Jean Balié, MAFAP Manager

Global Forum on Agriculture

OECD , 16 December 2013

Monitoring and Analysing Food and

Agricultural Policies (MAFAP) in Africa

1.Overview

2.Selected results

3. Vision and way forward

Outline

MAFAP System

1. Working with national partners to build evidence

a) Price incentives for key agricultural value

chains

b) Public expenditure and aid

c) Policy coherence

2. Facilitating policy dialogue, uptake and advocacy

– Regional (CAADP) and national (investment

plans, policy reforms)

3. Developing institutional capacities

- Ministries and other selected partner institutions

4. Establishing a community of practice

– National, Regional and Global

Where MAFAP works

http://www.fao.org/mafap

Burkina Faso

Kenya

Mali

Tanzania

Uganda

Ghana

Ethiopia

Malawi

Mozambique

Nigeria

Countries in the pipeline for 2014 -2019

Africa Asia

Burundi

Benin

Niger,

Rwanda

Senegal

…

Bangladesh

Cambodia

Lao PDR

Myanmar

…

Snapshot of results

for the period 2005-2010

On going updates for 2011-2012

The policy environment depressed prices received by producers

Producer prices were depressed by an average of 10 percent between 2005 and 2010, though price disincentives are declining.

Average percentage deviation of producer prices from equivalent world prices

Price incentives to Cotton in Tanzania

Government wishes to develop cotton sector

BUT

Negative price incentives

Taxation at district, regional and central level

Inefficiencies in processing

For sector to grow, policy reform and targeted investments required

Market inefficiencies further depressed prices received by producers

Average market development gap (percent)

Producer prices would improve significantly if market distortions from structural inefficiencies were eliminated. However, MAFAP results suggest these distortions are increasing.

Measuring the Market Development Gap in Ethiopia

Wheat

-60.00%

-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

2005 2006 2007 2008 2009 2010

Dis

incen

tive

s I

ncen

tive

s

Observed NRP at farm gate Adjusted NRP at farm gate

Declining level of public expenditure on agriculture and rural development Agriculture and rural development public expenditure as a percentage of total public expenditure

The share exceeded 10 percent over the period, but is declining over time, except in Kenya.

Shifting composition of public expenditures from rural development to agriculture-specific

Public expenditure on agriculture and rural development (Million USD)

Agriculture-specific spending increased from 39 percent to 57 percent of total expenditure on agriculture and rural development over the period analysed.

Composition – indirect ag-specific

Agricultural research

Inspection (veterinary/crops)

Storage

Tech assistance/extension/training

Infrastructure

Marketing

Composition of general support to

agriculture, 2006 - 2010

Direct support to agriculture favoured producers over consumers Average share of total direct support to agriculture targeting producers, consumers and other agents

Budgetary transfers to private agents targeted producers, while consumers were supported through a variety of trade and market policies, especially during the 2007/08 global food price crisis.

Composition – groups of

commodities

Share of PE targeting individual commodities

Government spending on rice in Mali

Increasing rice production is a key policy objective

Support to producers through:

- Input subsidies targeted

- Investments in irrigation infrastructure

Rice24%

Grains12%Other

64%

Share of agricultural specific expenditure targeted to the rice sector

(2005 – 2010)

...but not consistent with other policy effects

Farmers did not benefit from high international prices during the food crisis

They have faced strong price disincentives

Government signals are inconsistent

Conclusions

Market and trade policies are not producing the expected results; producers have faced price disincentives

Value chain inefficiencies are increasing, and have not been adequately addressed through public expenditure

Short-term policy measures adopted to protect consumers in the wake of the 2007/08 global food price crisis often conflicted with long-term goals to support production growth

Despite volatile conditions faced by consumers, public expenditure targeting consumers was limited compared to expenditure targeting producers

Although research is a CAADP pillar and a stated priority for many governments, public expenditure allocated to research was low in all countries and declined in East African countries

Need to continue monitoring policies to distinguish long-term trends from crisis effects

MAFAP: The way forward

A sustained, systematic and comparable policy monitoring system based on common methodology,

international peer review, country ownership, skilled national professionals, and

targeted partnerships.

Upgrade methodology (consumers, input markets)

Consolidate and “graduate” the 10 initial African countries

Expand to additional countries in Africa and beyond

Move from evidence for policy dialogue to policy reform

Institutionalize within FAO

Thank you! For more information:

www.fao.org/mafap