Transcript Document

Workshop on Food Security, Economic
Growth and Poverty Reduction
Presentation to Agr. Donor Working Group
June 21, 2012
by Don Mitchell USAID
Feed the Future Sera Project
Implemented by Booz Allen Hamilton
USAID Feed the Future SERA Project
• SERA is the Policy Component of Feed the Future
• Focused on improving the agricultural policies
through research to better understanding policy
tradeoffs and options
• This activity looks at food security and the export ban
• Presented to Government in Dodoma on June 16th
and all stakeholders at Kunduchi Beach on June 19th
Background on activity
• Concept Note to Government in October 2011
proposing three studies on Tanzania food security,
economic growth and poverty reduction
• Process: Teams brought together in March
• Regional Export Potential to 2025 (AIRD)
• Economy-wide Impacts of Export Bans (IFPRI)
• Food Security and Policy Options (USDA)
• Impacts of Climate Change on Exports (World Bank)
G8 Summit in Washington in May
• Launched a New Alliance for Food and Nutrition
Security between African nations, international
donors and private firms
• The Government of Tanzania committed to pursuing
policy goals to build investor confidence and
investments in order to reduce poverty and end
hunger
• Tanzania also committed to finding an alternative to
the export ban on staple commodities used during
food emergencies
Main Messages of Research
• Regional markets offers good export opportunities for
maize and rice through at least 2025
• Tanzania will need to increase production and
productivity to take advantage
• The export ban is not very effective and discourages
investments
• Diets are changing and maize is no longer the only
important food security crop
Main Messages continued
• Poor data is hampering analysis and decision making
• New approaches to food security should be
considered
• NFRA could be more effective if more focused on
providing food aid
Maize and Rice Regional Export Potential
• The East Africa Region is expected to face growing
deficits of maize and rice through at least 2020
2009 2020
– Maize Deficit (mil tons)
– Rice Deficit (mil tons)
1.3
1.2
7.8
2.8
• Tanzanian Export Potential to 2020
– Maize at 4% production growth net exports of .6 mil tons
at 5% production growth net exports of 1.6 mil tons
– Rice at 7.3% production growth net exports of .17 mil tons
at 10.% production growth, net exports of 1.03 mil tons
Climate Change Could Benefit Maize Exports
• World Bank study examines climate change models
and concludes that Tanzania will likely have
increased rainfall in the future.
• Key African trading partners, including Mozambique,
South Africa and Zimbabwe, will have lower rainfall.
• In addition, climate change will reduce the similarity
of weather patterns between Tanzania and key
trading partners.
Export Bans
•
•
•
•
Discourage investments and reduce production
Not very effective in controlling inflation
Not very effective at limiting exports
Harm poorest farmers while benefiting weathiest
consumers
• Have significant regional impacts
• Institutionalized Export Permits which impede exports
Export bans have a modest effect on food prices
Price indices, % change from free exports
CPI
Agr. CPI
Food CPI
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
-3.0
2011
2017
-3.5
• Maize and maize flours account for 16% of consumer food spending.
• Banning cross border maize exports lowers the national food price index by only
2.0-2.4 percent.
Trend of Annual Inflation Rate 2011
25
21.3
20
15
10
14.8
13
10.8
17.4
14.1
10.2
22.8
16.8
17.9
11.4
12.2
24.7
19.2
12.6
5
July
Aug
Sep
Oct
Nov
Annual Headline
Food inflation Rate
Non Food Inflation Rate
Tanzania Maize and Rice Reported Exports
vs. Partner Reported Imports, 2011 (tons)
Tanzania
Exports
to:
Maize
Reported
Exports
Rice
Reported
Imports
Reported
Exports
Reported
Imports
Uganda
30
254
7,743
27,338
Rwanda
1,830
11,042
23,985
24,228
Kenya
1,012
79,073
2,622
10,475
Burundi
-
4,719
155
5,877
DRC
1
1
1,409
1,409
2,873
95,089
35,914
69,327
Total
Exports are reported by Tanzania. Imports are reported by trade partner.
