PCD Impact Assessment on Food Security in Tanzania
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1 PCD Impact Assessment on Food Security in Tanzania Consultation Workshop Module 2 Economic and Social Research Foundation (ESRF) & European Centre for Development Policy Management ECDPM, 17 September 2014 Dar Es Salaam
2 On the menu today I. Introducing the PCD IA pilot in Tanzania: rationale and history, scope and objectives -Coffee break- II. Module 2: the Tanzania Food Security Profile Rationale State of food and nutrition security Food security System The agro-food sector: characteristics and challenges The agricultural trade profile The policy framework III. Outstanding issues and identifying relevant OECD policies ECDPM Page 2
3 I. Introducing the PCD Impact Assessment on food security in Tanzania ECDPM Page 3
4 Policy coherence for development (PCD) The Rationale Domestic policies of OECD member countries (e.g. agriculture, trade, investment, science, migration) can have a spill-over impact on developing countries, that impact is not necessarily coherent with the objectives formulated under the policy for development cooperation of that OECD country PCD is a conceptual tool aimed at addressing such incoherencies to the benefit of development objectives, e.g. food security ECDPM Page 4
5 For example ECDPM Page 5 Source: OECD, 2014.
6 Prevalent definitions: PCD = EU 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-fold implication: do no harm and beyond: 1. Make sure all policies are development-friendly 2. Ensure the proactive promotion of development objectives in other policies: exploit synergies ECDPM Page 6
7 Prevalent definitions: PCD Diverging interpretations and use of the concept of PCD. PCD IS NOT (only): Coordination with other policies Harmonization with other donors Adjustment of development policy to other policies (it is PC for Development) ECDPM Page 7
8 Measuring PCD = one of the key PCD building blocks ECDPM Page 8
9 Context OECD, EU and Member States have strong commitments to enforce PCD, frontrunners include: NL, SE, FIN, DK 2008 OECD Ministerial declaration confirmed commitment to promote PCD, incl. measuring the effects of OECD members policies on international development objectives. EU 2012 Council Conclusions on PCD ask for a more evidence-based approach, to further improve monitoring, implementation and follow-up. Relevant baselines, indicators and targets should also be developed including for measuring the impact of PCD in a way which demonstrates clear development results. ECDPM Page 9
10 Different ways to monitor PCD Ex-ante check lists and impact assessments of OECD member countries policy proposals Ex-post assessments of OECD policy impact at country-level This is where this research project comes in ECDPM Page 10
11 The project: how did we get here? 2012: OECD asked ECDPM to develop a methodology for country-level impact assessments of PCD on food security July 2013: presentation of a draft toward a methodology Now two pilot projects to apply, test and fine-tune this methodology in: Tanzania (FIN & OECD) Burkina Fasso (SWISS & OECD) ECDPM Page 11
12 Objectives General objective: to develop a methodology for identifying and assessing the impacts (+/-) of OECD policies on food security in individual developing countries Specific objectives: 1. Help OECD DAC members in pursuing their PCD policy objectives through providing evidence for policy change domestically and for programme design at country level (e.g. more information to address trade-offs between internal goals & negative externalities on developing countries) 2. Enable partner countries and civil society to advocate for improved PCD and to address the impacts of incoherencies. ECDPM Page 12
13 The Methodology: how does it look like? 5 key principles: i) stakeholder involvement; ii) deductive reasoning; iii) disaggregation of impact; iv) mixed methods. For a variety of audiences and users: public good Meant to be done relatively quickly and with limited resources. Modular and flexible. No straightjacket that researchers have to follow to the letter. Designed to pick up on the effects of public policies. While acknowledging the effects of other external factors beyond the scope of this study (e.g. Climate Change) ECDPM Page 13
14 A modular, step-by-step approach 1. Getting started: considerations and decisions before launching the exercise 2. The country food security profile: the FS system, determinants and FS situation 3. Establish a route of impact: causal linkages with OECD policies 4. In-country contextualisation and verification of causal linkages > response strategies 5. Communication strategy and follow up
