Ethiopia Monthly Report - January 2003 appeal fully pledged

Highlights

• The January 2003 appeal was fully pledged, making it the first time this drought year that 100 percent of food aid needs were committed. Non-food items, which are critical for recovery, still show a 10 percent shortfall, which is currently estimated at about USD 8.3 million.

• Additional food and non-food aid assistance (on top of the January appeal and amended March and April appeals) are anticipated following the on-going Pre-Harvest and Food Needs Assessment. The assessment results, which are expected at the end of July, are likely to guide food and non-food relief needs and targeting for the second half of 2003.

• While the main efforts by donors and the government have been directed towards the immediate task of saving lives in 2002/03, some attention has been paid to protecting livelihoods, in particular through trying to meet the estimated seed requirement of approximately USD 12.5 million this year. Nevertheless, a recent report from Ministry of Agriculture (MoA) indicates a remaining shortfall of seed and fertilizer in many drought-stricken areas.

• June saw erratic and below average rainfall, and hence a late onset of kiremt rains (June - September), in the eastern highlands of Tigray, Amhara and Oromiya Regions. This late onset may shorten the growing period for these areas, and may be damaging for both short and long-cycle crops, especially if the dry spell continues during the coming weeks.

• Given last year's drought, which made conditions even worse this hunger season, cereal prices have been higher than normal this June. Staple prices in selected markets are higher than they were last month, and higher than the historical average for this time of year. Because poor people spend much of their total budget on cereals, these excessive increases and fluctuations in cereal prices have a significant impact on their food security.

After a year of drought, the food aid pipeline is secure for the first time, but non-food assistance shortfalls remain

The January 2003 appeal was fully pledged, making it the first time this drought year that 100 percent of food aid needs were committed. As of 24 June 2003, all 1.4 million MT of the cereal and 94 percent of the 0.128 million MT of supplementary food (blended food) requirements were pledged. Non-food items, critical for recovery, still show a 10 percent shortfall, which is currently estimated at about USD 8.3 million. See Figure 1.

Despite the positive pledge outlook, concerns remain that only about 60 percent of the committed food assistance has been actually delivered at the national level or distributed locally. This concern is especially acute with supplementary foods because, while donors and the Government can borrow grain against pledges from the reserve, they cannot do so for blended food because the Ethiopian Food Security Reserve Administration (EFSRA) does not have supplementary foods in store. According to WFP, it takes about 4 months to transport and deliver supplementary foods to the targeted beneficiaries. There is, therefore, a significant delay between the receipt and delivery of this commodity. UNICEF reports a 15 percent shortfall of famix and unimix for targeted supplementary feeding, noting that 6,000 MT of supplementary foods were required to help 150,000 children, lactating and pregnant mothers. As of 03 July 2003, only 5,000 MT was committed.

Furthermore, as of 04 July 2003, the EFSR's stock is reported to be about 86,771 MT, which is below the minimum level of 100,000 MT set by the Government. As such, unless repayments on outstanding loans, which stand at around 217,767 MT are made, it will be difficult for agencies to obtain additional grain from the reserve for food aid distribution.

During the course of the crisis, non-food needs were not as fully assessed and understood as food requirements. Drought shocks cause food insecurity but they also result in a host of other economic difficulties. For instance, a serious shortfall of emergency water supply remains in all drought-affected Regions, with Amhara having the largest share (37 percent of the total) of unmet needs. According to UNICEF's assessment, of the 4.3 million people who required emergency water supplies in 2003, only 32 percent of them received assistance. While agriculture and livestock sectors are directly affected by drought, water shortages, resulting from drought or inter-seasonal rainfall shortages, have a significant impact on other sectors as well. For the past several months, Ethiopia's ability to generate hydro electricity has been drastically affected, causing electric power rationing in the country. As a result, the manufacturing and trade sectors (especially exports) have been severely affected.

Despite donors' extensive efforts up to this point, the two droughts in 1999-2000 and 2002-2003 have stretched the coping abilities of the existing indigenous and government systems, and the return of rains does not mean immediate recovery. Additional food and non-food aid assistance (on top of the January appeal and amended March and April appeals) are, therefore, anticipated following the on-going Pre-Harvest and Food Needs Assessment. The assessment results, which are expected at the end of July, are likely to guide food and non-food relief needs and targeting for the second half of 2003.

Despite donors coordinated efforts, seed shortfalls remain in many drought-stricken areas

While the main efforts by donors and the government have been directed towards the immediate task of saving lives in 2002/03, there has been some attention paid to protecting livelihoods, in particular through trying to meet the estimated seed requirement of approximately USD 12.5 million this year. Nevertheless, a recent report from the Ministry of Agriculture (MoA) indicates a remaining shortfall of seed and fertilizer in many drought-stricken areas (Figure 2).

