The Sahelian cow is sad – Will its happy smile return ?

The ECOWAS is in the midst of internal negotiations on the adoption ofa new common external tariff (CET = overall customs’ tariffs). After having adopted the CET of the West African Economic and Monetary Union, WAEMOU, it has just approved the addition of a 5th tariff band of 35%. The hardest part remains: to decide which items are to be included in this band. Which products are to be protected by an import duty of 35%? Here is where  the difficulties start !

Indeed the 15 Member States of the WAEMOU do not all have the same interests. Even within a single Member State the stakes (at least in the medium term) are different for farmers and urban consumers. The example of milk is altogether significant. 

Since the food crisis of last year the countries in the Sahel have taken an interest in the milk sector. Last year the price of powder milk reached a record high and firms  which produced yoghurt or dégué (a popular yoghurt and cereal mix)  and other dairy products based on milk powder have had to close. But the good side of things is that small dairy plants, which use fresh local milk, are developing and the governments of the Sahel region are now waking up and finally beginning to pay attention to domestic milk production.

However, today the world price of milk powder has once again fallen. What is even worse is the arrival on the market of new, low quality products, partly based on skim milk powder, vegetable fats and sugar.  Things like “sweetened condensed milk” are now being marketed at prices defying all competition. Therefore it is necessary to introduce real protective measures, if countries in the Sahel want  to develop their dairy sector.

The example of Kenya is a significant case in point. A few years ago this country imported most of its dairy products, just like the nations of the Sahel at present, for their urban consumers. But today Kenya has become an exporter. What happened? Kenya gradually increased its customs duties on milk products from 25% in 1999, to 35% in 2002 and finally to 60% in 2004.

We recommend those who want to know more to read : Kenya and Niger: Laughing cow  and crying cow *   (a reference to the well known French brand name “La Vache qui rit”, N.d. Traducteur)

It is obvious that if Sahelian countries are to develop the dairy business they must put milk products in the new 5^th ECOWAS 35% tariff band. However,  it has transpired that Ivory Coast is asking for the classification of milk powder (in particular industrial 25 kg bags) in the 0% category. It considers milk powder a basic input for the production of milk formula and yoghurt.

At the time of writing I do not yet know the outcome of the negotiations on this point. But a choice must be made: if the coastal nations want to support regional integration, they  must let the Sahelian countries develop in areas where they have real opportunities. The Sahelian countries, in turn, must be able to defend their interests, if not they would have every reason to reconsider their ECOWAS membership. In particular, they ought to refuse to sign any Economic Partnership Agreement, from which they have nothing to gain, as part of the LDC group (Least Developed Countries).

We have  referred to the example of milk, but  could have studied the situation of other commodities, such as rice, meat, tomato (under threat from Chinese tomato paste),  jam or sugar… Hence negotiations on the ECOWAS’ Common External Tariff should be transparent and supported by genuine consultations with the civil society, especially the farmers’ organisations in each of the countries concerned.  On the other hand the farmers’ organisations should make their views on the CET of ECOWAS public,  along with precise proposals.

To sum up let us return to the milk issue once more. ECOWAS did not take on board the request from Nigeria for a 50% tariff band. This means that ECOWAS has not adopted the necessary instruments to protect  itself,  with a 50% customs duty  or even less,  a 60% tariff like Kenya. An alternative would be, in case the ECOWAS finds that 35 % is insufficient, to supplement this with an excise duty of 10 000 CFA francs per 25 kg bag of milk powder.

Koudougou, July 26, 2009

Maurice Oudet, Director

SEDELAN