Discussion: Food crisis and business
- Posted on Wednesday 11 June 2008 - 14:07Olivier Nyirubugara, AfricaNewsMany African countries including Malawi and Tanzania, have banned the exportation of food items to prevent food shortages on domestic markets. While the general public hailed this attitudes, businessmen are furious as export is the source of their profit. Have your say.
Like Western countries, African nations have gone far in the liberalisation of their markets favouring fierce competition. The key beneficiaries of that price war were the consumers who prefer to pay for the least expensive and governments who generate huge tax-generated income.
As the global food crisis starts hitting Africa, governments are changing their strategies to impose not only prices but also to ban any possible competition. In Cameroon for instance, the government has imposed the price of rice and designated stores authorised to sell rice. Inspectors are searching small shops to unearth illegal rice.
Send us your opinion(s) about these questions and other you might think of:
- Should African governments take their responsibilities and infringe commercial competition?
- Is price control a solution to the food crisis?
- What should be the long-term solution?
- Is your own government tackling the food crisis differently?
See previous discussions
Reactions
- Posted on Wednesday 11 June 2008 21:56Africa’s leaders looking to economic priorities and food security for the Continent should be putting the environment high on the list. For report after report are now demonstrating that the sustainable management of Africa’s natural resources is one of the keys for overcoming poverty and food insecurity.
To read that the European Commission plans to provide a further ¤117.25 million for food assistance as a response to the impact of the increase in food prices on the world's most vulnerable people mostly in Africa is a wake up call to African leaders.
According to Louis Michel, Commissioner for Development and Humanitarian Aid, the rise in basic food prices is a worldwide humanitarian disaster in the making.
Africa is under enormous pressure with less food available for people already on the brink of starvation. Millions more, who were just about coping before, now risk going hungry.
Addressing food price issue in Africa requires long-term solutions but the emergency is now.
African leaders have an obligation to act – and act quickly. The latest humanitarian funding consists of ¤57.25 million taken from the existing food aid budget run by the European Commission's Humanitarian Aid department, and a requested ¤60 million in new money has been placed to feed the most vulnerable people.
In the face of increasing needs, it committed ¤160 million - more than 70% of the available food aid funds - in a decision adopted in February (IP/08/369).
The total humanitarian food aid budget so far in 2008 is ¤283.25 million.
African leaders should take advantage of the vast natural wealth or ‘nature capital’ residing in its ecosystems-from forests up to coral reefs- can be a leading player on this multi billion dollar stage of trying to encourge alternative crops and address climate change.
Africa’s wealth of natural resources has always been an asset and has sustained her people during good and hard times. But their true value, the sheer scale of the wealth of Africa’s freshwaters and landscapes up to its minerals and marine resources, has been invisible in economic terms. This should be utilized now with much more urgency.
Take the wetlands of the Zambezi River Basin. According to estimates, outlined in the new Africa Environment Outlook-2, the economic value in terms of crops and agriculture alone of these wetlands is close to $50 million a year. The wetlands also have other economic importance. In terms of fisheries, nearly $80 million a year and in terms of maintenance of grasslands for livestock production, over $70 million annually. Wetland -dependent eco tourism is valued at more than $800,000 annually and natural products and medicines associated with wetlands on the Zambezi, worth over $2.5 million a year.
In other words it is the developing world, and some of the poorest countries, that are helping the global community by freely removing large levels of the gases causing climate change. Some developed countries are recognizing that debt. They are turning to creative market instruments to repay it in a way that balances the need to fight poverty with a need to sustainably manage these income-generating natural resources.
Many countries in Africa, like the Gambia, are now mainstreaming environment into their Poverty Reduction Strategy Papers. They are also starting to turn to market instruments to balance economic concerns with environmental ones.
The need to underline the how African leaders need to make use of the continent’s natural wealth and increase food security is actually the missing link.
To allow Zimbabwe’s president Robert Mugabe to lecture the Food Summit on food security was a huge mistake and is a blackmail of the African leadership. African leaders need to stand up and protect their natural resources and the environment that are key to food security in the continet. - Posted on Friday 13 June 2008 09:57Humanitarian crisis with two faces
Kamurai Mudzingwa --The current food crisis rocking the world, particularly Africa and developing nations is a result of both natural and political causes. However, whether the causes are man-made or natural, the result is the same—a serious humanitarian crisis that needs urgent short and long term solutions.
