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PCD Impact Assessment on Food Security in Tanzania

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Assessing Linkages between OECD Policies and Tanzania’s Agro-Food Systems and Food Security Conditions
Workshop 2, Dar Es Salaam, 27/11/2014
With support from the Ministry for Foreign Affairs of Finland

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PCD Impact Assessment on Food Security in Tanzania

  1. 1. PCD Impact Assessment on Food Security in Tanzania Assessing Linkages between OECD Policies and Tanzania’s Agro-Food Systems and Food Security Conditions Workshop 2, Dar Es Salaam, 27/11/2014 Towards a level Impa With support from the Ministry for Foreign Affairs of Finland Page 1ECDPM
  2. 2. INTRODUCTION AND REMINDER Page 2ECDPM
  3. 3. Policy Coherence for Development: Concepts • Non-development cooperation policies of OECD countries (e.g., agriculture, trade, international investment, tax, science and technology, migration, etc.) can have (negative/positive) spillover effects on developing countries • Those effects can be incoherent with development objectives (whether they are the objectives of a particular developing country, a region, developing countries as a whole, or the objectives of development cooperation policies of OECD countries) • Different dimensions of development: economic growth, poverty reduction, food security, health, human development, environmental sustainability, etc. Page 3ECDPM
  4. 4. OECD Member States Map Source: Wikimedia Commons Page 4ECDPM
  5. 5. Policy Coherence for Development: Concepts • European Union: ‘The EU seeks to minimise contradictions and to build synergies between policies other than development cooperation that have an impact on developing countries, for the benefit of overseas development’ • OECD: ‘The pursuit of development objectives through the systematic promotion of mutually reinforcing policy actions on the part of both OECD and development countries’ • Two implications: “Do not harm”; “do good” – Ensure that all policies are “development-friendly” – Promote synergies among policies with regards to development objectives Page 5ECDPM
  6. 6. PCD Concept—Case of Food Security Source: OECD Page 6ECDPM
  7. 7. PCD as a Policy and Institutional Mechanism Source: OECD Page 7ECDPM
  8. 8. PCD Impact Assessment Approaches Ex ante Ex post OECD-Policy-based Country-/region-based X Page 8ECDPM
  9. 9. Our PCD Impact Assessment Approach • Developing a methodology for ex post, country-level PCD assessments with a focus on food security • Involving local and OECD stakeholders (participatory approach) • Supporting OECD Development Assistance Committee in improving PCD, fostering policy change and addressing trade-offs between domestic and international goals based on evidence • Supporting developing country actors (governments, private sector and civil society) in understanding OECD policies’ impacts on their countries, advocating for improved PCD and formulating policy responses Page 9ECDPM
  10. 10. Food Security Analysis Framework • Food availability • Access to food • Food utilization • Stability Page 10ECDPM
  11. 11. Page 11ECDPM
  12. 12. OECD-Tanzania Linkages Commodity Tanzania’s net trade balance Primary linkage Secondary linkage Food security factor(s) Grains and rice Small exporter/importe r Int’l markets Foreign direct investment Availability and access (pr. & inc.) Dairy products Importer Int’l markets - Availability and access (pr. & inc.) Sugar Importer Int’l markets OECD Market access Access (inc.) and utilization* Coffee, tea, and tobacco Exporter OECD Market access - Access (inc.) Cotton Exporter Int’l markets OECD Market access Access (inc.) Horticultural crops Exporter OECD Market access - Access (inc.) Fisheries Exporter OECD Market access - Access (inc.) * Local development Page 12ECDPM
  13. 13. OECD-Tanzania Linkages • Investigating changes in OECD policies and market outcomes over an adequate period of time and identifying negative/positive spillover effects • Taking into account contextual changes (e.g., domestic/regional market and policy changes, global market and policy changes, etc.) Page 13ECDPM
