The Network of Farmers' and Agricultural Producers' Organisations of West Africa (ROPPA), the West African Grains Network (WAGN-ROAC) and the African Rural and Agricultural Credit Association (AFRACA) are regional partners of the CTA who share the vision that the modernisation of the grain market has become the key element for increasing the production and processing of grains by guaranteeing the participants that they will be able to sell at competitive prices. The availability of grains is also a strategic factor for the production of poultry feed (poultry farms), livestock feed (livestock farms), fish feed (fish farms), etc.
With the support of the CTA, this conference is a planning tool aimed at bringing together the main actors in the grain value chains, developing a winning strategy, benefiting from the UEMOA-ECOWAS common market and working together to establish market instruments guaranteeing the promotion of agribusiness by means of a better grain market.
The Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA) is a joint international organisation operating within the framework of the Cotonou Agreement concluded between the states of the ACP Group (Africa, Caribbean, and Pacific) and the European Union (EU). The CTA aims to improve food security, increase prosperity and encourage the sound management of natural resources through information, communication and knowledge management, the facilitation and reinforcement of capacities and by providing the agricultural and rural development organisations and networks in the APC countries with greater autonomy. At the West African regional level, the intervention of the CTA is consistent with the regional agricultural policy frameworks of UEMOA and ECOWAS and supports regional organisations such as ROPPA, ROAC and AFRACA, as well as national ones.
- Grain crops play an essential role in West Africa, not only in the agricultural systems, but also in the household food basket. They make a significant contribution to the region's food and nutrition security. Grain crops occupy a fifth (1/5) of the arable and cultivated land in the region and provide part-time work for around 80% of the West African population.
- According to CILSS, the production of grain in West Africa has increased significantly, rising from 16 million tonnes in 1980 to approximately 63 million in 2015. The production volumes of maize and rice increased five-fold and three-fold respectively due not only to a rise in productivity, but also to the significant expansion of the production zones. Overall, despite the variability of the climate observed over the last twenty years, the regions that traditionally show a surplus grain production are still more or less the same (centre and north of Nigeria, Mali and Burkina Faso). Although millet and sorghum are mainly produced in Sahel, maize is predominantly grown in the coastal countries (southern Nigeria, Benin, Togo, Ivory Coast and Ghana). Compared to other grain crops, the production of rice is less concentrated, although four countries dominate production (Nigeria, Guinea, Mali and Ivory Coast).
- Since the 1980s, demand for grain crops in West Africa has increased significantly as a result of three major phenomena: (i) the rapid growth of the population (400 million inhabitants by 2025) due to a profound change in the type of settlement (acceleration of urbanisation), meaning a change of preferences and dietary habits, (ii) the development of the agrifood sector, and (iii) the increased demand for livestock fodder.
- Regional trade in grains has increased over the last thirty years due to the rise in local production and a better connection between the production areas and the urban consumption centres, as well as to the rise in purchases on the international market (Soulé, 2010).
- However, while infra-national transactions are well-developed, connecting the production areas to the major urban markets, regional trade remains below the potential for the region due to the intensification of human demand, agrifood industries and other uses. According to the CILSS and numerous other regional analysts, this is focussed on Niger. Indeed, due to the almost cyclical crises reported by this Sahelian country, Niger has become the leading outlet for cross-border transactions in local grains. Nigeria, followed by Ivory Coast, Ghana, Benin and Togo, constitute the largest suppliers. These imports from neighbouring countries are considered in this country to be the initial rampart for food security in case of crisis, while waiting for food aid (Roger Blein, 2013). Other trade of much less importance takes place between Mali and Mauritania, and between Mali, Burkina Faso and Niger.
- The overall volume of cross-border trade in local grain crops is not known, but involves under 1.5 million tonnes per year, and is mostly comprised of millet, sorghum and maize. Almost two thirds of the grain transactions are between Nigeria and its neighbours (Niger, Chad and Cameroon). They are less significant than the external supplies of wheat, wheat flour and, in particular, rice, much of which is re-exported by some countries to their neighbours or circulates in a transit system within the community space.
