85Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Julie Kurtz, Lulit Mitik, and Chahir Zaki AFRICAN TRADE IN LIVESTOCK PRODUCTS AND VALUE CHAINS 4Chapter Photo by Victor Puente/Pexels 86 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains INTRODUCTION Since the launch of the Africa Agriculture Trade Monitor (AATM), its fourth chapter has been dedicated to the study of different African agricultural value chains. In 2019, the AATM report examined the competitiveness of export-oriented commodity value chains, including traditional cash crops such as cashew nuts, cocoa, coffee, cotton, sugar, and tea, and more recent top exports like citrus, grapes, sesame seeds, tomatoes, legumes, and pulses. In 2020, the report considered the defensive trade interests of African cereals, sugar, and vegetable oil value chains. This year we examine livestock trade, one of the most complex trade sectors in African agriculture. Understanding this sector is complicated by the fact that formal livestock trade data tell only part of story, given that informal cross-border trade is widespread within Africa — especially informal trade of live animals. Many consumers in Africa continue to slaughter their own animals, whether purchased at markets or raised by their own households. In this chapter, we rely primarily on official trade statistics, but also qualify their validity and compare them with the (albeit limited) informal trade data available. Though several African countries have extensive grazing land and strong pastoral traditions, only a handful have established strong export markets to the rest of the world. Many countries lack the capacity to meet global sanitary and phytosanitary (SPS) standards, especially those imposed by wealthy importing countries. Despite generous low-tariff or tariff-free quotas from several global importers, even Africa’s strongest livestock exporters fall short of meeting the export quotas and import demand (Cabrera et al. 2010), while limited capacity to comply with the health standards of destination countries and other burdensome nontariff trade measures (NTMs) prevent many African traders from participating in global markets. In previous years, the AATM has examined the competitiveness of African value chains at three stages: raw unprocessed goods, semiprocessed goods, and processed goods. Due to the complexity of animal product value chains, the breakdown of products in this year’s report is slightly different, though the intent remains the same. We consider three main groups of livestock products — animals and meat, dairy, and poultry — breaking these down further as follows: 1 Category I: Animals and Meat • Live animals, including o Horses, mules and hinnies, asses o Cattle o Oxen o Swine o Goats o Sheep o Camels and camelids • Carcasses and cuts o Cattle o Other animals • Offal, salted or prepared meats • Hides and skins Category II: Poultry • Live fowl • Whole fowl (slaughtered) • Fowl cuts, offal and preparations Category III: Dairy • Fluid milk • Processed dairy o Dry milk and cream o Concentrated, whey, fats, constituents o Cheese o Cultured Within these categories, the live animals (including live fowl) and fluid milk subcategories loosely resemble the unprocessed classification used for raw products in other value chains. Slaughtered poultry and other meat carcasses and cuts best fit the semiprocessed classification. Offal, fowl cuts (which are grouped with fowl offal at the HS6 level), prepared meats, hides and skins, and various forms of processed dairy can be considered processed products. 1 Appendix Table A4.1 presents the HS codes for each value chain of meat, dairy, and poultry products. 87Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Previous research has estimated that African urban consumers’ demand for meat and milk may triple by 2050 (Latino, Pica-Ciamarra, and Wisser 2020). Booming African urban demand, plus increased global demand for livestock products, have the potential to transform Africa’s livestock value chains and international livestock trade. Yet low existing production, failure to achieve global SPS standards, and limited infrastructure investments and coordination may prevent African producers from benefiting from demand growth. They also face sharp competition globally from nations that invest heavily in livestock infrastructure and research and subsidize domestic meat, dairy, and poultry producers. These cumulative factors mean African exports will face difficulty becoming competitive at the world level. Within Africa, most livestock trade is intraregional, primarily between neighboring countries and within regional economic communities (RECs). Yet, more broadly across the continent, intra- African trade is stifled by several countries that impose sizable tariff and nontariff trade barriers, especially for live animal trade. Ad valorem equivalents (AVEs) of nontariff restrictions (which measure their impact on trade by estimating an economically equivalent tariff rate) are high across Africa. AVEs for SPS measures and technical barriers to trade (TBT) range from 37 percent (for SPS) in Cabo Verde for edible meat to 146 percent (for TBT) in Gambia for meat preparations. While countries purportedly use NTMs to protect consumers and the environment, and also to support domestic industries, these measures further push producers to informal trade and may inadvertently reduce investments in livestock production and infrastructure. At the time of publication, negotiations for the African Continental Free Trade Area (AfCFTA) were ongoing, with high stakes over rules of origin and highly sensitive products. Easing intra- African barriers to livestock trade may help to formalize Africa’s large informal livestock trade sector, but it is unclear whether the AfCFTA will expand the total livestock trade flows (combined informal and formal trade). Given current limited infrastructure and coordination capacity, and the related challenges of transporting live animals or chilled or frozen meat or dairy, intra-African livestock trade will likely remain regional. Amid the threats of a rapidly changing climate (and the climate impact of livestock production) as well as numerous capacity challenges, it is still uncertain whether African production can meet the continent’s growing domestic demand for meat, poultry, and dairy. Against this backdrop, this chapter has several objectives. First, we examine the main trade flows (by product and by destination and origin markets) for the three product groups of interest, with some focus on informal trade. Next, we investigate the protectionist effect of trade policies, tariffs, and NTMs. Then, we consider the opportunities and risks in livestock production systems, especially risks from climate change and conflict, which are the primary threats to food security in Africa (IFPRI 2019). In the final section, we conclude and offer some policy recommendations. GENERAL OVERVIEW OF TRADE FLOWS In the past decade, African countries have imported over US$10 billion annually in livestock products and exported close to $3.2 billion, according to official (formal) livestock trade statistics.2 Of those livestock exports, approximately $1.8 billion are exported beyond the African continent, while African countries formally trade over $1.3 billion in livestock products within the continent. Figure 4.1 indicates that sheep and cheese are Africa’s primary extracontinental exports, followed by bovine and other meat carcasses and cuts, goats, and hides and skins. Within Africa, cattle, buffalo, and other bovine live animals are the most commonly traded (formally), followed by cheese, bovine carcasses and cuts, dry milk and cream (including baby formula), fluid milk and cream, and poultry cuts, offal, and preparations. However, given the predominant role of informal intra-African livestock trade — especially live animal trade — 2 Throughout this chapter, “$” refers to US dollars. 88 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains formal intra-African export data must be interpreted cautiously. They likely grossly underestimate the degree to which livestock move across internal African borders. In this section, we examine trade over the past decade to present a broad overview and better compare formal and informal trade data; in the following sections, we focus on the recent 5-year trends. Figure 4.1 African formal exports, intra-African and extracontinental, annual average 2010–2019 0 100 200 300 400 500 600 Live poultry Poultry, whole Poultry meat cuts, edible offal and preparations Cultured Concentrated, whey, fats, constituents Dry milk and cream (including for baby formulas) Fluid milk and cream Cheese Swine Horses, mules and hinnies, asses Offal, salted or prepared meats Camel Cattle, buffalo, other bovines Hides and skins Goats Other meat carcasses and cuts Bovine meat carcasses and cuts Sheep Po ult ry Da iry M ea t a nd an im als US$ millions Extracontinental exports Intra-African exports Source: 2021 AATM database. Figure 4.1 captures Africa’s intracontinental and extracontinental exports. Logically, intra-African imports are equivalent to intra-African exports (bearing in mind that exports are often expressed at FOB prices and imports at CIF prices). African imports from the rest of the world (ROW) (Figure 4.2) far exceed exports to ROW, making Africa a net importer of livestock products. As shown in Figure 4.2, dry milk and cream (including for baby formula) are Africa’s top ROW imports, with a value of $2.9 billion annually, followed by $1.6 billion in meat (bovine meat carcasses and cuts) imports, and $1.3 billion in poultry cuts, offal, and preparations. 89Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.2 African imports from rest of the world, annual average 2010–2019 0 500 1000 1500 2000 2500 3000 3500 Cultured Fluid milk and cream Cheese Concentrated, whey, fats, constituents Dry milk and cream (including for baby formulas) Camel (live) Swine (live) Goats (live) Hides and skins Horses, mules and hinnies, asses Sheep (live) Other meat carcasses and cuts Cattle, buffalo, other bovines (live) Offals, salted or prepared meats Bovine meat carcasses and cuts Live poultry Poultry, whole Poultry meat cuts, edible offal and preparations Da iry M ea t a nd an im als Po ul try US$ millions Source: 2021 AATM database. The role of informal livestock trade No discussion of intra-African trade is complete without attention to informal cross-border trade. Last year’s AATM report found that informal trade flows of livestock products can be up to 47 times the trade formally reported to UN Comtrade (Bouët, Odjo, and Zaki 2020). Though the AATM database accounts for some unreported trade (see the methodology description in Chapter 1), informal trade remains largely unreported. The Comité permanent Inter-Etats de Lutte contre la Sécheresse dans le Sahel (CILSS), which tracks informal trade in West Africa, noted an additional $82.7 million in livestock trade between Burkina Faso, Côte d'Ivoire, Ghana, Mali, Niger, Nigeria, and Senegal during 2016, compared with official Comtrade statistics (Bouët, Odjo, and Zaki 2020). Similarly, in East Africa, Little (2005) reported that unofficial exports of commodities like livestock to neighboring countries exceeded official exports by a factor of 30 or more. Given the prevalence of informal cross-border trade, official intra-African livestock trade statistics must be interpreted cautiously. Since Africa has no continentwide system to assess the extent of informal trade, we rely on existing regional data collection systems or isolated studies (see Chapter 5 of the AATM 2020 for more detail). For example, the Food Security Nutrition Working Group (FSNWG) has an extensive data-tracking system on informal livestock trade. Figure 4.3 shows formal trade reported by 11 East African countries.3 For comparison, Figures 4.4 and 4.5 examine informal flows among the same 11 countries (not all countries reported informal livestock trade) from 2010 to 2019, as reported by FSNWG.4 Even this data must be interpreted cautiously; reliability of informal trade data can be compromised for various reasons: The number of trade enumerators at borders and their consistency (that is, their evaluation of the number of head of livestock, the number of days per month they work a full shift at a particular border) greatly impact the accuracy of the data. Inclement weather that disrupts travel to the border or even delayed payment for enumerators 3 These are Burundi, Djibouti, DRC, Ethiopia, Kenya, Rwanda, Somalia, South Sudan, Sudan, Tanzania, and Uganda. 