|
| | Rising Prices in Africa - Thinking Beyond the Short Term |
In efforts to contribute to preventing food and agricultural crises in the Sahel and West Africa, the Club du Sahel1 established a Food Crisis Prevention Network (FCPN) in 1985 charged with informing the international community about the food situation in the region and creating a space for consultation on actions to undertake.
In its January 2008 note2 the FCPN looks back at the "issues linked to the rise in prices of food products," which reached over 86% for wheat in 2007 and poses a direct threat to food security in the Sahelian and West African countries. It also points to the measures that could be undertaken to face this new situation.
While it is indeed necessary to monitor the effects that the soaring prices of agricultural materials could have on the different regions of Africa, which are so dependant on agriculture, price trends are actually forecast to undergo a sharp turnaround, as indicated by the first simulations of the WOAGRI model. As such, the proposed measures, designed in the context of price increases, will be unable to respond to such a change if global prices fall.
This is why proposals reflecting the current climate must be supplemented with a more structural analysis based on the volatility of agricultural raw material prices.
Many agree that agricultural raw material prices will remain sustainably high and that this new order is a "godsend" for farmers in least developed countries (LDCs), who presumably would see a rise in income. However, this once again denies the negative effects that skyrocketing prices could have on countries that are importers of agricultural products, as well as the impact on purchasing power for poor populations and LDCs. It also completely disregards the idea that prices could fall back down due to the high volatility of agricultural prices.
In effect, the FCPN note shows that this period of rising prices has serious consequences for countries such as "Mauritania, Cape Verde, Senegal and Guinea Bissau...[,which] greatly depend on commercial rice and wheat imports for their food security. Not only could cereal prices be higher in these countries, their urban populations and rural households with production deficits will be even more affected."
According to the FCPN, this hike is also fueled by "low production levels" at the local level, which are due to a lack of infrastructure, a severe reduction of supply and an agricultural system with low levels of mechanization, as well as by the "cereal stock retention by market operators, reacting to the situation of the flood- and drought-affected agricultural campaign." These handicaps constitute a major obstacle to development in most African countries.
In this light, these countries are “held hostage" to the decisions made on international agricultural markets and clearly carry no weight in World Trade Organization negotiations, despite how important the negotiations are to their development.
For the time being, the FCPN recommends several measures in response to the context of rising prices, including: "The constitution and use of food crop stocks, [...] the promotion of food crisis management tools assuring complementary provisions, [...]information and early warning systems to maintain vigilance on market dynamics [...] and strengthen[ing] regional local market fluidity."
While these measures are relevant, they are designed as responses to the current situation and assume that prices will remain high in the long term. However, agricultural raw materials prices are highly volatile and the current trend will most likely reverse, as indicated by the first simulations obtained from the WOAGRI model for the period up until 2020: the more unregulated and liberalized trade becomes, the more prices will be volatile.
It is therefore crucial to supplement these kinds of efforts with structural measures that account for the volatility of agricultural raw materials prices. Otherwise, it is very likely that by the time such efforts take effect, the international context will have changed and the measures will be essentially ineffective.
|
We must not be misled: the current rise in agricultural prices must not make us forget all of the years in which agricultural raw materials prices were low. Prices will remain volatile, and this essential characteristic must be integrated into the food policies not only of African countries but of countries in Europe and the Americas as well. In order to end national stop-and-go3 measures, which merely provide short-term solutions, what is needed are the type of simulation tools being advanced by WOAGRI: the WOAGRI Model and the International Assessment and Grading Agency (NAR Agency). The long-term salvation of the market cannot be ensured by the "market only" mentality, but only by a comprehensive approach that grants proper importance to such issues as food security.
WOAgri editorial
| 1 Created in 1976, the Club du Sahel is an active forum that brings together the Sahelian states belonging to the CILSS (Permanent Inter-State Committee for the Prevention of Drought in the Sahel) - Burkina Faso, Cape Verde, Chad, the Gambia, Guinea Bissau, Mali, Mauritania, Niger and Senegal.
2 www.food-security.net//medias/File/FOSIN_16_January08_Final_ENG.pdf
3 This strategy consists of boosting production during the "go" phase, when there is a supply shortage, and slowing production during the "stop" phase, in response to overproduction..
| |
| |
| | |
|
|
Advocating for
agricultural market
regulation and global
food governance | |
| |
| | |
| |
|