|The Courier N° 130 Nov - Dec 1991 - Dossier: Oil - Reports: Kenya - The Comoros (EC Courier, 1991, 96 p.)|
|Dr Subroto, Secretary General of OPEC|
|Low-key Joint Assembly in Amsterdam|
|The Joint Assembly - as seen by four of its members|
|Kenya - Democracy: winning the hearts and minds of wananchi|
|KANU, the ruing|
|Gearing up for industrial take-off|
|Matching resources with the population|
|Pressing ahead with refonns|
|EEC at the grassroots|
|Financial cooperation between Kenya and the EEC|
|The Comoros - In dire economic straits|
|An interview with President Said Mohamed Djohar|
|An interview with former Production and Industry Minister, Ali Mroudjae|
|External aid to The Comoros|
|Interacting cereal policies in the Western Sahel|
|The European social area|
|Social policy measures for the achievement of the internal market|
|Social policy measures with regard to economic and social cohesion|
|Measures to promote employment and solidarity|
|Dialogue between management and labour|
|The European Social Charter|
|Some basic statistics|
|Oil and its uses|
|Petroleum: working for ACP-EEC cooperation|
|Petroleum replacement polices in the ACP Stales|
|The Resource Curse thesis: sowing oil windfall|
|OPEC - aIms, achievements and future challenges|
|Oil development: time depart from false illusions|
|Kerosene as a household fuel|
|Redundant oil figs - what to do when the oil runs out|
|Oil and gas in Ethiopia: the legal basis|
|An overview the Angolan oil industry|
|The pace of oil: an environmentalists viewpoint|
|Microprojects gaining ground|
|UN at Africas bedside|
|Scientific research: a partners forum|
|Culture and the arts|
|Le Noir du Blanc: an exhibition of clichés and racial stereotypes|
|Agricultural research in the Pacific|
|The convention at work|
The CILSS and the Club du Sahel told states and aid agencies that national policies needed to fit into a regional framework back at the Nouakchott meeting on cereal policies in the Sahel in 1979 and, in 1986, delegates at Mindelo were moved to recommend investigating the possibility of a protected regional cereal unit where production could be encouraged and trade facilitated.
The work which began after Mindelo, triggered discussion of two things - the point of using protective measures to reduce competition from imports and get local production off the ground again and the feasibility of such protection. A first look at the idea of the regional unit made it very obvious that there would be many barriers unless there was a clear show of political will from the States. It also indicated that regional cooperation meant organising areas where people worked together.
The seminar in Lomn November 1989 was a further stage in the two Secretariats thinking on the matter. The countries on the Gulf of Guinea were involved for the first time on this occasion, so the whole of West Africa was now covered.
The meeting found that trade in farming and livestock products between the countries on the coast and those in the Sahel was an important aspect of food security in this part of the world. It also identified groups of countries in West Africa which had particularly well developed relations and seemed likely settings for a pragmatic quest for new regional balances. In these sub-regions, governments could swap information about production, trade patterns, sectoral policy trends and so on, to make for more consistent national policies and collective reorganisation of the interface between local markets and the world market.
The CILSS and Club du Sahel Secretariats began by looking at the western sub-region.
The investigations, which continued with a full diagnosis of the way the area worked, bringing hitherto scattered information together and filling in the gaps as far as possible, hinged on two teams - a Franco-African group combining the IRAM, INRA and UNB, which concentrated on diagnosis and analysed the way policies and trade interacted in the area, and an American team from the AIRD, which took a close look at the comparative advantages of various branches of the cereal trade.
Both teams also did prospective work, investigating the possibilities that would be open to the area, whether it decided to change or to continue along present lines.
The Secretariats also encouraged the authorities in the six countries to set up a forum to exchange information and discuss their various cereal policies. Support from the ECDPM helped get a dialogue going between staff of the different authorities concerned with grain (i.e. Agriculture, Trade and Finance).
Work continued for a year and then, on 27-31 May 1991, the CILSS and Club du Sahel Secretariats organised their Bamako meeting on the interaction of cereal policies in the western sub-region. This was the opportunity to take stock of achievements so far and to look at the results and check on their consistency.
