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Talking Points

Dilemmas for West Africa’s agricultural and trade policies

26-03-2013

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Praise has been won by West Africa for elaborating a regional agricultural policy, the ECOWAP, that could go a long way in promoting food security in the region. However, how this vision ties in with the region’s trade policy is anything but simple – says Quentin de Roquefeuil

The Economic Community of West African States (ECOWAS), is the one of the few regions in Africa to have an elaborated regional policy for agriculture and food security, the ECOWAP (ECOWAS Agricultural Policy). Implementation has been slow, but it is on track, with thematic working groups fleshing out the details and concrete steps to be taken to concretise the region’s vision for its agricultural sector. In the process, the links between the region’s nascent agricultural policy, and its equally young trade policy, are becoming clearer.

Regional food sovereignty? 

Conceptually speaking, some aspects of the ECOWAP are arguably inward looking, focusing on building the region’s productive capacities and developing regional markets, with a little help from the state.

At a recent conference I attended, a consensus seemed to be emerging: whereas approaches that aim at closing off national markets to agricultural imports had clearly failed in the past, replicating such approaches at the regional level could be a viable option. Protecting a bigger, more competitive market (given that internal barriers to regional trade are removed), coordinated with supply side efforts, could overcome the failures of past attempts at self-sufficiency.

This sort of thinking is, to a certain extent, present in the ECOWAP, where the concept of food sovereignty is clearly mentioned. For example, West Africa plans to build its productive capacities and develop a comparative advantage in rice production, alongside a few other key agricultural goods deemed essential to food security and rural incomes.

Another example would be the design of the region’s food reserves, which, as it currently stands, intends to source some of its stocks directly from regional producers, with heated debates underway as to whether the food reserves should also aim at stabilizing prices on regional markets.

Grain of thought – rice

All of these choices have heavy consequences for West Africa’s nascent trade policy, whose future orientation is currently being decided. The example of rice, a particularly divisive issue in the region, is illustrative of the dynamics at play.  Countries like Mali and Senegal, part of the UEMOA (West African Economic and Monetary Union), French-speaking block, have relatively low duty rates on agricultural imports – around 10% for rice.

This favors consumers, who pay less for this key staple, but it also places producers – farmers – at a disadvantage since they have to face fierce competition from Asian rice imports. Countries like Nigeria, on the other hand, charge a hefty duty on rice (around 110%) – with reports emerging that it considers banning its importation outright – clearly opting for the development of its own rice sector. What should the regional, common rate be, keeping in mind that the ECOWAP clearly opts for boosting regional production?

Some have argued that the logical next step, if the goals of the ECOWAP are to be reached, is for the region to agree on a common regional duty rate on rice closer to that of Nigeria then to those of Senegal and Mali, placing it in the Common External Tariff’s (CET) highest band of 35%. Higher tariffs could provide local producers with a measure of breathing space to invest and build their productive capacities. Combined with supply side measures provided for in the ECOWAP, it could help the sector become competitive in a few years from now.

This would, however, have the inevitable consequence of raising the price of rice on the local markets on medium to longer-term basis, hurting already vulnerable households and even possibly fueling social unrest.

It looks like different countries in the region, which have been negotiating on issues like the one described above for years, are coming to an agreement on the CET. They have had to negotiate and agree on this sort of issues across many tariff lines. In the particular case of rice, it seems that the duty rate agreed upon (reportedly 10%) will not be as high as some had hoped. Producers associations are already crying foul, arguing that this is just the latest example of urban bias in African trade policy.

Plenty to do

Coming back to the broader links between the ECOWAP and trade policy, ECOWAS’s room for maneuver is clearly constrained by WTO commitments and law.

For example, an immediate problem is that the current draft version of the CET rates would see countries like Senegal and other setting tariff rates on agricultural goods above their level bound at the WTO. This could mean that they would have to enter into negotiations with other WTO members because they would, in fact, be violating their engagements and risk retaliatory action.

In the case of food reserves, current WTO law constrains the ability of its members to source directly from local smallholders when stocking up their food reserves. This is exactly what a G33 proposal drafted in view of next December’s Bali WTO ministerial aims to change.

On top of all this, the region also has to finalize the design of its trade defense instruments and agree on a revised Market Access offer to present to the EU in the context of EPA negotiations, both of which will have sizeable impacts on West Africa’s agricultural sector.

In essence, it is likely that West African trade experts and civil servants will be very, very busy in the coming months.

Quentin de Roquefeuil is a Policy Officer in ECDPM’s Food Security Programme

 

This blog post features the author’s personal views and does not represent the view of ECDPM.

 

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Economic Transformation and TradeRegional IntegrationECOWAS Agricultural Policy (ECOWAP)Economic Community Of West African States (ECOWAS)West Africa