1. High food prices and volatility
There is no doubt that rising food prices are always a concern due to their potential for diminishing the food security of the poor as well as their potential for creating political instability as seen during 2008 in many countries. Three years after the 2008 food and financial crises, food prices on international markets are rising again.
In South Africa and the rest of Africa, price volatility hits poor people the hardest, as they already spend the majority of their income on feeding their families. The World Bank’s food price index increased by 15% between October 2010 and January 2011 and is only three percent below its 2008 peak.
According to world food programme:
- rising prices have pushed 44 million people into extreme poverty and hunger since June 2010.
- in a number of African Countries, food inflation continues to be higher than headline CPI inflation.
- there are number of factors that causes food prices to rise, these includes:
- high energy prices
- adverse weather conditions such as flood, drought and fires
- the demand for feedstock in biofuel plants and the demand for animal feed
- exchange rate volatility.
- The frequency of extreme weather-related events over the past year and their impact on food prices underscores the vulnerability of the poor to climate change.
- the impact of the severe drought in Russia induced the first rally of world commodity markets in the second half of 2010; adverse weather events across the world have continued to influence markets.
2. Current global food price trends
There is also consensus in Africa and the rest of the World about the patterns in world food prices that current price increases are not typical of past increases because of the following points:
- Food prices are rising at an unusually rapid rate
- Volatility is greater, particularly for oilseeds and cereals
- Duration of the price increases is likely to be longer
- Breadth of products affected is much greater — early all major food and feed prices are rising as well as fuel, transport, manufactured goods and fertilisers.
3. What Africa needs from the Developed World?
Africa needs a Developed World that sees it (Africa) as a strategic partner. In this regard, I can argue that, Africa’s prosperity world mean Global peace. That peace would propagate itself through decline in numbers of Africans asylum seekers (seeking refugee status) in Europe. A vibrant and stable Africa would present business opportunities to Developed countries business (Europe is Africa’s immediate neighbours – proximity).
In addressing the question of what Africa needs from the developed world, I would like to argue the following:
- Africa continues to need developed countries food aid. A bigger proportion of this food aid could be sourced from other African countries (or within the country receiving aid). This would eliminated that perception that Africa is treated as a dumping ground by developed world.
- The developed countries donor need to strengthen their commitment by developing coordinated support and investments plans that reflect the priorities of African Union and African governments.
- Africa needs the Economic Partnership Agreement (EPA) with Europe and in that Europe has to consider with sensitivity some of the proposals put by African governments in pursuit of their Agendas
- Financial and technical support for the implementation of NEPAD’s Comprehensive African Agriculture Development Programme (CAADP) that will increase production of stable foods and also to increase Africa’s exports to the World
- Elimination of non-tariff barriers is also very critical to ensure market access for African agriculture products to the rest of the World and failure to conclude Doha Round is a blow for African agriculture producers and food security
- It is important that key commodity markets for maize, wheat or rice publish regularly reliable information about the available stocks or expected harvest to avoid information uncertainty that always leads to panic buying thus artificially keeping prices from falling to the levels expected when a good harvest is expected
- Larger exporting countries for key commodities must also avoid unnecessarily imposing export restrictions which would help maintain price stability, which is critical to prevent further increases food insecurity.
- At the same time, developed countries must assist in ensuring that safety net and nutritional programs are scaled up in vulnerable African countries.
- It is also important to ensure that those vulnerable developing countries who are large net commodity importers with low reserve cover and limited fiscal space be monitored to assess their external financing needs.
- In conclusion, the World through Durban COP17 must agree over the medium term, to raise investments in environmentally sustainable agricultural productivity, climate change adaptation measures, and finding less food intensive biofuel technologies which are all necessary to mitigate the impact of food price volatility on the most vulnerable.
