1. Presented at theReSAKSS Stakeholder Workshop onStrategic Analysis to inform Agricultural Policy 11th June, 2012Dr. Mary Mbithi

2. Overview of the presentation1.Introduction2. Study methods3. Key findings on protection and market access indicators4. 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 addressingregional food insecurity in COMESA (COMESA treaty), Cooperation in the field of agriculture with the regions implementation of programmes to enhanceregional cross border trade through its Cross Border Trade Reformprogramme. 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 foodimports 4. Introduction Although trade liberalization through COMESA, EAC, andSADC Trade restrictiveness in staple foods still exists in the region. Tariff restrictiveness varies greatly from one country toanother and from one product to another Ad hoc use of export and import restrictions combinedwith non-tariff measures restricts intra-regional trade instaple foods Trade restrictive of staple food, diminishes the gainsexpected 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, livebovine 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 countrylevels Also studies analysed NTBs Not analysed intra-COMESA protection at bilaterallevel, and at sector/product level limited information on existing types of tariff protectionincluding average tariffs, tariff peaks, and tariff escalation. There is also little information on non-ad valorem tariffs ofintra-COMESA trade for various products including foodproducts, 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 economyThe key assumption Trade is determined by gravity (i.e. by the size of aneconomy), thus exports to a given market should beproportional to the GDP of that country.Data source: COMESA Statistics (COMSTAT): year 2009or 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 the12 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 20093. 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 accessfor food products of one country in various markets However, in a few cases, there is difference in marketaccess 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 KenSA X to Ken SA X to ZamProduct Product Name RMA (000 US$) (000 US$)Milk and cream, not0401concentrated no0.00.1 374.90402Milk and cream, concentrated or 0.0 18.7253.80702Tomatoes, fresh or chilled 0.00.1 2.2071220Onions 0.00.0 8.01001Wheat and meslin 0.10.1 0.61005Maize (corn) 763.3 64000.021.01006Rice 0.22.4 3.11101Wheat or meslin flour0.10.1 0.3110220Maize (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 andwheat 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 MalawiSA X Mal SA x ZamValueHs code Product name RMA($000) Value ($000)0102Live bovine animals15.9 97.9520.690201Meat of bovine animals 114.660.521.7703Fish& crustacean, mollusc1.0223.4783.80401Milk and cream, conc not added sugar 2.40 212.21 296.990402Milk and cream, conc or add sugar1.44 2920.586814.530702Tomatoes, fresh or chilled 0.35 0.51 4.89071220Onions 0.96 0.36 1.2620713Dried leguminous vegetables, 1.23 54.43148.06071410Manioc (cassava) 0.00 0.8930.01001Wheat and meslin 0.00 0.06 113435.711005Maize (corn) 0.71 705.40 3327.081006Rice 0.27 54.50675.701101Wheat or meslin flour16.26303.98 62.69 15. Revealed Market Access for Kenya exports to Tanzania and Uganda - Milk and cream; concentrated or containing added sugar and maize (corn) flour products, Kenya may be facing market barriers in Tanzania that she does face in Uganda.