Agricultural trade liberalization under Doha: the risks facing African countries

African countries tend to be affected by global agricultural policies in the same way as other economies but with much more severe economy-wide repercussions... The present discussion paper 1) examines the vulnerability of Africa economies with respect to global agricultural trading policies and their induced changes in world agricultural markets, based on the above characteristics; 2) analyzes the efficiency effects within Africa's agricultural sector of world market distortions resulting from agricultural trading policies; 3) illustrates the impact of global protectionism on poverty levels and distribution among rural households in Africa and the implication for the objective of poverty reduction; 4) reviews the options and risks facing African countries in their pursuit of opportunities for greater participation in the global trading system, in particular in connection with the Doha trade agenda; and 5) discusses options for global trade liberalization that would best benefit African economies. The paper argues that the insistence on the part of African countries on Special and Differential Treatment entails much more risks than benefits for their economies. It also indicates that trade preferences have been less beneficial to African economies than usually assumed and at any rate have not been significant enough to compensate African countries for the negative impact of global protectionism. Finally, the paper also disagrees with the widely accepted conclusion that African countries would suffer from liberalization of global agricultural policies because they tend to be net food importers. That conclusion does not sufficiently take into consideration the dynamic long term effects of global policy changes on production and trading patterns among African countries and the potential efficiency effects that would emanate there from.Agricultural policies, International trade, agricultural sector, Protectionism, Doha agreement, trade liberalization, Poverty reduction, Rural households,

Sustaining and accelerating Africa's agricultural growth recovery in the context of changing global food prices:

"Starting in the mid-1990s, Africa embarked upon its longest period of sustained, positive per capita income growth since the 1960s. This growth recovery has made a dent in poverty and holds out hope that a number of African countries may reach the Millennium Development Goal targets for poverty and food security (MDG 1), if not by 2015, then within the following few years. Agricultural growth has been, and will remain, key to reducing poverty and hunger in Africa. To significantly reduce poverty, Africa needs to sustain, broaden, and accelerate its recent growth performance and boost its investments in agriculture. The recent spike in global food prices represents an opportunity that could support further agricultural sector growth in Africa. The unfolding financial crisis, on the other hand, could have the reverse effect, especially if it leads to lower investments in the sector." from author's abstractFood prices, Agricultural growth, economic recovery, Development assistance,

The growth-poverty convergence agenda: Optimizing social expenditures to maximize their impact on agricultural labor productivity, growth, and poverty reduction in Africa

The need to achieve the Millennium Development Goals (MDGs) has raised the profile of social sector investments in Africa and other developing countries. As a result, many African countries are pressured to emphasize short-term concerns related to the symptoms of poverty at the expense of the longer-term needs to raise productivity and incomes, and thereby tackle the real roots of poverty. Because of scarce budget resources, there is a major challenge for African governments in terms of ensuring the necessary consistency of policies and strategies to promote long-term economic growth, raise smallholder productivity, achieve food security, and reduce poverty, while providing the social services that respond to immediate welfare requirements. The main objective of the convergence agenda exposed in this paper is to identify strategies that would allow developing countries to improve the management of public expenditures so as to raise the chances of meeting the income growth and social needs of their populations under tight budget constraints. In this paper we have (1) discussed the terminology used in describing the problem being studied and formulated the assumptions and hypotheses underlying the research; (2) defined a typology of growth–poverty pathways; (3) developed metrics to measure the strength of the relationship between growth and poverty reduction; (4) laid out the theory for the measurement of the degree of convergence of public expenditures on social services, that is, the extent to which they are optimized with respect to their impact on labor productivity and growth; and (5) outlined models for (a) the quantification of social services availability at the local level using a single-score concept, (b) the evaluation of the quality and efficiency of public expenditures in social services sectors in rural areas, and (c) the optimization of public expenditures allocation to maximize the impact on growth and poverty reduction; as well as (6) provided initial evidence proving the validity of the theory of convergence.Poverty, Expenditure, Social services, Convergence, Agriculture, Poverty overhang, Growth deficit, Public investment,

