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197) The impact of milk powder imports on the milk trade in Burkina Faso (Part I) |
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| The impact of milk powder imports on the milk trade in Burkina Faso (Part I) | A friend has sent me an interesting document. It is an analysis of the effect of milk powder imports on the milk trade in Burkina Faso. It is a useful supplement to the document we published some months ago under the title
Is a white revolution possible in Burkina Faso and in the wider context of West Africa?
Here are some excerpts.
1) « An FAO document by J.C. Lambert … starts by emphasising that the 14 million tonne overall deficit of food stuffs in Africa in 1990, will have risen to 125 million tonnes by 2025. To fill the gap many countries have turned to imports of animal products, notably of milk. The import of milk in the form of milk powder has become institutionalised.
This has worked well for some time and enabled industrialised countries to ship off their surplus as subsidised exports and allowed developing countries to alleviate their nutritional shortages. But now the system seems to have attained its limits. On the one hand many of the countries with overproduction are now starting to try and control their output. This may lead to a rise in world prices, which could become even sharper, if negotiations at the WTO result in the abolition of export subsidies. On the other hand many developing countries with a trade balance deficit are finding it hard to cope with import costs. It therefore becomes vital for a number of countries to drain off a maximum of livestock products to the large urban consumer markets.
As regards milk products, the author concludes that the only way forward is to encourage the development of the domestic dairy sector, replacing imports by local production and protecting the local dairy industries against subsidised imports.” (Page 10)
2) As for the information on the second largest town, Bobo Dioulasso, the diagnostic profile in the document from 2001 (G5) contains a number of remarks on the competition from imported products. It underlines the fact that local processors are faced with problems of supply and a lack of attractive packaging, with one important consequence: local products cut a low figure in comparison with imported ones.
The report also describes the work of a number of local processing plants and stresses that many of them also sell formula milk, based on imported milk powder. In the summary conclusions of the analysis of the processing link, it is pointed out that there is a good potential that could quickly be activated for substituting local milk for imported milk powder. Women workers in the processing units would be willing to take this step, on condition that they be assured of access to training courses and regular supply of fresh milk.
It is further reported that during an inquiry on prices at various points of sale, the persons conducting the study were struck by the presence of imported articles everywhere. According to the document, 90 % of dairy products consumed originated from imports, in particular imported milk powder. They found it regrettable that the merits of milk powder and products derived from it are heralded every night on Burkina Faso television, whilst no advertising is broadcast for local products.” (Pages 10 and 11)
3) …/… “a) Burkina Faso imports dairy products for nearly 10 billion FCFA and there is a big potential for the development of the local industry, on condition that quality can be guaranteed at competitive prices. Burkina consumers appreciate fresh milk and would be happy to pay even a slightly higher price to get it.
To sum up the main points of these documents, it is clear on the one hand that the problem of competition from imports is relevant. All studies reviewed indicate this, even though they do not contain a systematic analysis. On the other hand, the two documents that specifically deal with the subject, conclude by proposing urgent protection of the local milk trade against subsidised imports, to pave the way for the development of the sector. (Page 13)
4) In short, an increase of import duties on milk products up to 20% or more, seems to be a viable political avenue within the WAEMOU. And moreover, according to Mr El Hadj Sako, the official in charge of tax, customs and trade policies at the WAEMOU, the revenue from such a surcharge could then be invested in the development of the milk sector. He added that this is both technically and legally possible and even financially desirable. Obviously, to be effective with regard to the controls of imported milk products, the higher CET (customs tariff) of the WAEMOU should also be made to apply to all ECOWAS member states. It should be remembered that efficient checks on imports at the borders of Burkina Faso is not a simple matter and that Ghana – also a member of ECOWAS but not of WAEMOU - has become a very important port of entry for milk products. Parts of these imports are probably re-exported to other areas in the sub-region, without leaving any trace in the official statistics of the countries concerned. (Page 39)
Next week we will take a look at the recommendations of the study.
It is possible to download the document in full in PDF format:
Analyse de la problématique de la poudre de lait au Burkina Faso et de son effet sur le développement de la filière lait.
Paris, September 4 2006
Maurice Oudet
Director, SEDELAN |
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