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CTA Brussels News

Information on key ACP-EU programmes and events relevant to agriculture and rural development in ACP countries
October 2019 - No. 624

Highlights

Impact of the CAP on developing countries

The impact of the CAP on developing countries continues to be a topic of great interest to many people, particularly in the context of the EU’s commitment to achieving the UN Sustainable Development Goals. Together with Rossella Soldi, I recently completed a report evaluating the impact of the EU’s current agricultural policy on the agriculture of developing countries which was commissioned by the European Committee of the Regions and which is now available on its website.
 
The terms of reference for the study asked for an evaluation of the impact of current CAP subsidies on the price of EU food produced and exported to developing countries. The research is intended to contribute to the current debate on how the proposed reform of the Common Agricultural Policy may minimise its impact on developing countries coherently with EU development cooperation’s objectives. As developing countries are increasingly heterogeneous, the focus of the study is on developing countries facing particular problems of food insecurity. In the study, these ‘vulnerable’ developing countries (VDCs) comprise the Least Developed Countries, the countries of Sub-Saharan Africa, and the African, Caribbean and Pacific countries that are signatories to the Cotonou Agreement with the EU.
 
The first aspect investigated is whether CAP subsidies lead to countervailable subsidies or dumping where the former refers to price suppression and lost sales by other countries, and the latter to export sales below the cost of production in the EU. Literature review provides the evidence that CAP subsidies continue to have a production-stimulating effect despite the reform path of the CAP in recent decades. Decoupled direct payments, but also coupled direct payments and productivity-enhancing investments under Pillar 2, are mainly responsible for this effect. EU agricultural production is greater and so are net exports as a result.
 
The best recent estimates suggest that the magnitude of this effect at the aggregate level is relatively small and that EU production is around 5%-6% higher than it might be in the absence of CAP subsidies. However, there are several factors influencing the degree of this increase and the fact that other EU non-agricultural policies may offset any potential CAP effects that increase agricultural production cannot be ignored.
 
Then, to better understand the role of the EU in the global agri-food trade and exports to VDCs, three case study products related to milk powders, chicken meat, and processed tomato products, are examined.
 
The EU is one of a number of exporters supplying imports of the case study products to the VDCs, where the most important importers are countries in West Africa and, in the case of chicken meat, also South Africa. The EU supplies around 35% of whole milk powder (WMP) imports by VDCs and nearly all of its fat-filled milk powder (FFMP) imports, though its share in skimmed milk powder (SMP) imports is lower at 15%, with New Zealand and the US being other major suppliers.
 
The importance of the EU as a supplier of chicken meat exports to VDCs varies by country but has been growing, and the EU now accounts for almost half (46%) of total imports in the main VDC import markets, with the remainder supplied by Brazil and the US.
 
In the case of tomato paste, the EU (and particularly Italy) has been squeezed out of these markets by Chinese competition, and the EU now accounts for around 12% of their total imports. Most EU exports of these products are sold to non-VDCs although VDC markets have been growing in importance in the case of chicken meat (now accounting for almost half of total EU exports of that product) and FFMPs.

Read the full article by Alan Matthews here

Source: Capreform.eu, 24 September 2019

Featured CTA partner

Jan Douwe van der Ploeg is Professor Emeritus of Wageningen University and Adjunct Professor in Rural Sociology at the College of Humanities and Development Studies (COHD) of China Agricultural University (CAU) in Beijing

Jan Douwe was previously involved in designing parts of the European Rural Development Policy (also known as Pillar 2 of the Common Agricultural Policy). He is a co-author of 'Investing in Smallholder Agriculture', the HLPE document of the Committee of World Food Security of FAO.

Jan Douwe van der Ploeg was one of our experts on Smallholder agriculture at our last Brussels Development Briefing n. 57 on Investing in smallholder agriculture for food security and nutrition held on 11th September 2019. He presented the strengths and challenges, evolution and recent trends of smallholder farming. He advocated for the key role of smallholders in the world. 500 million smallholdings are not only located in Asia, Africa, Latin America and the Pacific but also in Europe and the US. In Europe, there are 12 million family farms of which 80% are smallholdings. The same applies to the US where 60-70 % are smallholdings. Small doesn’t mean irrelevant, smallholder agriculture is a cornerstone of the US agriculture and rural economy.

Smallholdings are grounded on independent units of production, that dispose autonomous self-controlled resource-base (land, building, water resources, animals, labour force, genetic material…). All or most of these resources belong to the smallholder family who decides on the use and combination of these resources, illustrating a democratic organisation of the rural economy. The smallholder family develops this resource base through labour and financial investments. Therefore, with the right conditions, smallholder agriculture is dynamic, vibrant and resilient.
Governing the resource base requires choices and balance between income, investment, food, use of labour…  Smallholdings are complex systems that can react to different conditions. They are in territorial markets which are crucial for feeding the populations.

There is a misconception that only the big producers contribute largely to the agricultural sector. Smallholder farmers contribute to food security, employment, income, sustainability, biodiversity, cultural heritage and landscape. He promoted a different type of farm and change agricultural policies which only support large farms. If we want to help small farmers, we must improve access to markets and allow for market protection temporary (as Senegal did in reducing imports of Dutch onions), improve local irrigation schemes, support reforestation and local agroecological practices beneficial to smallholder organisations.