15 Module 1: Getting started Very straightforward: key factors to consider before starting the assessment: What country/ group of countries? Country buy in/ local partners. Team composition. ECDPM Page 15
16 Module 2: Country food security profile Output indicators OECD Policies Other factors (e.g. other policies, Climate change, ) ECDPM Page 16
17 Module 3: Verifying causal linkages The idea is to take the potentially relevant OECD policies, identified in module 2, and to draw linkages on paper of how the impact would be transmitted. Main aim of the module is to make the IA solid from a theoretical point of view Relatively straightforward for some effects (e.g. tariffs), very complicated for others (e.g. agricultural subsidies and price transmission). ECDPM Page 17
18 Module 4: In-country research Verify theory through field research Three aims: ü ü ü Contextualize and further explore the theoretical causal chains developed in module 3 Formulate conclusions. Define response strategy options. - for OECD country policies. - for adaptation/advocacy strategies by local partners. ECDPM Page 18
19 Module 5: communication Messages will differ depending on the targeted audience (NGOs, in country embassies, partner govnts, etc). Communication Plan should formulate -What information is relevant to which stakeholder audience - How to best approach which audience, through which communication channels ECDPM Page 19
20 So, where does this workshop come in? Stakeholder involvement is one of the 5 overarching principles of the methodology: Not an (exclusively) desk-based project Should be a process as much as a study. Inclusive, consultative process per module to enhance chances of follow-up. Today: We present the methodology, discuss initial findings of Module 2 and pick your brains on what could be the potentially relevant OECD policy externalities for analysis in Module 3. ECDPM Page 20
21 Q & A - coffee break - ECDPM Page 21
22 II. Module 2 The Tanzania Food Security Profile -initial findings for discussion- Rationale The food security situation The food security system - The agro-food sector - Agricultural trade flows - The policy framework ECDPM Page 22
23 Rationale Module 2 What? A comprehensive, yet straightforward profile of the country s food security situation and the key underlying dynamics that determine that situation. How? i) Mapping key socio-demographic dynamics of food insecurity ii) Snapshot of the food security system: Agro-food sector; Trade; Should allow to identify key crops, consumption and production patters, trade flows and (N)TBs, price trends, etc. ECDPM Page 23
24 The Food and Nutrition Security Situation of Tanzania ECDPM Page 24
25 The food security situation At national Level: million people undernourished 62 nd out of 78 on the GHI (IFPRI, 2013) Prevalence of undernourishment is improving in the last decade Prevalence of undernourishment (%, 3-year average) Source: FAOSTAT, 2014 ECDPM Page 25
26 Stunted growth: 42.5% > 5yr olds; too short for their age, indicates chronic malnutrition, poor feeding practices and regular intestinal infections. Wasting: 4.9% > 5 yr olds; low weight-for-height, indicates acute malnutrition Underweight: 16.2%; low weight-for-age, indicates a combination of chronic and acute malnutrition (TDHS, 2010) Source: FAOSTAT, 2014 ECDPM Page 26
27 Spatial, temporal and demographic dimensions of food Rain-fed agriculture > hunger is seasonal and climate dependent Two rainfall regimes: i) Unimodal (S, C, W; Dec-April) ii) Bimodal (N, E,NE, N Coast; Sept-Oct & Feb/ March June) - Bimodal zones = more draught prone, but more food diversity - Food shortages (price spikes) most common running up between Oct March Source: Fewsnet, 2014 ECDPM Page 27
28 Source: USAID, ECDPM Page 28
29 At household level: WFP Comprehensive Food Security Vulnerability Analysis (CFSVA, 2012): 8.3% of households (HH) has Poor Dietary Intake (PDI) = insufficient calorie intake and dietary diversity Daily per capita energy intake by food groups, selected households, (CFSVA, ) ECDPM Page 29
30 PDI over-represented: In rural areas (87% of Tanzania s PDI HHs were in rural areas vs. 69% of all Tanzania s households); Among poor HHs (66% of poor dietary intake households fell below the poverty line vs. 28% of all households in Tanzania); Among HHs in which the head worked in the farming sector (82% of PDI HH-heads worked in farming vs. 64% of all household heads); Among households in which the head was unemployed (8.0% of poor dietary intake household heads were unemployed vs. 5.4% of all household heads in Tanzania). In female-headed households - slightly more prone to food insecurity (in 2010/11, 11% of the female-headed households suffered from PDI, compared to 7% of the male-headed households) ECDPM Page 30
31 Food security Situation = outcome dimension Access Availability Utilization Stability ECDPM Page 31