- The West African grain market has specific characteristics that reflect the significant trends associated with it.
- There is no doubt that it constitutes the third largest place for intra-community trade in products originating from the region, behind hydrocarbons and live animals.
- It mainly concerns products with very different development potential. In fact, although regional grain production is still dominated by millet and sorghum, regional demand is more oriented to maize (food industry and livestock fodder) and particularly rice. Although demand for rice is growing at a rate of 5.4% per year (AfricaRice, 2013), its production is changing at a rate of only 4.2%. Depending on the years, rice imports represent more than 10% of the total grain production in West Africa.
- Demand (especially urban demand, as almost half of the regional population is urban) is more concerned with better developed products virtually ready for consumption, such as rice and, to a lesser degree, maize. There are not many products processed from millet and sorghum that are in a position to circulate within the region.
- Such a dynamic and characteristic of the grain market constitutes both an opportunity and a significant advantage in terms of expanding the regional market. However, the regional market is still faced with numerous difficulties and challenges, in particular:
- Logistical problems: the age of the transport networks and market infrastructures. In terms of transaction costs, it is much easier to import grains via the international market than from neighbouring West African countries.
- The failure to respect existing regional trade rules and agreements, particularly the trade liberalisation plan, under the terms of which the circulation of raw products is exempt from various fees and taxes. As a result, there are numerous abnormal practices that push up the prices of grain products.
- The lack of harmonisation of grades and standards. The grain market is still dominated by miscellaneous products, meaning there is no possibility of traceability. Worse, the products are sometimes affected by aflatoxin, posing serious problems for public health.
- The lack of strong regional trade support institutions (e.g. market information systems, warehouse receipt systems, commodity exchanges).
- The limited use of information and communication technologies (ICT).
- The low level of organisation of the actors in the structured sector of the market, leaving the market in the hands of traditional networks that are still incapable of significantly influencing national and regional trade policies, and the difficulties of accessing funding for trade.
- The imperfections of the market, characterised by the strong, even volatile, fluctuation of the prices, reflecting the instability of the offer as well as the strong dependence on international markets, especially for rice, wheat and wheat flour.
- With regard to these problems, the regional market has to address a number of major issues to be in step with the demographic, economic, social and environmental changes and transformations experienced by West Africa.
- Meeting the food needs of a population that almost doubles every twenty years. The challenge is to ensure a significant and sustainable increase in the supply of grain products by improving productivity and production. This is a major challenge in relation to the efforts required by the development of certain local sub-sectors, like rice. The efforts of recent years have made it possible to achieve significant progress, though not enough to satisfy regional demand. West Africa still has to import between 30 and 40% of its rice needs, depending on the year. There remains, therefore, a significant issue in terms of transforming grain production systems that have been added to the market over the years.
- Adding value to and standardising grain products in response to regional market trends. This issue requires the promotion of genuine value chains, involving new forms of coordination between the actors in different links and improving the professionalism of the different operators. Improving the competitiveness of the local grains is largely dependent on this.
- The structuring of the market to improve the flow of trade. In spite of the efforts made in recent years by the RECs (Regional Economic Committees) to create a regional stock exchange for grain products and by the professionals (creation of ROAC), the regional market is still driven by traditional networks, without any real influence on the public choices that govern regional trade. From this perspective, the recent actions undertaken by UEMOA and ECOWAS to promote consultation frameworks, especially interprofessional organisations for the rice and maize value chains, may be a credible alternative to the issue of organising the actors.
- Establishing trade policies and incentives aimed at improving trade. This issue involves: (i) the use of a strategy for the effective application of the SLE, (ii) the introduction of an efficient information system for trade opportunities, (iii) the establishment of a suitable funding system enabling economic operators to develop the logistics required for regional grain trading (transport equipment, storage infrastructure, etc.)
II. BASIS FOR THE CONFERENCE
ECOWAS has made the promotion of grain crops one of the principal axes of its agricultural policy. In fact, the Regional Agricultural Policy of ECOWAS (ECOWAP) considers grains, especially maize and rice, to be strategic products guaranteeing food security, or even sovereignty, of the region's populations. ECOWAS and UEMOA have included actions aimed at improving productivity and the development of the regional market in a variety of investment plans to support the implementation of the policies. They have also begun major activities based around certain grain crops, such as rice, which in all the countries benefit from community space associated with national development strategy, and at regional level from a major support programme for national actions. Actions with regard to other grains lack visibility.
