Rising food prices could trigger crisis - FEWS Net

Food prices have risen by between 25 percent and 30 percent since August, and should this trend continue, then a significant number of Djiboutian households could face a food crisis, a food-security early warning organisation has warned. A report released on Monday by the USAID-funded Famine Early Warning Systems Network (FEWS Net) said the prices of rice and wheat flour had risen significantly because of a decline in the value of the dollar, lower levels of cereal production, rising prices for oil and concerns over reduced rice production in the Far East, among other reasons. It added that basic expenditure for very poor households in the capital, Djibouti City, had risen from about 20,000 Djibouti francs (US $113) per household in September to about 21,800 francs last month. Should this rise to 22,000 francs, then there could be crisis, it added. The report said the poorest households among the 500,000 residents of Djibouti were subsisting on incomes of less than 50 US cents per person per day, and were therefore very sensitive to price changes. FEWS Net called for a number of measures to be taken to improve food security for the poorest households, including: extension of the school-feeding programme to poorer urban areas; monetisation of basic food commodities to stabilise market prices; reduction in the cost of education; reduction of taxes and charges associated with the importation of staple foods into Djibouti; and further reduction in the tax on kerosene. Djibouti's arid climate and rocky soil make it difficult to practise agriculture and large-scale livestock management. The country imports all its rice, wheat flour and sugar, and 90 percent of its fruit and vegetable requirements. According to its poverty-reduction strategy paper, 42.2 percent of its population lived in extreme poverty in 2002. It cited the extreme poverty line at $1.80 per adult per day, which is actually high by African standards, but reflects price levels in Djibouti.