Agricultural products account for 20 percent of Senegal's total merchandise exports, while food imports absorb 29 percent of total foreign exchange earnings. Agricultural exports are dominated (to the extent of over 50 percent) by groundnut products, followed by cotton, fruit and vegetables and hides and skins. Senegal is a net food importer, particularly for rice, which represents almost 75 percent of cereal imports.
Reform of the agricultural sector began in the 1980s under a structural adjustment programme. It involved principally the elimination of direct government support and the privatization of State holdings in major enterprises along with the dismantling of certain trade privileges which had enlarged the scope of the private sector. Although the CFA franc was devalued in January 1994, exports did not increase as expected. So far, there has been little difficulty in meeting WTO commitments, but a freer environment in the future may adversely affect some agricultural sectors and industries, such as: onions, rice, sugar and tomato paste.
Despite the implementation of the different liberalization policies since 1979, agricultural performance has been weak. The sector generates 18 percent of GDP, and 55 percent of cereals consumed (mainly rice) is imported. Some 75 percent of the population depends on agriculture for a livelihood. Daily food consumption averages 2 400 kcal/day and about 25-30 percent of the population is undernourished.
However, the liberalization policies have brought about new forms of organization in agriculture, such as the Economic Interest Groupings (EIG), national federations, professional associations and national NGOs. They have also resulted in a more diversified supply of products for consumers.
Before independence, Senegal participated in GATT in its capacity as a French overseas territory. In 1963, it became a contracting party in its own right with its tariff schedules maintained as those originally granted by France before independence.2 About 29 percent of agricultural tariff lines were bound in these schedules. During the UR negotiations, these tariff concessions were renegotiated and Senegal bound 100 percent of its tariff lines in agriculture at a relatively high and uniform rate and made no reduction commitment.
The bindings consist of a customs duty of 30 percent and other duties or charges (ODCs) of 150 percent. The use of ODCs, which is more frequent in Africa, has been questioned by Senegal's trading partners during the verification process3. Examples of ODCs on imports include, among others, a maritime tax, a supplementary tax (which is intended to approximate the VAT applicable on importers' profit margins), and product-specific excise taxes (e.g. on stimulants such as coffee, tea and tobacco).
Applied tariffs are much lower than bound tariffs, ranging from 27 percent to 65 percent (Table 1), leaving considerable margin for discretionary increases in applied rates. This large gap between bound and applied rates could be explained by the fact that under structural adjustment programmes, Senegal was committed to setting up low tariffs. In fact, tariff reductions and reorganization of the import regime took place much before the conclusion of the UR. Unlike bound rates, applied rates vary, with relatively high tariffs for products like fruit and vegetables, cotton and textile fibres, and sugar.
Table 1: WTO bound tariffs and applied rates for selected agricultural products, 1995-97 (annual average, percent)
Category |
Product |
Bound rate |
Applied rate | ||||
Bound rate of duty |
Other duties or charges |
Tariff rate |
Surtax |
Total | |||
Cereals |
Intermediate and whole rice Millet, sorghum, corn, wheat |
30 |
150 |
15 27 20.5 |
20 10 |
35 37 20.5 | |
Oils & fats |
30 |
150 |
27 | ||||
Sugar |
30 |
150 |
44 | ||||
Animal products |
30 |
150 |
31 | ||||
Cotton and textile fibres |
30 |
150 |
48 | ||||
Fruit and vegetables |
Bananas Onions, potatoes |
30 |
150 |
44.5 35 |
20 20 |
64.5 55 | |
Source: WTO Schedule and Statistiques douanières, Direction Générale des Douanes Sénégalaises. | |||||||
For several products considered `sensitive', surtaxes were introduced during the UR in replacement of the earlier import quotas (Table 2). The surtax is 20 percent for rice, bananas, onions and potatoes and 10 percent for imported millet, sorghum, and corn.
Table 2: Goods subject to import licensing in the 1980s
|
Certain cereals: buckwheat, millet, sorghum Maize meal, cereals flours, rice with over 35 percent content of broken rice Bananas Cola nuts Onions and potatoes for consumption and for planting Tomato concentrate Vegetable oil Sugar Sacks of jute and articles of adornment |
Source: Trade Policy Review of Senegal, 1994, WTO. |
Since it opted for the ceiling binding approach in the UR, Senegal is not entitled to resort to the special safeguard (SSG) provisions of the AoA. It has no specific safeguard provisions, anti-dumping or countervailing duty legislation. However, the application of reference import prices (valeurs mercuriales) may serve a similar purpose.