MAP - Figure 2: Drought affected areas where seed shortfalls remain for the 2003 meher Season (Late June to October)

According to the report, about 24,000 MT (72 percent) of the total seed aid requirement (35,000 MT, equivalent to USD 10.2 million) has already been committed; but this still leaves a gap of more than 11,000 MT. Similarly, out of the total fertilizer requirement of 270,000 MT, only 207,000 MT (about 77 percent) is available in the country.

These shortfalls, coupled with credit limitations, may reduce potential production during the 2003/04-meher season, even if normal rainfall occurs.

Despite a significant reduction in belg and meher production last year, the recent MoA analysis found that enough seed is available in local markets to fill the national gap, and these supplies can be purchased locally without disturbing the market. Furthermore, there is still a window of opportunity with respect to the short cycle crops. Short season planting (cereals and pulses, and some sweet potato cuttings) in the meher season extends from June to October, depending on the area. This planting may also be contingent on the residual moisture from the kiremt rain (June to September) in some areas and on river levels (for recessional agriculture) in others.

In sum, continued and timely distribution of appropriate seeds is urgently required as time is running out for planting short cycle crops. This provision would play an important role in farmers' early recovery and rehabilitation.

A Poor Start to the Meher Season reported in the Eastern half of Tigray, Amhara and Oromiya Regions

June is the time when all parts of the country, with the exception of the northeastern, southern and southeastern lowlands, expected to receive rainfall, signaling the meher start of season.

However, the rains were erratic and below average in June in the eastern highlands of Tigray, Amhara and Oromiya Regions (Figure 3). This suggests a late onset to the kiremt rains (June September), and if it shortens the season, would be damaging for both short and long-cycle crops. The recent outlook by the National Meteorological Service Agency (NMSA) indicates that sufficient seasonal rains will set in across these regions during July, which would help to turn the situation around.

On the other hand, most of the western half of the country, central and parts of the southern half received normal to above normal rainfall in June, helping to boost soil moisture for main season crops. Late belg rains have been offset by extended kiremt rains (meher cultivation period) in these areas, which is favorable to long cycle crops. Other cereals, such as teff and wheat, are being extensively planted in most meher growing areas.

If the current rainfall pattern continues, as predicted by the NMSA, with the necessary input provision, a normal to above normal harvest will be expected in the western half of the country, at least. Most of the Somali Region and Borena zone of the Oromiya Region are expected to remain seasonably dry until late September, when the next wet deyr season begins.

MAP - Figure 3. Difference of Satellite Estimated Rainfall from the Long-term Average: June 2003

Cereal prices continue to rise

Cereal prices in most Ethiopian markets usually increase with the declining stocks between June and September. Given last year's drought, which made conditions even worse this hunger season, cereal prices have been higher than normal this June. The new General Consumer Price Index (CPI) figure of more than 120 in June suggests a continuing rise in food prices. As depicted on Figure 4, staple prices in selected markets are higher than they were last month, and higher than the historical average for this time of year.

MAP - Figure 4: Retail Prices for Selected Cereals by Market

It is clear that the gap between current prices and historical averages has widened further over the past six months (Figures 4 and 5), and not just in Addis. In some cases prices were as much as 140 to 190 percent higher than the same time last year, particularly in traditional surplus areas. Big fluctuations in price have also been occurring. For example, in Nakempt (traditional surplus producing area) during the period June 2001 - June 2003, prices fluctuated 51 percent around the mean value and wheat prices in Hossana (typical wheat producing area) fluctuated 34 percent.

Because poor people spend much of their total budget on cereals, excessive increases and fluctuations in cereal prices have a significant impact on their food security. According to a study by the Addis Ababa University, a 20 percent rise in cereal prices may reduce poor household consumption by more than 10 percent, adversely affecting their nutritional status.

With cereal prices continuing to climb towards their seasonal peak levels, poor households will be at ever increasing risk of food shortages.

Rainfall in Ethiopia is becoming Increasingly Erratic
(Recent Notes by FEWS NET and USGS)

Most parts of Ethiopia have experienced severe drought conditions and poor agricultural output due to extreme climatic conditions. The Water Requirement Satisfaction Index (WRSI, see note below for definition), a crop-specific performance indicator taking rainfall and soil characteristics into account, indicates extreme and increasing variability in recent years. Based on long-term climatic data (1961-2003), the WRSI shows that rainfall has become unusually erratic in many districts, suggesting that recent declines are an aberration from the longer-term trend.

Virtually all food crop agriculture in Ethiopia depends on rainfall that is frequently erratic and unpredictable. Recent belg and meher season WRSI analysis in different districts show increasing variability over the past 15 years. This variability has become even more pronounced for the last 5 - 7 years, with consequent significant production shortfalls.