  14. 14. Objectives of Workshop 2 1. Providing an overview of OECD agricultural and trade policies and their spillover effects on international markets and domestic markets in developing/emerging countries and Sub-Saharan Africa 2. Assessing the impacts of OECD agricultural and trade policies in specific agro-food sub-sectors in Tanzania 3. Assessing the implications of OECD countries’ agro-food market regulations and private standards on Tanzanian exporters’ access to OECD markets 4. Assessing the influence of OECD policies on foreign direct investment and international businesses’ practices in Tanzania’s agricultural and food sectors 5. Soliciting views of stakeholders on ways and extent to which OECD policies affect the agro-food system and food security in Tanzania 6. Discussing methodological aspects Page 14ECDPM
  15. 15. Q&A • According to you, what does Policy Coherence for Development mean for Tanzania? Page 15ECDPM
  16. 16. MODULE 3 PART 1 OECD domestic agricultural policies and spillover effects on Tanzania through international marketsOverview of OECD domestic agricultural policies and spillover effects on international markets Page 16ECDPM
  17. 17. Objectives 1/ Have a common understanding of the global context in which Tanzania operates  Reality check on the recent evolutions globally and in Tanzania 2/ Present assumptions on theoretical impact pathways through international prices and evidence of their relevance in the litterature Page 17ECDPM
  18. 18. Methodology • So far desk-based research – Official data (OECD etc.) – Academic literarure and « grey » literature (reports) • Limitations: – Limited up to date data – Publications on very specific commodities or dimensions (2008 crisis) =>Risk of using specific cases as general lessons => Your feedbacks are key Page 18ECDPM
  19. 19. Initial assumptions: Impact of OECD policies through intl markets Assumption 1: OECD policies act as discentives to produce food for Tanzanian farmers, lowering supply of locally produced food and income of farmers Assumption 2: OECD policies act as barriers to trade (through tariffs) reducing the quantity exported to OECD markets by Tanzanian farmers, lowering their income Page 19ECDPM
  20. 20. Assumption 1: discentives to supply of locally produced food Channel 1: => depress price levels for Tanzanian farmers Through competition from low cost imports Page 20ECDPM
  21. 21. Assumption 1: discentives to supply of locally produced food Support policies and exports subsidies : increase supply on intl markets  depress intl prices  Lower intl prices transmit to local prices Depress farmers gates prices of import competing commodities Farmers income Net food buyers Page 21ECDPM
  22. 22. Assumption 1: discentives to supply of locally produced food Channel 2: => increase price volatility which act as a discentive for farmers to invest in ag production Page 22ECDPM
  23. 23. Assumption 1: discentives to supply of locally produced food Temporary subsidized exports  increase volatility of intl prices  More volatile intl prices transmit to local prices  Increase volatiliy of farmers gates prices of import competing commodities Farmers income Net food buyers Page 23ECDPM
  24. 24. Assumption 1: discentives to supply of locally produced food Reality: Yes, it happened in the past: USA, Japan and Europe were highly supporting their producers 0 10 20 30 40 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 %PSE % PSE Evolution of Producer Support Estimate in percentage of gross farm receipts in OECD Source: OECD (2014), "Producer and Consumer Support Estimates", OECD Agriculture statistics (database). USA, Japan and Europe were highly supporting their producers22 Page 24ECDPM
  25. 25. Assumption 1: discentives to supply of locally produced food Reality: Yes, it happened in the past => Those countries are considered to have contributed to the decrease in international price of grains, milk, butter, sugar, cotton Page 25ECDPM
  26. 26. Assumption 1: discentives to supply of locally produced food Yes, but - has since become self sufficient in maize and rice - local prices in Tanzania have been shown to be higher than intl markets prices more volatile  Availability and accessibility problems of grains in Tanzania are due DOMESTIC factors and inefficiencies lack of market integration within Tanzania and price transmission with intl Globally Tanzania - Since then reduction of supports by OECD, increase in non OECD emerging economies (China, Ind - Since 2000s increase in international prices (3 spikes,:2008, 2010, Page 26ECDPM
  27. 27. Assumption 1: discentives to supply of locally produced food Yes, but REALITY CHECK: Regarding international prices of grains, no case to accuse OECD policies of incoherence nowadays Coton USA ? Page 27ECDPM
  28. 28. Assumption 2: Reduced market access for exporters Channel 1 Barriers to entrance in the OECD markets - tariffs - non tariff measures Page 28ECDPM