In general, its market access commitments do not seem to impose any real constraint on Senegal's border policy. The bound rates are too high to provide effective protection against import-competing products. Actual border policies seem to be governed more by domestic structural adjustment programmes (SAPs) and regional trading agreements (RTAs) in which Senegal is involved. Under SAPs, the bulk of non-tariff barriers existing before 1995 have been abolished and import tariffs and duties have been considerably lowered.
Being a signatory of a number of RTAs, Senegal has recently implemented a series of changes in trade policy in order to comply with these agreements, the most significant of which was the far-reaching reduction in border tariffs following its application of the Common External Tariff (CET) of the West African Economic and Monetary Union (UEMOA)4 in January 2000. Under the CET, Senegal lowered its top rate, setting its tariff for four product categories with rates of 0, 5, 10 and 20 percent (Table 3). Most of the agricultural products fall within categories III and IV with CET of 10 and 20 percent, respectively. To conform with the CET, the surtaxes were eliminated, except for millet, onions, potatoes, sorghum, banana, maize, cigarettes, rice, and oil products until the effective implementation of the táxe cónjoncturelle à l'importation (TCI). Obviously, these commitments are much more restrictive than those made under the AoA. They have provoked a wide-ranging debate on their possible implications for the Senegalese economy. Concerns were expressed on their possible negative effects on fiscal revenue and agricultural producers. The benefits from RTAs were seen to originate mainly from exports of industrial products to regional trading partners.
Despite adopting a simplified tariff structure, Senegal maintains an array of other taxes on agricultural imports:
These two last instruments may serve as safeguard measures in replacement of the former reference import price system.
Table 3: Common External Tariff (CET) of UEMOA
Category/products |
Tariff |
Category I: Essential social products: pharmaceutical products, books, newspapers, etc. |
0% |
Category II: Basic consumption products: raw materials, equipment and specific inputs, etc. |
5% |
Category III: Intermediate consumption products and inputs |
10% |
Category IV: Final consumption products and all other products not listed in I-III |
20% |
Source: Ministry of Economy, Finance and Planning. | |
Having declared an Aggregate Measurement of Support (AMS) of zero for the reference period 1986-88, Senegal has no reduction commitment to fulfil. Measures exempted from reduction (green box and SDT) are shown in Table 4, where it can be seen that the total outlay on such measures was 36 million CFA francs (about US$60 million), of which over 85 percent was for investment in water development.
Table 4: Expenditure on domestic support exempted from reduction commitments, 1986-88
Type of measure |
Description |
Expenditure (FCFA* million) |
Support to production |
Hydraulic and agricultural infrastructures |
31 500 |
Support to production |
Support to agricultural infrastructure of the Senegal River |
1 867 |
Support for product intensification |
Integrated rural development programme |
3 100 |
* 600 FCFA = US$1.00. Source: Senegal's WTO Schedule. | ||
Support for agriculture has been wound down since 1995. The fertilizer subsidy has been removed and the fertilizer market is now in the hands of SENCHIM, a private company. Government credit for seeds has also been stopped. Producers are responsible for the debts incurred with the farm credit agency (Caisse Nationale de Crédit Agricole). The Government is also pulling out of strategic sectors such as peanuts, with the imminent privatization of SONACOS, the peanut-processing factory. Its role is now limited to maintaining a strategic stock of seed and grains within the framework of an ambitious agricultural programme.5
Senegal has not notified any domestic support measures since 1995. Hence, and also because of the lack of detailed information on the level of support actually provided to agriculture, it is difficult to assess the situation regarding its compliance with the relevant AoA provisions. The discussion which follows of some issues is thus inevitably of a more general nature.
Regarding trade-distorting (amber box) measures, as a developing country Senegal can grant subsidies, under the de minimis provision, to farmers up to 10 percent of the value of production of particular crops and up to 10 percent of the total value of agricultural production in the case of non-product-specific support measures, e.g. inputs like fertilizers. There consequently seems to be substantial scope for such subsidization. With the total value of agricultural production of approximately US$860 million, non-product-specific subsidies are allowable up to US$86 million. Moreover, many of the non-product-specific subsidies could be transferred to the SDT category, if they are directed to low-income and resource-poor farmers.
