Côte d’Ivoire^[30]

1 Introduction

Côte d’Ivoire is a small West African country with an area of 322 416 square kilometres and a population of 16.4 million inhabitants growing at 3.8 percent per annum in 1999. Its per capita income fell by 5 percent from US$720.1 in 1985 (BNETD, 1996) to US$685 in 1999 (IMF, 2000). Since the early 1980s, the country has experienced a deep recession following both negative external shocks and subsequent inappropriate domestic policy responses.

The country has three agro-ecological zones: a humid and dense forest in the South making half of the total area; a sudanian-guinean zone, providing a transition between the forest and the savannah in the centre with 19 percent of the total area; and a sudanian zone with a humid savannah in the north with 31 percent of the total area. The forest zone, with the most appropriate lands for agricultural activities, is the most populated area as it attracts large flows of both internal and external migrants. Cultivable land represents 75 percent of the total area, whereas the actually cultivated land is 30 percent of the total.

Agricultural activities are undertaken almost completely on small-scale farms with an average area of 4 ha and 7.1 residents, of which 4.9 are family labour (Minagra, 1999). The techniques used on the farms are traditional, as most (72 percent) of the farm heads are illiterate; only 0.95 percent of farms use tractors, 4.4 percent use animal traction, and 18 percent of these farms are run by women. Irrigated land represents only 2 percent of the total cultivated land (Minagra, 1999). Maize and yams are consumed and produced predominantly in the north, yam in the centre and cassava and plantain in the south. Rice is consumed in all regions, but half of the 600 000 tonnes national consumption is imported.

Small-scale family farms are the rule for traditional cocoa and coffee export crops, whereas large plantations are dominant in bananas, rubber, palm oil and pineapple, but the share of plantation agriculture is relatively small. Although Côte d’Ivoire does not have the reputation of being an animal-raising country, 40 percent of its farms combine agriculture and some animal raising. Animal raising is concentrated in the north with 85 percent of total cattle.

1.1 Structure of the agriculture sector and sector performance

Agriculture is the main economic activity of Côte d’Ivoire. It was the principal source of the country’s prosperity in the 1960s and 1970s, and also the main cause of its economic decline that started in the mid-1980s. This was a consequence of both inappropriate domestic policies and the sharp decline of the prices of its major export crops, especially coffee and cocoa.

Agricultural GDP grew slightly faster than total GDP in 1985-1994 (1.0 percent vs. 0.6 percent in real terms) and slightly less in 1995-1999 (4.5 percent vs. 5.7 percent in real terms). The share of agriculture in total GDP fell from 30 percent in 1985-1994 to 27.4 percent in 1995-1999. Despite this falling share of agriculture, the majority of the active population (67 percent in 1985 and 58.5 percent in 1998) makes a living from it. Its share of total trade is substantial but fell from 37.5 percent of export volume and 59.8 percent of export value in 1985-1994 to 28.9 percent and 57.6 percent in 1995-1999, respectively. Over the 1985-1994 period, the share of both volume and value of agricultural exports fell as a consequence of the sharp drop of their prices. The other reason for the decline of exports was the loss of competitiveness as expressed by the 29 percent real appreciation of the CFA franc over the 1985-1993 period, compared with which the subsequent 0.23 percent real depreciation over the 1995-1999 period was not significant. Food imports have grown rapidly and represented 21.3 percent and 19.4 percent of total import value in 1985-1994 and 1995-1999, respectively.

In 1999, the relative share of food crops, traditional export crops (coffee and cocoa) and non-traditional export crops represented, respectively, 60.8 percent, 30.9 percent and 8.3 percent of total agricultural GDP. There has been diversification from food crops to export crops since 1993 when the respective shares were 73.6 percent, 19.9 percent and 6.5 percent. Over 1993-1999, the real GDP of food crops declined annually at the rate of 2.7 percent, whereas that of traditional and non-traditional export crops grew, respectively, at 11 percent and 6.7 percent.

Coffee and cocoa dominate the country’s agriculture. The decline of their growth rate over the 1985-1994 period explains the economic and financial problems of the country. The annual growth rate of production of coffee fell from 0.7 percent in 1985-1989 to -7.9 percent in 1990-1994, whereas that of cocoa slowed down from 11.4 percent to 3.5 percent over the same period. These mediocre performances were explained by the behaviour of these products’ world prices.

The index of coffee prices fell from 100 in 1985 to 57.8 in 1989 and 35.3 in 1993, whereas the index of cocoa prices fell from 100 to 38.7 and 48.8 over the same period. In 1994, the index of world prices rose sharply to 116.5 and 120.7 for coffee and cocoa, respectively, as a consequence of both the CFA franc devaluation and improvement in world prices. In 1995-1999, coffee and cocoa production increased by 11.2 percent and 5.7 percent, respectively, relative to the previous period. Exogenous shocks were a significant factor in the economic and financial hardships of the 1980s and 1990s.

The same pattern is observed for rubber but not for banana or pineapple. The growth rate of the production of rubber fell from 11.4 percent in 1985-1989 to 5 percent in 1990-1994 as a consequence of the fall in the index of the world price from 100 in 1985 to 86.4 in 1989 and 33.9 in 1993. The growth rate recovered to 7.5 percent in 1994-1999 as prices improved. In contrast, the production of banana and pineapple grew steadily from 2.4 percent and -13 percent, respectively, in 1985-1989 to 3.9 percent and 3.8 percent, respectively, in 1990-1994 and to 8.3 percent and 7.5 percent, respectively, in 1995-1999.

Public investment allocated to agriculture has been falling as a consequence of the economic and financial crisis since the early 1980s; these allocations fell from current CFAF114 billion in 1986-1990 to CFAF64 billion in 1994. After the surge in allocations to agriculture in 1994 (28 percent of total investment), they fell continuously until 1999 to reach 21 percent, the same level as in 1986-1990 (Banque Mondiale, 1994; IMF, 2000). This development does not square with the contribution of the sector to total GDP.

1.2 Policy changes and programmes over the last two decades

Industrial and trade policies are marked by several milestones: initiation and deepening of protection (1960-1984), liberalization (1984-1988), reversal to protection (1988-1990), return to liberalization (1990-1993), consolidation of liberalization (1994 to the present). This succession of steps forward and backward illustrate the ups and downs of government policies as well as the difficulties of its policy dialogue with the IMF and the World Bank (Berg et al., 1999).

During the period ending in 1984, effective and implicit rates of protection increased significantly; the government took direct part in industrial activity by creating industrial public enterprises. In 1984, the investment code and the tariff system were reformed in order to reduce protection and promote industrial exports; exemptions were suppressed, and rates of effective protection were capped and harmonized at 40 percent; quantitative restrictions were also eliminated. The government introduced an import duty and export subsidy meant to simulate a real devaluation and improve competitiveness, which was damaged by the CFA franc overvaluation. Financial difficulties in 1987 and 1988 made it difficult to pay the scheduled export subsidies and necessitated an increase in import duties. The failure of the mock devaluation stemmed also from its lack of credibility among the private sector.

During 1988-1990, protection rates were raised because of the increasing financial difficulties of the government linked to the decline of cocoa and coffee prices as well as the suspension of financial assistance by the Bretton Woods institutions because of non-compliance with conditionalities. As a consequence, rates of protection and quantitative restrictions increased once more. In 1989, the World Bank approved an agricultural adjustment loan with the following objectives: (1) improve the internal terms of trade in favour of agriculture; (2) reorient the incentive system towards crops with a high comparative advantage; (3) reduce costs in agro-industrial production in order to improve internal and external competitiveness; (4) decrease the direct involvement of public enterprises in productive activities and the provision of services to agriculture; (5) shift public expenditures in favour of rural priority activities; (6) develop financial intermediation in rural areas and improve access to credit by rural producers; (7) improve the management of natural resources through the promotion of sustainable forest management systems. A further series of sector adjustment programmes were implemented between 1991 and 1993 with the objectives to improve the legal, regulatory and institutional environment as well as to enhance the competitiveness of the economy. Some tariffs were eliminated, and others were reduced. Despite these reforms, the sector growth rates did not improve, as cocoa and coffee prices fell, and the overvaluation of the CFA franc continued.

Since the early 1980s, the CFA franc devaluation issue was a bone of contention between the government of Côte d’Ivoire and France, on the one hand, and the Bretton Woods institutions, on the other hand. The 50 percent devaluation enacted on 12 January 1994 relative to the French franc was a milestone on the road to trade liberalization. It improved significantly the effective rate of protection of the economy and eased the sizeable reduction of import duties and taxes. In the wake of the devaluation, export and private sector promotion assumed a renewed importance with the creation of APEXCI, a privately led organization for export promotion activities. The government role in the marketing of cocoa and coffee was redefined, whereas the involvement of the private sector was increased.

Throughout this period, the government favoured industrial and export crops as opposed to food crops, which were left without meaningful public support, with the exception of rice. Over the years, the government of Côte d’Ivoire has supported rice production and marketing in various ways. Between 1983 and 1995, policies aiming at self-sufficiency in rice were implemented through the intervention of specialized public enterprises, specific price incentives and extension services to individual producers. Heavy public investments were made in irrigation schemes while rain-fed rice was abandoned to traditional cultivation methods. Public enterprises were placed in charge of rice marketing. Despite these public interventions, the self-sufficiency target was not met. Instead, consumption grew faster than production, owing to the high rate of population growth and the inability of domestic production to cover domestic needs at low costs. Domestic consumption climbed to 650 000 tonnes in 1995, of which half was imported. The rice sector was liberalized in 1995, and the Caisse de péréquation, the marketing board in charge of rice imports, was dismantled.

1.3 Participation in regional and international integration efforts

Côte d’Ivoire is a dynamic participant in the successive attempts at regional integration that started as far back as 1959 with the Conseil de l’Entente putting together Burkina Faso (then Haute Volta), Benin (then Dahomey), Côte d’Ivoire, Niger and Togo. A monetary union, Union Monétaire Ouest Africaine (West African Monetary Union) was created by the 1962 treaty transformed in 1994 into an economic and monetary union, WAEMU. Its membership consists of eight countries (Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo), and its governing body, the Commission, started work in 1995. WAEMU took over the objectives and activities of the Communauté économique de l’Afrique de l’Ouest (West African Economic Community), an earlier effort at economic integration. These integration efforts were limited at first to countries having the French language in common. They were later extended to the English and Portuguese speaking countries of West Africa, with the creation, in 1975, of the Economic Community of West African States (ECOWAS) consisting of Cape Verde, Gambia, Ghana, Guinea (Conakry), Nigeria, Liberia and Sierra Leone, in addition to the membership of WAEMU countries.

The main objective and activity of WAEMU is the promotion of a common market. As a step towards this final goal, a transitional preferential trade regime was put in place with a specific schedule for the design and implementation of a CET. To be eligible for the benefit of the community, preferential duty applications must be filed by the governments of member countries where applicant firms are located; the decision made by the Commission after consultation of experts of member countries is made within three months.

In particular, WAEMU contemplates a common agricultural policy with the following main objectives: (1) realization of food security and adequate selfsufficiency; (2) increase in agricultural productivity; (3) improvement in the operation of domestic markets for agricultural products; (4) establishment of a common market in agricultural products; and (5) integration of the regional agriculture into the world market. The legal adoption of the envisaged common agricultural policy occurred on December 2001 (Acte Additionnel no. 03/2001). To finance the implementation phase of the policy, a regional fund for agricultural development is scheduled to be created in 2005.

ECOWAS envisaged the integration of member states in a common market with an economic and monetary union. The instruments to achieve these objectives are: elimination of custom duties and taxes of equivalent impact; inception of a CET; harmonization of economic and financial policies; and creation of a monetary zone. The results of ECOWAS have been generally disappointing as intraregional trade is estimated to be only 11 percent of the total (www.ecowas.org, 2002). The CET and policy harmonization through a multilateral macroeconomic policy surveillance are still to be implemented. Notwithstanding these problems, ECOWAS non-WAEMU countries plan to create a non-CFA monetary zone by 2003 that is scheduled to merge with the WAEMU monetary zone into a unique ECOWAS monetary zone by 2004. This is a very ambitious decision and a very difficult task given previous experience and outcomes.

Côte d’Ivoire is a signatory of the African, Caribbean and Pacific (ACP)/EU partnership agreement (ex Lomé Convention) signed in Cotonou on 23 June 2000. This new partnership shifts from non-reciprocal tariff preferences granted Côte d’Ivoire under the previous Lomé Conventions to reciprocal trade relationships starting on 1 January 2008. The transition period will be followed by an integral free trade regime after 12 years of progressive trade liberalization of imports from the EU. During the transition period, the unilateral tariff preferences will remain in force (Courrier ACP-UE, 2000). Thus, Côte d’Ivoire has to prepare itself to face full free trade very soon.

Since March 2002, Côte d’Ivoire has been a beneficiary of the African Growth and Opportunity Act (AGOA). AGOA has two objectives of expanding (1) US investment in sub-Saharan Africa (SSA); and (2) exports from SSA into the USA. For countries eligible for the GSP, 4 600 items are available; AGOA grants an additional 1 835 line items including footwear, luggage, handbags and flatware. Under AGOA provisions, sub-Saharan Africa (SSA) can export eligible products into the USA duty- and quota-free. Benefits under AGOA are available until September 2008.

Côte d’Ivoire did not have any noticeable participation in the UR negotiations, and it has not been active in WTO activities since the signing of the Marrakesh agreement in 1994. A national committee was set up in 1996 to deal with WTO issues and those specifically related to agriculture, but we can report nothing pointing to the dynamism of this committee.

2 Experience with implementing the WTO agreements

In the continuation of the reform process initiated in the early 1980s, the government undertook the liberalization of imports by reducing customs duties and eliminating NTBs. In the context of this reform, the average nominal tariff on imports fell from 32 percent in 1989 to 24 percent in 1993. A further reduction of these duties to an average of 20 percent was implemented after the 1994 devaluation. After devaluation, the rise of the prices of imported agricultural inputs increased the cost of agricultural export activities using imported inputs. To mitigate these costs to exporting firms, a system of temporary admission without import duties was put in place as Côte d’Ivoire has not developed free zones. The duration of the suspension was 12 months under the ordinary law with a required guarantee of 50 percent of the suspended duties.

After devaluation, the government instituted an export tax (Droit unique de sortie [DUS]) on cocoa and coffee. Despite its fiscal justification, this tax had an antiexport bias that was regularly a bone of contention between the government and the Bretton Woods institutions.

Côte d’Ivoire’s trade has been characterized by a variety of NTBs and QRs. Up to the devaluation in 1994, they were concentrated on basic agricultural products and agricultural inputs. QRs concerned mainly rice, wheat and vegetable fibre sacks.

Before devaluation, rice imports were organized by a public enterprise (Caisse générale de péréquation des prix). Starting in 1995, production, processing, importation and marketing activities were entirely transferred to the private sector. The liberalization of the pricing and marketing system of rice was extended to the following products: palm oil, rubber, cotton, coffee and cocoa. This price liberalization was based on (1) the full responsibility of professionals involved in the concerned activities and (2) the substitution of interprofessional agreements or conventions for the former administered price system. As for banana and pineapple, their activities were liberalized earlier, and the professionals formed Office de la Commercialisation de l’Ananas-Banane (OCAB), which designs, negotiates and oversees the application of the marketing regime defined with the different intervening agents in the trade.

Transport costs are a substantial part of the country’s trade and performance. Maritime transport constitutes 20-30 percent of the c.i.f. price of banana and pineapple exports, but this share is lower (6-9 percent) for coffee, cocoa and cotton exports (Banque Mondiale, 1994). Transport costs were high as a consequence of delays owing to government regulations concerning allocation of space available on ships through OIC. SITRAM, a public enterprise, had a monopoly on maritime transport activities. Reforms of the sector consisted of introducing more competition in the non-specialized transport sector to allow for the entry of more local private companies; they also limited SITRAM’s share of specialized transport including that of bananas and pineapple in particular.

Exports of pineapples and non-traditional exports such as flowers, ornamental plants, mangoes and papayas encountered difficulties which limited export volumes mainly because of limited freight capacities on Air Afrique and Air France aircraft, and their monopoly on the air routes, and the lack of organization of local exporters.

2.1 Regional integration-led liberalization

The main objective and activity of WAEMU is the promotion of a common market. Four categories of products are defined in the CET to simplify the existing tariff, with category 0 for social goods; category 1 for essential goods, raw materials and equipment (most are agricultural goods); category 2 for inputs and intermediate goods; category 3 for manufactured goods. From 1 January 2000, the maximum tariff rates are, respectively, 0 percent, 5 percent, 10 percent and 20 percent. To this tariff rate, a 1 percent statistical tax and a 1 percent community levy are added.

In addition to the permanent tariff of the CET, two temporary tariffs were designed to protect the products of member countries from the losses generated by the adoption of CET and by the vagaries of world prices. These tariffs are, respectively, the Taxe dégressive de protection (TDP) and the Taxe conjoncturelle à l’importation (TCI); the TDP concerns mainly industrial and agriculture-based industrial products, whereas the TCI deals with agricultural products, in addition to the agriculture-based industrial products. The TCI, which mostly concerns agricultural products, is set at 10 percent of a trigger price whose mode of computation is properly specified. The TCI is implemented when the c.i.f. price of the eligible product is lower than, or equal to, the trigger price level.

After three years of a transition period starting in 1997, the CET is fully implemented, without exceptions, in every member country, including Côte d’Ivoire, since 1 January 2000. However, the WAEMU Commission complains that in some member countries (1) tariffs exist that are in excess of those in the CET; (2) some required tariff lines are missing; (3) some products are misclassified; (4) some import duties and taxes actually collected do not belong in the CET (www.izf.net, Rapport d’activité de la Commission, 2002).

The CET for agricultural products is lower than the commitments to WTO. However, tariffs actually applied on agricultural imports are much higher than those permitted by the CET. The average tax rate on agricultural imports is 13.8 percent in 1992-1994, 17.9 percent in 1995-1999, 13 percent in 2000 and 16.4 percent in 2001 (Table 1). Thus, even after the official implementation of CET starting in 2000, Côte d’Ivoire is one of the member countries that do not conform to the CET rate, as evidenced by the complaints voiced by the WAEMU Commission mentioned earlier. Given the leadership of Côte d’Ivoire in this organization, this is bad news for the prospects of regional integration. However, the applied rates are within the range of its AoA commitments. Despite the complaints on non-compliance, efforts at the implementation of the CET rates mean that Côte d’Ivoire’s self-imposed trade liberalization reforms have gone much further than required by its AoA commitments.

2.2 Market access commitments

The major obligations of Côte d’Ivoire in the context of the AoA relate to the elimination of NTBs, tariff rationalization and consolidation and appropriate custom valuation of transactions. As discussed above, autonomous reforms were implemented by Côte d’Ivoire before the AoA, which resulted in a liberal agricultural trade regime and a more open economy.

Table 1. Actual applied duties on agricultural imports (%)

Source: Author’s computations based on databases of the Customs Administration.

The specific market access commitments undertaken in the AoA include: customs duties on all agricultural products bound at a ceiling rate of 15 percent with the exception of 25 tariff lines whose tariffs were bound at rates varying between 5 and 75 percent initially in 1995, then between 4 and 64 percent in 2004 (www.wto.tpr).

Table 1 shows that Côte d’Ivoire is within its WTO commitments, although it does not seem to comply with the CET 5 percent maximum obligations.

Customs valuation

With respect to customs valuation, Côte d’Ivoire used the provision of the agreement relating to special and differentiated treatment to obtain a first waiver of five years with application of the agreement scheduled for 1 January 2000 and a second waiver of 18 months explained by the political turmoil since the December 1999 coup d’état. Since 1 July 2001, the customs valuation agreement is being implemented.

Safeguard measures

Côte d’Ivoire did not create legislation to fight price dumping and duties that threaten domestic activities. But before the Marrakesh agreement, specific duties were levied on certain meats and dairy products to countervail the negative impacts of subsidies that the EU granted its export products (www.wto.tpr). Côte d’Ivoire did not apply any safeguard measures until the institution of the TCI mentioned earlier. Prior to the TCI, reference prices for import products played this role.

TCI is explicitly designed as an agriculture special safeguard measure in accordance with WTO regulations; it is meant to dampen the impact of the erratic movements of world prices of certain products and fight against dumping practices; it applies mainly to agriculture, animal products, fisheries and agriculture-based industrial products. Four criteria define the product eligibility: volatility of world prices; dumping; subsidies; ability of the product to cover a large proportion of union needs. A few products are de facto eligible for TCI.

The aggregate agricultural data do not show surges in food imports during the period 1995-1999 as compared with the period 1985-1994, except for fish. However, as shown later, these imports were re-exported; net imports did not show these import surges. At the more micro level, we can report at least one application to benefit from this safeguard measure that was filed in May 2001. It concerned mainly raw palm oil products. According to the submission, the c.i.f. price of this product fell from US$671/tonne in 1998 to US$310/tonne in 2000 and US$250/tonne in the first trimester of 2001. Côte d’Ivoire producers’ loss of competitive edge versus Malaysian imports was around 22-29 percent owing to a 50 percent reduction of export taxes by Malaysia in order to reduce its large stocks. The application of the 10 percent TCI would reduce farmers’ loss of farm gate price by 75 percent, keeping it at CFAF18.5/kg instead of CFAF15/kg (Cosmivoire SA, 2001).

2.3 Domestic support

Côte d’Ivoire did not make any commitments on domestic support in its AoA schedule. In future, therefore, its use of trade-distorting support is limited to that allowed under the de minimis rules. However, after 15 years of trade reform, Côte d’Ivoire has dismantled virtually all interventions with distorting effects, leaving in place only Green Box support mechanisms. The main intervention concerns the help provided in order to strengthen the agricultural professional organizations of producers and traders to help them to set up flexible and efficient stabilization mechanisms for producer prices (Minagra, 1999). Indeed, the outcome of the liberalization of agriculture hinges on the ability of these professionals to find ways to effectively manage their sector of activity.

2.4 Export subsidies and taxes

Côte d’Ivoire levies taxes on certain exports. A single export duty (DUS) of CFAF200/kg is applied on roasted and unroasted coffee and cocoa beans (CFAF200/kg); ad valorem taxes are levied on cola nuts (14 percent), raw timber (from 1 to 44 percent according to variety of wood) and plywood (1 percent). The DUS was CFAF125/kg for cocoa in 1999 and CFAF160/kg and CFAF10/kg for cocoa and coffee, respectively, in 2001.

There are no export prohibitions except that prior authorization is required for some products. Côte d’Ivoire participated in the retention plan of coffee in 1993 and of cocoa aiming at reducing over production. Under the Lomé Convention provisions, Côte d’Ivoire banana exports were subject to a quota of 155 000 tonnes per year, which was subsequently raised to 162 500 tonnes in 1994.

2.5 Export promotion

Besides the 1994 devaluation that directly worked in favour of exports, other reform measures taken before and after devaluation contributed indirectly to the promotion of agricultural exports. Indeed, trade liberalization and the reduction of NTBs and QRs, by allowing in imported inputs at lower prices, helped agricultural export activities that used those inputs. The process of privatization of state-owned enterprises in direct production of goods (Société africaine de plantations d’hévéas and Société de caoutchouc de Grand Béréby in the rubber sector; PALMINDUSTRIE and Plantations et Huileries de Côte d’Ivoire in the palm oil sector) provided the private sector opportunities to increase the production of different export products.

Another indirect way of stimulating exports was to strengthen professional associations in agricultural export activities such as OCAB for producers of bananas and pineapple, l’Association des Producteurs Manufacturiers de Caoutchouc and Association des Producteurs de Palmier à Huile for producers of rubber and palm oil products. In 1996, Côte d’Ivoire changed its export policy by replacing Centre de Commerce International d’Abidjan, the former public agency, by Association pour la Promotion des Exportations de Côte d’Ivoire (APEXCI), a joint private/public agency for export promotion.

A specific project, Projet de Promotion et de Diversification des Exportations Agricoles (PPDEA), aiming at promoting private sector involvement in nontraditional exports was set up in 1995 to diversify the range of export products and export markets for non-traditional exports and agro-industrial products. The PPDEA supported private producers in marketing, research and development, logistics and fundraising activities, and training in export techniques; it also provided quality control services. This programme concerned the following products: mangoes, papayas, flowers, ornamental plants, horticulture, processed fruit, condiments. These programmes explicitly promoted the diversification of exports from coffee and cocoa. As a result of these programmes, Côte d’Ivoire ranks fourth in the export of papaya behind Brazil, Jamaica and Ghana, with 4 percent of an annual global market of 15 000 tonnes.

2.6 Export market access

Basically, Côte d’Ivoire exports non-processed agricultural products like pineapples, bananas, coffee beans and cocoa beans to non-regional markets, mostly in Europe. These exports benefit from the preferences granted by the EU/ACP Cotonou Agreement (previously the Lomé Convention) that facilitates access to the EU market. But these preferences have been challenged by the country’s Latin American competitors in the same market; besides, these preferences are being reduced as a consequence of WTO regulations.

Trade preferences under the EU/ACP agreements have not helped the country to develop its exports; its market share declined from 6.7 percent of EU imports in 1976 to 3.7 percent in 1992 (Contamin, 1997). Apparently, these preferences did not stimulate an adequate supply-side response.

As a consequence, the share of WAEMU in the country’s exports increased at the expense of EU’s. This result is partly attributable to the progress of the customs union and the removal of duties on Côte d’Ivoire’s exports to its WAEMU partners. Indeed, as already mentioned, the CET has been enforced since 1 January 2000 after three years of progressive trade duty reduction. The results of these efforts are that intracommunity exports within the union increased from 11 percent in 1996 to 15.4 percent in 1999 (www.izf.net: Commission UEMOA, 2002). Another indicator of the progress of integration is the compensating revenues collected as a result of the application of the CET; these revenues are estimated at CFAF40 834.9 million over the 1998-2001 period for the eight member countries with CFAF83.215 million in 2001 for Côte d’Ivoire (www.izf.net: Commission UEMOA, 2002).

As for processed agricultural products shipped to non-regional markets, they generally face tariff escalation according to the degree to which the product has been processed. For example, on the Japanese market, non-roasted coffee bears 0 percent tax, whereas roasted (decaffeinated or non-decaffeinated) coffee pays a 20 percent basic tax (Nathan Associates, 1999). This tax rate jumps to 30 percent for extracted concentrated coffee, while concentrated coffee with sugar and preparations with 30 percent milk pays a 35 percent tax. On the EU market, nonroasted and non-decaffeinated coffee pays 5 percent tax versus 15 percent for non-roasted but decaffeinated, and 18 percent for roasted and decaffeinated. Another example concerns pineapple; on the EU market, fresh pineapple pays a 9 percent basic tax versus 47 percent + €257/tonne for pineapple juice. On the Japanese market, fresh pineapple pays a 20 percent tax versus 39.5 percent for pineapple juice.

However, as Côte d’Ivoire has duty-free export to the EU for both processed and non-processed food exports, this tariff escalation actually provides protection to Côte d’Ivoire against other third country exporters. Thus, as the EU reduces these MFN duties, it also reduces the level of protection to coffee processing in Côte d’Ivoire. On the Japanese market, this tariff escalation is clearly discriminatory, unless there are GSP tariff preferences which give Côte d’Ivoire preferential access.

The government of Côte d’Ivoire raises the issue of using 5 percent of nonvegetal raw material for the production of chocolate; this is a real danger for the national economy as it reduces the income of farmers. Labelling might be a solution to enable consumers to distinguish 100 percent cocoa-based chocolate from that which is not. A thorough discussion of this issue requires both sharp technical expertise and strong bargaining power on the part of Côte d’Ivoire.

2.7 Sanitary and phytosanitary standards

Côte d’Ivoire takes appropriate measures to protect the health of its food consumers. A specific administration at the Ministry of Agriculture and Animal Resources is responsible for the health control through veterinary and phytosanitary control services for animal products and through seed and plants services for vegetal products. Both these control services are performed by separate divisions of the Laboratoire National d’Appui au Développement Agricole (LANADA) (Minagra, 1999).

For animal products, systematic controls are performed on site to ensure consumability of meats. For exports of animal products and imports of fish products and meats, sanitary controls are performed before the marketing of these products. Since 1986, Côte d’Ivoire has had no bovine pest on its territory, and animal pests for other types of animal have significantly decreased. In 1996, Côte d’Ivoire experienced a large porcine pest that was quickly contained and eradicated. The economic and financial impact of this porcine pest was considerable: 3 000 jobs were lost, 1 500 households were affected, and financial losses were estimated to be CFAF15 billion.

In the last two years, two instances were reported of refusal of Ivorian coffee in Spain and Belgium because of the presence of an excess concentration of a chemical product. Problems were also reported for pineapple.

Côte d’Ivoire is organizing itself to participate in the future SPS negotiations and to comply with the upcoming regulations. In the meantime, it set up a specific institution (Direction de la qualité et de la normalization) in June 2001 to coordinate and manage quality and standardization issues at the national level.

2.8 Trade related intellectual property rights

Côte d’Ivoire has regulations (Decree no. 92-392 dated 01/07/1992) aiming at fixing conditions to register and protect vegetal varieties and produce, control, certificate, market, import and export seeds and plant varieties. Two implementation acts have been passed to create an Official Catalogue for vegetal species and varieties (interministerial act no. 012 dated 15/02/1999) and to institute a Technical Committee to examine applications to register on the official catalogue (interministerial act no. 011 dated 15/02/1999). The quality control aiming at certification is performed by an appropriate division of LANADA. Imports and exports of vegetal material require prior authorization from the Ministry of Agriculture and Animal Resources after due phytosanitary inspection of the vegetal origin (Minagra, 1999).

The intention is to produce a law aiming at protecting intellectual property rights on newly created vegetal seed and species. These problems are taken care of by Office ivoirien de la propriété intellectuelle (OIPI). At present, Côte d’Ivoire is not a member of the UPOV (www.upov.org and OIPI sources).

In summary, Côte d’Ivoire implemented sweeping trade liberalization reforms prior to and independently of the 1994 AoA; the reform momentum was also accelerated by the willingness to hasten regional integration. More explicitly, the AoA had minimal impact on these liberalization efforts. The ensuing opening up of the economy has gone far ahead of, and deeper than, what is required by the present state of WTO rules. Considering the short-term fiscal revenues losses, the inertia in domestic support and export subsidies by richer countries, other NTBs (SPS and TRIPS) and, most importantly, the lack of liberalization-led economic growth, it is temping to regret those costly efforts and to look around for possibilities of reinstating some duties and taxes.

3 Review of agricultural and food trade

In the following analysis, the period under review is divided in two subperiods: 1985-1994 and 1995-1999, the year 1994 being the dividing line. This year is important for two reasons for Côte d’Ivoire: the devaluation of the CFA franc and the signing of the Marrakesh agreement that instituted WTO. It has been very difficult to disentangle the relative effects of both events. The section describes the evolution of exports and imports and relates their changes to price and production movements.

3.1 Overall balance on agriculture and food trade

Table 2 shows the values of agriculture and food imports and exports as well as the per annum growth rates of these trade categories. It tells three very clear stories with the common thread that trade significantly intensified in period B as compared with period A.

Table 2. Agriculture and food trade (annual averages)

Source: Author’s computations based on BNETD (1996) and IMF (2000).

The first story is that agricultural imports and exports increased, respectively, 2.2 times and 3.4 times faster in the second period than in the first. This trend was even more significant for food trade as food imports and exports increased, respectively, 5 times and 6.3 times faster in the second period than in the first. The second story is that increases in food trade were greater than those for agricultural trade; in particular, food trade accelerated in period B as compared with period A. Indeed, in period A, food imports grew 61 percent faster than agricultural imports, whereas the growth rate of food imports was 3.7 times greater than its agriculture counterpart in period B.

The same thing happened to exports; in period A, food exports grew faster than agricultural exports by 20 percent, whereas the factor was 2.21 times in period B. The third story concerns net exports; agricultural net exports grew at the same 6 percent rate in periods A and B, whereas food net exports grew at a modest 6.7 percent compared with the 212 percent in period A; actually, this extreme growth rate is due to devaluation as net exports jumped from US$6 million in 1993 to US$153 million in 1994. When this extreme value of 1994 is removed, the per annum growth rate of the period is actually negative (-68 percent) in period A.

The stimulus to trade in period B cannot be explained by only one factor: the Marrakesh agreement, the 1994 CFA franc devaluation or Côte d’Ivoire’s previous efforts at autonomous liberalization. It seems difficult to assign individual contributions to these different factors. Probably, the combination of devaluation and the previous trade liberalization reforms plays the predominant role, since the implementation of the Marrakesh agreement needed more time to bear fruit. The third story is very worrisome as it implies that the competitiveness of Ivorian products decreased over the period, despite the previous reforms including the devaluation and unilateral tariff preferences granted Côte d’Ivoire by EU.

The review of imports showed that most imports increased sharply after 1994 despite the post-devaluation higher prices. This evolution is accounted for by the autonomous removal of NTBs and QRs on agricultural products implemented in the context of adjustment programmes and prior to AoA.

3.2 Export developments

In descending order of importance, the following five products are the main contributors to total export revenues: cocoa beans, coffee beans, processed cocoa, canned fish and processed coffee (see Table 3). The share of cocoa beans in total export revenues increased from 29.2 percent in 1985-1994 to 30.4 percent in 1995-1999, whereas processed cocoa and palm oil had a stable share before and after 1994. The share of most of other products (coffee beans, pineapple, logs, processed coffee, canned pineapple) decreased between 1985-1994 and 1995-1999; in contrast, the share of bananas, rubber, oil crops and canned fish increased between these periods. The shares of products in export value are explained by the underlying evolution of production, and the prices of these products as discussed below.

Côte d’Ivoire exports of which agricultural products are a large proportion are mainly oriented towards the EU, WAEMU, North America and Asia in descending order of importance (Table 4). By 1995-1999, there was a slight diversification of markets. Over the study period, the share of EU in Côte d’Ivoire’s exports did not change. Unlike the EU, the share of WAEMU and Asia in exports increased steadily, whereas that of North America fluctuated between the two periods.

Table 3. Average annual share of products in total export value

Sources: Author’s computations based on BNETD (1996); INS and Direction de la conjoncture et de la prévision économique (1998); IMF (2000).

Table 4. Direction of exports and origin of imports (%)

Source: Author’s computations.

The 18 percent and 11.3 percent increases in the shares of WAEMU and Asia, respectively, in Côte d’Ivoire’s exports are an indication of the progress of regional integration; but they are also an indication of the deterioration of competitiveness of its products, since it occurred simultaneously with a 8.4 percent loss on the EU market. Indeed, competition is more fierce on the European market than on regional African market.

