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World Trade Organization’s Trade Liberalization Policy on Agriculture and Food Security in West Africa

By Emeka C. Iloh, Michael Nwokedi, Chijioke Francis Onyebukwa and Queeneth Ekeocha

Submitted: January 22nd 2019Reviewed: April 26th 2019Published: April 22nd 2020

DOI: 10.5772/intechopen.86558

Downloaded: 23

Abstract

The study explores the link between WTO’s trade liberalization policy on agriculture and food security in West Africa. Specifically, it investigates whether the policy undermines food security in the subregion by examining its impacts on food importation and food dumping. The study relied mainly on documentary evidence. Data were scooped from documents and annual publications of the WTO, UNCTAD, FAO, ECOWAS, and World Bank. Data were analysed using content analysis, rooted on logical deductions. The results of data analysis show that the increased dependency on international trade (as being championed by the WTO) by many countries in West Africa has a number of direct and indirect implications on the realization of food security in the subregion. Importation not only exposes producers and consumers to increased vulnerability both to worsening terms of trade and to fluctuations in commodity prices, but also exposes the domestic food-producing industries to danger of extinction through steep competition. The study also found that relying on international trade for food supply encourages dumping of the excess products on developing countries at relatively cheaper prices. This harms domestic production and reduces the income of domestic farmers and other investors in the food production chain.

Keywords

  • trade liberalization policy
  • food importation
  • food dumping
  • international trade
  • agriculture

1. Introduction

Trade liberalization is a cardinal principle of the World Trade Organization (WTO), though its origin could be traced to the structural adjustment programmes of the international financial institutions (The World Bank and the IMF) in their attempts to incorporate developing countries into the capitalist development paradigm. In order to hasten this process of incorporation, countries, especially from the developing world, were mandated to liberalize their economies, including their trade relations with the rest of the world. Thus, every member country of the world trade body, while acceding to the document that embodies the WTO agreement, undertakes to liberalize its trade, especially trade in agriculture. Developing countries in particular are being encouraged to liberalize their agricultural trade in order to maximize abundant food and foreign exchange earnings for their ever-growing population.

Agriculture is a very important sector for West African countries. In addition to being the biggest employer of labour in the ECOWAS region, constituting 60% of the active labour force, and also representing about 35% of the gross domestic product (GDP) of the region [1], agricultural exports constitute an important element of West Africa’s foreign trade. With the exception of Nigeria that its main trade commodity in the international market is crude oil, agriculture constitutes the major trade commodity between West African countries and the rest of the world. More importantly, it is a vital factor in efforts by the region to combat poverty and food insecurity.

However, the importance of agriculture to West Africa as enumerated above notwithstanding, two major worrying trends have been noticed in West Africa’s agricultural trade performance in the international market. First, despite the majority of its population being engaged in agricultural activities, many of the countries in West Africa are food insecure. In other words, there is food security crisis in the subregion. Second, despite the fact that agriculture constitutes its main trade commodity in the international market, West Africa’s food imports have been on the increase.

Available evidence suggests that trade liberalization, instead of addressing these issues as promised by the international financial institutions, reinforces them. This is because the policy promotes unfair trade practices such as dumping, which undermines food security in developing countries. The policy also encourages food importation from developed countries, thereby undermining food self-sufficiency strategy of most developing countries, especially in West Africa. In other words, it has made many West African countries to depend on importation in order to meet their food requirements.

The role of international trade in this importation and redistribution of food from food-surplus regions to food-deficit regions cannot be over-emphasised. This is where the WTO, being the only prevailing international organization charged with the regulation of international trade, comes in. Through its Agreement on Agriculture, the WTO, therefore, has an undisputed international legal authority to make certain policies relating to food security, like other food and agriculture-based organizations such as the Food and Agriculture Organization [FAO], the World Food Programme [WFP], and the International Fund for Agricultural Development [IFAD]. Thus, since the WTO was institutionalised in 1995, it has been playing increasing role in global food governance through its Agreement on Agriculture. The trade liberalization policy has been the driving force of this agreement.

In West Africa, there are three major agro-ecological zones—the Sahelian, Sudanese, and Coastal zones—where production and consumption of food staples can be easily classified. In the Sahelian zone (northern Senegal, southern Mauritania, central Mali, northern Burkina Faso, Niger, Cape Verde and extreme north of Nigeria), the main cereal cultivated by most farmers is millet. However, in Cape Verde, rice and maize are mostly cultivated. In Mauritania, maize and sorghum are mostly cultivated. In Senegal, rice production is dominant. The principal alternatives are cassava floor, rice and sorghum. In the Sudanese zone (Southern Chad, Central Nigeria, Benin, Ghana, Togo, Côte d’Ivoire, southern Burkina Faso, Mali, Senegal, Guinea Bissau, Sierra Leone, Liberia) maize and sorghum are the principal cereals consumed by most of the population, followed by rice, cassava, and yam. In the Coastal zone—with two rainy seasons—(Guinea, Cote d’Ivoire, Liberia, Sierra Leone and southern Nigeria) yam and maize are the most important food products, supplemented by cowpea [2].