As for the non-trade-distorting (green box) measures, there is no limit to the support that can be accorded, and indeed most of the support measures adopted in accordance with the current strategy for agriculture fall under this category. The strategy document stresses: (i) implementation of basic rural infrastructures; (ii) institutional reforms aimed at strengthening the capacities of the local governments and rural organizations in the context of the decentralization policy; and (iii) the introduction of agricultural services - research and extension - that are flexible and efficient, managed and financed with the effective participation of the beneficiaries. In addition, Senegal has considerable flexibility for supporting agriculture through measures under SDT. In view of the financial constraints, however, support through green box and SDT measures is likely to remain limited for the time being.
On the whole, complying with the AoA rules on domestic support measures has not been an issue of concern in Senegal so far. In view of the longer-term implications of WTO commitments, it would be prudent to develop a far-sighted vision of how the AoA disciplines might constrain in any way the future implementation of agricultural development policy. To that end it would be necessary to undertake an in-depth analysis of the situation by computing the threshold levels under various forms of support measures. The important first step is to compute all these support measures, categorize them under the various AoA "boxes" and report to the WTO.
Senegal has not notified any export subsidies either in the base period or in subsequent years, and hence it is not entitled to provide non-exempt export subsidies in the future. In point of fact, traditional exports have often been taxed in the past. For example, prior to 1984, a 20 percent tax was applied on groundnuts and groundnut oil. In 1984, under the New Agricultural Policy (NAP), taxes were abolished on exports in order to increase producer revenue as well as to ensure competitiveness in world markets. Prior to the UR, export subsidies were provided for only a few products, mainly processed goods, with rates varying from 5 percent for fruit and vegetables to 59 percent for cattle fodder (Table 5). Although they were terminated before the UR was completed, they point to the type of products that the Government might be interested in supporting through WTO-compatible subsidies, if it had sufficient financial resources.
Table 5: Export subsidies granted to agricultural products in 1989
Product |
Exports (f.o.b.) |
Subsidy |
Subsidy as a percentage of f.o.b. value of exports |
(FCFA million) | |||
Fruits and vegetables Preserves Fish flour Cigarettes Cattle fodder |
1 313 17 575 151 725 217 |
66 1 318 6 146 128 |
5 7 4 20 59 |
Total |
19 981 |
1 664 |
8 |
Source: Customs Department, Customs Inquiry Division.
By virtue of its developing country status Senegal is entitled to grant subsidies to reduce the cost of domestic marketing and international freight, an exemption that could be important in view of the country's high transport costs, particularly for fruit and vegetables.
There are also a number of other incentive measures aimed at promoting exports, such as drawback facilities for custom duties, export finance, and export insurance and guarantees.
Agricultural exports represent around one fifth of total exports and are constituted predominantly by groundnut products (oil of groundnut, cake of groundnut, shelled groundnut) (52 percent of the value of total agricultural exports in 1998). Over time, this dominance has changed in favour of other products or groups of products such as cotton (21 percent), fruit and vegetables (8 percent) and hides and skins (3 percent).
Exports have fluctuated sharply over the 10 years 1985-1998, during which they have been only on a slightly rising trend. In the initial year (1985) they had the same value as in the final year (Figure 1); their average value in 1995-98 (US$94.6 million) was 32 percent lower than in 1990-94 and 34 percent lower than the extrapolated trend value (Table 6).
Table 6: Agricultural trade in 1990-94 and 1995-98 (annual average value, in million US$, and percentage change)
Period |
Exports |
Imports |
Net imports |
1990-94 actual (a) 1995-98 actual (b) 1995-98 extrapolated (c) 1
(b) - (a) 2 (b) - (c) 2 |
140 95 143 -45 (-32%) -48 (-34%) |
371 462 438 91 (24%) 24 (5%) |
231 367 295 135 (59%) 72 (24%) |
1 Extrapolated value based on 1985-94 trend. 2 Numbers in parentheses are percentage changes over (a) and (c) respectively. Source: Computed from FAOSTAT data. Agriculture excludes fishery and forestry products. | |||
Figure 1: Agricultural trade, 1985-98 (in million US$; thick lines are actual values, thin lines are trends for 1985-94, extrapolated to 1998)
Source: FAOSTAT
Because of the predominance of groundnut products, it is desirable to examine the trend of agricultural exports when groundnuts are excluded. On that basis, exports are seen to rise somewhat more, increasing from US$39 million in 1985 to US$50 million in 1998 (Figure 2). The average value of non-groundnut product exports in 1995-98 (US$43 million) was nonetheless 0.9 percent lower than in 1990-94. Thus, the decrease in total exports during 1995-1998 was mainly due to groundnut products.
Figure 2: Exports of non-groundnut agricultural products, 1985-98 (in million US$; thick lines are actual values, thin lines are trends for 1985-94 extrapolated to 1998)
Source: FAOSTAT
The agricultural trade deficit accentuated in 1995-98, rising by 58 percent to US$367 million, compared to 1990-94 (exports are only 20 percent of imports). From 1985 to 1994, total agricultural imports, which account for one third of total imports, rose from US$244 million to US$352 million with continuous fluctuations. The upward trend continued in subsequent years. As a result, the average value of imports in 1995-98 (US$462 million) was 24 percent higher than in 1990-94 and 5 percent higher than the extrapolated trend value.
Senegal is a large net agricultural importer; net imports were on a strongly rising trend in 1985-94, and the deficit increased considerably thereafter. Their average value in 1995-98 was 59 percent higher than in 1990-94 and 24 percent higher than the extrapolated trend level.
The rest of this subsection reviews the export trade in the major export commodities.
Groundnut products are the engine of the economy. They accounted for some 63 percent of total agricultural exports in 1985-98, 75 percent of which was constituted by groundnut oil. Export performance has been poor. This sector was very dynamic during the 1960s, but encountered difficulties in the mid-1970s with the emergence of other vegetable oils and the decline in demand for groundnut oil. The crisis was intensified in the beginning of the 1990s with the privatization of the sector under the NAP and elimination of the import ban on groundnut oil in 1998. At present, output is well below capacity, estimated at 920 000 tonnes, with high costs of production.
One consequence of these difficulties has been reduced groundnut production. During 1985-98, the increase in output of groundnuts was mainly due to cultivated area rather than higher yields. On the contrary, yields fell mainly because of the utilization of low-quality seeds. In addition, factors such as those associated with the climate, the diminution of soil fertility and unattractive producer prices also contributed. In 1995, it was decided that the professional association of groundnut producers should fix the producer price.
In parallel to production, exports also declined (Figure 3). The average value of exports declined from 34 percent of total agricultural exports in the 1980s to 18 percent in the 1990s. In addition, export performance depends heavily on the behaviour of world prices. The increase in export earnings in 1985-1990 was mainly due to favourable world prices, while the collapse of prices in 1990-1993 resulted in a fall in earnings. In 1994, exports benefited from both a recovery in world prices and devaluation of the CFA franc, which tripled their volume and led to the improvement of the financial situation of the SONACOS. However, although the improvement in world prices has been sustained, Senegal did not improve its share in the world market due to strong competition from vegetable oils. The average value of exports of groundnut oil in 1995-98 (US$41 million) was 43 percent lower than in 1990-94 and equally below the extrapolated trend value (Table 7). Exports of cake of groundnut dropped even faster.
Figure 3: Exports of groundnut products, 1985-98 (in US$ million)
Source: FAOSTAT
Their average of US$6 million in 1995-98 was 66 percent lower than in 1990-94 and 62 percent lower than the extrapolated trend value (Table 7).
Groundnut oil competes in world markets with vegetable oils, exports of which, unlike in Senegal, are subsidized. The liberalization of imports and prices of vegetable oils in 1995 in Senegal did not favour domestic production. Indeed, despite the surtax of 44 percent on imported vegetable oils in 1995, their prices are still lower than those of groundnut oils, resulting in a rise in such imports (see Table 9). Therefore, the tax revenue provided by this surtax, complemented by Stabex6, contributed indirectly to supporting producer prices at the level of 145 FCFA/kg while the world price was 115 FCFA/kg. As a result, groundnut exports rose in 1998 (Figure 3).
One of the opportunities in this sector is probably the peanut (groundnuts) production that benefited from favourable world prices. The sector is mainly controlled by a private society (NOVASEN) that ensures all the activities, from the supply of seeds to the export of the final product.