4 The authors thank Thomas Awuor of FSNWG for providing these data in January 2021 90 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains can reduce the accuracy of their work, as can the frequency with which goods are smuggled or go uncounted at border crossings, as well as numerous other factors that can introduce bias in the data. According to formal data (Figure 4.3), Ethiopia and Sudan are the significant regional exporters of live animals on the formal market, each with over $150 million annual average value in exports, primarily in camels and cattle. Informal trade data show Ethiopia playing a smaller role in regional livestock trade, whereas Rwanda, Tanzania, and Somalia appear to dominate the informal export market (Figure 4.4), each exporting several hundred thousand live animals in the past decade. Rwanda has exported roughly 100,000 animals on average each year (over 930,000 total from 2010 to 2019), but reports less than $10 million in formal exports. In another stark contrast, informal trade data from FSNWG showed zero live animal exports from Sudan, which is highly unlikely given its strong formal live animal export market. Nonetheless, existing informal trade data give us some perspective on the gaps present in formal statistics. Available data from FSNWG show that goats and cattle predominate in informal trade, followed by sheep and camels (Figures 4.4 and 4.5). Yet goats and sheep have only a nominal presence in formal intra-African trade statistics, even though — according to informal trade sources — they are robustly traded within the region. Sheep and goats are also Africa’s primary live animal exports to the rest of the world, according to formal trade data (see Figure 4.1). While comparison of informal and formal data sources may raise more questions than answers, we highlight the differences here to emphasize that formal livestock trade data fail to tell the whole story. Limited data on actual trade flows, especially of live animals, mean that we can only make educated assumptions about the amount of livestock goods crossing African borders. Figure 4.3 Formal intra-African exports of live animals in East Africa, annual average 2010–2019 0 20 40 60 80 100 120 140 160 South Sudan DRC Burundi Kenya Rwanda Djibouti Tanzania Ethiopia Sudan US$ millions Liv e a ni m als Camels Cattle, buffalo, other bovines Goats Horses, mules and hinnies, asses Sheep Swine Source: 2021 AATM database. 91Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.4 Informal intra-African exports of live animals in East Africa by country, 2010–2019 totals 0 200,000 400,000 600,000 800,000 1,000,000 Kenya Djibouti South Sudan Ethiopia Uganda Somalia Tanzania Rwanda Heads of animal Camels and camelids Cattle Chickens Goats Oxen Sheep Swine / pigs Source: Food Security Nutrition Working Group. Note: Includes collected informal intra-African livestock trade between Burundi, Djibouti, DRC, Ethiopia, Kenya, Rwanda, Somalia, South Sudan, Sudan, Tanzania, and Uganda. Figure 4.5 Total informal exports of live animals in East Africa, 2010–2019 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 He ad s o f a nim al Swine / pigs Sheep Oxen Goats Chickens Cattle Camels and camelids Source: Food Security Nutrition Working Group. Note: Includes collected informal intra-African livestock trade between Burundi, Djibouti, DRC, Ethiopia, Kenya, Rwanda, Somalia, South Sudan, Sudan, Tanzania, and Uganda. 92 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains NET AFRICAN TRADE FLOWS OF LIVESTOCK PRODUCTS According to official statistics, Africa is a net importer of meat, dairy, and poultry (Figure 4.6), importing far more than it exports in all animal products except live animals and hides and skins. On average from 2015 to 2019, African countries imported $3.6 billion of processed dairy, $0.85 billion less than the 2010–2014 average. Similarly, net imports of meat carcasses and cuts were $1.5 billion on average between 2015 and 2019, a slight reduction from $1.6 billion annually between 2010 and 2014. In the 2010–2014 period, Africa was a net exporter of live animals, reaching $0.3 billion on average annually, and of hides and skins, with an average value of $0.2 billion annually. In the 2015–2019 period, the continent became a net importer of live animals, reaching $30 million annually. Decomposition of the data into intra-African trade and trade with the rest of the world reveals that nearly 40 percent of imports and exports are within Africa. Furthermore, as presented in the previous section, informal trade of live animals is substantial but unaccounted for by formal trade data. Figure 4.6 Continent-level net exports by stage of processing of meat, dairy, and poultry value chains, averages 2010–2014 and 2015–2019 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 Hides and skins Live animals Meat carcasses and cuts Offals, salted or prepared meats Fluid milk and cream Processed dairy Live poultry Poultry meat cuts, edible offal and preparations Poultry, whole Beef Dairy Poultry US $ b illi on s 2010–2014 2015–2019 Source: 2021 AATM database. Note: Negative values indicate net imports. Table 4.1 shows the composition of African exports and imports. According to official statistics, live animal exports represented 61.8 percent of total value of exports on average from 2010 to 2014, and 60.5 percent for 2015 to 2019, followed by meat carcasses and cuts. In contrast, half of African meat imports are meat carcasses and cuts and one-fourth are offal and salted or prepared meat. For dairy products, processed products dominate trade, accounting for 82 percent of exports and 92.7 percent of dairy imports between 2015 and 2019. Of these, cheese accounts for nearly two-thirds of African exports; and dry milk and cream account for close to two-thirds of imports. African poultry exports and imports are composed of meat cuts, edible offal, and preparations, which together accounted for 67.4 percent of total exports and 64.9 percent of total imports between 2015 and 2019. 93Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Table 4.1 Share of African livestock export and import values, 2010–2014 and 2015–2019 averages Subcategory Exports Imports 2010–2014 2015–2019 2010–2014 2015–2019 Meat and animals Hides and skins 9.1 4.8 0.9 1.0 Live animals 61.8 60.5 23.7 27.6 Meat carcasses and cuts 23.2 28.9 52.4 49.0 Offal, salted or prepared meats 5.9 5.8 23.0 22.4 Dairy Fluid milk and cream 18.0 4.7 7.3 Processed dairy 82.0 95.3 92.7 Poultry Live poultry 12.6 12.2 6.4 7.3 Poultry meat cuts, edible offal and preparations 76.2 67.4 66.3 64.9 Poultry, whole 11.2 20.4 27.3 27.8 Source: 2021 AATM database. Note: Values for dairy for 2010–2014 are omitted due to data inconsistencies. The evolution of net exports of meat, dairy, and poultry between 2003 and 2019 is presented in Figure 4.7. Africa was already a net importer of these animal-source foods in 2003, and net imports increased more than threefold between 2003 and 2019. Net imports of animals and meat rose from $0.3 to $2.2 billion; dairy from $1.6 to $3.8 billion; and poultry from $0.5 billion to $2 billion. Figure 4.7 Net African exports of livestock products, 2003–2019 (US$ billions) -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Meat Dairy Poultry Source: 2021 AATM database. Note: Negative values indicate net imports. Three countries — Sudan, South Africa, and Egypt — are Africa’s main net exporters of meat and animals, dairy, and poultry. The continent’s three primary net importers are Libya, Lesotho, and Mozambique. At the product level, net exporters primarily export live animals and meat, while net imports are a combination of the three product groups. 94 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Meat value chain Within the meat value chain, a major share of imports consists of carcasses and cuts (Figure 4.8). Africa is a net exporter of live animals and hides and skins. The evolution of trade between 2003 and 2019 shows an increase in net exports of live animals and, conversely, an increase in net imports of slaughtered and processed meat until 2015. From 2016 to 2019, Africa was a net importer of meat and animals at all processing stages (Figure 4.8). Net exports of live animals increased from $60 million in 2003 to $540 million in 2015. Since 2016, a sharp drop in exports (from $1.6 billion in 2015 to $554 million in 2016) combined with increasing imports explains the change in status from net exporter to net importer of live animals. Africa was a net importer of meat carcasses and cuts and offal and prepared meats in 2003; these net imports increased nearly fivefold between 2003 and 2019 (from $418 million to $2 billion). Figure 4.8 Net exports of Africa of meat and animals by processing stage, 2003–2019 (US$ billions) -4.00 -2.00 0.00 2.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Hides and skins Live animals Meat carcasses and cuts Offal, salted or prepared meats Source: 2021 AATM database. Note: Negative values indicate net imports. Sudan is Africa’s top net exporter of animals and meat, followed by Namibia, Somalia, Ethiopia, and South Africa. For these countries, net exports ranged on average from $590 million for Sudan to $121 million for South Africa from 2015 to 2019 (Figure 4.9). Net exports are mainly composed of live animals. Ethiopia, Kenya, and Sudan are the top three net exporters of meat carcasses and cuts, while South Africa is the top net exporter of offal, salted or prepared meats and meat carcasses and cuts. The three largest net importers of live animals are Egypt, Côte d’Ivoire, and Senegal; net imports ranged from $135 million for Egypt to $28 million for Senegal, on average, between 2015 and 2019. The top five net importers of meat are Egypt, Côte d’Ivoire, Senegal, Lesotho, and Mauritius. Africa is a net importer of processed meat carcasses and cuts, and offal, salted or prepared meats. Among African countries, Egypt is the top net importer of slaughtered animals and processed meat ($23.3 million) from 2015 to 2019, closely followed by Lesotho ($22.8 million) and Mozambique ($21.2 million). 95Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.9 Meat and animal net exports by stage of processing, country averages 2015–2019 (US$ millions) -200.0 -100.0 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 Egypt Côte d'Ivoire Senegal Lesotho Mauritius Mozambique Eswatini DR Congo Angola Nigeria Djibouti United Rep. of Tanzania Kenya Botswana Mali South Africa Ethiopia Somalia Namibia Sudan Hides and skins Bovine meat carcasses and cuts Camels Cattle, buffalo, other bovines Goats Horses, mules and hinnies, asses Sheep Swine Offal, salted or prepared meats Other meat carcasses and cuts Source: 2021 AATM database. Note: Countries are classified from the largest to smallest net exports of semiprocessed meat. Negative values indicate net imports. Dairy value chain Africa’s dairy trade mainly comprises processed products. Figure 4.10 presents the evolution and composition of net dairy exports. Africa’s net imports of processed dairy were $1.6 billion in 2003, peaking in 2014, and stood at $3.7 billion in 2019. Figure 4.10 Net African dairy exports, 2003–2019 (US$ billions) -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Fluid milk and cream Processed dairy Source: 2021 AATM database. 96 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Africa’s net exports of processed and unprocessed dairy products are presented in Figure 4.11. Country-level data show that the top five net exporters are Egypt, South Africa, Uganda, Morocco, Tunisia, and Togo, with average annual net exports ranging from $71 million for Egypt to $31 million for Morocco in 2015–2019. The decomposition by processing stage reveals that South Africa, Uganda, and Egypt are net exporters of fluid milk and cream, with net exports reaching $65 million, $52 million, and $14 million, respectively, in 2015–2019. Only 11 African countries are net exporters of processed dairy; Egypt, South Africa, and Morocco are the top three. Most countries are net importers of dairy products; the five largest are Kenya, Libya, Botswana, Namibia, and Mozambique. Among the net importers of fluid milk and cream, the top three are Kenya, Botswana, and Lesotho, with average annual imports of $49 million, $21 million, and $12 million between 2015 and 2019, respectively. The top three net importers of processed dairy are Libya, Namibia, and Botswana, with average annual imports of $47 million, $30 million, and $28 million between 2015 and 2019, respectively. Figure 4.11 Net dairy exports by African country and stage of processing, average 2015–2019 (US$ millions) -100.0 -50.0 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 Kenya Libya Botswana Namibia Mozambique Lesotho Eswatini Angola Zambia Mauritania Sierra Leone Rwanda Algeria Nigeria Togo Tunisia Morocco Uganda South Africa Egypt Cheese Concentrated, whey, fats, constituents Cultured Dry milk and cream Fluid milk and cream Source: 2021 AATM database. Note: Countries are classified from the largest to the smallest net exporters in processed dairy. Negative values indicate net imports. 97Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Poultry value chain The poultry value chain includes live chickens, ducks, geese, turkeys, and guinea fowl. Processed preparations include poultry meat cuts, edible offal and preparations, and whole poultry. Africa is a net importer of poultry. From 2003 to 2019, African countries increased poultry imports significantly; in 2003, Africa imported $46 million in live poultry, $324 million in cuts, edible offal and preparations, and $92 million in whole poultry, which increased to $157 million, $1.26 billion, and $558 million, respectively, by 2019 (Figure 4.12). Figure 4.12 Net African poultry exports by processing stage, 2003–2019 (US$ billions) -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Live poultry Poultry meat cuts, edible offal and preparations Poultry, whole Source: 2021 AATM database. Note: Negative values indicate net imports. Country-level data show that net exports and imports of live birds are small, remaining below $1 million for most countries (Figure 4.13). Only South Africa, Zambia, and Kenya were net exporters of live birds, with values over $1 million. South Africa is also a net exporter of processed poultry, with $91 million in average net exports from 2015 to 2019. Benin is the second net exporter of poultry meat cuts, edible offal and preparations, with net exports reaching an average of $14 million from 2015 to 2019. Although Egypt is a net importer of live birds, it is a net exporter of processed poultry, with net exports reaching $11 million on average for 2015–2019. Most African countries are net importers of poultry products. The countries with over $1 million in net imports of live poultry are Botswana, Mozambique, Lesotho, and Uganda. As for processed poultry, the top three net importers from 2015 to 2019 were Lesotho, Mozambique, and Nigeria, with imports averaging $32 million, $19 million, and $15 million, respectively. 98 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.13 Net poultry exports by processing stage, average 2015–2019 (US$ millions) -60.0 -40.0 -20.0 0.0 20.0 40.0 60.0 80.0 100.0 120.0 Lesotho Mozambique Nigeria DR Congo Botswana Namibia Zimbabwe Ghana Eswatini Angola Kenya Algeria Mauritius Togo Morocco Tunisia Zambia Egypt Benin South Africa Live poultry Poultry meat cuts, edible offal and preparations Poultry, whole Source: 2021 AATM database. Note: Countries are classified from the largest to smallest net exports in live birds. Negative values indicate net imports. The figures above show that Africa is increasingly a net importer of poultry and processed meat. In contrast, its exports of live animals have been increasing over time. Table 4.2 shows the live animal exports for Africa and globally. Although African countries are among the world’s top exporters of camels, cattle, buffalo, other bovines, and sheep, they are not well positioned in the global ranking of exporters of cuts, carcasses, and prepared meats (Table 4.3). To increase their exports of processed meat, rather than simply exporting live animals, African countries need to improve their production capabilities. African countries do have a productive advantage in camels, as they are produced in few regions of the world. 99Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Table 4.2 Average share and ranking of top 10 exporters of live animals, 2015–2019 Camels Cattle, buffalo, other bovines Goats Horses, mules and hinnies, asses Sheep Swine W or ld Sudan 28.0 France 16.3 Somalia 29.7 UK 15.6 Sudan 24.3 Netherlands 24.2 Oman 17.6 Australia 12.9 Romania 11.4 Ireland 14.8 Romania 13.0 Denmark 23.4 Ethiopia 13.7 Mexico 11.1 Oman 9.6 USA 12.3 Australia 11.7 China 10.9 Saudi Arabia 12.0 Canada 10.4 India 9.4 Netherlands 11.2 Spain 10.7 Canada 8.7 UAE 6.9 Brazil 4.8 Sudan 7.1 Germany 7.9 Jordan 6.6 Germany 6.4 Djibouti 5.9 Germany 4.1 Iran 7.0 France 6.0 Somalia 4.8 Spain 5.0 Somalia 4.9 Spain 3.4 Australia 5.0 Australia 5.3 Mali 4.1 Belgium 4.7 Kuwait 2.7 Uruguay 2.8 Djibouti 3.7 China 4.4 Iran 3.3 Ireland 2.4 Other small countries 2.3 Netherlands 2.6 Namibia 2.1 Belgium 4.2 Hungary 3.0 France 2.3 Qatar 2.0 Czech Rep. 2.3 Mali 1.9 New Zealand 3.9 Portugal 2.1 Hungary 1.9 A fr ic a Sudan 53.2 Namibia 29.8 Somalia 63.3 South Africa 51.8 Sudan 65.6 South Africa 75.3 Ethiopia 26.0 Mali 19.4 Sudan 15.1 Ghana 14.8 Somalia 12.8 Niger 7.5 Djibouti 11.2 Ethiopia 12.5 Djibouti 8.0 Mauritius 9.5 Mali 11.0 Malawi 5.9 Somalia 9.2 Sudan 11.6 Namibia 4.6 Niger 4.3 Namibia 4.1 Kenya 3.9 Mali 0.3 Somalia 10.7 Mali 4.0 Tunisia 4.1 Ethiopia 3.3 Zambia 2.0 Niger 0.05 South Africa 7.2 Ethiopia 2.4 Mali 3.4 Djibouti 2.2 Mali 1.6 Egypt 0.02 Tanzania 4.2 South Africa 1.1 Somalia 2.0 South Africa 0.6 Uganda 1.2 Libya 0.02 Rwanda 1.1 Tanzania 0.5 Morocco 1.7 Burkina Faso 0.1 Botswana 0.6 South Africa 0.01 Botswana 0.7 Kenya 0.4 Namibia 1.4 Niger 0.1 Nigeria 0.5 Kenya 0.01 Burkina Faso 0.5 Niger 0.4 Djibouti 1.4 Eritrea 0.0 Rwanda 0.4 Source: 2021 AATM database. 100 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Table 4.3 Average share and ranking of top 10 exporters of meat products, carcasses and cuts, hides and skins, 2015–2019 Meat products Carcasses and cuts Hides and skinsOffal, salted or prepared meats Other meat carcasses and cuts Bovine meat carcasses and cuts W or ld USA 15.6 USA 12.3 Australia 14.6 USA 30.8 Germany 10.5 Germany 12.2 USA 12.7 Australia 7.1 Brazil 6.9 Spain 11.0 Brazil 11.6 France 6.9 Italy 6.8 Denmark 7.5 India 7.7 Germany 5.9 Spain 6.2 Canada 7.4 Netherlands 5.4 Netherlands 5.6 Netherlands 5.7 Australia 7.3 New Zealand 4.8 Canada 4.9 China, Hong Kong 4.0 New Zealand 6.6 Ireland 4.7 Italy 3.2 Denmark 3.8 Netherlands 6.3 Canada 3.8 Spain 3.1 Ireland 3.7 Belgium 4.3 Argentina 3.6 United Kingdom 3.0 Poland 3.4 Brazil 3.9 Uruguay 3.5 Ireland 2.8 A fr ic a South Africa 67.5 Ethiopia 36.0 South Africa 38.6 South Africa 47.3 Namibia 13.8 Kenya 19.0 Botswana 21.8 Tunisia 9.2 Kenya 5.4 Sudan 17.5 Namibia 21.5 Sudan 5.7 Egypt 2.1 South Africa 14.3 Sudan 9.7 Rwanda 4.5 Togo 1.8 Namibia 6.6 Ethiopia 2.1 Tanzania 4.3 Uganda 1.8 Tanzania 2.6 Kenya 1.8 Nigeria 3.9 Botswana 1.4 Somalia 1.2 Eswatini 1.0 Botswana 3.9 Ethiopia 1.0 South Sudan 0.6 Cameroon 0.8 Libya 3.1 Senegal 0.9 Mauritania 0.2 Madagascar 0.7 Madagascar 2.7 Morocco 0.8 Niger 0.2 Egypt 0.6 Kenya 1.8 Source: 2021 AATM database. African countries do not figure among the top global exporters of dairy or poultry. In dairy products, European Union (EU) countries, New Zealand, and the United States (US) are dominant global exporters; within Africa, South Africa and Egypt are the key players (see Figure 4.17). Poultry is dominated globally by the EU countries, US, and Brazil. South Africa dominates the intra-African market for live birds, slaughtered and poultry cuts (see Figure 4.18). Zambia has notably increased its poultry exports recently, which Agriprofocus (2014) attributes to both demand and supply side factors. On the demand side, the domestic market expanded with the country’s increasing population, rising disposable income, and rapid urbanization. On the supply side, production increased due to advances in poultry breeding, expansion of the small and medium firms that are the main suppliers of poultry, and the introduction of modern technology. This analysis highlights some important implications. First, in the livestock value chains, African exporters generally perform well only in exports of live animals. Second, at the continental level, exports of dairy, poultry, and meat originate from just a few countries, indicating that these 101Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains sectors are highly concentrated. Third, on a different but pertinent note, the competitiveness of the livestock sector is eroded by outbreaks of animal diseases (avian influenzas and animal- source foodborne-diseases); inadequate production practices that degrade soil, water, and air; low capacity utilization of slaughter facilities; the high cost of feed for fattening animals; very low carcass weights; and meat quality factors. In response to these issues, the Food and Agriculture Organization of the United Nations (FAO) recently initiated a project entitled Africa Sustainable Livestock 2050 that is formulating a strategy to identify policy actions to ensure a sustainable livestock sector in the long term. It currently operates in Burkina Faso, Egypt, Ethiopia, Kenya, Nigeria, and Uganda. Expanding such initiatives to other countries and implementing them through the African Union will be crucial to improving the competitiveness of this sector. Moreover, if the AfCFTA adopts such initiatives, it will help mainstream trade