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Posts Tagged ‘Burundi

Meagre morsels: the food crisis of 2012

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Children enjoy their lunch break at Ngoma School, Sikaneka village, Maamba district, Zambia. February 2007. The UN’s Millennium Development Goals for 2015 aim to improve primary education, reduce child mortality, promote gender equality and reverse the spread of HIV/AIDS, malaria and other diseases. Photo: IRIN / Manoocher Deghati

1. The Dawn of Pakistan has reported that “a global race for grain trading power is putting more of the world’s vital cereals in the hands of fewer companies, with a string of recent acquisitions raising fears that consumers will pay even more for their food, while farmers are squeezed”. The report said that Archer Daniels Midland last week bid for Australia’s last independent grain handler GrainCorp, the latest in a series of moves by grain trading heavyweights to grab a larger slice of a booming market as developing economies seek food security.

2. Nobel Prize winner Octavio Paz acutely observed that the invention of corn by the Mexicans is only comparable to the invention of fire by the early humans, according to this report from Voxxi. “From the inedible grass of the teocintle or teosinte, ancient Mexicans created modern corn, which was spread across Mesoamerica and eventually around the world.” The report said that the 60 or so breeds and the thousands of different varieties native to Mexico act as a genetic reservoir and a crucially important strategic good in terms of the global food supply and economy.

3. “Hunger and revolutions have always gone hand-in-hand, of course — the latter is what happens when you let them eat cake but the people have no bread,” explained this blog on Reuters. But at which point do prices pass the point of no return? Their research has found that food riots are most likely to occur when the FAO Food Price Index rises above 210. “Recognising the dangers of food speculation, six European banks – including Commerzbank, Germany’s second largest – this summer removed agricultural products from their commodity funds altogether. Wall Street, however, has not been so accommodating.”

4. Food security levels declined in 98 out of 105 countries between June and September because of rising food prices, according to updated data from the Economist Intelligence Unit and reported by Bloomberg Businessweek. The score for affordability of food dropped to 50.5 on a scale of 100 from 53.2 previously, an EIU researcher told the business magazine. Hungary, Brazil, Argentina and Russia had the biggest drops in affordability of food on a combination of economic weakness and inflation, the unit wrote. Global food prices have advanced 7.7 percent from June, according to the EIU. Among the most undernourished countries, the biggest drops in food affordability were recorded in South Africa, the Dominican Republic, Guatemala and Botswana, according to the report.

Food scarcity during Ramadan exacerbated by floods threatens thousands of poor people in Pakistan. Photo: IRIN / Abdul Majeed Goraya

5. The countries with the highest burden of under-nutrition, responsible for as many as 2.6 million child deaths a year, are the most exposed to food price spikes, reported The Guardian. They tend to be net importers of food, and have citizens who spend 30-60% of their income on food. When prices go up, poor people take their children out of school and prioritise foods that provide energy over nutrition. A relatively short spike can have long-term effects on the development and potential of children.

6. In August 2012, three of the eight “livelihood zones” in Burundi – around 200,000 people – were found to be at a “crisis” level of food security, or Phase 3 in the Integrated Food Security Phase Classification scale, said this All Africa report. This was variously due to recurrent drought, plant disease, poverty, lack of drinking water and land scarcity. Most of the rest of the country is in Phase 2 – also classified as “stressed” – with a risk of falling into Phase 3 “at the slightest shock”, such as flooding or hailstorms, according to Isaac Nzitunga of the Ministry of Agriculture. More than 60 percent of the population in the tiny, densely populated central African state, one still recovering from a 1993-2005 civil war which killed some 300,000 people and uprooted more than a million others, is at risk of food insecurity. Some 58 percent of children are chronically malnourished, which means their physical and intellectual development is seriously threatened.

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The global transmission of high food prices-World Bank’s February evidence

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Higher global wheat prices have fed into sharp increases in domestic wheat prices in many countries, the February 2011 Food Price Watch of The World Bank has said. The transmission rate of global wheat price increases to the domestic price of wheat-related products has been high in many countries, according to the report. “For instance, between June 2010 and December 2010, the price of wheat increased by large amounts in Kyrgyzstan (54%), Bangladesh (45%), Tajikistan (37%), Mongolia (33%), Sri Lanka (31%), Azerbaijan (24%), Afghanistan (19%), Sudan (16%), and Pakistan (16%). Several of these countries have a large share of calories consumed from wheat-based products, particularly for the poor. Global food prices continue to rise, though not uniformly for all grains.”