Table 7: Exports and export unit values of major agricultural products,
1990-94 and 1995-98
Actual value |
Trend value1 |
Percentage change | ||||||
1990-94 |
1995-98 |
1995-98 |
(b/a) |
(b/c) | ||||
Product |
Unit |
(a) |
(b) |
(c) |
(d) |
(e) | ||
Oil of |
million US$ |
72 |
41 |
71 |
-43.3 |
-43.3 | ||
groundnuts |
000 tonnes |
83 |
59 |
79 |
-29.7 |
-25.6 | ||
US$/tonne |
832 |
775 |
832 |
-6.9 |
-6.9 | |||
Cake of |
million US$ |
18 |
6 |
16 |
-66.1 |
-61.8 | ||
groundnuts |
000 tonnes |
121 |
51 |
97 |
-58.1 |
-47.8 | ||
US$/tonne |
147 |
139 |
158 |
-5.9 |
-12.1 | |||
Cotton lint |
million US$ |
20 |
23 |
26 |
15.8 |
-10.0 | ||
000 tonnes |
14 |
12 |
18 |
-13.1 |
-34.9 | |||
US$/tonne |
1 533 |
2 079 |
1 525 |
35.6 |
36.3 | |||
Fruit and |
million US$ |
5 |
4 |
3 |
-20.4 |
36.9 | ||
vegetables |
000 tonnes |
4 |
5 |
1 |
20.4 |
349.8 | ||
US$/tonne |
1 236 |
723 |
1 318 |
-41.5 |
-45.1 | |||
Hides and |
million US$ |
3 |
4 |
3 |
24.9 |
21.4 | ||
skins |
000 tonnes |
2 |
2 |
2 |
17.5 |
-0.2 | ||
US$/tonne |
2 019 |
2 090 |
1 768 |
3.5 |
18.2 | |||
1 See note 1 to Table 6.
Source: Computed from FAOSTAT data.
Cotton is the second most important agricultural export, accounting for around 16 percent of total agricultural exports. This sector is controlled by SODEFITEX, which is the main processing unity. Eighty percent of cotton lint produced is exported, but since the liberalization of the seed sector and the elimination of support for fertilizers and agricultural raw materials in 1984, producers have preferred selling in parallel markets (at subregional level sometimes), where they benefited from better prices. Despite stronger incentives (credit to producers and guaranteed producer prices), SODEFITEX is facing problems and its production capacity is under-utilized. In addition, the 50 percent devaluation of the CFA franc did not stimulate exports because most inputs are imported and their import prices doubled. However, the effects of the surtax of 48 percent on imported cotton lint imposed in 1993 have not yet been fully felt. A new private operator (COTONSEN) started the production of irrigated cotton in the Senegal River Valley two years ago.
Because of the situation outlined above, production of cotton lint has declined since 1991, and exports have been on a falling trend since 1985. However, their average value of US$23 million in 1995-98 was 15.8 percent higher than in 1990-94, though 10 percent lower than the extrapolated trend value (Table 7). The improvement was mainly due to favourable world prices.
Horticultural products: One of the most dynamic sectors to have endured the liberalization process as well as devaluation is that of horticultural products. The sector is essentially in private hands and uses relative few imported inputs. At the end of 1994, the Government eliminated import licensing for onions, bananas and potatoes and liberalized most horticultural product markets as well as those for inputs (particularly seeds, fertilizers and pesticides). Production has risen in the 1990s, particularly since 1995. Imports are still relatively high compared to exports. The average value of exports of US$4 million in 1995-98 was 20 percent lower than in 1990-94, but 37 percent higher than the extrapolated trend value. The principal constraints to the expansion of output are the lack of adequate transport facilities, and their high cost, and conservation and water supply problems. At the international level, competition is strong among African countries in the EU market.
Hides and skins: The liberalization of the sector as well as the elimination of the monopoly situation of SERAS have provided a great opportunity for private traders, whose number increased from 4 in 1987 to 16 in 1997. The average export value of US$4 million in 1995-98 was 25 percent higher than in 1990-94 and 21 percent higher than the extrapolated trend value. In order to develop the sector, there is a need to update the processing infrastructures.
Food exports represent more than 60 percent of total agricultural exports and, as already noted, are dominated by groundnut products. Therefore, the evolution of food exports is broadly similar to that of total exports as described above. Total food exports were on a broadly flat trend during 1985-94 (Figure 4), much as were total agricultural exports. In 1995-98 they were 40 percent lower than in 1990-94 and roughly as much below the extrapolated trend value (Table 8).