3.3 Trends in exports by commodity

Export volumes

Export volumes increased in both the 1990-1994 and 1995-1999 periods for 64-73 percent of the individual export products displayed in Table 5. For 45 percent of these products by value (cocoa beans, processed cocoa, canned fish, bananas and rubber), export growth was consistent in both periods. Four products experienced export decline in 1990-1994 (processed coffee, pineapple, logs and oil seeds) and three in 1995-1999 (coffee beans, palm oil and logs); only logs declined consistently throughout the study period. Agricultural trade went rather well for all major products, except for coffee (beans and processed), palm oil and logs. For products with positive export growth, it happened despite the decline of unit export prices in 1990-1994 (except for bananas), or their modest increase in 1995-1999 (except for canned fish). For products experiencing a decline of their export volume, export and price movements went in opposite directions for logs and oil seeds in 1990-1994 and for coffee beans and palm oil in 1995-1999.

Table 5. Agricultural exports by commodity

Source: BNEDT (1996); FAOSTAT; IMF (2000).

Cocoa exports have been on a rising trend since 1988 (Figure 1), and the speed of increase accelerated after 1994. The increase in cocoa export volume in 1985-1989 is due to the 11.4 percent rise in production and probably contributed to the 17 percent fall of world prices in that period; this movement is explained by the dominant position of Côte d’Ivoire on the world cocoa market. Côte d’Ivoire exports around 40 percent of world cocoa. The growth in export volume slowed down in 1990-1994 owing to a decline of production that induced a slowdown in the price fall. The slowdown in the growth of export volume was also explained by the retention policy of the Ivorian government in an attempt to influence world prices upwards. Exports continued to rise after devaluation following the rise in production and price.

The volume of coffee exports fluctuated around 200 000 tonnes with peaks above that level in 1989-1994 and 1996-1998. Unlike cocoa, the coffee export volume fell throughout the study period. In 1985-1994, it fell over the 1985-1994 period as a consequence of the decline of production; its export fell less in 1995-1999 because production increased by 11 percent. Thus, Côte d’Ivoire lost its market share in coffee beans as a consequence of production constraints while its market share increased for cocoa beans.

Figure 1. Exports of coffee beans, cocoa beans and fresh pineapple (thousand tonnes).

The volume of fresh pineapple exports fell in 1985-1994 mainly as a consequence of the decline of production; but devaluation helped it increase on average in 1995-1999 as production increased, despite a fall in yields owing to adverse weather conditions in 1998. The increase of production and exports may also be due to the following policies implemented by the government in 1998: selective reduction of taxes on imported inputs, authorization of the importation of wrapping materials on a temporary admission regime, and liberalization of maritime freight.

The volume of export of bananas grew in 1985-1994 and 1995-1999 owing to the rise of production (Figure 2). The more than doubling of the rate of growth of production between the two periods is a consequence of the heavy investments undertaken with the assistance of the EU that significantly improved yields and quality at international standards. Banana producers were also beneficiaries of the same favourable policies applied to pineapple producers. The slowing down of exports in 1995-1999 is partly due to the termination of the export quota on European market since early 1999 as part of the modification of the system of preferential access to the European market. These changes may also have triggered more efforts aiming at improving the productivity and competitiveness of Ivorian producers equally split between nationals and Europeans.

Figure 2. Exports of banana, palm oil and logs (thousand tonnes).

The volume of log exports declined in 1985-1994; the rate of decline even increased after devaluation. Thus, there has been an accelerated loss of market share throughout the study period. The decline in the export volume in this activity is due to a deliberate government policy to limit the cutting of wood.

The export volume of palm oil increased sharply in 1985-1994 before falling in 1995-1999 despite the increase in production from 288 000 tonnes in 1990-1991 to 273 000 tonnes in 1997-1998 and the 1994 devaluation; this discrepancy is because an increased share of production is sold on the domestic market.

The export volumes of rubber, canned fish and processed cocoa (Figure 3) have a positive trend, especially after devaluation. Indeed, the volume of rubber exports grew in 1985-1994 and accelerated after devaluation. The production of rubber rose steadily in 1985-1994 and 1995-1999 despite low export prices. Producer prices are indexed on the export price in a mechanism managed by both producers and processing firms in the context of a newly set agreement following liberalization. The growth in exports of processed cocoa was almost halted in 1985-1994 but was then boosted in 1995-1999 probably as a consequence of devaluation and despite the escalation of taxes on processed products on consumer markets. The exports of canned fish grew rapidly in 1985-1994 but slowed down considerably in 1995-1999 despite devaluation.

Figure 3. Exports of rubber, canned fish and processed cocoa (thousand tonnes).

Canned pineapple (Figure 4) lost market considerably in 1985-1994 as its export volume declined sharply before the ground lost was recovered after devaluation as export volume resumed growth in 1995-1999. The story was different for processed coffee; the growth rate of its export volume accelerated between the two periods.

There is almost an equal split between the number of products that took advantage of devaluation (cocoa beans, pineapple, rubber, processed cocoa, processed coffee, canned pineapple) and those that did not (coffee beans, banana, palm oil, logs, canned fish); among those that took advantage of the devaluation processed products large bulk.

Figure 4. Exports of canned pineapple, oil crops, processed coffee (thousand tonnes).

Export revenues

In 1990-1994, compared with 1985-1989, export revenues fell for 54.5 percent of products by value, including the traditional exports, probably as a consequence of the price decline (Table 5), but the trend reversed for almost all products in 1995-1999 in their volume and price movements.

The export value of cocoa beans increased less than their export volume; this was due to the decline in the export unit price in 1985-1993 and despite the 127 percent increase in export price in 1994. In 1995-1999, export revenues increased at approximately the same rate as the volume exported.

Export revenues from coffee beans behaved differently; they fell throughout the study period. Their decline was faster than that of export volume as the export price fell in 1985-1993 and despite the 209 percent increase in export price in 1994. The export revenues of pineapple decreased in 1985-1994 at the same rate as the export volume and despite the 66.4 percent increase in prices in 1994. But the revenues increased annually in 1995-1999 at a rate higher than the export volume.

Export revenues of logs fell throughout the study period. The sharp decline in export revenues was due to the fall of both the volume and export prices whose acceleration accounted for the increased speed of fall in export revenues. The export revenues of bananas fell in 1985-1989 but increased steadily throughout the rest of the study period following export volume and price. Palm oil export revenues increased between the two periods.

Rubber export revenues increased in 1985-1994 and in 1995-1999. The revenue growth in the first period was faster than the growth rate of export volume as devaluation raised the export price by 146 percent. The export revenues of processed cocoa declined in 1985-1994 before increasing in 1995-1999; export revenues fell faster than the increase in volume as the export price fell in 1985-1993, and the 68 percent rise of the export price at devaluation could not reverse that trend. The export revenues of canned fish grew throughout the study period.

The export revenues of processed coffee increased in 1985-1994, and this growth accelerated in 1995-1999; during the first subperiod, export revenues grew faster than volume despite the drop in export prices prior to devaluation that raised export prices by 103 percent. After devaluation, export revenues increased less than the export volume as the export price rose at a smaller rate than the volume increase.

The export value of canned pineapple declined sharply in 1985-1994 despite the increase of export price in 1985-1993 and the 41 percent increase engineered by devaluation; this behaviour was explained by the drop in export volume. In 1995-1999, the export value increased too. The export value of canned fish grew faster than their export volume over the study period. The faster rise in export value than export volume in 1985-1994 despite the price fall in 1985-1993 was due to devaluation that raised the export price by 111 percent. The rise of export value was higher than the export volume in 1995-1999 because of the export price increase.

