Updated on 2/27/2003 - 

Marketing and Global Trade Facilitation

IN ORDER TO guide the Consultative Process this Proposed AU Commission on Global Economic Integration (GEI) Research and Information System on the Consultation process with collaborative efforts and supports of all stakeholders, AU communities and member States partners is implementing for review the interim Agricultural Marketing and Global Trade System (AUAMTS).

The AUAMTS System is proposed to be an Act of the AU Assembly Parliament for the purpose of operating a regional food reserve with emphasis on capacity building for private sector through institutionalised assistance and promotion of joint ventures between the AU communities and private sectors.

The AUAMTS System is meant to be a collaborative player in the global markets by putting in place to adopt price discovery mechanisms and be a lean self-sustaining organisation. It is intended to meet the expectation of regional farmers and impact positively on food security, marketing and trade facilitation. AUAMTS is set to be the buyer of the last resort with its first mandate being to maintain strategic reserves at regional level by engaging in input marketing, trade and financing with the collaborative efforts of regional and international Donors.

Sustainable efforts will be engaged to maintain adequate level of funding, avoid political interference, implement modern, proven and secured technological systems to prevent fraudulent transactions and cater for the marketing and trading needs of farmers.

The AU communities and member Sates have continued to see a minimal contribution of the agricultural sector to real growth and a failure to meet the regional requirements in food as evidenced by the substantial food security situation in most AU Eastern and Southern member Sates (Lesotho, Malawi, Mozambique, Swaziland, Zambia, and Zimbabwe...) that is currently taking place and been seen over the past decade.

Other factors contributing to this situation has do with gaps in services and investment in the AU member States agricultural sector. The private sector has been unable to expand beyond its current levels of coverage in the provision of food services due to constraining factors such as unclear policy signal from the involvement of responsible member States' agencies and inexistence of a policy making and food security managing body at regional level.

The help to AU communities affected by the lack of a coordinated policies and managing body has remained essentially  emergency packages granted by the World Bank Group and International Donors. A critical situation which could worsen over a long period in the future.  

The benefiting of the above mentioned emergency packages have therefore been restricted mainly to accessible areas in AU effected communities - leaving to hunger strikes and despairs many remote rural areas.

It is against this current and future live and death food security situation that this Proposed AUAMTS wants to establish as the agricultural marketing and trade facilitator and regional food reserve entity that will be semi-autonomous and will focus on improving regional crop marketing, trade and food reserve security in partnership with the private sector and will maintain a regional strategic reserve.

The key objectives of the Proposed AUGEIP Interim Agricultural Marketing and Global Trading System (AUAMTS) is to enhance food security by providing production, marketing and trade support at regional level  with global commercial "linkages" with the private sector and  administrating regional strategic reserve stocks.

The functions of the AUAMTS will mainly be regional and global marketing and markets facilitation all produces, maintenance of a regional strategic food reserve and managing produces and agricultural storage facilities. 

The AUAMTS will encourage private sector participation in crop marketing and promote economically viable industrial  production, marketing and trade at regional level.

No price controls will be introduced or uniform prices but shall influence prices of selected crops through the volume of purchases and sales it buys and trade into the regional markets, and stores between seasons through the proposed AU Regional Food Security Reserve (AURFSR). 

The AUAMTS will also interface with cooperatives, other farmer organisations and the private sector through regional markets,  trades, and bulking centers including other forms of partnerships.

Relating to the actual, short and long term food security situation, the selected commodities for AUAMTS crop marketing, trade and Regional Food Security Reserve (AURFSR) will be maize, sorghum, millet, rice, cassava, cross-board vegetables, meat and fish (dry and non-dry), cooking oil, salt, sugar and non-food essential items. Other crops will be chosen depending on availability of funds and markets and trades development potential.

The volumes expected to be traded, areas of purchase and sale procurement and payment modalities to be used is mainly electronically and are listed bellow.Other traditional distribution methods (member States government's gazette and other medias in the the AU communities) will also be listed. 

Marketing and trade services will be provided in the form of promotion of grades, standards, provision of regional and global markets information and the promotion of "linkages" between various actors in the regional and global markets.

The proposed AU Regional Food Security Reserve (AURFSR) functions will be to maintain and administer a Regional Strategic Food Reserve for selected produces items and crops that will ensure total Regional and National stocks for a minimum period of four months.

The proposed AUAMTS will sell, trade and buy stocks of selected produces items and crops as and when the markets requires through AUAMTS System and all other available channels.

It will also collaborate with institutions involved in early warning, disaster management, food relief and other food security programmes including contracting farmers to grow selected produces items and crops for the proposed AU Regional Food Security Reserve (AURFSR). 

