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Calls for nuanced response to West African food crisis

12 February 2012

With lower than average harvest in a number of Sahelian states, UN agencies are predicting ‘2.5 million ton cereal deficits in the region, some of which should be met by market flows’. Countries such as Mauritania and Chad are reportedly ‘showing deficits of over 50% compared to last year’, while ‘national food reserves are dangerously low.’ In all, an estimated 7 million people could be affected in Niger, Mali, Burkina Faso, Nigeria, Chad and Mauritania.

High prices are a particular cause of concern, with prices having risen post-harvest on the back of poor yields, rather than falling, as was expected. Problems of food accessibility have been compounded by the return of migrant workers from north Africa and a termination of these remittances.

USAID analysts, on the USAID food security website, argue for a more nuanced approach to food security in the region. They argue that the ‘complexities of regional market conditions’ need to be taken into account if ‘long-term structural solutions’ are to be found. USAID analysts argue for greater efforts to ‘draw grain stocks from coastal countries into the region, which could serve to increase the availability of food in markets, and stabilize prices’. USAID also notes ‘lower-than-average cereal crops could be compensated for by food imports, which for instance in Niger in 2010-11 amounted to 900,000 tons - more than double the current estimated production gap’. It is argued that ‘the current food insecurity is less a food availability problem than an access issue’.

It is maintained that current policy interventions can have unforeseen effects on market prices. Thus, for example, highlighting potential impending shortages can lead to stock retention and price inflation, exacerbating food accessibility. These contrary effects of early warning systems could, it is argued, account for why ‘prices in some places have increased by over 80 percent over the five-year average, and have continued to rise rather than fall, which is the usual seasonal dynamic’. In this context, according to WFP representatives, ‘high food prices are a greater problem than a deficit of grains’. However, ‘opinions differ on the degree to which the markets will be able to resolve the access problem’.

In December 2011, a call was made by the Food Crisis Prevention Network to ECOWAS governments ‘to keep food trade fluid across their borders’ and to ‘avoid any action which will by nature impede the proper functioning of the markets and cross-border trade flows’. It has been highlighted how ‘protectionist measures worsened the impact of the 2005 food crisis’ and also created ‘some barriers to response in 2009-2010’, resulting in extra-regional grain purchases and delayed delivery of supplies. However, WFP has pointed out that prices are currently high in all three of the region’s major grain trading systems for staple grains such as maize and millet. Thus even where surpluses exist in the region (e.g. Ghana with its 240,000-tonne surplus), prices are 75% higher than in 2009.

Processes of climate change are thought to be increasing the incidence of droughts across the region, suggesting that longer-term solutions are urgently needed. In this context greater emphasis on meeting Comprehensive Africa Agriculture Development Programme (CAADP) targets of investing 10% of government expenditures in the agricultural sector are highlighted.

Editorial comment

As indicated in the contrasting USAID and WFP perspectives, there are two related critical trade policy issues faced in West Africa. The most fundamental relates to strengthening the functioning of grain markets, so that supplies from food surplus areas can reach food deficit areas at reasonable prices, while at the same time providing incentive prices for investment in improved grain production in areas best suited to the production of the cereals required in the region.

The other concerns market perceptions. If prices rise unexpectedly, it may be because the impending gap between supply and demand is higher than realised, but it may also be because local traders are limiting flows onto the market in the expectation that supplies might be tight. In areas of the world where there is good information on yields, harvest size and stocks, the scope for such market manipulation may be limited. In large parts of the ACP, however, knowledge on actual yields and accurate harvest predictions and stock levels is limited. Getting it wrong and attributing rising prices to market manipulation rather than an actual but unappreciated fall in supply can have tragic consequences – as Malawi found out a decade ago.

These are complex issues requiring a comprehensive approach. For example, early warning systems and improved market information systems at national level can contribute to providing the accurate information that can then be used to source required supplies regionally if possible. However, such systems need to be operated within a broader policy framework which facilitates trade flows, rather than simply increasing speculation on grain markets.

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