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Exploiting opportunities in intra-regional trade in food staples in COMESA region
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Exploiting opportunities in intra-regional trade in food staples in COMESA region


Presentation by Juliet Wanjiku, Maurice Ogada, Paul Guthiga, Joseph Karugia, Stella Massawe and Jonesmus Wambua at the 28th triennial conference of the International Association of Agricultural …

Presentation by Juliet Wanjiku, Maurice Ogada, Paul Guthiga, Joseph Karugia, Stella Massawe and Jonesmus Wambua at the 28th triennial conference of the International Association of Agricultural Economists (IAAE), Foz do Iguaçu, Brazil, 18-24 August 2012.

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  • 1. Exploiting opportunities in intra-regional trade in food staples in COMESA region Presentation at the 28th triennial conference of the InternationalAssociation of Agricultural Economists (IAAE) Foz do Iguacu, Brazil, 18-24 August 2012 by Julliet Wanjiku, Maurice Ogada, Paul Guthiga, Joseph Karugia, Stella Massawe and Jonesmus Wambua ILRI-ReSAKSS-ECA
  • 2. Presentation Outline Introduction  COMESA poverty levels  Food insecurity  Food price indices Regional Trade patterns Basis of intra-regional trade Challenges of intra-regional trade Suggested policy interventions
  • 3. Poverty levels are high in COMESA region Poverty Rural poverty Urban poverty National poverty survey year rate (%) rate (%) rate (%)Burundi 2002 68.7 66.0 68.0DRC 2004–2005 75.7 61.5 71.3Egypt 2004–2005 ... ... 20.0Eritrea 1993–1994 ... ... 53.0Ethiopia 2004–2005 39.3 35.1 38.7Kenya 2005–2006 49.1 33.7 45.9Madagascar 2001 70.1 48.1 76.5Malawi 2009 43.0 14.0 39.0Mauritius 1992 ... ... 10.6Rwanda 2005–2006 ... ... 56.9Swaziland 2000–2001 75.0 49.0 69.2Tanzania 2007 38.0 24.0 33.6Uganda 2005–2006 34.2 13.7 31.7Zambia 2006 64.0Zimbabwe 1995–1996 48.0 7.9 34.9Sources: IMF (2004); NSO (2009); UNCTAD (2005); URP (2007); UBOS (2006); NSO (2007); NISR (2007a);World Bank (2008); AfDB (2009); World Development indicators
  • 4. Food insecurity in COMESA regionProportion of children under 5 with moderate and severe malnutrition 1996-2005
  • 5. Maize production (Tones) in COMESA region Source: FAOSTATProduction maize has been quite erratic in most of the countries; maizeyields in a majority of countries are very low and in most cases have beenless than 2 tons/ha
  • 6. Food Price Indices 2007=100 400 350 300 250 200 150 100 50 0 Ethiopia- Food Total FAO GLOBAL- Food Kenya- Food & Non-Alcoholic Drink Malawi- Food MauritiusFood And Non Alcoholic Beverages Rwanda- Food And Non-Alcoholic Beverages Tanzania- Food and Non alcoholic beverages Uganda- Food Zambia- Food Djibouti - Food Data source: FAO Global: FAOSTAT; Kenya: Central bank of Kenya; Ethiopia: Ethiopia central statistical agency; Rwanda: National institute of statistics of Rwanda; Tanzania: Tanzania national bureau of statistics; Uganda: Uganda bureau of statistics; Malawi: Malawi national statistical office; Madagascar: Madagascar national institute of statistics; Mauritius: Mauritius government website; Zambia: Zambia central statistical office. The food price index has been increasing Severity of high food prices varies by countries & seasons This offers opportunity for increased regional food trade
  • 7. Maize price volatility Data source: Tanzania: Bank of Tanzania; Kenya: Ministry of Agriculture; Uganda: Uganda bureau of statistics; Global: FAOSTATMaize prices are more volatile in Kenya than in Tanzania and Uganda. The domesticmaize prices in Kenya, Tanzania and Uganda are more volatile than the global maizeprices.
  • 8. Regional Trade Patterns: Intra-COMESA trade flows Value of COMESA exports in US dollar COMESA Aggregation140,000,000 Libyan Arab Jamahiriya Egypt Sudan120,000,000 Zambia Kenya100,000,000 Democratic Republic of the Congo Ethiopia 80,000,000 Mauritius Uganda Zimbabwe 60,000,000 Madagascar Malawi 40,000,000 Swaziland Seychelles Burundi 20,000,000 Rwanda Djibouti - Comoros 2006 2007 2008 2009 2010 Eritrea
  • 9. Maize imports (Tonnes) for selected COMESA countries Rising in some countries, falling in others 700000 600000 500000 400000 300000 200000 100000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Burundi Ethiopia Kenya Malawi Mauritius Mozambique Rwanda Uganda Tanzania Zambia Zimbabwe
  • 10. Increased informal trade ( about 40% of total trade)
  • 11. Basis of Regional Trade Larger regional market base  Domestic markets are smaller and fragmented  Regional approach provides expanded market-about 420 million people in COMESA•
  • 12. Basis of regional trade…Length of growing period (LGP) Agro-ecological and political boundaries do not coincide This offers potential to scale up improved production techniques and land management practices across the boarders
  • 13. Basis of regional trade…Diversity in agro-ecological zones/spatial climatic variability implying: diversified agricultural production  even where countries produce similar agricultural products, supplies are available at different times in a year due to staggered harvesting in the regionSource: Data: FEWS NET,2008
  • 14. Basis of regional trade…Maize Surplus and Deficit status in East Africa
  • 15. Production spots and market flows for maize and Livestock in the Greater Horn of Africa (GHA)Maize Livestock
  • 16. Border markets for food staples in ESABorder marketsenhance movementof food staplesacross countries,dictated by supply& relative prices Source: ReSAKSS-ECA, 2011
  • 17. Other factors promoting intra-regional trade in food staples Regional production volatility- Areas with low food supply are able to receive food from areas with increased supply Substitution among food staples- countries facing shortages of their main food staples could secure substitutes from other countries e.g. Maize vs cassava Varying tastes and preferences- what a country produces is not necessarily what is preferred locally. Such products could be sold to where they are needed most.
  • 18. Challenges of intra-regional trade High transport costs 90 80 70 percentage 60 Kenya 50 40 Tanzania 30 Uganda 20 10 0 NTBs (%) Transport costs NTBs (%) Transport costs (%) (%) Beef transfer costs Maize transfer costsSource: Karugia et al., 2009
  • 19. Challenges of intra-regional trade.... Regional barriers to trade: Common NTBs  Administrative requirements mainly licenses, municipal and council permits  Security  Taxes/duties mainly excise and cess duty  Road blocks  Custom barriers  Weighbridges  Corruption e.g. through bribesNB: There is need to implement the commitment to eliminate NTBs andprevent entry of new NTBs so as to reap maximum gains from intra-regional trade
  • 20. Other challenges.... Lack of information Export-import bans Non predictability: Impact of climate change High cost of production and low intensity in input use
  • 21. Suggested interventions An integrated regional approach to food security and agricultural growth rather than national isolated approaches, joint regional food policies; Clear follow up and monitoring of implementation of commitments to eliminating NTBs and prevention of entry of new NTBs at regional level; Increased investment in early warning system through joint regional efforts; Investment in market information at regional level; and Investment in improved regional and within country infrastructure: Through joint government actions.
  • 22. Exploit opportunities in regional diversity to increase food security Thank you!