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Five ways to enhance agricultural markets in hungry regions of East and West Africa

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Causes of livestock deaths

Causes of livestock deaths, figure reproduced in ILRI-AGRA book: Towards priority actions for market development for African farmers: Proceedings of an international conference, Nairobi, Kenya,13-15 May 2009. Nairobi (Source of figure: J McPeak, PI Little and C Doss. 2010. Livelihoods in a Risky Environment: Development and Change among East African Pastoralists, Routledge Press, London.)

With food shortages being predicted for dryland communities in both East and West Africa this year, it seems an appropriate time to revisit a major way African experts see that the continent can feed itself: Get Africa’s markets working.

Three years ago, 150 of the world’s leading market experts gathered in Nairobi, Kenya, to document the best ways to drive agricultural market development in sub-Saharan Africa. Both the proceedings of this international conference, Towards Priority Actions for Market Development for African Farmers, held 13–15 May 2009, and a synthesis of its outcomes, Priority Actions for Developing African Agricultural Markets, were published last year by ILRI and the Alliance for a Green Revolution in Africa (AGRA).

The synthesis of this major African markets conference begins by referring to the sudden escalation in food costs that began in late 2010 and persisted into 2011—the second time in only three years that rapid food price rises, caused by a combination of production shortfalls and market failures causing dramatic gaps between supply and demand, rocked developing countries worldwide. With Africa’s long-term struggle with food insecurity, this continent and its economies and people are especially vulnerable to any sudden rise in food prices.

Even before the price shocks of 2008 and 2011, expert opinion had begun to coalesce on the centrality of agriculture in addressing African hunger and poverty. Much of the discussion has focused on increasing agricultural productivity through improved crop varieties and animal breeds, along with increased access to inputs and veterinary services, to boost farm yields. And, indeed, with crop and livestock yields on African farms typically a fraction of that in other regions, there appear to be big opportunities for new breadbaskets and milk sheds emerging across the continent.

But it will not be enough to simply produce more food from Africa’s fields and grazing lands. First, most Africans—including most smallholder, and even subsistence farmers—are net purchasers rather than growers of food.  Also, as more and more people migrate from rural to urban areas, more and more Africans are relying on markets to meet their food needs. And because most rural as well as urban Africans spend a significant proportion of their income on food, even modest increases in food prices can tip millions of them into poverty.

Efficient and vibrant agricultural markets would help. But Africa’s agricultural markets suffer from a dearth of processing and storage facilities, pricing information, smallholder credit, and transport. These create inefficiencies that both raise prices for consumers and restrict sales opportunities for farmers, who are stopped from selling their food surpluses in nearby food-deficit regions.

View or download the full proceedings of this international conference:
Towards Priority Actions for Market Development for African Farmers, 13–15 May 2009, published by ILRI and AGRA, 2011.

and a synthesis of the outcomes of the conference:
Priority Actions for Developing African Agricultural Markets, published by ILRI and AGRA, 2011.

Five recommendations
The following five recommendations, highlighted here for their special pertinence to the drylands of East and West Africa, are presented in case studies published in the ILRI-AGRA markets book:
1 Support village seed trade in semi-arid areas
2 Manage pastoral risk with livestock insurance
3 Employ ICTs to raise smallholder income
4 Embrace informal agro-industry
5 Encourage intra-regional trade

Details of these recommendations follow.
1 Support village seed trade in semi-arid areas
Section 2 of the proceedings volume, Seed and Fertilizer Markets, includes a case study of the utility of Tapping the potential of village markets to supply seed in semi-arid Africa in Mali and Kenya. This paper, written by Melinda Smale, (Oxfam America), Latha Nagarajan, Lamissa Diakité, Patrick Audi (ICRISAT), Mikkel Grum (Bioversity International), Richard Jones (ICRISAT) and Eva Weltzien (ICRISAT), shows that village markets have the potential to supply high-quality pigeon pea and millet seed in semi-arid areas of Kenya and Mali, respectively.

