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Do import restrictions really benefit the local poor in West Africa?

2023-04-03

Isabel Knößlsdorfer, doctoral researcher at Georg-August University of Göttingen

Protectionist policies like tariffs supposedly protect domestic producers if they cannot compete with cheaper imported products. Some African countries have therefore opted to impose such import restrictions for a number of products. For the case of chicken imports in Ghana, this study analyses whether restrictions would lead to overall positive or negative welfare effects among households.

Demand for poultry meat is increasing in many places and cannot be met by domestic production. ©ToniEtyang

By Isabel Knößlsdorfer

Isabel Knößlsdorfer is a Docotoral Researcher at the Chair of International Food Economics and Rural Development at the Georg-August-Universität Göttingen. Knößlsdorfer has studied Culture and Society of Africa at the University in Bayreith and for her masters she went to the University of Passau and studied Development Studies. Her research interests lie in Food Security and Dietary Diversity, Inequality and Poverty, Agrobiodiversity and Rural Development.

All contributions

This article first appeared as a news item in Rural21 and is part of a media cooperation between Rural21 and weltohnehunger.org.

Our study draws on data from the 7th round of the Ghana Living Standards Survey (GLSS7) from 2016/2017, a nationally representative household survey with about 14,000 household observations. The data includes information on chicken consumption and production, while distinguishing between consumption of fresh and frozen chicken. Based on market reports and other literature, it is fair to assume that the frozen chicken meat is imported, while the fresh meat is domestically produced. Additional local market price data were also collected in 2016/2017 as part of the GLSS7 and used to compute regional chicken prices.

Descriptive statistics show that around 43 per cent of all households consumed any chicken in 2017. At 36 per cent, frozen chicken consumption is much more common than consumption of fresh chicken (6 %). Around 15 per cent of all households owned chicken, either for the production of eggs or meat. Only 4 per cent sold any chicken during the 12-month survey period. The proportion of households hurt directly by cheap chicken imports is therefore rather small.

Regarding the distribution across rural and urban areas, rural households are more likely to own chicken and to sell any chicken than urban households, where only seven per cent own chicken. Consumption-wise, urban households are more likely to buy chicken from the market – either frozen or fresh – than to consume their own chicken. In both rural and urban areas, poor households are more likely to sell chicken and consume their own chicken than non-poor households. To identify poor households, we used the official poverty line, as defined by the Ghana Statistical Service (2018) for the GLSS7 data. A household is defined as poor if its consumption expenditures are below 1,761 Ghanaian cedi per adult equivalent and year.

In the first scenario, with an increase of the import tariff on chicken from the current 35 per cent to hypothetical 50 per cent, prices for chicken meat would rise by about 11 per cent for imported and 6 per cent for domestic chicken, respectively. In the second scenario, with a prohibitive tariff, prices for imported chicken would increase so much that this market segment would cease to exist, and imports would drop to zero. Prices for domestic chicken would then rise by 34 per cent. These new prices would affect consumption and production of chicken in Ghana as follows.

On the consumption side, only those households who purchase chicken products from the market would be affected. In the first scenario, consumption of imported chicken would decrease by 6 per cent, whereas consumption of domestic chicken would decrease by 3 per cent. In the second scenario, the changes are more drastic, as consumption of imported chicken would decrease by 100 per cent and consumption of domestic chicken by 17 per cent.

While consumption would decrease, as expected, market supply levels among those households that sold any chicken would increase.

In the first scenario domestic chicken sales quantities would increase by 3 per cent. In the second scenario, sales quantities would rise by 17 per cent. Accordingly, average incomes of these households would increase by 22 per cent and 74 per cent in the two scenarios, respectively. While these are large effects, they only affect a small proportion – about four per cent – of all households as the rest are not involved in chicken sales.

As expected, higher import tariffs would lead to welfare losses on the consumption side and to welfare gains on the supply side.

The proportion of households that would gain from additional import restrictions – those who produce chicken – is much smaller than the proportion of households that would lose as consumers.

Thus, the average consumption losses would be much bigger than the average gains from additional sales, meaning that the overall welfare effects of higher import tariffs would be negative. The total negative welfare effects would be much larger with a prohibitive import tariff than with a 50 per cent tariff, as with a prohibitive tariff, the market for imported chicken would cease to exist. Overall effects in both scenarios would still be relatively small. This is true for all household types, poor and non-poor, as well as for those living in rural and urban areas. There are however differences in the scope of gains and losses. It should be kept in mind that the proportion of households selling chicken might potentially increase in the long run with consistently higher market prices.

