Tackling extreme concentration in agriculture inputs and food markets in Africa is critical for sustainable development.

Research by the African Market Observatory, supported by the Shamba Centre together with competition authorities, has found very high prices for key inputs such as fertiliser and low farmgate prices paid to farmers for produce. This undermines production and exacerbates the unacceptably high levels of hunger and poverty. Strikingly, this concentration prevails across much of the food value chain, from the inputs used for production to storage, food processing, transport, fertiliser and inflating food prices to consumers.

In this context, the Competition Authority of Kenya hosted the 2024 International Competition Network (ICN) Advocacy Workshop in February 2024 which included a focus on agri-food markets, along with climate change and sustainability, and digital platforms. The workshop provided a platform for participants to share experiences and knowledge on competition law enforcement globally. The workshop was attended by delegates from five continents (Africa, Asia, Europe, North and South America).

The ICN Workshop addressed strategic advocacy priorities to help promote competition in agriculture and food markets with an expert panel. There was a Nairobi consensus that combating food insecurity and persistent poverty begins with ensuring open and fair markets. Competition enforcement by regional and national authorities is necessary to unravel entrenched market concentration and enable all market players to participate under equal conditions.

Advocacy by authorities is a critical complementary tool to enforcement for building broad support for the competition agenda and ensuring compliance by companies. From a policy standpoint, advocacy for the government ensures that laws and policies are aimed at achieving economic growth and development through fair and inclusive markets.

The following 5 advocacy priorities were identified from the Workshop as necessary for promoting competition in agriculture and food markets in Africa and aimed at removing barriers and improving markets within the African continent.

Action 1: Invest in more data, research, and analysis

Data are essential for understanding markets, revealing bottlenecks to competition, and analyzing patterns of (mis) behavior across regions and tradeable commodities. Data need to be frequently gathered from multiple sources including relevant government ministries, research institutions, the informal sector, and industry in a form that allows a common understanding of the market, particularly in the agriculture sector markets.

The African Market Observatory provides a unique insight into market characteristics, price differentials, and market dynamics of staple foods across select African countries. The scope of the market observatory should be expanded to include more agricultural commodities and more countries. We see a value chain approach is recommended to better understand the interconnected market segments and address any behavior that can give rise to restrictive effects on competition at all levels, including production costs related to input prices, barriers to transport and marketing and delivering final products to the consumer. A policy shift towards investment in more research and data to incentivize increased and inclusive agricultural production and processing is key for creating employment opportunities.

Action 2: Reform of harmful agri-food policies

Public policy has significant impacts on markets and competition. It is essential that interventions work for fairer markets. Competition authorities need to advise governments to understand if and how public policies undermine competition, entrench market positions, or harm consumers. The advocacy work by authorities needs to include restrictions on regional competition and the potential anticompetitive conduct of competitors across countries within common markets.

A proliferation of non-tariff barriers (NTBs) in recent years has undermined regional integration and exacerbated food security. This is especially important when one country has extreme weather impacts while neighboring countries continue to have good growing conditions and can meet regional demand. NTBs are negatively affecting prices for consumers across borders who depend on food production from neighboring countries. Poorly designed subsidy programs, such as for fertiliser, can also create market distortions and reinforce fertilizer monopolies that generate excessive margins.

Action 3: Cultivate multi-stakeholder partnerships for agri-food market research and market inquiries

Competition regulators benefit from partnerships with other stakeholders involved in the agri-food sector to collect data, advocate for competitive markets, and enforce market rules. Market inquiries and studies are tools through which competition authorities can gather and analyse data to diagnose market issues and make robust recommendations. The impact of such actions depends on partnerships where each stakeholder plays their role, from industry associations, research institutions, and community leaders, to government regulators as well as regional authorities. In addition, partnerships should encompass those involved in adjacent issues, such as health and nutrition, directly impacted by agri-food markets. This will provide regulators with greater leverage to tackle issues that apply to prevailing market circumstances and fulfill consumer needs.  

Action 4: Mobilize a network of advocates and supporters

Advocacy strategies are key to bringing attention to uncompetitive market practices and seeking compliance. Authorities can mobilize a broad base of supporters to promote fair competition practices. Many constituencies, such as small producers, farmer cooperatives, SMEs, and consumers are negatively impacted by uncompetitive behavior in agri-food markets.  

Competition regulators need to reach out to these groups to explain the harm of market concentration when markets are controlled by a small number of players. Competition authorities have a duty to use a variety of channels, such as media, to inform the public and advise policymakers, consumers, associations, and other market players - to raise awareness about anti-competitive conduct and the consequences of non-compliance with the competition laws. Such advocacy initiatives, when used alongside enforcement measures, helps through public pressure to prevent anticompetitive conduct, and enhance the welfare of consumers.

Action 5: Make the case that competition issues are important for the agri-food systems

The competition space remains a relatively small and specialist group of competition authorities, researchers, and consumer groups. There is insufficient attention by the sustainable development community, particularly those working on food and agriculture, to the harm caused by anti-competitive markets.

More awareness and advocacy are needed in the agri-food systems space about the role of competition authorities and the need for better enforcement of competition laws and policies, and for advocacy towards governments to reform harmful trade and subsidy policies.

Dr. Adano Roba is the Ag. Director General of the Competition Authority of Kenya and Carin Smaller is the Executive Director of the Shamba Centre for Food & Climate, and