By Mary Hearty
The soaring global food and commodity prices have forced many developing countries especially in Africa, which depend on international markets for food imports to leverage on the existing frameworks to cushion their populations against the negative effects posed by this situation such as hunger.
With grains being among the most affected food, the Alliance for a Green Revolution in Africa (AGRA) May 2022 report titled: Food Security Monitor, notes that some African countries, for example, have diversified their grain diets as well as substituted wheat with local crops following the exponential increase of the crop’s price.
Food producers in Kenya, Egypt, Democratic Republic of Congo, Nigeria and Cameroon are now mixing cheaper alternatives into pastries, bread and pasta, and substituting wheat with local rice, cassava flour and sorghum.
In addition, African countries are beginning to turn to Argentina as an alternative source of supplies from the Black Sea continue to fall.
Countries such as Cote d’Ivoire, Kenya, Nigeria, Rwanda, Senegal and South Africa are set to receive 147,200 tons of wheat from Argentina-33% increase from last year,according to the Global Trade Tracker.
AGRA further states that the demand has been spurred by the recent wheat export ban by India, which had emerged as an alternative source for wheat supplies.
Governments in countries like Burkina Faso has put a ban on exports of all staple crops. On the 18th of May, the government adopted a 2022 Response and Support Plan for Vulnerable Populations against Food Insecurity and Malnutrition (PRSPV-2022) with a budget of 238 billion CFA ($396 million), which will be financed by the government, technical and financial partners, and communities. The government has also supplied 500 tractors at a 50% subsidy to farmers to boost production.
In Tanzania, the government has put in place several measures to increase the supply of fertilizers, including: removal of the bulk procurement scheme and opening of the fertilizer import business to anyone who can import fertilizer.
Also, the Tanzanian ministry of agriculture plans to introduce subsidies that will make fertilizer affordable to farmers; the removal of fertilizer price requirements, giving more incentives to private companies to import and trade in fertilizers. The government has also put a subsidy on petroleum products (petrol – 9.3%; diesel – 9.3%) effective 1 July 2022.
In Kenya, the government is planning to allow maize imports from outside the East African Community as a way to mitigate an increase in flour prices in Kenya. The move is expected to force farmers hoarding maize to release their supply to the market.
The government also waived a 50% duty levied on maize outside the East African region and allowed millers and traders to ship in 540,000 tones in order to check the current high prices of flour.
In Zambia, the government has implemented an export quota for soybeans, and announced that it is monitoring the impact of the conflict particularly on the agri-food and energy sectors.
Whereas the Ugandan government says it will continue to support farmers to grow vegetables and grains such as wheat and corn. It has also partnered with 40,000 farmers in northern Uganda to grow sunflowers and soybeans for the production of cooking oil.
In Ghana, the government has extended its temporary export ban for rice, maize and soybeans for an additional six months up to the 30th of September 2022.
To cushion consumers, rice, flour, cooking oil, margarine, salt, sugar, maize meal, milk powder, infant milk formula, tea, petroleum jelly, toothpaste, bath soap, laundry bar, and washing powder will now be imported duty free.
Various organizations have also undertaken measures to cushion the impacts of the current global food and commodity price crisis.
For instance, the Africa Finance Corporation ( AFC) is launching a US$2 billion facility to support recovery and resilience of food systems in Africa.
The facility will be disbursed through loans from the AFC to selected commercial banks, regional development banks and central banks in various African countries, providing them with much-needed hard currency liquidity to finance trade and other economic activities in their jurisdictions.
On the other hand, the African Development Bank (AfDB) group of directors have approved a US$1.5 billion Emergency Food Production Facility to help African countries avert the looming food crisis.
The facility will provide 20 million African smallholder farmers with certified seeds, increase access to agricultural fertilizers, and enable them to rapidly produce 38 million tons of food.
What is driving high food and commodity prices?
In the month of May, 2022, AGRA identified South Sudan, Burkina Faso, Mali and Niger as the food insecurity hotspots across Africa.
The food insecurity crisis in these countries has been driven by a myriad of factors such as conflict, weather and economic shocks, although the situation varies per country.
In South Sudan for instance, AGRA notes that the continued macroeconomic crisis and depreciation of local currency has resulted in the loss of livelihoods, reduced incomes and increases in food prices, leaving most low-income households with difficulties in accessing food from markets.
Also, the purchasing power for the majority of low-income households in the country has been reduced due to the deteriorating security situation which is leading to displacements, loss of assets and livelihoods.
The situation is similar in Niger as the rising security incidents and prices continue to limit household food access in the far west, far southeast and south-central parts of the country.
In addition, the imported food products, particularly vegetable oil, dairy products, wheat and its by-products, are also experiencing a general increase of 50% and more following the decline in their availability related to the Ukrainian crisis, which is disrupting the functioning of international commercial circuits.
In Burkina Faso, AGRA reports that despite the favorable agro-hydro-climatic seasonal forecasts which show abundant forecast rainfall, the country’s agricultural campaign remains at risk due to delays and in accessing sufficient quantities of industrial fertilizers (NPK and Urea), a challenge that has been exacerbated by the global food and commodity price crisis.
Moreover, disruptions and displacements in rural communities as a result of ongoing security attacks continue to deprive rural households’ access to food supplies and their livelihoods.
In Mali, cereal production and supplies, which have generally declined across the country, particularly in the insecure areas of the country, have led to a decline in the trade of cereals resulting in prices rising by more than 30% above the five-year average.
In Mozambique, delayed harvests and crop loss due to weather conditions and conflicts continue to sustain higher maize prices during a period where maize prices are typically low.