The foregoing discussion of export trends can be summarized by the following classification:

1. products whose export volume fell despite the rise of export unit price;
2. products whose export volume increased despite the fall of export unit price;
3. products whose export volume increased along with a rise in export unit price;
4. products whose export volume fell along with the decline of export unit price.

From the analysis, the outcome of this classification is as follows: (1) coffee beans, palm oil, canned fish; (2) rubber; (3) cocoa beans, processed cocoa, processed coffee, fresh pineapple and canned pineapple; (4) banana and logs.

The first group of export activities faces supply constraints whereby export opportunities cannot be exploited as a consequence of internal problems related to lack of knowledge and information, paucity or inadequate skills and absence or limited access to appropriate technologies. Above all, infrastructure bottlenecks play a significant role in hindering production. These problems may explain most losses of European market shares mentioned earlier. They must be solved before the upcoming free trade era starting in 2008. The second group of export activities illustrates the structural problems created by the predominantly perennial export agriculture of Côte d’Ivoire; the price response of supply is lagged and amplifies price movements with undesirable fluctuations in farmers’ revenues. The diversification of agricultural exports out of perennial crops can improve the flexibility of overall agricultural production and exports and stabilize farmers’ incomes. The next two groups illustrate the importance and role for future trade of processing activities in enhancing the flexibility of export supply both in taking advantage of the upcoming export opportunities and in avoiding contracting markets and activities.

3.4 Imports

Fish, dairy products, rice and wheat are the four main imports in descending order of importance (Table 6). Unlike fish, which was the object of no significant government development policy, rice was the focus throughout the 1970s and 1980s of self-sufficiency programmes with limited success as already mentioned. The European Union provides 57 percent and 55.7 percent of total food imports in 1985-1994 and 1995-1999, respectively, followed by Asia (10.8 percent and 11.2 percent, respectively) and North America (6 percent and 5.6 percent, respectively). WAEMU is still a negligible import origin for Côte d’Ivoire.

Table 6. Share in total food imports (%)

Sources: Author’s computations based on FAOSTAT statistics.

Table 7 shows that agriculture import volume declined in 1990-1994 as compared with the previous period, whereas the reverse was true in 1995-1999. These contrasting movements were basically explained by price changes. In 1990-1994, imports of most products (rice, dairy products, wheat, beverages, tobacco, fruit) fell partly as a consequence of price rises (4.7 percent for rice, 8.9 percent for dairy products, 6.9 percent for beverages, 2.9 percent for fruit and 1 percent for tobacco).

Table 7. Agricultural imports by commodity

Source: BNEDT (1996), IMF (2000), FAOSTAT.

Imports of both fish (Figure 5) and sugar increased despite the price rise, whereas imports of wheat (Figure 6) fell despite the price fall. In these apparently strange cases, factors other than prices are at work as well. In 1995-1999, all imports except meat increased in larger proportions than in the previous period; prices fell for half of the products (fish, rice, dairy products, fruit) and increased for the other half (wheat, beverages, tobacco, sugar; Figure 7). Meat imports decreased as a consequence of their price rise.

Figure 5. Imports of dairy products, fruit and fish (CFAF billion).

Figure 6. Imports of rice and wheat (CFAF billion).

Figure 7. Imports of sugar, beverages and tobacco (CFAF billion).

In summary, agricultural trade developed considerably in 1995-1999 as compared with 1990-1994, but the individual products had different patterns. Cocoa export volume increased significantly, whereas the reverse was true for coffee. There was an equal split between products that took advantage of devaluation and those that did not; among those that did, processed products made up a large share. The export value of cocoa increased steadily despite the fall in prices as production increased sharply. Coffee export value fell throughout the study period; the export price fell more sharply than the export volume.

There was an apparent import surge for almost all food products, but as exports of these products also increased, these import surges should not be of concern since these net imports actually declined. At the more micro level, however, some import surges occurred that triggered the use of safeguard measures.

4 Food security trends

4.1 Trends in dietary and calorie intake

The analysis of this section is based mainly on the statistics of the FAO Statistical Databases (FAOSTAT) Web site, which provides the per capita food availability for the following items: cereals, starchy roots, fruit, meat, fish, oil crops, vegetable oils and vegetables. Information on food consumption for all these products in total was unavailable. Instead, food expenditure in current CFA francs was estimated from total gross expenditures by applying the share of food (48 percent) used in the calculation of the consumer price index by the Institut National de Statistique (INS) and Ministère de l’économie et des finances (DCPE, 2000). The result was then converted into constant total and per capita food expenditure as a proxy for total food consumption.

Domestic production is the first component of food supply. The average annual growth rates of food products is generally well below 4 percent, the rate of population growth applicable during most of the study period. Besides, for almost all products, the rate of growth of production slowed down between 1985-1994 and 1995-1999.

The second component of domestic food supply is net imports; changes in the ratio of net imports to supply show the following characteristics: (1) net imports are negative for fruit, oil crops and vegetable oils; (2) the country is self-sufficient in starchy roots; (3) the country is highly dependent on imports for cereals and fish.

The dependence of the supply of fish on imports increased from 54 percent in 1985-1994 to 60.1 percent in 1995-1999; for cereals (mainly rice and wheat), meat and vegetables, the ratio fell from 38.2 percent to 36.2 percent, 14 percent to 2.2 percent and 10.2 percent to 7.2 percent, between the two periods, respectively. Food imports increased sharply in 1995-1999, but net imports fell, implying that Côte d’Ivoire re-exports large quantities of the imported food.

The daily calorie intake can be estimated from per capita agricultural production and food production; the growth rates of these indicators between 1990-1992 and 1997-1999 are, respectively, 1.2 percent, 0.8 percent and 0.7 percent for Côte d’Ivoire (FAO SOFI, 2002). It appears that for most products, except fish and meat, per capita food availability declined in 1985-1994. Declines were also experienced for most food products except vegetable oils and particularly cereals in 1995-1999 (Table 8).

Table 8. Per annum average of net imports of food and per capita food available

Source: Author’s computations based on FAOSTAT statistics.

The volume of food expenditure declined by 1 percent annually on average in 1985-1994 but recovered by 5.2 percent during the period 1995-1999. These movements were due to the worsening and improvement, respectively, of the economic situation. Per capita food expenditure (Figure 8) declined by 4.2 percent in 1985-1994; its decline accelerated from 2.7 percent in 1985-1989 to 5.5 percent in 1990-1994 before rising to 3 percent annually in 1995-1999 for the same reasons already mentioned. In general terms, the food situation deteriorated between the two periods.

Figure 8. Per capita real food expenditure (CFAF).

4.2 Trends in poverty and undernutrition

According to poverty studies, the proportion of the population below the poverty line rose from 10 percent in 1985 to 37.6 percent in 1995 before falling to 33.6 percent in 1998. It is believed that, since 1998, the poverty situation worsened as a consequence of the 5 percent decline of GDP over 1998-2000 period (INS, 2002). From a spatial point of view, poverty is unequally distributed. Its incidence is larger in rural areas (42 percent in 1993, 46 percent in 1995 and 42 percent in 1998) than in urban areas (19.3 percent in 1993, 24 percent in 1995 and 23 percent in 1998). But its pace of increase in urban areas accelerated especially in Abidjan with 5.1 percent in 1993, 20.2 percent in 1995 and 11.1 percent in 1998. The incidence of extreme poverty in 1998 is 10 percent, with rural areas even more affected than in the previous case: rural savannah (21.6 percent), east forest region (15.1 percent). The socio-economic groups most affected by poverty are: 50 percent of food crop farmers, 45 percent of export crop farmers, one-third of rural labourers, one fourth of informal sector workers. Fifty percent of the poor are women (INS, 2002).