  29. 29. Assumption 2: Reduced market access for exporters Tariffs  decrease OECD demand of Tanzanian goods  decrease income of export producing farmers Farmers income Page 29ECDPM
  30. 30. Assumption 2: Reduced market access for exporters Channel 2 Increase of tariff with stage of processing in the value chain (« tariff escalation ») => Disencentives to transform products locally and capture higher share of value addition Page 30ECDPM
  31. 31. Assumption 2: Reduced market access for exporters Tariff escalation  decrease OECD demand of Tanzanian processed ag products  decrease income of export producing farmers Decrease employment creation in agroindustreis Farmers income Employment creation Page 31ECDPM
  32. 32. Assumption 2: Reduced market access for exporters Yes, historically agricultural products more protected than other types of products But Tanzania has benefitted from preferences : - Historically from the EU as an ACP country (Lomé, Cotonou etc.) -Since 2000s from preferential agreements from other OECD countries as a LDC (EBA from EU, AGOA from USA etc.) -=> Many preferential agreements: question is what is also provided to competitors ? -=> Example of sugar. Page 32ECDPM
  33. 33. IMPACTS OF OECD POLICIES ON TANZANIA’S SECTOR CASE OF SUGAR Page 33ECDPM
  34. 34. Tanzanian Sugar Sector • A major agro-food sector • Tanzania, a net importer of sugar • Four large sugar factories, some new projects underway • Low sugar cane yields relatively to Southern African producers and other Eastern African producers (lack of irrigation, low-performance varieties, low fertiliser use and other production and marketing factors) • Privatization and efforts to rehabilitate the sector in the 1990s led to productivity enhancement and production increase Page 34ECDPM
  35. 35. Sugar Production and Trade 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 Page 35ECDPM
  36. 36. Sugar Trade • Tanzania exports sugar mostly to the EU under the EBA regime (10,000 tonnes, but export licenses are difficult to obtain reportedly) • Import duties and quotas (licenses) • Large volumes of sugar imported illegally • Sugar factories have experience difficulty competing with cheap sugar imports, notably sugar from Latin America, Southern Africa, and some Asian exporters • Import surges/dumping cases in the late 1990s and early 2000s, incl. sugar from the EU among other origins • Need to strengthen capacity to implement countervailing duties and other safeguard measures Page 36ECDPM
  37. 37. Sugar Production and Trade 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 Page 37ECDPM
  38. 38. International Sugar Markets • 2/3 of world sugar production from Brazil, Australia, Cuba and Thailand • Other big producers: India, EU, and South Africa • Net exporting regions: Americas, Oceania • Net importing regions: Asia, Europe, Africa • Largest exporters: Brazil, EU, Australia, Cuba and Thailand • Largest importers: Russia, EU, and Japan • Concentrated sector; e.g., EU imports done by a few multi- national companies • About ⅓ of world sugar production is trade internationally • Most of international trade in sugar is done under trade agreements; residual trade thru spot markets; as a result (in addition to the fact that sugar cane is a perennial crop), this market is very volatile Page 38ECDPM
  39. 39. International Sugar Markets • Decline in international prices in the 1990s (rise of Brazil as a producer and an exporter), rise in prices in the 2000s; EU and US became net exporters after having been net importers (e.g., in the 1970s) Page 39ECDPM
  40. 40. Sugar Production in OECD Group 0% 10% 20% 30% 40% 50% 60% 70% 80% 0 10000000 20000000 30000000 40000000 50000000 60000000 70000000 80000000 90000000 100000000 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 Shareinworldproductions(%) Productions(tons) EU productions (LA) US productions (LA) Other OECD (LA) US share (RA) EU share (RA) All OECD share (RA) Page 40ECDPM
  41. 41. Sugar Exports of OECD Group 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0 2000000 4000000 6000000 8000000 10000000 12000000 14000000 16000000 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 Shareinworldexports(%) Exports(tons) EU exports (LA) US exports (LA) Other OECD exports (LA) US share (RA) EU share (RA) All OECD share (RA) Page 41ECDPM
  42. 42. Sugar Imports of OECD Group 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0 5000000 10000000 15000000 20000000 25000000 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 Shareinworldimports(%) Productions(tons) EU imports (LA) US imports (LA) Other OECD imports (LA) US share (RA) EU share (RA) All OECD share (RA) Page 42ECDPM
