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FAO 2011 October Food Index down, food prices still up, what’s going on?

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FAO has released its Food Price Index for October 2011, saying the index has dropped dropped to an 11-month low, declining 4 percent, or nine points, to 216 points from September. Indeed the index has dropped, declined and has certainly not risen. But does this mean food prices for the poor in many countries, for labour, for informal workers, for cultivators too – has the cost of food dropped for any of them?

The answer is a flat and unequivocal ‘No’. FAO has said so too: “Nonetheless prices still remain generally higher than last year and very volatile.” At the same time, the Rome-based food agency has said that the “drop was triggered by sharp declines in international prices of cereals, oils, sugar and dairy products”.

The FAO has said that an “improved supply outlook for a number of commodities and uncertainty about global economic prospects is putting downward pressure on international prices, although to some extent this has been offset by strong underlying demand in emerging countries where economic growth remains robust”.

Once again, the FAO is speaking in two or more voices. It should stop doing so. A very small drop in its food price index does not – repeat, does not – indicate that prices for food staples in the world’s towns and cities has dropped and people can afford to buy and cook a square meal a day for themselves and their children. Not so at all.

I am going to contrast what FAO has said about its October food price index with very recent reportage about food and food price conditions in various parts of the world.

FAO: “In the case of cereals, where a record harvest is expected in 2011, the general picture points to prices staying relatively firm, although at reduced levels, well into 2012. International cereal prices have declined in recent months, with the FAO Cereal Price Index registering an eleven month-low of 232 points in October. But nonetheless cereal prices, on average, remain 5 percent higher than last year’s already high level.”

Business Week reported that rising food prices in Djibouti have left 88 percent of the nation’s rural population dependent on food aid, the Famine Early Warning Systems Network said. A ban on charcoal and firewood production, which provides about half of the income of poor people in the country’s southeast region, may further increase hunger, the Washington- based agency, known as Fewsnet, said in an e-mailed statement today. Average monthly food costs for a poor urban family are about 33,907 Djibouti francs ($191), about 12,550 francs more than the average household income, Fewsnet said. Urban residents in the Horn of Africa nation don’t receive food aid, it said.

FAO: “According to [FAO’s November 2011] Food Outlook prices generally remain ‘extremely volatile’, moving in tandem with unstable financial and equity markets. ‘Fluctuations in exchange rates and uncertainties in energy markets are also contributing to sharp price swings in agricultural markets,’ FAO Grains Analyst Abdolreza Abbassian noted.”

A Reuters AlertNet report quoted Brendan Cox, Save the Children’s policy and advocacy director, having said that rising food prices are making it impossible for some families to put a decent meal on the table, and that the G20 meeting [currently under way in Cannes, France] must use this summit to agree an action plan to address the food crisis. Malnutrition contributes to nearly a third of child deaths. One in three children in the developing world are stunted, leaving them weak and less likely to do well at school or find a job. Prices of staples like rice and wheat have increased by a quarter globally and maize by three quarters, Save the Children says. Some countries have been particularly hard hit. In Bangladesh the price of wheat increased by 45 percent in the second half of 2010. In new research, Save the Children analysed the relationship between rising food prices and child deaths. It concluded that a rise in cereal prices – up 40 percent between 2009 and 2011 – could put 400,000 children’s lives at risk.

FAO: “Most agricultural commodity prices could thus remain below their recent highs in the months ahead, according to FAO’s biannual Food Outlook report also published today.  The publication reports on and analyzes developments in global food and feed markets. In the case of cereals, where a record harvest is expected in 2011, the general picture points to prices staying relatively firm, although at reduced levels, well into 2012.”

IRIN News reported that food production is expected to be lower than usual in parts of western Niger, Chad’s Sahelian zone, southern Mauritania, western Mali, eastern Burkina Faso, northern Senegal and Nigeria, according to a report by the World Food Programme (WFP) and the Food and Agriculture Organization (FAO), and a separate assessment by USAID’s food security monitor Fews Net. “We are worried because these irregular rainfalls have occurred in very vulnerable areas where people’s resilience is already very weakened,” said livelihoods specialist at WFP Jean-Martin Bauer. Many Sahelian households live in a state of chronic food insecurity, he said. “They are the ones with no access to land, lost livestock, without able-bodied men who can find work in cities – they are particularly affected by a decrease in production.” A government-NGO April 2011 study in 14 agro-pastoral departments of Niger noted that pastoralists with small herds lost on average 90 percent of their livestock in the 2009-2010 drought, while those with large herds lost one quarter. Those who had lost the bulk of their assets have already reduced the quality and quantity of food they are consuming.

FAO: “Food Outlook forecast 2011 cereal production at a record 2 325 million tonnes,  3.7 percent above the previous year. The overall increase comprises a 6.0 percent rise in wheat production, and increases of 2.6 percent for coarse grains and 3.4 percent for rice. Globally, annual cereal food consumption is expected to keep pace with population growth, remaining steady at about 153 kg per person.”

