Tackling extreme concentrations in agriculture inputs and food markets in Africa is critical for sustainable development. This concentration prevails across the food value chain, from production inputs to storage, food processing, transport, and fertiliser.
Research shows that the high cost of key inputs and low farmgate prices undermine production and exacerbate the unacceptably high levels of hunger and poverty.
Participants at the recent International Competition Network (ICN) Advocacy Workshop in Kenya, hosted by the Competition Authority of Kenya, observed that combating food insecurity and poverty begins with ensuring our markets are open and fair.
Competition enforcement by regional and national authorities is necessary to unravel entrenched market concentration and enable players to participate under equal conditions.
Advocacy was also highlighted as a critical complementary tool to enforcement. Specifically, five priority advocacy priorities were identified as necessary for promoting competition in agriculture and food markets in Africa.
Research: Data is essential for understanding markets, revealing competition bottlenecks, and analysing patterns of (mis)behaviour across regions and tradeable commodities. Data should be frequently gathered from multiple sources, including government ministries, institutions, the informal sector, and industry in a form that enables a common understanding of markets, particularly in the agriculture sector.
The African Market Observatory, a consortium of researchers, supported by the Shamba Centre and competition authorities, provides a unique insight into market characteristics, price differentials, and market dynamics of staple foods across select African countries. The observatory’s scope should be expanded to include more agricultural commodities and countries.
A value chain approach is recommended to better understand the interconnected market segments and address any behaviour that has restrictive effects on competition at all levels, including production costs related to input prices, barriers to transport and marketing, and the final delivery of products to consumers. A policy shift to investment in more research to incentivise increased and inclusive agricultural production and processing is key to creating jobs.
Harmful agri-food policies: Public policy has significant impacts on markets and competition. Interventions must work for fairer markets. Competition regulators should advise governments to understand how public policies may undermine efficient markets and harm consumers. Advocacy work by these agencies should include restrictions on regional competition and the potential anticompetitive conduct of competitors across countries within common markets. For instance, a proliferation of non-tariff barriers (NTBs) in recent years has undermined regional integration and exacerbated food security.
This is especially important when one country has extreme weather impacts while another enjoys favourable conditions to meet regional demand. NTBs are negatively affecting prices for consumers across borders who depend.
Multi-stakeholder partnerships: Competition regulators benefit from partnerships with other stakeholders in the agri-food sector to collect data, push for competitive markets, and enforce market rules.
Market inquiries and studies are tools through which competition authorities can gather and analyse data to diagnose market issues and make robust recommendations. The impact of such actions depends on partnerships where each stakeholder plays their role, from industry associations, research institutions, and community leaders, to government regulators as well as regional authorities.
Mobilise a network of advocates and supporters: Advocacy strategies are key to bringing attention to uncompetitive market practices and enhancing compliance. Authorities can mobilise a broad base of supporters to promote fair competition practices. Many constituencies, such as small producers, farmer cooperatives, small and medium enterprises, and consumers, are negatively impacted by uncompetitive behaviour in agri-food value chains.
More awareness and advocacy are needed in the agri-food systems space about the role of competition authorities and the need for better enforcement of competition laws and policies, and for advocacy towards governments to reform harmful trade and subsidy policies.
Make competition important for the agri-food systems: The competition space remains a relatively small and specialist group of competition authorities, researchers, and consumer lobbies. There is insufficient attention by the sustainable development community, particularly those working in food and agriculture, to the harm caused by anti-competitive markets.
Competition regulators need to reach out to these groups to explain the harm of market concentration when markets are controlled by a small number of players. Competition authorities have a duty to use a variety of media channels, such as media, to inform the public and advise policymakers, consumers, associations, and other market players - to raise awareness about the negative consequences of anti-competitive conduct.
Carin is the Executive Director of the Shamba Centre for Food and Climate and Dr Roba is the acting Director-General of the Competition Authority of Kenya.
