Strategic Analysis to inform Agricultural Policy ReSAKSS ECA stakeholder workshop, 11th June, 2012

1. Presented at the
ReSAKSS Stakeholder Workshop on
Strategic Analysis to inform Agricultural Policy
11th June, 2012
Dr. Mary Mbithi

2. Overview of the presentation
1.Introduction
2. Study methods
3. Key findings on protection and market access indicators
4. Conclusions and Recommendations

3. Introduction
 Trade openness, regional integration and food security
 through regional trade integration
 through cooperation in regional initiatives
 which improve availability, access, utilization and safety of food
 The importance of regional trade integration in addressing
regional food insecurity in COMESA (COMESA treaty),
 Cooperation in the field of agriculture
 with the region’s implementation of programmes to enhance
regional cross border trade through its Cross Border Trade Reform
programme.
 COMESA now a Common Market
 Tariffs reduced as a result of the COMESA FTA (14/19 countries
 Some increase in intra regional trade
 However trade in staple foods remains low: -about 12% of taple food
imports

4. Introduction
 Although trade liberalization through COMESA, EAC, and
SADC
 Trade restrictiveness in staple foods still exists in the region.
 Tariff restrictiveness varies greatly from one country to
another and from one product to another
 Ad hoc use of export and import restrictions combined
with non-tariff measures restricts intra-regional trade in
staple foods
 Trade restrictive of staple food, diminishes the gains
expected from the Regional Trading Arrangements (RTA)

5. Introduction
 Objectives of this study
 Compute protection and market access indicators for selected food
staples among COMESA member countries.
 Staple foods analyzed: maize grain, rice grain, dry legumes, live
bovine animals, milk and cream, bovine meat, fish and crustaceans,
tomatoes, maize flour, wheat flour, cassava and onions (12 products).
 Countries analysed
 COMESA member countries (19)
 Burundi, Comoros, Congo D.R, Djibouti, Egypt, Ethiopia, Eritrea,
Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles,
Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
 plus other key staple food trading partners for COMESA member
countries.
 Mozambique, Tanzania and South Africa
 Total 22 countries (COMESA plus)

6. Trade openness in COMESA
….What literature shows
 Analysed average tariff protection at the macro COMESA and country
levels
 Also studies analysed NTBs
 Not analysed intra-COMESA protection at bilateral
level, and at sector/product level
 limited information on existing types of tariff protection
including average tariffs, tariff peaks, and tariff escalation.
 There is also little information on non-ad valorem tariffs of
intra-COMESA trade for various products including food
products, at bilateral level

7. Computing protection and market access
…..Three approaches

8. 1. Reviewed Market Access indicators
 Compares the level of market access of one country into a
given economy with the level of access into a comparator
economy
The key assumption
 Trade is determined by “gravity” (i.e. by the size of an
economy), thus exports to a given market should be
proportional to the GDP of that country.
Data source: COMESA Statistics (COMSTAT): year 2009
or 2008, depending on data availability

9. Estimation of Revealed Market Access (RMA2)
indicators
 Estimation equation:
 i is any of the 12 staple food products
 j is the food exporter (e.g. Malawi)
 k (k1, k2) are the food importing countries (Ethiopia, Kenya)
 E.g. RMA >1
 suggests that the normalized value of exports to Ethiopia of a
particular food product is greater than the normalized value of
exports of the same food product to Kenya,
 implying a greater market access for the specific product exported by
Malawi to Ethiopia than for the same food product in Kenya
 Implying a likelihood of barrier for those products in the Kenya Market

10. 2. Tariff-based protection measures
 Estimated average tariffs and weighted average tariffs for the
12 food products for the 22 countries
 Ranking of average tariffs (bilateral)
 Analysed type of tariffs
 the existence of tariff peaks, tariff escalation and other non-
transparent tariffs, particularly specific tariffs
 tariff data from UN TRAINS was used. Data at Hs 6-digit level
from TRAINS was accessed and analyzed through WITS data
access programme
 Year 2009
3. Non tariffs measures
 Descriptive analysis of Non-tariff Measures (barriers)

11. Key findings

12. Revealed Market Access (RMA)
 Generally there is limited difference in market access
for food products of one country in various markets
 However, in a few cases, there is difference in market
access

13. RMA- South Africa exports to Kenya and Zambia
-wheat and meslin, rice, and wheat or meslin flour, SA may be facing more barriers in Ken than in Zambia
-maize and maize flour, there seem to be more barriers for SA in Zambia than in Ken
SA X to Ken SA X to Zam
Product Product Name RMA (000 US$) (000 US$)
Milk and cream, not
0401 concentrated no 0.0 0.1 374.9
0402 Milk and cream, concentrated or 0.0 18.7 253.8
0702 Tomatoes, fresh or chilled 0.0 0.1 2.2
071220 Onions 0.0 0.0 8.0
1001 Wheat and meslin 0.1 0.1 0.6
1005 Maize (corn) 763.3 64000.0 21.0
1006 Rice 0.2 2.4 3.1
1101 Wheat or meslin flour 0.1 0.1 0.3
110220 Maize (corn) flour 47.9 4.2 0.0

