Government has commissioned a study to identify foodstuffs that are highly consumed in a bid to set a price ceiling on foodstuffs. This according to government will curb the escalating food prices in the country.
Irish, sugar, wheat, meat, bananas, rice, posho, beans, cassava, sorghum, millet have all hit record prices, some by 60 per cent increase.
All fingers are now pointing at Abademuka cooperative, a society with tentacles countrywide for partly causing the price hikes.
According to the Ministry of Commerce, the cooperative society is a monopoly. This, according to the Ministry hoards the produce to cause shortage on the market.
"The Abademuka cooperative and their members with their exploitative practices through monopolising the sale of agriculture produce are to be fought," Vincent Karega, State Minister for Industry and Investment Promotion said.
The minister called the intermediaries under the cooperatives ‘exploitative’ at all markets since they buy at low prices speculate or hoard, tax farmers and above all, release when prices are high.
However farmers are also to blame. Karega said, "Farmers do not keep any harvested crops to maintain supply during the periods of no harvest thus leaving the entire market unsupplied."
Monique Nsanzabaganwa the Minister of Commerce said the demand for cereals in the country is greater than the supply in spite of a projected production increase of 2.6 percent.
Food and Agriculture Organisation of the United Nations (FAO) last year projected the world cereal demand to surpass supply this year, pushing down stocks to an uncomfortably low level with a steady upward trend in prices.
This is further hit by the competing uses of cereals and sugarcane like in the production of alternative sources of energy and animal feeds especially in emerging economies of China and India.
These economies have higher consumption of meat and dairy products yet there also an increase in demand for biofuels production.
"Therefore the basic law in economics is at play; when demand outweighs supply, naturally prices do increase. This justifies the increased prices for the cereals (bread, rice) as same on world trends," Nsanzabaganwa.
The ignorance of consumer associations about foodstuff prices and price discriminations is also believed to have given broker cooperatives advantage for exploitation.
The minister said the ministry is finding strategies for strengthening consumer associations in order to challenge unfair practices in the market.
Nsanzabaganwa also said that the price increases can partly be associated with the increase in petroleum prices; she was however quick to add that some times this has been brown out of proportion, for speculative reasons.
The increasing prices are also attributed to climatic changes worldwide. The weather vagaries have hurt food production causing a decrease in food supplies yet its demand greatly increases as the population swells. Kandeh K. Yumkella, Director General of United Nations Industry Development Organisation (UNIDO), said, "Climate change will impose great stresses on the world’s ability to feed ever growing populations. This challenge brings new threats to arable land areas, livestock rearing and fisheries through droughts, water shortages and pollution of land, air and sea. It is, after all, agricultural and livestock production that provide the raw materials that are basic to human existence – especially food."
Reports from Uganda show that food prices have been increasing by 30 per cent in the last three months. Uganda is also a member of the East African community (EAC), where Rwanda imports some of its foods.
Therefore, Nsanzabaganwa said little can be imported from those countries and importers have resolved to go other routes such as Egypt, another Comesa country. However, logistics are too costly yet imports from outside Comesa are charged 25 per cent duty, with a bearing on their price.
"And since Rwanda imports a big percentage of foodstuffs to feed its citizens, the declining dollar has affected the importation of food through exchange rates loss," she continued.
Measures to curb
Nsanzabaganwa said the Ministry of Agriculture through the Integrated Development Programme (IDP) has programmes that will turn around agricultural sector to improve production and supply.
Government has also started a campaign to encourage farmers store some foodstuffs especially grains to be prepared for the future. The agriculture market is also to be liberalised to eliminate monopolies in the distribution chain.
Karega said his ministry is planning to set up a Market Information System (MIS), which once in place, will improve the flow of information. The system that will be inter-provincial and at districts will avail producers and citizens with agricultural produce prices from different markets.
On April 11, the Executive Director of the United Nations World Food Programme (WFP), Josette Sheeran, warned that surge in food prices could lead to increased unrest such as those witnessed recently in Haiti and other countries.
Burkina Faso, Cameroon, Egypt, Indonesia, Cote d’Ivoire, Mauritania, Mozambique and Senegal have also experienced unrest in related to soaring food and fuel prices.
He said rising prices mean less food for the hungry. A new face of hunger is emerging: even where food is available on the shelves, there are now more and more people who simply cannot afford it.
Earlier, WFP had also announced its seeking for funds to close a $500 million gap caused by the global spike in food and fuel prices, which have increased by an estimated 55 per cent since June last year.
It has also been noted that the reasons for the shortages are many and cannot be solely ascribed to a simple trade-off between biofuels and agriculture, though this may be a factor. According to the UN Economic Commission for Africa, rising food and energy prices could hurt Africa’s growth in the 21st century.
However, urgent measures are needed to ensure that short-term adverse effects of higher food prices do not impact even more alarmingly on the very poor, FAO Director-General Jacques Diouf said during first Global Agro-Industries Forum in New Delhi.