  43. 43. International Sugar Markets • Sugar trade regimes – EU’s preferential tariff and quota trade regimes: • EU Special Preferential Sugar (SPS) arrangements, bilateral agreements with ACP countries, annual TRQ for raw cane sugar • Sugar protocol of the EU-ACP Cotonou Partnership Agreement, TRQ with guaranteed prices – US’ preferential tariff and quota regime (Puerto Rico, Philippines and other countries with whom the US has special trade relations—not for EA countries and excl. other low-cost producers) – Commonwealth Sugar Agreement: TRQ for exports to UK until Lomé Agreement Sugar Protocol • Other international agreements for sugar, incl. bilateral agreements (e.g., Cuba-Russia Sugar Agreement) • WTO MFN regime (residual spot market) Page 43ECDPM
  44. 44. EU Sugar Policy • Major reform of the sugar sector started in 2006 – Cut in subsidies to farmers; cut in the target price of white sugar; farmers compensated by decoupled payment for a 4-year period, additional to the single farm payment; abolition of the intervention price – Closure of obsolete sugar mills – Losses for countries with preferential access to EU market – Full liberalization of imports from LDCs in 2009 (duty-free access to EU sugar market for 48 LDCs in 2009 under the EBA agreement signed in 2001) • Elimination of production quotas after 2015; production will increase, prices will go down Page 44ECDPM
  45. 45. EU Sugar Policy Quantities in tonnes Page 45ECDPM
  46. 46. Support to the Sugar Sector in OECD Group 0 10 20 30 40 50 60 70 80 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 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 SCT OECD (value LA) SCT EU (value LA) SCT US (value LA) SCT OECD (% RA) SCT EU (% RA) SCT US (% RA) Page 46ECDPM
  47. 47. Support to the Sugar Sector in OECD Group PSCT in nominal terms, in USD; price of sugar in USD/kg 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 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 OECD PSCT EU PSCT EU Price ISA Price Page 47ECDPM
  48. 48. Support to the Sugar Sector in OECD Group 0 100 200 300 400 500 600 700 800 900 0 10 20 30 40 50 60 70 80 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 Price($/ton) SCT(%) SCT EU (% RA) SCT US (% RA) SCT OECD (% RA) EU price ($/ton LA) US price ($/ton LA) World price ($/ton LA) Page 48ECDPM
  49. 49. Sugar Markets in Africa • Southern African producers more cost-competitive than Eastern and Central Africa producers – Malawi, Mauritius, Sudan, Zambia, Zimbabwe, South Africa: low- cost sugar producers (SADC more competitive than EAC in general, production costs relatively high in Eastern Africa) – Kenya, Swaziland, and Tanzania: higher-cost producers (indebted sugar companies in Kenya and Tanzania in early 2000s, late payments to farmers) • Regional market protection in the EAC customs union; tariff protection; sensitive industry • In the late 1990s, near collapse of the industry in the region (period of low prices, consumer prices at or below sugar production costs); after that, development of safeguard measures; due to lack of policy planning and administrative capacities, the regional industry is still affected by cases of dumping (as of 2006); low-cost imports from Brazil, Southern Africa and Australia Page 49ECDPM
  50. 50. EU Development Assistance for the Sugar Sector • Sugar Protocol Accompanying Measures introduced as part of the 2006 reform; assistance package for ACP countries; 40m euros • ACP Sugar Research and Innovation Programme, to fund research to enhance sugar productivity, diversify uses of sugar cane (biofuels, bio-fertilisers, bio- polymers, etc.) and generally ensure that the sugar industry remains viable; about 20m US$, mostly from EU, also from Australia, US and ACP countries Page 50ECDPM
  51. 51. Q&A Page 51ECDPM
  52. 52. MODULE 3 PART 2 OECD non-tariff measures and private standards Overview of OECD standards and implications for market access for Tanzania’s exports and food security conditions Page 52ECDPM
  53. 53. ECDPM Page 53 Non-Tariff Measures in OECD and other countries UNCTAD, 2010 Non-Tariff Measures are : • Most NTMs are governed by WTO laws and closely monitored • Members are ‘required’ to notify new and revised measure to the WTO • TBT and SPS measures are by far the most important