In spite of the importance that actors at different levels attach to grains, they have never organised a regional forum addressing the issue of developing the grain product market.
III. OBJECTIVE OF THE CONFERENCE
As an extension of the regional conference "Food Across the Borders", held in January 2013 in Accra by ECOWAS, UEMOA and USAID/E-ATP, this new conference on "Cross-border value chains" is aimed at analysing the challenges, issues and opportunities related to regional trade development.
More specifically, it is aimed at:
- Informing the stakeholders (public decision-makers, economic operators and other professionals) of the changes and other transformations in the grain market and their implications in terms of the public policies to be implemented at both national and regional level.
- Building up experiences and best practices, and proposing ways and means to promote cross-border grain value chains in West Africa.
- Agreeing a roadmap for the implementation, monitoring and evaluation of the Conference's recommendations, including the roadmap for the development and implementation of a "Regional Grain Exchange". The partnership network of the ECOWAS Agricultural Policy will be used to work as a team to implement the Conference's recommendations. The organisations of actors in production, processing, marketing, consumption, and political dialogue could organise their advocacy within this framework.
IV. EXPECTED RESULTS
The following results are expected on completion of the work of the Conference:
- The participants have been informed of the ongoing changes in the regional grain market and have taken on board their policy implications
- The professionals involved in the regional grain trade: producers, processors and dealers, have built up best practices with regard to information, structuring, financing and standardising
- Recommendations aimed at promoting the intra-regional grain trade have been defined in a participatory way and a roadmap has been drawn up for their implementation involving regional and international organisations in partnership with ECOWAS.
V. METHODOLOGICAL APPROACH
The conference is held over three days in plenary session and working groups.
The first day is centred around thematic presentations in plenary sessions to update the level of information of the participants, while clarifying the issues surrounding the regional grain trade and certain possible avenues of solution:
- Session 1: the changes in the West African grain market with two introductory communications (evolution of grain consumption and market trends);
- Session 2: structuring and regulation measures for the grain market: inter-professional approach and regional grain stock exchange approach;
- Session 3: issues relating to the development of cross-border grain value chains: access to financing for production, processing and marketing; grain standards in regional trading; the constitution of Grain Reserves, contractualisation as a means of accessing institutional markets; the aflatoxin problem.
- Session 4: the creation of Market Information Systems (MIS) and the use of innovative tools (ICTs) in facilitating the regional grain trade, accompanied by a "Plug & Play" demonstration by the CTA and by presentations by young innovators in the area of ICTs for agriculture.
The second day concentrates on strategic reflection in groups, with a view to combining the experiences, best practices and proposals of the participants on the main issues identified during the previous day's presentations, which determine or influence the promotion of the regional grain trade in West Africa.
The group projects will cover the following four themes:
- Regional problems of access for producers to the market, quality standards, adaptation to climate change and regional diversification (led by ROPPA)
- Regional problems of storage infrastructures, industrial processing, transport and the cross-border movement of grain products (led by ROAC)
- Problems of access to bank financing, guarantees and insurance for producers, processors and traders (led by AFRACA).
- Examination of a Roadmap for the creation over 5 – 7 years of a "Virtual Regional Grain Exchange", starting with the existing exchange, the Grain Reserves project in progress, the market information systems under construction, the use of ICTs and the development of cross-border value chains
The questions specific to each type of grain (rice, maize, sorghum, beans and pearl millet) will be addressed in a "World Café" format.
The third day of the Conference will be centred around 4 points:
- Plenary session discussion of the working group results and adoption of recommendations.
- Measures to develop the Regional Partnership, such as elements of the roadmap for the implementation, monitoring and evaluation of the Conference's recommendations.
- Adoption of a Final Communiqué of the Conference.
- The closing ceremony followed by a press conference by the organisers.
