Feeding hunger and insecurity

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5. The global response to high food prices: what is being done?5.2.4 The Scramble for AgriculturalLandThe high food prices have spurred a number of middleand upper-income countries to lease or buy agriculturalland in poorer nations with the intention ofshipping produce back to their own domestic marketsin an effort to protect national food security (Borger2008). In 2007, China acquired access to 1.24 millionhectares of Filipino land, in 2008, the Governmentof South Korea announced plans to purchase690 thousand hectares of arable land in Sudan andhas recently supported Daewoo Logistics negotiatea 99-year lease for 1.3 million hectares of land inwestern Madagascar (Borger 2008). China, SouthKorea and Saudi Arabia are the largest investors todate, but other countries, including the United ArabEmirates, Japan, Egypt, Libya, Qatar, Kuwait andIndia, are making similar advances, particularly inAfrica and South East Asia (Borger 2008).Generally, poorer nations have been pushed bybilaterals and multilaterals to attract foreign investments,but in the present political climate, there isan air of uncertainty surrounding the deals. Thereis certainly a danger of marginalised groups andpoor farmers with poor access to land losing outfurther – with the potential of sparking protest. InLaos, wealthy elites have been selling large tractsof land to foreign investors at prices below the marketrate, for forestry or agricultural purposes. Smallholderfarmers, who were forced to vacate their landfor minimal compensation have begun to rebel insome regions by burning the plantation crops andmachinery (MacKinnon 2008). Foreign investmentis regarded as necessary for economic development,but can have anti-developmental effects bycreating dependency and building inequality. Moreefforts must be made to support civil society groupsmonitor and influence the way national investmentsare negotiated.5.3 Case Study 3: Responses to theFood Crisis in Monrovia, LiberiaResearch conducted on behalf of Action AgainstHunger in Liberia provides a more localised pictureof responses to the Global Food Price Crisis. TheLiberian economy has been severely affected bythe two civil wars fought between 1989 and 2003.Petroleum and food are Liberia’s greatest importsat 25 and 24 percent of total imports (rice accountsfor 65 percent of food imports). This reliance onimported food and fuel has seen the Liberian tradedeficit widen gradually since 2005 as global pricesincreased – oil by 37 percent and food by 280 percentin this period.Despite great potential (some areas may permitthree harvests per year), food production has neverreally been developed, rendering local produceuncompetitive. Transportation networks are poor,restricting the commercialisation of local productionand forcing urban coastal populations to becomemore reliant on imports for food. Ninety-twopercent of rice consumed in urban Liberia is imported,making the population highly vulnerableto changes in global food prices as seen over thepast two years.Food and Oil Prices Increase DramaticallyThe cost of basic food stuffs in Monrovia has beenincreasing since 2006 – with a more pronouncedrise in prices starting in late 2007 – affecting rice,cassava, palm oil, vegetable oil, fish and meat.The Central Bank of Liberia estimated the 2007inflation rate of food at about 19 percent, 10 percentfor imported goods and 26 percent for localproduce (see figure 5.4 overleaf).Food price inflation in 2008 was higher than in2007. Imported rice is the primary staple food formost Monrovians, followed by cassava, but supplywas limited in early 2008, and prices increased by33 percent in the first few months of the year. Thereliance on rice imports has left the Monrovianmarket sensitive to external fluctuations in priceand supply. Trade restrictions on rice imposed byIndia and China significantly constrained rice importsin Liberia as the cost of importing a ton ofrice rose from US$ 400 in October 2007 to over$1,000 per ton in mid-2008 contributing to the highdomestic prices experienced in the annual lean46ACF International NetworkFeeding Hunger and Insecurity
5. The global response to high food prices: what is being done?Figure 5.4: Consumer Price Index in Monrovia from January 2007 to January 2008170160150Domestic food itemsPrice Index140130Food and non-alcoholicbeveragesGeneral Index120110Imported food items100Jan-07Feb-07Mar-07Apr-07May-07Jun-07Jul-07Aug-07Sept-07Oct-07Nov-07Dec-07Jan-08Source: Central Bank ofLiberia - FAOseason. Four types of imported rice are generallyavailable in Monrovia: American (USA) parboiledrice, Chinese parboiled rice, Chinese butter riceand Indian white long grain rice, varying in quality,preference and price.Other important foods also increased in price.Palm oil, the favoured edible oil in Liberia,was reported to have experienced the greatestprice rise of all food products. Cassava pricesalso increased significantly in early 2008 dueto increased demand as consumers alteredtheir diets away from rice. The cost of fish, theprinciple source of protein for Monrovians, alsorose due to higher transport costs.higher prices in contract concessions duringthe dry season and cash crop production in thefarming season.Anecdotal Impacts on HouseholdsThe study in Liberia was the first undertaken byAction Against Hunger in 2008, but was unableto determine the precise impact of high foodprices on urban households. However, anecdotaland observational evidence suggested thatthe exceptionally high cost of food was hittingthe poorest hardest, restricting dietary diversityand constraining household budgets withdamaging effects on nutrition and livelihoods.A number of findings stood out:Domestic and regional factors also had an effecton food costs in Monrovia. Cross-bordertrading, for example, may have affected domesticprices, though the exact volume and impactof this trade is unknown. Local rice pricesare inflated by poor storage capacity. In 2007,19 percent of post-harvest stock was lost. Poorinfrastructure raises the price of local produceand limits its distribution, creating pockets ofinsecurity. Supply is further constrained bylack of profitability for farmers in Liberia, whoare discouraged from subsistence farming byThe poorest suffered most. Poor householdswere unable to accumulate food stocks whenprices were cheap and are now especially vulnerableto high price volatility and inflation.These households are able to afford only smallquantities of food and so are obliged to purchasefrom the market on a regular basis. Riceis usually sold in cups, a procedure that escapesthe government-imposed ceiling price(discussed below). The result is that poor peopleare more vulnerable to future price shocks,can afford less food and must pay more for it.ACF International Network Feeding Hunger and Insecurity 47
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Feeding Hunger and InsecurityField
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Executive SummaryKey MessagesThe cr
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executive summarybuffers and greate
Page 11 and 12: List of FiguresFigure 1.1Figure 1.2
Page 13 and 14: List of AbbreviationsACFCARCFACFSCR
Page 15 and 16: © ACF / S. Hauenstein Swan1. Intro
Page 17 and 18: 1. IntroductionFigure 1.2: Map depi
Page 19 and 20: © ACF / S. Hauenstein Swan2. What
Page 21 and 22: 2. what caused the global food pric
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Page 25: © Julien Goldstein3. Households in
Page 28: 3. households in crisis: who loses?
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Page 38 and 39: 4. The Hunger Crisis:4. What Happen
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Page 68 and 69: 6. what more is needed?non-food nee
Page 70 and 71: 6. what more is needed?Box 7: Hunge
Page 72 and 73: 6. what more is needed?Box 8: Malaw
Page 74 and 75: 6. what more is needed?Table 6.3: T
Page 76 and 77: 6. what more is needed?and local in
Page 78 and 79: 7. ConclusionData from Ethiopia sho
Page 80 and 81: ReferencesAbebe, Y., Stoecker B.J.,
Page 82 and 83: Referencesable at: http://www.iht.c
Page 84 and 85: AnnexesAnnex 1: Real international
Page 86 and 87: annexesAnnex 5: Percentage househol
Page 88 and 89: annexesAnnex 7: Harriss’ typology
Page 90 and 91: A HUNGER WATCH PUBLICATIONhunger Wa
Page 92: ACF INTERNATIONAL NETWORKSiège d
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