The problem: Periods of seed insecurity occur in remote, semiarid areas when spatially covariate risk of drought is high and many farmers fall short of seed. In these remote environments, seed systems are typically informal, and farmers rely on each other for locally adapted varieties. They are not reliable clients for private seed companies because they purchase seed irregularly. Less improved germplasm has been developed for semiarid environments because of the high costs of breeding and supplying seed—a situation that has worsened with decreasing public funding for agricultural research. In the Mali study, village markets assure a supply of seed of identifiable, locally adapted, genetically diverse varieties as a final recourse in a risky environment where there are as yet no reliable formal channels, for which competitive varieties have not yet been bred, and the potential of agro-dealers to supply certified seed has not yet been exploited. In the Kenya study, well-adapted varieties have been bred, but no formalized channels of seed provision exist for pigeon pea and agro-dealers are active in selling improved varieties of maize and vegetables. In both studies, farm women are major seed trade actors. Interestingly, the characteristics of seed vendors and the locations of seed programs—not the price of seed—tend to determine the quantities of seed sold. The authors argue for strengthening and linking both formal and informal systems for non-hybrid dryland crops.

Some solutions: Several approaches piloted recently are potential candidates for improving the supply of good-quality seed on a large scale.

The West Africa Seed Alliance (WASA) and the Eastern and Southern Africa Seed Alliance (ESASA) work to help local entrepreneurs expand existing seed companies and create new ones.

Since private seed companies do not yet operate in the sorghum- and millet-based systems of the Sahel, where state agencies are underfunded, scientists at the International Crops Research Institute for the Semi-Arid Tropics (lCRISAT) have tested several models that draw on the comparative advantages of farmer organizations.

2 Manage pastoral risk with livestock insurance
Section 3 of the ILRI-AGRA markets proceedings, Strengthening Finance, Insurance and Market Information, has two case studies of particular relevance to the food problems facing the drylands of West and East Africa.

First is a report on Insuring against drought-related livestock mortality: Piloting index-based livestock insurance in northern Kenya, written by ILRI’s Andrew Mude and his partners Sommarat Chantarat, Christopher Barrett, Michael Carter, Munenobu Ikegami and John McPeak.

The problem: Climate extremities pose the greatest risks to agricultural production, with droughts and floods not only causing crop failures but also forage and water scarcity that harms and kills livestock. The number of droughts and floods has risen sharply worldwide in the last decade, with disaster incidence in low-income countries rising at twice the global rate. In much of rural Africa, where water harvesting, irrigation and other similar water management methods are under developed, the impacts of climate change are expected to be especially pernicious.

A solution: In the last several years, new ways to manage weather-related agricultural risk have been developed. Of these, index-based insurance products represent a promising and exciting market-based option for managing climate-related risks faced by poor and remote populations.

This paper describes research to design commercially viable index-based livestock insurance for pastoral populations of northern dryland Kenya, where the risk of drought and drought-related livestock deaths is high.

The analysis indicates a high likelihood of commercial sustainability in the target market and describes events leading up to the pilot launch in Marsabit District in early 2010. The paper concludes that this insurance tool has largely succeeded in helping Marsabit’s livestock herders better manage their risk of drought. Growing interest from both commercial and development partners is helping to take this instrument to other arid and semi-arid districts in Kenya and other countries and regions.

3 Employ ICTs to raise smallholder income
The same Section 3 of the ILRI-AGRA book offers a case study from West Africa, written by Kofi Debrah, coordinator of MISTOWA, supporting the Role of ICT-based management information systems in enhancing smallholder producers’ incomes.

The problem: Smallholder African farmers typically have little access to reliable marketing outlets in which to sell their surplus produce at remunerative prices. Furthermore, their ability to respond quickly to market opportunities is constrained by lack of labour, credit, market information and post-harvest facilities. As a result, West African farmer incomes from agriculture are low and variable and little agricultural produce is traded in the region.

