The RATES Maize Program has the long-term objective to improve the flow and expand the availability of maize in ways that will contribute to regional market stabilization and food security. The program monitors the availability of maize throughout the region, provides improved supply and price information to traders, facilitates the flow of trade information, supports the organization of the value chain, both nationally and regionally, promotes systems of structured trade (warehouse receipts and commodity exchange), and links food aid operations with the commercial sector. RATES also collaborates with mission projects such as ATEA in Ethiopia, APEP in Uganda, and KMDP in Kenya that support expanded production and market systems.
The maize program, under the banner of “Maize without Borders”, has two key components. The first component, improved trade facilitation, is managed through the RATES Trade Office and is supported by two complementary websites: www.ratin.net, a market information site, and www.tradeafrica.biz , a trade linkage site. This component also promotes institutional formation of the grain trade value chain and the move towards structured marketing systems that is gaining momentum in the region. The second component concerns the enabling environment for trade and focuses on regional and national policies and regulations that tend to inhibit trade. RATES has initiated a joint private/public sector policy rationalization/harmonization initiative that was launched in 2003 through the auspices of COMESA and EAC. This support is managed under the policy component.
Activity 1. Build capacity within EAGC to take the lead in new and forward thinking regional grain trade initiatives. It is critical that the RATES grain program is well positioned to transition into a broader regional food staple trade initiative in 2008. This involves developing the necessary foundations for creating a more structured grain trading system and building the capacity of the Eastern African Grain Council (EAGC) to lead this effort.
RATES, in partnership with USAID Kenya’s bilateral maize project, the Kenya Maize Development Program (KMDP), will continue to provide technical assistance and direct program support to the Eastern Africa Grain Council (EAGC). The aim is for the EAGC to lead the regional grain industry into a new era of structured trade, quality market intelligence services, and harmonized policies. RATES will provide a Partners Fund grant to the EAGC to support its FY 08 program.
RATES will provide technical assistance and support for the organization to develop a funding strategy and to explore other funding opportunities. With RATES support, the EAGC is finalizing a concept paper to DFID to fund activities involved in improving the WRS financial policy and regulatory environment.
EAGC is key to the success of warehouse receipts schemes (WRS) that are now forming under various USAID bilateral activities and other donor-funded projects. By the end of RATES, all the systems and instruments will be in place that can be used by these WRS programs to harmonize these efforts.
RATES will assist the EAGC to sanction these schemes through warehouse inspection and certification, developing rules of trade, developing arbitration rules and certifying arbitrators, and developing warehouse receipt certificates. RATES is currently working with the former CEO of GAFTA to conduct a region-wide training course in arbitration, the training of arbitrators and how to avoid situations that would lead to arbitration.
To kick start this longer-term effort, RATES and KMDP will provide support for a pilot WRS program in Kenya. KMDP will provide the on-the-ground support. RATES will work with EAGC to assume the coordinating role and to work with all the stakeholders including producer/trader representatives, warehouse managers, millers, and the financial institutions to ensure that the framework is in place. The lessons learned from this activity will be used to support other regional efforts. RATES will support the EAGC to hold a warehouse receipt workshop in early FY 08 for all these programs to come together to share lessons learned and develop best practices.
EAGC will also provide support where needed to the EU funded Commodity Exchange and WRS program in Uganda. This program has expressed a strong interest in adopting the EAGC rules of trade, contracts and arbitration mechanism.
EAGC is well poised to manage the critical follow-up in 2008 to the COMESA maize standards harmonization effort currently well under way. Phase Two of the program is to use its membership to influence the legislation and adoption of the approved (through the COMESA Council of Ministers) standards at the national level and to see the process through to the final publication stage.
The leading MIS service in the East African region, the Regional Agricultural Trade Intelligence Network (RATIN), will be expanded to cover the needs of new country members (Ethiopia, Burundi, and possibly Zambia). To meet the demand of new members dealing in these other staple commodities, rice and wheat will be added to the commodities currently being tracked by RATIN. The sub-regional network, which includes cross-border and terminal market monitors and reporting systems for four East African countries, also provides a comprehensive and up-dated grain market information and analysis for a large group of registered stakeholders.
