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Key Issues and Policy Options for Sierra Leone’s Agricultural Trade




Issues: Rules of origin and lack of adequate compliance with SPS measures are undermining Sierra Leone’s existing market access for its agricultural exports. Weak infrastructure (laboratories) and institutions (standards bodies) for SPS management also affects the extent to which Sierra Leone’s agricultural exports can be developed further. Sierra Leone has not made effective use of the flexibilities in the WTO Agreement on Agriculture to provide protection for infant agricultural industry.
Policy Recommendations:


  • Negotiate more flexible rules of origin under EBA and AGOA and in the future EPA.

  • Make more use of the flexibilities in the Agreement on Agriculture to protect infant and other vulnerable agricultural industry

  • Comply with SPS standards for cocoa, ginger and other important agricultural commodities

  • Develop and enact comprehensive law and regulations on SPS, including systems and management


POLICY CONCLUSIONS AND RECOMMENDATIONS





  1. A careful mix of policy, smart incentives, institutional support, and technology applications is necessary in developing the agricultural sector in Sierra Leone, which is critical in ensuring the growth and prosperity of rural livelihoods and moving farming communities into the market economy. That said, Sierra Leone’s agricultural sector has good prospects for commercialisation. The Government of Sierra Leone (GoSL) has signalled, in important policy statements backed up by fiscal instruments and other measures that agriculture is now to be the centre piece of Sierra Leone’s growth and development. The private sector is to play a significant role in this transformation.




  1. While progress has been made on the food security front, there is still a significant agricultural potential that has yet to be tapped by the country. Lessons are therefore being learnt by the MAFFS and other actors in agriculture from the past policies and there is a move towards a more coherent approach to policy making and implementation. The proposed NSADP is a step in this direction.




  1. Because many of the measures to addressing commercialisation of agriculture are not the province of one ministry alone, the agricultural sector should therefore not be viewed in isolation, but should be seen as a key component of the economy linking other economic sectors, promoting social cohesion, and charting a sustainable development paradigm in Sierra Leone. For this reason, it will be important that the GoSL takes a holistic approach to the development of the agricultural sector.




  1. Due to the destruction of most social and economic systems in the country during the war, Sierra Leone is virtually starting from scratch. This gives the country the opportunity to chart a different path from the previous economic development model adopted a few decades ago. It would require a paradigm shift in the approach to agriculture and its role in economic development.




  1. The focus should be on development of productive capacities all along the value chain of selected products that will enable a stronger role for agriculture in the country’s development. This can take place through a strengthening of the domestic knowledge systems; further development and transformation of FBOs and SMEs to more commercial features; improvement in the scientific and research infrastructure; development of skills and institutions necessary to ensure inter-sectoral linkages; institutional collaboration and use of trade policy as a tool for further facilitating agricultural development.



  1. This paper has identified critical gaps in the infrastructure and policy framework necessary to reform the agricultural system in Sierra Leone towards a more market oriented path described above. Specific policy recommendations are set out for consideration below, and are listed in the same sequential manner, as outlined in the foregoing text, for ease of reference and efficient action.



Policy Recommendations for Commercialising Agriculture in Sierra Leone:

[This section revisits the policy recommendations outlined in each section of the paper].


Integrated Agriculture Approach

  • Develop productive capacities all along the value chain of promising agricultural products using a clustering approach (agriculture, agro-industry and agricultural services)

  • Make constant agricultural growth linkages between small and medium scale farms and local food processing industries for the tourist industry or for export


Agriculture Investment Policy

  • Target investment incentives and tax relief at each part of the value chain in agricultural production, agro-processing and agricultural services.

  • Revise the Investment Promotion Act’s package of incentives to reflect the new agricultural incentives in the 2009 GoSL budget. Disseminate the package as widely as possible.

  • Deepen the reforms in the general business climate to provide a level playing field, certainty and predictability for domestic and foreign investors.


Agricultural Financing:

  • MAFFS (and the MTI) should work with the Bank of Sierra Leone to finalise the draft Financial Sector Development Plan which envisages increased lending by the commercial banks to the private sector.

  • Establish an efficient (private sector-led) financing vehicle for long term lending to the agricultural sector, providing subsidised lines of credit for farmers and smallholders.

  • Establish an export credit guarantee scheme in the medium term to provide support to exporters of traditional and non-traditional export commodities.

  • Provide incentives for insurance companies to develop packages of crop insurance for farmers and SMEs in agricultural production.

  • Establish a regulatory framework for credit unions to operate in order to encourage savings among small farmers.


Institutions

  • SLIEPA, MAFFS and MTI should collaborate to produce selected investment and export development packages to attract domestic and foreign investors to agriculture.

  • Encourage public-private partnerships in agricultural related infrastructure and research, through the use of fiscal and other instruments.

  • Establish ‘Producer Companies’ through an amendment to the pending Companies Act.

  • Review and amend the Cooperative Societies Act 1977.
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