32 Tanzania Food Security System Tanzania agri food sub sector Trade Pattern Regulatory frame work Page ECDPM 32
33 The Agro-food sector ECDPM Page 33
34 Rationale Role of agriculture sector within Tanzania economy Identifying key consumption and production commodities Identifying key characteristics and challenges in production and processing Page ECDPM 34
35 Tanzania Agri food system Crop production takes up the bulk share of agricultural activity and total GDP share, as food and cash crops account for 65% and 10% of the agricultural GDP respectively. Crop production also accounts for about 70% of rural incomes, which largely depend on the production of staple foods. Crops sub sector contributes 17.6% to the national GDP Livestock sub sector contributes 4.6% of the total GDP Fisheries sub-sector contributes about 2.6 percent of the Tanzania GDP (URT, 2013a) Page ECDPM 35
36 Tanzania agri food system cont Share of agriculture sector is declining over time is it structural transformation or lack of agriculture sector diversification and low productivity? Page ECDPM 36
37 Tanzania Agri food system cont Agri-food system is made up of 80% of subsistence farmers producing on ha of land, using rudimentary technologies Tanzania is rich with natural resources, an abundance of arable land (44 million ha), 29.4 million ha potential for irrigation and adequate water sources for both gravity-fed and well-based resources (Binswanger-Mkhize and Gautam, 2010). Indeed it has a potential to become a major exporter of food crops, especially maize and rice, to the East Africa region and the Horn of Africa Widely consumed food commodities are maize, cassava, rice, banana, pulses Low consumed food commodities but important source of diet are meat&milk and fish Page ECDPM 37
38 Production and consumption pattern Cassava has high productivity compared to rice and maize Yields ton/ha Cassava Maize Rice, paddy Page ECDPM 38 Source: FAOSTAT, 2014 But cassava is not highly subsidized compared to rice and maize
39 Livestock production Thousands Eggs, hen, in shell (N) Meat sheep and goat (ton) Milk, whole fresh goat (liters) Meat cattle (ton) Milk, whole fresh cow (liters) Source: MAFC, 2013 Whole milk production from cow is relatively higher than from goat Number of eggs produced is still very low Beef production is below 350,000 tons despite of having more than 18,000,000 herd of cattle Page ECDPM 39
40 Food commodities consumption Crops kcal/capita/day Source: FAOSTAT, 2014 Bananas Cassava Maize Pulses, Other Rice (Milled Equivalent) Wheat Maize consumption is higher than other crops followed by cassava and rice Page ECDPM 40
41 Livestock products Food commodities consumption cont. Domestic supply (tons) Thousands Bovine Meat Eggs Fish Meal Source: FAOSTAT, 2014 Livestock consumption equivalent is high for whole fresh milk than other livestock products in the country Page ECDPM 41
42 Food prices trends Maize Price (USD/MT) Averag Averag Arusha Dar-Es-Salaam Iringa Mbeya Rukwa Tabora Int' Price Despite subsidization of maize production, local maize prices are higher than international prices Page ECDPM 42
43 Rice Food prices.cont 2500 Price USD?MT Average Average Arusha Dar-Es-Salaam Mbeya Morogoro Shinyanga Tabora Int' Price Rice prices similarly are higher than international prices Page ECDPM 43
44 Underlying challenges facing agro food sub sector q In adequate access to improved inputs Tanzanian farmers use fertilizer on average 19.3 kg/ha, compared to 100 and 120 kg/ha in Kenya and South Africa respectively Only 16.8% of households used improved seeds and many farmers retain seed from their prior year cereal or vegetable crop and are therefore less likely to buy new seed every year Page ECDPM 44
45 Underlying challenges facing agro food sub sector q Lack of irrigation infrastructure only 490,392 ha are currently under irrigation while the total potential area for irrigation development is 29.4 million ha. q low level of value addition and storage infrastructure Tanzania exports unprocessed agricultural and livestock products MAFC estimates such post harvest losses at 30% to 70% due to lack of storage and processing facilities for cereals, vegetables and fruits q High inflation of food prices hampers access to adequate food Page ECDPM 45
46 Underlying challenges facing agro food sub sector cont The state of Tanzania s infrastructure for transport connecting major regions has improved but feeder roads to trunk roads and also to railways is relatively poor and forms a major impediment to connect surplus and deficit regions Transport costs for international trade with Tanzania are very high as well, despite its favourable geographic position alongside the Indian Ocean (URT, 2013a). ECDPM Page 46