In addition to annual aberrations from long-term trend, it appears that the long cycle crop producing areas in Ethiopia have been experiencing a strong and consistent drying trend. These negative trends tend to occur when they have the largest potential impact on crops (March to May and June to August), adding a major additional threat to fragile rain fed farming system in the country. This implies that even a "good" rainfall year in the present decade will tend to be drier than any year in the 1970s or 80s. Increasing food requirements and decreasing precipitation point toward more chronic food shortages and destitution.

Most rural households are able to manage the shock of a single poor rainy season and recover when the rains resume the following season. However, the cumulative shocks of consecutive poor seasons have pushed some households beyond their means, turning the temporary shock into chronic food insecurity. Over time, as households lose resources, crop production declines as farmers cannot afford to keep their plow oxen, plant improved seeds or apply purchased fertilizer.

Other factors make it increasingly difficult for Ethiopian households to manage their own food security: rising staple food prices, collapsing coffee prices, slumping livestock exports and the growing specter of HIV/AIDS. When considering additional factors, such as, climate variability, rapid population growth, poor infrastructure, rugged terrain and soil degradation, it is clear that reliance on low-input, low-yield rain-fed agriculture on small plots will not solve the pervasive problem of rural hunger and poverty. This makes it imperative for Ethiopia and its partners to boost crop and livestock productivity and rural incomes now as a way to address food insecurity in the short term.

This is a summary extracted from the report entitled "Rainfall in Ethiopia is becoming Increasingly Erratic". The full report can be found at FEWS NET web site, here.

Note: The Water Requirement Satisfaction Index (WRSI) is a model of crop performance developed by USGS that takes rainfall into account. WRSI is based on the ratio of seasonal actual evapo-transpiration to the seasonal crop water requirement for a particular crop. A WRSI of 100 indicates optimum water supply for the crop, 80 is about average crop performance, while WRSI below 50 is considered a complete crop failure.

Estimating meher crop production and its implication on food deficit for 2004
(Research findings by USGS, FEWS NET and USAID)

Meher season crop production is well correlated with April-May rainfall in the Ethiopian 'long cycle' crop-growing region. The significant production of long cycle crops, and the dependence of these crops on April-May rainfall, means that considerable information regarding prospective September-December meher cereal and pulse production becomes available as soon as May rainfall estimates are processed in early June.

This relationship is, therefore, used to make an early estimate of meher smallholder gross production. For the 2003/04 season, production is estimated at 87 million quintals (8.7 million MT) of cereals, pulses and other crops, using historical production from the Central Statistical Authority (CSA). This figure is about 17 percent higher than last year, but 1.1 percent lower than the last seven years' average.

While the meher production forecast (8.7 M MT) is typical of recent figures, it will likely be insufficient to prevent food shortages in 2003-04, unless commercial and food aid imports are substantially above recent amounts. Assuming recent levels of commercial and food aid imports, belg production and population growth, this estimate can be translated into food deficits of about 23 million quintals (2.2 million MT) for 2003-04, smaller than those experienced during 2002-03 (34 million Qt, or 3.4 million MT), but similar to the deficits experienced in 1997-98.

Considering the Disaster Prevention and Preparedness Commission's (DPPC's) food aid requirement appeal in 2003, the current food aid projection is about 32 percent lower than 2002/03 estimates (but still more than 1 million MT of food aid). In other words, if these assumptions hold true, more than 8 million people will require food assistance for the year 2004.

Population growth plays a significant role in these food shortage projections. Average population growth has been about 1.8 million people a year from 1995 through 2002, adding about 3.3 M Qt (330,000 MT) a year to the national cereals and pulses consumption requirement, or about 59 percent of the average recent annual food aid amounts (558,000 MT). Even in a year of "average" crop production, using CSA's population and production information, Ethiopia is unable to meet its own cereal and pulse consumption requirements. The increasing population simply aggravates this already substantial crop production deficit.

The implication of this analysis is that projected food shortages in Ethiopia may soon pass beyond chronic into tragic, exceeding the ability of food aid to make up the difference. To halt and reverse these ominous trends, Ethiopia will require urgent changes in its rural landscape and national development. Issues such as security of land holdings, improvements in crop yields and production technologies, restoration of the environment, more efficient markets, protection of livelihoods and entitlements, and reductions in population growth will need to be addressed. A more diversified and trade-oriented economy can help reduce reliance on low-input, low-yield rain fed agriculture on small plots and solve the pervasive problem of rural poverty and hunger.

This is a summary extracted from the report entitled "Estimating meher crop production and its implication on food deficit for 2004". The full report can be found at FEWS NET web site, here.

Disclaimer:

This document should not be construed as an official pronouncement by FEWS NET or members of the Early Warning Working Group. Comments and suggestions regarding this report should be addressed to:

The Country Representative
USAID/FEWS NET
P.O. Box 1014
Addis Ababa, Ethiopia
Tel: (251-1) 510088 or 510488
Fax: (251-1) 510043
Email: ethiopia@fews.net