Enabling smallholders to trade across regions and borders promotes food security and economic growth. Although everyone is calling for exactly that, implementation is still difficult
Prof. Dr. Christine Wieck has been teaching and researching at the University of Hohenheim since February 2018, where she heads the Department of Agricultural and Nutrition Policy. She is a member of the Task Force Rural Africa, an independent expert group of the European Union. Previously, she spent two and a half years working as a political consultant for the German Society for International Cooperation (GIZ).
Not just since the Malabo declaration has regional agricultural trade been high on the agenda of African countries. In the declaration, African states declared their intention to triple intra-African agricultural trade by 2025. The recent political agreement on establishing a free trade zone across the continent is cause for hope for regional integration in Africa.
After all, trade in agricultural products is an important source of income generation for most small farmers and the agri-food industry.
Regional trade in agricultural products - i.e. between neighbouring countries or within a region such as West Africa - helps to balance seasonal production fluctuations and regional bottlenecks caused by extreme weather and climate change.
This increases food availability and variety, and helps to reduce price volatility, keeping food prices affordable.
This in turn helps to achieve global sustainable development goals, to eliminate hunger and malnutrition and to strengthen the livelihoods and income prospects of people in rural areas.
Trade in agricultural products generally takes place when buyers and sellers agree on the quantity, price and quality of a product. In the field of staple foods in particular, there are still many opportunities for development, but also great challenges.
Along with the perishable nature of many products, a lack of packaging options and of cooling equipment means that potentially attractive trading opportunities often fail.
Unlike "cash-crops”, which are mostly destined for export, regional agricultural trade in basic foodstuffs is mostly small-scale, often informal and often challenging with regard to transportation and border crossing. Along with the perishable nature of many products, a lack of packaging options and of cooling equipment means that potentially attractive trading opportunities often fail, with losses occurring during transport. This often makes it cheaper to import agricultural products, especially in coastal regions.
This is also reflected in the fact that regional agricultural trade in Africa has not achieved the growth rates that could be expected in comparison to other regions of the world.
For instance, according to a study of the International Food Policy Research Institute (IFPRI), only six percent of regionally traded agricultural products were also regionally produced in the Western African ECOWAS region, measured by the value of the products. The remaining regionally traded agricultural products were imported from other African and non-African countries. The figures look slightly better for the COMESA trade zone in Central and Southern Africa, with regional produce accounting for 20 percent of regional trade, and 42 percent for the Southern African SADC. But even here, that is less than half of the traded products.
In terms of product value averaged across Africa, 15 percent of agricultural products are traded regionally in Africa, the remainder being exported mainly to Europe and other emerging and developed nations. A World Bank study from 2011 comes to a similar conclusion: it states that only about five percent of the grain imported by African countries is also produced in Africa.
These very small trade volumes are closely linked to the still very high trading costs for agricultural goods. For example, a joint OECD and WTO study shows that trading costs for agricultural goods in developing countries are on average twice as high as for processed goods.
However, not only the cost of cross-border trading is high: the cost of domestic trade - including for producers - can often be extreme. 50 percent of non-tariff measures often associated with (trading) costs are enforced by one of the countries. For example, the World Bank report shows that for trucks carrying staple foods, crossing the border between Chad and Niger costs the same as an additional 600-kilometre trip. However, the report also emphasises that the "first mile" - from the smallholder to the nearest market - is often the most costly.
Infrastructure in rural areas, i.e. agricultural production areas - is often poorly developed, which increases transport costs and losses, and prevents the connection of agricultural production areas to the urban regions and cities where demand is rising. These do not need to be the often cited “megacities”: the demand for food is also growing steadily in small and medium-sized cities.
The cost of domestic trade - including for producers - can often be extreme.
Recent estimates by the IFPRI, the OECD and other research institutions show that households in African countries now buy about half of their food in stores. That’s why the market connection and a functioning infrastructure are so important.
Not only transport within a country needs attention: there are still many obstacles to cross-border trade between neighbouring regions. In this context, the regulatory and administrative framework is of particular importance. Trade facilitation measures, customs clearance, veterinary checks at borders and the harmonisation of rules for trade in food are important to support regional agricultural trade.
The World Food Programme is one of the most important staple food retailers in Western Africa. In practice, however, there are great problems in obtaining the often necessary export licenses or quality certificates, leading to delays and high transaction costs.
In Zambia, each vehicle carrying agricultural products requires a permit that costs six US dollars. To obtain the permit, traders must also provide other valid documentation, for example phytosanitary certificates, which are often arbitrarily issued. Corruption and bribery therefore generate massive transaction costs for traders.
This problem is illustrated by an anecdotal example from the Congolese border. Here, an egg trader had to pay 1500 Congolese francs and four eggs in bribes to obtain all the certificates and permits necessary to export his goods.
Regional agricultural trade faces many problems that reduce the competitiveness of regional products and limit their availability.
