EASTERN AFRICA GRAIN COUNCIL (EAGC) Grain Value Chain in EA EASTERN AFRICA GRAIN COUNCIL (EAGC) Grain Value Chain in EA. Gerald Makau MASILA, Executive Director, EAGC Presented to the E.A Agric Value Chain Investment SUMMIT 4th – 6th Dec 2012, Kampala, UGANDA

Contents Grain Sector in EASTERN AFRICA Intro to EAGC Who, Why & What Grains Investment Opportunities

Grain Sector in E. Africa MAIN GRAINS/CEREALS MAIZE WHEAT RICE BEANS TEFF SORGHUM MILLET FINGER MILLET SOYA BEANS SIMSIM..etc...

GRAIN VALUE CHAIN..... PROCESSING/ /MANUFACTURE TRADE NATIONAL MILLING DISTRIBUTION/ CONSUMER/ MARKETING PRODUCTION/FARMERS POST HARVEST MGT/STORAGE TRADE NATIONAL /IMPORT/EXPORT PRODUCTION ( SMALLHOLDERS 70-80%) INPUTS(SEEDS, AGRO-INPUTS, FERTS HIGH POST HARVEST LOSSES FEW STORAGE SYSTEM/SOLUTIONS LOW FINANCE & MARKET ACCESS LACK MKT INFORMATION RISK MANAGEMENT PRICE VOLATILITY, PESTS & DISEASES DROUGHTS & FLOODS COMPETITION (INTERNATIONAL/REGIONAL POLICY – MACROECON FISCAL MONETARY NATIONAL POLICIES IMPORT/EXPORT REGIONAL POLICIES(RECS) AFRICAN UNION(AUC) IGAD,COMESA,EAC SADC, ECOWAS etc

Grain Sector CHALLENGES... .......& OPPORTUNITIES INVESTING IN AGRIC CAADP - AUC MDGs STRUCTURED TRADE STDS & GRADES PHH& M, WRS COMMODITY EXCHANGE ENABLING POLICIES HARMONIZATION REG. INTEGRATION PRODUCTION ISSUES QUANTITY & QUALITY SAFETY & NUTRITION TRADE IN FOOD – LOW MARKET ACCESS CROSS BORDER TRADE HIGH TRANSACTION COSTS FARMER INCOMES – LOW FINANCE COSTS - HIGH

EAGC –Who we are…. Grain Value Chain Actors..GETTING TOGETHER Inclusive… Farmers/Producers – small holder and large Traders, Handlers, Warehouses Processors/Milling/Manufacture As Members of EAGC…Active, Affiliate, Associate EAGC is a Regional Council for Grain Value Chain, Not for Profit Company, Ltd by Guarantee Object – develop and promote regional structured grain TRADE and advocate for an enabling environment, reduce transaction costs trade barriers, increase incomes/reduce poverty, improve food security

Why EAGC. Grain Sector Issues – Global/Regional/National Cross Border Trade Barriers Frequent Bans on Cross Border Maize Tariff and Non Tariff Barrier Informal Cross Border Trade Access to Markets & Price Risks/Volatility Standards/Quality/Grading/Safety/Aflatoxins Post Harvest – Storage, Preservation, losses Market mechanisms (ss/dd) vs State regulations

EAGC Scope and Relevance Apex regional organisation for the grain industry providing a voice for farmers, processors and traders. Influencing regional integration of the grain trade through harmonisation, trade facilitation and market development. Development and provision of a Market Intelligence System on the grain industry A unique forum for food value chain policy advocacy Development of a national and regional Structured Trading System for grains

Key EAGC Initiatives Structured Trading Systems (STS) Grades and Standards Storage and warehousing Warehouse Receipt System, Standard grain trading contracts Arbitration mechanism Financing Systems –Inventory Credits -Collateral Management Commodity Exchange Market Information Systems (MIS) Regional Agricultural Trade Intelligence Network (RATIN) Electronic Grain Trade (EGT Africa) Capacity Building Training on WRS, Grades and Standards, market information sourcing and disseminate ,trade contracts, rules trade and the process of arbitration Trade Policy Policy Dialogue Regional harmonization of Trade Policies Regional Food Balance Sheet Removal of Trade barriers

