Thursday, 24 November 2016

Boosting West Africa's regional grain trade through stronger market institutions and enabling policies

The level of intra-regional trade of cereals such as maize, millet, sorghum and rice is lagging way below its potential in West Africa, despite opportunities from flourishing local production and strong demand from growing urban populations. A conference on How to structure the grain trade in West Africa: which market instruments and public policy measures? will examine some of the current constraints to increased intra-regional trade in the cereals sector.

In a region where the population is almost doubling every twenty years, grain crops account for one-fifth of the total cultivated land area and provide part-time work for around 80 percent of the West African population. But despite increases in production from 16 million tonnes in 1980 to 63 million tonnes in 2015, less than 1.5 million tonnes of local grain crops are sold in cross-border trade in the region. Figures for the inter-regional grain trade are lower than imports of wheat, wheat flour and especially rice into the region.

"Modernising the West African grain market is critical to ensuring higher incomes for small-scale farmers, improved food security and a reliable supply of cereals needed for livestock and fisheries feed supply chains," said Michael Hailu, Director of the Technical Centre for Agricultural and Rural Cooperation (CTA), which is organising the event together with the West African regional farmers' organisation (ROPPA), the West African Grains Network (WAGN-ROAC) and the African Rural and Agricultural Credit Association (AFRACA).

A range of barriers prevents local producers from being able to sell at competitive prices. Due to high transaction costs and inefficient logistics, some agrifood processors such as breweries and feed manufacturers prefer to import sorghum or millet from outside the region, rather than source locally.

Bringing together the main players in the region's grain trade, including cooperatives, processors, traders, policy-makers, development organisations and financiers, the three-day regional forum will seek to develop a strategy that can overcome current challenges and take advantage of the common market formed by the West African Economic and Monetary Union (UEMOA) and the Economic Community of West African States (ECOWAS).

High on the agenda will be developing market instruments that can help to organise, regulate and finance the regional grain trade, enabling producers to obtain higher prices, buyers to have a more reliable supply of high quality cereals, and other actors in the supply chain to benefit as a result. As well as examining and sharing best practices for producers, processors and dealers, the conference expects to produce a roadmap for a regional grain exchange.

"Beans and grains such as rice, maize, sorghum and millet are strategic for food security and the rural economy in West Africa," said Souleymane Zeba, CTA Senior Programme Coordinator for West Africa. "However, the current market does not offer farmers a guarantee that they will sell their produce at a good price."

"For farmers and other agricultural producers, grains are their staple supply, helping to ensure the right to food for people in the region," said ROPPA President Djibo Bagna. "However, the current market structure supports a few cash crops, leading to food systems that do less and less to promote the consumption of local grains. Market reforms are needed to establish a balance for sustainable food security."

The conference will examine ways of creating a regional policy environment to encourage greater private sector involvement in the grain trade and improve the capacity of trade support institutions, so as to promote efficient and stable regional grain markets. Use of information and communication technologies (ICTs) and innovative funding and insurance tools will be explored, as will prospects for developing cross-border grain value chains, methods for helping farmers to adapt to climate change and strategies to address aflatoxin - which causes serious problems, both to public health and trade.

Stéphane Gambier, Senior Programme Coordinator, Communications (CTA)

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