Towards%20Equitable%20Agricultural%20Development%20in%20the%20EAC:

1
Towards Equitable Agricultural Development in the
EAC
An Analysis of the Multilateral Trading System

• Fostering Equitable Agricultural Development in
  Africa (FEAD) Project

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Structure of the Presentation

• Agricultural disciplines in the Multilateral
  Trading System (MTS)
• Equitable Agricultural Development
• Towards an Enabling Environment (Opportunities
  Constraints)
• Conclusion and the way forward

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Agricultural Disciplines in the MTS

• The WTO Agreement on Agriculture disciplines
• Market Access
• Domestic Support
• Export Subsidies

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Agricultural Disciplines in the MTS Market Access
Current disciplines Under negotiation
Tariffication of NTMs provided transparency and predictability HOWEVER Resulted in tariff peaks for politically sensitive products Tiered formula seeks to redress tariff peaks Highest tariff rates to receive biggest reduction Developing count. lesser tariff cuts LDCs exempted from tariff reductions Tariff reductions and elimination of tariff escalation for tropical products

Special Safeguard Measures for Developing Countries
STRATEGIC INTEREST OF EAC REGION Would facilitate
value-addition on their agricultural products,
sold at higher prices on world market and
increasing incomes for farmers
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Agricultural Disciplines in the MTS Export
Subsidies
Current disciplines Under negotiation
Progressive elimination of subsidies contingent upon export performance, which account for depressed international prices and market instability Seeking commitments to eliminate export subsidies
General consensus on a 2013 deadline for developed countries to eliminate these subsidies, and a 2016 deadline for developing countries
STRATEGIC INTEREST OF EAC REGION Would guarantee
stable international prices for EAC
agro-products, hence increasing livelihoods
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Agricultural Disciplines in the MTS Domestic
Support
Current disciplines Under negotiation
Reduction commitments on domestic support, except for responses to special circumstances Further constrain domestic support and leave flexibilities to developing countries
green box measures (e.g. domestic food aid) are not distorting, hence not subject to tariff reduction commitments
blue box measures (payments under production-limiting programmes) are not subject to tariff reduction commitments Proposed ceiling to avoid box shifting
amber box measures are distortive and subject to tariff reductions
Members required to notify their domestic support periodically to WTO Enhanced monitoring and surveillance mechanism for domestic support
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The Cotton Issue

• Cotton issue has received specific attention in
  DDA.
• Initially introduced by 4 cotton-dependent
  W.African countries affected by heavily
  subsidised cotton producers in developed
  countries
• Current WTO negotiations aim to
• dramatically reduce these subsidies
• provide development assistance to LDCs dependent
  on cotton

STRATEGIC INTEREST OF EAC REGION EAC countries
are cotton producers with great potential, and 4
would be eligible for development assistance
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An Introduction to EAD

• MTS being an avenue for growth, development and
  poverty reduction
• EAC endowed with great potential in agriculture
• THUS
• Strong need for an enabling environment that
• Harness opportunities in MTS towards equitable
  agriculture development

EAD
MTS
Trade Opportunities
Enabling Environment
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EAD Continued

• Equitable Agricultural Development entails
• Reformed international and regional trade
  disciplines in agriculture
• Increased investment to improve productivity
• Redress of agriculture related trade facilitation
  constraints
• Prioritizing capacity building of small and
  medium sized farmers and traders
• Encouraging multi-stakeholder consultations and
  coordination.

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Reaping benefits from the Multilateral Trading
System
towards and enabling environment for equitable
agricultural development
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Towards an enabling environment Reformed Int.
Trade Disciplines

• Further reforms necessary for equitable
  development
• Tightening of domestic support
• Elimination of export agricultural subsidies
• Meaningful market access (DFQF)
• Enhanced monitoring and survaillance mechanism

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Towards an enabling environment Investment
opportunities the MTS

• Increased market access and value added for EAC
  products will be an incentive for investment in
  EAC agriculture, thereby improving agricultural
  productivity
• To ably harness new market opportunities, the EAC
  agriculture sector will need
• Supporting policy measures
• Sufficient resource allocation
• Supportive business environment

• Investing in the great potential of the EAC
  region in ORGANIC AGRICULTURE could contribute
  immensely to poverty reduction

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Towards an enabling environment Trade
Facilitation the MTS

• Trade facilitation constraints hinder effective
  participation in MTS, with factors such as
• Trade infrastructure constraints (transport
  networks, storage facilities etc.)
• Fragmented and imperfect markets
• Inefficient and cumbersome border procedures
• Redressing these constraints will contribute to
  an enabling environment towards EAD

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Towards an enabling environment Redressing TF
constraints

• A number of initiatives undertaken to redress
  these constraints in the region include

Initiative Assessment
East Africa Trade and Transport Facilitation Project (started 2006) 9 annual growth in goods traded at Mombasa port Annual trade growth gt 20 in Uganda Crossing Uganda-Kenya border is now 15 min (3-5 days before)
The North-South Corridor Project (forthcoming) Will expand markets by linking Eastern and Southern Africa
Standards Trade Development Facility (STDF) Better awareness and resources to meet SPS requirements
Other Aid for Trade and EIF programs Specifically designed for trade facilitation AfT should be additional and access to EIF funding less cumbersome
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Towards an enabling environment Building
stakeholders capacities

• Smallholder farming practices in most EAC
• Agriculture a way of life for self-consumption
  rather than commercial
• Need for capacity building for SMS farmers
• ? Capacity building needs of farmers and
  traders
• - More and better information about the
  potential of trade and trading opportunities for
  them
• - Training in better farming practices for
  improved productivity
• - Information about rules and requirements to
  conform with

STAKEHOLDER INVOLVEMENT IN WTO TRAININGS Governmen
ts should select stakeholders from all sectors to
participate in Training Workshops provided by the
WTO
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Towards an enabling environment Encouraging
dialogue

• Multi-stakeholder consultative forums in
  policy-making processes would ensure
• Reality-linked policies
• Ownership by the society, leading to more
  effective implementation
• Trust-building and knowledge-sharing among and
  between all stakeholder groups

• EAC MULTI-STAKEHOLDER COORDINATION MECHANISM
  would
• Foster mutual learning about utilizing the
  potential benefits of trade policy
• Facilitate better interactions between national
  and international processes

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Specific stakeholder constraints

• Inefficient marketing systems and market
  availability
• No access to financial services
• Reliance on weather conditions
• Poor quality extension services
• Affordability of inputs
• Poor infrastructure (transport, storage,
  irrigation, comm)
• Farmer capability
• Policy frameworks and government actions

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Conclusion

• The MTS presents opportunities for EAD in the EAC
• HOWEVER
• The constraints faced by the agro-sector need to
  be redressed for the region to effectively
  harness the opportunities

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