A solution: A project funded by the United States Agency for International Development (USAID), ‘Strengthening Regional Networks of Market Information Systems for Traders’ Organizations in West Africa’ (MISTOWA), helped build a private-public partnership to develop and deploy an ICT-based market information system that improved farmers’ access to markets. Some 12,500 agricultural producers and traders from 15 West African countries benefited from the project, with the beneficiaries reporting USD4,080 in benefits, or USD4.33 per dollar of donor funds invested.

Evidence from the beneficiaries suggests that access to real-time market information provides smallholder farmers with incentives for investing in agriculture.

 

4 Embrace informal agro-industry
Section 4 of the markets book, High-Value Commodities and Agroprocessing, includes a paper by ILRI scientists Amos Omore and Derek Baker on Integrating informal actors into the formal dairy industry in Kenya through training and certification.

The problem:  Throughout the developing world, most food produced by smallholder farmers is delivered and processed by an ‘informal’ agro-industry, which is the principal source of food for most poor consumers and a major source of employment of poor people as traders and service providers. In spite of this, agro-industrial policy has historically tended to displace this informal sector with a formal one featuring relatively large-scale and capital-intensive production and marketing. Other policy concerns, such as public health and municipal planning, have further selected against informal agribusiness, particularly livestock’s informal agro-industry.

A solution: This paper presents a case study of interventions in the Kenyan informal milk industry that led to changes in dairy policy that in turn reduced poverty levels in the East African country. The paper identifies the informal agribusiness sector as fertile ground for alleviating poverty and supporting vulnerable groups.

Policies do well to embrace informal agro-industry, the research indicates, while helping it transform itself into a more formal industry.

The ILRI scientists show that the informal dairy industry can respond well to consumer demand for quality, particularly for safe food, and, when unjustified policy barriers are removed, can compete well when price alone becomes the basis of competition. These achievements support much conjecture in the development literature about the centrality of markets, and access to them, for pro-poor development and the idea that pro-poor markets rely heavily on policy and institutional change. The lessons of this project are being transferred to other informal commodity sectors (goats, beef cattle and pigs) in Africa and Asia and the policy changes seen in the Kenya dairy project have been adopted across the East African region.

5 Encourage intra-regional trade
Section 6 of the markets book, Encouraging Regional Trade, includes a paper on The impact of non-tariff barriers on maize and beef trade in East Africa. The paper is written by Joseph Karugia (ILRI and ReSAKSS-ECA), Julliet Wanjiku (ILRI and ReSAKSS-ECA), Jonathan Nzuma, Sika Gbegbelegbe, Eric Macharia, Stella Massawe, Ade Freeman, Michael Waithaka and Simeon Kaitibie.

The problem: In 2004, the East African Community member states established an East African Community Customs Union, committing them, among other things, to eliminate non-tariff barriers to facilitate increased trade and investment flows between member states and to create a large market for East African people. However, several such trade barriers are still applied by member states and there exists little reliable information about how, and how much, these non-tariff barriers are actually hurting regional trade. This study identified the existing non-tariff barriers on the trade of maize and beef in East Africa and quantified their impacts on trade and citizen welfare in the region. The study found that the main types of non-tariff barriers within the three founding members of the East African Community (Kenya, Tanzania and Uganda) are similar and include administrative requirements, taxes/duties, roadblocks, customs barriers, weighbridges, licensing, corruption and transiting.

Some solutions: The study recommends taking a regional approach to exploit economies of scale by eliminating non-tariff barriers, since they are similar across the member countries and across commodities. Specific policy recommendations include streamlining administrative procedures at border points to improve efficiency; speeding up implementation of procedures at point of origin and at the border points; and implementing monitoring systems to provide feedback to relevant authorities on progress in removing unnecessary barriers to trade within East and Central Africa. The welfare analysis of the study shows that abolishment or reduction of the existing non-tariff barriers in maize and beef trade increases trade flows of maize and beef within the East African Community, with Kenya importing more maize from both Uganda and Tanzania and Uganda exporting more beef to Kenya and Tanzania. As a result, positive net welfare gains are attained for the entire East African Community maize and beef sub-sectors.