See his presentation and watch the video

Strategic Events

Four new EU-funded renewable energy projects worth EUR 100 million adopted

The Africa Renewable Energy Initiative (AREI) Board held its tenth meeting yesterday, 23 September, in the margins of the UNGA in New York. The Board adopted several new projects, four of which are EU-funded and worth EUR 100 million in all. These four projects will develop renewable energy infrastructure in Tanzania, Zambia, Côte d'Ivoire, Kenya, Namibia and Nigeria. They bring the total EU contribution to AREI to around EUR 1.1 billion, across 78 projects. This means that the EU has already provided more than two-thirds of its financial commitment to AREI (EUR 1.5 billion by 2020) and is well on track to meet its goal for additional generation capacity (5 GW by 2020).

The meeting was chaired by Alpha Condé, President of Guinea. Stefano Manservisi, Director-General for International Cooperation and Development at the European Commission, represented the EU, which enjoys observer status on the Board.
AREI is an Africa-owned and Africa-led initiative to speed up and scale up efforts to harness the continent’s huge renewable energy potential. It is set to achieve at least 10 GW in new and additional renewable energy generation capacity by 2020, and mobilise Africa’s potential to establish at least 300 GW of new generation capacity by 2030.

Source: European Commision, 24 September 2019

News

African banana producers urge EU to maintain tariffs on Latin American imports

Struggling African banana producers called on the European Union not to cut tariffs on imports from Latin America any further. Exporters in Africa, the Caribbean and Pacific (ACP) have been losing market share since 2009, when the EU agreed to progressively cut tariffs on bananas from bigger growers in Latin America.
That reduced the advantage previously enjoyed by ACP growers in mostly former European colonies, who have tax-free access to European markets, although the EU agreed to provide them around 200 million euros ($220 million) in compensation.
At a convention in Abidjan, banana industry representatives from Cameroon, Ivory Coast and Ghana urged the EU not to cut tariffs on Latin American producers below 75 euros/tonne, the rate which will come into effect on Jan. 1, 2020. They cited recent trade discussions between the EU and Colombia, Ecuador and Peru that they fear could lead to even lower tariffs.
 
“The African, Caribbean and Pacific producers are worried about the constant weakening over the past few years of their access to the European market,” said Gervais Kacou, spokesman for an association representing African banana producers. The African producers also called on the EU to continue to support their farmers when the current compensation scheme expires at the end of this year.
 
The EU ambassador to Ivory Coast, Jobst von Kirchmann, told the convention that the EU would support ACP producers but did not provide specifics. Cameroon, Ivory Coast and Ghana’s combined banana exports to Europe fell to 600,000 tonnes last year, from 660,000 tonnes in 2017. Latin America now accounts for about 70% of the EU’s banana imports.

Source: Reuters, 20 September 2019

EU: €60K grant to support scholarships for regional African university program

The European Union is supporting the establishment of a regional virtual university for Eastern and Southern Africa, aimed at fostering regional integration in the 21 member-states Common Market for Eastern and Southern Africa (COMESA). The EU is extending €60,000 to support scholarships for a master’s degree program in Regional Integration to be offered by Kenya’s Kenyatta University in collaboration with other higher learning institutions from member states.

Through the capacity building program of the Africa Caribbean and Pacific group known as TradeCom II, the grant will support the training of an initial group of 40 students, according to COMESA assistant secretary General Kipyego Cheluget.
The COMESA University of Regional Integration will operate as a virtual institution of higher learning initially offering a master’s in Regional Integration program aimed at helping improve and build integration within the trading bloc.
According to the official, it will target students intending to work as trade officers, trade policy analysts, advisers, researchers, trade attaches, and private sector trade practitioners among others.

Source:  The Pei News, 24 September 2019
EU and Angola seek economic partnership

Brussels hopes to benefit from free access to the Angolan market, and Angola hopes to ensure continued duty-free exportation to EU countries after moving to middle-income country and joining the Development Community Free Trade Zone (FTA) of Southern Africa (SADC).
The conditions for the implementation of a possible economic partnership agreement between Angola and the European Union after joining the SADC free trade zone began to be discussed in Luanda.
Angola currently enjoys preferential access in export processes to countries in Europe, America and Asia as it is considered the least developed country by the United Nations. This status will change in 2021, with the move to a middle-income country, meaning that it will no longer benefit from free access to various markets including the EU.

As head of the EU Economic Partnership Agreements Unit for Africa, with the implementation of these agreements, Brussels hopes to benefit from free access to the Angolan market. Speaking to Euronews, Cécille Billaux said: "There are two very important aspects in terms of investment: Defining the exchange rules and promoting a stable business climate for corporate investment, which is a very important aspect. On the other hand, the agreement aims to provide free access for Angolan products to EU countries without customs duties, except of course for weapons, and all other products will be duty-free.

On our side, we expect Angola to liberalize entry into certain products that we are interested in exporting to Angola; products such as machinery, chemicals and many others that are not produced in Angola. If Angola liberalizes access, it could reduce prices and promote the country's economic growth and development. That is what we want to achieve with this agreement. "
Until 2021, Angola benefits from preferential access to exports to several countries in America, Europe and Asia, ie it does not pay customs duties on products such as oil or diamonds, because it is still considered a low-income country.

Source: EuroNews Portugal, 12 September 2019
EU Offers ECOWAS 1bn Euros Development Assistance

The European Union says it has provided over 1bn Euros as development assistance to support standardisation of goods and services produced in the Economic Community of West African States (ECOWAS) countries.
This was revealed recently in Abuja by The EU Project Manager for the West Africa Quality Systems Programme, Mr Frank Okafor, at the extended steering committee of the West Africa Quality System Programme (WAQSP).

He said the amount was specifically targeted to ensure that goods produced within the sub-region meet the global market, particularly for Europe and the Americas. The objective of the meeting was to assess the progress of countries for certification purposes.
Okafor explained that the support of the EU for the project was aimed at promoting and unifying trade within the ECOWAS sub-region as well as to the world markets. The contribution, he added has been for a period of about 17 years and also included EU’s partnered and coordinated efforts with other Development partners such as the United States Agency for International Development, Germany among others.

Source: Leadership Nigeria, 19 September 2019
Agency wants EU to expand maritime security mandate over Horn of Africa

A regional maritime organisation wants a European Union military ships operating in the Horn of Africa to extend its mandate to cover all maritime crimes in the Indian Ocean. The Inter-Governmental Standing Committee on Shipping (ISCOS), says the EU NAVFOR Somalia Operation ATALANTA— which mainly focuses on anti-piracy activities — should extend its mandate to deal with all the maritime crimes including terrorism, charcoal smuggling as well as drug and human trafficking.
 
ISCOS made the request to the EU NAVFOR Somalia Operation ATALANTA, Force Commander, Rear Admiral Armando Paolo Simi.“Maritime security is our concern. It (ocean) serves international trade, aiding tourism and transportation. We have been partnering with EU on educating the masses on maritime activities,” said acting ISCOS secretary general Kassim Mpaata when he led a delegation that visited the military ship that docked at the Port of Mombasa on Saturday.
 
“EU has done a good job, and collaboration between the regions will spur international trade. But the mandate should be expanded to cover all areas of maritime crime and not only piracy.”

Source: Business Daily, 24 September 2019

Key resources

Trade and Development Report 2019

The deep and widespread economic and social damage caused by the global financial crisis has been followed, in most advanced economies, by a decade of austerity, sluggish productivity growth and stagnant real wages. Growth has also slowed in most developing countries, albeit with considerable variation across regions. The struggle to create good jobs has intensified, with rapid urbanization, premature deindustrialization and rural stagnation accompanying rising inequality and growing political tensions.
 
Everywhere, anxiety over the prospect of increasing economic insecurity is compounded by the impending threat of environmental breakdown. The Intergovernmental Panel on Climate Change has recently raised the stakes by starting the clock on a climate meltdown; but a shortening time horizon is just part of a growing recognition of a wider and deeper ecological crisis.

Source: UNCTAD, 2019

Codex 2019: The year of food safety


2019 has been the year of food safety with The First FAO / WHO / AU International Food Safety Conference in Addis Ababa and the WTO International Forum on Food Safety and Trade in Geneva shining the global spotlight on issues that will affect global food production and supply systems, consumers, industry and the planet itself. The Codex Alimentarius Commission is where the world comes together to set international food safety and quality standards to protect consumer health and facilitate international trade.
 
This publication reports on the Codex year and is produced in conjunction with the 42nd Codex Alimentarius Commission held in Geneva 8-12 July 2019.

Source: FAO, 2019

Events

European Week of Regions and Cities
More than six thousand people from all over Europe are expected to join the European Regions and Cities, this year under the headline "Regions and Cities: Pillars of the EU's Future".
7-10 October 2019
Brussels, Belgium
Registration Info
Food 2030: Nourishing people and nurturing the planet through sustainable health diets for all
Event organized by the Food and Agriculture Organization of the United Nations (FAO)
16 October 2019
From 13:00
Brussels, Belgium
Brussels Briefing n.58 - Africa's Agriculture Trade in a changing Environment
23 October 2019
09:00 - 13:00
Brussels, Belgium
Register here
More information: https://brusselsbriefings.net/
The 2019 EU Agricultural Outlook Conference
The Conference is a key annual opportunity for European stakeholders to engage and discuss the future of agriculture in Europe and the challenges that lie ahead.
10-11 December
Brussels, Belgium
This CTA Brussels newsletter is produced weekly by the CTA Brussels Office

Publisher: Ms Isolina Boto, Manager CTA Brussels Office (boto@cta.int)
Editor: Félix Ajong (ajong@cta.int)
Technical support: Thierry Lewyllie (lewyllie@cta.int)

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The Technical Centre for Agricultural and Rural Cooperation (CTA) is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). CTA operates under the framework of the Cotonou Agreement and is funded by the EU.
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