Lifting barriers could unlock Africa food trade: World Bank

By Lesley Wroughton

WASHINGTON (Reuters) - Africa could avoid food shortages if it reduces the tangled web of rules, fees and high costs strangling regional food trade and by putting large swathes of uncultivated land to productive use, a World Bank report said on Wednesday.

Just 5 percent of Africa's cereal imports are now provided by African farmers, according to the report released on the eve of an African Union summit on agriculture and trade in Ethiopia.

"Too often borders get in the way of getting food to homes and communities which are struggling with too little to eat," said Makhtar Diop, World Bank vice president for Africa.

The bank estimated that 19 million people are in danger of hunger and malnutrition in West Africa's Sahel region. Yet, removing cross-border restrictions could help avoid food crises if farmers were allowed to trade more easily with each other and get food to communities facing shortages.

In addition, the World Bank estimated that fewer restrictions on food trade could generate an estimated $20 billion in annual earnings for African governments.

Food trade barriers also increase the cost to the consumer and the farmer, the World Bank said. For example, farmers on holdings in Africa who sell surplus harvest typically receive less than 20 percent of the consumer price of their produce, with the rest being eaten up by various transaction costs and post harvest losses.

"This clearly limits the incentive to produce for the market," the World Bank said.

Soaring global food prices in 2008, which triggered social unrest in several African countries, highlighted the problem of decades of underinvestment in agriculture in Africa. It also stimulated interest among investors in Europe, the Middle East and Asia in Africa's untapped farming potential. Fears of land grabbing also increased.