As noted above, West Africa has historically relied on international and regional trade to help assure its food security [3]. In other words, the region has always depended on food importation to provide sustainable supply of food for its population. The questions emanating from this fact are: why is this so since agricultural products remain the major item in West Africa’s export basket? Why do West African countries still grapple with food security issues when the majority of its active labour force is engaged in agriculture? These issues make a good case study in West Africa’s experience in multilateral trade in agriculture, especially as it affects its food security. Meanwhile, extant literature has mainly attributed food insecurity in West Africa and other subregions in the developing world to issues relating to unfriendly weather conditions, lack of research and development (R&D) in agriculture, lack of investments in the sector and many other reasons. Thus, the link between WTO’s trade liberalization policy on agriculture and food security problems in West African countries is yet to be adequately explored and given systematic treatment in extant literature. Against this background, this study intends to examine the role of WTO’s trade liberalization policy on agriculture in undermining food security in West Africa.

The chapter is divided into six sections. Following this introduction is Section 2, which discusses the materials and methods used for the study. Section 3 gives an overview of the WTO’s trade liberalization policy while Section 4 explores the link between trade liberalization, food importation and food security in West Africa. In Section 5, the nexus between trade liberalization, food dumping and food security was also explored. Section 6 concludes the chapter.

2. Materials and methods

The study relied on documentary evidence (secondary data). These were data sourced by extracting relevant information from other sources and previous studies. These documents were mainly annual publications of the WTO that contained information on trade liberalization; UNCTAD’s documents that analysed key statistics and trends in international trade, trade performance and commodity dependence, export performance and trade liberalization, as well as other topics covered in its annual Economic Development in Africa series. Also used were The World Bank’s publications on food security and FAO’s The State of Food Insecurity in the World. Furthermore, ECOWAS publications such as ECOWAS Agricultural Policy were utilized. Other secondary sources such as text books, journal articles and other written works sourced from libraries were also utilized. Finally, the study also made extensive use of internet materials that contained information on trade liberalization and food security. These documents are already in the public domain. What the authors did was to refine, interpret, evaluate and analyse them.

To analyse our data, we used content analysis, rooted on systematic logical deductions. This meant that we organised and synthesised the large volumes of textual data we generated from all the documents mentioned above, with a view to searching for patterns and discerning what was relevant from the documents. In other words, we systematically reduced the documents to logical, meaningful and coherent interpretation, and on the basis that drew our inferences and conclusions. Figures were used where necessary to enhance clarity of thought and presentation.

3. Overview of WTO’s trade liberalization policy

Trade liberalization means removing or reducing restrictions or impediments to the free movement or exchange of goods between and among countries. This includes removing or reducing tariff barriers such as surcharges and duties as well as non-tariff barriers which include quotas and licensing rules. The idea behind the policy is to minimize the role of government in making decisions on the allocation of resources and to change the incentive structure in favour of exports through the liberalization of imports to follow the path of export promotion instead of traditional import substitution [4]. The policy did not start with the WTO. It was part of a policy package of market-oriented reforms advocated by the International Financial Institutions (IFI), that is, the World Bank and the International Monetary Fund (IMF), in response to the economic crisis in Africa, brought about by the global economic crisis that followed the two oil crises of 1973 and 1979 [5, 6]. Then it was referred to as Structural Adjustment Programmes (SAP). It gained momentum with the establishment of the WTO in 1995, and became one of the major policies that guide international trade, especially in agriculture. The trade liberalization policy under the WTO regime has three fundamental components. They include:

  1. Expansion of market access by requiring the conversion of all non-tariff barriers to tariffs (tariffication) and the binding and reduction of these tariffs.

  2. Reduction of trade-distorting domestic subsidies or support.

  3. Reduction of both the volume of and expenditures on subsidized exports [7, 8].

Accordingly, it has been noted that:

Under the Agreement, countries agreed to substantially reduce agricultural support and protection by establishing disciplines in the areas of market access, domestic support, and export subsidies. Under market access, countries agreed to open markets by prohibiting non-tariff barriers (including quantitative import restrictions, variable import levies, discretionary import licensing, and voluntary export restraints), converting existing non-tariff barriers to tariffs, and reducing tariffs. …countries also agreed to reduce expenditures on export subsidies and the quantity of agricultural products exported with subsidies, and prohibits the introduction of new export subsidies for agricultural products. Domestic support reductions were realized through commitments to reduce an aggregate measure of support (AMS), a numerical measure of the value of most trade distorting domestic policies [9].

Market access simply means the right which exporters have to access a foreign market. The WTO agreements allow WTO members to protect their markets, to the extent necessary to protect human, animal or plant life or health. In practice, ‘market access’ indicates the means in which this protection can be implemented. In the context of the WTO, it is a legal term that indicates the conditions imposed by a government for a product to enter a country and be released for free circulation in that country under normal circumstances [10]. Before the Uruguay Round, protection for agricultural products at the border did not always consist of tariffs only. In addition to tariffs, other non-tariff measures at the border have also been applied. One of the key elements of the Uruguay Round trade negotiations was the agreement by parties to convert these other types of border protection mechanisms into tariffs. The process of this conversion is known as ‘tariffication’. With respect to export subsidies, they are governments’ special incentives provided to promote more foreign sales. These subsidies, which depend on export performance, can take the following forms: divestment of government shares at lower market prices; cash payments; subsidies funded by producers or processors as a result of government measures such as assessments; marketing subsidies; transport and freight subsidies; and subsidies for commodities based on their incorporation into export products [10].

Some of the specific provisions of the Uruguay Round which were meant to enhance and accelerate the process of trade liberalization have been articulated as follows:

  1. Tariffs: tariffs for industrial products were reduced on average from 4.7% to 3% and the share of zero-tariff products increased from 20% to 22% to 40–45%. Tariffs were completely removed on construction equipment, pharmaceutical products, medical equipment, steel and paper products.

  2. Quotas: countries replaced import quotas for agricultural products, textiles and clothing (under the multi-fiber agreement) with less restrictive tariffs over a 10-year period. Tariffs for agricultural goods were reduced at the rate of 24% in developing countries and by 36% in industrialized countries. Tariffs for textiles were reduced by 25%.

  3. Subsidies: the quantity of agricultural exports to be subsidized was reduced by 21% over a six-year period.

  4. Antidumping: antidumping procedures were made more rigorous, thereby ensuring that it became much more difficult to use them for protectionist purposes.

  5. Safeguards: voluntary export restraints, orderly marketing arrangements and similar trade-restrictive measures were prohibited. Existing schemes were removed in 4 or 5 years [11].

Trade liberalization was forced on Africa in the form of Structural Adjustment Programmes (SAP) by the International Financial Institutions (IFIs) in the 1980s. The late 1970s and early 1980s witnessed a combination of factors that created a large-scale economic crisis in Africa. First, there was a global economic crisis occasioned by the two oil crises of 1973 and 1979 which strongly and negatively affected the demand for African exports and resulting in falling commodity prices. Secondly, interest rate hikes dramatically increased the cost of servicing foreign debt. The Gross Domestic Product (GDP) growth rate of the region plunged from 4.3% per annum in the period 1971–1975 to 1.1% in 1981–1985 [6]. In response to this economic crisis in Africa, the World Bank and IMF advocated and actually imposed a policy package of market-oriented reforms, otherwise known as SAP or economic liberalization. As a result of these structural adjustment programmes, agricultural policy in many developing countries (including West Africa) was characterized by a high level of market openness even before the Uruguay Round reforms [8].

Before this period, trade policies in most African countries were characterized by extensive state involvement in the economy, both in production and in marketing. In the decades following independence, most African countries adopted heavily interventionist policies [12]. Governments were involved in agricultural marketing and food processing through the creation of marketing boards, parastatal processing units, and government controlled cooperatives. The trade policies of many countries in Africa were informed by the doctrine of Import-Substitution Industrialization (ISI). This is from the 1960s to the 1980s. ISI was widely accepted then as a viable policy package to help developing countries achieve structural transformation and lessen their dependence on primary products. This strategy advocated the protection of the domestic market from foreign competition in order to promote domestic industrial production. Therefore, the domestic market in these countries was shielded from foreign competition through these policy measures. Non-tariff measures (NTMs) such as quantitative import restrictions and government licenses were used profusely to restrict imports. For example, some African countries such as Burundi, Ethiopia, Madagascar, Sudan, the United Republic of Tanzania, Zambia, and Nigeria, Ghana and Senegal in West Africa all adopted inward-oriented policies with significant trade restrictions [6]. However, with the introduction of SAP, African countries started the process of economic liberalization.

Thus, Africa has liberalized its economy even before the policy became a guiding principle of international trade under the WTO regime. However, it gained momentum with the establishment of the WTO in 1995 and the multilateral trade obligations enshrined in its agreements for African countries that are members. Import liberalization measures focused on three main policy areas: to reduce the overvaluation of currencies of African countries and removing exchange rate rationing; the decommissioning of non-tariff measures by reducing the list of products for which import licenses are required; and to reform the tariff system by reducing tariff dispersion and the general level of tariffs [13]. Liberalization of exports was also necessary to improve the balance of payments. There were four instruments that were considered to be the most distorting of exports and they were targeted with the following measures: withdrawal of export licenses; devaluation of the national currency; reducing or eliminating export taxes; and dismantling of agricultural marketing boards for export crops [6]. Thus, the process of liberalization in Africa involved the tariffication of non-tariff barriers, cuts in the number and value of tariffs, exchange rate liberalization and the removal of export barriers.

4. Trade liberalization, food importation and food security in West Africa

Extant literature has always glossed over the link between trade liberalization policy of the WTO and food security challenges prevalent in West Africa. In the first place, food insecurity in the region is a consequence of frequent weather- and market-related shocks, as well as by widespread conflicts and political instability in the region that often trigger the mass abandonment of arable land [14]. The market-related shocks in this case have to do with constant price spikes that make market prediction and projections difficult. Many authors tow this line, ignoring the effect of trade liberalization on food security in developing regions.

The effect of WTO’s trade liberalization policy on food security in West Africa is evident. To start with, West Africa, during the food crisis of 2008, encountered the problems of rising food prices, high unemployment and population growth that has surpassed agricultural productivity. These developments, added to external factors which include trade restrictions by major international food exporters, have made West Africa prone to supply shocks and food insecurity. In the absence of increased agricultural productivity growth, the region’s food needs are realized by depending on food aid and food imports. This reliance on food imports is facilitated by the system of free market exchange [15], otherwise known as trade liberalization. This dependence on imports has its drawback, as was underscored by the 2008 surge in world food prices in which export restrictions by major suppliers triggered widespread food riots in West Africa [16]. Export bans from some Asian countries such as India, for instance, threatened the availability of rice imports to West African countries at the peak of the food crisis [3].

Apart from export restrictions by major food suppliers, food importation encourages food self-reliance, as against food self-sufficiency strategy. Self-reliance in food occurs when a country pursues an outward-oriented trade regime in order to earn enough from its exports of goods and services to finance its food needs. Conversely, the food self-sufficiency approach (or what western literature, exemplified by Staatz et al. [3], described as an autarkic approach to food security) entails the country meeting its food requirements—or a substantial part of it—from domestic production [17]. However, food import dependency is viewed differently depending on each individual country’s ability to pay its food import bill [18]. For some oil or mineral rich countries or for some of the relatively more industrialized countries (such countries are however few in West Africa, if at all), importing some types of food products seems more beneficial than producing these products at home, especially since they have enough foreign currency reserves to pay for the food import bills. But for cash-strapped countries (a category where many West African countries belong to), persistent food import becomes a problem when the high and rising food import bills take money away from other important development agenda without resolving food insecurity. Figure 1 shows the composition of West African food imports before and after WTO was established.

Figure 1.

Composition of food imports into West Africa pre- and post-WTO (%). Source: Developed by authors from [19, 20].

The figure shows that the composition of food imports has changed somewhat over time. Cereals have remained steadily at the top of the list (39% between 1986 and 1990; 41% between 2006 and 2010; and 43% between 2011 and 2016), followed by fish, dairy products and sugar. Vegetable oils, however, have increased sharply, from seventh place in 1986–1990 (4% of food imports) to second place in 2006–2010 (13% of food imports). This is not surprising as during this time, West Africans were sharply increasing their consumption of fats and oil [19]. However, it decreased to 11% of food imports between 2011 and 2016. The figure also indicates that cereals are the major food staples consumed in West Africa. These staples not only constitute the highest type of food imported into West Africa but the region has also attained a certain level of self-sufficiency in them, as shown in the Self-Sufficiency Ratios (SSR) in Figure 2 .

Figure 2.

Self-sufficiency ratios of individual cereals in West Africa (%). Source: Developed by authors from [19, 20].

As noted above, cereals are the main food staple in West Africa, and also the most imported food item in the region. They are very important to food security in West Africa, as they are the leading commodity group that are imported to address food requirements in normal years, but especially when the region faces shortfalls in production. The reliance of the region on the international market for cereals has been on the increase in recent years and as at 2010 was about 20%. Five countries in West Africa that import cereals on large quantities to support their food deficit are Cape Verde, Liberia, Mauritania, Gambia and Côte d’Ivoire [21]. The region’s overall self-sufficiency ratio (SSR) for cereals stood at 88% between 1986 and 1990. This is prior to the coming into existence of the WTO and its liberalization policy in the agricultural sector. The SSR for cereals declined to 83% between 1996 and 2000, few years after the establishment of the WTO, and declined further to an average of 81% in the 2006–2010 period. It increased slightly to 82% between 2013 and 2017. For individual countries, SSRs for cereals vary widely, ranging from as low as 7% for Cape Verde to 100% for Mali in the 2006–2010 period.

Likewise, countries have major differences as regards changes in their SSRs over time. For instance, countries such as Burkina Faso, Guinea, Togo, Mali, The Gambia and Sierra Leone have improved their dependence on domestic cereal supplies. However, majority of the countries increased their reliance on imported supplies. Such countries include Nigeria, Senegal, Côte d’Ivoire, Liberia, Cape Verde and Mauritania [19]. Nigeria is by far the largest producer of cereals in West Africa. It accounted for 51% of the West African cereals supply over the period 2005–2010, followed by Mali (10%), Niger (8%) and Burkina Faso (7.5%). As regards maize production in particular, Nigeria is also the West Africa’s leading producer accounting for as much as 54% of total West Africa’s maize production, followed by Ghana (10.6%) and Cameroun (10.3%) [22].

There are also significant differences in SSRs between commodities and countries. Given the limited potential for domestic production in the region, nearly all of the wheat consumed in West Africa (99%) is imported. In addition, no country in the region fully meets its rice consumption requirements from domestic production alone, though some do so to a significant extent (the SSR of Mali is 96%, that of Sierra Leone is 80% and that of Guinea is 80%). Nigeria, the largest rice producer and consumer in the region, saw its SSR fall from 83% to 56% from the late 1980s to 2006–2010 [19].

