Kenya + 5 more

Africa Less Exposed to Rising Food Prices, But Trouble Spots Remain

  • Favorable harvests have boosted agricultural output in many parts of Africa, dampening the impact of rising food prices around the world
  • The poor remain vulnerable to higher food prices, which also adversely impact nutrition, especially among children and pregnant women
  • Gains in agricultural output need to be complemented with efforts to raise income levels for the poor and strengthen safety nets and nutritional interventions

WASHINGTON, February 15, 2011—So far Sub-Saharan Africa appears less exposed to risks related to soaring food prices, according to the latest World Bank estimates published in Food Price Watch, a bulletin that tracks the food price trends in developing countries. However there is no room for complacency as poverty and food insecurity remain serious concerns.

Globally, 44 million people have fallen into poverty as a result of the sustained rise in food prices, which on average currently stand at 29 percent above their level just a year ago. The situation is made even more alarming by the fact that prices have increased 15 percent between October 2010 and January 2011.

Africa buoyed by stable maize, rice prices

Africa has benefited from good harvests of maize, millet, sorghum and cassava. Take for example maize, an essential staple in many countries. In Kenya, where maize-based food items account for 35 percent of overall calorie intake, prices fell 8 percent. Another source of good news for Africa is the relative stability of the price of rice, which rose moderately on world markets between June and December 2010. This is a major factor, given that rice remains a basic food item in many developing countries, and also because the soaring price of rice was one of the main triggers of the 2008 food crisis.

In addition, many African countries have since tried to reduce their dependence on imported commodities like wheat, and turned more toward local substitutes. These are usually cheaper, because they are not directly subject to the fluctuations of prices on international markets. Thus, in Sudan and Mali, increased supply of sorghum has helped reduce its price respectively by 37 percent and 13 percent. A similar effect was noted in Ethiopia and Kenya, where in both countries the price of maize fell by 8 percent. In Mozambique and Cape Verde, the price of cassava has dropped by 39 percent and 26 percent respectively.

Sparing vulnerable populations

But these aggregates must be taken with a lot of caution. "While it is true that overall prices in many parts of Africa have been stable, there are significant numbers of poor people who remain hungry and chronically food insecure," warns Hassan Zaman, a World Bank Lead Economist and main author of the report. "So the progress which has led to gains in agricultural output need to be complemented with efforts to raise overall income levels for the poor and strengthen safety nets and nutritional interventions," he adds.

Indeed, when low-income families feel cornered on the economic front, they tend to consume more filling yet affordable food items, but unfortunately these tend to be without much nutritional value. Nutritional deficiencies have negative consequences on small children, pregnant women, nursing mothers and newborns. Burundi, which has experienced a 41 percent increase in the price of rice and a 48 percent rise in the price of beans, is particularly vulnerable. Likewise for the Democratic Republic of Congo, where the price of cassava, a local staple that represents up to 53 percent of the country's calorie intake, has increased by 20 percent between June and December 2010.

In vulnerable countries such as these, policymakers need to scale up "safety nets" – measures that aim to lessen the impact of soaring food prices on at-risk families and individuals. In this regard, the World Bank has put in place since May 2008 the Global Food Crisis Response Program (GFRP) with the aim of helping countries hardest hit by rising prices.

To date some twenty African countries have received assistance under the GFRP. The funds released through the GFRP are used for school nutrition programs, the purchase of fertilizers and other agricultural inputs, a reduction of taxes on imported food, irrigation, as well as infrastructure that facilitates to the delivery of agricultural products to markets.

Finding long term solutions

In addition to providing short and medium term assistance, the Bank also helps African countries to position themselves on a sustainable path that focuses on small farmers, investments along the value chain, and rational management and sustainable use of land. That is the case with projects known as "Fadama" that are currently being implemented in Nigeria, the most populous country in Africa.

These projects target the poor living in rural areas - farmers, herders, fishermen, traders - but also vulnerable groups such as widows, the disabled, unemployed youth and people living with HIV/AIDS, among others. To date, Fadama projects have helped increase the income or assets of more than 3 million beneficiaries. They have also contributed to knowledge sharing and to minimize intra-community conflicts.

But prevention is better than cure. To that end, Food Price Watch recommends more transparency on food stocks held by the largest exporters. Regular publication of data related to food stockpiles will help avoid the effect of panic caused by market uncertainty about the actual availability of essential commodities. At the same time, it will help deter speculation, which thrives on uncertainty.

Experts also stress the need to avoid export bans, because they create artificial shortages and accentuate a sense of panic among net importers of food. Given the vulnerability of poor populations to climate change, it is also necessary to focus on sustainable agricultural techniques, and adaptation technology. Finally, analysts call for greater investment in biofuels research with a view to finding less food intensive technologies.