The World Bank’s Food Price Watch is produced by the Bank’s Poverty Reduction And Equity Group, Poverty Reduction And Economic Management Network. The World Bank’s food price index rose by 15% between October 2010 and January 2011, is 29% above its level a year earlier, and only 3% below its June 2008 peak. A breakdown of the index shows that the grain price index remains 16% below its peak mainly due to relatively stable rice prices, which are significantly lower than in 2008. The increase over the last quarter is driven largely by increases in the price of sugar (20%), fats and oils (22%), wheat (20%), and maize (12%).

Maize prices have increased sharply and are affected by complex linkages with other markets. In January 2011, maize prices were about 73% higher than June 2010. These increases are due to a series of downward revisions of crop forecasts, low stocks (U.S. stocks-to-use ratio for 2010-11 is projected to be 5%, the lowest since 1995), the positive relationship between maize and wheat prices, and the use of corn for biofuels.

Ethanol production demand for corn increases as oil prices go up, with sugar-based ethanol less competitive at current sugar prices. Recent United States Department of Agriculture (USDA) estimates show the share of ethanol for fuel rising from 31% of U.S. corn output in 2008-9 to a projected 40% in 2010-11. Increased demand for high fructose corn syrup from countries such as Mexico, as they substitute away from higher priced sugar, also contributes to higher demand for corn. Prospects of easing in this market depend partly on the size of the crops in Latin America, particularly Argentina, which has been affected by unusually dry weather due to the La Nina effect, and the extent of import demand from China in 2011 as well as oil and sugar price trajectories.

Domestic rice prices have risen sharply in some countries and remained steady in others. The domestic price of rice was significantly higher in Vietnam (46%) and Burundi (41%) between June–December 2010. Indonesia (19%), Bangladesh (19%), and Pakistan (19%) have increased in line with global prices. These Asian countries are large rice consumers, especially among the poor. Rice prices have increased in Vietnam despite good domestic harvests. This is primarily due to the depreciation of the currency, which has fuelled overall inflation and expectations of higher demand from large importers and led  to the minimum rice export price being raised by the Vietnamese government. Rice price increases in Sri Lanka (12%) and China (9%) have been relatively moderate in the second half of 2010, while in Cambodia and the Philippines the retail price of rice remained largely unchanged during this period.

Largest Movers in Domestic Prices, June to December 2010
Wheat
Kyrgyzstan (retail, Bishkek) 54%
Bangladesh (retail, national average) 45%
Tajikistan (retail, national average) 37%
Mongolia (retail, Ulaanbaatar) 33%
Sri Lanka (retail, Colombo) 31%
Azerbaijan (retail, national average) 24%
Afghanistan (retail, Kabul) 19%
Sudan (wholesale, Khartoum) 16%
Pakistan (retail, Lahore) 16%

Rice
Vietnam (retail, Dong Thap) 46%
Burundi (retail, Bujumbura) 41%
Bangladesh (retail, Dhaka) 19%
Pakistan (retail, Lahore) 19%
Indonesia (retail, national average) 19%
Mozambique (retail, Maputo) 14%

Beans
Burundi (retail, Bujumbura) 48%
Cameroon (retail, Yaounde) 43%
Uganda (wholesale, Kampala) 38%
Kenya (wholesale, Nairobi) 22%

Maize
Brazil (wholesale São Paulo) 56%
Argentina (wholesale, Rosario) 40%
Rwanda (wholesale, Kigali) 19%

State of Food Insecurity 2010 – FAO says too little, too timidly

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Food and Agriculture Organization (FAO), State of Food Insecurity (SOFI) 2010The 2010 edition of the State of Food Insecurity says much too little and what it does say is unconvincing. There is a theme for this years edition of one of the Food and Agriculture Organization’s (FAO) ‘flagship’ reports. The theme is “countries in protracted crisis” by which FAO means conflict and war, internal and external.

