CUTS Geneva Resource Centre
Key Findings
of Five Country Studies
Structure of the presentation
INTRODUCTION
BRIEF SYNTHESIS OF FIVE COUNTRY STUDIES
Agriculture
Trade
THEMES AND MAIN RECOMMENDATIONS
CUTS GENEVA RESOURCE CENTRE
For more than 25 years, CUTS International pursues research-based advocacy to
promote consumer sovereignty with social justice and equality within and across
borders.
In 2008, CUTS Geneva Resource Centre started functioning to promote a protrade, pro-equity credible Southern voice in the Geneva trade and development
community.
CUTS GRC aims to provide services that would bridge the gap between capitals
and Geneva on trade-related issues.
At the same time it also launched its flagship three-year project entitled “Fostering
Equity and Accountability in the Trading System (FEATS)” .
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Introduction
THE FEATS PROJECT
Fostering Equity & Accountability in the
Trading System
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Introduction
Introduction
THE FEATS PROJECT
Objectives
Enhancing positive linkages between Trade and Development in Africa
Advocacy with trade officials by establishing two-way linkages between
activities in Geneva and Project Countries
Generating a more coherent and pro-trade for development voice in trade
policy making and implementation.
Introduction
THE FEATS PROJECT (Cont’d)
Two-phase project
Phase One:
 research on policy making processes
 role of stakeholders at the national level
Phase Two:
 research on country-specific issues related to trade in agriculture in the
overall context of development constraints and objectives
 today’s presentation is based on the findings from these studies
Introduction
KEY MESSAGES
Agriculture is key to inclusive growth and development:
 increase investment to improve productivity
 adopt and implement holistic and balanced policies
Trade can play an important role for inclusive development through
agriculture:
 reform international trade in agriculture and promote formal regional trade
 urgently address trade facilitation constraints
Stakeholder involvement and capacity building is a must
 prioritise capacity building of small farmers and traders
 Encourage multi-stakeholder consultations and coordination
LINKING TRADE & AGRICULTURE IN SELECT AFRICAN COUNTRIES
The project was undertaken in LLCs Malawi, Uganda and Zambia, and nonLLCs Kenya and Tanzania.
In all the five countries, agriculture constitutes a substantial portion of the
economy. Its role is crucial for food security, livelihoods and poverty reduction.
Therefore, strategies and policy interventions aimed at inclusive development
should give precedence to the agriculture sector.
From the1990’s, these countries implemented trade liberalization measures,
with mixed success.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Introduction
LINKING TRADE & AGRICULTURE IN SELECT AFRICAN COUNTRIES
However, if well managed, trade can be a powerful instrument for growth and
poverty reduction, as well as a tool to correct imbalances between areas of
surplus and areas of deficit.
Therefore, by increasing opportunities and expanding markets, trade has a
direct impact on competitiveness, productivity and livelihoods.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Introduction
Research Findings from the
Five Country Studies
Brief Country Analysis
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
MAIN ECONOMIC INDICATORS
MAIN ECONOMIC INDICATORS
Last decade witnessed good GDP growth rates with some variations across
countries and between the first and second half of the decade.
Growth attributed to higher commodity prices, growing exports volumes,
macro-economic policies, FDI and debt relief among others.
Although there are variations among them (e.g. in per capita GNI and
population size), poverty is widespread in all project countries.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Brief Country Analysis
Agriculture
PRODUCTIVITY
Zambia, Malawi and Uganda
In landlocked Zambia, Malawi and Uganda, the study
focused on agricultural productivity, livelihoods, and
trade.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in LLCs
PRODUCTIVITY (Con’d)
Zambia, Malawi and Uganda
Findings:
Heavily dependent on Agriculture, making the sector critical for overall
economic development.
Some strengths, e.g. availability of land, comparative advantage in
many Ag. Products, and large scope for improving agricultural
productivity.
However, there are constraints such as infrastructure, economic
policies, legal frameworks and cultural attributes affecting agricultural
productivity and production.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in LLCs
PRODUCTIVITY (Con’d)
Zambia, Malawi and Uganda
Factors Affecting Agricultural Productivity:
Limited availability and poor quality of inputs used.
Only a limited segment of Ag. production is carried out on commercial
basis.
Land tenure system
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in LLCs
FOOD SECURITY
Kenya and Tanzania
In non-landlocked Kenya and Tanzania the study
focused on regional trade and food security
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in Non-LLCs
FOOD SECURITY (cont’d)
Kenya and Tanzania
Both countries face the challenge of Food Insecurity.
(Data indicates that Food Insecurity in these countries is linked to poverty.)
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in Non-LLCs
FOOD SECURITY (Cont’d)
Kenya and Tanzania
Three key elements widely agreed as necessary for
food security:
Availability of enough food
Access to the available food
Stability of availability and access
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in Non-LLCs
FOOD SECURITY (cont’d)
Kenya and Tanzania
A number of factors responsible for this situation, that
can be categorized as follows:
Economic
Environmental
Political and Institutional
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in Non-LLCs
FOOD SECURITY (cont’d)
Kenya and Tanzania
ECONOMIC
FACTORS
Low food production
Limited availability of
food at household
level
Fragmented and
insufficient market
REASONS
•
•
•
•
•
•
small plots of land
low input use
plant diseases
low investment
Short rainfall season
Insufficient market information
•
Sale of a great portion of what they
produce to meet other needs
Exacerbated by volatility in food
prices
Barriers to trade, e.g. NTBs, SPS.
