Presentation of Dr. Ousmane Badiane at the Global Food Policy Report 2013 Launch at Dakar - April 7, 2014

1. 2013 IPFRI
Global Food Policy Report
AFRICA
OUSMANE BADIANE
Director for Africa | International Food Policy Research
Institute

2. Progress in CAADP
implementation
01
Food Policy Development
and Issues
In Africa in 2013
Resilience agenda in West
Africa
02
Input subsidy policies03

3. Progress in CAADP
implementation
01
Food Policy Development
and Issues
In Africa in 2013
Resilience agenda in West
Africa
02
Input subsidy policies03

4. CAADP in
2013…•Launched in 46 countries
•39 signed Compacts
•28 country investment plans
•2 regional compacts
•Ecowas Regional Agency for
Agriculture and Food
•Ecowas Regional Fund in 2012

5. CAADP in
2013…•Benin, Malawi, Nigeria, and Senegal
Joined New Alliance
•Progress in implementation by first
six countries: BF CIV ETH GH MoZ TZ
•Bulk of donor commitment honored
•Grow Africa Investment
commitments on track

6. CAADP in
2013…•Advancing Mutual Accountability
•Two major training events in Dakar
•IFPRI/ReSAKSS TA for improved JSRs
•Methodology, tools, inclusivity
• Ghana, Rwanda, Moz launched JSRs
•Burkina, Senegal, Tanzania, Malawi, E
thiopia next

7. PROGRESS TOWARDS GROWTH TARGET – BY RECs
Agriculture GDP growth, 1980 – 2010 COMESA Agriculture GDP growth, 1980 – 2010 ECCAS
Agriculture GDP growth, 1980 – 2010 ECOWAS
Agriculture GDP growth, 1980 – 2010 SADC

8. PROGRESS TOWARDS GROWTH TARGET BY COUNTRY - COMESA
Agriculture GDP growth by country, 1980 – 2010 COMESA

9. PROGRESS TOWARDS GROWTH TARGET BY COUNTRY - ECCAS
Agriculture GDP growth by country, 1980 – 2010 ECCAS

10. PROGRESS TOWARDS GROWTH TARGET BY COUNTRY - ECOWAS
Agriculture GDP growth by country, 1980 – 2010 ECOWAS

11. PROGRESS TOWARDS GROWTH TARGET BY COUNTRY - SADC
Agriculture GDP growth by country, 1980 – 2010 SADC

12. PROGRESS TOWARDS MAPUTO TARGET BY RECs
Agriculture expenditure share, 1980 – 2010 COMESA Agriculture expenditure share, 1980 – 2010 ECCAS
Agriculture expenditure share, 1980 – 2010 ECOWAS Agriculture expenditure share, 1980 – 2010 SADC

13. PROGRESS TOWARDS MAPUTO TARGET BY COUNTRY - COMESA
Agriculture expenditure share by country - COMESA

14. PROGRESS TOWARDS MAPUTO TARGET BY COUNTRY - ECCAS
Agriculture expenditure share by country - ECCAS

15. PROGRESS TOWARDS MAPUTO TARGET BY COUNTRY - ECOWAS
Agriculture expenditure share by country - ECOWAS

16. PROGRESS TOWARDS MAPUTO TARGET BY COUNTRY - SADC
Agriculture expenditure share by country - SADC

17. ANNUAL GROWTH RATE OF PUBLIC AG. EXPENDITURE – 2003 - 2010
Source: Benin and Yu. ATOR 2012.

18. Progress in CAADP
implementation
01
Food Policy Development
and Issues
In Africa in 2013
Resilience agenda in West
Africa
02
Input subsidy policies03

19. Resilience Key events in
2013…
•AU, Lula Inst., FAO Partnership to
End Hunger by 2025
•NPCA Nutrition Capacity Initiative
•Integration of nutrition into NAIPs
•Regional AGIR roadmap
•Ecowas Food Reserve

