Tapping the Potential of Regional Agricultural Trade: Why Regional Cooperation and Integration are Important for CAADP and Food Security

Background

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. 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 between different components of regional cooperation and integration as well as between different public and private stakeholders. Key Purpose of ECDPM Study Africa is a net importer of agricultural products, while patterns of agricultural export are largely characterized by a small number of traditional commodities and dependency on preferential access to a few markets in developed countries. Only about 20-25% of local agricultural production is marketed and intra-African agricultural exports account for only 19% of total intra-African exports. 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. Key Findings of ECDPM

• Individual countries alone cannot address certain challenges and tap important opportunities - Regional integration and regional agricultural markets are particularly important for African agriculture, since national markets and institutions are too small to bring about all the needed transformation of African agriculture.

• Coherence and coordination of different regional initiatives enhance their chances of success - 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 and regional Comprehensive Africa Agriculture Development Programmes (CAADP) can improve effectiveness of ongoing regional integration initiatives.

• Bridging agriculture and trade stimulates private sector investment and sustainability and synergies across sectors also enhance the effectiveness of development partners’ support, such as Aid for Trade (AfT), which also includes the development of trade corridors.