FAO doesn’t say so explicitly in the introduction to SOFI 2010 on its website. There’s no excuses for FAO not to when the World Food Programme, Oxfam, ActionAid and a number of international agencies and aid groups have done so, not just this year but for at least a decade.

As the world’s pre-eminent compiler of food and agriculture-related research, data and analysis, FAO ought to see itself as duty-bound to be clear and fair in its reportage but it is not.

SOFI 2010 says that the majority of the world’s undernourished people live in developing countries. Two-thirds live in just seven countries (Bangladesh, China, the Democratic Republic of the Congo, Ethiopia, India, Indonesia and Pakistan) and over 40% live in China and India alone.

The report says that “FAO’s projections for 2010 indicate that the number of undernourished people will decline in all developing regions, although with a different pace. The region with most undernourished people continues to be Asia and the Pacific, but with a 12% decline from 658 million in 2009 to 578 million, this region also accounts for most of the global improvement expected in 2010″. Where does FAO think this improvement is going to come from, given the fact that its own food price index shows how cereals have risen at a clip this year to match the rise in 2007?

Food and Agriculture Organization (FAO), State of Food Insecurity (SOFI) 2010Just as it did a month ago, the FAO is sounding like it is in two minds about what to report. SOFI 2010 says that “developing countries as a group have seen an overall setback in terms of the World Food Summit goal (from 827 million in 1990–92 to 906 million in 2010), while some progress has been made towards MDG 1 (with the prevalence of hunger declining from 20% undernourished in 1990–92 to 16% in 2010)”.

Which are the 22 countries covered by the ‘protracted crisis’ theme? Here they are, the numbers in total population in millions followed by number of undernourished in millions, both for 2005-07. (Why couldn’t these have been for 2009 in a report dated 2010?): Afghanistan (na / na), Angola (17.1 / 7.1), Burundi (7.6 / 4.7), Central African Republic (4.2 / 1.7), Chad (10.3 / 3.8), Congo (3.5 / 0.5), Côte d’Ivoire (19.7 / 2.8), Democratic People’s Republic of Korea (23.6 / 7.8), Democratic Republic of the Congo (60.8 / 41.9), Eritrea (4.6 / 3.0), Ethiopia (76.6 / 31.6), Guinea (9.4 / 1.6), Haiti (9.6 / 5.5), Iraq (na / na), Kenya (36.8 / 11.2), Liberia (3.5 / 1.2), Sierra Leone (5.3 / 1.8), Somalia (na / na), Sudan (39.6 / 8.8), Tajikistan (6.6 / 2.0), Uganda (29.7 / 6.1), Zimbabwe (12.5 / 3.7).

SOFI 2010 says: “On average, the proportion of people who are undernourished is almost three times as high in countries in protracted crisis as in other developing countries (if countries in protracted crisis and China and India are excluded). Nonetheless, not all countries in protracted crisis present very high levels of undernourishment as in some of these countries crises are localized to certain areas or regions. There are approximately 166 million undernourished people in countries in protracted crisis – roughly 20% of the world’s undernourished people, or more than a third of the global total if China and India are excluded from the calculation.”

Food and Agriculture Organization (FAO), State of Food Insecurity (SOFI) 2010The question, what happens when China and India are excluded from calculations? With the exclusions 130.4 million (China) and 237.7 million (India) fall out of the equations? Moreover, SOFI isn’t following it’s own data. The para above says 166 million (approx) undernourished in countries in ‘protracted crisis’ but the table annex shows that the 22 countries together have 146.8 million undernourished. If the larger number for the 22 countries is the 2009 estimate, then FAO could have used the same method to provide estimates for all countries for 2009.

When FAO recalculates its food price index monthly (the current index is up-to-date for September 2010) why are these estimates three years old? Why should China and India be excluded when they account for over a third of the global undernourished population? Last month FAO said that 925 million people in the world live in chronic hunger and explained that “the decline (from 1,020 million in 2009) was primarily attributable to better economic prospects in 2010 and the fall in food prices since mid-2008”. What fall in food prices? What better economic prospects?

The State of Food Insecurity 2010 is a disappointing and pedestrian effort. FAO ought to retract this version and revise it thoroughly without dwelling on themes like ‘protracted crisis’ and instead get to grips with the market- and economics-related reasons for food price spikes and the hunger they bring.