These findings give compelling evidence in support of the elimination of non-tariff barriers within the East African Community Customs Union.

Scientists say farmers must be linked to markets to combat Africa’s food woes

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Poultry seller in Mozambique

Poultry seller at the morning market in Chokwe, Gurue, Mozambique (photo credit: ILRI/Stevie Mann).

From dairy cooperatives, text messaging and grain storage to improved credit, transport and trade initiatives, a new book presents ‘high-payoff, low-cost’ solutions to Africa’s underdeveloped agricultural markets and chronic food insecurity.

As a food crisis unfolds in West Africa’s Sahel region, some of the world’s leading experts in agriculture markets say the time is ripe to confront the ‘substantial inefficiencies’ in trade policy, transportation, information services, credit, crop storage and other market challenges that leave Africans particularly vulnerable to food-related problems.

‘We can’t control the weather or international commodities speculators, but there are many things we can do to improve market conditions in Africa that will increase food availability and help stabilize food prices across the continent,’ said Anne Mbaabu, director of the Market Access Program at the Alliance for a Green Revolution in Africa (AGRA), which has invested US$30 million over the last four years to improve market opportunities for Africa’s smallholder farmers.

AGRA and the Nairobi-based International Livestock Research Institute (ILRI) have just released a book that features a range of studies that collectively make a compelling argument for embracing agriculture-oriented market improvements as crucial to not only avoiding future food crises but also for establishing a firm foundation for rural development and economic growth. The research was originally prepared for a conference in Nairobi in which 150 experts from around the world discussed how to ‘leverage the untapped capacity of agricultural markets in Africa to increase food security and incomes.’

Its publication comes as international aid groups are rushing assistance to Niger and other nations of the African Sahel—a narrow but long belt of arid land south of the Sahara that stretches across the continent—where a combination of high food prices and poor weather has left some 14 million people without enough to eat. The food problems in the Sahel are emerging just as African governments and aid groups say they have stabilized a food crisis in the Horn of Africa that at its peak in Somalia had left 58 percent of children under the age of five acutely malnourished.

But while volatility in international commodities markets is being widely cited as a major cause of the food shortages in the Sahel, there is growing evidence that at least some of the food price fluctuation in Africa is caused by domestic factors.

Recent research—led by Joseph Karugia, Coordinator of the Regional Strategic Analysis and Knowledge Support System for Eastern and Central Africa (ReSAKSS-ECA) at ILRI, and colleagues at the Association for Strengthening Agricultural Research in Eastern and Central Africa (ASARECA)—examining food price volatility in Eastern Africa suggests domestic factors are playing a role as well. The researchers found that over the last few years, even when global prices have receded, domestic prices in the region have remained high. For example, while global maize prices declined by 12 percent in the last quarter of 2008, in Kenya, Tanzania, Ethiopia, Zambia and Rwanda, they increased.

The study finds food price volatility in these countries is at least partly due to barriers and policies impeding the flow of food among markets in the region and between the region and global markets.

‘We need to consider what can be done within Africa to reduce our vulnerability to food-related problems,’ said ILRI’s interim deputy director general for research Steve Staal, an agricultural economist with expertise in smallholder farming systems. ‘Improving regional and sub-regional agriculture markets is one way we can increase food security and the impact of even minor improvements could be impressive. Just as it doesn’t take a big rise in food prices to tip millions of Africans into poverty, it does not require a sharp move in the other direction to generate huge benefits.’

The book from the markets conference outlines a number of ‘high-payoff, low cost’ initiatives that combine ‘innovative thinking’ and ‘new technology’ along with policy reforms to give farmers an incentive to boost production—and the means to make their surplus harvests more widely available and at an affordable cost.