Activity 2. Provide the long-term support to structured trading systems (STS). There are several STS initiatives throughout the region which are supported by various donor and commercial entities. These initiatives are engaged in the creation and operation of warehouse receipts, commodity exchanges and collateral management. Some of these initiatives include the World Bank working in Malawi on futures options with SAFEX, USAID supporting warehouse receipt efforts in Kenya and Uganda and CFC providing financial assistance to the Zambia warehouse receipt effort. Other organizations including Rockefeller and DFID have also expressed interest in becoming involved.
RATES has recognized the need to “regionalize” these individual national-level efforts with the long-term intent to link them together for trade and to have them share their experiences during their development phases. The RATES role in this sector was strongly supported by the delegates at the Regional Grain Trade Summit and expectation is high to keep the momentum of that successful event moving. RATES will focus on the following STS tasks for the next program year: To achieve the activity results, the next steps in the process will be completed by RATES during the 2008 program year:
Promote best practices and building blocks of a viable structured trading system
Encourage and coordinate collaboration between national and regional programs working on STS
Promote and increase awareness of STS to all sector players including service providers
Promote commodity risk management tools that are available to regional grain sector players
Create "regional fraternity" with STS donors, projects and stakeholders
Update and publish status of STS programs in the region
Activity 3. Strengthen regional information, policy and network systems. The RATES trade office has been the leading regional grain trade institution in the COMESA region. This project asset should be more formally embedded into a more permanent regional structure. RATES will focus on how to transform the RATES grain trade office into a regional grain trade policy, research, and information unit or network. This could include a number of public or private options on where to house this unit. RATES will also explore options to better integrate national MIB programs into the newly formed unit and to suggest ways to improve the services and data. RATES will focus its efforts during the extension period on ensuring markets function efficiently and that policies and incentives are aimed at increasing product quality and safety standards. This effort will build upon the earlier RATES policy work that has led to regional harmonization of a number of product standards.
Regional Market Information Systems
A major limitation to regional market information, due mostly to limited resources, is the state of national level marketing information systems and the bureaus that run them. RATES will have completed a capacity assessment to determine the institutional state of the MIBs and the services they provide. RATES will collaborate with COMESA-led AMPRIP to address institutional, sustainability and technical issues and arrive at a long-term plan for regional MIS programs.
RATES will also provide limited technical and financial assistance, where appropriate, to national marketing information agencies to enable them to feed required information into the regional network on a timely basis. Such assistance will be accessed through the RATES Partner Fund.
To meet the challenges of the new staple food trade initiative, new products and services are required, especially in the field of information services. www.tradeafrica.biz will be incorporated into www.ratin.biz and be adjusted to meet the needs of STS initiatives. The site will be re-designed to better represent the regional information needs of commodity exchanges and WRS programs
Regional Maize Standards
The RATES Program will work with stakeholders to implement and complete the policy process to harmonize COMESA maize standards. National Consultative Meetings have been held in all target countries and the regional workshop has been scheduled for July 2007. The following tasks will be completed during the 2008 program year:
RATES will ensure that final documents derived from the 2007 Regional Sub-committee of Maize Standards will be submitted for approval to the COMESA Standards Committee during their meeting in Nov/Dec/2007.
The contractor will provide technical assistance as the process moves to the Council of Ministers meeting scheduled for April 2008.
Phase Two of the process is the legislation/adoption of the new standards at the national level; the contractor will work with EAGC to facilitate this through their membership. Round table meetings will be held in each target country under contractor supervision to discuss and agree on the appropriate process for implementation. RATES will also plan and implement the training of border officials and traders in the regulations.
RATES will assist in the dissemination of the new standards through the use of websites, newsletters, training courses, and official publications.
Activity 4. Facilitate the transition from informal national working groups to organized grain trade institutions. RATES will continue to meet and work with national working groups and agribusiness trade associations during FY 2008 and will be more aggressive in transforming these groups into more formal, industry driven, commercial trade associations. To date, RATES has actively supported the formation of the Malawi Grain Traders and Processors Association, and the Eastern Africa Grain Council. Similar efforts in Uganda, Zambia and Ethiopia, although promising, are still in the incubation stage. Once formed, RATES will work to empower trade associations to participate in the policy harmonization process, especially at the national level where they need to assert their expertise and influence to encourage results. RATES will provide technical and financial resources to the associations so that they can engage themselves in a broader regional approach, networking together for commercial trade, and creating forums to encourage more efficient trading systems and policy reform.
