Enhancing Food Security in Africa Through Implementing the Trade Facilitation Agreement

17 May 2017

Trade-related barriers constitute one of the major causes of food insecurity in Africa. How can the WTO’s Trade Facilitation Agreement help facilitate agricultural trade and improve food security on the continent?

 

Trade in agriculture is remarkably low in most African economies compared to the sector’s contribution to their GDP. The less-developed-yet-complex agricultural supply chains in the region are also challenged by intricate and burdensome import and export procedures. This exacerbates food insecurity in Africa. By ensuring simple and efficient trade in agriculture, the WTO’s Trade Facilitation Agreement (TFA) may provide a solution for enhanced food security on the continent.

As per the UN Food and Agriculture Organization’s (FAO) definition, “food security exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life.” This could be expressed through the four pillars of food security: (1) availability, (2) access, (3) utilisation, and (4) stability.

Food Security is a serious challenge in many African countries. According to the FAO-IFAD-WFP State of Food Insecurity in the World 2015 report, 232 million of Africans were still undernourished during the 2014-16 period, which corresponds to 20 percent of the continent’s population, compared to the 10.9 percent global average and 12.9 average in developing countries.


How can the TFA help improve food security in Africa?

In Africa, one of the main causes of food insecurity, in addition to regional/domestic production constraints and resource scarcity, is the lack of cost-effective and timely availability of food products from international markets. Imports are costly due to the high cost of trade. Higher trade and transaction costs stem from cumbersome regulatory procedures, both at the export and import level, as well as from the uncertainty at destination border points due to a number of non-tariff measures (NTMs) that may require a last-minute application of various standards and, at times, be nearly impossible to comply with by the exporters and importers.

The 2030 Agenda for Sustainable Development clearly asserts a collective responsibility to fully achieve the Sustainable Development Goal 2, which aims to end hunger and all forms of malnutrition by the year 2030. It also commits to the provision of universal access to safe, nutritious and sufficient food all year round. This will require sustainable food production systems, resilient agricultural practices, equal access to land, technology and markets, and international cooperation on investments in infrastructure and technology to boost agricultural productivity. In doing so, the global community needs to focus on Africa, where the prevalence of hunger is more acute, high in proportion, and the recovery potential is low due to a lack of resources and related endowments.

Most African countries do not have food self-sufficiency, thus imports are essential to feed their ever-growing populations. It should also be noted that intra-regional trade is very low in Africa, particularly in the agriculture sector, which is often attributed to the complexity of trading and logistics with neighbouring countries. Agricultural supply chains can be extremely complex and fragmented, particularly in African countries. This is due to multiple factors, most of which could be addressed through the implementation of the WTO’s TFA. Following is a brief overview of the TFA could help tackle these various challenges.

 

Addressing the challenges at borders and customs would greatly help in enhancing food security in Africa. In addition to the aforementioned specific results, there are certain systemic implications of implementing the TFA that would help enhance food security in Africa.

First and foremost, like in all other sectors, increasing the efficiency of logistics (which is a hallmark of the TFA) would result in gains for agriculture and food trade that, in turn, would contribute towards improving food security. Efficient transport and logistics systems, with improved ports and borders connectivity, increases the economic size of markets, which often result in competitive prices. As per estimates of the WTO Secretariat, full implementation of the TFA could result in a reduction of trade costs ranging from 9.6 to 23.1 percent. With an expected average drop of 16.5 percent, Africa is the region that would benefit the most from this reduction.[1]

Secondly, in the particular case of Africa, the access pillar of food security is jeopardised due to low income levels and prevailing poverty on the one hand, and food price volatility and stockpiling on the other. The rent-seeking behaviour of food traders in many countries would be mitigated through the increased availability and competitive prices of food items resulting from the implementation the TFA.

Thirdly, with the enhanced level of information sharing and transparency required by the TFA, there would be less opportunities for red-tape in regulatory and trade administrations. It would allow many new traders, particularly small-scale ones, to enter the international trade of agriculture products, thus contributing to regional food security.

Fourthly, due to the establishment of national trade facilitation committees under the TFA, the public-private interaction would result in better collaboration, particularly in the area of agriculture, leading to a more enabling trading environment.