Apart from cereals, regional SSRs are also declining for some other basic food commodities, meaning that imports of such food commodities are on the increase. In particular, this is true for sugar, palm oil, milk, and poultry meat. From being a net exporter and almost having self-sufficiency in both poultry meat and palm oil in the 1980s, West Africa became a net importer of these products and its SSR has gone down to below 70% in the period between 2006 and 2010, and below 80% in the period between 2013 and 2017. For milk and sugar, the region has always depended on imports to meet a large share of its needs. In fact, in the case of sugar, the region now covers only some 12% of its needs, almost one-third of the level of the 1980s. These are illustrated in Figure 3 .

Figure 3.

Self-sufficiency ratios of selected non-cereal commodities in West Africa (%). Source: Developed by the authors from [19, 20].

As it is in the case of cereals, there are also large differences among the countries of the region regarding their dependence on imports in these other basic food commodities. None of the countries is self-sufficient in milk. Six counties (Cape Verde, Côte d’Ivoire, The Gambia, Ghana, Liberia and Nigeria) actually produced less than one-third of the milk they consumed within the study period, and their dependence on imports is increasing. For palm oil, all countries that are producers in the region, except Côte d’Ivoire and Benin, have decreased their SSR considerably, thereby increasing the importation of this staple. While palm trees are native to West Africa, the region has been unable to expand production and productivity to meet domestic and export demand. In fact, Figure 3 shows that the production capacity of West Africa for palm oil has been decreasing over the years. Other parts of the tropical world (in particular Malaysia and Indonesia) now produce and export more palm oil than other countries, including West African countries. These two countries alone account for 80% of world production and are the main exporters to West Africa and to other countries [23].

Another commodity where SSRs for almost all countries in West Africa have been declining fast is poultry meat. While the average SSR in the region is just under 70%, some of the countries such as The Gambia and Cape Verde import more than 80% of their growing poultry meat consumption, whereas they have almost reached their lower consumption levels at the end of 1980s. Other countries have significantly increased their reliance on imports, and some have taken protective measures to limit this situation (for example, Nigeria’s ban on chicken imports). Finally, as regards sugar, though many countries have never had a significant production, of those who have, only Niger seems to have managed to maintain its already low SSR. All the other countries have increased their reliance on imported sugar, as Figure 3 shows.

A study done in 1999 [8] found that trade liberalization intensified and sustained food trade deficit in Africa: an increase in food imports and an accompanying decline in food production. Thirteen years after this study, another study [18] also found that this trend has continued as shown in Figure 4 .

Figure 4.

Africa’s food import and export trends, 1961–2016 (US$ billion). Source: Developed by the authors from [18, 20].

The figure shows that in the 1960s, when most African countries were gaining political independence, African countries were exporting more food to the rest of the world than they were importing. This trend continued till around 1970. Africa’s food trade deficit started showing after 1970 and since then, the trend has continued at a much more alarming rate. In fact, between 2000 and 2009, nine African countries switched from being net agricultural exporters to being net agricultural importers. Three of these countries—Benin, Chad and Mali—are in West Africa [24]. By 2007, the food trade deficit amounted to about US$ 22 billion, with total food imports by countries in the continent amounting to 40 billion US dollars. African food imports peaked at almost US$ 50 billion in 2013 before coming down to US$ 39.7 billion in 2016. This growth in African food imports also reflects in the growth of the various categories of food the region has been importing, which includes animal products, dairy products, fruit and vegetables, oils and staples. Figure 5 shows the value of imported food into West Africa from 1995 to 2017.

Figure 5.

Import of foods, ECOWAS, 1995–2017 (US$ million). Source: Developed by the authors from [20, 25].

It could be deduced from the figure that the trade liberalization policy of the WTO has only opened the doors for more importation of food staples into West Africa, undermining food self-sufficiency and thereby threatening food security in the subregion.

As at 2010, staples constituted to a large extent the biggest share of all food imported into the region, and this has increased over the years. These staples (cereals, cassava, pulses, potatoes and other roots and tubers) represented more than 50% of all foods imported by West African countries in 2010 [14]. However, by 2016, it reduced to about 36% as shown in Figure 6 .

Figure 6.

Total West African imports in food products in percentage (2016). Source: Calculations from [20].

The figure shows that Nigeria, Ghana, Senegal and Cote d’Ivoire are some of the top countries that import staple food in West Africa, while Sierra Leone, Guinea Bissau and Cape Verde are some of the least importers within this period. Imports of all other food groups have also increased over the years, though averagely, animal products, dairy products, fruits and vegetables, and oils accounted for 1%, 4%, 5% and 3%, respectively of total food imported as at 2010 [14].

Imports of poultry meat have also grown exponentially, increasing from virtually nothing to more than US$ 600 million in 2012 [25]. Poultry meat is essentially sourced from the European Union, the United States and Brazil. However, some countries such as Nigeria and Senegal have banned the importation of frozen poultry meat into their countries since 2002, ostensibly to boost local production, after import surges of the 1990s occasioned by the liberalization of import barriers threatened the local industry. Presently, Nigeria alone accounts for about half of poultry meat produced within the ECOWAS territory. However, despite tremendous progress made in domestic production of poultry meat in West Africa, especially in Nigeria, Ghana and Senegal, the subregion is yet to attain self-sufficiency in poultry meat as about half of the poultry meat consumed in West Africa is still imported. Figure 7 shows the main origins of poultry meat imported into ECOWAS countries by 2017.