14. -
RMA: South Africa exports to Malawi and Zambia
-For live bovine animals and meat of bovine animals; milk and cream, dried leguminous vegetables and
wheat or meslin flour, there seems to be more market access in Malawi than in Zambia:
-Tomatoes, onions, maize and rice- more MA in Zambia than in Malawi
SA X Mal SA x Zam
Value
Hs code Product name RMA ($000) Value ($000)
0102 Live bovine animals 15.9 97.95 20.69
0201 Meat of bovine animals 114.6 60.52 1.77
03 Fish& crustacean, mollusc 1.0 223.4 783.8
0401 Milk and cream, conc not added sugar 2.40 212.21 296.99
0402 Milk and cream, conc or add sugar 1.44 2920.58 6814.53
0702 Tomatoes, fresh or chilled 0.35 0.51 4.89
071220 Onions 0.96 0.36 1.262
0713 Dried leguminous vegetables, 1.23 54.43 148.06
071410 Manioc (cassava) 0.00 0.893 0.0
1001 Wheat and meslin 0.00 0.06 113435.71
1005 Maize (corn) 0.71 705.40 3327.08
1006 Rice 0.27 54.50 675.70
1101 Wheat or meslin flour 16.26 303.98 62.69

15. Revealed Market Access for Kenya exports to Tanzania and Uganda
- Milk and cream; concentrated or containing added sugar and maize (corn) flour products, Kenya may be facing market
barriers in Tanzania that she does face in Uganda.
-Kenya has better market access to Tanzania than Uganda for meat of bovine animals and milk and cream not containing
sugar and maize.
Ken X to Tz Ken X Ug
Product Product Name RMA $ ‘000 $ ‘000)
0102 Live bovine animals 0.00 0.00 2.32
0202 Meat of bovine animals, frozen 3099.95 747.60 0.17
0401 Milk and cream, conc. not added sugar 2.55 3561.24 989.41
0402 Milk and cream, concentrated added sugar 0.25 1390.25 3925.20
070200 Tomatoes, fresh or chilled 0.00 0.00 5.78
071220 Onions 0.00 0.00 0.20
071410 Manioc (cassava) 0.00 0.00 0.00
1005 Maize (corn) 2.62 2409.10 651.18
1006 Rice 0.00 0.18 360.52
110100 Wheat or meslin flour 0.00 0.00 27.42
110220 Maize (corn) flour 0.39 14.17 25.84

16. 2. Tariff protection

17. Intra-regional protection in agriculture and food, staple foods and
non-agricultural products
-protection still exists: Agri and food more protected, high tariffs exists, specific duty exists
Staple foods even more protected: higher S. ave. tariff, larger prop. Dutiable-
Trade description S W. Ave. Min Max No. of Dutiabl Specific
Ave. Rate Rate Int'l e (%) duty
Peaks (%)
Agri- foods intra- 7.26 10.48 0 75 2048 39.6
regional
4.41
Non- agricultural- intra 4.7 2.7 0 60 8984 25.1 0.03
regional
Intra-regional staple 7.42 28.98 0 75 206 64.0
foods
0.01

18. Average tariffs charged on staple food imports from the region
in 2009
Rank Importer S. Ave. W. Ave. Min Max Dutiable S. Duty
Rate Rate Imports (%) Imports (%)
1 Tanzania 23.70 19.04 0.00 75.00 60.2 0.000
2 Burundi 20.77 2.21 0.00 75.00 8.4 0.000
3 Ethiopia 15.93 10.39 4.50 30.00 100.0 0.000
4 Rwanda 7.87 1.96 0.00 75.00 3.7 0.000
5 Kenya 6.06 46.27 0.00 75.00 93.6 0.000
6 Malawi 4.25 1.07 0.00 25.00 13.5 0.000
7 Madagascar 3.86 1.13 0.00 20.00 9.7 0.000
8 Zambia 2.70 0.34 0.00 25.00 2.3 0.000
9 Sudan 2.13 1.43 0.00 10.00 18.7 0.000

19. Average tariffs charged on staple food imports from the
region in 2009
Rank Importer S. Ave. W. Ave. Min Max Dutiable S. Dutyy
Rate Rate (%) Imports(%)
10 Mozambique 1.57 2.05 0.00 20.00 32.5 0.000
11 South Africa 1.28 2.95 0.00 30.00 28.4 0.000
12 Comoros 1.11 1.34 0.00 5.00 26.9 2.970
13 Mauritius 0.13 0.00 0.00 12.00 0.0 0.000
14 Swaziland 0.00 0.00 0.00 0.00 0.0 0.000
Average 7.42 28.9 0.00 75.00 64.0 0.011

