Farm trade policies in major economies: effects on EAC food security and agriculture
1. CLIMATE AND NERGY
Farm trade policies in major economies: effects on EAC food security and
agriculture
Fabien TONDEL, Policy Officer, Food Security Programme, ECDPM
8 JULY 2015 | Nairobi, Kenya
AGRICULTURE
2. CLIMATE AND NERGY
How do international market distortions affect agricultural incentives and food security
conditions in Eastern Africa?
• Which international commodity markets are distorted?
• Which agricultural subsectors in Eastern African countries are affected?
• What are the implications of related regional/local market impacts for food
security?
Key questions
7. CLIMATE AND NERGY
Transfers to specific commodities in OECD and EEs, 2008-10
Source: OECD, 2011
China South Africa
8. CLIMATE AND NERGY
Higher international food commodity prices…
00
50
100
150
200
250
300
350
400
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Food Price Index Meat Price Index Dairy Price Index
Cereals Price Index Oils Price Index Sugar Price Index
Source: FAO, 2015
(Nominal prices)
9. CLIMATE AND NERGY
Domestic availability
(1000 mt, 2014/15)
Utilisation
(1000 mt, 2014/15)
Burundi 262 398
Kenya 3.994 6.554
Rwanda 762 902
Tanzania 7.961 8.796
Uganda 3.457 3900
Cereal trade balances in Eastern Africa
Source: IFPRI, 2014
10. CLIMATE AND NERGY
And rising food prices in Eastern Africa
Food prices in EA
Source: FEWS NET, 2015
(Nominal prices)
11. CLIMATE AND NERGY
Example: sugar sector in Tanzania
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Tanzania sugar cane prod. Tanzania sugar prod. (raw) Tanzania sugar imp. (raw)
Tanzania sugar imp. (refined) Tanzania sugar exp. (raw) Tanzania sugar exp. (refined)
Left axis, sugar cane production in tonnes; right axis, sugar production and trade in tonnes
Import surges
Source: TSB &
UNCTAD, 2015
12. CLIMATE AND NERGYImproving food security in EA but some variability across & within countries
Source: IFPRI, 2014
13. CLIMATE AND NERGY
• Increasingly competitive global markets for agricultural commodities (traditional OECD exporters,
newer EE exporters)…
• In the Americas, expected growth in exports of oilseeds, sugar, meat, cotton and ethanol
• In Asia, increasing agro-food imports, but continued exports of rice, vegetable oils and fish will remain strong; India’s
cotton exports will increase
• In Africa, increasing intra-African trade
• Preference erosion and increasing price and quality competition in OECD markets for tropical
agricultural products (product regulations (SPS, TBT) and private standards); increasing demand for
reciprocity (EPAs)…
• South-South trade prospects improving (RTAs)…
• And rising competitiveness and quality requirements in South-South and regional markets too
• Inadequate domestic policy environment often a major cause of low performance in agro-food
sectors (productivity, quality, value chain efficiency, value addition, etc.)
Take-away messages
14. CLIMATE AND NERGY
• Besides cotton, sectors to pay attention to in the negotiations are rice, dairy products, meat
products and sugar, both in OECD countries and emerging economies
• Need to better enforce trade policies in the EAC (common external tariff for sensitive products)
• Need for a better business environment for farmers and other value chain operators, and for
inclusive, private-sector-led approaches to agricultural development; need to seize regional market
opportunities and the potential benefits from foreign trade and investment
• CAADP remains a central policy framework (political support, inclusiveness, public investments,
private-sector driven agricultural development, alignment and coordination of development
partners and mutual accountability)
• Mobilization of resources: innovative finance and trade facilitation for regional integration
Take-away messages
Notes de l'éditeur
Decline in farm support in the EU, Japan and the US
Factors: decline in administered price and other forms of market price support and some decline in other forms of farm payments more or less decoupled from production (General Services Support and support to consumers must be added to the PSE to obtain Total Support Estimate)
But still some high tariffs and SSMs
Subsidies are subsidies, even decoupled/under the green box
Important distinction to be made between Producer Support Estimate (PSE); Market Price Support (MPS, support due to policy measures creating a gap between domestic market prices and international market prices); and Producer Single Commodity Transfers (SCTs, support due to policies requiring the production of concerned commodities)
(Producer) Nominal Assistance Coefficient (NAC): ratio between the value of gross farm receipts including support and gross farm receipts (at farm gate) valued at border prices (measured at farm gate)
(Producer) Nominal Protection Coefficient (NPC): ratio between the average price received by producers (at farm gate), including payments per tonne of current output, and the border price (measured at farm gate)