Small traders usually account for the majority of informal trade. There are good reasons for that: In the border area between Zambia and DR Congo, informal small traders pay 40 percent more bribes per tonne of traded goods than wholesalers. A World Bank study found that these retailers would pay 76 percent more customs fees than the wholesalers if they participated in formal trading. This shows that there is virtually no economic incentive for small traders to enter into formal trade. Another case study analysed which costs are incurred by the lack of harmonisation in SPS rules. According to estimates, this increases the cost of staple foods in Africa by 13 to 15 percent.
All these examples show that regional agricultural trade faces many problems that reduce the competitiveness of regional products and limit their availability.
Political declarations promoting regional and intra-African trade are therefore to be welcomed, while much remains to be done in practice and at the African border crossings.
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A contribution by Heike Baumüller, Christine Husmann, Julia Machovsky-Smid, Oliver Kirui, Justice Tambo
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A contribution by Jes Weigelt and Alexander Müller
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A contribution by Kerstin Weber and Brit Reichelt-Zolho (WWF)
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Double interview with Tony Rinaudo and Volker Schlöndorff
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Chancellor Merkel has begun an ambitious European political programme: Striving for compromise in budget negotiations, an orderly Brexit as well as an appropriate response to the corona crisis. Unfortunately, one of her positions that she previously held is nowhere to be found: Africa's prosperity is in the interest of Europe.
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A contribution by Nadine Babatounde and Anne Floquet (MISEREOR)
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A contritbution by Essa Chanie Mussa (University of Gondar)
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A report by Bettina Rudloff and Annette Weber (SWP)
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A report by Alexander Müller and Jes Weigelt (TMG)
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A contribution by Michael Brüntrup (DIE) und Daniel Tsegai (UNCCD)
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A contribution by Dr. Karin Gaesing and Prof. Dr. Frank Bliss (INEF)
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Interview with Paul Newnham, Director of the SDG 2 Advocacy Hub.
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An Interview with Francisco Marí (Brot für die Welt)
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A Contribution by Emile Frison and Nick Jacobs (IPES-Food)
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A Contribution by the Forestry Research Institute Nigeria
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A Contribution of the 'Initiative for Sustainable Agricultural Supply Chains' (INA)
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New insights on trade and value addition in the rice sector in West Africa
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A contribution by Prof. Dr. Anna-Katharina Hornidge
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A Contribution by Dr. Fatima Olanike Kareem and Dr. Olayinka Idowu Kareem
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A contribution by the Global Donor Platform for Rural Development
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Chancellor Angela Merkel in the Podcast of the Federal Government
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A Contribution by Emmanuel Atamba & Larissa Stiem-Bhatia
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A contribution by Dr. May Hokan and Dr. Arnulf Köhncke (WWF)
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The soybean is a natural crop that can be used to make a lot of food. So, Tata Bi started a small processing business first on her own, then with a few other women, which provides the women with an additional source of income year-round besides selling the soybeans.
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A Contribution by Adrian Muller, Catherine Pfeifer and Jürn Sanders (FiBL)
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Stefan Liebing is chairman of the Africa Association of German Business. The manager calls for a better structure of African farms. Jan Rübel asked him about small farmers, the opportunities for German start-ups and a new fund.
Why aren’t bars of chocolate made where cocoa is grown? Author Frank Brunner analyses the industry’s fragile value chain from the plantation to the supermarket
Time to dig deeper: We can only benefit from technical progress if we have a solid legal framework for everybody. But so far, none is in sight - in many countries. Instead, international corporations grow ever more powerful.
What do electrical engineering, telecommunications and agriculture have in common? They arouse the passion of Strive Masiyiwa: Thirty years ago, he started an electrical installation company with $75, later riding the telecommunications wave as a pioneer. Today he is committed to transforming African agriculture.
The Cashew Council is the first international organisation for a raw material stemming from Africa. The industry promises to make progress in processing and refining cashew nuts - and answers to climate change
As President of the IABM cooperative in Muhanga, Alphonsine Mukankusi is not simply focused on the figures. She has learned how to deal with people and how to take on responsibility. At the same time, her work helps her to come to terms with the past
In the tropics rainforests are still being felled for the production of palm oil, meat and furniture. It is high time to act. Proposals are on the table.
At the 8th German-African Agribusiness Forum (GAAF) representatives from business and politics discussed successful investment models to improve living conditions in Africa.
Based on a scientific study by TMG Think Tank, the authors highlight various challenges in the fight against the hunger crisis. The findings show that climate change, conflict and covid-19 are increasing food and energy prices.
The Africa Agriculture Trade Monitor 2022 (AATM) was published by IFPRI and AKADEMIYA2063. The report analyses the short- and long-term trends and drivers of African agricultural trade flows, including regional policies and the role of global markets.
An Artikel by the Initiative for Sustainable Agricultural Supply Chains (INA)
A study published by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) examines the differences between globally traded agricultural commodities and domestic niche products in terms of economic, environmental and social impact on the region of origin. The results provide new evidence to make supply chains more sustainable.
Taking a look at the data (as of February 11th 2022) what the current price hike means for world hunger and what can be done to prevent from another food crisis.
Until Easter 2022, GIZ publishes a new episode every fortnight introducing people who are committed to fair and sustainable cocoa in Côte d'Ivoire and Germany.