-Kenya has better market access to Tanzania than Uganda for meat of bovine animals and milk and cream not containingsugar and maize.Ken X to TzKen X UgProduct Product Name RMA$ 000 $ 000)0102Live bovine animals0.00 0.00 2.320202Meat of bovine animals, frozen 3099.95 747.600.170401Milk and cream, conc. not added sugar2.55 3561.24989.410402Milk and cream, concentrated added sugar 0.25 1390.253925.20070200Tomatoes, fresh or chilled 0.00 0.00 5.78071220Onions 0.00 0.00 0.20071410Manioc (cassava) 0.00 0.00 0.001005Maize (corn) 2.62 2409.10651.181006Rice 0.00 0.18 360.52110100Wheat or meslin flour0.00 0.00 27.42110220Maize (corn) flour 0.39 14.1725.84 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 existsStaple foods even more protected: higher S. ave. tariff, larger prop. Dutiable-Trade description S W. Ave. Min Max No. of Dutiabl SpecificAve.Rate Rate Intl e (%)dutyPeaks(%)Agri- foods intra-7.26 10.480 75 2048 39.6regional4.41Non- agricultural- intra4.7 2.7 0 60 898425.1 0.03regionalIntra-regional staple7.42 28.98 0 7520664.0foods0.01 18. Average tariffs charged on staple food imports from the regionin 2009RankImporterS. Ave. W. Ave. MinMax DutiableS.DutyRate RateImports (%) Imports (%)1 Tanzania23.70 19.04 0.00 75.00 60.20.0002 Burundi 20.77 2.210.00 75.00 8.4 0.0003 Ethiopia15.93 10.39 4.50 30.00 100.0 0.0004 Rwanda7.871.960.00 75.00 3.7 0.0005 Kenya 6.0646.27 0.00 75.00 93.60.0006 Malawi4.251.070.00 25.00 13.50.0007 Madagascar 3.86 1.130.00 20.00 9.7 0.0008 Zambia2.700.340.00 25.00 2.3 0.0009 Sudan 2.131.430.00 10.00 18.70.000 19. Average tariffs charged on staple food imports from theregion in 2009Rank ImporterS. Ave. W. Ave. MinMaxDutiable S.Dutyy Rate Rate (%)Imports(%)10 Mozambique 1.57 2.050.00 20.00 32.5 0.00011 South Africa 1.28 2.950.00 30.00 28.4 0.00012 Comoros 1.111.340.00 5.00 26.92.97013 Mauritius 0.130.000.00 12.00 0.00.00014 Swaziland 0.000.000.00 0.00 0.0 0.000Average7.4228.90.00 75.00 64.0 0.011 20. Tariff escalation- exists in meat, wheat, maize and the wheat-related productsProduct Product Name S. Ave. W. Ave. MinMax ImportsHs codeRate RateValue (US$000)Meat products0102 Live bovine animals2.822.18 0.0025.00 13269.40202 Meat of bovine 9.44 10.29 0.0025.00 1113.5 animals, frozen0201 Meat of bovine 12.25 7.15 0.0030.012182.8 animals, fresh or chilledWheat100110 Durum wheat0.710.05 0.005.001112.6110100 Wheat or meslin flour16.25 2.07 0.0060.00 19368.1 21. Tariff escalationProduct Product NameS. Ave. W. Ave. Min Max Value (USHs code Rate Rate $000)Maize100590 Other (maize-other 9.77 46.15 0.00 50.00 330979.4 than seed)110220 Maize (corn) flour 10.4314.92 0.00 50.00 2606.1Rice100610 Rice in the husk6.540.000.00 75.00 11601.9 (paddy or rough)100620 Husked (brown) rice 13.33 0.030.00 75.00 2086.6100640 Broken rice 17.37 1.620.00 75.00 3159.9100630 Semi-milled or wholly 17.80 0.370.00 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 cassavaS. Ave. W. Ave.MaxDutiable S.Duty ImpProduct Name Rate (%)(%)Milk and cream, not conc /added sug 13.18 8.86 60 43.4 0.00Wheat or meslin flour 12.36 7.16 60 70.7 0.76Meat of bovine animals fresh/chilled12.25 10.2925 79.8 0.00Milk and cream, conc or added sugar 11.03 4.13 60 42.5 0.02Meat of bovine animals, frozen9.447.15 30 60.5 0.00Onions and shallots 8.884.04 27 80.9 0.00Tomatoes, fresh or chilled7.060.71 27 50.8 0.00Maize (corn)5.7524.7450 56.3 0.00Fish & crustacean, mollusc4.990.77 25 6.70.00Live animals4.811.34 30 21.0 0.00Manioc (cassava)3.891.12 25 11.1 0.00Rice3.082.09 15 20.9 0.29Wheat and meslin2.57035 0.00.00 23. Some bilateral tariffs 24. Intra-COMESA imports of milk and cream, not concentrated nor containing added sugar (0401), 2009Importer ExporterSimple Weighted Min Rate Max Rate Average AverageBurundiS. Africa 60.0060.0060.00 60.00Madagascar S. Africa 20.0020.0020.00 20.00MozambiqueS. Africa 5.00 4.36 0.00 10.00MozambiqueZimbabwe5.00 5.00 0.00 10.00Rwanda Congo, DR 60.0060.0060.00 60.00Tanzania S. Africa 60.0060.0060.00 60.00Tanzania Egypt 60.0060.0060.00 60.00Zambia S. Africa 15.0015.0015.00 15.00 25. Bilateral tariffs on dried legumes (2009)ImporterExporter S. Ave W. Ave. MinMaxDutiableRate Rate (%)Burundi South Africa 25 25.025.0 25.0 100Kenya Ethiopia 2.52.5 2.52.5100Kenya South Africa 25.0 25. 