20. THE NATURE OF THE RECENT CRISIS IN THE SAHEL:
NOT A PRODUCTION CRISIS

21. REGIONAL TRADE AND RESILIENCE: THE SUPPLY STABILIZATION CHANNELCoted'Ivoire
ECOWAS
Togo
Guinea
Benin
BurkinaFaso
GuineaBissau
Ghana
Nigeria
Niger
Senegal
Mali
Gambia
Liberia
0
10
20
30
40
50
ECOWAS Cereal Production Instability, 1980--2010
COMESA
Comoros
Egypt
Uganda
Burundi
DRC
Kenya
Madagascar
Angola
Namibia
Malawi
Sudan
Swaziland
Zambia
Rwanda
Zimbabwe
Mauritius
0
20
40
60
80
100
120
COMESA Cereal Production Instability, 1980--2010
SADC
South.Africa
Angola
Namibia
Malawi
Mozambique
Swaziland
Zambia
Lesotho
Zimbabwe
Bostowana
Mauritius
0
0.2
0.4
0.6
0.8
1
1.2
SADC cereal production instability, 1980--2010
The difference between the average
regional production volatility levels
and individual country volatility
indicates scope of domestic market
stabilization through regional trade

22. 0
50
100
150
200
250
300
350
0-10 10-20 20-30 30-40 40-50 50-60 60-70 70-80 80-90 90-100
NumberofcountryPairs
Production Similarity Index
COMESA
ECOWAS
SADC
Similarity of production patterns within RECs, 2007-2011
SPECIALIZATION AND TRADE EXPANSION POTENTIAL
More scope for trade Less scope for trade

23. 0
100
200
300
400
500
600
700
800
0-10 10-20 20-30 30-40 40-50 50-60 60-70 70-80 80-90 90-100
NumberofCountryPairs
Export Similarity Index
COMESA
ECOWAS
SADC
Similarity of export patterns within RECs, 2007-2011
SPECIALIZATION AND TRADE EXPANSION POTENTIAL
More scope for trade Less scope for trade

24.  Baseline = 2000-2007
 SIM1 = 0.5% reduction in trade cost annually 2013 – 2020
 SIM2 = 50% increase in yields by 2020
 SIM3 = Combine SIM1 and SIM2
ALTERNATIVE POLICY OPTIONS TO EXPAND REGIONAL TRADE

25. 0
5
10
15
20
25
BurkinaFaso
CapeVerde
Chad
Gambia
Mali
Mauritania
Niger
Senegal
Percentage
BASE SIM1 SIM2 SIM3
CHANGE IN REGIONAL IMPORTS SAHELIAN COUNTRIES BY 2020 UNDER ALTERNATIVE SCENARIOS

26. -15
-10
-5
0
5
10
15
20
25
30
BurkinaFaso
CapeVerde
Chad
Gambia
Mali
Mauritania
Niger
Senegal
Percentage
BASE SIM1 SIM2 SIM3
CHANGE IN REGIONAL EXPORTS SAHELIAN COUNTRIES BY 2020 UNDER ALTERNATIVE SCENARIOS

27. 0
5
10
15
20
25
30
Baseline SIM1 SIM2 SIM3
PercentageCHANGE IN TOTAL WEST AFRICAN INTRA-REGIONAL EXPORTS BY 2020 UNDER ALTERNATIVE SCENARIOS

28. Progress in CAADP
implementation
01
Food Policy Development
and Issues
In Africa in 2013
Resilience agenda in West
Africa
02
Input subsidy policies03