The two main aims were:
- to analyse the cereal trade and agricultural policies of the
- given the African countries increasing interest in regional integration, to look at how the cereal trade might be used to make regional cooperation in the area more dynamic.
Food dependency increasing
Researchers from the INRA-IRAMUNB team pointed straight to the fact that the policies used since independence had failed to bring either lasting food security or - even less - self sufficiency. Indeed, they had actually led to unstable food economies which were forced to look to the outside world.
Over the past 20 years:
- imports had expanded (at 5% p.a. on average) faster than the population (at 2.5% p.a.) with imported grain, initially a quarter of the average ration, now representing a third;
- supplies had continued to be irregular because of the weather, poor productivity increases, the inefficient workings of the cereal market and shortcomings on the processing front.
However, the picture was not entirely bleak, because:
- the grain available per capita rose from an average of 135 kg to 183 kg p.a. (although this was largely due to imports);
- production expanded (at 3% p.a.) faster than the population - a very strong improvement largely due to good harvests at the end of the period under scrutiny.
The AIRD team measured the competitivity of the different local crops (rice, maize and millet/sorghum) in Mali, Guinea and Senegal by reference to internal costs. It appears that, in comparison with the imported rice used as a reference, local rice is competitive in the area of production in almost all the branches investigated, although it is never competitive in the capital cities - other than in Mali, which has the natural protection of being land-locked. Dry cereals are more competitive.
In time, the AIRD method will mean that competitivity comparisons can be made between the various branches of production and marketing in the countries in the region and not just with the world market. This information will be useful in the quest for comparative advantages within this area.
Regional trade has not improved food security
The investigations have also shown that the regions trade in local cereals has made only a very small contribution to its food security. One or two figures illustrate this:
- Cross-border regional trade is modest in comparison with what is actually available on the market (2 million t approx.), being estimated at an average of 230 000-280 000 t ( l2- 14% of the market) p.a. between 1987-88 and 1989-90.
- Cereal trading between the countries in the sub-region is 70% world market in origin (mainly rice and wheat) and only 30% local.
A fair percentage of this cross-border trade is illegal re-export, triggered by the disparity in the economic and monetary policies of the western sub-region, for which the wide geographical, human and economic diversity of the countries there is very much to blame. Mali, for example, is land-locked, while the other five have ports as their capital cities. Population spread is very uneven, the majority being concentrated in three countries (Guinea, Mali and Senegal). Guinea and Mauritania have major natural resources, Mali and Guinea Bissau have mainly agricultural resources and livestock, while Senegal has more diversified export earnings than its neighbours and Gambia is doing its utmost to become a trading nation.
This diversity, which could well bring out complementarily, has in fact led to dependence and division so far. This is one of the least integrated parts of West Africa, where there are almost as many monetary zones as countries and transnational communications are only practicable with difficulty.
A scenario of greater dependence
The researchers on the INRA-IRAMUNB team wondered what would happen if present production and trade trends continued. A demand projection based on current rates of demographic growth and estimated per capita consumption (separate levels for each country) suggests that almost 6 million t of cereals could be needed within the next decade - 1.4 million t up on the present volume of consumption. The team wondered whether regional dynamics of a different kind, in which policies were concerted with a view to local cereal promotion and a drive for a more homogeneous interface with the outside world, would make it possible to avoid a scenario tending towards food dependence - which is unsustainable in the long term.
THE MAIN CONCLUSIONS
After hearing the researchers diagnoses, delegates moved to round tables and working parties to discuss where the cereal economy stood in the national strategy of each of the six countries, how national policies interacted with the policies of the neighbouring countries and what the prospects of cooperation were in the western sub-region.
The cereal policies
The first thing to emerge was that the cereal trade posed complex problems, probably to a far greater extent than other products. Not only did remunerative conditions have to be created for people throughout the sector, but, since cereals were a major part of the human diet, they were more socially important than other crops and the discussions they triggered were impassioned. Rationality, particularly in economic matters, was not always the order of the day. What it amounts to is that cereals are a strategic commodity, with all the constraints that brings when policies are defined.
They are heterogeneous and the problems of, and prospects for rice, maize and millet/sorghum are very different, be it at national or regional level.
Millet and sorghum, which are traditional cereals, find their position gradually being eroded in these six countries, in relative terms at least. They are not marketed much, they are still grown by very unintensive methods and production fluctuates, but they are the staple diet nonetheless and occupy the majority of the arable land, so it would be foolhardy to underestimate their economic importance. Gambia, Mauritania and Senegal have a structural demand for them, as, to a lesser extent, do Guinea and CdIvoire. Mali alone could perhaps become a regular exporter.
Maize is undeniably the cereal which could develop fastest, because various parts of this area have the right weather conditions and no major investments are called for. Schemes offering a stable outlet to producers (in Senegal and Mali in particular) attracted a rapid response, despite the fact that the prices were fairly low. Unfortunately, however, maize does not usually feature in the traditional diet in this part of the world, so the demand for human consumption is low and attempts at creating a significant market in the sub-region through either processing or secondary utilisation (for livestock) have not met with success so far.
Lastly, the greatest problems are with rice. All the countries produce it - on irrigated plots in the north and on rainfed, lowland and mangrove plots further south - and, to varying degrees, all the countries import it as well. The regional market in this, the main imported cereal, reflects the differences and contradictions in the economic and agricultural policies of the various countries, those of Senegal and Gambia, for example, being a case in point.
The western sub-region is compartmentalised and the countries outwardly oriented
With regional integration resurfacing as a way of coping with crisis, delegates analysed why a political desire for regional integration had failed to stand up to economic realities in the past.
These countries have always had stronger economic ties with external partners than with their neighbours and the national economies had not yet managed to develop a network of regional trade. Seeing that dependence on aid tends to follow privileged relations with the metropolises, the delegates wondered whether there really was any point in setting so much store by regional integration. Word and deed were very much at variance.
The regional dynamics of the unit had led to greater food dependence. Policies were not consistent with each other and there were plenty of harmful effects and delegates came to the conclusion that each of the countries had only a limited understanding of the virtues and constraints of its neighbours. They did not include them in their thinking and they did not have the means of doing so either.
So, despite a (sometimes vehemently defended) regionalist philosophy, the countries basically were not very worried about regional cooperation. They had not achieved the dynamics of regional integration, nor would they do so spontaneausly.
But the structural and agricultural adjustment programmes run in all the countries in the western sub-region had not in fact helped harmonise cereal policies. If such programmes were to do more for regional integration and economic development, the various partners should avoid recommending the countries to adopt over-antagonistic policies. The Food Aid Charter, a remarkable example of regional cooperation, showed that such things were indeed possible.
Furthermore, despite a recent awakening, most of the aid agencies cooperation programmes were as compartmentalised as the sub-region itself.
The meeting was reminded that the ECs unification process had been long and hard. It had begun with two products, coal and steel, and then moved on to common tariffs before managing to adopt common policies, some of which were still only on the drawing board.
Delegates therefore recommended that the States and aid agencies be clearsighted about the prospects for rapid regional integration.
No model, they stressed, no foreign institution, even a multilateral one, could ever replace the African leaders themselves as organisers of their regional relations.
Cereals alone will not bring about integration in the sub region
In spite of their economic and strategic importance in each of the countries concerned here, cereals will not be the economic foundation on which regional integration can be built, illegal re-exports having been the biggest feature of regional activity so far.
That is not to say that there is nothing to be done in the matter of sub-regional cooperation in the cereal sector.
First of all - and this is urgent - plans have to be made to stop one country having harmful effects on another. Countries can also make bilateral moves to encourage existing and potential flows between regions with surpluses and regions with shortfalls.
However, if the idea is to go beyond cooperation and gradually move towards greater integration of the economies in this sub-region (and this involves reorienting some of the national policies), then a far broader framework than just the cereal sector is called for. The thinking must be extended to include more (agricultural and other) products and take account of relations with the neighbouring areas of Sierra Leone, Liberia and CdIvoire.
Discussion also revealed that the region would benefit from a harmonised world market interface policy coupled with a freeing of the internal market. A lot of progress was made on this front at Bamako, but the problem is that most countries see harmonisation as getting all the other countries lined up on their own national policies, be they very liberal or very protectionist.
More awareness needed of what is at stake at national and regional level
There is no ready-made answer for the problems of food security in the countries of the western sub-region.