The Business Line reported that in India, food inflation inched up to 11.43 per cent in mid-October, sharply higher than the previous week’s annual rise of 10.6 per cent, mainly on account of the statistical base effect of the previous year. Inflation in the case of non-food items and the fuels group, however, eased during the latest reported week. According to data released by the Government on Thursday, an increase in the year-on-year price levels of vegetables and pulses contributed to the surge in the annual WPI-based food inflation for the week ended October 15, apart from the base effect. Sequentially food inflation was up 0.25 per cent.

FAO: “The continuing decline in the monthly value of the FAO Cereal Price Index reflects this year’s prospect for a strong production recovery and slow economic growth in many developed countries weighing on overall demand, particularly from the feed and biofuels sectors.”

Al Ahram reported that Egyptian household budgets had mixed news in September with prices for some basic foods tumbling month-on-month and others showing small climbs, according to state statistics agency CAPMAS. Figures released this week show the price of local unpacked rice fell 15.6 per cent to LE4.96 per kilo between August and September 2011. It was the commodity’s first decline in nearly a year, although the per kilo price remains 68 per cent higher than the LE2.95 that rice cost in October 2010. Chicken also fell 5.8 per cent to LE16.26 per kilo between August and September. Other staples, however, continued to rise; the price of potatoes climbed 14 per cent to LE4.89 per kilo, while a kilo of tomatoes gained a monthly 14.8 per cent to cost LE4.65.

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Food, climate, conflict – all that caused the Horn of Africa refugee crisis

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New arrivals from Somalia waiting to be registered at Dagehaley camp, in Dadaab. Photo: Kate Holt/IRIN

IRIN News has reported that about 1,300 Somalis are arriving at the Dadaab refugee camps in northeast Kenya every day. The help they are seeking – refuge from a severe drought and the effects of years of conflict – is being handed out as fast as possible. But in a camp complex that has already been stretched well beyond its limits, the new arrivals need more assistance than can be provided. The nutritional state of older children, as well as under fives, is of concern, but the local Kenyan population is faring little better.

“The number has skyrocketed,” a registration expert with the UN Refugee Agency, UNHCR, told IRIN. The official said UNHCR had had to hire more employees, who now work in shifts, to accommodate the rush. The three Dadaab refugee camps – Dagahaley, Ifo and Hagadera – were originally meant to cater for 90,000 refugees, but housed at least 380,000 people, according to UNHCR. Despite the overcrowding, the government of Kenya has yet to allow people to move into a fourth camp, known as Ifo II, which stands empty.

“Water systems, latrines and healthcare facilities are ready to use but are standing idle,” Oxfam said in a statement. Oxfam reported that 60,000 new arrivals were living in basic tents outside the camp boundaries, with limited access to clean water or latrines, risking an outbreak of disease. Those living in these informal settlements are some of the worst-off. In the settlements on the outskirts of Dagahaley camp, 17.5 percent of children between six months and almost five years old are severely malnourished, three times the emergency level, according to Caroline Abu-Sada, a research unit coordinator with Médecins Sans Frontières (MSF).

Newly arrived Somali refugees waiting to be registered at Dagahaley camp, Dadaab in Kenya. Photo: Al Jazeera/EPA

The lack of water in the outskirts was a real concern. Refugees are only able to obtain up to three litres of water a day, 80 percent less than they need according to the Sphere Standards, which are already based on emergency situations. Some are only receiving 500ml for drinking, bathing, washing clothes, and everything else. By comparison, in North America and Japan most people use 350l a day, according to the World Water Council. Water is now being trucked to the camp outskirts by MSF and CARE, but there were previously only 48 taps for 20,000 people. Abu-Sada said diarrhoea was already rampant, along with skin rashes and respiratory infections.

More than 11 million people are estimated to be in need of humanitarian aid across the region, a UN News report has said. Almost 500,000 children in Somalia, Ethiopia and Kenya are suffering from imminent, life-threatening severe malnutrition. In addition, over 1.6 million children under the age of five are acutely malnourished, according to UNICEF.

In addition to the thousands of people from Somalia seeking refuge in Ethiopia and Kenya, millions more are living on the brink of extreme poverty and hunger, suffering the consequences of failed rains and the impact of climate change, said the agency. UNICEF has appealed for $31.8 million to ramp up assistance to the Horn of Africa over the next three months, especially for children, who are suffering the brunt of the crisis. It says the most urgent needs include therapeutic feeding, vitamin supplementation, water and sanitation services, child protection measures and immunization.

In Geneva, two UN human rights experts appealed to the global community to take “concerted and urgent” measures to assist the millions who are suffering in the region, warning of large-scale starvation if international intervention is not forthcoming. Shamsul Bari, the Independent Expert on the situation of human rights in Somalia, noted that drastically increasing food prices and continuing conflict and insecurity have caused a huge displacement of the population, with thousands of Somalis fleeing to Ethiopia, Kenya, and Djibouti every day. Bari, who last week visited Somalia and Kenya, said the situation was markedly worse than in March, when he had expressed concerns over the slow response of the humanitarian community to the situation.