Marketing policy reform and competitiveness

The response of local markets to sectoral and macroeconomic policy changes is a key determinant of the long term impact of policy reforms on reforming economies. In other words, changes in arbitrage costs that are associated with policy reforms as well as the level of integration among local markets exert a strong influence of the economic outcome of reform programs. The objective of this paper is to explore this question theoretically and empirically. A model that can be used to capture the long term process that is involved has been developed and tested using data from Ghana. The model is later applied to analyze the outcomes of further liberalization of groundnut markets in Senegal. The findings highlight the potential cost of failing to pay sufficient attention, when liberalizing domestic markets, to the emergence of a competitive and efficient private distribution sector. The results also indicate that, when state-run processing sectors with monopoly power are involved, effective liberalization of pricing and marketing policies in all likelihood would not yield the anticipated benefits, unless accompanied with efforts to improve productivity and cut unit costs of production in the processing sector.Markets Prices ,Macroeconomics Models Ghana ,

Emerging policies and partnerships under CAADP: Implications for long-term growth, food security, and poverty reduction

The Comprehensive Africa Agriculture Development Programme (CAADP) is one of the main components of the New Partnership for Africa's Development (NEPAD). CAADP is an initiative launched by the African Union Commission (AUC) in 2002 to serve as a continent-wide framework to facilitate faster agricultural growth and progress toward poverty reduction and food and nutrition security in Africa. CAADP seeks to promote policies and partnerships and raise investments in Africa's agricultural sector and achieve better development outcomes. It is an unprecedented, comprehensive effort to rally governments and other stakeholders around a set of key values and principles; create partnership mechanisms at continental, regional, and country levels; promote evidence-based and outcome-driven policy design and implementation; and establish inclusive dialogue and review processes to increase the effectiveness of the development process among African countries. This paper examines the new policy and investment planning and the review, dialogue, and partnership modalities and evaluates their likely impact on future growth and poverty-reduction outcomes.Agriculture, CAADP, Growth, NEPAD, Nutrition, partnership, Poverty,

The theory and practice of agriculture, growth, and development in Africa

Africa's improved growth performance over the last 15 years provides an opportunity for the continent to transit from recovery to structural transformation. This paper reviews the evolution of development theory and practice, the role of agriculture therein, and the pace of structural transformation in Africa over the last 50 years. The evolution has involved shifting roles of industry vs. agriculture and that of government, and the public sector vs. markets and the private sector. Government intervention in favour of industrialization in the 1960s-1970s resulted in the neglect of agriculture, poor growth performance, and a productivity-reducing structural transformation, characterized by an increasing concentration of low productivity labour in the informal service sector. The paper suggests a move away from the dual-economy to a three-dimensional model that pays greater attention to the large informal segment of the service sector. A successful transformation will require accelerated agricultural productivity growth, a modernized informal service sector, and effective industrialization strategies, with balanced roles for government, markets, and the private sector, all supported by country-led, evidence-based strategies exemplified under the Comprehensive Africa Agriculture Development Programme (CAADP)

Spatial price transmission and market integration in Senegal’s groundnut market

The groundnut sector is the largest of Senegal’s agricultural sectors. It has been subject to various degrees of intervention since the country’s independence. Some, including the determination of farm prices by the government have survived the wave of reforms of the 1980s. Groundnut pricing policies have been the source of major transfers from farmers to the groundnut milling industry, which until 2007, was dominated by SONACOS, a publicly owned parastatal. The state was thus a major beneficiary of the transfers. In 2007, the company was privatized and is now privately owned, raising even greater concerns about the distribution of implications of pricing policies for groundnuts. The paper examines the potential ramifications of liberalizing groundnut prices in terms of its impact on prices received by producers and paid by the milling industry. One fundamental question in the analysis is the extent to which local markets would respond to such a move. To answer this question, the paper presents a dynamic model of price formation that uses estimates of spatial integration across local markets to measure the response of local agricultural prices to policy changes. We then apply this model to simulate the impact of liberalizing groundnut prices to allow domestic prices to reflect their international levels. We find that doing so would change prices in the border city of Dakar, which happens to be the central market that determines prices in the local markets of the producing regions of Kaolack and Fatick. We also find that if markets had been fully liberalized when SONACOS was privatized in January 2007, then groundnut prices would have been higher and that the increase in prices would have been passed on almost entirely to producers in Kaolack and, to a lesser extent, to producers in Fatick. Such reforms would have reversed the longstanding discrimination of groundnut farmers. Prices received by farmers in Kaolack over a period of one year would have increased from 352 FCFA/kg to 494 FCFA/kg of shelled groundnuts. For farmers in the Fatick region, prices would increase from 389 FCFA/kg to 474 FCFA/kg.groundnuts, Liberalization, marketing integration, pricing policies, Privatization,