Export bans hurt rural poor and benefit urban rich
Income effect by quintile, % change from free exports
Rural
q1
q2
q3
Urban
q4
q5
q1
q2
q3
q4
q5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
2011
2017
Note: Income quintiles (q1-q5) are defined according to per capita income at the national level.
q1 represents the poorest 20% of households while q5 the richest 20% of households
• Export bans benefit urban consumers at a cost to rural households
Rural poverty population rises due to export bans (2017)
Maize surplus region, rural
Arusha
Iringa
Kigoma
Mbeya
Maize deficit region, rural
0Coast
32,000Dodoma
0Kagera
-8,139
-9,478
-15,021
13,879Kilimanjaro
0
0Lindi
0
Manyara
40,792Mara
9,274
Rukwa
26,735Mtwara
0
Ruvuma
-22,273Mwanza
0
Tanga
43,781Shinyanga
Singida
Tabora
134,915 Deficit rural total
210,169
-48,624
161,544
Morogoro
Surplus rural total
Rural total
Urban total
National total
27,148
47,651
23,819
75,254
Note: A positive number indicates increased poverty in 2017, while a negative number means a fall in
poverty.
The effect of export bans on maize producer
prices differs across regions
Maize regional producer price, % change from free exports
0
-5
-10
-15
-20
-25
-30
•
•
2011
2017
In the surplus regions maize producer prices are about 20-26% lower than the free export scenario
In the maize deficit regions, the price effect is modest. Maize producer prices decline by a modest
10-12%
Maize Prices in Arusha, Mbeya and Nairobi
Maize Prices in Arusha, Mbeya and Nairobi, Tsh/Kg
2007 - 2012
900
March 2011
800
700
600
500
400
300
200
100
0
Arusha
Mbeya
Nairobi
Requiring Export Permits discourages legal exports
• Exporters must travel to both regional and national
capitals to obtain permits to export food
• Required even when no export ban because
authorities expect it
• Leads to bribes and corruption
• Severely constrains exporter’s business activities
according to recent TANEXA survey*
*TANEX 2012, Problems of Official Export Permits to EAC and SADAC:
The case of Tanzania
Food Security – the focus on maize
• Maize is still the staple food crop and accounts for
40% of total calories and 16% of household
expenditures
• However, there are large regional differences in
calorie shares and household expenditures
• Rice and wheat account for 26% of calories in urban
areas and 12% in rural areas
Calorie share of maize declines with
income…
1.00
0.90
Beverages
0.80
Oil/fat
0.70
Milk
Meats
share
0.60
Fruits
Vegetables
0.50
Nuts, seeds and spices
Pulses
0.40
Sugars
Starches
0.30
Other grains
Rice
0.20
Maize and maize products
0.10
quintile 1
quintile 2
quintile 3
quintile 4
quintile 5
Maize and Rice Production
• Method of estimation not rigorous and possibly
biased
• Comparisons with Other Data:
– Agricultural Census-Survey of 2002/03 and 2007/08
– Household Budget and Consumption Survey of 2000/01
– Simulate consumption growth based on population and
income
• Conclusion - maize production is much higher than
MAFC’s estimates and rice is lower
NFRA not very effective
• NFRA bought only 121,000 tons of maize in 2011/12
– about 6% of marketed maize production
• Buying price was well above market price which
limited quantities that could be purchased and
disrupted markets
• Lack of transparency disrupted private sector
marketing
• Small farmers not able to benefit from NFRA higher
prices
New approaches to dealing with food security
• Conditional Cash Transfers
– Government to launch a Productive Social Safety Net
Program that will provide cash and conditional cash transfers
to low-income households
– Financed by World Bank Loan
– If successful this could become the main way to deliver food
aid assistance
• Currently used in Rwanda, Ethiopia and Malawi
Conclusions
• Government committed to building investor
confidence and finding alternatives to export ban
• Regional export opportunities are attractive
• The export ban is not very effective
• Broader definition of food is needed
• Better data is essential
• New approaches to food security are promising
• NFRA could play a more important role in food
security