For the past 18 months food shortages and escalating food prices have had dire consequences on developing nations and have left millions vulnerable to starvation.
World Bank President Robert Zoellick was recently quoted saying that the doubling of food prices could push 100 million people in low income countries deeper into poverty.
Developing nations have accused the West of using food as a political weapon and some events on the ground have proved the assertion correct. The recent events in Haiti have practically confirmed that food crises not only result in food riots but in effecting regime change.
Western nations, through the Bretton Woods institutions have pressured Africa and other developing nations to liberalize their economies and this effectively opened markets for Western food products. The short term gain was that domestic consumers could afford to buy cheap products imported from the West and governments reaped large quantities of revenue through taxes.
The problem with the liberalization drive was that African governments were discouraged from subsidizing their farmers who found themselves facing stiff competition from their western counterparts who continued to receive government subsidies.
Consequently, the local farmer was discouraged from producing food crops and when global food prices skyrocket the consumer can no longer turn to the domestic market for food because the local farmer no longer delivers due to lack of incentive.
Various factors, including the use of grain as a source for bio-fuel by North America, the rising cost of oil prices and transport costs among other things, have forced food prices to shoot upwards. Due to liberalization, this effectively means that the rise of food prices in America for instance, affects the prices in Africa and other developing nations.
The IMF notes that for the past year, grain prices have risen by about 43% globally, triggering a serious food crisis.
While some analysts have slammed government intervention in addressing the food crisis through actions such as imposing prices on products and other protectionist policies, reality is that governments have no choice as they can not fold their arms while people starve.
The tension is actually between business and government; that is, commercial competition and humanitarian responsibility.
Some governments have imposed a total ban on grain exports to conserve the little that they have in their countries while others, like the Zimbabwe government, have gone as far as imposing strict controls on internal movements of agricultural products such as maize.
It would be naïve to attribute food crisis solely to trade liberalization as other internal factors within respective countries come into play.
Africa, for instance, has vast arable land and skilled human resources; a combination that should guarantee food security for most countries but ironically most government policies and implementation strategies militate against the production of adequate or surplus food supplies.
It is a fact that Western countries cannot come and produce food for Africa. It is the prerogative of African governments to ensure that research is prioritized so that suitable crop varieties are grown to ensure food sustenance.
Lack of proper and serious research has seen African countries, particularly the drought prone southern parts, forcing varieties of grain crops that are not compatible with the now characteristic short seasons. This is tantamount to signing a starvation certificate.
Governments should invest more in agricultural technology to combat natural phenomena such as drought and to ensure that local farmers have adequate paraphernalia and inputs for each agricultural season.
While it is undeniable that the colonial wound left an indelible scar on resource allocation, it is important that the imbalance engendered has to be addressed in a rationale manner that safeguards food security.
Zimbabwe has shown the world the result of giving political precedence over food security through emotive and corrupt redistribution of land—hunger.
African leaders have often sacrificed food security for political power and such leaders have been known to talk a lot about measures to curb hunger in their countries but they never walk the talk.
Many countries in Africa have institutions that churn out graduates with competent agricultural skills but governments seem not to have strong policies to ensure the graduates are fully utilized to ensure adequate food production.
Where sound agricultural or food programmes are crafted, monitoring of the implementation processes is done in a lethargic manner that can only be a means to disaster.
A huge chasm between a program or policy and its implementation is usually evident as what the program spells out and actions taken are perpetually at loggerheads.
When situations go bad, governments then panic and impose short term measures such as price control and export bans that are not only inevitable because they bring temporary relief, but are at war with commercial viability and they portray lack of serious planning.
Africa has the resources, both natural and human, to turn the continent into the breadbasket of the globe if only there is political will on the part of governments.
The panic approach does not augur well for food security.
While the West has its own negative contribution to the food crisis in developing nations it does not do any good for African governments to use this unnecessarily as a scapegoat to swathe their policy and implementation shortcomings.
End.
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