Utilisation, renting out and building of storage facilities will be an important activity and will raise income for the maintenance and repairs of facilities and building of new ones.

The proposed AUAMTS "Participants" are National  ministries of AU member Sates such as Agriculture, Commerce trade and industry, Legal Affairs, Finance and Planning, Transport and Communications, Farmers Union, Rural communities; Regional; International Institutions; Cooperatives; Farmer Organisations; Traders; Processors; Agro-NGO Forum and the private sector.

With three divisions comprising of: 

- The proposed Selected Agro-Produces Items, Crops Marketing and Trade System AUGEIP AUAMTS System.

- The proposed Regional Food Security Reserve System AUGEIP AURFSR System. 

-The proposed interim Agricultural, Natural Resources and Manufacturing Research and Information Development Global Network and Systems UAGEIP-ANMRIDS Global Stock Exchange Network System

All staff exception of members of the proposed AU Commission on Global Economic Integration (GEI) Research and Information System on the Consultative Process (AUGEIP) are contract and will not be considered civil servants.

The Proposed AUGEIP Commission  strongly emphasizes the use of modern, proven and secured technological systems to aid in the Consultative Process, for preparation and implementation of projects, for day to day management, controls  and to prevent fraudulent transactions and corruption, designed to fulfill the requirements of all stakeholders needs to openness and good governance:

They are interim comprehensive Communications and Information Management Systems designed and implemented to handle the following AUGEIP Consultative Process tasks: 

I) Project Co-ordination, Co-operative, Planning functions: These are intended to help Agribusiness, Industry product transformers, Service providers, Buyers, Traders and Investors support Development Programme duties:

This system includes the following components in a database storage and retrieval system:

- Project preparation Documents database sub-system :

a) Reports of all the components of the project.

b) Safeguard studies according to acceptable Bank guidelines.

c) The database will identify all the fiduciary documents and consultants selected for all the studies.

- Project Status database sub-system:

a) The database will identify the projects being considered, action taken on them and activities.

b) Reports on details work plan with clear benchmarks of the project.

c) Ad hoc reports on specific project preparation process:

- Tasks identification of each project by region

- Reporting capabilities to:

- Institutional investors; Private investors; Financial institutions, World Bank

-Pre-appraisal and appraisal missions reporting capabilities

- Project implementation preparation of the action plans, implementation, reporting capabilities during the implementation and follow up reporting including:

- Project Implementation manual (PIM)

- Project procurement manual (PPM)

- Hand book for community based Micro-projects

- Reports on contacts with concerned Ministries of member States where the project takes place and with other Agencies in connection with the project preparation, implementation and follow up tasks

- Consultants' study reports on the project and consolidation

- Recommendation to the financing institutions, government, private investors and national, regional and international level implementation arrangements reports

- Report of project appraisal missions

- Budget information database sub-system:

This database will describe:

- The early budget of each project in line item form. It will identify revenues by source and expenditures by purpose and geographic distribution

- Project budget for Project Preparation Office (PPO) activities

- Details estimated costs of the funding to be given to selected projects levels with outputs to be achieved with time bound schedule

- To head quarters levels with outputs to be achieved with time bound schedule

- Provinces levels with outputs to be achieved with time bound schedule

- Districts levels with outputs to be achieved with time bound schedule

- Issue Briefs database sub-system:

This database will include short summaries and analyses of important issues of interest to all stakeholders and the AU Assembly. It will also feature selected relevant articles taken out of news papers, magazines and wire services in the region where the implementation will take place.

- Legal status/ Institutional brief database sub-system:

This database will store and report:

- Program Steering Committee reports

- Board of management reports

- Secretarial and cross board financial and management status reports

II) Production and Processing Systems and Tools: These address some of the specifics systems needs for AU farmers organisations, natural resources producers and manufacturing units and extend practical technological, management, and production modern capabilities to each specific group:

This system includes the following components in a database storage and retrieval system:

- Project Status database sub-system (Logical component and relationship to above Project preparation Documents database sub-system):

a) Capabilities to store and report review of consultants' studies by  Agribusiness, Industry product transformers, Service providers, Buyers, Traders and Investors with stockholding interest in the outcome of the project

b) Capabilities to research, store and report national, regional and global research and  consultants' specific review studies on trade market AND global capital markets linkages

c) Capabilities to report (identification) of pilots that be eligible for support under Agricultural Commercialization and Investment Fund and other:

- Details preparation of the pilot operations selected for Agribusiness, Industry product transformers, Service providers, Buyers, Traders and Investors partnerships with investors

- details guidelines for designing and preparing project proposals under the accepted common practices and procedures for accessing global finances. These guidelines could be developed for Rural, District, Provincial, City or State investment and capability is provided within the system to expand to include criteria and requirements for income generating activities, including business and marketing plans.

