5 May 2011

Africa: Food Prices Rise to Highest Levels Since 1984

Photo: Africa Progress Panel
This graph published in the Africa Progress Report 2011 shows how steady African growth was interrupted by the global financial crisis in 2009 but is expected to regain its momentum through 2011.

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An excerpt from the Africa Progress Report 2011:

Even though several African countries are on the verge of meeting their MDG targets for hunger reduction, the continent as a whole continues to be the world's most food-insecure region. Hunger and malnutrition remain pervasive in many countries, and rising food prices are compounding the situation for millions across the continent, particularly in zones of protracted conflict and in fast-growing urban areas.

Volatility of Food Prices

Food prices are higher now than at any time since 1984. Even though the World Bank's Food Price Watch sees Sub-Saharan Africa less exposed to risks related to soaring food prices as domestic food production is increasingly replacing imports and recent harvests have been good, the price spikes have deepened existing macro and micro vulnerabilities. On the macro level, countries with a high share of food imports and limited fiscal space like Burundi are driven deeper into current-account deficits and the possibility of social unrest as they become unable to use subsidies and price controls to shield their populations from inflation.

On the micro level, higher prices make life even more difficult for Africa's poorest, who already spend between 60 to 80 per cent of their income on food. Faced with reduced access to food and increased vulnerability to the seasonality of local food prices and markets, households are forced into unavoidable compromises, such as choosing cheaper (often less nutritious) food, selling productive assets, withdrawing children from school, forgoing healthcare, or simply eating less than they need.

The recurrence of food-related crises over the last few years has focused international attention on the tragic state of food security in Africa and given rise to a number of supportive initiatives such as the G8's L'Aquila Food Security Initiative, the Global Agriculture and Food Security Program, and the World Bank's Global Food Crisis Response Program. The French G20 Presidency has also prioritized food security, and especially the moderation of speculative trading in food commodities, for the 2011 Summit in Cannes. It is planning to host the first ever meeting of the Group's Ministers of Agriculture before the Summit. In addition, there are attempts to create more transparency of food stocks held by large exporters to avoid panic caused by market uncertainty about the availability of essential commodities.

Structural Barriers to Food Security

At the same time, the fact that the number of Africans suffering from hunger had already been on the increase well before prices spiked suggests that chronic and structural problems rather than mere price fluctuations continue to underlie much of the continent's food insecurity. These problems include: disadvantageous international trade rules and subsidy regimes; a debilitating lack of essential infrastructure such as irrigation and storage systems; inadequate agricultural research; a lack of improved seeds, fertilizers, and plant protection material; poor soil and water management systems; poor access to credit and marketing services; as well as inefficient and wasteful agricultural value chains.

Agricultural productivity is also affected by social realities such as persistent poverty and insufficient access of women to land and other essential resources.

These structural barriers are increasingly compounded by global trends. In the short-term, the gap between the continent's domestic food supply and demand will widen as global consumption patterns continue to shift towards meat products, and more profitable bio-fuels supplant food crops. In the mid-to-long- term, the continent's food system will experience an unprecedented confluence of pressures, including through the reinforcing impacts of population growth, climate change and environmental degradation.

Agricultural productivity

Over the last year, African countries and their partners have increased their commitment to raise agricultural productivity on the continent, including through multi-stakeholder partnerships. For example, the Comprehensive African Agriculture Development Programme (CAADP) now has 25 signatory countries (seven more than last year) committed to spending at least 10 per cent of their national budgets on agriculture, to accelerate growth in the sector to at least 6 per cent a year. Nineteen countries have finalized Agricultural Investment Plans.

Practical efforts to boost agricultural production are beginning to yield results in many countries, including Ghana, Malawi, Mali, Mozambique and Tanzania. Focused international assistance and innovative partnerships, like the Alliance for a Green Revolution in Africa (AGRA), have helped governments to intensify production. Methods include: the introduction of high-yielding varieties of crops and improved techniques such as micro-dosing of fertilizers and drip irrigation; increased accessibility of production- enhancing inputs, credit and other financial services such as weather-indexed crop insurance; and improved markets and information.

The increasing engagement of the private sector, including through the promotion of agricultural growth corridors and agro-industrialization, will help to increase resources available for agricultural investments.

These successes remain too small to feed the continent. Global food production will have to increase by 70 per cent over the next 40 years to keep pace with population growth, and a significant part of that increase will have to come from Africa. There is an urgent need to scale up successful interventions, focus on Africa's army of smallholder farmers and increase emphasis on staple food crops. There is also a need to ensure that the growing foreign investments in Africa's arable land, sometimes referred to as "land grabs", are transparent, add to the continent's food security, benefit local farmers and communities, and avoid undermining social, environmental and governance systems.

The dire social consequences of the recent food crises have shown that efforts to improve agricultural productivity and connectivity on the supply side need to be complemented by better risk management, efficient social safety nets and targeted nutritional programmes on the demand side.

As with the implementation of agricultural development plans, national governments ultimately bear responsibility for this.

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