47 Trade in agricultural commodities ECDPM Page 47
48 Trade in Agriculture Traditional Agriculture exports contribute 13 percent of total export earnings to Tanzania (BoT,2013) These include tobacco, tea, coffee, cotton, sugar, sisal, and horticultural crops (eg vegetables) The main trading partners include India, China, Japan, EU member countries, United Arab Emirates, and USA EU member countries trading with Tanzania depending on specific agricultural commodities Maize and rice are widely traded within the region to DRC, Kenya, and Horn of Africa Page ECDPM 48
49 There has been a general increase in export earnings from cash crops since early 2000s 400 Cash Crops Export Earnings USD Million Coffee Cotton Tea Tobacco Cashewnuts 50 Page ECDPM Source: NBS, 2013
50 Tobacco Tanzania s tobacco sub-sector is a success story in the country s agricultural domain and this success has been facilitated primarily through the introduction of contract farming (ESRF, 2013) It is the leading traditional export, bringing about USD 350 million in 2012 It employs about 70,000 farmers; mostly smallholder farmers Page ECDPM 50
51 90.0% Tobacco attracts good market to the OECD Countries Leading Export Destination blocs for Tobacco 80.0% 70.0% 60.0% Percentage 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% OECD REGIONAL (SADC+EAC) ROW Page ECDPM 51 Source: UNCOMTRADE 2014
52 Belgium and Germany taking the lead Leading Export destination States for Tobacco 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Belgium Germany Netherlands UK Zimbabwe Source: UNCOMTRADE 2014 Page ECDPM 52
53 Tea This is the fifth leading cash crop in Tanzania Employs not less than 50,000 families and Directly or indirectly affects as many as 2 million Tanzanians On average brings about USD 25 million; with recent leap to USD 50 million in 2012 Page ECDPM 53
54 50% Tea Relatively traded regionally Leading Tea Export Destination Partner Blocs 45% 40% 35% Percentage 30% 25% 20% 15% 10% 5% 0% OECD REGIONAL (SADC+EAC) ROW Page ECDPM 54 Source: UNCOMTRADE 2014
55 .Kenya and UK getting the most 45.0% Leading Tea Export destination States 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Page ECDPM 55 Netherlands Kenya Pakistan South Africa UK Source: UNCOMTRADE 2014
56 Coffee Tanzania s second most important export commodity, after Tobacco Accounts for 14% of its agricultural exports and 4% of its total exports during the period More than 90% of the coffee is produced by smallholder farmers and provides direct incomes to some households and livelihoods to 2.5 million people Page ECDPM 56
57 Coffee OECD s favorite 100.0% Coffee Export destination Blocs 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% OECD REGIONAL (SADC+EAC) ROW Source: UNCOMTRADE 2014 Page ECDPM 57
58 30% More than 50 percent going to Germany and Japan Leading Coffee Export destination States 25% 20% 15% 10% 5% 0% Page ECDPM 58 Germany Japan Italy USA Netherlands Source: UNCOMTRADE 2014
59 Cashewnut Constitute only a small share of agricultural production in Tanzania But, represents on average 10% of the country s total agricultural exports. Only marginal shares of the production are consumed domestically Warehouse receipt system has been put in place in 2008; where all cashew nuts produced is to be auctioned via cooperatives at auctions managed by the Cashew Board of Tanzania Page ECDPM 59
60 Cashewnuts thinly traded with OECD Countries Cashewnuts Export destination blocs OECD 1% REGIONAL (SADC +EAC) 0% ROW 99% Page ECDPM 60 Source: UNCOMTRADE 2014
61 India taking it all Leading Export destination states Canada 1% Singapore 2% UAE 1% India 96% Page ECDPM 61 Source: UNCOMTRADE 2014
62 Cotton One of Tanzania s largest export crops after coffee and tobacco Contributes to 24% of the total agricultural exports and 4% of total exports (MAFAP, 2013) An estimated average of ha of Tanzanian arable land is dedicated to cotton production Cotton production takes place in the western zone (Shinyanga, Mwanza and to a lesser extent Mara and Tabora On average 70% of the total cotton lint production is exported ( ) Page ECDPM 62
63 Cotton Little going to the OECD Cotton Export destination blocs 90% 80% 70% 60% Percentage 50% 40% 30% 20% 10% 0% OECD Regional (SADC+EAC) ROW Page ECDPM 63
64 ..Asia taking the most of it Leading Cotton Export destination States 30% 25% 20% 15% 10% 5% 0% Page ECDPM 64 Indonesia China India Pakistan Thailand Vietnam Source: UNCOMTRADE 2014
65 However, there exist Trade Barriers: The most serious NTBs relates to the border administrative procedures such as Border Operating Hours and delays at border posts. (TCCIA) Other NTBs/NTMs are: 1. Existence of several weight bridge stations to neighbouring countries 2. Several police road blocks particularly for food movements and trading across markets 3. Corruption at various administrative sites, weight bridges and police road blocks 4. SPS measures put on horticulture commodities such as carbon footprint issues Page ECDPM 65