The UN Special Rapporteur on the right to food, Olivier De Schutter, said the international community should be prepared for more such droughts. “This crisis looks like a natural calamity, but it is in part manufactured,” De Schutter said, adding that climate change will result in such events being more frequent. He called for, among other measures, emergency food reserves in strategic positions, and better preparedness for drought, for which Governments must be held to account.

“With a rate of child malnutrition above 30 per cent in many regions of these countries, the failure of the international community to act would result in major violations of the right to food,” De Schutter said. “International law imposes on States in a position to help that they do so immediately, where lives are at stake.”

Shokuri Abdullai like most mothers in Bisle feeds her family boiled maize in the Somali region's Shinile zone (Ethiopia). Photo: Jaspreet Kindra/IRIN

Al Jazeera has reported that Kenya has agreed to open a new camp near its Somalia border to cope with the influx of refugees fleeing the region’s worst drought in 60 years. The lfo II camp in Dabaab will open its doors to 80,000 refugees within 10 days, the Kenyan government said. Prime Minister Raila Odinga agreed to the opening to the new camp, after visiting Dadaab’s three existing camps where an estimated 380,000 refugees are now living at facilities intended to cope with a population of 90,000 people.

A spokesman for the charity Save the Children, said “more children have died in Dadaab in the first four months of the year than all of last year”. Many Somali refugees at the camp have travelled through harsh conditions with little food or water, and no humanitarian assistance, often abandoning members of their family who have died or are so weak to travel. Al Jazeera’s Azad Essa, who reported from the Dabaab camp, said, “Over the past month, around 20,000 have made their way to Dadaab, many of them through similar means”.

Dadaab’s existing camps were set up in 1991 to host refugees fleeing war in Somalia. Between 40,000 and 60,000 are thought to be living outside the boundaries of the complex – existing as refugees beyond the current scope and control of the UN. Somalis have been fleeing from war for years now, but the drought, affecting 12 million people across the Horn of Africa, has brought the threat of a new humanitarian catastrophe to the region, with many people also seeking refuge in Ethiopia. Al Jazeera has more on the refugee crisis in the Horn of Africa here.

The U.N. Office for the Coordination of Humanitarian Affairs  (OCHA) has provided a ‘snapshot’ of the humanitarian crisis in the Horn of Africa country:
* 2.85 million Somalis require urgent aid – that’s one in three people
* At least one in three children are malnourished in parts of southern Somalia
* More than 460 Somali children have died in nutrition centres in Somalia between January and May this year
* Malnutrition rates among new arrivals in refugee camps in Ethiopia and Kenya range between 30 and 40 percent
* As of late June, 60,200 Somalis were registered in Kenya this year — a more than 100 percent increase compared with the same period last year
* Life expectancy is 50.4 years, according to the U.N. Development Programme (UNDP)
* Women dying in childbirth: 1,000 per 100,000 live births reported, according to UNICEF
* One in 10 Somali children dies before their first birthday
* Primary school enrolment rate is 23 percent
* Average HIV prevalence level estimated at 0.5 percent of the population aged 15 to 49
* Percentage of people with access to safe, clean water: 29 percent

(Sources: OCHA, UNICEF, UNDP)

It is not just Somalis who are suffering, Euronews has reported. Famine is affecting all countries in the Horn of Africa. Now 11 million people need help to survive the food shortages. In Habaswein in the far north of Kenya there has been no rain for a year. Many animals have died. Others have been taken further north in search of water. Only women, children and the elderly remain in the village.

Like many others, Fatuma Ahmed depends on rations of maize, beans and oil provided by aid agencies and the government. She said: “I have no husband. I’m raising my children alone. We had some animals but they’ve all died. Now we’re depending on aid from charities. What I’m cooking now is the only meal my family will eat today.” In the village of Fini, farmers try to move a dying cow into the shade. The animal will only last a few days. This is not the first time this area has been hit by drought, but according to villagers like Mori Omar, it has never been this bad.

“I’ve never experienced anything like this. I’m 56 years old, but I look more like 80 because of many years of not having enough food. During the droughts, there’s no meat or milk,” she said. There is a growing consensus that climate change is to blame for the driest period in 60 years. The UN says droughts are becoming more frequent – before they used to be every five or 10 years, now it is every two.

IRIN News has a report, ‘Somalis living from drought to drought’, on the perilous state of food availability in Bisle, the Somali region. Every day, 500g of boiled wheat is divided up between two adults, four children, a calf, a goat and a donkey in the Farah household. It is the only food they have had after rains failed for the past two seasons. The 15kg sack of wheat is provided to about 1,200 people in the Bisle area, which has four settlements, under the government-run Productive Safety Net Programme (PSNP) as payment for work, such as digging water holes.

“It is boiled wheat for breakfast and for the main meal – we don’t have anything else – no milk, no meat, no vegetables, no oil,” says Maria Farah, the mother. Not surprisingly, two of her children are severely malnourished. The calf and goat that share their “ari” – a collapsible egg-shaped hut made of sticks and covered with sheeting – are emaciated. It is too hot for them outside, in temperatures that soar beyond 40 degrees Celsius. There is no water in their settlement, about 54km north of Dire Dawa town in the Somali region, one of the worst hit by drought in Ethiopia. More than a million people have been affected.