Table 8: Food trade in 1990-94 and 1995-98 (annual average value, in million US$, and percentage change)
Period |
Imports |
Exports |
Net imports |
1990-94 actual (a) 1995-98 actual (b) 1995-98 extrapolated (c)1 (b) - (a) 2 (b) - (c) 2 |
322 419 391 97 (30%) 28 (7%) |
90 54 89 -36 (-40%) -35 (-39%) |
232 365 302 133 (57%) 63 (21%) |
1 See note 1 to Table 6. 2 Numbers in parentheses are percentage changes over (a) and (c) respectively. Source: Computed from FAOSTAT data. Food excludes fishery products. | |||
Food imports accounted for almost 90 percent of total agricultural imports in 1998, averaging 85 percent in 1985-1998. Five product or product groups accounted for around 80 percent of the total: cereals (rice and wheat) (46 percent); dairy products (8 percent); refined sugar, vegetable oils (oil of colza, oil of soybean) (20 percent); and fruit and vegetables (6 percent). Total food imports rose by 90 percent from 1985 to 1990, from US$199 million to US$322 million. After a decrease of 23 percent in 1990-1991, they were relatively stable in 1991-94, averaging US$308 million. Their average value in 1995-98 (US$419 million) was 30 percent higher than in 1990-94 (Table 8). Over the entire period 1985-98, total net food imports increased almost continuously, worsening the situation of Senegal as a net food importer. Average net imports of US$365 million in 1995-98 were 57 percent higher than in 1990-94 and 21 percent higher than the extrapolated trend value (Table 8).
The rest of this subsection reviews the import behaviour of the main agricultural imports: cereals (particularly rice), dairy products and sugar.
Figure 4: Food trade, 1985-98 (in million US$; thick lines are actual values, thin lines are trends for 1985-94 extrapolated to 1998)
Source: FAOSTAT
Cereals: Imports of cereals accounted for about 37 percent of total agricultural imports and 43 percent of food imports in 1985-1998, with an annual value ranging from US$71 million to US$218 million. Despite the CFA devaluation in 1994, the tonnage imported rose in 1995 by 21 percent in order to satisfy increasing population needs and by a further 11 percent in 1996. It steadily fell by 22 percent in 1997 and rose again in 1998, by 42 percent. This evolution is linked to rice imports, which averaged 68 percent of cereal imports in 1985-1998, followed by wheat (28 percent).
Figure 5: Cereal imports, 1985-1998 (in million US$)
Source: FAOSTAT
Rice: Although rice is a staple food, domestic production covers only one third of consumption requirements. There has been a progressive liberalization of the sector:
These measures, along with the devaluation of the CFA franc in 1994, did not favour domestic production, which has not increased substantially since the early 1980s. Imports, on the other hand, have increased in value as well as in quantity since the 1970s and reached 440 000 tonnes in 1995, despite the devaluation. At US$137 million, average rice imports were 84 percent higher than in 1990-94 and 71 percent higher than the extrapolated trend value. Similarly, the average tonnage imported (490 000 tonnes) was 29 percent higher than in 1990-94 and 25 percent higher than the extrapolated trend amount (Table 9).
To limit imports, the Government introduced a surtax of 20 percent on imported rice, as explained in Section II above. This measure has not yet produced the expected effect on the competitiveness of local production. Domestic producers face high costs of production in a very competitive market, and in the long term this sector is unlikely to survive without some protection from imports.
Sugar: The Sugar Company of Senegal (SCS), a private company, has a monopoly of trade in sugar. Despite the prevalence of a high surtax since 1995, sugar imports have continued to increase in value as well as in volume, as they did (to a lesser extent) in earlier years. Their average value of US$29 million in 1995-98 was 104 percent higher than in 1990-94 and 47 percent higher than the extrapolated trend value. In terms of quantity the increase was even greater, respectively 112 percent and 53 percent.
Dairy products: Local production satisfies only 32 percent of domestic demand. Liberalization of the sector has left imports in the hands of the private sector, with "accessible" consumer prices and a large variety of products. This dynamism has not eliminated the risk of producing low-quality products, sometimes not in conformity with international standards due to the lack of control at the frontier. In the face of tough competition, Nestlé and SOCA, the two principal domestic producers, are undergoing restructuring.