20. Tariff escalation
- exists in meat, wheat, maize and the wheat-related products
Product Product Name S. Ave. W. Ave. Min Max Imports
Hs code Rate Rate Value (US
$’000)
Meat products
0102 Live bovine animals 2.82 2.18 0.00 25.00 13269.4
0202 Meat of bovine 9.44 10.29 0.00 25.00 1113.5
animals, frozen
0201 Meat of bovine 12.25 7.15 0.00 30.01 2182.8
animals, fresh or
chilled
Wheat
100110 Durum wheat 0.71 0.05 0.00 5.00 1112.6
110100 Wheat or meslin flour 16.25 2.07 0.00 60.00 19368.1

21. Tariff escalation
Product Product Name S. Ave. W. Ave. Min Max Value (US
Hs code Rate Rate $’000)
Maize
100590 Other (maize-other 9.77 46.15 0.00 50.00 330979.4
than seed)
110220 Maize (corn) flour 10.43 14.92 0.00 50.00 2606.1
Rice
100610 Rice in the husk 6.54 0.00 0.00 75.00 11601.9
(paddy or rough)
100620 Husked (brown) rice 13.33 0.03 0.00 75.00 2086.6
100640 Broken rice 17.37 1.62 0.00 75.00 3159.9
100630 Semi-milled or wholly 17.80 0.37 0.00 75.00 12898.5
milled rice,

22. Intra-COMESA staple food tariffs (2009)
-the most protected staple foods in intra-COMESA trade based on simple average tariffs are milk and cream, wheat or meslin
flour, and meat of bovine animals while the least protected are wheat, rice and cassava
S. Ave. W. Ave. Max Dutiable S.Duty Imp
Product Name Rate (%) (%)
Milk and cream, not conc /added sug 13.18 8.86 60 43.4 0.00
Wheat or meslin flour 12.36 7.16 60 70.7 0.76
Meat of bovine animals fresh/chilled 12.25 10.29 25 79.8 0.00
Milk and cream, conc or added sugar 11.03 4.13 60 42.5 0.02
Meat of bovine animals, frozen 9.44 7.15 30 60.5 0.00
Onions and shallots 8.88 4.04 27 80.9 0.00
Tomatoes, fresh or chilled 7.06 0.71 27 50.8 0.00
Maize (corn) 5.75 24.74 50 56.3 0.00
Fish & crustacean, mollusc 4.99 0.77 25 6.7 0.00
Live animals 4.81 1.34 30 21.0 0.00
Manioc (cassava) 3.89 1.12 25 11.1 0.00
Rice 3.08 2.09 15 20.9 0.29
Wheat and meslin 2.57 0 35 0.0 0.00

23. Some bilateral tariffs

24. Intra-COMESA imports of milk and cream, not
concentrated nor containing added sugar (0401), 2009
Importer Exporter Simple Weighted Min Rate Max Rate
Average Average
Burundi S. Africa 60.00 60.00 60.00 60.00
Madagascar S. Africa 20.00 20.00 20.00 20.00
MozambiqueS. Africa 5.00 4.36 0.00 10.00
MozambiqueZimbabwe 5.00 5.00 0.00 10.00
Rwanda Congo, DR 60.00 60.00 60.00 60.00
Tanzania S. Africa 60.00 60.00 60.00 60.00
Tanzania Egypt 60.00 60.00 60.00 60.00
Zambia S. Africa 15.00 15.00 15.00 15.00

25. Bilateral tariffs on dried legumes (2009)
Importer Exporter S. Ave W. Ave. Min Max Dutiable
Rate Rate (%)
Burundi South Africa 25 25.0 25.0 25.0 100
Kenya Ethiopia 2.5 2.5 2.5 2.5 100
Kenya South Africa 25.0 25. 25.0 25.0 100
Madagascar South Africa 20.0 20.0 20.0 20.0 100
Rwanda Congo DR 25.0 25.0 25.0 25.0 100
Rwanda South Africa 25.0 25.0 25.0 25.0 100
South Africa Ethiopia 10.0 10.0 10.0 10.0 100
South Africa Madagascar 11.7 12.3 0.0 30.0 100
Sudan Ethiopia 6.8 8.0 2.0 8.0 100
Tanzania Malawi 25.0 25.0 25.0 25.0 100
Tanzania South Africa 25.0 25.0 25.0 25.0 100