Figure 7.

Imports of poultry meat by major origin, ECOWAS, 2017. Source: Calculations from [20].

The increased dependency on international trade and importation by many countries in West Africa has a number of direct and indirect impacts on the realization of food security in the subregion. First, producers and consumers are exposed to greater vulnerability both to commodity price fluctuations and to deteriorating terms of trade. This kind of situation limits the ability of countries that tremendously rely on world trade and imports to absorb external shocks, such as overproduction or harvest failures in other countries [26]. Second, depending on imports for food needs of the population exposes the domestic food-producing industries to danger of extinction through steep competition. Obviously, imported food staples are cheaper in price due largely to export subsidy and domestic supports those products received from their home countries. When they are flooded in developing countries’ markets, people tend to patronize these products more because they are not only cheaper, but also urban consumers mostly tend to have preference for these foreign products as they ‘suit’ their class and status. Domestic products should be left for ‘local’ people.

5. Trade liberalization, food dumping and food security in West Africa

Dumping occurs when manufacturers export a product to another country at a price below the normal price. It entails selling products in foreign markets at unfairly low prices (prices lower than domestic costs or production costs) for the purpose of gaining competitive advantage over other suppliers. Dumping occurs when trade companies export agricultural products from developed countries to developing countries’ markets at prices below production costs in the country of origin, undercutting the prices of local agricultural products and consequently destroying small farmers’ domestic markets [27]. An example of this could be ascertained in the different prices European Union (EU)’s producers sell their poultry meat in their home countries and in West African countries. For instance, in 2003, EU producers sold their chicken at an average of 1.48 Euro/kg. In France (the largest chicken producer in the EU), during the same year, consumers bought their chicken at 4.86 Euro/kg. At the same time, EU frozen chicken was sold at 0.50 Euro/kg in the West African cities of Dakar, Cotonou, Douala, and Abidjan [28]. This is a classic example of dumping with serious implications for domestic production, food self-sufficiency and food security. Meanwhile, these frozen chicken parts exported to West Africa and other African countries have no value in the EU, because there is no demand and consequently no markets for them. The only alternative market is pet food, and because African traders offer higher prices than the price offered by the pet food industry in EU, the products are shipped to Africa and dumped in African markets.

Another example is the dumping of dairy products by the EU in West African markets. Every year, the EU, with nearly 40% of global trade volume, exports approximately 40,000 tons of milk powder and sweetened condensed milk to the Francophone countries of West Africa alone [29]. These products are subsequently sold at prices far below their market prices in the countries of origin, undermining domestic production. On the surface level, it looks good that these products are sold at lower prices. At least, consumers would not spend so much purchasing food. But as has been warned in [26], short-term interest in procuring food from international markets at lower prices should not lead countries to sacrifice their long-term interest in building their capacity to produce the food they need to meet their consumption needs. As noted in [29], in 1999, 1 L of milk from subsidized milk powder from the EU costs 160 African Francs in Senegal, while 1 L from domestic production costs about 350–400 African Francs. This summarizes the extent of dumping by the EU on West African markets. The focus on EU is because the Union is West Africa’s biggest trading partner. The US trade with West Africa is mostly centred on exportation of machinery and importation of crude oil, except in few cases where it imports agricultural products such as cocoa from Cote d’Ivoire [30].

Both GATT and the WTO consider dumping as an unfair trade practice, yet some member countries (especially developed countries) of the world trading body still use it in their trade relations with developing countries. Countries that subsidize productions at home are mostly the ones that use dumping in their trade relations with trade partners. This is because subsidized products are usually exported at lower prices—prices that are lower than the cost of production and the prevailing price in international market. In international agricultural and food trade, the EU and the United States are the major users of dumping as a competitive strategy because of the high level of export subsidies and domestic support they grant to their farmers. Hence, as argued in [8], the rules governing the multilateral trading system are seen as providing opportunities for the United States and the European Union to continue subsidizing agricultural production and dumping the surpluses on the international market at artificially low prices while at the same time requiring developing countries to open up their markets to harmful and unjust competition from producers in industrialized countries. This brings about a situation where domestic food production in developing countries is displaced by cheap imported food. It has also stripped local farmers their ability to increase their incomes and for the local population to have access to food.

Apart from export subsidies and domestic support given by the US and EU to their farmers which encourage dumping, the Economic Partnership Agreements (EPAs) entered into between West African countries and the EU also encourages dumping of EU foods in West Africa. The agreement requires that West African countries should open up their markets for EU imports while EU gives them access to European markets as well. It has been argued that imports into West Africa from the EU would increase as a result of the agreement and that some African producers would be harmed as a result of the removal of tariffs on EU imports [31]. The implication is that West African food producers who cannot compete with the cheap imports are thrown out of production. This has very severe consequences for food security in the subregion. A study funded by the EU also shows that lower tariffs on potatoes, onions, poultry and prepared tomatoes could cause serious injury to domestic production and the well-being of producers, depress local industry and discourage the development of processing capacity [19]. In the same vein, the highly subsidized export of beef from the EU to West Africa has led to thousands of nomads in the Sahel to be driven to starvation by European beef dumping [32].