The TFA’s contribution to the four pillars of food security

The link between trade and food security has been discussed in FAO’s The State of Agriculture Commodity Markets 2015-16. It was observed that while the effect of trade on enhancing food security is contextual, there is a body of evidence that establishes positive contributions of trade in enhancing food security. The very core function of the TFA is to make trade simpler and easier, thus strengthening the ability of businesses and countries to trade and leading to increased volumes of trade. As a result, the TFA would also contribute to improved food security. As Africa ranks particularly low on food production and relies heavily on imports, these positive effects of the TFA would be proportionally higher on the continent than in other food-insecure regions and countries. Following is a summary of how the TFA could help strengthen the four pillars of the food security in Africa.


Availability

By expediting the import and export of goods, especially goods in transit, countries would ensure reliable options to source food from external markets whenever and wherever needed. In the case of Africa, most states are net food importing countries, with huge untapped potential for intra-regional agricultural trade. By promoting expedited and simple import and export, the TFA would enable the region to fully harness the potential of intra-African trade and ensure timely food procurement from external markets whenever required. This would also result in facilitating the establishment of regional agricultural supply and value chains.


Access

The implementation of the TFA would reduce transaction costs and, potentially, ensure consistent food supplies while avoiding supply gaps. This would result in relatively lower prices thus improving access and affordability.


Utilisation

Trade, in general, increases the variety of food products available in domestic markets by adding to the options offered by national production. By addressing bottlenecks at borders and harmonising the application of food-related standards, the implementation of the TFA would thus improve the nutrition mix available in African markets. Presently, a lot of food items may not be imported due to a lack of knowledge and the arbitrary application of sanitary and phyto-sanitary standards, which may result in the loss of perishable products at border check-points. The TFA provisions addresses such concerns through its provisions related to advance rulings, e-certifications, and the expedited clearance of perishable items.


Stability

The lack of stability in food supplies is a very serious concern in many African countries, particularly given the context of natural disasters, protracted crises, and situations of drought or famine in some of the continent’s sub-regions. The stability dimension of food security depends on the availability of food in the first place, but more importantly it requires the ability to fill food gaps in a timely manner. By ensuring efficiency in international trade and reducing the time taken to export and import, the TFA would help ensure that food can be supplied constantly, efficiently, and in a timely manner whenever and wherever needed.


One implementation: Two outcomes

By addressing trade inefficiencies at various stages and reducing bottlenecks at borders, it is possible to significantly increase the sustainability and reliability of agricultural supply chains in Africa, which would help ensure sustainable food security on the continent.

After its ratification by the required number of member states, the WTO’s TFA has come into force and the implementation efforts are in progress. Longer implementation timelines, coupled with the availability of technical assistance, will allow African countries to adopt and implement the required legislative, regulatory, and functional instruments in a way that is in-line with their specific needs. Implementing these commitments would, in turn, make agricultural trade easier and contribute to improving food security on the continent. For these positive results to materialise, it is essential for African countries to put measures that increase the efficiency and simplicity of at-the-border processes at the centre of their priorities, in order to expedite food and agriculture imports and exports. The importance of before and beyond-the-border regulatory infrastructure should not, however, be underestimated, as they also play a key role in providing an enabling environment for food trade.

It is perfectly legitimate to be cautious about agricultural trade, in particular as regards safety standards. Nonetheless, turning a blind eye and having a lacklustre attitude about the potential of trade to ensure reliable food supplies to vulnerable populations may fall short of jurisdictional and ethical legitimacy, despite the fact that maintaining a margin of policy space is also important. The implementation of the WTO’s TFA is a significant opportunity to put in place measures that would improve food security at national and regional levels in Africa, while keeping the required policy space and applying legitimate safety standards.

The views expressed in this article are of author’s own and do not necessarily represent the views of the FAO or any of its Committees/Bodies.

 

Author: Ahmad Mukhtar, Economist, Trade and Food Security, Food and Agriculture Organization of the United Nations.


[1] WTO. World Trade Report 2015. Geneva: WTO, 2015. 

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