Table 9: Imports and import unit values of major imported products, 1990-94 and 1995-98
Actual value |
Trend value1 |
Percentage change | ||||
1990-94 |
1995-98 |
1995-98 |
(b/a) |
(b/c) | ||
Product |
Unit |
(a) |
(b) |
(c) |
(d) |
(e) |
Sugar 2 |
million US$ |
14 |
29 |
20 |
103.5 |
47.3 |
000 tonnes |
31 |
66 |
43 |
111.5 |
52.7 | |
US$/tonne |
470 |
446 |
579 |
-4.9 |
-22.9 | |
Fruit and |
million US$ |
24 |
23 |
25 |
-5.5 |
-9.0 |
vegetables |
000 tonnes |
44 |
50 |
44 |
13.9 |
14.9 |
US$/tonne |
548 |
472 |
579 |
-13.9 |
-18.5 | |
Dairy |
million US$ |
49 |
36 |
65 |
-27.0 |
-44.6 |
products |
000 tonnes |
27 |
19 |
30 |
-29.2 |
-36.1 |
and eggs |
US$/tonne |
1 807 |
1 874 |
2 278 |
3.7 |
-17.8 |
Rice |
million US$ |
75 |
137 |
80 |
83.8 |
70.8 |
000 tonnes |
380 |
490 |
391 |
29.0 |
25.4 | |
US$/tonne |
196 |
280 |
206 |
42.7 |
35.7 | |
Wheat and |
million US$ |
42 |
50 |
48 |
19.2 |
3.2 |
flour 2 |
000 tonnes |
200 |
206 |
234 |
2.6 |
-12.3 |
US$/tonne |
201 |
242 |
207 |
20.6 |
16.7 | |
Vegetable |
million US$ |
56 |
74 |
73 |
32.2 |
1.2 |
oils |
US$/tonne |
94 |
115 |
124 |
23.2 |
-6.9 |
000 tonnes |
604 |
642 |
595 |
6.3 |
7.9 | |
|
1 See note 1 to Table 6. 2 Prices and tonnages are expressed in terms of raw sugar (or wheat) equivalent. Source: Computed from FAOSTAT data. | ||||||
During 1985-98, imports of dairy products were on a downward trend, and their average value of US$36 million in 1995-98 was 27 percent lower than in 1990-94 and 45 percent lower than the extrapolated trend value.
Figure 6 shows how food imports have varied annually in relation to total agricultural exports. The ratio has risen almost constantly over the period 1985-1998 and particularly during the last four years of the period. Food imports were on average 4.2 times as much as agricultural exports in 1995-98, which was 72 percent more than in 1990-94 and 38 percent more than the extrapolated trend ratio. There has thus been a worsening of the agricultural trade balance, particularly in 1995-98.
Figure 6: Ratio of the total value of food imports to that of agricultural exports, 1985-98
Source: FAOSTAT
Senegal participated actively in the UR, motivated as regards agriculture by the desire to preserve existing preferences, secure special and differential treatment for developing countries and gain compensation for the potentially adverse effects of higher world prices of food. Several developments that have taken place since 1995, including the experience of implementation of the AoA, by both Senegal and its trading partners, together with the deepening of many of the RTAs in West Africa have increased the country's stake in multilateral negotiations on agriculture. Some of the main concerns for Senegal in the new WTO negotiations are summarized in the following paragraphs.
As seen in Section II above, the AoA rules do not seem to have constrained the country's domestic support and border policies. Bound tariffs are much higher than applied rates, leaving considerable margin for discretionary increases in the latter. The only difficulty foreseen may arise from the tariff-only regime: the only border protection currently in use is the tariff, combined with temporary taxes (surtax on sensitive products). Given the high dependency on food imports and the large fluctuations in domestic food production, safeguarding domestic food markets from fluctuations in world prices is considered crucial. A tariff-only regime, even though with relatively high bound tariffs, may not be sufficient to achieve the desired stability in food prices. This constraint becomes more onerous with the implementation of the Common External Tariff (CET) of UEMOA, under which agricultural tariffs are below 20 percent. Under the UR, the most appropriate manner of overcoming it would be to resort to SSGs, but Senegal's commitment status excludes this possibility. This is an issue of concern and is likely to be raised by Senegal in any negotiations related to SSGs.