Structured TRADING System TRADING PLATFORM/ COMMODITY EXCHANGE PROCESS/MILLING BANKS SILOS STORES WRS FARMERS/ TRADERS MARKET INFO. SYSTEM RULES OF TRADE/CONTRACTS/ARBITRATION STANDARDS & GRADING ENABLING POLICY ENVIRONMENT/LEGAL & REGULATORY FOR STS

Grain Sector Investment Opportunities Level 1 - PRODUCTION Farmer Services – Seed, Inputs, Mech, Tech Trans Level 2 – POST HARVEST Drying, Cleaning, Grading, Storage, WRS Services Bulk Grain Handling, sea port/inland, Level 3 – PROCESSING/MANUFACTURING Milling, Cereals, Animal Feeds, Distillation, Brewing Level 4 – TRADE, MARKETING, SUPPLY CHAIN Logistics – in/out bound, Branding, Level 5 – FINANCE, ICT, INSURANCE

EAGC IN ESA REGION.......... Kenya - Regional Head Office Est 2006, 50+ members STS program, WRS, MIS(RATIN) Draft WRS bill, ABE 2010/11/12 Tanzania Est 2008, Dar & Arusha office 20+ members, TWLB, COPA,ABE 2012 Uganda Est 2008, Kampala office, 30+ members, UCE , ABE 2010/12 Rwanda/Burundi Kigali office, Est Aug. 2012 South Sudan – Est 2012, Juba office Ethiopia – Est 2012, Addis office DR Congo, Zambia, Malawi , AGT Summit , 2005, 2007,2009,2011

EAGC & FOOD SECURITY FOOD SECURITY QUANTITY QUALITY VARIETY AFFORDABLE AVAILABILITY ACCESS ADEQUACY QUANTITY QUALITY VARIETY AFFORDABLE MKT ACCESS MKT INFO. FOOD SECURITY NUTRITION ACCEPTABLE SOC-CULTURAL

EAGC Benefits A unique FORUM for Grain Stakeholders TO ADDRESS COMMON ISSUES & CREATE PARTNERSHIPS SET OWN PRIORITIES AND DESTINY FOR THE SECTOR HAVE A VOICE/SAY IN THE POLICY DIALOGUE AFFECTING YOUR BUSINESS ACQUIRE SKILLS/TRAINING IN STS, REGIONAL TRADE BUSINESS TO BUSINESS (B2B)LINKAGES – SUPPLY CHAIN & SERVICES A link to the REGIONAL GRAIN value chain Larger Regional Market – More Sales/Profits Regional Integration & Harmonization (Trade Policies, Standards etc Regional & Continental Trade SUMMITS Share best practice in the region – COMMODITY EXCHANGE! A link to the REGIONAL Market Information System (RATIN) Access market and Trade info for ESA region, RFBS

EAGC Benefits......... Benefits Farmer Trader Processor Millers Financial Inst Consumer Market Information (RATIN) √ Grain Bulking, Market Access Better Prices Price Risk Mgt (WRS/Commodity Exchange) Finance Access (WRS, Inventory Credit) Storage, Handling, Safety Quality, Supply Guarantee Policy/Enabling Environment Transaction Costs Reduced (Working Capital, Multi -Transact Increased Incomes More Organised Clients

EAGC - Vision “To be the leading voice for the grain industry in Africa” Mission..... “To advocate for an enabling environment and promote structured grain trade for optimum stakeholder benefits”

Asante Sana... SIDA ( Sweden) USAID FSD AGRA FAO WFP CGA/UCE UNCTAD Donor Support Partners FAO WFP CGA/UCE UNCTAD RESAKSS ASARECA ICRISAT CTA ACDI/VOCA/KMPD Nile Basin Initiative EAC COMESA African Union SIDA ( Sweden) USAID USAID/Compete USAID/MLI USAID/Lead FSD AGRA

E.A AGRIC VALUE CHAINS STAKEHOLDERS.... ....YES WE CAN! “IT ALWAYS SEEMS IMPOSSIBLE, UNTIL IT IS DONE” Nelson Mandela