Patterns of agricultural trade and policy are changing rapidly. Africa is being squeezed not by formal World Trade Organisation (WTO) negotiations but through the rearrangement of agricultural subsidies in developed countries, changes in trade preferences and Africa’s inability to participate in setting standards. Africa faces the prospect of paying more for the cereals it imports and earning less from its agricultural exports.

Research from the UK's Institute for Development Studies reviews the ‘old’ and ‘new’ trade agendas and implications for food policy and food security in Africa. It examines the likely effects on three groups of Africa’s agricultural exports: traditional products (such as beverages) that are exported to a relatively undifferentiated, liberal world market; other traditional exports (such as beef and sugar) exported to markets heavily influenced by agricultural protectionism; and non-traditional products (such as horticulture) exported to markets characterised to a greater or lesser extent by protectionism.

Sub-Saharan Africa has become increasingly dependent upon imports. Contrary to popular belief, this is not primarily a result of food aid – which has formed a relatively small and declining share of food imports. A significant part of the foreign exchange used to pay for imported food comes from agricultural exports. Any change in either side of the trade equation could affect indirectly the food security of individuals and regions.

The sugar market highlights how importers of Africa’s agricultural exports are set to gain increasing bargaining power. Under the EU-ACP Sugar Protocol countries in the African, Caribbean and Pacific (ACP) group receive a price related to the European Union (EU) domestic price. As each beneficiary of the Sugar Protocol has a fixed quota, Tate and Lyle, the dominant processor and distributor, cannot play one country off against another. This will change when the sugar trade is liberalised under the EU’s ‘Everything but Arms’ (EBA) initiative – allowing all least developed countries to sell unlimited quantities of any product except arms to the EU.

Europe’s public health fears and moves towards more rigorous sanitary and phytosanitary standards (SPS, on  food safety and animal and plant health) also raises new hurdles for African farmers:

• Concerns about pesticide residues are leading European supermarket chains to focus purchasing from larger farms which find it easier to comply with SPS standards.
• Southern African beef exports could be at risk as the EU reacts to the threat of bovine spongiform encephalopathy (BSE) by ranking countries by perceived degree of risk.
• Outbreaks of foot and mouth disease (FMD) in Europe may lead the EU to demand not only the long-established practice of keeping disease-carrying buffalo apart from FMD-free cattle but also extensive certification that small producers would be unable to meet because of the costs involved.

Erosion of Africa’s preferential access to European markets and rising import costs seem inevitable. There may be little that countries in sub-Saharan Africa can do other than to negotiate delays to give them more time to adjust.

The author argues that:

• Standards being imposed have been influenced by agribusiness technical knowledge to suit their convenience.
• Countries where livelihoods and food security are affected by new forms of SPS standard must be assisted to participate as equal partners in scientific discussions.
• Higher standards demanded on the world market and the increased cost of feeding Africans from imports highlight the need for considerably more support for Africa’s agricultural sector.

Despite the publicity given to ‘reform’ of the EU’s Common Agricultural Policy and Doha round of trade negotiations, we are not about to see anything resembling liberal trade in agriculture. EU ‘liberalisation’ aims to sustain European production but to reshuffle the subsidies and taxes to make them less costly to the European budget and more easily defensible in the WTO.

Source(s):
‘Food trade and food policy in sub-Saharan Africa: old myths and new challenges’ Development Policy Review, Overseas Development Institute, 21 (5-6), pp 669-681, by Christopher Stevens, 2003. Full document.
‘Food trade and food policy in sub-Saharan Africa: old myths and new challenges’ in ‘Food Policy Old and New, edited by  Simon Maxwell and Rachel Slater, Overseas Development Institute, pp 119-132, by Christopher Stevens 2004 Full document.

id21 Research Highlight: 20 November 2004

Further Information:
Christopher Stevens
Institute of Development Studies
University of Sussex
Falmer
Brighton BN1 9RE
UK

Tel: +44 (0)1273 678790
Fax: +44 (0)1273 621202
Contact the contributor: C.Stevens@ids.ac.uk

Institute of Development Studies (IDS), UK

Other related links:
'US producers reap cotton subsidies and destroy African livelihoods'

'Common Agricultural Policy: devastating livelihoods in developing countries?'

'Dumping: blocking the trade escape route from poverty?'

'Breaking the WTO logjam: towards enforceable special and differential treatment'

'Dialogue on agricultural trade reform, subsidies and the future of small and family farms and farmers' from ELDIS

'Agriculture in the global economy' from ELDIS

'Stop the dumping!: how EU agricultural subsidies are damaging livelihoods in the developing world.' from ELDIS