RATES will support the Malawi Grain Traders and Processors Association to influence grain trade policy in Malawi. The MGTPA has a viable annual work plan and the contractor will focus on its effective implementation.
The Agricultural Commodity Exchange for Africa opened in 2007 and is supported by the members of MGTPA. RATES views ACE as a prime example of an effectively designed commodity exchange and will provide technical and financial support to expand its operations.
Zambia and its immediate region will be assessed to determine if the EAGC concept can be replicated in that zone or if a different format should be considered. The Zambia grain sector is vibrant having replaced Zimbabwe as the regional supplier of grain (in a good year), and, if the sub-regional focus isn’t viable, then a full national value chain institution may be appropriate.
RATES will continue strengthening formal trade through organized cross-border traders. Although these groups tend to be smaller and more localized, collectively they form a viable network and significant volume. RATES will assist them to positively influence and improve cross border trading systems.
RATES will provide a package of skills and knowledge to newly formed grain trade association that, in turn, can be provided to their members. These include:
Standard contracts
Warehouse certification
Rules of trade
Product standards
Market data and updates
Business plans and operational manuals
Activity 5. Promote synergies linking food aid with commercial trade. Food aid operations, (specifically the World Food Program’s local procurement program which is the region’s largest net buyer of grain, and USAID’s Food for Peace initiative which is the region’s largest net importer of grain), are key players in grain trade operations in the region, two critical reasons to maintain a close collaborative relationship. The objective under this activity is to engage the food aid sector into the commercial trade systems, not only their use of the on-line trade sites but also the conversion of their procurement process into a more transparent and trader-friendly operation. Discussions to date have been positive and RATES is optimistic that significant results will be eventually achieved. Another goal of this activity is to gain food aid support and participation in the emerging structured market systems. Food aid agency and public sector recognition of the value of warehouse receipt systems would be an added bonus to those initiatives and would be a key element to their success. The contractor will pursue the following tasks during 2008 to implement this activity:
RATES will work with food aid agencies to gain their support for, and transition into, structured trade and finance initiatives.
RATES will work closely with USAID/FFP public/private partnership programs and collaborate on program implementation. This includes a new program activity (in the preliminary planning stage) slated for Northern Uganda. RATES is available to support this effort as required.
It is necessary to form strong linkages between food aid agencies and national and regional grain trade associations and to engage them in pilot efforts through ongoing structured trade initiatives such as the Uganda Commodity Exchange. RATES will forge these linkages through direct meetings and food security forums.
RATES will hold consultative meetings with food aid agencies, commercials traders and other stakeholders to create synergies for improved procurement and distribution systems for food aid.
RATES will assist in the linkage of local procurement of food aid in the region with commercial trade through www.tradeafrica.biz and www.ratin.net.
Deliverables:
Institutional capacity developed by the EAGC to provide support to national initiatives on setting up warehouse receipts systems and/or commodity exchanges.
By the end of the extension period, components of the RATIN market intelligence system fully managing by the EAGC.
At least 3 training events presented by EAGC on structured trading.
A regional forum conducted that brings together implementers of warehouse receipt and commodity exchange schemes to share information, develop a set of best practices and determine the best way forward for these schemes.
At least 2 sub-regional workshops held on futures trading and commodity risk management strategies.
Regional maize standards adopted by key countries involved in 80% of the regional trade of these commodities.
Web-based information Trade Information Monitoring and Reporting System (TIMRS) launched by COMESA by September 30, 2008.
An-in-house system for monitoring NTBs within the region developed by COMESA by September 30, 2008.
STR adopted by at least 5 COMESA countries by September 30, 2008.
At least 3 new grain trade associations formed and networked on a regional basis
Commercial grain is procured by WFP through a least one WRS scheme by September 30, 2008.
Smallholder producers’ ability to commercially market grain increased through support of FFP and their cooperating sponsors.
top 