The afternoon of Day 3 will see the presentation by the CTA of a special event relating to the use of ICTs in Agriculture, with a debate on the outlook in West Africa.
VI. THEMES COVERED
Among others, the following sub-themes will be addressed by the conference:
6.1. Creating a regional political environment to encourage the involvement of the private sector in the grain trade
Numerous studies have identified the different factors behind the high cost of the grain trade across West Africa, and certain political commitments have been made to find solutions to some of them. However, the problem lies in the incompatibility between the political commitments and their implementation on the ground. In order to have a significant impact on the scope and orientation of regional trade in West Africa, the facilitation of the regional grain trade requires changes in the political, legal and regulatory environments at both regional and national level, as well as concrete actions by different stakeholders to reduce post-harvest losses, the problem of aflatoxin being one of the issues to be addressed.
Improving cooperation between the private and public sectors in the main areas of transport and customs could prove to be extremely useful. More efficient partnerships with the private sector (like those created by the 'Borderless Alliance' initiative) to overcome the commercial barriers to regional integration appear to be an essential step. There are excellent opportunities to strengthen undertakings with the private sector in order to develop regional trade and investments in West Africa. The conference will serve as a platform to encourage the creation of an environment more favourable to the private sector, especially with regard to reasonable access to funding and long-term technical support for the regional grain trade. The lessons of East Africa on this particular point will be shared.
This seminar will also analyse how to improve and accelerate the implementation of fact-based policies to help farmers, processors and dealers to comply with the quality and hygiene security standards for the products and to identify the issues they will have to deal with on a daily basis.
6.2. Improving the capacity of trade support institutions in order to promote efficient and stable regional grain markets
Agricultural production and distribution based on the markets, especially integrated regional markets, require institutions that facilitate trade and reduce the risks inherent to agricultural markets. The market support institutions can be identified by their nature and organisational structure and must be suited to the different regional conditions with regard to sustaining the functions of the markets in terms of information and distribution.
The conference will examine the opportunities and challenges related to developing trade support institutions that are both efficient and effective in order to stimulate the regional grain trade in West Africa.
The gulf between extra-regional and intra-regional trade can be filled by establishing suitable trade facilitation bodies that will support the existing trade and investment protocols in the region. Some examples of successes in other African regions will be presented.
The liberalisation of agricultural marketing systems in West African countries has highlighted the need to establish market institutions, for example market information systems(MIS), warehouse receipt systems (WRS) and raw materials exchanges, as these offer a significant potential for improving the functioning of raw materials markets and stimulating regional trade. One decision made during the African Trade Ministers' Summit held in November 2005 in Arusha stipulates that the national governments are obliged to encourage the creation of such institutions.
Market information systems (MIS) have received substantial support in the region at both national level and regional level (via RESIMAO), although there are still too few private sector actors to make proper use of them. One of the challenges is to create feasible trade monitoring services that efficiently meet the needs of private operators, and not only those of the political decision-makers and relief agencies.
As regards the development of warehouse receipt systems (WRS) and raw materials exchanges, the first are currently being developed in a number of West African countries, although no raw materials exchange has yet been created in the region.
On the basis of the technical work carried out and the several consultations with multiple stakeholders in 2014 and 2015, the conference will look at the progress required in the development of a structured grain trade, and in particular the path to follow to create a regional raw materials exchange.
6.3. Using efficient information and communication technologies (ICT)
ICTs are essential to facilitate trade, quite simply because they improve the information about and knowledge of commercial processes.
They also help trade by simplifying, harmonising and standardising the processes and reducing the time and cost related to bottlenecks, as well as improving reliability for all stakeholders involved in trading activities. This conference will analyse the value of ICTs for facilitating trade when properly integrated with broader cross-functional activities by the main stakeholders in regional trade.
Using concrete cases, it will address how ICT can improve the efficiency with which commercial transactions are managed by reinforcing transparency, reducing the cost related to human interfaces, eliminating delays and limiting possibilities for corruption. In addition, the conference will take a detailed look at questions relating to information and knowledge of the commercial processes and the markets available to the enterprises, helping them to manage their consignments of goods more efficiently and enter new markets while limiting the risks involved.
