15 October 2012

African Wheat - Balancing Consumer and Farmer Demands

Addis Ababa — Whether Africa can scale-up wheat production to meet growing demand will depend on governments' support of local producers. A key test is whether they are willing to take on wheat import subsidies, which keep bread prices low and urban consumers happy, said experts at a recent five-day conference on African wheat production.

"Most often, politicians end up prioritizing the needs of the consumers, which is understandable, but not good for agriculture and the country in the long-run," said an expert.

Why do governments permit low-price wheat imports? A researcher put this question to a panel of agriculture ministers from four countries. Local wheat is often of poorer quality, the supply is inadequate, and transportation costs can be higher than cost of imported varieties, the ministers from Sudan, Ibrahim Adam Ahmed El-Dukheri, and Burundi, Odette Kayitesi, explained.

In fact, Sudan recently removed import taxes on wheat, part of measures to ease burdens on consumers in the face of rising food prices and currency depreciation.

"But even if duties are imposed, our producers cannot compete with the kind of subsidies that producers in the exporting countries enjoy," added Dahprose Gahakwa, the Rwanda Agriculture Board's deputy director of research. "It is a question that needs to be addressed at an international forum where everyone should recognize the need to encourage producers in Africa."

Aiming at self-sufficiency

Government action is required to making local producers competitive against cheap imports. Earlier this year, Nigeria - the largest wheat importer in sub-Saharan Africa - increased the duty on wheat imports from five percent to 20 percent. It also announced a 65 percent levy on wheat flour imports, increasing the effective duty from 35 percent to 100 percent.

Bread prices have since seen a 20 percent hike, although Agritrade, a technical resource site, reckons the spike could also be related to global increases in wheat prices.

Further prompted by the massive amount of foreign exchange Nigeria haemorrhages to import wheat - around US$2 million every day - the country has announced it intends to stop wheat imports by 2016. It also intends to end rice imports by 2013. Nigeria currently produces 70 percent of its requirements, according to Agritrade.

Industry specialists are sceptical about the country becoming self-sufficient in wheat. Erratic rainfall, inconsistent policies and receding water levels in Lake Chad have all seen wheat production fall in the past 20 years.

But Oluwasina Olabanji, head of the Lake Chad Research Institute, is confident the domestic wheat industry can be expanded. Only 10 percent of the land that could be exploited for irrigated wheat production is being used, he said. "We need more drought- and heat-tolerant seed varieties and financial support."

Nigeria, the worlds' largest cassava producer, also hopes to boost its cassava yield for bread-making. Bakeries have been given 18 months to start adding cassava flour to wheat-based bread. Officials hope bread will contain 40 percent cassava flour by 2015, helping reduce wheat imports by 40 percent.

The decision has been controversial. Small-scale producers and the Nutrition Society of Nigeria have come out in favour of the requirements; nutritionists argue it will lower bread's glycaemic index, making it healthier. But consumers have raised concerns about bread flavour, and bakeries are fretting about how to make the flour mix work.

Against Western subsidies

Zambia has protected its local producers by regulating wheat imports; the country became self-sufficient in wheat in 2009. But continuing efforts to protect domestic wheat production have elicited criticism from outside industry and food experts.

"[Africa] can never become competitive with cheap imports from the West," said Cobus le Roux, general manager of the crop division in South Africa's Agricultural Research Council. "Unless we get the same amount protection and subsidies producers [in the West] have enjoyed over the years."

From 1995 to 2011, $34.4 billion worth of subsidies for wheat were provided in the US, the world's leading exporter, according to the NGO Environmental Working Group.

Declaration

The conference's declaration recognized the importance of protecting wheat producers, and called for countries with the potential to increase production to receive technical support and access to climate-change-resilient seeds. It also called on governments to invest in infrastructure, such as roads and markets.

"Essentially, it is about providing support to agriculture, but modifying it slightly to fit the wheat requirements," said Ambrose Agona, director of research coordination at Uganda's National Agricultural Research Organisation.

"It is about scaling-up investment in agriculture to the required 10 percent of their national budgets - how many countries are doing that?" Rwanda's Gahakwa said, referring to the requirements of the African Union's Comprehensive African Agricultural Development Programme (CAADEP). Rwanda exceeded its 10 percent target this year, she noted.

This report does not necessarily reflect the views of the United Nations

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