So far as domestic support is concerned, it has been significantly reduced under SAPs7 and for reasons mostly related to fiscal constraints. Thus, complying with the AoA rules on domestic support has not been a problem. Overall, the exemptions under the de minimis, green box and SDT provisions permit considerable flexibility. In common with many other developing countries, Senegal has stressed the importance of agriculture and urged that the new negotiations should maintain and strengthen such measures.
Regarding export subsidies, Senegal does not have the option of providing non-exempt export subsidies, but as a developing country it can grant subsidies to reduce the costs of domestic marketing and international freight, and that should prove very helpful in view of its high internal transport and marketing costs, particularly for fruit and vegetables, where continuation of this exemption would be particularly important.
As an exporter of agricultural products, Senegal has expressed its concerns over the need for increased access to the markets of developed countries. Most of its exports, e.g. groundnut oil and tomato paste, compete both domestically and abroad with subsidized products of other countries. On the other hand, as a net food importer, Senegal is against the immediate and complete elimination of export subsidies on cereals.
In trade with its main partner, the EU, Senegal enjoys preferences under the Lomé Convention. The current Lomé Convention (Lomé IV) expired in February 2000 and negotiations for a successor arrangement are under way. The current proposal envisages replacing non-reciprocal trade preferences by regional free trade areas between the EU and regional groupings of ACP countries. Concerns were raised over the desirability of such arrangements for ACP countries. Adoption of reciprocity could have grave consequences for agriculture and food security in countries such as Senegal, which needs to be prepared to address its concerns in this respect in the new multilateral negotiations.
Another challenge is to raise TBT standards to at least internationally recognized levels. Quality requirements have been the major obstacles facing exports of groundnuts and fishery products to the EU market. Fulfilling its commitments under the SPS and TBT Agreements calls for considerable investments that are beyond the country's financial ability. What is at stake is how to make use of the provisions related to technical assistance to developing countries included in these Agreements.
In common with a number of West African economies, Senegal faces not only the problem of a weak and unstable export base but also that of a growing import burden as consumption shifts away from traditional coarse grains (millet) towards imported commodities such as rice. Accordingly, Senegal is recognized by WTO as a net food-importing developing country (NFIDC) eligible for assistance under the Marrakesh Decision. To date, the Decision has scarcely been implemented, despite the fact that food aid has dropped to very low levels and food import bills of LDCs and NFIDCs have risen. Implementation of the Decision has so far been hampered by several factors, including, among others, the requirement for providing proof of the need for assistance and whether it results from the reform process under the UR. Thus, appropriate implementation of the Decision is a matter of great concern.
At Seattle, Senegal voiced its concern over the difficulties encountered in fulfilling its notification obligations.8 It stressed the urgent need to reach agreement on steps to reduce the number of notifications, simplify the procedures and, adopt appropriate technical assistance measures. Technical and financial assistance on capacity building is essential if Senegal is to: i) strengthen its capacity in multilateral negotiations; ii) analyze the consequences of the AoA rules and their interactions with SAPs and RTAs for domestic policy-making; and iii) take advantage of trade opportunities.
1 Based on a background study prepared for the FAO Commodities and Trade Division by Mbaye Sarr, Dakar.
2 Trade Policy Review of Senegal, 1994, WTO.
3 Before the UR ODCs were not listed in schedules. According to the Understanding on the Interpretation of Article II:1(b) GATT 1994, ODCs levied on bound tariff items should be listed in Schedules of concessions and should reflect actually applied rates on 15 April 1994. Contracting parties (WTO members) can challenge the ODC rates during a three-year period after the entry into force of the WTO Agreement. This does not seem to be a problem for Senegal now as more than three years have passed since it acceded to WTO.
4 UEMOA (Union Economique et Monétaire Ouest-Africaine) is the regional trade agreement of West African countries, comprising Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
5 Niassy, Abdoulaye, 1998, "Situation prévalante au Sénégal en termes de normes pour l'arachide, le riz, l'anacarde, les fruits et légumes et les produits transformés", Direction de la Protection des Végétaux, Sénégal.
6 Compensation system of agricultural export losses in the Lomé Convention.
7 For details see: Direction de la Planification, 1996, Plan d'orientation pour le Développement Economique et Social : 1996-2001 - 9ème Plan : Compétitivité et Développement Humain Durable, Ministère de l'Economie, des Finances et du Plan.
8 Statement by H.E. Mr. Khalifa Ababacar Sall, Minister of Commerce and Handicrafts, at the Seattle WTO Ministerial Conference.