25.0 25.0 100MadagascarSouth Africa 20.0 20.020.0 20.0 100RwandaCongo DR 25.0 25.025.0 25.0 100RwandaSouth Africa 25.0 25.025.0 25.0 100South AfricaEthiopia 10.0 10.010.0 10.0 100South AfricaMadagascar 11.7 12.30.030.0 100Sudan Ethiopia 6.88.0 2.08.0100TanzaniaMalawi 25.0 25.025.0 25.0 100TanzaniaSouth Africa 25.0 25.025.0 25.0 100 26. Bilateral Tariffs applied on maize grain (2009)ImporterExporter S Ave W Min Max Imports Value Dutiable Average Rate Rate ($ 000 ) (%) ComorosTanzania5.05.05.0 5.0 2.3 100Kenya Ethiopia5.05.05.0 5.0 3.1 100Kenya South Africa 37.549.9 25.0 50.0 306111.7100 Madagascar South Africa5.09.99 0.0 10.0 2767.3 99.9 RwandaCongo, D R 37.5 47.2 25.0 50.0140.0100 Rwanda South Africa 50.050.0 50.0 50.0323.6100Sudan South Africa 10.010.0 10.0 10.0367.2100 Tanzania Malawi25.0 25.0 25.0 25.01118.2 100 27. Non Tariff barriers 28. Common NTBSThe most important non-tariff measures Pre-shipment inspection EAC region road blocks, corruption and weigh bridges are prominent National food security policies particularly quantitativerestrictions and export/import bans, standards and SPSrequirements also lead to restrictions in staple foods tradein East and Southern Africa region. 29. Quality standards requirements for maize imports in the regionSpecificationEAC** Malawi* Zambia* Zimbabwe Ethiopia*Grade II *Moisture content (%) 13.5 14 12.5 14 13Foreign matter (%)1.0 2.6 1.52 0.5Inorganic matter (%)0.5-Broken Grains (% )4.0 11662Pest-damaged grains (%) 3.0-5-3Rotten and diseased grains (%)4.0-2 0.5 -Discoloured grains (%)1.0- - 3 0.5Live insect infestation Nil- - --Immature/shrivelled grain (%) 1.0- - --Aflatoxin (ppb) 10 3 - --Package if not in container (kg 5010010090 100gunny bags) 30. Conclusions Some staple food product exports from some regional tradingpartners face more market access barriers in some regional exportmarkets 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 tradein the region. Tariff peaks (tariffs above 15 percent), with the highest tariffs of 75percent being charged by EAC countries. Specific duty: Small quantities of imports by Comoros (about 3percent 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 highestprotection for their staple food markets based on average tariffs. Exports of staple food from Congo D.R., Djibouti, Sudan and South Africa facethe most restrictions in terms of import tariff barriers in intra-regional trade. On average maize, rice and milk products are the most protected staple foodswith high tariffs, and EAC Partner States are the most protective of theseproducts. Non-tariff protectiveness is prevalent in the region. The common non-tariffprotective 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 andexport quotas Implementation of standardized customs documentationand 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 tariffand NTBs limiting trade already identified here. Need for a study to analyse how the tripartite could impact ontrade flows in staple foods and therefore on food security of the26 tripartite countries 35. Presented at theReSAKSS Stakeholder Workshop onStrategic Analysis to inform Agricultural Policy 11th June, 2012Dr. Mary Mbithi