Food surpluses generate new concerns

Current food crop surpluses have helped improve the food security of important, vulnerable groups in Eastern Africa and the Horn of Africa in the short term, but could have serious negative effects later if farmers, reacting to lower prices, reduce the area planted with cereals, according to a new report from the Famine Early Warning System Network. The 2000-2001 cereal harvest was the best in seven years in many parts of the region - though with important exceptions to the general trend - and this had improved the food security of farmers through increased production and consumers through lower prices, the USAID-funded FEWS Net reported. Cereal production in Sudan of 4,800 mt in 2000-2001 was 109 percent of the five-year average for the country, while the situation was even better in Ethiopia (for the Meher season) at 118 percent the five-year average, and in Kenya, at 124 percent (for maize only), the report stated. In Uganda, it was 144 percent up (for maize only) and, in Tanzania, 112 percent, it said. The 2000-2001 crop in Eritrea was 285 percent that of the disastrous previous year, yet only 95 percent of the five-year average, while in drought-affected Somalia, the crop was only 55 percent that of the previous year and only 62 percent of the five-year average, it added. Food relief distributions would still be required in parts of Ethiopia, Kenya and Sudan, and most particularly in Somalia, where the main Gu harvest last year was disastrous, according to FEWS Net. Poor and erratic rainfall in the Somali/Kenyan/Ethiopian pastoral border zone meant communities there would also require external support, as it might take three to seven years to rebuild herd sizes to pre-drought levels, it said. However, with cereal prices at record lows as a result of surpluses in many parts (including key production areas of Ethiopia, Kenya and Uganda), there were also "increasing concerns over the disincentives to production in the coming season", according to the service, which aims to build countries' abilities to improve food security by providing timely early warning and vulnerability information. The fear is that reduced crop sales and incomes for farmers will constrain their purchase of necessary inputs (seeds, fertilisers, pesticides etc), according to the report. "With farm-gate prices falling below the costs of production in significant areas, farmers can be expected to react by reducing the area planted to cereals," it added. A key food security challenge was, therefore, to minimise price fluctuations to a level that would ensure affordable food for consumers while providing reasonable incentives (profit) for producers, FEWS Net stated. One way this could be achieved would be expanding trade opportunities - within countries, in the region and beyond, it said. For instance, with harvests in Uganda and Tanzania available in June and July, before the main Kenyan harvest, a flow of grains from these two countries could help cap excessive prices for Kenyan customers while providing good markets for Uganda and Tanzanian farmers, it stated. Regional flows could also make more sense than restricting trade within national boundaries, according to FEWS Net. In Tanzania, for example, surpluses from the main surplus zones in the south of the country could usually supply deficits in Malawi, Zambia and the Democratic Republic of Congo more profitably than the main internal market in Dar es Salaam. The capital could, if necessary, be more efficiently supplied by international imports delivered by sea, it added. However, there were some key constraints hampering regional trade, including: national government policies which tend to inhibit rather than encourage trade; desperately weak transport infrastructures; the frequently poor quality of crops, which limits exports to low-quality informal trade; and, inadequate information on which to base policy choices and alert traders to opportunities, FEWS Net reported. This year's Ethiopian experience, where much of an estimated 500,000 mt marketable surplus produced in the west and southwest of the country still remained unsold, was instructive it said. Although the government had bought 125,000 mt for food relief distributions, the volume unsold and prices well below production costs meant farmers were expected to substantially reduce the amount they produce in 2001-2002. In Sudan, predicted cereal surpluses in Western Equatoria, Lakes region (Buhayrat) and Upper Nile State would be unavailable in deficit areas due to market weaknesses and the absence or breakdown of normal trade routes and infrastructure due to the country's civil war, the United Nations Food and Agriculture Organisation and World Food Programme reported on 17 January. It was "particularly important to facilitate the timely purchase and transfer of grains from surplus to deficit areas" in order to support both producers and consumers, and to stabilise prices, they added. There was considerable potential for large food surpluses in parts of the region - including the southern Tanzanian highlands, western Ethiopia and southwestern Sudan - but "there is little potential benefit in expanding production without an associated market and the requisite transport infrastructure," according to FEWS Net. In the short term, measures to improve producer prices - for instance through the local purchase of food aid in preference to imports - were justified, it said. However, for longer-term food security in the region, individual countries "can no longer afford to remain isolated" and would have to make strategic improvements in policy, information, infrastructure and quality levels to prepare for increased trade, it added.