Non-poor households would suffer more from chicken import restrictions than poor households, as non-poor households in all groups tend to purchase more chicken from the market.

That means they depend on the price of chicken more than those households who consume a larger share of their chicken from their own production.

Therefore, we also express welfare effects relative to households’ total food expenditure. In both scenarios and for all groups of households, the total welfare losses would account for less than 2.3 per cent of total food expenditures. The main reason for this relatively small effect size is that chicken consumption, production and sales quantities are small for the average household in Ghana. For comparison, we also analysed the welfare effects when considering only households that consumed or produced any chicken. In such a case, the welfare effects increase in magnitude, but the direction of the effects remains unchanged. This means that at least in qualitative terms, our results may also hold if chicken consumption in Ghana continues to rise. This is also an important notion for those other African countries where the consumption of chicken meat plays a larger role than it currently does in Ghana.

Given the negative welfare effects of both hypothetical scenarios, additional import restrictions for chicken cannot be considered a pro-poor policy in general. Import tariffs do not seem to be an appropriate way to protect producers of chicken in Ghana from cheap imports, because only a small proportion of households are involved in production and the majority of them are net consumers who would be negatively affected. Targeted support measures, for example through technical assistance or direct income transfers, could be a better strategy. Overall, cheap chicken imports do not seem to be as harmful for poorer Ghanaian households as often claimed, and without access to alternative protein sources, cheap imported chicken products contribute to improved nutrition of income-restrained households. Furthermore, policies to strengthen local infrastructure, technologies, and institutions are better suited to promote sustainable development than import restrictions.

An additional question is also whether it would really make economic sense for countries in Africa to foster a commercial broiler sector for which developing international comparative advantage will be very difficult under current conditions. Fostering other agricultural sub-sectors for which African countries have stronger comparative advantages (including mostly raw and unprocessed products, like cocoa and its derivatives) would probably make more sense economically and socially.

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Five tips to reduce food waste

A listicle against food waste

Whether it's banana bread made from brown bananas, conscious shopping plans or foodsharing, we give you five tips on how to reduce your everyday food waste.

The Case for Fair Fashion

A Contribution by Jan Rübel

On the podcast ‘From the Field to the Shelf’, Marie Nasemann calls for new attempts to promote fair fashion. An evening about burnt returns, filterless washing machines and a lot of room for improvement.

Knowledge about spice production

A listicle regarding spice production

The global trade in spices currently has a volume of over 10 billion euros. But at what price do these spices refine our Christmas cuisine? On closer inspection, aspects of the value chain leave a bitter taste.

Achieving more together – New forms of cooperation for sustainability in the cotton sector

A Contribution by Saskia Widenhorn

Saskia Widenhorn, Head of the Cotton Component in Cameroon and the Sub-Saharan Cotton Initiative at GIZ, reports on the Bremer Cotton Week, which brought together international industry experts. The agenda included supply chain transparency, sustainability and new forms of cooperation between the private sector and partner countries.

David versus Goliath: Consequences of mainstream agricultural export commodities and niche products

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.

Côte d’Ivoire: Sweet Temptation without a Bitter Taste

A Story by GIZ

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.

Fair Trade and Climate Justice: Everything is Conntected

A Contribution of the 'Initiative for Sustainable Agricultural Supply Chains' (INA)

Fair Trade organisations and the Initiative for Sustainable Agricultural Supply Chains (INA) have launched the #ichwillfair campaign during COP26 to highlight the link between global supply chains and climate change.

The Rice Sector in West Africa: A Political Challenge

New insights on trade and value addition in the rice sector in West Africa

Low import tariffs, smuggling activities, unpredictable tax exemptions and weak enforcement of food safety standards: The potential of local rice value chains is undermined in West African countries.

The fight against illegal fishing

A Report

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.

From field to fan shop: how to increase supply

A contribution by Jan Rübel

Organic cotton is extremely popular – but farmers still find it difficult to change their conventional cultivation methods. A new project addresses this dilemma: Bundesliga football teams in Germany are promoting the switch to organic cotton in India. And thereby setting an example.

The Agri-Food Map: An interactive map to explore sustainable agri-food systems

A Contribution by GIZ

The complex interrelationships of the sustainable transformation of agricultural and food systems are not always easy to understand - the Agri-Food Map, an interactive online app, makes the comprehensive relations accessible by providing a wide range of comprehensibly prepared information.

Strengthening the market linkages of smallholders in the face of global supply shocks

A Contribution by Niladri Sekhar Bagchi

The consequences of the Russian invasion of Ukraine have enabled many countries to open up new export markets for their agricultural goods. However, smallholder farms have been largely left out. Drawing on his experience in India, our author gives a brief overview of how this can be changed.