66 The policy framework ECDPM Page 66
67 The Policy framework This section of the module aims to: 1. Identify key policies in place guiding agricultural development; 2. Map out the domestic agricultural policy context in which foreign investors and donor countries operate. 3. Provide a better understanding of the effects of domestic policy on agricultural development and food security; v Understanding of the domestic policy context will help to attribute changes in Tanzanian food security and agriculture caused by OECD policy externalities Page ECDPM 67
68 The Policy Framework v Tanzania Development Vision 2025 v Goal:the transformation of the predominantly agriculture dominated with low productivity to a modernized and high productivity one Ø The Agriculture Sector Development Strategy (ASDS) & Revised 2013 Ø Goal: Contribute to the national economic growth, household income, food and nutrition security Ø The Agriculture Sector Development Programme (ASDP) Kilimo Kwanza (Agriculture first): Window for OECD linkages SAGCOT- Pilot model for PPP, Commercial Agric Big Results Now (BRN)- is a delivery and monitoring tool. For ASDP II focusing on sugar, Rice, and maize Ø The (CAADP) TAFSIP Irrigation, productivity & commercialization Page ECDPM 68
69 TANZANIA MAINLAND ZANZIBAR LONG TERM Tanzania Development Vision (TDV) 2025 Vision 2020 MEDIUM TERM National Strategy for Growth and MKUKUTA II F i v e Y e a r Reduction of Poverty (MKUKUTA I) 2010/ / Development Zanzibar Strategy of Growth and 2005/ /10 15 Plan (FYDP) Reduction of Poverty SECTOR LEVEL Agricultural Sector Development Strategy (ASDS) 2001; Revised 2013 PRIVATE INVESTMENT FRAMEWORK Kilimo Kwanza (Agriculture First) Southern Agricultural Growth Corridor of Tanzania (SAGCOT) PUBLIC INVESTMENT FRAMEWORK: Agricultural Sector Development Programme (ASDP) /13; Revised 2014 Agriculture Transformation Initiative Agriculture Strategic Plan District Agriculture Sector Investment Project (DASIP) Agricultural Marketing Systems Development Programme (AMSDP) Rural Financial Services Programme (RFSP) Marine and Coastal Environment Management Project (MACEMP) COMPREHENSIVE AFRICA AGRICULTURE DEVELOPMENT PROGRAMME (CAADP) Tanzania Agriculture and Food Security Investment Plan (TAFSIP) 2011/ /21 Page ECDPM 69
70 Wrap Up! ECDPM Page 70
71 Transmission of OECD policy effects to Tanzania (Direct and indirect) Competition in reg l and int l commodity markets between OECD exports and Tanzanian exports Competition with OECD and RoW commodities in Tanzanian domestic markets Barriers to Tanzanian cash crop and processed food exports (competition in OECD domestic markets) Foreign direct investments in agriculture and related sectors in Tanzania Food assistance ECDPM Page 71
72 Transmission of OECD policy factors in Tanzania Other linkages: Input market linkages, nonagricultural market linkages (access to basic non-food goods and basic services important for maintenance of livelihoods) Policy linkages? Examples: EPAs, WEF-sponsored SAGCOT, quality/geographic labeling (organic cotton), corporate tax policy in OECD countries, etc. ECDPM Page 72
73 Way Forward: Selecting OECD- Tanzania market linkages Where OECD-borne external factors have the most economically significant impacts over extended periods of time? Which OECD-borne external factors can be omitted? Changing int l context: increasing imports/ exports from/to emerging and developing countries ECDPM Page 73
74 Product Prod (t) Cassava 5,462,45 3 Maize 5,104,24 8 Sweet potato 3,018,17 5 Banana 2,524,74 0 Rice 1,800,55 2 Irish potato 1,235,04 1 Beans 1,199,26 7 Cons (kcal/cap/ d) Imp Regio n (t) Imp OEC D (t) Imp RoW (t) Exp Regio n (t) Exp OEC D (t) Exp RoW (t) , ,803 4,050 1,744 65, , , , , ,
75 Product Prod (t) Sugar cane 2,900,00 0 Cons (kcal/cap/ d) Imp Regio n (t) Imp OEC D (t) Imp RoW (t) ,57 0 Exp Regio n (t) Exp OECD (t) Exp RoW (t) Cotton seeds 225, , ,301 1, ,74 0 Tobacco leaves 126,624-1, ,567 90, ,379 Cashew nuts 122, Coffee 33, ,17 5 3,365 Tea 32, ,797 8,462 8,525
76 Way Forward: Empirical challenges Food and nutrition security measurement issues; measurement issues for other variables Geographical disaggregation (disaggregation of impacts); timeframe Aggregation of effects of multiple OECD policies Mixed quantitative-qualitative analysis Need to take into account domestic policies, domestic business environment (incl. regional markets) as well as social and natural environment ECDPM Page 76
77 Thank you Page 77
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