29. THEY CAN BOOST PRODUCTDION IN SHORT RUN
THEY ARE NOT CERTAIN TO RAISE INPUTS USE AND YIELDS ONCE
REMOVED (BROOKS 2012)
THEY DISTORT COSTS OF FACTORS, LEADING TO INEFFICIENT ALLOCATION
OF INPUTS
THEY MAY BYPASS NASCENT LOCAL INPUT DEALERS (BANFUL 2009, BUMB
ET AL., 2011; TAKESHIMA ET AL, FORTHCOMING)
THEY HAVE BEEN PRONE TO BAD TARGETING AND LEAKAGES (MASON
AND RICKER-GILBERT, 2012)
EXCESSIVE LEAKAGE BENEFITS LARGER FARMERS
FAILURE TO REACH THE POOREST AND MOST VULNERABLE HH
1
WHAT DOES THE EVIDENCE TELLS US?
3
2
4
5

30. THEY ARE VERY COSTLY FISCALLY:
GHANA: FERTILIZER SUBSIDIES: 17 % OF MOFA BUDGET
COSTS TRIPLED FROM GHS 29 TO GHS 90 MILL. OVER LAST 3 YEARS
COULD REACH 35% OF BUDGET IN 2020. (BENIN ET AL., 2012)
MALAWI: FERTILIZER SUBSIDIES: 74% OF AG BUDGET IN 2008/09
AND 6.6% OF COUNTRY’S GDP (DORWARD AND CHIRA, 2011).
ZAMBIA: FERTILIZER AND SEED SUBSIDIES: 40% OF AG BUDGET
BETWEEN 2004 AND 2011 (MASON AND RICKER-GILBERT, 2012)
THEY LEAD TO SERIOUS MACRO IMPLICATIONS IN THE LONG RUN
SERIOUS FISCAL DEFICIT / FOREIGN EXCHANGE SHORTAGES
CURRENCY OVERVALUATION
DECREASED COMPETITIVENESS
SLOWER ECONOMIC GROWTH
WHAT DOES THE EVIDENCE TELL US?
5
6

31. WHAT IS THE PROBLEM?
PRINCIPLES OF EFFECTIVE INPUT
POLICIES
IT IS THE ABSENCE OF A CRITICAL MASS OF:
 OPERATORS
 NETWORKS
 INFRASTRUCTURE, AND
 SERVICES
IN ORDER TO ENSURE THAT INPUTS ARE
AVAILABLE AT TIMES AND PLACES NEEDED AT
REASONABLE COST

32. WHAT IS THE SOLUTION?
PRINCIPLES OF EFFECTIVE INPUT
POLICIES
IT IS THE PROMOTION OF:
 COST COMPETITIVE
 PRIVATE SECTOR BASED
 SMALL-HOLDER FRIENDLY
INPUT PROCUREMENT AND DISTRIBUTION
SYSTEMS

33. UNDERSTANDING THE COST OF
SUPPLYING FERTILIZERS
Source: Bumb, Johnson and Fuentes, 2012 *Averaged across Ghana, Mali, Senegal, and Nigeria

34. 1
ADOPT POLICIES THAT SUPPORT EXPANSION OF FERTILIZER MARKET BY:
 REMOVING TARIFF AND NON-TARIFF BARRIERS
 RATIONALIZING FERTILIZER REGULATIONS AND INSTITUTIONAL
ARRANGEMENTS
o PRODUCT HARMONIZATION
o TECHNICAL RECOMMENDATIONS
AVOID DIRECT GOVERNMENT PROCUREMENT WHICH INVARIABLY
 BECOMES FISCALLY UNSUSTAINABLE
 DELAYS DEVELOPMENT OF FERTILIZER MARKETS
CONCENTRATE GOVERNMENT EFFORTS ON:
 STRENGTHENING HUMAN AND INSTITUTIONAL CAPACITY FOR
POLICY AND REGULATION
 IMPROVING ACCESS TO FINANCE AND MARKETING SERVICES,
 INCLUDING TARGETED, COST EFFECTIVE, PRIVATE SECTOR BASED
SUBSIDIES
HOW TO REDUCE POLICY BOTTLENECKS AND
LOWER COST
2
3

35. ETHIOPIA: LOWERING DELIVERY COST
Source: Guo et al., 2009
SUCCESSFUL POLICIES TO RAISE FERTILIZER USE

36. THANK YOU