The Principle of Sharing

A contribution by gebana

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.

Nature conservation around the world

A Contribution by WWF

From measures to promote biodiversity in Germany to more sustainable cocoa cultivation methods in Ecuador: WWF works at many different levels. At the Green Week, it will be demonstrated just how multifaceted nature conservation work is and what role each individual's decision plays.

From Coexistence to Collaboration

A Contribution by Initiative für nachhaltige Agrarlieferketten (INA)

The demand for sustainable products and supply chains is constantly increasing. DIASCA is an alliance that works on interoperability of digital solutions in agricultural supply chains through the development of open standards for forest monitoring, farm income and traceability.

The Idea of Coffee entirely made by Women

A Conversation with Allan Mubiru

Allan Mubiru was standing in front of a shelf in Kigali, Rwanda, and discovered a local type of coffee. He took it, tasted it and was thrilled. A story about a grocery shopping trip that became the beginning of a successful business idea.

Coconuts, Digitalization and the Future

An Interview with Ebun Feludu

Female founder Ebun Feludu wants to bring the coconut value chain to Nigeria with her start-up Kokari. In this interview, she explains why she envisions every coconut palm tree bearing its own name in the future and how digitalization can contribute to this.

From the perennial to the catwalk – banana silk as an alternative

A Contribution by Paul Kadjo

The textile industry contributes significantly to environmental pollution as it produces over 100 billion garments every year, resulting in huge CO2 emissions and water consumption. Fashion designer Paul Kadjo uses banana silk as an environmentally friendly alternative to make textile production more environmentally conscious and socially just.

"Farmers are smart"

Interview with Maria Andrade

From the lab to the masses: Maria Andrade bred varieties of biofortified sweet potatoes which are now widely used all over the continent. She sets her hope on the transformation of African agriculture.

One Health – What we are learning from the Corona crisis

A contribution by Dr. May Hokan and Dr. Arnulf Köhncke (WWF)

Due to the coronavirus crisis, the connection between human and animal health has gained new attention. Politicians and scientists are joining forces to propagate the solution: One Health. But what is behind the concept? And can it also guarantee food security for all people worldwide?

The state of food security in Cape Town and St. Helena Bay

A study by Markus Hanisch, Agustina Malvido, Johanna Hansmann, Alexander Mewes, Moritz Reigl, Nicole Paganini (SLE)

Post-Covid-19 lockdown: How food governance processes could include marginalised communities - an extract of the results of an SLE study applying digital and participatory methods.

School Feeding: A unique platform to address gender inequalities

A contribution by Carmen Burbano de Lara (WFP)

Besides the well known impacts of Covid19 lockdowns for the adult population, the associated school closures led to 90 percent of the world’s children with no access to schools. However, school meals are in often the only daily meal for children. Without access to this safety net, issues like hunger, poverty and malnutrition are exacerbated for hundreds of millions of children.

Borderless food security

A contribution by Christine Wieck

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

How do you campaign “Food Systems”?

Interview with Paul Newnham, Director of the SDG 2 Advocacy Hub.

The UN Food Systems pre-Summit in Rome dealt with transforming the ways of our nutrition. How do you bring that to a broad public? Questions to Paul Newnham, the Director of the Sustainable Development Goal (SDG) 2 Advocacy Hub.

African Nutrition - 'Try It at Home'!

A Video Series by Agribusiness TV and GIZ

Share in the taste of African Nutrition – Try it at home! The mini-series showcases traditional, nutritious dishes across the African continent.

Diversity Is the Fundamental Principle to Use

An Interview with Shakuntala Thilsted

A conversation with aquatic researcher Shakuntala Thilsted on the long-neglected nutrition benefits of aquatic diets and the empowering qualities of a sustainable aqua-food systems transformation.

Food security is more than production volumes and high yields

A Contribution by Adrian Muller, Catherine Pfeifer and Jürn Sanders (FiBL)

Taking Biodiversity Focus Areas under production or abandoning lower yielding, more extensive production systems is the wrong approach to mastering the looming global food crisis, say the authors of the Research Institute of Organic Agriculture (FiBL).

Felix Phiri and two decades of Agriculture

A Conversation with Felix Phiri

Felix Phiri has been Head of the Department of Nutrition, HIV and AIDS at the Ministry of Health in Malawi for almost 20 years. A conversation about constants and change.

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Do import restrictions really benefit the local poor in West Africa?

By Isabel Knößlsdorfer

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