policies in the conception and implementation of these development projects. AFRICAN LIVESTOCK MARKETS: DESTINATIONS AND ORIGINS As we examine the destinations and origins of African livestock product trade, we must bear in mind both the differences between intra-African trade and Africa’s extracontinental trade and the prevalence of informal trade channels within Africa, especially for live animals. Figure 4.1 compared African livestock exports within and outside of Africa, and while the formal data indicate that extracontinental exports exceed intra-African exports by roughly half a billion dollars, this does not account for the unrecorded value of informal livestock trade, which could easily exceed its formal counterpart. With nearly 2.5 billion animals informally traded in the past decade in East Africa alone (according to limited FSNWG registers), the actual count and value of Africa’s livestock trade remain unknown. International trade requirements for livestock products, including SPS and health requirements, plus low relative productivity in the sector overall, mean that only a few African countries are substantial exporters of livestock products to the rest of the world. Intra-African livestock trade According to formal trade reports within the continent, African countries traded over $1.3 billion in livestock products among themselves annually between 2010 and 2019. Of that, close to $423 million was in live animals,5 $177 million in carcasses and cuts, $97 in meat offal and hides and skins, $500 million in dairy, and $146 in poultry. Figure 4.14 illustrates the top importers and exporters geographically; countries with a green-toned background ranked in the top 10 importers and exporters in live animals, meat, and hides, and dairy and poultry. Regional traders, particularly countries within the same REC, share natural trade advantages due to REC trade agreements, geographic proximity, culture, and other factors, with notable regional hotspots of trade in southern and eastern Africa between neighboring countries (Figure 4.14). 5 Again, this statistic must be considered with caution, given the likely magnitude of intra-African informal trade of live animals. 102 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.14 Top intra-African importers and exporters of livestock products, annual average 2010–2019 Source: Authors’ own elaboration using the 2021 AATM database. Meat and live animals For formal trade of live animals, Sudan dominates the intra-African market, due to its $250 million annual average exports of camels, plus $50 million in live cattle. Ethiopia, Namibia, and Mali follow Sudan, each predominantly exporting cattle, though sheep exports also play an important role for these countries. The intra-African meat export market is far smaller in value. South Africa and Namibia are the largest players; both countries export bovine meat, as well as meat carcasses and cuts of other animals. South Africa and Namibia are also Africa’s top intra-African exporters of offal, salted and prepared meats. Botswana and Sudan are the other significant intra-African meat exporters. Figure 4.15 identifies the top exporters for live animals and meat. In intra-African trade in hides and skins (not shown due to its smaller role), Rwanda ($3.6 million) and Botswana ($3.5 million) are the top exporters, followed by Sudan, Zimbabwe, and Tanzania (each exporting $2–3 million). (b) Top intra-African exporters(a) Top intra-African importers Meat and live animals Poultry Dairy 103Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.15 Top 10 intra-African exporters of live animals and meat, annual average 2010–2019 0 50 100 150 200 250 300 350 Botswana Rwanda Niger Djibouti United Rep. of Tanzania South Africa Mali Namibia Ethiopia Sudan Ghana Djibouti Mali Cameroon Ethiopia Kenya Sudan Botswana Namibia South Africa Zambia Morocco Gambia Botswana Nigeria Uganda Togo Kenya Namibia South Africa Liv e a ni m al s M ea t c ar ca ss es an d cu ts Of fa l, s al te d or p re pa re d m ea ts US$ millions Swine Horses, mules and hinnies, asses Goats Other meat carcasses and cuts Offal, salted or prepared meats Sheep Bovine meat carcasses and cuts Camels Cattle, buffalo, other bovines Source: 2021 AATM database. Somalia and South Africa are the top importers of live animals, each importing around $90 million annually in cattle, plus a smaller value of live goats and sheep (Figure 4.16). Egypt imports $31 million in cattle, plus $43 million in camels. Senegal and Côte d'Ivoire in West Africa follow the top three importers, followed by Djibouti, where live animal imports may eventually make their way across the Red Sea to Saudi Arabia. In slaughtered animal imports, South Africa dominates, though its share fell significantly between 2010–2014, when it imported over $110 million (both in bovine meat and other animals), and 2015–2019, when its imports averaged $43 million. This drop may reflect increased animal processing (slaughter) capacity within South Africa over the last decade6; average live animal imports to South Africa rose by approximately $50 million between the two time periods, potentially displacing meat imports. Offal and highly processed or prepared meats play a smaller role in intra-African trade, with no country surpassing $20 million in imports. South Africa is both a top importer and the top exporter of prepared meats, though its imports decreased between 2010 and 2019. In hides and skins (not shown), South Africa is also the largest importer ($6 million annual average), followed by Nigeria ($4.3 million), Uganda ($2.5million), and Kenya ($2.2 million). 6 For further details, see https://www.brookings.edu/blog/africa-in-focus/2020/09/17/easy-meat-the-case-of-the-pork- industry-in-south-africa/ . https://www.indexmundi.com/fr/matieres-premieres/?marchandise=feves-de-cacao&mois=180 https://www.indexmundi.com/fr/matieres-premieres/?marchandise=feves-de-cacao&mois=180 104 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.16 Top intra-African importing countries, animals and meat, annual average 2010–2019 0 20 40 60 80 100 120 140 Kenya Nigeria Sudan Mauritius Côte d'Ivoire Djibouti Senegal Egypt South Africa Somalia United Rep. of Tanzania DR Congo Botswana Angola Namibia Lesotho Mozambique Eswatini Egypt South Africa Uganda Nigeria United Rep. of Tanzania Mozambique Eswatini Zimbabwe Botswana Namibia Lesotho South Africa Liv e a nim als Me at ca rca sse s a nd cu ts Of fal , sa lte d o r p rep are d m ea ts US$ millions Bovine meat carcasses and cuts Camels Cattle, buffalo, other bovines Goats Horses, mules and hinnies, asses Offal, salted or prepared meats Other meat carcasses and cuts Sheep Swine Source: 2021 AATM database. Dairy and poultry In dairy (Figures 4.17 and 4.18), South Africa is the dominant intra-African exporter, averaging nearly $225 million annually for all dairy exports. Unlike other intra-African top dairy exporters, South Africa exports a balanced mix of fluid milk, dry milk powders, cheese, and cultured and concentrated milk products. The second-ranked exporter, Egypt, predominantly exports cheese to other African countries, as do Tunisia and Morocco. Africa’s third-ranked exporter, Uganda, exports predominantly fluid milk, followed by dry milk powders. Libya is Africa’s top intra-African dairy importer, largely importing cheese. Figure 4.17 Top 10 intra-African dairy exporters, annual average 2010–2019 Source: 2021 AATM database. 0 10 20 30 40 50 60 70 Zambia Gambia Senegal Togo Ghana Morocco Tunisia Egypt Uganda South Africa US$ millions Cheese Fluid milk and cream Dry milk and cream (including for baby formulas) Cultured Concentrated, whey, fats, constituents 105Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.18 Top intra-African dairy importers, annual average 2010–2019 0 10 20 30 40 50 60 Zambia Angola Zimbabwe Eswatini Lesotho Mozambique Namibia Kenya Botswana Libya US$ millions Fluid milk and cream Dry milk and cream (including for baby formulas) Cultured Concentrated, whey, fats, constituents Cheese Source: 2021 AATM database. In poultry (Figures 4.19 and 4.20), South Africa is again the leader, dominating the formal intra- African market in poultry cuts, whole birds, and live chickens, with a total of $102 million in exports annually. Benin is the only other significant exporter, with $33.5 million in average annual poultry exports. Lesotho, Nambia, and Nigeria are the top importers. Here again, the actual quantities and economic values are unknown, given that African poultry markets are largely domestic, and cross-border trade in chicken is largely informal. Figure 4.19 Top 10 intra-African poultry exporters, annual average 2010–2019 0 10 20 30 40 50 60 70 Mauritius Tunisia Morocco Zimbabwe Kenya Togo Zambia Namibia Benin South Africa US$ millions Poultry meat cuts, edible offal and preparations Poultry, whole Live poultry Source: 2021 AATM database. 106 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.20 Top intra-African poultry importers, annual average 2010–2019 0 5 10 15 20 25 30 Ghana Zambia Eswatini DR Congo Zimbabwe Botswana Mozambique Nigeria Namibia Lesotho US$ millions Poultry, whole Poultry meat cuts, edible offal and preparations Live poultry Source: 2021 AATM database. Livestock trade between Africa and ROW Africa’s top exports to the rest of the world include live animal exports from Sudan (predominantly sheep, $387 million annual average) and Somalia (sheep, goats, cattle, and camels), and cheese from Egypt ($277 million). A handful of countries — Namibia, Ethiopia, South Africa, Botswana, Sudan, and Kenya — export between $24 and $77 million annually in meat carcasses and cuts. South Africa is the only country that exports more than a few million dollars worth of hides and skins (Figure 4.21). Figure 4.21 Top African exporters of meat and live animals to ROW, annual average 2010–2019 0 50 100 150 200 250 300 350 400 450 500 Sudan Libya Egypt Rwanda Nigeria United Rep. of Tanzania Kenya Madagascar Tunisia South Africa Zimbabwe Mauritius Sierra Leone Egypt South Africa Nigeria Djibouti Ethiopia Somalia Sudan Madagascar Somalia Eswatini United Rep. of Tanzania Kenya Sudan Botswana South Africa Ethiopia Namibia Hi de s a nd sk ins Liv e a nim als Me at ca rca sse s a nd cu ts US$ millions Bovine meat carcasses and cuts Camels Cattle, buffalo, other bovines Goats Hides and skins Horses, mules and hinnies, asses Other meat carcasses and cuts Sheep Swine Source: 2021 AATM database. 107Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.22 Top African exporters of dairy to ROW, annual average 2010–2019 0 50 100 150 200 250 300 Nigeria Zimbabwe Benin Namibia Algeria South Africa Uganda Tunisia Morocco Egypt US$ millions Cheese Concentrated, whey, fats, constituents Cultured Dry milk and cream (including for baby formulas) Fluid milk and cream Source: 2021 AATM database. In poultry (not shown), only two countries export more than $1 million on average annually of slaughtered poultry — Egypt ($10 million) and South Africa ($3.5 million). For live birds, Somalia exports an annual average of $2 million. Origins of African global imports For African countries that import livestock products, Brazil, India, US, New Zealand, Argentina, and EU countries dominate overall (Figure 4.23), yet import origins are particular to the specific commodity type and its processing level. Sudan is the only African country to make the top 10 among origin countries for African imports, highlighting the degree to which Africa misses an opportunity within its own regional markets — again, with the caveat that these figures do not reflect informal regional markets. Figures 4.24 and 4.25 break down the product groups with more detail. Figure 4.23 Top origin countries of African livestock product imports, annual average 2010–2019 0 100 200 300 400 500 600 Romania Sudan Uruguay France Netherlands Argentina New Zealand USA India Brazil US$ millions Dairy Meat Poultry Source: 2021 AATM database. 