As well as ICT, the participants will discuss ways to make a real reduction in the bottlenecks in the management of knowledge and information in the region and, in particular, the possibilities making the data and information more accessible and better suited, and finally, to move in the direction of more open systems.
6.4. Innovative funding and insurance tools
The sustainable and balanced growth of the grains value chain and the promotion of the regional grain trade are often hampered by the difficult access to funding. While most traditional tools for funding agriculture in Africa have had limited results until now, the innovative funding of the value chain has managed to make a real impact on the ground.
In the funding process of the value chain, the fund-providers use interconnections within the value chain to reduce the risks they incur by granting loans to participants in the chain. This means that the farmers, who would otherwise have no access to bank services (as most of them are women or young people), can access credit before or after the harvest. For example, those farmers who have guaranteed contracts are in a better position to obtain bank loans, or can obtain them directly from the contracting company
However, this instrument is not yet currently used by West African banks, partly because the successful examples have not been widely publicised. Furthermore, the institutions helping the banks to structure and manage the loans on the value chain are few and far between, and the political environment can also be an obstacle.
By using the success of the CTA "Fin4Ag" conference, held in Nairobi in July 2014, as a basis, this conference will study how to use value chain funding in the grains sector and how innovative and effective mechanisms can free up the sector's exceptional development potential, including by the promotion of the regional grain trade.
6.5. Adapting to climate change in the regional grain trade
The surpluses and shortages of grains seen in the different countries are often due to production levels affected by the climate. One of the main goals of the conference will be to contribute to a sustainable grain trade in regional terms within a context of changing climate conditions. During the conference, past information on the orientation and volume patterns of the grain trade between the countries will be used to understand to what degree climate changes influence these trends in the long term and to identify cases in which regional trade has been able to make up for the shortfalls through imports from countries in surplus.
Around 150 participants are expected to attend this conference. It will bring together the main stakeholders concerned by the policies and activities related to the grain trade in the region, i.e. representatives of the private sector (farmers, dealers, millers, transporters, warehouse operators, funders and insurance brokers), political decision-makers, researchers, IGO representatives, Agriculture and Trade managers, fund providers, representatives of civil society and the media.
VIII. PLACE AND DATE
Ouagadougou, BURKINA FASO, 29 November – 1 December 2016.
IX. FORMAT OF THE EVENT AND ORGANISATION
The Conference will present a platform for learning and knowledge exchange, best practices and actions to implement for the main stakeholders in the West African grain trade. A display area will be set up with posters and stands to present best practices, examples of success, tools, materials and information, along with other products of the public and private sectors, as well as organisations from civil society and all continents. Continuous broadcasting and a blog dedicated to the conference will provide updates to an international audience.
9.1. Theme Committee
A theme committee (TC) composed of 6 experts from CTA, AGRA, ROPPA, ROAC, AFRACA, and USAID/TH will supervise the conception and implementation of the conference. These organisations will suggest the participants and the CTA will provide the invitations.
9.2. National Organisation Committee
An Organisation Committee (OC) based in Ouagadougou will be responsible for logistics within the country, relations with the organisations, managers and national media, and for the local organisation of the conference.
The conference will be organised by CTA, ROPPA, ROAC and AFRACA under the patronage of the Ministry of Agriculture of Burkina Faso, under the auspices of sub-regional institutions (ECOWAS, UEMOA) and in collaboration with the partner organisations of the West African Agricultural Policy: West Africa Trade Hub/USAID, AGRA, CSAO/OECD, CILSS, EU, ACP.
A visual identity and other promotional materials will be created for the Conference. There will be promotional activities to arouse and maintain interest in the Conference. The media will also play an important role before, during and after the Conference. The main activities forming part of the media strategy are:
a. A Brochure advertising the conference with logos of the strategic partners,
b. The preparation and distribution of press releases to several journalist networks,
c. Organising press conferences, interviews with experts and political decision-makers, and
d. A short publicity video for the Conference to be broadcast on social networks and some TV channels, such as TV5, Africa24, France24, in some large meetings before the conference),
Social media will be widely used.