Tanzania is likely to benefit most from grain exports to countries within and outside of Africa as climate change increases the likelihood of severe precipitation deficits in other countries.
This is very likely so in the event of a simultaneous decrease in severe precipitation deficits in the country.
This was revealed recently by William Martin, Manager for Agricultural and Rural Development in the World Bank’s Research Group at the just-ended workshop on impacts of maize export ban and policy options hosted by the SERA policy project of USAID Feed the Future.
He said a research on Agriculture and Trade opportunities for Tanzania, Post volatility and Future climate change carried out by him, Thomas W. Hertel, Noah S.Diffenbaugh and Syud Amer Ahamed indicate that trade restrictions, like export ban, prevent Tanzania from taking advantage of these opportunities, foregoing significant economic benefits.
He said that Tanzania has the potential to take advantage of future periods of high prices but only if it refrained from export restrictions.
According to him, Tanzania’s economy has the potential to capitalise on the increasing heterogeneity of climate impacts on agriculture in the future.
Besides, such benefits will only arise if the trade policy environment changes, he said, noting that in the past, inconsistent application of export bans may have prevented Tanzania from capitalising on historical export expansion opportunities.
According to him, the World Bank (2009) also points out that export bans and other trade restrictions negatively affected private sector development and investments owing to investors’ fear of policy reversals as has been illustrated throughout Africa in the 1990s.
Permanent removal of the ban or movement to a rules-based policy mechanism as advocated by Chapoto and Jayne (2010), would remove both the policy uncertainty and the resulting price instability and would pave the way for Tanzania to capitalise on its favourable position with regard to future climate change impacts.
Considering climate change, analysis of the Coupled Model Intercomparison Project (CMIP3) archive of global climate model simulations indicates that severe dry conditions in Tanzania will most often coincide with non-dry conditions in the country’s key trading partners within Africa in the future.
However there may be decades in the 21st century projections when some countries frequently experience coinciding severe dry conditions.
Based on future predictions under climate change, Tanzania’s key trading partners will also experience increases in the occurrence of severe dry conditions as greenhouse gas concentrations rise in the 21st century, the study shows.
Tanzania is likely to experience non dry years in most of the years in which key trading partners experience severe dry conditions in the 21st century including 58 per cent of dry years per decade for South Africa and Zimbabwe and about 90 percent of dry years per decade for Australia and Mexico respectively.
There is substantial evidence that the frequency and intensity of extreme climate events may change in the coming decades and with these changes being particularly important for agriculture, sub-Saharan African countries like Tanzania are particularly sensitive to climate extremes due to their reliance on rain-fed subsistence agriculture.
Also it estimate that average maize productivity in SSA may decline by 22 per cent by mid-century and these projected declines have severe development and poverty implications given that maize is the most important staple food in Eastern Africa and the most widely traded agricultural commodity.
Apart from that there is considerable heterogeneity in the impacts of climate change across countries and so international agricultural markets may allow for pooling of the risk posed by local or national climate extremes.
Farmers in countries that are less severely affected by particular weather outcomes may be able to sell excess supply to meet the excess demand from consumers in the more severely affected regions.
Open trade regimes have the potential to reduce domestic price volatility, he said, noting that for example an open trade regime restricts the increase in food prices to the import parity price in the event of a drought and open trade also bounds price declines at export parity in the event of a favourable productivity shock.