  54. 54. ECDPM Page 54 Examples of NTMs measures in OECD countries • Microbiological standard • Pesticide residue limits • Contaminants in foodstuffs standards • Veterinary drug residue limits • Restrictions on antibiotic use in aquaculture • Fumigation requirements • Factory hygiene • Quality attributes (size, shape, design, freshness, quality ) • Labeling requirements • Packaging standards • Traceability requirements for food and animal • Health certificates • Pest risk analysis requirements • Import licensing and quota • price control • Bans/Restriction in Illegal Fishing • Rule of Origin for manufactured products Source: EU Helpdesk, 2014 and various other sources
  55. 55. ECDPM Page 55 Increasing use of SPS and TBT 0 2000 4000 6000 8000 10000 12000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 EU (28) US Other OECD BRICS Other Countries Figure 2: Cumulative number of SPS Notifications to the WTO 0 1000 2000 3000 4000 5000 6000 7000 8000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 EU (28) US Other OECD BRICS Other Countries Source: SPS and TBT notifications from the WTO Available at http://spsims.wto.org/web/pages/search/notification/regular/Search.aspx and at http://tbtims.wto.org/web/pages/search/notification/BasicSearch.aspx Figure 3: Cumulative number of TBT Notifications to the WTO • As of August 31st, 2014, a total of 10,945 SPS measures and 7,158 TBT measures has been notified to the WTO • Reflect the increase in exports • But poses the question policy substitution in a context of decreasing tariffs
  56. 56. ECDPM Page 56 Non-Tariff Measures by sectors Table 1: Number of NTMs by economic sectors (all countries) Source: Adapted from Gourdon and Nicita (2012) • Food and agricultural products are the most affected • Important implication of food security
  57. 57. ECDPM Page 57 Working definition proposed by China and New Zeeland to WTO Private Voluntary Standards are : Rising role of Private Voluntary Standards
  58. 58. ECDPM Page 58 Too many PVS ? Source: Standardmap, ITC More than 400 (UNCTAD and EU estimates)
  59. 59. ECDPM Page 59 Rising role of Private Voluntary Standards… • Despite their voluntary nature, PVSs are ‘de facto’ mandatory for to access developed countries markets (Henson and Northen, 1998). • PVSs versus Public Standards? • PVSs are used by retailers to establish and maintain reputations, minimise monitoring and inspection costs due to public standards • PVSs are more complex and stringent and are not necessarily being based on scientific evidences (Henson and Humphrey 2009). • PVSs cover number of dimension (social, environment, equity, organic production, etc.) not covered by public standards
  60. 60. Increase regulation and standard  Restrict OECD market access  decrease income of export producing farmers Decrease employment creation in agroindustreis Farmers income Employment creation Causal chain of the impact of standards on food security… ECDPM Page 60
  61. 61. ECDPM Page 61 NTM for Traditional exports crops : Coffee, tea, tobacco and cotton Coffee and tea • Microbiological standard • Pesticide residue limits • Quality attributes • Labelling and Packaging standards Tobacco • Prohibition of certain types of tobacco • Restriction of certain substances (nicotine limit) in cigarette • Labeling requirements • Packaging standards Cotton • Pesticide residue limits in textile products • Contaminants in feedstuffs • Quality attributes Several private standards, mostly social, sustainability and environmental : Fair Trade, Rainforest Alliance, UTZ certified, Ethical Trading Initiative • Mostly exported raw will little or no value addition • Regulated sectors by commodity boards Publicstandards Privates standards
  62. 62. ECDPM Page 62 Example of Coffee 0 50 100 150 200 0% 20% 40% 60% 80% 100% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Exports($USmillion) Share(%) Export to OECD (LA) Export to EU (LA) Export to US (LA) Share to OECD (RA) Share to EU (RA) Share to US (RA) 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total value and share of Tanzania export of coffee to OECD Share of Tanzania in OECD total coffee import Note : RA=Rigth Axis, LA = Left Axis Source : UNCOMTRADE 2014
  63. 63. ECDPM Page 63 Traditional exports crops access to OECD • Standards are realities in traditional export crops • But, they are not major barrier to access OECD market • Other factors are major constraints to the development of these sectors • Domestics policies • Low value addition (but why?) • Lack infrastructures and low productivity • Instead private certification offer the opportunity : • to expand trade and access niche markets (coffee and tea) • earn ‘decent’ prices (fair trade) • In the medium term, private standards could become majors challenges (carbon footprint, etc.)