The oceans are important for our food supply, but they are overfished. To halt this trend the global community is now taking action against illegal fishing. Journalist Jan Rübel spoke with Francesco Marí, a specialist for world food, agricultural trade and maritime policy at "Brot für die Welt," and others.
The German government is struggling to pass a supply chain law. It is intended to address violations of human rights, social and environmental standards. What would the consequences be for business? A double interview with Veselina Vasileva from GEPA and economics professor Andreas Freytag.
gebana, a Swiss fair trade company, follows the principle of "sharing" with its corporate philosophy: farming families in the Global South participate directly in the sales of their online shop. Caroline Schaar, Marketing at gebana, explains the company's approach.
With the annual topic "Earth’s well, all’s well!", Fairtrade Germany is focusing on the concept of agroecology at all levels - and is thus taking the next step towards achieving greater global sustainability. At the Green Week trade fair, Fairtrade Germany will show how this can be achieved taking the cocoa supply chain as an example.
Many of ALDI SOUTH Group supply chains begin in the Global South. How does the food retailer assume its responsibility? Questions for Sally Roach, Senior Manager - International Sustainability Department at the ALDI SOUTH Group.
Countries across Africa coordinate their efforts in the fight against corona by the Centre for Disease Control (CDC) of the African Union in Addis Abeba. Until now, the curve of new infections has been successfully flattened – why? Dr. Ahmed Ouma, Deputy Director, explains the work of CDC in an interview with Tilman Wörtz.
In August, Germany’s development ministry set up a division concentrating on One Health topics. Parliamentary State Secretary Maria Flachsbarth on knowledge gaps at the human-animal-environmental interface, the link between One Health and food security, and lessons learnt from previous pandemics.
Financial innovations can prevent a crisis turning into a catastrophe. The livelihoods of people in affected areas may well depend on intervention before a crisis – and on risk funds.
Innovation is the only way to end hunger worldwide by the deadline we have set ourselves. The secret lies in networking and sharing ideas – and several initiatives are already leading by example.
After four years of Donald Trump in the White House, it is time to take stock: What policies did the Republican government pursue in African regions? And what will change in favor of Joe Biden after the election decision? Here is an evaluation.
The COVID 19 pandemic is hitting developing and emerging countries and their poorest populations particularly hard. It is important to take countermeasures at an early stage. Companies in the German agricultural sector want to make their contribution to ensuring the availability of urgently needed operating resources.
Corona makes it even more difficult to achieve a world without hunger by 2030. So that this perspective does not get out of sight, Germany must play a stronger role internationally - a summary of the Strategic Advisory Group of SEWOH.
What contribution does development cooperation make to conflict prevention? What can it do for sustainable peace? Political scientist Karina Mroß talks to Raphael Thelen about post-conflict societies and their chances for peaceful development.
Agnes Kalibata, AGRA president since 2014 and former minister of agriculture and wildlife in Rwanda, is convinced that Africa's economy will only grow sustainably if small-scale agriculture is also seen as an opportunity.
From a circular food system in Rwanda to functioning cooled transports in Kenya: The lab of tomorrow addresses development challenges such as preventing food loss and waste
In Zambia, innovative approaches are used to address the problem of post-harvest losses in the groundnut value chain. GIZ's Rapid Loss Appraisal Tool (RLAT) can help to develop more such approaches.
The climate crisis fuels world hunger. What needs to change in the global fight against hunger, and which role plays humanitarian aid in international development cooperation?
In March 2022, the virtual conference ICTforAg summons leading actors in the agrartechnology and food sector from low- and middle-income countries to exchange ideas advancing resilience, nutrition and agriculture-led growth.
When women have control over the resources of a household and manage the income, it usually leads to a more balanced and healthier diet for the family. But often the decision-making power lies with the men. How can this gender inequality be addressed? The GIZ global project Food Security and Resilience provides insights into project work on gender-transformative approaches finances by the Federal Ministry for Economic Cooperation and Development (BMZ).
A Contribution by the Federal Ministry for Economic Cooperation and Development
At the network meeting "Partners for change - Transformation to a food secure, resilient and sustainable future", almost 250 participants from over 20 countries came together to exchange experiences and ideas on the transformation of agricultural and food systems. The final product, joint recommendations to transform agricultural and food systems, can now be read online.
Halfway through the 2030 Agenda, the BMZ invited participants to a network meeting entitled "Partners for change - Transformation to a food secure, resilient and sustainable future". Experts from around the world developed recommendations in a consultation process and then consolidated them in Berlin. A site visit.
A Contribution by Harry Hoffmann (TMG) & Nathalie Demel (WHH)
At the halfway mark of the 2030 Agenda and two years after the UN Food System Summit 2021, a stocktaking moment was held in Rome to analyze the progress of countries on the commitments to action in transforming food systems. Dr Harry Hoffmann, TMG Think Tank, and Nathalie Demel, Welthungerhilfe, were on site and take stock as well.
It takes the joint efforts of diverse actors to achieve a transformative impact on the global food system. Barbara Rehbinder, Scaling Up Nutrition Movement (SUN), discusses four people-centred principles to get closer to this goal.
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