Also, trade liberalization has facilitated the dumping of frozen chicken cut parts (neck, back, legs, and wings) into West Africa by the EU. European Union consumers tend to eat breast rather than whole chicken, and there is no market in the EU for the other parts, except for pet food [28]. European poultry processing industry, therefore, has the choice between using the remaining parts as pet food and exporting to poor countries at low costs. These poultry products exported to developing countries are usually not hygienically produced, with high negative impact on food security [28]. Often, chickens are fed with antibiotics daily, not as medicines, but as growth hormones. This results in low quality of meat both in terms of taste and sanitary standards, with dire consequences on the food-quality aspect of food security. The costs of all these damages are carried by the importing country, and not by producers. This has been summarized thus:

The dumping of agricultural commodities on world markets increased food insecurity in developing countries by undercutting domestic production. The availability of cheap imported food depressed domestic food prices in developing countries, lowered the income of local farmers, and reduced incentives to invest in agriculture. Export dumping also reduced the export earnings of developing country producers by depressing world market prices for agricultural commodities [8].

A good example of the effect of dumping on food security is illustrated by the impact of trade liberalization in tomato concentrate on Senegal’s domestic production capacity. Tomato processing industries in Senegal have been affected adversely by the influx of cheap food products that were previously produced domestically [33]. Those industries cannot compete with mass production from the developed countries especially the EU due to lacking economies of scale. So in Senegal, the promotion of a viable agro-industry has been exposed even further to subsidized competition. Before liberalization, Senegal was a noticeable exporter of processed tomatoes—especially into other West African countries, but increasing imports of EU subsidized tomato concentrate has undermined the domestic infant industry. Within a year of WTO’s existence, exports of tomato concentrate from the EU into Senegal jumped from 64 tons to 5348 tons, following trade liberalization as dictated by the WTO. On poultry meat, by 1992, before WTO and its trade liberalization policy came into place, Ghana’s domestic market supplied 95% of Ghana’s poultry requirements [33]. However, a decade later, the domestic market supplied only 11% of the country’s poultry requirements. The rest were supplied by foreign competitors which was made possible by trade liberalization. The issue was that local producers could not compete with the obviously subsidized imports from developed countries’ markets. The resultant effect was that this undermined the domestic industry with its consequences on food security.

The irony of the situation is that the trade liberalization narrative ignores the historical precedent in most developed countries of how agricultural trade protections facilitated development of agricultural sectors and industrialization. Details of the extensive use of subsidies, policy supports, and market protections by nearly all industrialized countries as part of their own economic development have been provided in [34]. Liberalization of agricultural sectors was never the trajectory taken by developed countries in achieving agricultural development. Indeed, liberalization policies only arrived well after industrialization. Even then, trade liberalization is arguably more illusionary than existent because even in this era of WTO, industrialized countries still employ the use of subsidies, domestic support and other restrictive measures in their trade relations with the rest of the world. For instance, In OECD countries, support to the agricultural sector has been increasing rather than decreasing. While the total support amounted to US$ 298 billion in 1986–1988 (before WTO), it amounted to US$ 311 billion in 2001 (even with the WTO in place), with three quarters of this support going to farmers [27].

However, there is no gainsaying the fact that in some ways, trade liberalization influences food security positively. First, it expands markets. For consumers, it opens access to additional sources that can supplement domestic production to meet demand. Imports can be essential during drought, diseases, floods, or other disruptions to domestic production. Farmers can also benefit from access to larger markets, supporting their income by exporting excess quantities and providing access to a wider variety of low-priced inputs like fertilizer, seeds, pesticide, and machineries [35]. However, because the rules governing international trade is biased in favour of the interests of developed countries, reliance on it for food security as being championed in liberal literature will spell doom for developing countries in general and West Africa in particular. In line with the argument in [26], the role of international trade should be reduced to complement a quest for greater food self-sufficiency.

Closely related to food dumping is the issue of food aid. The effect of food aid on international trade, but especially on agricultural production in the countries receiving the aid had culminated in adopting the FAO Principles of Surplus Disposal as well as the founding of the Consultative Sub-Committee on Surplus Disposal (CSSD) as early as 1954. The Principles of Surplus Disposal is a kind of code of conduct that guides governments in providing food aid. Principally, they are meant to ensure that food and other agricultural commodities which are exported on concessional terms result in more consumption for the country receiving the food aid and do not displace normal commercial imports. Also, they seek to ensure that domestic production is not affected adversely or even discouraged. These principles were recognized in Article 10 of the Uruguay Round Agreement on Agriculture [36]. Article 10 demands that countries respect the FAO’s Consultative Sub-Committee on Surplus Disposal and its principles and make food aid available ‘to the extent possible’. However, neither the recommendation of the FAO-CSSD nor that of the WTO has had an impact on WTO members’ food aid practices, as donors continue to use it as alternative to dumping after, in many cases, placing conditionality on them [36].

