Agricultural Sector Technical Working Group28th November 2012 - Dar es Salaam (Tanzania) 1

Future steps

Agricultural Sector Consultative Working Group28th November 2012 - Dar es Salaam (Tanzania)

With the financial support of

MAFAP TEAM TANZANIA ( MAFC – ESRF– FAO – OECD)

Agricultural Sector Technical Working Group28th November 2012 - Dar es Salaam (Tanzania)

1. Price Incentives and Disincentives Analysis:a. Draft technical notes for Milk and Pulses [Dec. 2012]b. Finalize analysis and draft technical notes for Sorghum/Millet, Cassava, Nuts

and Livestock [Dec. 2012]2. Public Expenditure Analysis:

a. Include some additional expenditure that might have been missed (i.e. School Feeding Program) [Dec. 2012]

3. Country Report:a. Finalize Policy Review Section [Dec. 2012]b. Finalize Topic of Specific Interest (Export bans and Maize markets) [Dec. 2012]c. Integrate all parts into the final document & policy coherence analysis [Dec.

2012]4. Development of Policy Briefs:

a. For main commodities, Public Expenditure and Overall Findings [Jan. 2013]

TECHNICAL WORK

Agricultural Sector Technical Working Group28th November 2012 - Dar es Salaam (Tanzania)

POLICY ORIENTATION NOTEBURKINA FASO – Cattle

1

PRODUCTION

Source : FAOSTAT, 2012

Figure 1: Trend of the number of cattle heads in Burkina Faso (‘000 heads) Figure 2: Trends of cattle trade (‘000 heads)

Source : FAOSTAT, 2012 and DGPSE, 2012

MARKETING AND TRADE

External trade flows for cattle are limited to thesub-region. The marketing pathway chosen for ouranalysis corresponds to the horizontal flow ofcattle converging to Nigeria. The producer price isthe price in the market of Yilou. The wholesaleprice has been collected in the main export markettowards Nigeria, Pouytenga. The prices in Porgawas selected as the border prices. Porga is thetown by which cattle flowing to Nigeria is traded.

Map 1 : Cattle flows from Burkina Faso to Nigeria

Source: DGPSE,2012 and MAFAP 2012

The total bovine headcount of Burkina has increasedbetween 2000 and 2010. The annual growth rate isestimated at 2%. In absolute value, the cattle herdwas worth 1142,3 billion fCFA in 2009.

Cattle exports are increasing since 2005. The cattlevalue chain is the fourth provider of foreigncurrency in the country but the trade intensityremains low when compared with the productionImports are almost non existent.

0

2,000

4,000

6,000

8,000

10,000

2000 2002 2004 2006 2008 2010Number of cattle heads

November 2012

Cattle producers of Burkina Faso receive prices that are lower than those they could receive,because of an unfavourable policy environment. Concrete policy orientations aimed at improvingmarketing and value chain organization policies are put forward in this note.

0%

1%

2%

3%

4%

5%

6%

050

100150200250300350400

2005 2006 2007 2008 2009 2010Exports Trade intensity (right hand axis)

The present policy orientation note draws from the technical note on cattle in Burkina Fasoavailable at www.fao.org/mafap 2

The observed Nominal Rate of Protection (NRP) shows that producers do not receive the export marketprices. The shade area between the observed NRP and the adjusted NRP is a visual representation of theadditional disincentives to producers generated by misaligned exchange rates, excessive traders‘ marginsand illicit taxes.

MESSAGESProducers and wholesalers in the cattle valuechain get disincentives (2005-2010), despitepolicy measures that were adopted to promotecattle production in the country.

Producers get stronger disincentives, notablybecause of insufficient marketing infrastructure.Low producer prices are a major constraint to thedevelopment of the value chain.

Wholesalers get disincentives because of theinefficience of the marketing and trade circuit,both domestic and regional (infrastructure,market linkages…). As a consequence, they areisolated from the regional market prices.

RECOMMANDATIONSTrade policies : Ease cattle exports through suppression of non-trade barriers at the border. Develop a regulatory framework for oncompetition between meat products in the region. Better harmonisation of policies at the borders ofWAEMU, including non-tariff aspects.

Value chain organization : Improve the integration of the cattle value chain inregional markets. Implement policies to lower transport costs andhandling Promote a better organization of exporters Lower transaction costs and illicit taxes.

Figure 3: Trends of cattle prices (‘000 fCFA/ tonnes)

Source: DGPSE, 2012

Figure 5: Trends of incentives and disincentives received by the producers (percent)

Source: DGPSE,2012 and MAFAP 2012

.

Source: DGPSE,2012 and MAFAP, 2012

Figure 4: Trends of observed farm gate prices and reference prices (‘000 fCFA/ tonnes)

Producer and wholesale prices at the border havebeen increasing in the 2005-2010 period.

Observed prices are those received by producers.Reference prices are those that producers couldreceive without distortions from domestic policies.Farmers could receive the adjusted reference pricesif others inefficiencies in the value chain wereeliminated.

0

100

200

300

400

500

2005 2006 2007 2008 2009 2010Observed farm gates prices (Yilou)Wholesale prices (Pouytenga)Border prices (Porga)

0

100

200

300

400

500

2005 2006 2007 2008 2009 2010Observed farm gate prices (Yilou)Reference prices at farm gateAdjusted reference prices at farm gate

-75%

-55%

-35%

-15%

5%

25%

2005 2006 2007 2008 2009 2010

Disin

centi

ves

In

centi

ves

Observed NRP at farm gate Adjusted NRP at farm gate

FAO and Ministry of Agriculture, Water and Water resources of Burkina Faso (DGPSE/DGPER)with support from OECD and the financial participation of the Bill and Melinda GatesFoundation (BMGF) and USAID

Agricultural Sector Technical Working Group28th November 2012 - Dar es Salaam (Tanzania)

5. Launch of Country Reporta. Present the Country Report and Policy Briefs at ASCG [Feb. 2013]b. Public presentation of Country Report in a suitable policy forum and

discussion of specific findings with relevant stakeholders [tbc]6. Technical workshop for Eastern African MAFAP countries (Tanzania, Kenya

and Uganda) involving EAC [Dates tbc] 7. Policy Dialogue at EAC level based on MAFAP findings [Dates tbc]8. 2nd Phase of MAFAP in Tanzania:

a. Updating analysis in technical notes and biennial country reportsb. Consolidation of in-country institutionalization of policy monitoring and

analysis functionsc. Options to expand to other topics (consumers, input markets, etc.)

Improvement of price data collection in Tanzania and cooperation with specific

commodity boards

POLICY DIALOGUE, OUTREACH AND COMMUNICATION

Agricultural Sector Technical Working Group28th November 2012 - Dar es Salaam (Tanzania)

For additional information please visit: www.fao.org/mafap