108 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains While Brazil and India clearly dominate the African import market for meat carcasses and cuts, the US (followed by Brazil) is the dominant origin for (often lower-quality) meat offal as well as prepared meats, such as cured meats and other highly processed meat products. In live animal imports, four African countries — Sudan, Ethiopia, Namibia, and Mali — are major suppliers of African camel and cattle imports, as well as some sheep and goats. EU countries — Spain, France, Romania, and Germany — also export live cattle and sheep to Africa, as do Brazil and Uruguay. The available data do not specify the breed of animals or at what stage of animals’ development countries typically import live animals from outside of Africa; but given the difficulty of shipping live animals overseas, imports are likely specialized breeding stock. Figure 4.24 Top origin countries of African meat and live animal imports, annual average 2010–2019 0 100 200 300 400 500 600 700 800 900 Uruguay Brazil Romania Germany Mali Namibia France Ethiopia Spain Sudan Sudan Paraguay USA Germany Namibia South Af rica Australia Spain India Brazil Netherlands Argentina India Italy Australia South Af rica France Portugal Brazil USA Liv e a nim als Me at car ca sse s a nd cu ts Of fal , s alt ed or pr ep are d m ea ts US$ millions Bovine meat carcasses and cuts Camels Cattle, buff alo, other bovines Goats Horses , mules and hinnies, asses Offal, salted or prepared meats Other meat carcasses and cuts Sheep Swine Source: 2021 AATM database. In dairy, New Zealand and EU countries — Netherlands, France, Ireland, Belgium, and Poland — account for most of Africa’s imports, along with the US and South America. Unlike live animals, meat, and poultry imports, no African countries are among the top origin countries of the continent’s dairy imports. Most dairy imports are in the form of dry milk powders (including for baby formula), totaling more than $2.3 billion of the $3.5 billion annual average dairy imports. Concentrated milk accounts for $620 million of average annual dairy imports, followed by $382 million in cheese imports. 109Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.25 Top origin countries of African dairy imports, annual average 2010–2019 Source: 2021 AATM database. African imports most poultry in the form of cuts, offal and preparations. While some cuts may have higher value, these imports are primarily lower-value offal, including feet, backs, and gizzards. However, between 2010 and 2019, Africa also imported $489 million on average as whole (slaughtered) birds (Figure 4.26). A few countries account for the continent’s average annual $105 million imports of live birds. South Africa and Benin are the only regional countries to make the list of top global poultry origins. Brazil, the US, and EU countries are the primary origins of African poultry imports. However, African poultry markets are largely domestic, in part due to protective bans and trade barriers in African countries (see next section on trade policies for more details). Again, for poultry, the existing cross-border trade within Africa is largely informal, with quantities and economic values largely unknown. Figure 4.26 Top origin countries of African poultry imports, annual average 2010–2019 Source: 2021 AATM database. Top African importers from ROW Finally, we briefly examine which African countries import most heavily from the rest of the world (Figure 4.27). Theoretically, these countries offer opportunities for expanding the intra-African export market if African products could displace imports from ROW. However, many challenges exist. Seaport access and the proximity of Egypt and the Arab Maghreb Union countries to Europe and the Middle East make them natural trading partners, especially when faced with the transportation barrier of the Sahara for trade with Africa south of the Sahara. Moreover, African producers may lack the capacity to meet regional demand, or intra-African trade may be stymied by other persistent trade barriers. 0 200 400 600 800 1000 1200 United Kingdom Uruguay Poland Argentina Belgium Ireland USA France Netherlands New Zealand US$ millions Cheese Concentrated, whey, fats, constituents Cultured Dry milk and cream (including for baby formulas) Fluid milk and cream 0 50 100 150 200 250 300 350 400 450 Canada Turkey Benin United Kingdom Poland South Africa France Netherlands USA Brazil US$ millions Poultry, whole Poultry meat cuts, edible offal and preparations Live poultry 110 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.27 African countries importing more than US$10 million in livestock products, annual average 2010–2019 Source: 2021 AATM database. African global livestock export destinations African countries export close to $1 billion annually in meat and animals, dairy, and poultry products, overwhelmingly to Saudi Arabia. Other major destinations outside of the continent include the United Arab Emirates (UAE) and Oman. Saudi Arabia and other arid Middle Eastern countries have invested heavily in Sudanese agriculture, and benefit from Sudan’s cheap food exports — especially exports of water-intensive products. Three African countries are among the top 10 destinations for African livestock product exports: South Africa, Somalia, and Egypt. Figure 4.28 summarizes the top destinations for Africa exports, and Figures 4.29, 4.30, and 4.31 break down the top import destinations by each commodity category. 0 200 400 600 800 1000 1200 1400 1600 Tunisia Côte d'Ivoire Somalia Mauritania Ghana Senegal Mauritius Sudan South Af rica Angola Morocco Libya Nigeria Egypt Algeria Liberia Ghana DR Congo Mauritius Gabon Congo Côte d'Ivoire Morocco South Af rica Libya Algeria Angola Egypt Guinea Liberia Morocco Algeria Equatorial Guinea Gabon Congo DR Congo Libya Ghana Egypt Benin Angola South Af rica Da iry Me at an d a nim als Po ult ry US$ millions Bovine meat carcasses and cuts Camels Cattle, buff alo, other bovines Cheese Concentrated, whey, fats, constituents Cultured Dry milk and cream (including for baby formulas) Fluid milk and cream Goats Hides and skins Horses , mules and hinnies, asses Live poultry Offal, salted or prepared meats Other meat carcasses and cuts Poultry meat cuts, edible offal and preparat ions Poultry, whole Sheep Swine 111Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.28 Top 10 destinations for African livestock product exports, annual average 2010–2019 Source: 2021 AATM database. 0 100 200 300 400 500 600 700 Norway Lebanon China Jordan Somalia Egypt UAE Oman South Africa Saudi Arabia US$ millions Bovine meat carcasses and cuts Camels Cattle, buffalo, other bovines Cheese Goats 112 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.29 Top global importers of African meat and animal products, annual average 2010–2019 Source: 2021 AATM database. Outside of African countries, Saudi Arabia, Yemen, and the UAE import the bulk of Africa’s extracontinental live animal exports (Figure 4.29). The UAE, United Kingdom, Norway, and Jordan import the bulk of the extracontinental meat exports, and China (and Hong Kong) is Africa’s primary destination for hides and skins, followed by Italy and India. For dairy products (Figure 4.30), Saudi Arabi again is Africa’s top destination outside the continent, followed by Lebanon, Jordan, Iraq, and Yemen. However, $288 million of Africa’s $472 million in dairy exports, roughly 61 percent, remains on the continent. For poultry (Figure 4.31), the UAE, Yemen, Kuwait, and Hong Kong (China) are the only extracontinental importers among Africa’s top 10 poultry importers. 0 100 200 300 400 500 600 South Af rica Nigeria India Italy China, Hong Kong SAR China Kenya Mauritius Sudan Senegal Yemen UAE Djibouti Côte d'Ivoire Small Countries Egypt South Af rica Somalia Oman Saudi Arabia Angola Qatar Viet Nam Oman Namibia Netherlands Germany Lesotho Mozambique Kuwait Eswatini China Saudi Arabia Egypt Jordan United Kingdom Norway South Af rica UAE Hi de s a nd sk ins Liv e a nim als Me at car ca sse s a nd cu ts US$ millions Bovine meat carcasses and cuts Camels Cattle, buff alo, other bovines Goats Hides and skins Horses , mules and hinnies, asses Other meat carcasses and cuts Sheep Swine 113Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.30 Top global importers of African dairy products, annual average 2010–2019 0 20 40 60 80 100 Eswatini Namibia Mozambique Libya Lesotho Botswana Kenya Senegal Zambia Oman Angola UAE Kuwait Mozambique Yemen Botswana Iraq Kenya Namibia Jordan Libya Lebanon Saudi Arabia Flu id mi lk an d c rea m Pr oc es se d d air y US$ millions Cheese Concentrated, whey, fats, constituents Cultured Dry milk and cream (including for baby formulas) Fluid milk and cream Source: 2021 AATM database. Figure 4.31 Top global importers of African poultry products, annual average 2010–2019 0 5 10 15 20 25 30 35 40 Ghana Kuwait UAE Zimbabwe Botswana DR Congo Nigeria Namibia Mozambique Lesotho US$ millions Live poultry Poultry meat cuts, edible offal and preparations Poultry, whole Source: 2021 AATM database. 114 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains TRADE POLICIES To understand the dynamics behind the trade flows presented above, it is important to consider the trade policies of African countries and their main trading partners. This section examines both tariffs and NTMs that affect meat, poultry, and dairy products. Before examining the various dimensions of trade policy, it is worth noting that, in a competitive market, the most important determinant of competitiveness is cost of production, which is a function of technology, productivity, production efficiency, and prices of inputs and products, and in turn is influenced by tradability. Thus in Africa, while tariff, domestic support, and NTMs might have a distortive effect on trade in livestock products, African countries should first address the domestic factors that impede their competitiveness in the sector. Though global tariffs ultimately pose the smallest barriers to Africa’s livestock product export markets, we examine them briefly here, as well as other nontariff barriers. Tariffs Figure 4.32 compares the tariffs imposed by the largest global producers of livestock products. Generally, India is the most protectionist, with a tariff of 24 percent on meat, 85 percent on poultry, and 45 percent on dairy products. The EU277 ranks second after India, with a tariff of 38 percent for poultry and 29 percent for dairy products. Moreover, while Africa’s tariffs are low for dairy (16 percent; only higher than China, where tariffs are 8 percent), Africa imposes a high tariff on meat (24 percent) and on poultry (26 percent) in comparison to other countries. In contrast, while the US is protectionist for dairy products, it imposes low tariffs on meat (2 percent) and poultry (5 percent). Figure 4.32 Tariffs on livestock products, 2016 (%) (a) Meat (b) Poultry (c) Dairy 2 7 10 14 14 24 24 0 5 10 15 20 25 30 USA Brazil China World EU27 Africa India 8 16 20 20 29 31 45 0 10 20 30 40 50 China Africa Brazil USA EU27 World India 5 8 8 26 28 38 85 0 20 40 60 80 100 USA China Brazil Africa World EU27 India Source: Constructed using MAcMap-HS6 and authors’ calculation. Given that, across this chapter, we compare live animals to products that are relatively more processed, it is important to consider whether the livestock sector faces tariff escalation. This refers to a situation where tariffs rise along processing chains: when tariffs imposed on processed products are higher than those imposed on live animals, tariffs are escalating; if tariffs decrease along the value chain, it is referred to as tariff abatement. Tariff escalation is of growing importance since it impedes export of more processed products, making it difficult for countries to shift away from exporting primary products. For the meat sector, Figure 4.33 shows that tariff escalation is observed for all countries. Tariffs are higher for offal, salted and prepared meats than for cuts, carcasses, live animals, or hides and skins, except in Africa. The highest tariff is imposed by India on meat preparations (as high as 32 percent). Moreover, the EU is generally more protective for all products and all types of meat 7 The EU27 refers to the European Union countries, except the United Kingdom. 115Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains than the US (23 percent vs. 1 percent for meat preparations; 13 percent vs. 3 percent for cuts and carcasses; and 11 percent vs. zero for live animals). Within Africa, while live animals are subject to a tariff of 16 percent (especially camels at 5.3 percent and cattle at 20.4 percent; see Table A4.2 in the appendix), meat preparations are less protected than cuts and carcasses (23 percent and 29 percent, respectively). Despite the high tariffs imposed by the EU27, most African countries benefit from the preferential access granted by the Everything But Arms (EBA) scheme. The EBA grants least developed countries (LDCs) duty- and quota-free access for almost all products (arms and ammunition excluded). Similarly, the US African Growth and Opportunity Act (AGOA) initiated in 2000 (and renewed to 2025) grants several African countries duty-free access to the US market for certain agricultural products. Nevertheless, as will be shown later, African exports face several NTMs (ranging from SPS measures to rules of origin) imposed by the US and EU that erode their competitiveness. Yet, even when African exporters have achieved SPS standards and face no tariffs, the low productivity of African countries has prevented them from meeting EU and US import demand (that is, they rarely reach the full import quotas allowed). In fact, the low tariffs in places like the US and Brazil may reflect their own high productivity in poultry and meat, which makes it difficult for other countries to compete. Figure 4.33 Tariffs imposed on meat products, 2016 (%) 3 3 2 0 0 6 2 6 16 0 11 13 6 1 16 29 3 13 27 11 9 16 23 1 23 35 14 11 0 5 10 15 20 25 30 35 40 World Africa USA EU27 India China Brazil Hides and skins Live animals Meat carcasses and cuts Offal, salted or prepared meats Source: Constructed using MAcMap-HS6 and authors’ calculation. For all poultry products, the EU and India have the highest level of protection. In addition, tariff escalation holds for most countries, though with different magnitudes. For instance, in Europe, live poultry is subject to a tariff of 11 percent, slaughtered poultry faces a tariff of 18 percent, and cuts and preparations 41 percent. The difference across the value chain is smaller for Brazil and the US. In contrast, Africa and China exhibit tariff abatement, with tariffs on cuts and preparations lower than on slaughtered animals (Figure 4.34). 116 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.34 Tariffs imposed on poultry products, 2016 (%) 6 1 5 11 28 1 11 28 9 11 18 29 4 33 26 10 7 41 95 6 29 0 20 40 60 80 100 120 Africa Brazil China EU27 India USA World Live poultry Poultry (slaughtered) Poultry meat cuts, edible offal and preparations Source: Constructed using MAcMap-HS6 and authors’ calculation. For dairy products, some countries are characterized by tariff abatement, with processed products less protected than fluid milk and cream (Figure 4.35). This holds for the EU (especially fluid cream, with a tariff of 42.5 percent), China, and Africa. In contrast, the US, India, and Brazil are characterized by tariff escalation, with India the most protected country (47 percent tariff on processed dairy products8). Figure 4.35 Tariffs imposed on dairy products, 2016 (%) 20 13 11 43 25 11 44 16 20 7 28 47 21 30 0 5 10 15 20 25 30 35 40 45 50 Africa Brazil China EU27 India USA World Fluid milk and cream Processed dairy Source: Constructed using MAcMap-HS6 and authors’ calculation. Within Africa, tariffs continue to hinder trade despite establishment of the RECs. For instance, for live animals, the highest tariffs are imposed by Morocco (50 percent), Equatorial Guinea (29 percent), and Gabon (28 percent). Hides and skins face a lower tariff on average within Africa, with Djibouti imposing the highest tariff of 29 percent. For offal and meat, Morocco is also the most protected (Figure 4.36). In the poultry sector (Figure 4.37), tariffs are also especially high in Morocco (28 percent on live poultry, 45 percent on cuts and offal, and 40 percent on slaughtered poultry) as well as ECOWAS countries (with a tariff of 35 percent on slaughtered poultry and cuts 8 India imposes a high tariff, compared to other countries, on dry milk (58.1 percent) and cheese (28.6 percent). 117Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains and offal). Processed dairy products are characterized by a higher tariff within Africa, especially in the case of SADC countries whose tariffs are 70 percent (Figure 4.38). Yet, it is important to note that these tariffs are those of 2016. With the ratification of the AfCFTA, starting from July 1, 2020, tariffs on 90 percent of goods traded are supposed to decrease until they are eliminated within 10 years for least developed countries (LDCs) and 5 years for non-LDCs (except for sensitive goods, for which tariffs will be lowered within 13 years for LDCs and 10 years for non-LDCs). Obviously, the AfCFTA will play an important role in reducing intra-African tariffs and thus in boosting exports and imports at the continental level. Figure 4.36 Intra-African tariffs imposed on meat, 2016 (%) (a) Live animals (b) Hides and skins 50 29 28 25 21 21 20 16 13 10 0 10 20 30 40 50 60 Morocco Equatorial Guinea Gabon Tunisia Cameroon Central African Republic Chad Algeria Sierra Leone Uganda 26 20 12 10 10 10 10 10 10 9 0 5 10 15 20 25 30 Djibouti Sao Tome and Principe Comoros Cabo Verde Gabon Equatorial Guinea Cameroon Central African Republic Chad Tunisia (c) Offal, salted or prepared meats (d) Meat carcasses and cuts 44 33 32 30 30 30 29 29 28 28 0 10 20 30 40 50 Morocco Tunisia Togo Ghana Senegal Côte d'Ivoire Algeria Ethiopia Benin Nigeria Source: MAcMap-HS6 and authors’ calculation. 189 36 35 34 34 34 34 34 31 31 0 50 100 150 200 Morocco Tunisia Congo, Rep. Mali Niger Benin Burkina Faso Nigeria Togo Ghana 118 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.37 Intra-African tariffs imposed on poultry, 2016 (%) (a) Live poultry (b) Poultry meat cuts, edible offal and preparations 28 27 16 15 15 13 13 10 10 10 0 5 10 15 20 25 30 Morocco Tunisia Algeria Gabon Equatorial Guinea Cameroon Central African Republic Chad Guinea-Bissau Guinea 45 35 35 35 35 35 34 31 30 29 0 10 20 30 40 50 Morocco Benin Nigeria Niger Burkina Faso Mali Congo, Rep. Togo Ethiopia Tunisia (c) Poultry, whole 40 35 35 35 35 35 35 34 31 30 0 10 20 30 40 50 Morocco Congo, Rep. Nigeria Benin Mali Niger Burkina Faso Togo Seychelles Cabo Verde Source: MAcMap-HS6 and authors’ calculation. Figure 4.38 Intra-African tariffs imposed on dairy, 2016 (%) (a) Processed dairy (b) Fluid milk and cream 70 70 70 70 50 47 35 34 32 32 0 20 40 60 80 Botswana Lesotho Namibia Swaziland Uganda Rwanda Kenya Burundi Zimbabwe Tanzania 43 40 30 28 25 23 20 20 20 20 0 10 20 30 40 50 Uganda Rwanda Algeria Ethiopia Kenya Burundi Mauritania Sierra Leone Cameroon Côte d'Ivoire Source: MAcMap-HS6 and authors’ calculation. 119Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Nontariff measures While tariffs remain an issue, the livestock sectors of interest face NTMS that are more restrictive. However, we note that if a country is able to comply with the health standards imposed by the main trade partners, it should be able to export without difficulties and NTMs will not be a serious trade impediment. Figure 4.39 shows that the EU and US, respectively, impose 862 and 40,800 NTMs on meat and edible offal, and 392 and 25,384 NTMs on dairy products. More specifically, Table 4.4 summarizes the types of NTMs imposed by the EU and US. These include SPS measures, TBTs, and pre-shipment controls. Obviously, while SPS measures represent 75 and 95 percent of the total number of measures imposed by the EU and US, respectively, the number of measures imposed by the US is much larger. However, edible meat (HS2-02) is subject to more NTMs in the EU, followed by meat preparations (HS2-16) and live animals (HS2-01). These results corroborate our previous finding that higher value-added products face greater protection. Figure 4.39 Number of nontariff measures imposed by EU and US in the agriculture sector, 2018 (a) EU27 (b) US 518 1934 3501 7369 7799 11187 25384 40800 0 10000 20000 30000 40000 50000 Misc edible preps Fats Animal products nes Meat, fish, preps Average Live animals Dairy products Meat, edible offal 117 278 305 392 524 589 601 862 0 200 400 600 800 1000 Animal products Misc edible preps Live animals Dairy products Fats Average Meat, fish, preps Meat, edible offal Source: Data from UNCTAD 2017. Note: Preps = preparations; nes = not elsewhere specified. While the number of NTMs is a useful indicator, it is important to calculate the ad valorem equivalent (AVE), that is, the tariff equivalent of these trade barriers, to measure the additional costs that NTMs put on imports (see Chapter 2 for a discussion of AVEs). Figures 4.40 and 4.41 present the AVEs of SPS measures and TBTs respectively for our sectors of interest, as calculated by Nguyen, Bouët, and Traoré (2020). For instance, SPS measures imposed by the US add some 63 percent to the cost of imports, and TBTs add 84 percent. In the EU, these AVEs are slightly lower, at 48 percent for SPS measures and 62 percent for TBTs.9 Similar AVEs, but slightly lower, apply for live animals and dairy products. Within Africa, NTMs are also costly, ranging from 37 percent for SPS measures in Cabo Verde for edible meat to 146 percent for TBTs in Gambia for meat preparations. This is why, in order to boost African trade in these products, reforms must be implemented in both the origin and destination countries. But increasing trade will also require greater investment in infrastructure, coordination, and capacity to meet global SPS and other NTMs. 9 These measures include: approving the exporting establishment under food-hygiene regulations and listed for export purposes, labeling, registering for Export Health Certificate (EHC) online, a prenotification of goods arriving (done by EU-based importer), and the control of residues of veterinary medicines in animals and animal products for human consumption. 