As food is the main item in the budget, and the budget declined over that period, poor households have probably suffered even more from the declining food supply (INS, 2002). Indeed, despite its agricultural wealth, Côte d’Ivoire has a large undernourished population of 2.5 million in 1990-1992 and 2.4 million in 1997-1999, representing 19 percent and 16 percent, respectively, of total population (FAOSTAT SOFI, 2002). As food deprivation is a major poverty indicator, this undernourished population can be classified as extremely poor (FAO SOFI, 2002).

Surprisingly enough, for years, Côte d’Ivoire received food aid (Figure 9) provided mainly by the US under PL 480. Food shipments increased from 15 509.3 tonnes in 1985-1989 to 47 530.2 in 1990-1994 and fell back to 30 487.6 in 1995-1999. Their annual rate of growth steadily declined from 36.7 percent in 1985-1989 to 26.5 percent in 1990-1994 and -10.8 percent in 1995-1999 (FAOSTAT, 2002).

Figure 9. Food aid (tonnes).

In summary, food security is a serious but neglected issue. On the one hand, Côte d’Ivoire depends on imports for rice and fish, two staple foods that concern large populations; on the other hand, the growth of per capita agricultural production, food production and daily calorie intake is very weak. Hence, large populations are under-nourished and consequently extremely poor despite the agricultural wealth of the country. Food aid flows are not insignificant, albeit on a falling trend.

5 Negotiating proposals and the future

Côte d’Ivoire did not submit any independent proposal to the Special Session on Agriculture but joined most African countries in making an African group negotiating proposal.

5.1 Market access

Côte d’Ivoire implemented trade reforms that reduced tariffs substantially below bound rates; substantial efforts at trade reforms were also made, even though the CET is not totally complied with. The problem of the negative impact of tariff escalation was investigated without any conclusive outcome as adequate information is lacking.

The government of Côte d’Ivoire regrets these tariff peaks and progressive rates applied by developed countries as they discourage transformation and hinder diversification of export products (Ministère du Commerce, 2002).

At the macro level, surges in food imports were not experienced in the period 1995-1999 as compared with the period 1985-1994 except for fish. However, as mentioned, these imports were re-exported; net imports did not show these import surges. At the more disaggregated level, Côte d’Ivoire experienced import surges in palm oil, and the concerned firms had to apply for the benefits of TCI to obtain compensating measures. The reference price that was used as a substitute for the missing safeguard measures has been reformed. Finally, after some problems, the customs valuation regime has been implemented since July 2001.

The Côte d’Ivoire government’s position is that safeguards should not be confined to developed countries: They must be extended to developing countries as well (Ministère du Commerce, 2002).

5.2 Domestic support

The official position of the Côte d’Ivoire government is that, given the high level of support by developed countries after 2000, the principle of not using Blue Box measures should be revisited unless the support by rich countries is drastically and rapidly reduced (Ministère du Commerce, 2002).

All the measures discussed under domestic support in the text are Green Box measures with government funding. The trade reforms implemented prior to the AoA left virtually no Amber Box measures in force. Given these efforts, the production constraints discussed and the less trade-distorting potential of Blue Box measures, it makes sense to request that these Blue Box measures be used.

Although this favouring of Blue Box measures while facing budgetary problems may seem surprising, it can be argued that budgetary constraints will be partially overcome with upcoming highly indebted poor countries (HIPC) resources that could be channelled into food production programmes. The mechanism of cutting production built into Blue Box measures could be safely applied to cocoa to reduce over production. The real issue, however, lies in administrative problems linked with the weaknesses of local technical capabilities.

5.3 Export competition

In 1995-1999, the import unit price situation was ambiguous as there was an equal split between prices that increased (wheat, beverages, tobacco, sugar) and those that fell (fish, rice, dairy products, fruit). On the one hand, the fall in the rice price, for example, as a result of the expansion of export subsidies by developed countries, is unfavourable to local farmers as it deters production. On the other hand, the decline of the import bills owing to the large import volume (not entirely offset by the anticipated increase of the import volume) would ease the balance of payments problems. Clearly, the trade-off should be in favour of the improvement in production incentives.

The fact that, after 2000, the amount of export subsidies paid by OECD countries to their farmers represented 64 percent of its base level (1986-1990) is considered by the government of Côte d’Ivoire as unfair competition that disrupts international trade. It deprives its farmers of new opportunities to increase local production and revive economic growth. Hence, it recommends the elimination of these export subsidies within a short period of time (Ministère du Commerce, 2002).

Côte d’Ivoire is a net exporter of several food items (fruit, oil crops, vegetable oil), but it usually does not use export restrictions, although export taxes such as DUS (single export tax) are used for coffee and cocoa; however, these taxes have been reduced. Since developed countries use tariff escalation to protect their domestic industries, it makes sense to link reductions of export restraints and taxes to a reduction of this tariff escalation.

5.4 Special and differential treatment

In Côte d’Ivoire, 98 percent of the cultivated land is tilled with traditional techniques within a majority of small-scale family farms. Therefore, the special and differentiated treatment issue is relevant to its national problems.

The government of Côte d’Ivoire believes that if this special and differentiated treatment is taken into account, liberalization would have results opposite to those assumed before undertaking the reform (Ministère du Commerce, 2002). However, no convincing reasoning has been provided to support this view and explain the alternative outcome.

There is a general issue as to why Côte d’Ivoire would look for SDT measures having almost completely opened up its trade policy. Liberalization should not be targeted for its own sake, as turns out to be the reality, but should aim at fostering economic growth. Since this growth has not been forthcoming despite the promises (Easterly, 2001; Stiglitz, 2002) and the country’s reform efforts, and has required foregoing fiscal revenues, it seems sensible to question the reform altogether. Budgetary constraints are a more convincing reason why Côte d’Ivoire should be advised not to use Blue Box measures. Otherwise, in principle, there is no convincing justification (except predominant position on the market and political power) to permit developed countries to use trade-distorting measures (even though they are less distorting than others) and prevent others from doing so.

In summary, Côte d’Ivoire deserves credit for its autonomous efforts at trade liberalization, and it should be allowed to increase tariff rates within committed bounds. Green Box measures offer opportunities to extend investment subsidies, but the use of Blue Box measures is conceivable too.

As far as import surges are concerned, the trade-off should be in favour of improving production incentives through lowering export subsidies as compared with balance of payment concerns. Only such export subsidy reductions can justify reductions of the few remaining export restraints on the part of Côte d’Ivoire. But no decisive change can occur in those policies unless developing countries are stronger as a group. If they do not improve their bargaining power, no significant agricultural growth will occur; instead, undernutrition and extreme poverty will persist and grow.

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