Project Brief INVESTMENT CLiMATE | WORLD BANK GROUP 90701 Opening Seed Markets in the East African Community Project At A Glance EXPECTED Results and Impacts CountrIES/Region BURUNDI, KENYA, RWANDA, TANZANIA, UGANDA/SUb-SAHARAN AFRICA • Harmonizing seed standards is the Product INDUstRY-SPECIFIC INVEstMENt CLIMAtE/ first step in eliminating non-tariff AGRIbUsINEss barriers for seeds and increasing theme COMPETITION POLICY trade. This project aims to increase intraregional trade of at least two The East African Community (EAC) investment climate program crop seeds by 10 percent. includes a component that removes constraints to seed markets and regional trade to expand business beyond national • Eliminating non-tariff barriers is boundaries and open markets to competition. This component expected to increase competition and reduce market concentration will help the program facilitate intraregional trade of certified by delivering higher quality seeds at seeds, increase access to quality seeds for EAC farmers, and boost lower prices and generating savings productivity. for farmers. Context The signing of the EAC Common Market Protocol in 2010 has been instrumental in facilitating the free movement of goods, labor, services, and capital in the EAC. It has helped improve the investment environment as well. The EAC is gaining momentum as Africa’s most promising regional economic community where small member states IN PaRtNeRship With World Bank Group have the potential to build economies of scale and become were selected: maize, sorghum, soybean, sunflower, and more competitive. However, existing regulatory constraints groundnut. Maize and groundnut are important for food in the region continue to impede economic activities security reasons, while sorghum, soybean, and sunflower within and across borders. Agribusiness, an important have commercial value in the brewery and oil industries. sector for the region, is faced with regulatory constraints Partnering with established EAC institutions already that negatively impact agriculture inputs such as seeds. working toward the harmonization of seed standards, Agriculture productivity is low in EAC countries. For investment climate teams faciliated regional working instance, 0.36 to 0.89 tons of maize are produced per acre group meetings. The teams provided essential assistance in Kenya, Tanzania, and Uganda, compared to 1.17 tons in guiding discussions and aligning draft certification per acre in South Africa. Producers have limited access standards with international best practices and other to quality seeds; adoption of improved seed varieties is regional agreements. This technical guidance included 18 percent in Tanzania and 35 percent in Uganda. Seed advice on provisions to allow for outsourcing of companies in the region face a number of constraints due inspections and lab testing, as well as contract farming for to the application of inconsistent seed standards and test seed production. methods that hinder trade and firms’ abilities to enter The teams continue to provide advisory services in national new markets and compete on a level playing field. These consultation workshops aimed at arriving at a regional issues discourage investment in the sector and reduce the position that will be submitted to the EAC Standards likelihood of it reaching full market potential estimated Committee for approval. National consultations serve a at $490 million per year (equivalent of 330,000 tons of dual purpose: they facilitate the integration of stakeholders certified seed) for staple food crops. in the sector, allowing for clarity around current seed certification practices, and they create a forum for Our Role discussions about national seed policies. They also Investment climate teams of the World Bank Group have benefit countries that have not yet established national been active in supporting the effort to develop EAC seed certification standards, such as Burundi and Rwanda. standards. After consultation with stakeholders, a review The government stakeholders are optimistic that with of the EAC’s list of priority standards pending revision, and the harmonization of the seed certification standards, analysis of trade flows, standards for the following seeds the region’s seed sector will experience an improved investment climate, a boost in agricultural productivity for key crops, and a strengthened regulatory framework for increased trade and competition. Overall, the project “I wish to thank the World Bank Group for expects to reduce administrative costs for trading seeds sponsoring and coordinating the development across borders, expand markets, improve investment in of the certification standards for key seeds in seed production, ease the adoption of quality seeds, and, the region. Seeds are important as they are key ultimately, improve agricultural productivity. inputs for production. Hence, the need for high quality standards.” PHILIP NZAIRE Quality Assurance Director Rwanda Bureau of Standards Contact Tania Begazo | Economist | Investment Climate Email: TBegazo@worldbank.org | TEL: + 254 20-293-7393 | www.wbginvestmentclimate.org