- Main question/s addressed
- How do trade and tax policies influence the competitiveness of local milk against imported powders?
- What policy changes are needed to promote the development of local dairy sectors in West Africa?
- How can European and West African stakeholders collaborate to strengthen local dairy value chains?
- Short description of key findings
- The import of fat-filled milk powders from Europe has significantly hampered the development of local dairy sectors in West Africa.
- Trade policies, such as low customs duties on dairy powder imports, and the Economic Partnership Agreements (EPAs), favor imports over local milk.
- Raising the Common External Tariff (CET) on imported powders and removing VAT on locally produced dairy products could increase demand for local milk, improve incomes, and generate rural employment.
- Key governance / legal / institutional frameworks that play a role
- WTO commitments and the ECOWAS Common External Tariff (CET) play a central role in the region’s trade policies.
- Economic Partnership Agreements (EPAs) between the EU and West Africa have led to market liberalization for imported dairy products, including powder.
- Tax policies such as VAT on local dairy products influence the competitiveness of local milk versus imported powders.
- Key policy frameworks that play a role
- The Regional Offensive for the Promotion of Local Milk Value Chains, launched by ECOWAS, aims to address trade and tax policy issues and boost local dairy production.
- Common Agricultural Policy of the EU.
- Issues related to competitiveness in markets that have been explored
- The impact of cheap fat-filled milk powders from Europe on local milk producers.
- The role of EU subsidies in driving down the price of milk powders, making them more attractive to West African processors than locally produced milk.
- The potential of raising tariffs on dairy imports to improve the competitive position of local dairy producers.
- Methodological approach used
A combination of statistical reviews, literature reviews, and interviews with key stakeholders from both West Africa and Europe. Country studies were conducted in Burkina Faso, Nigeria, and Senegal to analyze the dairy value chains.
- Data collected
Data on milk production volumes, import statistics from FAO, EU, and BACI databases, price surveys, and interviews with dairy sector actors (farmers, processors, cooperatives).
Models were constructed to simulate the effects of different trade and tax policy changes on the local dairy value chains.
- Impacts achieved and expected from this case study
- Immediate impacts include a better understanding of the role of trade policies in undermining local dairy sectors and potential pathways for reform.
- Expected impacts include reinforcement of the advocacy work of West-African players in demanding a higher CET in order to obtain increased incomes for local milk producers, higher employment in rural dairy sectors, reduced dependence on imports, and improved food security.
- Further case-study related documents
Case Study Leader
Oxfam België/Belgique
Local Partner(s)
The French Agricultural Research Centre for International Development (CIRAD)
Gret
SDG's Addressed
Geographical Focus and Scale
Burkina Faso
Nigeria
SenegalProduct and market focus
Focus on the local dairy value chains, particularly addressing the competition between locally produced milk and imported dairy powders, especially fat-filled milk powders.
Key stakeholders
Local cooperatives, multinational processors, West African governments, ECOWAS, and European dairy industry stakeholders, local dairy farmers, women involved in small scale dairy processing.