Thus, West African countries have been receiving large tons of food aid from developed countries. Among the highest recipients of food aid in a single year in West Africa were Liberia, which received 173,000 metric tons in 1997, and Ghana which received 123,000 metric tons in 1991. Both countries also received 55,338 metric tons and 81,000 metric tons of food aid in 1991 and 2000 respectively. Niger also amassed a total of 106,000 metric tons of food aid in 2010 alone. Sierra Leone, Cote d’Ivoire, Burkina Faso, and Cape Verde have also received food aids amounting to 75,000 metrics tons in 2002, 57,000 metric tons in 1990, 55,338 metric tons in 1991, and 53,227 metric tons in 1997 respectively [14]. It has been argued that this huge aid shipments of food, in particular wheat and rice, to West Africa have altered the consumption patterns in the region, shifting consumers’ preferences from domestically produced ‘inferior’ cereals to ‘superior’ imported grains [37]. Therefore, in its own way, food aid has contributed to the food security crisis in West Africa by shifting consumers’ preference for local food products to foreign food products, thereby undermining local production.

6. Conclusion

This paper demonstrated that WTO’s trade liberalization policy on agriculture has not improved food security in West Africa. Rather, it has undermined food security in the subregion. This conclusion is based on the results of empirical evidence and data analysis which indicated that local food production has been on the decrease while food importation and dumping are on the increase. These are direct effects of trade liberalization. More so, the subregion’s self-sufficiency ratios have been dwindling, which gives more impetus for food importation. This negative trend is made possible partly because of disincentive to continue production which is linked to the WTO’s policy of discouraging government’s supports and incentives to food producers in developing countries. The resultant effect is dumping of food products by the industrialized countries on West African markets which undermines local food industries and drives them out of production because of uncompetitive prices these foreign products offer. This has serious implications for food security in the subregion. On the basis of the foregoing, the paper concludes that the WTO’s trade liberalization policy on agriculture has not improved food security in the West African subregion. In fact, the policy has actually undermined food security in West Africa.

Thus, the paper established that the WTO trade liberalization policy on agriculture encourages food self-reliance/food importation as against food self-sufficiency/domestic production. As a result of this, most West African countries that have acceded to the WTO agreement tend to pursue food self-reliance strategies as against food self-sufficiency strategies, thereby relying on food imports that expose them to the vagaries of international food price hikes. Finally, the paper also established that against WTO rules, developed countries, especially the United States and European Union, still give export subsidies and domestic supports to their farmers. These encourage dumping of the excess products on developing countries at relatively cheaper prices. It also harms domestic production and reduces the income of domestic farmers and other investors in the food production chain.

7. Recommendations

On the basis of the findings, the study puts forward the following recommendations:

  1. West African countries should aim at food self-sufficiency instead of food self-reliance. A key advantage of a national food self-sufficiency strategy is that it ensures that the country depends less on the export policies of other countries, especially for important basic staples. The attention of this strategy is focused on the agricultural sector and it has the capacity to change the age-long underinvestment in agricultural production in most West African countries. Additionally, since agriculture provides employment for the majority of the active population in West Africa and is a major source of income for the majority of people, it follows that the strategy can promote overall development if they encourage increased productive investment in agriculture.

  2. As a corollary to the above, investments in the agricultural sector that will increase food availability and strengthen the food production system in West Africa should be given immediate priority by governments of West African countries, especially the innovation of family/smallholder farming. Reliance on international trade that is obviously biased against their food needs is not a strategy that can be sustained.

  3. West African countries, and indeed, all developing countries should move for the reform of the WTO agreements in general and the Agreement on Agriculture in particular, especially market access of West African commodities into developed countries’ markets. Greater market access can be achieved through further reduction of developed country tariffs in order to address dirty tariffication. It can also be improved by applying tariff reductions on a product-by-product basis rather than industry-wide averages in place currently. A review of the Agreement should also be such that affords developing countries with a policy space that gives governments allowance to pursue independent policies such that food security objectives are given precedent over WTO trade obligations.

  4. West African and other developing countries should insist on the removal of export subsidies and domestic supports enjoyed by agricultural producers of developed countries from their governments. It is these subsidies and supports that bring down the prices of foreign goods which leads to dumping of the products in African markets, thereby, undermining domestic industries.

Acknowledegments

The authors wish to acknowledge the African Heritage Institution, Enugu, Nigeria, for allowing the use of its library and space by the authors during the course of this research.

Conflict of interest

The authors wish to declare that there is no conflict of interest.

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Emeka C. Iloh, Michael Nwokedi, Chijioke Francis Onyebukwa and Queeneth Ekeocha (April 22nd 2020). World Trade Organization’s Trade Liberalization Policy on Agriculture and Food Security in West Africa [Online First], IntechOpen, DOI: 10.5772/intechopen.86558. Available from:

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