120 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Table 4.4 Number of nontariff measures imposed by EU and US, 2018 Animals live (HS2 01) Meat /edible meat (HS2 02) Dairy prod. (HS2 04) Meat prep. (HS2 16) Total SPS 232 667 300 410 1,609 TBT 39 66 33 89 227 Pre-shipment 0 0 0 2 2 Quantity control 34 129 59 100 322 Total 305 862 392 601 2,160 SPS 10,495 40,059 23,779 6,993 81,326 TBT 39 217 160 142 558 Pre-shipment 277 0 0 0 277 Quantity control 24 111 972 60 1,167 Price control 137 132 64 52 385 Export-related 215 281 409 122 1,027 Total 11,187 40,800 25,384 7,369 84,740 Source: Data from UNCTAD 2017. Figure 4.40 Ad valorem equivalent of SPS measures (%) 37 10 49 57 48 39 52 -5 47 58 89 5054 42 83 65 -24 48 63 -40 -20 0 20 40 60 80 100 Cabo Verde Ethiopia Gambia Ghana Morocco EU27 USA Meat /edible meat (02) Dairy (04) Meat prep. (16) Source: Based on Nguyen, Bouët, and Traoré (2020) estimations. 121Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Figure 4.41 Ad valorem equivalent of TBT measures (%) -41 17 65 78 73 53 61 86 34 81 78 75 86 37 0 146 82 14 62 94 -100 -50 0 50 100 150 200 Cabo Verde Ethiopia Gambia Ghana Morocco EU27 USA Meat /edible meat (02) Dairy (04) Meat prep. (16) Source: Based on Nguyen, Bouët, and Traoré (2020) estimations. One of the most important NTMs in the agriculture sector is domestic support. Table 4.5 shows the domestic support provided for livestock and dairy in the EU and US. Three observations merit mention. First, the total amount of domestic support is higher in the EU than in the US. Second, dairy products (skimmed milk) and some livestock products benefit from domestic support that exceeds the de minimis10 threshold, which makes these products more protected than others. Third, most of the domestic support provided by the US and EU is allocated in the WTO “green box.” In theory, these amounts must not distort trade or involve price support and must be government funded (WTO website). Yet, even though this support does not target specific products, it may have an indirect negative effect on African exports, since it makes US and EU producers more competitive. 10 Under WTO provisions, the de minimis threshold refers to the allowable level of domestic support spending — measured as a percent of the total value of production of a certain agricultural product — below which there is no requirement for reduction of support; for developed countries the threshold is 5 percent, and for developing countries it is 10 percent. Africa Agriculture Trade Monitor / 2021 Report 122 Chapter 4 - African Trade in Livestock Products and Value Chains Table 4.5 Domestic support in the US and EU United States European Union Product Product specific AMS Value of production (US$ millions) Support as a % of value of production Regime Product Product specific AMS Value of production (US$ millions) Support as a % of value of production Regime Meat Meat cattle and calves 61.7 50398.4 0.12% de minimis Meat 51.2 39641.3 0.13% de minimis Bison 0.3 120.2 0.26% de minimis Pig meat 40.5 46181.8 0.09% de minimis Goats 0.8 163.6 0.47% de minimis Sheep 59.0 6771.2 0.87% de minimis Hogs and pigs 0.5 19159.2 0.00% de minimis Other livestock 75.2 n.a. - 75.2 Sheep and lambs 2.3 711.9 0.33% de minimis Poultry 1.5 42781.7 0.00% de minimis Dairy Dairy 0.3 38119.3 0.00% de minimis Milk 248.26 70106.31 0.35% de minimis Skimmed milk 1829.62 n.a. - 1829.617 Period Sept. 1, 2017 to August 31, 2018 July 1, 2017 to June 30, 2018 Current total AMS 4,248.7 8,180.3 Non-product-specific AMS 3,442.4 1,256.8 Total AMS commitment level 19,103.3 85,401.8 Green box 118,185 77,694.2 Source: Constructed using WTO dataset. Note: Figures are in US$ million. Figures for EU have been converted using US$1= 0.8475 Euros. AMS = total aggregate measurement of support. 123Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains RISKS TO AFRICAN LIVESTOCK SUPPLY CHAINS In addition to the challenges of a competitive global market, distortionary domestic support programs, and tariff and nontariff barriers to trade, African livestock production faces risks from a changing climate and from conflict. Climate change and conflict are the primary threats to food security in Africa, and they have a critical impact on livestock production. Climate risks Climate change threatens livestock production through numerous pathways. Higher temperatures can cause heat stress in animals, leading to reduced productivity and reproduction efficiency, and in some cases, death. Heat stress typically reduces animal feed intake and weight gain and increases animal water intake. Dairy cows and laying hens are particularly sensitive to heat stress (Kadzere et al. 2002; Nardone 2010). Though the economic impact in Africa may be difficult to assess, even relatively temperate countries already experience substantial economic losses; the US, for example, loses between $1.7 and $2.7 billion annually due to heat stress (St-Pierre et al. 2003). While indigenous livestock breeds in Africa typically have high heat-stress tolerance, research has shown that the frequency of severe heat events has increased over the past decade, and some livestock production occurs in regions where dangerous heat events will jeopardize production. Rahimi et al. (2021) estimate that 11–15 percent of milk production in eastern Africa occurs in regions that will experience moderate or severe heat stress that cripples production, and milk production per cow will decrease by up to 35 percent. Some adaptation strategies can help reduce risk, such as agroforestry or built shelters to provide shade, but this adaptation will require capital investment, extension training, and/or strong farmer-to-farmer education. Breeding and genetic selection strategies offer some promise of increasing resilience, but face trade-offs: animals bred for higher productivity in intensive production systems typically have lower heat tolerance (Lukuyu 2009). Some regions may prioritize more resilient animals, such as goats and sheep, that demonstrate higher temperature- humidity resilience than dairy cows, cattle, poultry, and swine. Already, several regions have begun prioritizing more resilient animals, as evident in the large share of live goat, camel, and sheep exports from Africa. In addition to heat events, reduced quantity and quality of forage or feeds (IFAD 2010), reduced water availability, and increases in livestock diseases related to climate change will heighten risks to livestock production. Changes in precipitation and temperature affect the spread of vector- borne pests and diseases affecting livestock, and create greater risk for people, particularly those in close contact with livestock, as climate change exacerbates the risk of zoonotic pathogens and zoonoses (Godde et al. 2021). Beyond livestock production, higher temperatures, increased humidity, and increased frequency of extreme weather events put additional stress on animals during transportation and worsen conditions for storage and distribution, increasing risks to food quality, safety, and shelf-life that will put Africa at an added disadvantage in livestock processing. Extreme climate events and variability may also disrupt regular trade patterns or damage essential transportation infrastructure (Godde et al. 2020). As climate change marginalizes more African cropland, arid and semi-arid regions now used for crops may be shifted to grazing, since grass yields may be less affected than crop yields (Jones and Thornton 2009). At the same time, the world must grapple with minimizing global greenhouse gas (GHG) emissions, one-third of which come from food systems, including emissions from livestock production that account for 14.5 percent of total global anthropogenic emissions (Gerber 2013). 124 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains Conflict Extreme weather events, aridity, and desertification have decreased grazing land, heightening land competition in some regions. Weak government regulation of pastoralism and poor land management have further aggravated land-related tensions. The African Union estimates that 270 million African pastoralists compete for land and water with crop production, mining, and other interests (AU 2013). Regions in the Sahel and East Africa especially have experienced extreme farmer–herder conflicts. Research shows a direct correlation between drought in pastoral areas and conflict in neighboring agricultural areas; this suggests that displacement of pastoral groups caused by low precipitation in their home region leads to agro-pastoral conflict (McGuirk and Nunn 2020). In addition, the number of regions that have experienced conflict events roughly doubled from 1989 to 2018, while the number of months of regional drought recorded annually has risen sharply. Figure 4.42 explores the relationship between conflict events and regions well- suited to both nomadic/seminomadic pastoralism and agriculture. The conflict zones overlap with many top livestock production regions. Figure 4.42 Shared suitability for pastoralism and agriculture, with number of conflict events, 1989–2018 Source: Reprinted with permission from McGuirk and Nunn 2020. Note: Spatial distribution of “shared suitability” is equal to 1 if land is perfectly suited to both agriculture and pastoralism, and zero if it is not suited to either. Righthand map includes violent conflict events in each cell from 1989–2018, as measured by Uppsala Conflict Data Program (UCDP); it includes two-sided battles and one-sided attacks that produce at least one fatality. 125Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains CONCLUSION This chapter examined the defensive trade interests of African economies in meat and live animals, dairy, and poultry value chains. The African continent is a net global importer of all three product groups. Our findings suggest a large heterogeneity among African countries in terms of the performance in these value chains. Moreover, informal trade is an important component that must be taken into consideration when studying the livestock sector in Africa. In terms of trade policy, NTMs are particularly cumbersome for meat, dairy, and poultry. Some sanitary regulations are prohibitory for African producers and processors, especially those with limited capital to ensure pasteurization or other processing or storage for improved food safety and shelf-life. Many governments, including the EU countries and US, provide high levels of domestic support for dairy and other livestock producers. For African products to become more competitive, they must address these trade barriers and raise their country-level agricultural investment in order to match the high productive capacity and coordination of global competitors. Government investment in livestock value chains could make Africa more regionally competitive and would align with the African Union’s Malabo Declaration goal of investing 10 percent of national public expenditures in support for the agriculture and service sectors (AU 2014). Governments could work to reach this goal by investing in sanitary measures and pasteurization equipment, making these accessible for smallholder farmers, as well as improving access to markets, infrastructure, extension services, and farmer-to-farmer education strategies. Finally, foreign direct investment in the agriculture sector might also help improve the competitiveness of African countries. Indeed, such investments might help boost mechanization and increase technical and managerial spillover (Husmann and Kubik 2019; Pingali 2007). While strengthening livestock value chains has promising economic potential, the sector must contend with the associated risks of climate change and conflict, as well as livestock’s high GHG emissions compared with other food products. Africa must simultaneously embrace and seek investment for lower GHG production methodologies, invest in climate adaptation, and take strong government regulatory action to prevent resource conflicts over land and water. In addition, equity in the growth of African livestock value chains is a major concern, both for producers and surrounding affected communities, and for African consumers and environmental equity. As African demand for livestock products increases, policymakers should bear in mind not only the human health benefits of small amounts of animal-source foods for dietary health, but also their diminishing returns as the proportion and quantity of animal-source food increases within a complete diet. A small amount of animal-source foods offers substantial nutritional benefits for a healthy and productive life; high consumption often puts consumers at risk of chronic disease, and also contributes to pushing our environment beyond its planetary boundaries (Springmann et al. 2018; Willet et al. 2019). 