Building capacities for evidence and outcome-based food policy planning and implementation

The Comprehensive Africa Agriculture Development Programme (CAADP) is an Africawide framework for revitalizing agriculture and rural development in order to accelerate economic growth and progress toward poverty reduction and food and nutrition security. This study reviews CAADP and its strategic objectives, key players, implementation modalities, and approach to ensuring evidence and outcome-based policy planning and implementation. The study also lays out CAADP’s common analytical framework at the country level and shares economic modeling results from member countries of the Economic Community of West African States (ECOWAS) in which analysis was conducted to examine agricultural growth and investment options for meeting CAADP growth and expenditure targets and the Millennium Development Goal target of halving poverty. Finally, the paper discusses CAADP’s review and dialogue mechanisms and knowledge support systems that have been put in place to facilitate benchmarking, mutual learning, and capacity strengthening that will improve agricultural policy, program design, and implementation.CAADP, ECOWAS, growth options, MDG 1, Poverty reduction, public expenditure,

Cotton sector strategies in West and Central Africa

Cotton production is truly a success story in West and Central Africa. The region is now the second largest exporter of lint, after the United States, with a world market share of 15 percent. Despite its strong performance in the past, the sector is characterized by several institutional and structural weaknesses that jeopardize its viability in an era of increasing globalization of the cotton industry. The sector's future performance will also depend on the implications of cotton sector policies in major producing countries such as the United States, the European Union, and China. This paper examines how the above factors may affect future growth of the region's cotton industry. It also identifies the changes that are required to enable countries in the region to fully exploit the sector's significant growth potential.Environmental Economics&Policies,Agricultural Research,Markets and Market Access,Economic Theory&Research,Crops&Crop Management Systems,Markets and Market Access,Crops&Crop Management Systems,Environmental Economics&Policies,Economic Theory&Research,Agricultural Research

Trade pessimism and regionalism in African countries: the case of groundnut exporters

Agricultural exports, which have traditionally been the mainstay of African economies, have weakened since the 1970s, giving rise to pessimism among policymakers about the prospects for long-term development of overseas export markets. As a result, policies aimed at encouraging trade between African countries have proliferated. In Trade Pessimism and Regionalism in African Countries: The Case of Groundnut Exporters, Research Report 97, Ousmane Badiane and Sambouh Kinteh look at groundnut trade and its effects on production and marketing in the countries that are members of the African Groundnut Council (AGC): The Gambia, Mali, Niger, Nigeria, Senegal, and Sudan. They investigate related developments on international vegetable oil markets and the potential of regional markets to contribute to the rehabilitation of the groundnut industry in AGC countries. Until the mid-1970s, the groundnut sector contributed 15-40 percent of gross domestic product in AGC countries. With the exception of Nigeria and Sudan, groundnut exports provided 40-90 percent of export revenues during the 1960s and the early 1970s. The share of the rural labor force employed in the groundnut sector varied from 30 to 80 percent in AGC countries other than Nigeria. Between 1961 and 1965, the AGC countries produced 23 percent of the world's groundnuts and had a 62 percent share of world exports of groundnut oil, with the two main exporters, Nigeria and Senegal, accounting for 26 and 23 percent of world exports, respectively.Peanut industry Africa., Oil industries Africa.,