  64. 64. ECDPM Page 64 NTM and Non-traditional exports crops Fish and horticulture Fish • EU bans on lake victoria fish • Microbiological standards • Pesticide residue limits • Quality attributes • Packaging standards Flower • Plant material quarantine • Phytosanitary certification • Pest risk analysis • Fumigation requirements Fruit, vegetable and spices • Pesticide residue limits • Contaminants in foodstuffs • Quality attributes • Labeling requirements • Packaging standards Several private standards, food safety, social, sustainability and environmental : GlobalGap, BRC, Fair Trade • Emerging sectors with large potential (horticulture) • Important for export diversification • Regulated sectors by boards and GoT Publicstandards Privates standards
  65. 65. ECDPM Page 65 Example of Fish Figure 18: Total value and share of Tanzania export of fish to OECD Figure 19: Share of Tanzania in OECD total fish import Note : RA=Rigth Axis, LA = Left Axis Source : UNCOMTRADE 2014 0 50 100 150 200 0% 20% 40% 60% 80% 100% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Exports($US million) Share(%) Export to OECD (LA) Export to EU (LA) Export to US (LA) Share to OECD (RA) Share to EU (RA) Share to US (RA) 0.0% 0.1% 0.2% 0.3% 0.4% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Share of Tanzania in OECD total fish import Total value and share of Tanzania export of fish to OECD
  66. 66. ECDPM Page 66 Note : RA=Rigth Axis, LA = Left Axis Source : UNCOMTRADE 2014 0 5 10 15 0% 20% 40% 60% 80% 100% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Exports($USmillion) Share(%) Export to OECD (LA) Export to EU (LA) Export to US (LA) Share to OECD (RA) Share to EU (RA) Share to US (RA) 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.1% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total value and share of Tanzania export of vegetables to OECD Share of Tanzania in OECD total vegetables import Example of Vegetables
  67. 67. ECDPM Page 67 • Non-traditional sectors face high public and private standards • They are major barriers to market access, especially by small producers and exporters • Limit the (rapid?) expansion of these sectors (horticulture) • Other factors are also constraints to the development of these sectors • Domestics policies (slow but increasing support to these sectors-horticulture) • Lack infrastructures (cold storage, high transport cost, etc.) and low productivity • Certification offers access to OECD market but requires high cost • Small farmers are locked out of export market Non-traditional exports crops access to OECD Summary
  68. 68. ECDPM Page 68 Technical assistances to Developing countries The SPS agreement mentions, “members shall take account of the special needs of developing country Members, and in particular of the least-developed country Members” (Article 10.1). Example of initiative • WTO/FAO Standards and Trade Development Facility • Support to Horticulture Development Council of Tanzania • EU /COLEACP Pesticide Initiative Program (PIP) • 11 producing/exporting companies/farmers’ groups supported in Tanzania • Many programs/project from other partners These supports are essential to ensure the compliance of smallhollders But what about the million of non-beneficiary smallholders?