126 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains REFERENCES Agriprofocus. 2014. “Investors Guide: Poultry in Zambia.” www.agriprofocus.com/zambia AU (African Union). 2013. Policy Framework for Pastoralism in Africa. AU. 2014. Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods. Cabrera, R., M. Cochran, L. Dangelmayr, G. D'Aguilar, K. Gawande, J. Lee, I. Speir, and C. Weigand. 2010. “African Capacity Building for Meat Exports: Lessons from the Namibian and Botswanan Beef Industries.” Currents: International Trade Law Journal 19 (55). Gerber, P.J., H. Steinfeld, B. Henderson, A. Mottet, C. Opio, J. Dijkman, A. Falcucci, and G. Tempio. 2013. “Tackling Climate Change through Livestock: A Global Assessment of Emissions and Mitigation Opportunities.” Rome: Food and Agriculture Organization of the United Nations (FAO). Godde, C.M., D. Mason-D’Croz, D.E. Mayberry, P.K. Thornton, and M. Herrero. “Impacts of Climate Change on the Livestock Food Supply Chain: A Review of the Evidence.” Global Food Security 28: 100488. Hayenga, M.L. 1998. “Cost Structures of Pork Slaughter and Processing Firms: Behavioral and Performance Implications.” Review of Agricultural Economics 20 (2): 574–583. Husmann, C., and Z. Kubik. 2019. “Foreign Direct Investment in the African Food and Agriculture Sector: Trends, Determinants, and Impacts.” ZEF Discussion Papers on Development Policy No. 274, University of Bonn, Center for Development Research (ZEF), Bonn. IFAD (International Fund for Agricultural Development). 2010. Livestock and Climate Change. Livestock Thematic Papers. Rome. International Food Policy Research Institute. 2019. 2019 Global Food Policy Report. Washington, DC: International Food Policy Research Institute. Jones, P.G., and P.K. Thornton. “Croppers to Livestock Keepers: Livelihood Transitions to 2050 in Africa Due to Climate Change.” Environmental Science and Policy 12 (4): 427-437. Kadzere, C.T., M.R. Murphy, N. Silanikove, and E. Maltz. 2002. “Heat Stress in Lactating Dairy Cows: A Review.” Livestock Production Science 77: 59–91. Latino, L.R., U. Pica-Ciamarra, and D. Wisser. 2020. “Africa: The Livestock Revolution Urbanizes.” Global Food Security 26: 100399. Little, P.D. 2005. “Unofficial Trade When States Are Weak: The Case of Cross-Border Commerce in the Horn of Africa.” Research Paper No. 2005/13, UNU-WIDER, Helsinki. Lukuyu, B.A., A. Kitalyi, S. Franzel, A.J. Duncan, and I. Baltenweck. 2009. “Constraints and Options to Enhancing Production of High Quality Feeds in Dairy Production in Kenya, Uganda and Rwanda.” ICRAF Working Paper No. 95, World Agroforestry Centre, Nairobi. McGuirk, E.F., and N. Nunn. 2020. “Nomadic Pastoralism, Climate Change, and Conflict in Africa.” NBER Working Paper No. w28243, National Bureau of Economic Research, Cambridge, MA. 127Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains Nardone, A., B. Ronchi, N. Lacetera, M.S. Ranieri, and U. Bernabucci. 2010. “Effects of Climate Change on Animal Production and Sustainability of Livestock systems.” Livestock Science 130: 57–69. Nguyen, D.B., A. Bouët, and F. Traoré. 2020. “On the Proper Computation of Ad Valorem Equivalent of Non-tariff Measures.” Applied Economics Letters. https://doi.org/10.108 0/13504851.2020.1864273 Pingali, P. 2007. “Agricultural Mechanization: Adoption Patterns and Economic Impact.” In Handbook of Agricultural Economics, eds. R. Evenson and P. Pingali, v.3, chpt. 54, 2779– 2805. Elsevier. Rahimi, J., J.Y. Mutua, A.M.O. Notenbaert, K. Marshall, and K. Butterbach-Bahl. 2021. “Heat Stress Will Detrimentally Impact Future Livestock Production in East Africa.” Nature Food 2 (2): 88–96. Springmann, M., M. Clark, D. Mason-D’Croz, K. Wiebe, et al. 2018. “Options for Keeping the Food System Within Environmental Limits.” Nature 562 (7728): 519–525. St-Pierre, N. R., B. Cobanov, and G. Schnitkey. 2003. “Economic Losses from Heat Stress by US Livestock Industries.” Journal of Dairy Science 86: E52–E77. Willett, W., J. Rockström, B. Loken, et al. 2019. “Food in the Anthropocene: The EAT–Lancet Commission on Healthy Diets from Sustainable Food Systems.” Lancet 393 (10170): 447–492. http://www.fao.org/faostat/en/ http://www.fao.org/faostat/en/ 128 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains APPENDIX Table A4.1 List of HS codes by value chain Code Description Meat Live animals Horses, mules and hinnies, asses 10121 Horses; live, pure-bred breeding animals 10129 Horses; live, other than pure-bred breeding animals 10130 Asses; live 10190 Mules and hinnies; live Cattle, buffalo, other bovines 10221 Cattle; live, pure-bred breeding animals 10229 Cattle; live, other than pure-bred breeding animals 10231 Buffalo; live, pure-bred breeding animals 10239 Buffalo; live, other than pure-bred breeding animals 10290 Bovine animals; live, other than cattle and buffalo (i.e. bulls) Swine 10310 Swine; live, pure-bred breeding animals 10391 Swine; live, other than pure-bred breeding animals, weighing less than 50kg 10392 Swine; live, other than pure-bred breeding animals, weighing 50kg or more Sheep     10410 Sheep; live Goats     10420 Goats; live Camel     10613 Camels and other camelids Meat carcasses and cuts   Bovine meat carcasses and cuts 20110 Meat; of bovine animals, carcasses and half-carcasses, fresh or chilled 20120 Meat; of bovine animals, cuts with bone in (excluding carcasses and half-carcasses), fresh or chilled 20130 Meat; of bovine animals, boneless cuts, fresh or chilled 20210 Meat; of bovine animals, carcasses and half-carcasses, frozen 20220 Meat; of bovine animals, cuts with bone in (excluding carcasses and half-carcasses), frozen 20230 Meat; of bovine animals, boneless cuts, frozen Other meat carcasses and cuts 20311 Meat; of swine, carcasses and half-carcasses, fresh or chilled 20312 Meat; of swine, hams, shoulders and cuts thereof, with bone in, fresh or chilled 20319 Meat; of swine, n.e.c. in item no. 0203.1, fresh or chilled 20321 Meat; of swine, carcasses and half-carcasses, frozen 20322 Meat; of swine, hams, shoulders and cuts thereof, with bone in, frozen 129Chapter 1 - Overview Africa Agriculture Trade Monitor / 2021 ReportChapter 4 - African Trade in Livestock Products and Value Chains Chapter 4 - African Trade in Livestock Products and Value Chains 20329 Meat; of swine, n.e.c. in item no. 0203.2, frozen 20410 Meat; of sheep, lamb carcasses and half-carcasses, fresh or chilled 20421 Meat; of sheep, carcasses and half-carcasses (excluding carcasses and half-carcasses of lamb), fresh or chilled 20422 Meat; of sheep (including lamb), cuts with bone in (excluding carcasses and half-carcasses), fresh or chilled 20423 Meat; of sheep (including lamb), boneless cuts, fresh or chilled 20430 Meat; of sheep, lamb carcasses and half-carcasses, frozen 20441 Meat; of sheep, carcasses and half-carcasses (excluding carcasses and half-carcasses of lamb), frozen 20442 Meat; of sheep (including lamb), cuts with bone in (excluding carcasses and half-carcasses), frozen 20443 Meat; of sheep (including lamb), boneless cuts, frozen 20450 Meat; of goats, fresh, chilled or frozen 20500 Meat; of horses, asses, mules or hinnies, fresh, chilled or frozen Offal, salted or prepared meats 20610 Offal, edible; of bovine animals, fresh or chilled 20621 Offal, edible; of bovine animals, tongues, frozen 20622 Offal, edible; of bovine animals, livers, frozen 20629 Offal, edible; of bovine animals, (other than tongues and livers), frozen 20630 Offal, edible; of swine, fresh or chilled 20641 Offal, edible; of swine, livers, frozen 20649 Offal, edible; of swine, (other than livers), frozen 20680 Offal, edible; of sheep, goats, horses, asses, mules or hinnies, fresh or chilled 20690 Offal, edible; of sheep, goats, horses, asses, mules or hinnies, frozen 20860 Meat and edible meat offal; of camels and other camelids (Camelidae), fresh, chilled or frozen 20890 Meat and edible meat offal; n.e.c. in chapter 2, fresh, chilled or frozen 20910 Fat; pig fat, free of lean meat, not rendered or otherwise extracted, fresh, chilled, frozen, salted, in brine, dried or smoked 20990 Fat; poultry fat, not rendered or otherwise extracted, fresh, chilled, frozen, salted, in brine, dried or smoked 21011 Meat; salted, in brine, dried or smoked, of swine, hams, shoulders and cuts thereof, with bone in 21012 Meat; salted, in brine, dried or smoked, of swine, bellies (streaky) and cuts thereof 21019 Meat; salted in brine, dried or smoked, of swine, n.e.c. in item no. 0210.1 21020 Meat; salted, in brine, dried or smoked, of bovine animals 21091 Meat and edible meat offal; salted, in brine, dried or smoked, and edible flours and meals of meat or meat offal, of primates 21092 Meat and edible meat offal; salted, in brine, dried or smoked; edible flours, meals of meat or meat offal, of whales, dolphins, porpoises (of order Cetacea); manatees, dugongs (of order Sirenia); seals, sea lions, and walruses (of suborder Pinnipedia) 21093 Meat and edible meat offal; salted, in brine, dried or smoked, and edible flours and meals of meat or meat offal, of reptiles (including snakes and turtles) 21099 Meat and edible meat offal; salted, in brine, dried or smoked, and edible flours and meals of meat or meat offal, other than of primates, whales, dolphins, porpoises, manatees, du- gongs, seals, sea lions, walruses, reptiles (including snakes and turtles) 130 Chapter 1 - OverviewAfrica Agriculture Trade Monitor / 2021 Report Chapter 4 - African Trade in Livestock Products and Value Chains 160100 Meat preparations; sausages and similar products, of meat, meat offal or blood, and food preparations based on these products 160210 Meat preparations; homogenised preparations of meat, meat offal or blood 160220 Meat preparations; of the prepared or preserved liver of any animal (excluding homo- genised preparations) 160241 Meat preparations; of swine, hams and cuts thereof, prepared or preserved (excluding homogenised preparations) 160242 Meat preparations; of swine, shoulders and cuts thereof, prepared or preserved (excluding homogenised preparations) 160249 Meat preparations; of swine, meat or meat offal (including mixtures), prepared or preserved, n.e.c. in headin