26. Bilateral Tariffs applied on maize grain (2009)
Importer Exporter S Ave W Min Max Imports Value Dutiable
Average Rate Rate ($ '000 ) (%)
Comoros Tanzania 5.0 5.0 5.0 5.0 2.3 100
Kenya Ethiopia 5.0 5.0 5.0 5.0 3.1 100
Kenya South Africa 37.5 49.9 25.0 50.0 306111.7 100
Madagascar South Africa 5.0 9.99 0.0 10.0 2767.3 99.9
Rwanda Congo, D R 37.5 47.2 25.0 50.0 140.0 100
Rwanda South Africa 50.0 50.0 50.0 50.0 323.6 100
Sudan South Africa 10.0 10.0 10.0 10.0 367.2 100
Tanzania Malawi 25.0 25.0 25.0 25.0 1118.2 100

27. Non Tariff barriers

28. Common NTBS
The most important non-tariff measures
 Pre-shipment inspection
 EAC region road blocks, corruption and weigh bridges are
prominent
 National food security policies particularly quantitative
restrictions and export/import bans, standards and SPS
requirements also lead to restrictions in staple foods trade
in East and Southern Africa region.

29. Quality standards requirements for maize imports in
the region
Specification EAC** Malawi* Zambia* Zimbabwe Ethiopia*
Grade II *
Moisture content (%) 13.5 14 12.5 14 13
Foreign matter (%) 1.0 2.6 1.5 2 0.5
Inorganic matter (%) 0.5 -
Broken Grains (% ) 4.0 11 6 6 2
Pest-damaged grains (%) 3.0 - 5 - 3
Rotten and diseased grains (%) 4.0 - 2 0.5 -
Discoloured grains (%) 1.0 - - 3 0.5
Live insect infestation Nil - - - -
Immature/shrivelled grain (%) 1.0 - - - -
Aflatoxin (ppb) 10 3 - - -
Package if not in container (kg 50 100 100 90 100
gunny bags)

30. Conclusions
 Some staple food product exports from some regional trading
partners face more market access barriers in some regional export
markets than they do in other regional markets
 Some of these products include:wheat and meslin, rice, and wheat or
meslin flour, maize and maize flour
 Tariff protection measures are still prevalent in the staple food trade
in the region.
 Tariff peaks (tariffs above 15 percent), with the highest tariffs of 75
percent being charged by EAC countries.
 Specific duty: Small quantities of imports by Comoros (about 3
percent of total staple food imports) had specific duties applied.
 There is protection in the form of tariff escalation in meat, wheat,
maize, rice and their related products.

31. Conclusions
 Tanzania, Burundi, Ethiopia, Rwanda and Kenya have the highest
protection for their staple food markets based on average tariffs.
 Exports of staple food from Congo D.R., Djibouti, Sudan and South Africa face
the most restrictions in terms of import tariff barriers in intra-regional trade.
 On average maize, rice and milk products are the most protected staple foods
with high tariffs, and EAC Partner States are the most protective of these
products.
 Non-tariff protectiveness is prevalent in the region. The common non-tariff
protective measures in the region include:
 Government participation in trade and restrictive practices tolerated by
governments
 Customs and administrative entry procedures (including licensing)
 Technical barriers to trade
 Sanitary and Phytosanitary measures (SPS)
 Specific limitations (including export and import bans)
 Charges on exports and imports (different from import or export duty charges)

32. Recommendations
 To facilitate and increase intra-regional staple foods
trade countries need to:
Eliminate the existing tariffs on imports of staple food
imports from all the countries in the region including
South Africa, Congo D.R., Djibouti and Sudan, among
others.
Eliminate tariff peaks (high tariffs) on staple foods. EAC
countries have the highest tariffs for some products.
Eliminate specific duty especially on rice

33. Recommendations
 Eliminate tariff escalation in meat, wheat, maize, rice and
their related products. This will be crucial in increasing
processing, value addition and will contribute to
diversification of the staple food trade in the region.
 Countries need to address all the non-tariff barriers and
measures which limit intra-regional staple foods trade.
Key to these are:
 Infrastructure-related trade inhibiting barriers
 Abolishment of import and export bans, and import and
export quotas
 Implementation of standardized customs documentation
and administrative procedures

34. Recommendations
Further areas of work
 The analysed countries are all party to the
COMESA-EAC-SADC Tripartite initiative (26
countries
 Tripartite FTA
 Elimination of tariffs and NTBs
 Negotiations commenced in December 2011
 Presents an opportunity for the region to address the tariff
and NTBs limiting trade already identified here.
 Need for a study to analyse how the tripartite could impact on
trade flows in staple foods and therefore on food security of the
26 tripartite countries

35. Presented at the
ReSAKSS Stakeholder Workshop on
Strategic Analysis to inform Agricultural Policy
11th June, 2012
Dr. Mary Mbithi