Agricultural Globalization in Reverse: The Impact of the Food Crisis in West Africa

Transcription

1 Agricultural Globalization in Reverse: The Impact of the Food Crisis in West Africa by John M. Staatz, Niama Nango Dembélé,, Valerie Kelly, and Ramziath Adjao Department of Agricultural, Food and Resource Economics Michigan State University Geneva Trade & Development Forum Crans Crans-Montana, Switzerland September 17-2, 28 The Issue Soaring prices and export bans by Asian and West African exporters are driving many countries away from trade-based food security policies. This globalization in reverse raises serious questions about how food security can be achieved in the region, and at what cost.

2 The Context Importance of trade in West African countries food security strategies 4 types of countries Chronic importers Exporters that became importers Staple food exporters Importers & exporters Source: Web Atlas on Regional Integration in West Africa The Context Regional organizations promoting trade & economic integration: ECOWAS UEMOA CMA/WCA CILSS CMA/WCA CILSS ECOWAS UEMOA Recent reversals of regional trade reforms dating from the 197s

3 What triggered the change? Demand-driven driven soaring prices consumer unrest Food Other goods including fuel & fertilizer FCFA/kg Retail Price of Millet and Local Rice in Bamako (Mali) Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan- Jan-1 Jan-2 Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Jan-8 Millet Local Rice Source: Graph prepared by authors using data from OMA and AfriqueVerte bulletins Export bans Asian exporters West African exporters Motivation Inflation 12 in Sahelian Countries of UEOMA Percent Burkina Mali Niger Senegal Percent Inflation 12 in Coastal Countries of UEOMA Benin Côte d'ivoire Togo Source: Complied from UEOMA inflation rate data for 12 month periods ending in May of each year. Policy responses Price-reducing reducing strategies Consumer subsidies Price controls Import tax exemptions Export restrictions Increase national production New agricultural investments Input subsidies Safety-net programs

4 Price-reducing reducing strategies Import tax exemptions Limits on effectiveness in lowering prices Reduces government revenues Export restrictions Reduce regional integration Reduce production incentives in the restricting countries Spatial Price Differentials for Maize: Sikasso (Mali) - Niamey (Niger) 8 7 FCFA/kg Jan Feb March Apr May June July Aug Sept Oct Nov Dec Export restrictions Changes in grain trade volume (27/8): Mali (Nara) Mauritania* -38% Mali (Sikasso( Sikasso) Côte d Ivoired -27% Mali (Sikasso( Sikasso) Niger (maize) +174% Mali (Sikasso( Sikasso) Senegal (maize) +221% Burkina (Kantchari( Kantchari) Niger +3% * Prices in Mauritania fell due to subsidies on wheat products and rice from overseas.

5 Export bans: Like a badly designed & implemented export tax Push production from low-cost to high- cost regions Raise transaction costs of trade Cost unpredictable to traders Tax flows into private pockets rather than public coffers 4 possible strategies for the future 1. Increased national self-sufficiency sufficiency 2. Regional protected trade zone 3. A WTO-style, open-trade approach 4. Bilateral agreements within the context of regional economic communities

6 Questions to debate 1. Can trade policy protect the poor s s access to food without undermining production incentives? 2. What policies changes are needed at the national and regional level to attract private investment into agriculture in West Africa assuming an enduring high-price environment? 3. What are the appropriate policy responses for West Africa to the risk and uncertainties in the global food market created by export bans? 4. Is it possible to have rule-based food policy decision making in West Africa? Empirical questions: What we don t t know 1. How willing are consumers to substitute regionally produced foods for imports? 2. To what degree have the higher prices been transmitted back to farmers? 3. How will comparative advantage evolve within the region and between the region and the rest of the world? 4. What are the major producing basins for staple crops in the region and what are their likely supply responses? 5. Which among the technologies now available on the shelf are most likely to increase regional food supplies quickly? 6. What are the food assistance programs to the poor that are most compatible with improved production incentives?

7 Thank you for your kind attention Merci de votre aimable attention Evolution of Petroleum and Urea Prices Petroleum Average Crude Price ($US/barrel) Urea Price Trends: April 23 to April 28 $US/barrel Jan- 8 Jan- 7 Jan- 6 Jan- 5 Jan- 4 Jan- 3 Jan- 2 Jan- 1 Jan- Jan-9 9 Jan-9 8 Jan-9 7 Jan-9 6 Jan-9 5 Source: Graph prepared by the authors using data from IMF IFS Source: