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AGOA & Agriculture. Increasing Value to African Agriculture. AGOA & Trade. AGOA+GSP imports: $53.8 billion in 2011 500% increase from 2001 ($8.2 billion) AGOA import share rose from 0.7 to 2.5% Mineral fuel & oil were 91.6% of imports Non-petroleum imports rose from $1.2 to $4.5 billion

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Agoa agriculture

AGOA & Agriculture

Increasing Value to African Agriculture


Agoa trade
AGOA & Trade

  • AGOA+GSP imports: $53.8 billion in 2011

    • 500% increase from 2001 ($8.2 billion)

    • AGOA import share rose from 0.7 to 2.5%

    • Mineral fuel & oil were 91.6% of imports

    • Non-petroleum imports rose from $1.2 to $4.5 billion

    • Leading sectors (2011)

      • Apparel ($850 million)

      • Automobiles ($2.1 billion)

  • Agriculture: <1% of AGOA exports

Sources: CCA, ITC, Brookings, USDA, World Bank, FAO


Agoa agriculture1
AGOA & Agriculture

  • Limited impact in agriculture for these market-related reasons:

    • Some commodities not competitive in US market

    • Lack of investment in production/logistics

    • Underdeveloped infrastructure

    • Lack of market linkages

    • Lack of supporting institutions

    • Cost of complying with private/industry standards

Sources: CCA, ITC, Brookings, USDA, World Bank, FAO


Agoa agriculture2
AGOA & Agriculture

  • Commodities not competitive in US market

    • High transportation costs

    • Strong US/NAFTA/FTA competitors

  • Lack of investment in production/logistics

    • Quality/post-harvest losses

    • Cold chain/grain storage

  • Underdeveloped infrastructure

    • Poor roads, limited airfreight, congested ports

    • Limited grid electricity

    • High transport costs, road tolls

Sources: CCA, ITC, Brookings, USDA, World Bank, FAO


Agoa agriculture3
AGOA & Agriculture

  • Commodities not competitive in US market

    • Might not be always possible to change

    • Reduce transportation costs

  • Lack of investment in production/logistics

    • Increase/support investment in ag logistics

  • Underdeveloped infrastructure

    • MCC, OPIC, USTDA and Ex-Im to improve

    • Public-private partnerships

  • Example: Power Africa

Sources: CCA, ITC, Brookings, USDA, World Bank, FAO


Agoa agriculture4
AGOA & Agriculture

  • Lack of market linkages

    • Lack of regional/global market connections

    • Many middlemen reduce farmgate prices

  • Lack of supporting institutions

    • Limited extension/technical assistance

    • Limited access to credit

    • Gap between donors & for-profits

  • Complying with private/industry standards

    • High costs for higher-end markets (Global GAP)

Sources: CCA, ITC, Brookings, USDA, World Bank, FAO


Agoa agriculture5
AGOA & Agriculture

  • Lack of market linkages

    • Focus on connecting for/non-profit sectors

    • Development sustainability through profit

  • Lack of supporting institutions

    • Support extension/technical assistance

    • Boost access to credit

    • Create supporting network (legal and other)

  • Complying with private/industry standards

    • Technical support to boost capacity

  • Example : Cochran Fellowship

Sources: CCA, ITC, Brookings, USDA, World Bank, FAO


Agoa agriculture6
AGOA & Agriculture

  • Limited impact in agriculture for these policy-related reasons:

    • Many commodities already had MFN duty-free access

    • TRQs on some products

    • Some products not given duty-free treatment

    • Counterproductive local government policy

    • Sanitary and Phytosanitary (SPS) barriers

Sources: CCA, CDG, ITC, Brookings, USDA, World Bank, FAO


Agoa agriculture7
AGOA & Agriculture

  • Products already had MFN zero duty access

    • 620 of 1,300 ag tariff lines MFN duty-free

  • Products not given TRQ/duty-free treatment

    • Sugar, peanuts, tobacco, processed foods affected

    • Cotton, beef, dairy less affected

  • Counterproductive local government policy

    • Turnover & export taxes, marketing boards

    • Land policy/tenure

    • Negative foreign investment regulations

Sources: CCA, ITC, Brookings, USDA, World Bank, FAO


Agoa agriculture8
AGOA & Agriculture

  • Products facing TRQs

    • May need to expand TRQ-free list

    • Lower costs of TRQ operation

  • Products facing duties

    • May need to expand duty-free list

  • Counterproductive local government policy

    • Cooperation with government to reduce negative policies and promote position ones

  • Example: No duty or VAT on ag inputs or capital

Sources: CCA, ITC, DFID, Brookings, USDA, World Bank, FAO


Agoa agriculture9
AGOA & Agriculture

  • Sanitary and Phytosanitary (SPS) barriers

    • Some legitimately protect food quality and human, plant and animal health

    • SPS issues are a huge barrier to African exports

    • US regulatory system is complex and difficult to navigate:

      • Risk Assessment

      • Country Consultation

      • Risk Management Document (RMD)

      • Rule-Making

    • Approvals can take years

Sources: CCA, ITC, Brookings, USDA, World Bank, FAO


Agoa agriculture10
AGOA & Agriculture

Sources: USDA/APHIS


Agoa agriculture11
AGOA & Agriculture

  • Sanitary and Phytosanitary (SPS) barriers

    • USDA and USAID support activities to assist in SPS compliance

    • USDA/FAS has offices in Senegal, Ghana, Nigeria, Ethiopia, Kenya and South Africa

      • Need more support on the ground

    • However, SPS support for African exporters is insufficient

Sources: CCA, ITC, Brookings, USDA, World Bank, FAO


Agoa beyond 2015
AGOA Beyond 2015

  • Develop a comprehensive ag trade & investment strategy

  • Support regional integration

    • Agricultural/food standards

    • More efficient input markets

    • Regional customs cooperation

  • Boost technical assistance & capacity building

    • Support USDA & Cooperator programs

    • USAID FTF, Global Development Alliance, Development Innovation Ventures

Sources: CCA, ITC, DFID, Brookings, USDA, World Bank, FAO


Thank you
Thank you!

Eric Trachtenberg

Director, Food & Agriculture Sector

McLarty Associates

900 Seventeenth St, Suite 800

Washington, DC 20006

1-202-419-1420

Acknowledgements/Sources: USDA/Foreign Agricultural Service (FAS), TAHA, Economic Research Service (ERS)

Congressional Research Service, GCCA, GMF


Agoa background
AGOA – Background

  • African Growth and Opportunity Act

    • Signed into law on May 18, 2000

    • Covers Africa except Sudan, CAR, Somalia, Madagascar, Eritrea & Zimbabwe

    • Supports democratic governance

    • Shift from development assistance

    • Reduce poverty

    • Build on African strengths

    • Increase focus on trade

    • Expires in 2015

Sources: CCA, Brookings, USDA, World Bank, FAO


Agoa background1
AGOA – Background

  • Specific changes

    • AGOA + GSP – no duties on 6,400 products

      • The GSP total is around 4,600 products

    • 70% AGOA country exports duty free

Sources: CCA, Brookings, USDA, World Bank, FAO