For example, the Smallholder Dairy Project, a collaborative project between ILRI and research and development partners in Kenya, catalyzed some 40,000 small-scale milk vendors to generate an extra US$16 million across the Kenya dairy industry by seeking policy changes and providing practical training that made it easier for them to comply with national milk safety and quality standards. Prior to the initiative, smallholder dairy farmers were not realizing either their production or income potential because complex and costly food safety standards reduced participation in formal milk markets.

‘Smallholder farmers and herders in Africa need a combination of investment in infrastructure and services, along with regulatory changes to take full advantage of growing agriculture market opportunities,’ said Staal. ‘And since smallholders produce most of the milk, meat, vegetables and grains consumed in Africa, improving their participation in agriculture markets—particularly as populations gravitate away from rural areas to urban centers—is key to the continent’s food security.’

For example, a warehouse receipt program operated by the Eastern Africa Grain Council and Kenya’s Maize Development program is offering farmers two things they previously lacked: a place to safely store surplus harvests and easier access to credit. Research has shown that on average, 25 to 50 per cent of crops produced on African farms spoil in the fields and in East Africa alone up to USD90 million worth of milk is lost per year due to spoilage.

Lack of credit is also limiting the ability of African farmers to produce and sell more food. One important aspect of the warehouse receipt program is that it allows farmers to get credit using the deposited grain as collateral. They can use the credit to purchase such things as farm inputs for the next planting or meet immediate cash requirements.

‘We understand that credit is crucial for expanding production on African farms—as it is everywhere in the world—which is why AGRA is working with commercial banks to unlock millions of dollars in loans for smallholder farmers across Africa,’ said Mbaabu.

AGRA’s partnerships with Standard Bank, NMB Bank (Tanzania), and Equity Bank (Kenya) were modeled on an initiative by the Rockefeller Foundation in Uganda that had only a 2 per cent default rate. ‘This shows that investing in African farmers makes good business sense,’ said Mbaabu.

The book also discusses initiatives that are using post-harvest processing facilities and information technology to improve market opportunities. An analysis of processing facilities in Tanzania that make chips and flour from cassava—a crop many smallholder farmers can produce in abundance—found that they were profitable even when dealing at 50 per cent of capacity. Research in Northern Ghana found farmers were getting 68 per cent more for their harvests after using a service that provides a steady stream of pricing, market, transportation and weather information via text message.

On the policy front, the market experts see an urgent need to confront the ‘hodge-podge of tariffs’ and the numerous export restrictions and customs requirements that make it hard for areas of Africa where there are food surpluses to serve those in food deficit. Critically, they recognize that private investors are in many cases playing the lead role in new investments for market development and services.

Policy-makers need to shift emphasis from a traditional regulatory approach to one of co-investment to leverage private sector activity, supporting appropriate infrastructure and information systems,’ says Staal.

A recent report from the World Bank on trade barriers in Africa recounted how in Zambia, the grocery store Shoprite spends USD20,000 per week securing import permits for meat, milk and vegetables. And its trucks carry up to 1,600 documents to meet border requirements. Overall, the Bank report estimates African countries are forfeiting billions of dollars per year in potential earnings by failing to address barriers to the flow of goods and services.

‘When many people think of a food crisis in Africa, they picture crops withering in the field or dead or dying livestock, but rarely do they think about the market issues that are part of the problem as well,’ said Namanga Ngongi, president of AGRA. ‘African farmers face many challenges in the field and pasture but they will continue to lack the means and the incentive to boost crop and livestock yields if we continue to neglect our underdeveloped agriculture markets.’

The book, African agricultural markets: Towards priority actions for market development for African farmers, and synthesis document are available for download here.

The Alliance for a Green Revolution in Africa (AGRA)
is a dynamic partnership working across the African continent to help millions of small-scale farmers and their families lift themselves out of poverty and hunger. AGRA programmes develop practical solutions to significantly boost farm productivity and incomes for the poor while safeguarding the environment. AGRA advocates for policies that support its work across all key aspects of the African agricultural value chain—from seeds, soil health and water to markets and agricultural education.

