Import protection for agricultural products: current situation and challenges for sub-Saharan Africa

This Note is part of the Global Observatory of Support to Agriculture recently created by the FARM Foundation. It provides an overview of agricultural tariff protection around the world, based on the most recent data from the Centre for Prospective Studies and International Information (CEPII), and discusses the challenges of a possible increase in customs duties on agricultural products in Africa. Its main findings are as follows.

A. The observation

In sub-Saharan Africa, agriculture is moderately protected and to a lesser extent than in other developing regions.

• • Customs duties applied in different regions show significant differences depending on their method of calculation and depending on the agricultural products.
  • The methodological choices significantly condition the results: the weighting system chosen for the calculation of average tariff equivalents has a strong influence on their measurement.
  • Tariffs on agricultural products are on average higher for food products than for non-food products. Similarly, processed agricultural products are generally more protected than raw agricultural products.
  •  In 2013, across the world's major regions and for all agricultural products, the highest average tariffs were observed in South Asia and North Africa. Protection in sub-Saharan Africa (15 %) was close to the world average.
  • The evolution of average tariff protection on agricultural products between 2001 and 2013 reveals a slight decline at the global level, with however a more significant decrease of almost a third in South Asia and sub-Saharan Africa.

In sub-Saharan Africa, tariff protection on agricultural products is geographically very heterogeneous.

• • Within sub-regions, tariffs on agricultural products are on average much higher among West African countries than among countries in other sub-regions.
  • Between sub-regions, the highest tariff protections are observed in Central Africa and East Africa.
  • In 2013, all sub-regions of sub-Saharan Africa, with the exception of Southern Africa, protected their agriculture less from the rest of the world than from other sub-regions of the continent.

B. Political issues for sub-Saharan Africa

The debate over whether to increase protection for African agriculture is hampered by the "food price dilemma."
Reducing competition from low-cost imports, particularly from countries with much higher agricultural productivity and heavy subsidization, through tariff increases can both foster the development of robust agri-food sectors that can reduce the continent's dependence on global markets and create jobs. However, this risks penalizing the poorest consumers, who are highly sensitive to rising food prices, and hampering the participation of African farmers in global value chains.

To get out of this dilemma, the possible increase in tariff protection must be included as part of a global development strategy, combining various measures.

• • A significant increase in customs duties on agricultural products is not an option
    that if provisions, fiscal or otherwise, are implemented to
    reduce the additional cost of food for the poorest households.
  • An optimal policy could be to combine a small increase in tariff protection with strong support for investment in agriculture, with a view to improving farm productivity and product quality. The desirability and level of protection must be assessed on a case-by-case basis.
  • There is no point in increasing customs tariffs if we do not simultaneously reduce market inefficiencies, linked in particular to transport and processing costs and the market power of certain operators, as well as destabilising state interventions aimed at restricting agricultural exports in the event of a surge in prices, which weigh on the prices paid to producers.

Trade agreements significantly reduce the room for maneuver for African countries to potentially increase agricultural protection.

• • Under WTO agreements, African governments theoretically have room to increase applied tariffs, which are generally lower than bound tariffs. However, this room for maneuver is limited in practice due to the states' membership in regional economic communities. All member states of an economic community would have to agree to raise the common external tariff, which is politically difficult.
  • The Economic Partnership Agreements (EPAs), if ratified, will lead African countries to open their borders to products from the European Union, except for a certain number of sensitive products, mainly agricultural.
  • The African Continental Free Trade Area (AfCFTA) should offer undeniable growth opportunities, but, like the EPAs, it will deprive countries of customs revenue. Uncertainties related to the AfCFTA mainly relate to the impacts of liberalization, the products that may be recognized as sensitive, the budget that will be allocated to the most vulnerable regions, and the level of protection that will be established against third countries.

The debate on protecting African agriculture should not be taboo, but should be integral part of the issues that structure the political agenda aimed at a more great economic integration of the region.
Agri-food sectors are a key sector for sustainable development in Africa, which faces enormous demographic, socio-economic, and security challenges, amplified by climate change. Governments must anticipate the consequences of free trade agreements by increasing support for certain sectors and ensuring that sufficient tariff protection is established with regard to third countries, particularly for agribusiness, a major source of activity and employment.

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