d) Capabilities to prepare, store and report draft implementation manual and provide for review by appraisal mission (requirement for project negotiation). 

e) Capabilities to prepare, store and report Handbook for community level implementation and provide electronically and via Internet the draft to all stakeholders and concerned interests (including banks, investors on the global markets and institutions) for review prior to the arrival of the appraisal mission:

- Built-in system capability to monitor and ensure the implementation of the project related actions leading to appraisal

- Built-in capability to electronically and via Internet coordinate the preparation and guided multi-projects fields appraisals by stakeholders and concerned interests (including banks, investors on the global markets and institutions).

- Online Training and library database sub-system (Logical component and relationship to above Project preparation Documents database and Sub-systems):

- Included with the system is a comprehensive and complete built-in Online Training and library database sub-system capable of carrying out electronically and via Internet a training needs assessment to  all stakeholders and concerned interests (including banks, investors on the global markets and institutions) and District Councils selected to be included in the program in the first year and capability to to electronically prepare, store and produce a phased capacity building training program including a time bound schedule for implementation. 

III) Management Information and Trading Systems and Tools: These finally ensure that business transactions, management and reporting are done and reported in line with generally accepted accounting principles:

- Log procurement of goods and services for the Project Preparation Office (PPO) studies

- Log procurement of goods and services for the PPO.

This system includes the following components in a database storage and retrieval system:

- Accounting Controls and Reporting database sub-system (Logical component and relationship to above Project preparation, implementation and management sub-systems):

- This includes components dealing with management reporting and controls, salaries, payrolls, inventory, and purchasing and accounting sub-systems: 

a) Secured capabilities to electronically co-ordinate and controls the utilisation of financial resources available to the PPO:

- Effective and prudent maintenance of electronic accounting books to ensure accurate recording of business transactions, preservation of accounting records and timely provision of electronic accounting information to all stakeholders via secured Internet and other means of modern communication.

b) Secured capabilities to timely and diligently effect electronically all payments approved by relevant authorities:

- Built-in effective and diligent monitor expenditure system to ensure that all expenditures are in line with approved budgets and work plans, and in accordance with accounting procedures, and financial and regulations.

- - Built-in effective system for the issuance of imp rests and and staff advance to ensure compliance with relevant regulations and circulars, and conditions of service.

c) Secured capabilities to electronically prepare and submit as required periodic financial statements/reports, and appropriate accountings for purposes of auditing and management information.

d) Built-in secured capabilities for the appropriate authority to electronically prepare and submit Withdrawals Applications to the World bank and other Financial Institutions and ensure timely replenishment of the (project preparation Facility - PPF) Special Account.

e) Built-in secured capabilities to ensure prompt responses to audit queries and observations to enhance proper accountability.

- Project Implementation database sub-system (Logical component and relationship to above Project preparation Documents and  management database sub-systems):

a) Capabilities to prepare, store and report consultant studies on  AU farmers organisations, natural resources producers, manufacturing units and extension services.

b) Capabilities to electronically co-ordinate studies via Internet on AU farmers organisations, natural resources producers, manufacturing units extension including the review of the national and regional legislative provisions of the above stakeholders.

c) Capabilities to electronically advise via Internet  the concerned State's Ministries, and the World bank on matters of  AU farmers organisations, natural resources producers, manufacturing units and extensions within the framework of the project and funding support.

d) Built-in capability to monitor and ensure the implementation of agreed actions on AU farmers organisations, natural resources producers,  manufacturing units and extensions:

- Build-in capability to prepare, store and report details of the proposed awareness orientation program including the estimated costs, terms of reference for the contracted consultant, the invitation to bid and draft contract with a time bound implementation schedule according to project plan.

- Built-in capability to select and inform and electronically inform via internet and other modern communication means all Districts that will be covered by the implementation of the project within specific time frame according to the implementation plans.

- Online Training and library database sub-system (Logical component and relationship to above Project preparation Documents database and Sub-systems):

- Included with the system is a comprehensive and complete built-in Online Training and library database sub-system capable of carrying out electronically and via Internet a professional and business skills orientation program for development of the curriculum, the terms of reference for contractors, draft invitation to bid and draft contract and the estimated likely costs of providing the training.

In view of the above proposed policy on Marketing and Global trade Facilitation, the following proposed comprehensive interim Agricultural Marketing and Global Trade System UAGEIP-ANMRIDS Global Stock Exchange Network System is proposed  by this proposed AU Commission on Regional and Global Economic Integration (GEI) for implementation review to all stakeholders, AU communities and member Sates.