The International Livestock Research Institute (ILRI)
works with partners worldwide to help poor people keep their farm animals alive and productive, increase and sustain their livestock and farm productivity, and find profitable markets for their animal products. ILRI’s headquarters are in Nairobi, Kenya; we have a principal campus in Addis Ababa, Ethiopia, and 13 offices in other regions of Africa and Asia. ILRI is part of the CGIAR (www.cgiar.org), which works to reduce hunger, poverty, illness and environmental degradation in developing countries by generating and sharing relevant agricultural knowledge, technologies and policies. This research is focused on development, conducted by a Consortium of 15 CGIAR centres working with hundreds of partners worldwide, and supported by a multi-donor Fund.

 More on the book

Download the full book or individual sections

How can we solve Africa’s recurrent food supply and demand ‘paradoxes’?

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Pounding maize in Mozambique

Farmer Jocia De Sousa pounds maize for her daily meal in Muchamba Village, Mozambique. Improving food distribution, deepening the level of competition and enhancing market transparency by sharing information on  food stocks can cushion the poor against spiralling food prices (photo: ILRI/Mann).

Food prices have been on the decline for decades, but the tide has now turned. Consumers everywhere are seeing a growing share of their income go towards buying simple staple foods. Those most hurt by this turn of events are poor people living in poor countries.

Rises in food prices in 2007 and 2008 led to riots in many countries over food shortages. Prices came down after that but are now rising again.

As reported in Allianz, ‘the reasons for the high prices are many.

Milk prices have spiked in China, for example, because a growing middle class is discovering lattes and other dairy goodies. Indians must endure higher costs for rice because of higher gas prices and transportation costs which include hiring services like towingless in case of emergency. And the rising cost of tortillas and many other corn-based products can be pinned at least partly on a booming U.S. ethanol fuel industry, which now consumes about a fifth of the U.S. corn harvest each year.’

A recent (January 2011) announcement by the United Nations Food and Agriculture Organization said its food price index for December 2010 was at an all-time high, foretelling of a possible food crisis this year.

Scientists are increasingly warning of a connection between climate change, falling crop yields, high food prices and social tension, like the discontent now spreading across North Africa and the Middle East, which has been blamed at least partly on widespread poverty exacerbated by escalating costs of food

‘Climate-change-driven drought, falling crop yields and competition for water are fuelling conflict throughout Africa and elsewhere in the developing world,’ says Christiana Figueres, the executive secretary of the United Nations climate office, in an article in the New York Times.  According to Figueres, ‘the increasingly unpredictable weather will lead to falling agricultural production and higher food prices, resulting  in food insecurity in coming years unless governments and other actors focus on addressing climate change.’

In parts of Africa, falling food production, rising food costs and the resulting food insecurity are increasingly common as droughts and floods, for example, become more frequent. In many of these countries, however, climate change is not wholly responsible for food insecurity. What is also at least partly responsible are trends in food supply and demand that also drive up prices.

In Kenya, for example, a drought occurring in the north of the country this year is affecting pastoralists by killing many of their animal stock and making their remaining animals unproductive. The last severe drought here occurred just 1.5–2 years ago, in 2008–2009. But at the same time, in other parts of Kenya, farmers with surplus food are surprised at media reports that the country is experiencing a drought. The government has intervened to improve food distribution in the country and avert a national crisis.

Poor food distribution systems are one of the ‘paradoxes’ that increase food insecurity in developing countries. Using the Kenyan case as an example, Roger Thurow, a senior fellow for global agriculture with the Chicago Council on Global Affairs, says poor food distribution is common because ‘most of the hungry are in the fringes of the economy’ as a result of years of neglect of agricultural development, which has left many without ‘buying power’ that would attract surpluses, enabling the laws of supply and demand to operate and move the food around in the economy.