  69. 69. Q&A
  70. 70. MODULE 3 PART 3 Foreign direct investment and land acquisition Overview of FDI and implication for food security in Tanzania
  71. 71. • Out of the total global flows of FDIs in 2011 Africa’s share was 5.4% • This was half of that received by Asia (10.4%), with the European Union being the largest beneficiary (42.9%) followed by USA (14.3%) Global Flow of FDI 5.40% 10.40% 14.30% 42.90% 19.80% 2.00% 3.40% 2% Africa South Asia + East and South-East Asia United States European Union Other Transition economies Latin America and the caribbean West Asia Source: UNCTAD,2013
  72. 72. • financial and banking services (16.8%) taking the lead, • real estate development (15.4%), • primary mining (10.1%) • electricity, gas and water (8.8%), and • motor vehicle assembly (8.7%) Globally, Agriculture is among the least sectors attracting FDI Other Services, 26.8 Finance, 16.8 Real Estate, 15.4 Construction, 2.6 Electricty,Gas+water, 8.8 Primary Mining, 10.1 Coke&Petroleum, 4.7 M-Vehicles, 8.7 Manufacturing (others), 6.2 FDI, % by Sector/Industry Source: UNCTAD,2013
  73. 73. • Generally, the pace of land acquisition globally has been increasing • After an inventory of the media reports on GRAIN blog (farmlandgrab.org), the World Bank (Deininger et al. 2011) reports that between 2008-2009 there have been land acquisitions for 56.6 million hectares worldwide Global Pace of Land Acquisition
  74. 74. • Africa receiving most interest as destination for FDI since 2000 • Friis and Reenberg (2010) revealed that in period 2008-2010, African land deals alone amounted to somewhere between 51 and 63 million ha Interest in Land acquisition by region
  75. 75. • Structural reforms and investment promotion facilities and strategies contributed increase in FDI inflow in last decade • Mining & quarrying, manufacturing, wholesale & retail, accommodation share the largest share while agriculture sector attracted 4 percent of FDI stock • Despite low FDI stock in agriculture sector, Land acquisition has been associated with agriculture FDI in the recent years for production of biofuel crops Mining&Quarrying 28% Manufacturing 21% Wholesale,Retail Trade. Catering&Accommod ation Services 15% Agriculture, Hunting & Forestry 4% Finance Insurance, Retail Estate&Business Services 12% Construction 5% Transport, Storage& Communication 7% Others 1% Community, Social & Personal Services 1% Electricity, Gas & Water 6% FDI inflow in Tanzania 0 1 2 3 4 5 6 7 8 9 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 FDIinflow(USD)Millions Inflow FDI inflow/GDP FDI/GDP(%)
  76. 76. • Weak regulatory enforcement in land ownership and resource poor small holder farmers are at risk of losing livelihoods and food production land due to random sale of their land assets • More than 4 million hectares of land are in the hand of large investors • Local medium and small investors in agricultural land is rising but few land is optimally used Land acquisitions
  77. 77. • About 31 deals concluded for a total of 300 000 ha; OECD countries the major investors • Top countries are : US, Netherlands, UK, Finland, Sweden, India OECD countries firms and Land acquisitions in Tanzania Canada, 1% China, 0% Egypt, 2% EU, 43% India, 6%Kenya, 5% Mauritius, 5%Nigeria, Singapore, 1% Tanzania, 8% Turkey, 2% United States, 25% Source :Landmatrix
  78. 78. What is produced? Biofuels, 56% Food crops, 24% Other, 20% • Food crops : Maize, Rice, Barley, horticulture • Biofuel : Jatropha, Oil palm, Sugar cane • Other : Carbon sequestration Source :Landmatrix
  79. 79. What are links with OECD policies • EU and US biofuel policies? • Implication of land acquisition for local economy and food security? • OECD/EU code for responsible investment in Agricultures
  80. 80. What are the impacts to: • Livelihoods of local communities • Food security • Agriculture production
  81. 81. Q&A ECDPM Page 81
  82. 82. Thank you www.ecdpm.org www.slideshare.net/ecdpm Page 82

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