25 March 2008
Addis Abeba — Farmers' market power, not "greedy traders" and speculators are to blame for recent price rises, the BBC reported citing a UN assessment report, contrary to popular perceptions inside Ethiopia Prime Minister Meles Zenawi, in an address to the special parliamentary session devoted to the economy, and in particular to rocketing food prices, announced the creation of a special task force to monitor and prosecute "greedy" traders.
But the new report by the United Nations agencies concerned with food and agriculture, the Food and Agriculture Organization and the World Food Programme, says the traders are not to blame for the high prices, according to a report filed by a BBC correspondent from Addis Ababa.
The news report said the UN report noted traders were now complaining about the farmers' market power.
Meles had accused businessmen of profiteering and exploiting the situation.
"As markets get less centralized, and farmers become more sophisticated and better informed, the traders are starting to complain about the market power of the farmers," the report sited from the UN report.
The one popular perception the report does support is that farmers are now better off, and able to wait and spread their grain sales through the year, rather than having to rush everything to market immediately after harvest when prices are at their lowest," the report noted.
It said the main message of the UN report was that grain prices in Ethiopia, however much they may have risen, however unaffordable they may be to the urban poor, are still below world prices and below prices in most neighboring countries.
This, the report says, poses a dilemma in terms of government policy, according to the BBC.
Buying grain locally to give to those needing emergency aid might push up domestic prices, but while importing food from outside and giving it away or selling it cheaply could stop the price from rising, which would then encourage more and more grain to flow out across the borders to other places in the region where the price is higher, according to the report.
Subsidized wheat targeted at the poorest Ethiopians costs 90 birr ($9.5) for a 50kg bag - less than half the shop price of 4 birr/kg.
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