AMERICA
Source: GTAP Data Base
DAIRY
MEAT
WORLD AVERAGE
LIBERALIZATION OR PREFERENCES
PREFERENCE VALUE AS SHARE OF COUNTRY EXPORTS IN 2002
% of African
Exporters
100
80
60
40
20
0
< 1% OF
EXPORTS
1 - 5% OF
EXPORTS
EU
JAPAN
5 - 20% OF
EXPORTS
USA
Notes: Based on Brenton and Ikezuki (2004); EU: GSP & Cotonou
Programs; USA: GSP & AGOA Program; JAPAN: GSP Program
LIBERALIZATION OR PREFERENCES
IS AFRICA READY TO COMPETE?
PERCENT GROWTH RATES
20
18
16
14
Export
Value
12
Export Volume
AFRICA
10
8
6
4
2
0
2000-04
2002
AFRICA
DATA SOURCE:
2003
WORLD
2004
AFR EXP VOL
Export Values: WTO International Trade Statistics. 2005
Export volumes: UNCTAD Trade and Development Report, 2005
QUESTIONS THAT AN AFRICAN MAY
ASK ABOUT THE US FARM BILL
DOES THE US HAVE THE EXPERTISE AND RESOURCES TO DESIGN POLICIES
TO ADDRESS ITS LEGITIMATE SOCIAL AND ECONOMIC GOALS IN THE
AGRICULTURAL SECTOR IN A MANNER THAT DOES NOT AFFECT AFRICAN
ECONOMIES NEGATIVELY?
DOES AFRICA DESERVE THE OPPORTUNITY TO COMPETE?
DOES THE FACT THAT AFRICA CANNOT RETALIATE JUSTIFY IGNORING
THE EFFECTS THAT OTHER COUNTRIES’ POLICIES CAN HAVE ON ITS
ECONOMIES?
WHERE IS THE COHERENCE BETWEEN DEVELOPMENT ASSISTANCE
AND THE ADOPTION OF POLICIES THAT MAY UNDERMINE GROWTH
AND POVERTY REDUCTION IN AFRICA?