This situation, Thurow explains, leads to another problem commonly seen in Africa: ‘during times of high prices, farmers often lose rather than gain.’ This is because smallholder farmers are often net buyers of the very food they produce. In Kenya, many farmers pay school fees and buy seeds and fertilizers with income from selling farm produce. Many sell their grains (mostly maize, which is a staple in Kenya) not based on market needs, but rather to meet urgent financial demands at a time when demand for their produce is low. Later, they are forced to go back to buy food for their families, when demand has peaked and they end up spending more money than they made in the first place.

‘This paradox plays itself out with spectacular regularity,’ says Joseph Karugia, coordinator of the East and Central Africa node of an Africa-wide initiative that reviews trends in African agricultural development known as the Regional Strategic Analysis and Knowledge Support System (ReSAKSS), which is based at the International Livestock Research Institute (ILRI). ‘Low prices to farmers at harvest time and high prices during the “hungry season,” when they have to buy food staples from the market.’

Farmers also lose rather than gain during times of high prices because ‘domestic and regional food staple markets are not integrated and market forces are unable to effectively stabilize commodity prices,’ Karugia says.

A third paradox sometimes results when farmers, holding on to their produce hoping for higher prices, end up losing their food to spoilage while hunger ravages other areas of the country.

Though agricultural development in Africa has improved since the last food crisis in 2007–2008 and the continent seems better prepared for a food crisis now, high food prices are still a major threat to food security in the continent.

‘African countries need to respond quickly,’ says Obiageli Ezekwesili, World Bank Vice-President for Africa, warning that countries that are heavily dependent on food imports (of wheat for example) such as Mozambique and Mauritania need enough food to cushion themselves against spiralling prices, which could lead to social unrest.

Ezekwesili, however, sees the growing demand for food worldwide as an opportunity for Africa ‘to grow its agricultural sector by improving its business climate and put in place adequate infrastructure [that] attracts responsible investments into the sector.’ Rather than using legislation to control the prices of food, he suggests, ‘deepening the level of competition, enhancing market transparency by improving the quantity and quality of information in terms of food stocks, and “light touch legislation” to curb “speculative activities that are hostile to the poor.”’ He sees these options as a safer bet for ensuring stable food prices across the continent.

‘The continent also needs to focus more on ‘integrating regional food staple markets and improving transport links to make food distribution cheaper and faster,’ says Karugia. ‘And we need to put in place the right policies that will encourage the private sector to invest in food marketing over the long term.’

—

Read the latest brief by the Regional Strategic Analysis and Knowledge Support System (ReSAKSS): http://ilrinet.ilri.cgiar.org/Datafiles/files/ReSAKSS-ECA/Trends_of_staple_food_prices_in_ESA_2007-2010.pdf

For more information:

http://globalfoodforthought.typepad.com/global-food-for-thought/2011/01/roger-thurow-outrage-and-inspire-african-paradox.html

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:22830744~pagePK:146736~piPK:226340~theSitePK:258644,00.html?cid=3001_2

http://foodcrisis.foreignpolicyblogs.com/2011/01/22/lester-brown-food-crisis-2011-is-here/

Researchers call for regional approaches to deal with high food prices

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Malawi, Nr Dedza, Khulungira village

Researchers in eastern and southern Africa are calling for a new regional and integrated approach to address high food prices associated with global food shortages. They are doing this to help prevent a repeat of the global high food price crisis of three years ago.

Under the leadership of the Association for Strengthening Agriculture Research in Eastern and Central Africa (ASARECA), a regional body that seeks to transform agriculture and improve livelihoods, a team of researchers from key national, regional and international organizations in eastern and southern Africa (ESA) have determined that a ‘regionally coordinated response . . .  is potentially more effective in responding to the food price crisis than individual country responses.’

This is one of the key findings from a 2009 study that investigated food-price changes in the national and regional markets in eastern and southern Africa, which would provide an ‘evidence base for effective policy action.’

