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OUTLINE OF PRESENTATION

GLOBAL AGRICULTURE AND TRANSPORTATION PRICE TRENDS AND FOOD SECURITY - THE CASE OF COMESA Cris MUYUNDA, PhD Senior Agricultural Advisor, COMESA USDA/USAID FOOD AID CONFERENCE April 14-16, 2008, KANSAS CITY, MISSOURI, USA. OUTLINE OF PRESENTATION. COMESA OVERVIEW : MARKET PARAMETERS

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OUTLINE OF PRESENTATION

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  1. GLOBAL AGRICULTURE AND TRANSPORTATION PRICE TRENDS AND FOOD SECURITY- THE CASE OF COMESACris MUYUNDA, PhDSenior Agricultural Advisor, COMESA USDA/USAID FOOD AID CONFERENCEApril 14-16, 2008, KANSAS CITY, MISSOURI, USA

  2. OUTLINE OF PRESENTATION • COMESA OVERVIEW : MARKET PARAMETERS • FOOD SECURITY SITUATION • MAJOR ISSUES OF CONCERN OVER FOOD PRICES • MALAWI FOOD SECURITY SUCCESS STORY • KEY TRANSPORTATION ISSUES • CONCLUSION

  3. FORMED IN 1994 FROM PTA, itself est. 1982 19 member states POPULATION : 400 million – big potential market Intra-COMESA trade: US$9 billion (2007 est.); Extra-COMESA trade: US$90 billion US$3.0 billion (about 40%) of intra COMESA-trade is food and agricultural raw materials COMESA OVERVIEW : KEY PARAMETERS

  4. AGRICULTURE IN COMESA • 32% of COMESA GDP • 65% of Raw Materials for Industry: Agricultural commodities are major drivers for growth in intra-COMESA trade. • 80% of employment

  5. FOOD SECURITY SITUATION IN COMESA IN ADDITION TO EMEGENCY FOOD AID: • 2004/2005: 11 MEMBER STATES WERE IN FOOD DEFICITS AND REQUIRED EXTERNAL FOOD • 2005/2006: 5 MEMBER STATES EXPERIENCED FOOD DEFICITS, BUT THE WHOLE REGION HAD A SURPLUS OF 550,000 MT. • 2006/2007: 2 MEMBER STATES EXPERIENCED FOOD DEFICITS, BUT WHOLE REGION HAD A SURPLUS OF 1,500,000 MT. • 2007/2008: ……. • OVERALL: MAJOR INFRASTRUCTURE / DISTRIBUTION CHALLENGE

  6. NEGATIVE IMPACT OF HIGH PRICES • AFFECTS POVERTY LEVELS (Studies indicate 10% increase in prices leads to 2.3% increase in poverty in Africa) • HAS IMPACT ON NUTRITIONAL STATUS OF THE CONTINENT WHERE ALREADY SOME 200 MILLION PEOPLE ARE CHRONICALLY MALNOURISHED • HAS IMPACT ON POLITICAL SITUATION NATIONALLY, REGIONALLY • COULD AFFECT PEACE AND SECURITY SITUATION

  7. POSITIVE IMPACT OF HIGH PRICES • HIGH FOOD PRICES BRING ECONOMIC GROWTH IN AGRICULTURAL LED ECONOMIES: AGRICULTURE is 32% of COMESA GDP • GROWTH REDUCES POVERTY: 1% INCREASE IN GROWTH ELIMINATES 6 MILLION PEOPLE OUT OF POVERTY

  8. 2004/2005: SERIOUS FOOD DEFICIT: 800,000 MT; INTERNATIONAL FOOD APPEAL 2005/2006: 400,000 MT FOOD SURPLUS 2006/2007: 1,200,000 MT FOOD SURPLUS MAJOR FOOD SECURITY SUCCES STORY : MALAWI

  9. MALAWI: MAJOR CONTRIBUTING FACTORS TO LAND LOCKED COUNTRY “SUCCESS” • FERTILISER SUBSIDY PROGRAM • POLICY FOCUS: BUDGET IS ON THE INCREASE • COMPREHENSIVE FOCUS: IRRIGATION, FERTILIZER, MARKETING (COMMODITY EXCHANGE)

  10. KEY TRANSPORTATION/RELATED ISSUES ISSUES • LANDLOCKED COUNTRIES, 9 out of 19 countries (up to 55% of commodity costs) • TRANSPORT DELAYS, World Bank Study (each day is equivalent to 400 km) • ISLAND NATIONS, Net Importers of Food – food prices affecting them • AIR TRANSPORT AS A SOLUTION FOR LANDLOCKED COUNTRIES TO RAISE INCOMES • COMPREHENSIVE APPROACH – CAADP. • POOR INTEGRATION: EXPORT BANS

  11. Additional Transport Challenges • Lack of diversified transport systems based on inter and multi modal transport corridors comprising road, rail, water and air transport. • Poor physical connectivity: number of kilometers of paved road per million people is about 60. • Brazil and India: over 1,000. • Developed World, the kilometers of paved road per million people is about 20,000. • Sources of energy: need to aggressively explore hydro-power, bio-fuels and nuclear energy given the abundant resources in the region.

  12. REAL CHALLENGE: LOW CEREAL YIELDS – empty back trips

  13. POTENTIAL SOLUTIONS/CONCLUSIONS • HARMONIZED ROAD TRANSIT SYSTEMS, COMESA CARRIER’S LICENCE, AXLE LOADING AND MAXIMUM LOADING DIMENSIONS, COMESA YELLOW CARD INSURANCE • COMMON INVESTMENT AREA, RECOGNISES COMESA INVESTOR – REDUCED COST OF DOING BUSINESS • DEVELOPMENT CORRIDORS, not just transport corridors • CAADP: LAND AND WATER, MARKETS/INFRASTRUCTURE, FOOD/NUTRITION SECURITY, TECHNOLOGY/EDUCATION • PPPs: ACTESA, RELPA, AAMP

  14. THANK YOU

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