From neglect to action: Higher food prices here to stay

Higher food prices and unpredictable commodity markets are here to stay.That is the conclusion of a report from the UN Food and Agriculture Organization (FAO) and the Organization for Economic Cooperation and Development (OECD).Addressing an emergence summit on the global food crisis in Rome in June, UN Secretary General Ban Ki-moon underscored the threat of political stability and development.“Nothing is more degrading than Hunger, especially when man-made.

Saturday, October 22, 2011

Higher food prices and unpredictable commodity markets are here to stay.That is the conclusion of a report from the UN Food and Agriculture Organization (FAO) and the Organization for Economic Cooperation and Development (OECD).

Addressing an emergence summit on the global food crisis in Rome in June, UN Secretary General Ban Ki-moon underscored the threat of political stability and development."Nothing is more degrading than Hunger, especially when man-made.

It breeds anger, social disintegration, ill health and economic decline,” he told world leaders. "Only by acting together, in partnership, can we overcome this crisis, today and for tomorrow. Hundreds of millions of the World’s people expect no less”.

However, price hikes have fallen hardest on the poor in the 82 nations chosen by the United Nations as low-income food deficit countries.

Forty-two of those are in Africa. Many of these countries by now suffer high rates of hunger and malnutrition and rely on imported food even in good times.

Their governments can do little to mitigate their citizens from price shocks, lacking funds for subsidies or emergence feeding programs.

Economists say that with higher food prices, 100 million people woo add on to the 850 million around the world who are already chronically malnourished. They can also contribute to balance-of- payments problems and worsen debt in the poorest countries.

After posting strong economic growth rates in the last two years, Africa could see those gains literally eaten up by higher food costs since a big percentage of income could go to food and other consumer goods and living none for savings.

Agriculture economist Joachim von Braun, Director General of the International Food Policy Research Institute in Washington shares the view that factors such as rising oil prices, improved living standards in china and India, decades of underinvestment and declining yields in agriculture in African and other countries, which increases demand for limited world food supplies  limits the world’s ability to produce more  and increased speculations in agricultural commodity markets by large investors contributed to higher food prices.

From neglect to action- The FAO cautions, however, that high food prices are likely to go on for at least the next decade, and that long era of large world food surpluses and cheap exports that began with the Green Revolution in Asia in 1960s may be over for good.

On the ground some African governments have started different methods of stocking agriculture produce. For example Rwanda’s move to construct silos in Free Economic Trade Zone will boost the agriculture sector in terms on storage.

One of the advantages of these silos is that the Ministry of Agriculture will be able to buy seeds during harvesting season and sell them to farmers at a reasonable price during the dry season.

At the same time, this drying and storage facility will increase food security throughout the country.

Some economists have criticized the burden of export bans by major suppliers, particularly rice exporters, to protect local consumers, arguing that export controls only further restrict global supplies and drive prices higher.

Price controls have also come under fire because, experts say, they are difficult to enforce, encourage the development of black markets and reduce incentives for local farmers to grow more.

However with fears of famine and street protests in Arab countries easing and prices for rice and some other commodities are on decline.

Export controls are being lifted in some countries and the center of attention, is turning to what everyone agrees is the long-term solution to the price crisis-increasing production and food security in the poorest and hungriest countries.

On the other hand, major action need to be taken by our governments.

Such measures may include on addressing Africa’s infrastructure deficits and improving food security. In my view, the solution to higher food costs lay in boosting Africa’s domestic food production and easing supply constraints on agriculture products.

Constructing better roads that connect to agricultural fields to markets is very much important in addressing the problem of higher food prices. Our African governments need to allocate big percentage of budget to agriculture sector.
 
A National Agricultural Investment program should be launched in order to boost agriculture’s contribution to GDP while ensuring food security through targeting investments in land preparation and supply of agricultural inputs such as fertilizers and improved seeds.

In conclusion, regional integration for example East African Community in near future could alleviate higher food prices by solving infrastructure deficit in the region.

Our donors need to invest in projects that have tangible positive impacts more especially to the rural population since these  are people more affected by  the crises.

Ends