About AGTS 2019
More Trade and Better Trade
Transforming Grain Trade Value Chains for a Prosperous Africa
Grain trade enterprises (such as farmers, aggregators, traders and processors) play an important part of the socio-economic fabric in many parts of Africa. In the Eastern, Southern and the Greater Horn of Africa Region, grain trade accounts for almost half of all food trade. Such trade takes advantage of existing trade opportunities between countries borne out of variations in crop calendars and comparative advantages in production of food grains. Consequently, these enterprises do not just fulfil a business opportunity to generate profits, but actually play an important role in assuring food security, mitigating price volatility and improving access to markets for producers and traders. Arguably, the extent to which countries assure food security for their citizens is intrinsically linked to the extent to which grain trade enterprises can operate efficiently and profitably across the entire value chain.
Unfortunately, grain trade in Sub-Saharan Africa is limited by the relative weakness or absence of systems/modalities for such trade to be conducted in an efficient, orderly and structured manner. This situation is characterised by, among others, weak market linkages for producers, processors struggling for consistent supplies of large volumes of commodities of the required quality, inadequate trade finance, and limited market transparency. These hindrances typically stem from the policy environment, particularly considering that grain trade, particularly across national boundaries, is sometimes unfairly adjudged to be in direct conflict with sustenance of domestic food security and protecting domestic agro-processing industries. This leads to implementation of policies that restrict cross-border grain trade and disrupt the free operation of markets.
Disruption of grain trade has significant implications. Africa’s food import bill is expected to reach US$ 110 billion by 2025 due to dependence of imports as a result of hindrances in trade between countries on the continent. Some estimates indicate that informal trade is more than half of total grain trade as traders circumvent costly bureaucratic process required to engage in formal trade.
Nonetheless, grain trade can actually play an important role to facilitate achievement of socio-economic objectives beyond providing markets for surplus producers. It has been proven in several Jurisdictions within and outside Africa that liberal trade policy, allied with a private sector-led structured grain marketing system supported by availability of timely and accurate market information can deliver food security, investments and jobs in value addition, stimulate economic growth, support climate change mitigation and guarantee market access for grain producers.
Fortunately, some of the building blocks for more and better grain trade in Africa are already in place. Almost all countries in Africa are members of free trade areas or customs unions, while many countries, particularly in East Africa, have harmonised some important instruments for intra-regional food trade, such as food quality standards. Additionally, more than ever, grain trade enterprises are increasingly keen on trading across borders and express greater interest in being connected with one another and being supported to take advantage of cross-border trade and investment opportunities.
The 8th AGTS will therefore look to find solutions for the missing pieces of the grain trade puzzle and attempt to come up with an action plan to deliver more and better grain trade on the continent.
The 8th AGTS will look to find solutions for the missing pieces of the grain trade puzzle and attempt to come up with an action plan to deliver more and better grain trade on the continent.
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