Joseph Karugia led a core team of researchers who were coordinated by the Regional Strategic Analysis and Knowledge Support System-East and Central Africa (ReSAKSS-EA), which is based in Nairobi, Kenya, at the International Livestock Research Institute (ILRI). Karugia says that ‘Regional blocks can become effective avenues for policy creation and implementation because they offer a much wider and stronger platform to address the challenges posed by the global food price crisis and to exploit the opportunities that high food prices may offer.’

Between 2007 and 2008, most countries in the region (and across the globe) experienced a rise in food prices that threatened the livelihoods of many of the region’s poor. Causes of the rise in prices were attributed to rising incomes and growing uses of food grains for bio-fuel production and animal feeds. In addition, an increasing world population and urbanization, coupled with high agricultural input prices, reduced world stocks of food staples and exports. Declining agricultural resources also contributed to the low supply of food.

Unlike past food-price spikes, such as those in the mid-1990s, where only a few commodities were affected, the recent rise in prices saw substantial increases in the price of the world’s key cereals, oilseeds and dairy and meat products.

For resource-poor farmers and consumers in Africa, high prices translated into higher costs of living occasioned by the increase in the prices of basic foods and staples such as maize, rice and wheat. Prices of different foods across many countries in the region went up by between 11 and 50 per cent between March 2007 and March 2008.

In the wake of the crisis, ASARECA brought a team of key researchers together in a study to find out ‘the magnitude and implications of food prices’ in the region. ‘One of our key aims was to come up with practical short-, medium- and long-term options for governments and other stakeholders for addressing the problem posed by the crisis,’ Karugia says.

The researchers analyzed trends and outlooks in individual countries as well as the region and presented evidence about the regional food situation. They also explored connections between high domestic food prices in this period and global food prices and examined regional and national dimensions of food-price increases and how they related to food security in the region.

From the study findings, presented in a paper, ‘Responding to the food crisis in eastern and southern Africa: policy options for national and regional action’, researchers argue that the considerable scope offered by regional blocks such as the East Africa Community (EAC), the Common Market for East and Southern Africa (COMESA), and the Southern Africa Development Community (SADC) provides an opportunity to create and implement regional policies and strategies to improve food production, distribution and availability in ways that individual countries could not handle alone.

The findings of this research suggest that new ways of approaching food distribution can improve food security in the region by for example, enabling improved regional trade that would allow easier movement of foods, especially ‘non-tradeable’ commodities such as bananas, shipped from countries where they are readily available to countries where consumers face food shortages. This model of food distribution could effectively deal with challenges that result from failure of staple crops such as maize. This way, the report says ‘the income effect of rising food prices could be dampened if it is relatively easy for the household to substitute one staple food whose price is already rising with a cheaper food product that is nutritious and as easy to handle as the previous one.’

Findings from this study provide thought-provoking perspectives useful to policymakers and governments in managing the frequent food crises in the region.

The findings highlight the important role of regional trade, Domestic food prices are, to a large extent, determined by local and regional demand-and-supply conditions; if policies on informal trade were improved, this region’s food security would also improve. The researchers note that an inability of households to find alternative cheaper nutritious foods would lead to ‘lower resource allocation towards non-food items’. This would then affect other sectors, such as education, health care and water and sanitation, with the ‘eventual deterioration of human capital and overall household welfare.’

Although rising food prices are contributing to food price inflation, the researchers note that the domestic markets in the ESA region are resilient and are not always directly affected by global events. Arguing that the best way to address the food price crisis is to do so regionally, they say policies should aim to ‘increase household purchasing power, have no negative impact on food supply response and should not reduce income of poor food sellers.’

This study calls for paying renewed attention to the agricultural sector, which is essential for improving production. It also notes that high food prices provide incentives to the private sector to invest in the agricultural sector. However, productivity increases will require significant and sustained investments in agricultural research and extension, as well as development of agricultural and general infrastructure along with credit and risk-management instruments.

The complete findings of this research can be accessed on https://cgspace.cgiar.org/bitstream/10568/184/1/resakss%20workingpaper27.pdf

For more information please visit the websites of ResaKSS and ASARECA.