High transport cost and poor storage
Poor infrastructure and trade links
between producer areas and
consumer markets
•
•
•
•
IMPACTS
Less band fluctuating availability and access to
food
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in Non-LLCs
FOOD SECURITY (cont’d)
Kenya and Tanzania
ENVIRONMENTAL
FACTORS
REASONS
Repeated crop losses
•
Continued maize planting in Agro ecology
suitable for sorghum, millets, peas etc.
Limited vegetation
regeneration
•
Degradation in both pastoral and marginal
agricultural areas
Small proportion of
rainfall appropriately
used
•
High run off and poor water storage
Droughts and Floods
•
IMPACTS
•
•
•
Increased frequency and severity
Chronic food insecurity in rainfall
marginal areas
Limited income for Ag. labourers
during droughts
Limited investment in flood prone
areas
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in Non-LLCs
FOOD SECURITY (cont’d)
A case study of Kenya and Tanzania
POLITICAL AND INSTITUTIONAL
FACTORS
REASONS
Weak Public and
Private institutions
•
Shortcomings in
Policy Framework
•
•
•
IMPACTS
Limited resources
•
Wrong prioritisation
Abrupt changes
Lack of full implementation
Limited investment in agriculture and few
safety nets to protect farmers from natural
and man-made disasters
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in Non-LLCs
FOOD SECURITY (Con’d)
Kenya and Tanzania
Trade impacts on food security, either:
Positively
Negatively
Allows imports of staple food products at
affordable prices.
Heavily subsidized food production can
depress international food prices, discouraging
investment in food production in small
countries.
Increases livelihood options and hence
enhances food security
Additionally, trade liberalization measures
adopted by small developing countries leads to
immediate increase in imports, thus worsening
balance of payments
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agriculture in Non-LLCs
Trade
INTERNATIONAL TRADE PROFILE OF PROJECT COUNTRIES
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Trade
INTERNATIONAL TRADE PROFILE OF PROJECT COUNTRIES (Cont’d)
Project countries significantly integrated into the world economy if
measured by the share of imports/exports in their respective GDPs.
Hence they need to focus more on improving the contribution of
trade to growth.
Major exports mostly agricultural commodities except for Zambia
(dependent on mineral commodity exports)
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Trade
INTERNATIONAL TRADE PROFILE OF PROJECT COUNTRIES (Cont’d)
Dependence on primary commodity exports exposes them to declining
terms of trade and price shocks.
Diversification in export markets is a positive development because:
Traditional European partners are growing much slower than Asian markets
Diversified export markets provide some cushion against shocks in
individual markets.
All project countries run unsustainably high levels of current account
deficits due to imports being much higher than exports, which can lead
to macro economic instability.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Trade
PROFILE OF PROJECT COUNTRIES
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agricultural Trade
PROFILE OF PROJECT COUNTRIES (Cont’d)
The share of agricultural exports in total substantially decreased between
2000 and 2006, but it still forms the bulk of exports in these countries (1/3
for Kenya, Uganda and Tanzania in 2006)
Similarly, share of agricultural imports in total has decreased in the period
for four project countries (almost doubled in Uganda)
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agricultural Trade
PROFILE OF PROJECT COUNTRIES (Cont’d)
While Ag. Exports are mostly cash crops, Ag. Imports are
mostly food products.
Possible positive impact on FS if exports generate greater purchasing power
and if imports reach food deficit areas.
Possible positive impact on livelihood if returns on export-oriented
production are higher and evenly distributed.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agricultural Trade
REGIONAL TRADE IN AGRICULTURE
Potential of Regional Trade
creating larger markets and reducing dependence on traditional export
markets
improving production and productivity
reducing the trading costs through facilitated regional trade infrastructure
development
improving food security by enabling movement from surplus to deficit areas
within the region
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agricultural Trade
REGIONAL TRADE IN AGRICULTURE (Cont’d)
Production and regulatory constraints to regional trade
Over dependence on single primary commodities
Exports mostly geared for markets outside Africa
Production of similar Ag. outputs, not complementary for trade between
themselves
Poor Infrastructure a key bottleneck for intra-regional trade
Lack of harmonized regulations
Non-Tariff Barriers remain in the region: 1/3 of Africa’s imports face NTBs,
higher than OECD and Fast Growing Economies.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agricultural Trade
REGIONAL TRADE IN AGRICULTURE (Cont’d)
Lack of an enabling agriculture business environment
Virtual absence of production, financing and marketing channels among
businesses in Africa
Imperfect and/or asymmetric information on opportunities for businesses in
African Markets
Multiple currencies and convertibility problems
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agricultural Trade
REGIONAL TRADE IN AGRICULTURE (Cont’d)
80% of regional agricultural trade in East Africa is informal.
