Exchange Rate and Import/Export Policies

Some developed countries, most notably in coastal West Africa, have experienced significant imports of cheap meat and dairy products from developed countries, particularly the EU. This was caused directly by EU export subsidies and developing country import policies that tolerated these, and indirectly by overvalued exchange rates. When EU export subsidies on beef to West Africa were sharply decreased in 1993-94, and the CFA franc was devalued by 50% in 1994, there was a positive supply response from beef producers in the Sahelian countries that form the hinterland of coastal West Africa.

It is believed that the positive supply response is having long-term positive environmental effects, and in turn that the original export and exchange rate policies were having negative effects, though neither is demonstrated. The mechanisms are as follows:

- increased supply may (although the arguments, particularly concerning pastoralist production systems are complex) may be met by an increased offtake rate, particularly of males, thus lessening pressure on the rangelands,
- a long run increase in beef supply is likely (provided there is access to inputs and knowledge) to be associated with the use of improved production technologies to address scarce resources, which in semi-arid grazing systems is likely to include or imply better use of rangelands (for example, early sale of calves for stall fattening),
- the same argument applies where increased demand for milk products are met from domestic supply on semi-arid rangelands: improved production will involve intensification and less pressure on rangeland resources,
- however, inflation associated with devaluation, at least in the short-term, and increased price of beef, may increase the value of the savings and insurance values of cattle, and contribute to a build-up of herds with low offtake rates, and countervailing negative environmental pressures.

Research/Appraisal Methods

Conventional sector analysis tools must be applied to policies that effect changing demands for livestock products, combined with a) an understanding of the very complex factors governing offtake behaviour in pastoralist systems and b) of the likely environmental effects of maximising different livestock production objectives.

Options

Create price incentives for offtake and and for stratification
Establish pastoral banking systems

Key References

Moll, H.AJ. and Heerinck, N.B.M. 1998. Price Adjustments and the Cattle Sub-Sector in Central Africa, in A.J.Nell (ed.) Livestock and the Environment: International Conference, IAC, Wageningen.

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