August 5, 2013

 

East Africa to experience corn surplus in 2013

 

 

Increased production in Uganda and Tanzania will lift production beyond local demand making Eastern Africa as a region to achieve a corn surplus in 2013.

 

"As a result of sufficient rainfall, the eastern African region will experience a corn surplus in 2013," Eastern African Grain Council (EAGC) Executive Director Gerald Masila said during the launch of the fifth African Grain Trade Summit which will hold in Kenya from October 1 to October 3.

 

The biennial event will bring together over 300 government officials, researchers and traders from 20 African countries to discuss ways of improving grain trade in the region.

 

"It will also highlight investment opportunities in Africa's agriculture sector. However, some countries including Kenya are projected to have a corn deficit as consumption will outstrip production," he said.

 

In 2012, the region experienced a deficit in corn production. EAGC member states include Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, Zambia, Zimbabwe, Malawi and Ethiopia.

 

Experts say climate change was poised to significantly affect Kenya with an anticipated loss of GDP annually between now and 2030. They also say periodic floods and droughts were responsible for major macro-economic costs and reductions in economic growth due to increases in energy requirements and a rise in the cost of doing business.

 

Masila added that Kenya has an annual consumption of 40 million bags of corn against production of around 28 million bags. He noted that the deficit will have to be filled by imports both regional and internationally. "One of the ways for Kenya to achieve self-sufficiency in corn production is through improving average yields per acre," he said.

 

The executive director said that the government is in the process of implementing a long term plan to produce an additional 30 million bags through irrigation.

 

EAGC Chairman Judah arap Bett said that eastern Africa's grain trade with the rest of Africa is limited due to lack of inadequate transport infrastructure.

 

"Eastern Africa is therefore forced to import from international global markets instead of importing from west, southern or northern Africa," he said.

 

Bett also noted that West Africa exports its palm oil to the rest of the world, while eastern Africa imports the edible oil from Asia. The chairman urged Africa to address food security by tapping into its huge tracts of uncultivated land.

 

He said that agribusiness is considered a risky venture by commercial banks. "As a result, the level of investment is not enough for the sector to undergo a productivity transformation," he said.

 

The 2003 Maputo Declaration called for African governments to set aside at least 10% of their national budgets to agriculture in order to increase investments in the sector. According to Bett, most of Africa's food production is controlled by small holders whose land sizes are diminishing.

 

US International Development Agency (USAID) East African Trade Hub (EATH) Regional Trade Advisor Isaac Tallam said that Africa should reduce production constraints through adopting innovations.

 

Tallam noted that non-tariff barriers continue to prevent surplus food from reaching food deficit areas even within the same trading bloc.

 

He noted that the East African Community (EAC) has already agreed on sanitary and phyto sanitary standards of 18 common grains. "This will go a long way in encouraging intra Africa trade in basic staple foods," he said.

 

The trade advisor said that the economic bloc has already developed a simplified certificate of origin in order to enhance trade across the EAC. He added that a predictable agricultural environment will spur investment in the sector.

 

"The governments should also reduce imposition of ad hoc export bans of grains," he said. Tax Consultants PKF Tax advisor George Maina said that the Kenya has reduced the import duty of rice by 10%.