Reasons
Restrictive policies such as import tariffs, quotas, exchange controls etc.
Legal requirements for Trade in Agriculture and in food products, e.g.
compliance with SPS and Livestock Clearance Certificate.
Delays at the border and corruption
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agricultural Trade
REGIONAL TRADE IN AGRICULTURE (Cont’d)
Implications of informal trade
Positive: increases business activities and enhances income and
employment for poor households in the border regions, and allows
movement of food products from surplus to deficit areas in the region
Negative: no incentives to invest in formal economy, compromises
implementation of health safety and environmental standards, and erodes
government revenues
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Agricultural Trade
LANDLOCKEDNESS AND TRADE FACILITATION
Constraints to trade specific to LLCs
The major determinant for trade in the case of LLCs is the cost of
transportation, resulting from distance to the sea and inadequate
infrastructure. Landlocked LDCs spend almost double the percentage of
their export earnings for transport than the average developing country
Due to “price takers” in the international market, high transportation costs
reduce producers’ incomes and discourage them from investing and
trading.
Ag. products are perishable, requiring faster and efficient transportation
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Trade for LLCs
LANDLOCKEDNESS AND TRADE FACILITATION (cont’d)
Constraints to trade specific to LLCs
Neighbors are not strong enough economically to enable project LLCs to
expand their markets
Project countries are not rich to generate enough domestic demand, nor
they are resource rich.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
Trade for LLCs
Recommendations
Prioritize agriculture development through policies at the national, regional
and international levels, with enhanced support from IGOs, RECs, donors,
etc.
Increase government expenditure on agriculture (at least 10% of annual
budget)
CSOs should identify and promote an enabling environment for private sector
led and farmer friendly agricultural development
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
1. Recognize agriculture as key to inclusive growth and development
Strengthen governmental efforts in the sector, e.g. farm input subsidies, promotion of
organic manure, infrastructure etc.
Promote Farmer-Private sector collaborations through Out-Grower Schemes (OGS)
Encourage small-holder participation in cash-crop farming
Create collaboration networks involving researchers, extension services and farmers
towards productivity improvements.
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
2. Improve agricultural productivity
Government should encourage formal trade by
reducing tariff and non-tariff barriers
clamping down illegal payments
harmonizing SPS and food safety standards at the regional level
The secretariats of RECs should disseminate information and knowledge regarding the regional
market
Cooperation between regional farmer/trader organisations
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
3. Promote formal regional trade
Strengthen border transit efficiency
Upgrade facilities, e.g. customs infrastructure, transportation systems, etc.
Facilitate interconnections between countries at the regional level
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
4. Urgently address trade facilitation issues in landlocked countries
How to implement it
Governments should adopt comprehensive and balanced trade and agriculture policies that are
inter-linked, tackling bottlenecks of trade and distribution mechanisms
Set up farm service centers to address farmers’ needs: inputs, machinery, etc.
Improve warehouse facilities to better manage harvests and food insecurity issues
Ensure fair trade between farmers and sponsors of Out-Grower Schemes (OGS)
Facilitate commercialization of small-scale farmers by building their capacities
Establish security enabling smallholders to access credits
Invest in irrigation technology
Coordinate activities of donors to ensure effective and efficient use of funds
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
5. Develop and implement holistic, balanced and specific government
policies and strategies
Strength research extension services to farmers in order to improve agricultural
productivity
Other stakeholders, such as REC secretariats, private sector, donors and CSOs should
assist the governments educate farmers and traders and disseminate information widely
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
6. Educate and build capacity of small farmers and traders
Close collaboration between the ministries of agriculture and trade to bridge
the gaps between trade, rural livelihoods, agriculture and food security issues
Farmers and traders should be involved in policy making and implementing
processes through formal consultative mechanisms
Farmer/trade regional organisations (e.g., EAGC) should take the
responsibilities of honest brokers at the regional level
Establish national and regional consultative and coordination mechanisms
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
7. Encourage multi-stakeholder consultations and coordination
Donor assistance should shift to land and labour productivity improvements
Donors should collaborate in the implementation of agriculture-related projects, e.g. corridors in Africa
Lobby their governments to reduce entry barriers for imports from project countries
Encourage MNCs from their home countries to take on corporate social responsibilities
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
8. Define a more positive role for donors in the host and home
countries
CSOs should strengthen research and information dissemination to all stakeholders
Lobby for domestic policies to promote welfare of small-scale farmers
Build international networks among project countries
Lobby for the creation of bodies that act as fair arbiters between farmers and
agribusiness orgs
Lobby for increased government spending on poverty reducing oriented agricultural
projects
Design programs targeted at sensitizing the farmers on the commercial side of
agriculture
Other stakeholders, e.g. governments, REC secretariats and donors should recognize
the importance of CSOs for inclusive development of agriculture through trade
Introduction | Brief Analysis | Agriculture | Trade | Recommendations
9. CSOs as important partners in these endeavours
Thank You !
Questions ?