Promoting the grain trade in West Africa

  • West Africa

Enhancing intra-regional grain value chains in West Africa will complement the many, often large, initiatives of other agencies that work on the grain trade in the West African region. With a specific focus on maize, sorghum, millet and rice, the project will target farmers, the private sector and governments with a three-step approach to boost outputs from farms and the business around the grain market.

EN Western Africa tableWhy are we doing this?

Urban demand for grains is increasing in West Africa, driven by strong population growth and a fast-growing market. Cereal imports have increased from 12% in the late 1980s to about 20% in 2016, meaning a US$5 billion annual food import bill for the region. This demand presents an opportunity for farmers in the region to increase their earnings and improve their livelihoods.

Local agriculture could, in principle, supply all of the region's grain needs. There is room to expand the area of land under cultivation as only 15% of the potential of irrigable land is currently developed. Various productivity-increasing technologies are also available to increase yields. However, to harness these resources and take advantage of the growing regional market opportunities, two critical needs have to be met. First, the steps linking the farmer to the consumer, known as the 'value chain,' need to be built up, supported by strong institutions and closer connection to agro-industry. Second, despite the adoption of regional trade agreements by both ECOWAS and UEMOA strong trade barriers still exist in the West African food market. These need to be removed.

What are we going to do?

This project will depend on its partners. CTA's interventions will complement and add value to the initiatives of other agencies. With a specific focus on maize, sorghum, millet and rice, the project will target farmers, the private sector and governments with a three-step approach. First, we will identify existing opportunities that farmers have to supply regional grain markets, in the context of changes in production systems (including those caused by climate change) and changes in consumer demand. Then, we will work on improving the systems that inform farmers about market demand. Finally, we will work on strengthening the capacity of farmers' organisations in the region to expand their areas of operation.

Activities

The project will target farmers who have the potential to supply regional markets (through ROPPA), the actors who link farmers to markets (with a set of activities around the development of the West Africa Grains Network, WAGN), the institutions that can support the intra-regional grain trade through AFRACA, and the policies and regulations that may hinder intra-regional grain trade (through ECOWAS and UEMOA).

Implementing organisations 

African Rural and Agricultural Credit Association (AFRACA)
Réseau des organisations paysannes et de producteurs de l’Afrique de l’Ouest (ROPPA)
Technical Centre for Agricultural and Rural Cooperation (CTA)
West African Grains Network (WAGN

 Other key stakeholders Alliance for a Green Revolution in Africa (AGRA)
Economic Community of West African States (ECOWAS)
International Finance Corporation (IFC)
Partnership for Aflatoxin Control in Africa (PACA)
Union économique et monétaire ouest-africaine (UEMOA)
United States Agency for International Development (USAID)  

What are we expecting?

The project will create better conditions for farmers in the region to take part in the grain trade and increase their earnings as they build up their productivity. Farmers' organisations will be strengthened, allowing them to take more responsibility for trading the grain of their members. Operating in the grain trade will be easier as new rules, grades, standards, standard contracts and arbitration mechanisms are established to make transactions fairer. Better support mechanisms, such as market information, warehousing and logistics, financing and electronic trading platforms, will also make work easier for all concerned. It is expected that a regional grain commodity exchange will be developed, which will mobilise the regional grain market. Reduced policy and regulatory barriers will make trading within the region easier. Better access to finance from the central and commercial banks will allow expansion of businesses.

Who will benefit?

• Farmers' organisations
• Private agro-enterprises (including those owned by young people)
• Financiers
• Government policy-makers
• Decision-makers in international organisations and NGOs

What impact will we have?

Through better information and understanding, and through strengthened market institutions, farmers' organisations as well as private entrepreneurs will be able to aggressively pursue opportunities in the regional grain trade, rather than being held back by the present system. The regional grain trade will expand significantly as better national and regional policies take effect, supported by greater engagement by financial institutions in grain trade financing.

How will we sustain it?

Several key agencies will ensure the long-term effect of the project. WAGN, the main 'emerging' organisation, will be able to raise continuing funding from its members. Large private-sector companies will form partnerships with other stakeholders to sponsor activities. A grain information system and other web-based and mobile apps will be able to operate with a clear business model. Once viable delivery models for grain trade finance have been developed, the banks should continue to use them.

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