Michael Waithaka, Joseph Karugia, Sika Gbegbelegbe:
Persistence of High Food Prices in Eastern and Southern Africa: What Role for Policy?

MICHAEL WAITHAKA¹, JOSEPH KARUGIA², SIKA GBEGBELEGBE^2
1Association for Strengthening Agricultural Research in East and Central Africa, Uganda
²International Livestock Research Institute (ILRI), Regional Strategic Analysis and Knowledge Support Systems, Kenya

The high global food prices witnessed in 2007 and the first half of 2008 had large negative welfare impacts on the world's poor. Rising food prices and the current global financial crisis puts countries in Eastern and Southern Africa at risk of a reversal in gains made towards attainment of millennium development goals on hunger and poverty. The causes, effects and the policy implications of the food price crisis are not well understood. Paucity of data and information clouded the mechanisms and extent of food price transmission markets within ESA region. A study addressing the magnitude and implications of global food price changes in domestic markets in ESA correlated food price indices and several factors including landlockedness, tradability of food staples and level of import dependence. Results show that changes in global food prices are not fully transmitted to domestic markets in most countries in ESA. Countries with high import dependence for their key food staple which is also an internationally traded commodity face higher food prices. Policy responses advocated for by donors and country specific responses initiated by individual governments reflect a combination of short-term and long"=term measures and can be broadly classified into in support to regional trade; agricultural productivity growth and social protection measures. Most responses involved imposition of export restrictions or outright bans that only led to regional market imbalances and caused the domestic prices of food commodities to rise. Although global food prices have embarked on a downward spiral since July 2008, prices in ESA countries continue to defy the global downward trend. Unlike in the past, the recent price surge affects most food commodities, including key cereals, oilseeds and livestock products. The global economic crisis may have shifted global attention away from food prices, but ESA countries have many reasons to worry. Domestic prices remain high and many of the factors that contribute to high and volatile prices remain unaddressed. Continuous analysis and updates of information on the food situation in ESA will keep the issue high on the agenda.

Keywords: Eastern and southern Africa, food prices, policies

Footnotes

...P

Contact Address: Michael Waithaka, Association for Strengthening Agricultural Research in East and Central AfricaPlot 13 John Babiiha Road, Entebbe, Uganda, e-mail: m.waithakaasareca.org