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Agricultural export bans hit farmers

20 May 2012

Analysis of the effects of Tanzania’s 2011 maize export ban shows that it ‘served to relieve consumers of higher prices but condemn farmers in poverty’, according to Bohela Lunogelo, Executive Director of the Economic and Social Research Foundation. The export ban, imposed in May 2011, was formally lifted in October 2011. Early in 2012, however, it was reported that ‘[East African Grain Council] border monitors confirm that the ban is still in place and government agencies in various border points still restrict maize transits from Tanzania to other countries.’

Analysts argue that the Tanzanian export ban was ‘primarily motivated by inflationary tendencies’, as well as ‘lack of food supplies in some food deficit pockets of Tanzania’, rather than national food security concerns. However, it is argued that ‘the impact on inflation has virtually been zero,’ while farmers have borne ‘the burden of policy induced low prices’. In this way, the ban can undermine domestic food security. Speaking at a workshop on food and agriculture policy analysis in February 2012, Dr Lunogelo maintained that ‘food security cannot be achieved by prohibiting farmers to get better prices ... actually allowing farmers to export their produce sends a signal of good market and encourages production’.

Such actions also clearly create additional collateral damage for regional partners by making food supply vulnerable to arbitrary government action. According to Dr Richard Sezibera, Secretary General of the EAC, non tariff barriers (NTBs), of which an export ban is an extreme example, have ‘continued to exert a negative influence on the integration and trade agenda.’ Dr Sezibera told delegates that ‘NTBs have persisted or have merely mutated’. He cited a recent survey conducted in 19 countries in EAC, COMESA and SADC which established that, on average, 20% of annual shipments faced some form of NTB, and the average direct additional cost of NTBs per shipment was US$3,500. This denied to consumers ‘welfare enhancing opportunities, which arise from access to reasonably priced regional imports’.

Such NTBs undermine the goal of the African Development Bank (AfDB), which is aligned to several continental initiatives and regional agendas to create a fully integrated and internationally competitive region with the overarching objective of poverty reduction. In a new report, the AfDB argues that ‘Africa’s numerous border and customs posts, with the associated bureaucracy and long delays, continue to hold back trade and economic growth on the continent’.

Because of its centrality to welfare, trade in food is often first to feel the effects of NTBs, as with the Tanzania maize ban, and especially when supplies are genuinely short (across a region/nation, and not just in pockets as is reported to have been the case in Tanzania). Such a situation appears to be developing in West Africa. According to Famine Early Warning Systems Network, crisis-level food insecurity is expected in a number of areas of the Sahel in 2102. FEWSNET claims that this is not primarily due to a poor harvest – which, while lower than the record crop of 2010/11, ‘was within five percent of the recent five-year average’. Rather, it is due to knock-on effects of the late start of the season, and increased wage and other costs. Regional integration in West Africa is reported to have advanced insufficiently to date to provide a regional buffer to such localised shocks. According to a World Bank policy note on removing trade barriers in West Africa, ‘both the processes, and degree of regional integration have lagged behind expectations, and many political commitments have either not been translated into policy and regulatory reforms, or reforms are not implemented.’ 

Editorial comment

The creation in Africa of larger agricultural markets offers many attractions – but it faces numerous stumbling blocks, some of which were illustrated in 2011 by Tanzania’s maize export ban and may be again illustrated in 2012 in West Africa. Many of the stumbling blocks apply equally to agricultural and other traded items, but some that apply exclusively to agriculture are among the most problematic.

If domestic, regional or global food supply is restricted, there is pressure on governments to press the ‘stop’ button and limit exports (or seek to acquire a disproportionate share of regionally available imports). Such measures are highly controversial but need to be seen in the light of the central social and political importance of food. The analysis of the Tanzanian episode of 2011 also suggests that the stop button may be pressed too readily (when supply is not inadequate but just poorly distributed in some areas of the country), and does not support longer-term food security (because it both penalises farmers and because more appropriate alternatives are available).

One analysis of the Tanzanian experience recommends that:

  •  it is essential to establish (or improve) reliable regional harvest information systems that can help to reduce the danger of false alarms;
  • more reliance should be placed on the use of futures options as a way of ensuring adequate supplies if a harvest is poor;
  • a ‘green channel for staple foods trade’ should be created to reduce the delays, cost rises and losses that occur at border crossings.

The Tanzanian export ban on cereals did not in fact reduce exports. However, the exports  shifted to ‘informal’ trade, with the result that the gains accrued not to the farmers but to intermediaries. 


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