East African Business Week (Kampala)
Brian Coutinho
11 October 2008
Mombasa — With diminished access to European markets threatening to cost African farmers millions of dollars in lost exports, an international assemblage of banana experts meeting in Kenya last week warned that African growers must move quickly to take advantage of many local and regional opportunities for expanding production and boosting incomes.
For decades the income potential of many large-scale African banana farmers has been tied to exports to the European Union (EU), where African farmers-along with growers in the Caribbean and Pacific (the so-called ACP countries)-have enjoyed tariff-free access. But a relentless push from big producers in Latin America to "level the playing field"-a pitched battle often referred to as "the Banana Wars"-is finally bearing fruit.
Talks are likely to resume this fall between the EU and Ecuador, Latin America's biggest banana exporter, after the two nearly came to terms this summer. If, as expected, a deal is reached, the consensus view is that African farmers in places like Cameroon, Côte d'Ivoire and Ghana would quickly lose a sizeable chunk of their already meager 4% share of what is now a US $4 billion market.
"The current (European) trade policy is clearly in favor of ACP countries, but this is likely to change. So, Africa must prepare itself to remain competitive," said Thomas DuBois, a researcher at African based IITA.
Beed said that rather than focus on potential losses in Europe, Africa's mostly small-scale banana farmers-who produce a third of the world's bananas and plantains-should look to the untapped potential of local and regional demand for bananas and banana products. Already, more than 90 percent of Africa's crop is consumed on the continent, where in countries like Uganda it is the main dietary staple. And regional demand, particularly in rapidly growing urban centers, is increasing.
"Instead of depending solely on exports to Europe, African countries have an opportunity to adopt more liberalized policies that could increase cross-border trade between banana producing and consuming countries," he told attendees, who included growers, government officials, trade experts, banana researchers and industry representatives.
"The future of banana in Africa should move towards strengthening local and regional markets and market linkages that can feed the increasing urban populations, as well as taking advantage of value addition through processing for products like banana chips, beer, fried snacks, flour, fibre, and other consumer goods," said Sidi Sanyang of the Forum for Agricultural Research in Africa or FARA. "This will not happen without more intensive and deliberate efforts towards developing marketing strategies that will facilitate the consumption of these products."
For example, experts at the conference pointed to efforts in Kenya, where banana growers have doubled and even tripled their incomes through relatively simple steps, like organizing growers groups and adopting product standards that allowed them to sell directly to wholesalers. Also, on the trade front, there was discussion of how insufficient credit, inadequate transportation, unfair taxes and inconsistent prices are significantly stifling what could be a vibrant and, for farmers, highly profitable regional banana trade between Rwanda, Burundi and the DRC.
In Uganda alone, there are more than 200 processed banana products, yet limited investment in facilities and transportation has left them largely unavailable beyond local markets. That means farmers depend almost entirely on sales of fresh, perishable fruit for income.
"The processed food market is quite small and tends to be focused on middle income consumers who can afford to buy packaged foods from grocery stores, street vendors and kiosks in urban areas," said Richard Markham of Bioversity Int.
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