The States have to square the circle! They have to cap their spending, modernise their production apparatus and try and balance their payments. But, just like everyone else, they also have to strike a balance between the various groups (the producers, tradesmen, consumers etc. who are varyingly organised to defend their own interests), between the capital and the regions, between the cultural groups and so on and managing these socio-political balances could well weigh increasingly heavily on State decisions in a context of rapidly spreading economic discussion. Such considerations do not necessarily reflect what is best for the economy, nor are they always favourable to the neighbouring countries.
As things stand, it is the interests of Governments and tradesmen (and to a lesser extent consumers in the capital) which dominate in the six countries and, in the short term, there is every point in the three groups getting their supplies on the world rice and wheat market.
The advantages of this are considerable - real security for one thing, as regular quality and speedy delivery are major assets. Moreover prices are low and the potential profits appreciable.
However, delegates were concerned about the uncertainty that: this dependence entailed for security in the region, as long-term trends on the world market were difficult to predict. Some of them felt that world prices were a debatable reference, because they did not reflect pure, competitive markets but in many cases subsidised markets running a surplus.
So each country had to start thinking about food security again, looking beyond the framework of the agricultural administration and involving the civil society and the state in the diversity of their interests and taking in every side of the problem:
- the various cereal crops - types, commercial considerations and processing;
- cereals in relation to national development - price and growth targets, choice of production areas, changes to agrarian structures and regional balances;
- relations with the world market - the region being due to run a shortfall in the medium term, the countries have to stop referring to self sufficiency strategies, which they have done, more or less implicitly, so far, although they clearly do not reflect reality. Import management, which should be the best possible, must combine trade policy and monetary policy measures and include food aid;
- lastly, the implications of the various choices for the dynamics of the region.
A fresh start on national thinking would also be an opportunity to look at the structural adjustment processes. How do they affect food security? Are there any alternatives to the present procedures of conditionality which would really get reforms working? Answering these questions means setting up a broader dialogue between national technicians and aid agency representatives in a frank and open framework. Such a dialogue could also be incorporated in national debates, making the aid programmes more transparent.
As we know, proper regional dynamics must proceed from a political will and apply to a far wider product field than just cereals. They must also have the right instruments at their disposal and a forum for the countries of the sub-region to exchange information and ideas.
The meeting used preliminary work to look at outlines of other scenarios (in addition to the tendency scenario already mentioned). These were based on the adaption of common policies by several countries and mainly involved variations in commercial and monetary policy, ranging over the field of possibilities from end to end - an area protected by harmonised tariffs or the total liberalisation of imports, each country with a floating currency or all the countries belonging to a fixed exchange rate zone.
The committees which discussed the implications of these scenarios on different groups of nations suggested that there was ignorance about the machinery (trade protection, acting on currency or calculating comparative advantages, for example) on which any idea of regional cooperation would be based. Whatever the future of the zone, it was vital for the national cadres and decision-makers to get to know how this economic machinery worked and for the consequences to be discussed at both national and sub-regional level.
Grasp every opportunity for dialogue and reduce any harmful effects new.
The meeting stressed that, in spite of the constraints, which it would be wrong to hide, integration is of major importance to the region. It means displaying political will - as Agriculture Ministers of West and Central Africa and representatives of bilateral and multilateral aid agencies did in Dakar recently - and that will must be new. It must remember the many institutional failures of the past and the fact that there are specific national interests to cater for in each country.
The path to regional integration is long and, of course, strewn with obstacles. However, progress can be made in the short term by:
- encouraging data exchange;
- organising bilateral dialogues to reduce harmful effects;
- ensuring that countries and aid agencies also prepare for the future by investing in the sectors whereby the workings of the regional market can be improved, in particular by providing the region with transport and storage infrastructure.
Spread and continue thinking in all the countries in the western sub-region.
Back up national operations by completing the regional diagnosis and disseminating methods of forward thinking.
What happens next is up to the countries themselves, although the CILSS and Club du Sahel Secretariats, the aid agencies and the experts can also provide valuable backing for the national efforts by:
- helping to organise the national processes;
- running additional studies, in particular to continue with the identification of alternative policies (scenarios) in conjunction with the national teams and the aid agencies.