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Trade and Agriculture Development for Food Security

Tapping the Potential of Regional Agricultural Trade

01-01-2012

Rampa, F. 2012. Trade and Agriculture Development for Food Security: Tapping the Potential of Regional Agricultural Trade. GREAT Insights, Volume 1, Issue 1. January-February 2012. Maastricht: ECDPM

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In Africa, the large majority of the population depends on agriculture for their livelihoods. Trade enables farmers to capitalize on the economic potential of their produce, helping to turn agriculture into one of the most important contributors to income generation and pro-poor growth. Moreover, sustainable agricultural development is crucial to achieve food security. Intra-African trade, and regional integration in general, can surely help African agriculture live up to its pro-poor growth and food security potentials, but the right synergies have to be found. 

Africa is a net importer of agricultural products, while patterns of agricultural export are characterized by a small number of traditional commodities and dependency on preferential access to a few markets in developed countries. Only about 20-25 percent of local agricultural production is marketed(1) and intra-African agricultural exports account for only 19 percent of total intra-African exports(2). The poor performance of the sector is attributable to a combination of factors: declining investment in agriculture; inadequate physical infrastructures; high cost and shortage of fertilizers and high quality seeds; restricted access to credit; limited access to regional and international markets; and lack of conducive policy and business environments. 

Regional integration and regional agricultural markets are seen as particularly important for African agriculture, since national markets and institutions are too small to bring about all the needed transformation of African agriculture. The markets within national boundaries are often too small to justify investments, since both adequate supply of inputs and sufficient client bases (demand) remain too expensive or out of reach. Policies and markets need to be developed at the regional and continental levels for Africa to be able to respond to the growth opportunities related to international markets and to its own food demand (projected to increase exponentially over the next twenty years due to demographics and urbanization).

On the aggregate, opportunities are there, with Africa having 60% of the world’s total amount of uncultivated arable land and an immense potential for agricultural productivity growth. However more attention should be dedicated to increase the productivity of small-scale farmers, who contribute around 90% of Africa’s agricultural production but remain largely locked out of trade dynamics.(3) Regional integration and agriculture development, and in particular intra-African agricultural trade, offer a great potential for food security and pro-poor growth in Africa, if they can work in synergy, especially at the regional level. However, great challenges remain for both the coherence and coordination of trade and agriculture programmes, as well as with regional integration initiatives in the different African regional economic communities.

Various independent processes are under way to promote agricultural development and encourage regional trade, with particular traction respectively for the Comprehensive Africa Agriculture Development Programme (CAADP) and the development of trade corridors. However, the weak communication across the agriculture and trade sectors/communities (both within African governments and within the donors’ agencies), and the parallel – and at times competing – policy frameworks and arenas hamper the creation of much needed synergies. Better coherence, coordination and complementarity between regional integration, trade and agriculture (including in terms of the external support for their development) are needed to ensure policy frameworks stimulate public and private investment and the development of agricultural markets. By doing so, the processes would also be more effective.

The existing bottlenecks to regional integration in Africa, in particular the lack of ‘domestication’ and transposition of regional decisions at national level, point to the need to learn from past experience if intra-African agricultural trade is to expand and contribute to food security and economic growth. The focus should not (only) be on formal and institution-intensive integration arrangements. More limited approaches may be preferable (at least in a first stage), prioritising trade facilitation and regulatory cooperation in areas related primarily to the conduct of business. Pragmatic efforts towards effective regional integration should therefore not be reduced to the adoption of broad regional policy frameworks (as in free trade agreements), but should also target the development of business-oriented transport and regulatory systems for specific sectors.

The core mandates of the African Regional Economic Communities include the implementation of CAADP and numerous regional integration programmes. These should be coordinated, coherent and complementary. To do so requires designing and implementing regional CAADP plans as policies and actions to complement national investment plans, while ensuring that such national interventions positively contribute to effective regional integration. The development of viable investment programmes around regional trade opportunities and the adherence to existing regional agricultural policy frameworks are crucial steps in this regard.(4)

Such improved ‘bridging’ between agriculture and trade, together with stronger steps to develop regional agricultural markets in Africa, could contribute to two additional results. Firstly, it would enhance aid effectiveness through better coordination and task division across aid sectors, in the context of CAADP support programmes and Aid for Trade, which also includes the development of trade corridors. Secondly, it could also improve much needed public-private cooperation, without which policies will fail to have their expected impact. Indeed, reducing administrative barriers to regional investment and better linking the production and distribution aspects of agriculture development could attract the attention of the private sector and agricultural stakeholders. 

Footnotes
1. UNECA. 2010. Assessing Regional Integration in Africa IV: Enhancing Intra- African Trade. 
2. UNCTAD. 2009. Economic Development in Africa Report 2009: Strengthening Regional Economic Integration for Africa’s Development. However, it is important to note that most of intra-African agricultural trade is informal and therefore remains largely unrecorded.
3. Mo Ibrahim Foundation 2011. African Agriculture: from meeting needs to creating wealth.
4. Since 2010 ECDPM works on ‘bridging’ trade and agriculture and on regional dimensions of CAADP. Building on this, and as requested by several stakeholders both in Africa and Europe, ECDPM has set up a new programme on regional markets for agricultural development and food security, as part of the ECDPM Workplan 2012-2013. Such programme will focus on : i) brokering knowledge and dialogue on regional agricultural markets; ii) institutional strengthening for African regional organisations, in the context of the CAADP and RI processes; iii) building partnerships among key actors such as NPCA, RECs secretariats, regional farmers organisations, and donors.

Francesco Rampa is Programme Manager for Food Security at ECDPM working on regional and local markets for agricultural development 

This article was published in GREAT Insights Volume 1, Issue 1

Economic Transformation and TradeFood SecurityAid for TradeContinental and Regional CAADPTrade Policy and Economic Partnership AgreementsAgricultureTradeAfrica