News / Africa

Nations Seek to Prevent Uprisings by Controlling Food Prices

Violent protests in Egypt, Algeria and Tunisia recall 2007, 2008 food riots

Thousands of demonstrators protest in central Cairo to demanding the ouster of President Hosni Mubarak and calling for reforms. (Jan. 25, 2011)
Thousands of demonstrators protest in central Cairo to demanding the ouster of President Hosni Mubarak and calling for reforms. (Jan. 25, 2011)

As food prices soar worldwide, experts are advising policymakers that certain strategies to calm the markets - and the populace - do more harm than good.

Recent demonstrations in Egypt, Tunisia and Algeria recall memories of food riots in several countries in 2007 and 2008. While experts say the situation today has not reached that level, lessons learned then are part of a new guide the UN Food and Agriculture Organization (FAO) has published aimed at help policymakers wrestling with high food prices.

Don't ban exports

"I think the most negative experience in 2008 was the ban on exports," says FAO senior advisor Garry Smith.

India, Vietnam and other countries banned rice exports after bad weather damaged their crops. But taking rice off an already tight world market kicked global prices even higher.

"That's one of the things we strongly discourage," Smith says.

But Russia banned wheat exports this summer after drought ruined a third of its harvest.

"It's obviously also contributed to the current price situation," Smith says.

India has also banned onion exports in the face of high domestic prices. Experts are most concerned about the impacts of rising prices on an FAO list of 77 low-income countries that rely heavily on food imports, including 25 in Asia and 43 in Africa.

Price controls

Ethiopia is trying to control inflation by setting maximum prices for staple foods. Smith says that approach rarely works.

"It's all very well for a government to say, 'That's the maximum price,'" he says, "but what typically happens is product just moves to a black market."

In the legal markets, merchants forced to sell goods at a loss cannot afford to re-stock. In parts of Ethiopia, VOA reports on shortages of price-controlled goods such as cooking oil and oranges.

"Both export bans and price controls are pure political posturing," says agricultural economist Chris Barrett at Cornell University. "They tend not to wind up benefiting the poor populations that they most need to benefit."

Reserves buffer prices

Experts say global grain reserves currently are large enough to prevent a crisis on the scale of 2007-2008.

Some countries, including Saudi Arabia, are looking into increase their national reserves to build a bigger buffer.

"A buffer stock is very effective at helping to take the top off price spikes," Barrett says. However, he adds, "Those are typically expensive to maintain. They're very vulnerable to political manipulation when the states wants to suppress prices a bit, especially in the run-up to elections."

Boost imports

Governments can take a lighter approach by lowering tariffs to boost imports of staples.

Maximo Torero with the International Food Policy Research Institute says this approach can help, but it must be done carefully because the government will lose revenue.

"They have to get that money from somewhere else to keep their budget in balance," he says. "So, those types of policies can only be implemented for short term periods if you don't want to get into a fiscal problem."

Algeria has decided to accept that risk. Riots already broke out there earlier this month. FAO's Garry Smith says boosting imports will bring prices down.

"The question," he says, "is whether it's used as just a blunt instrument to be dumped into the market at subsidized prices and push the whole market down, or whether it's used to support needy groups."

Target the needy

Smith says targeting measures to needy groups is a much better way for governments to tackle the crisis. While he pans Ethiopia's price controls, he praises the country's safety net program.

"Local communities identify needy households," he says. "That's a way that we can better assure accurate targeting of need."

In addition to providing funds those families can use to buy food in local markets, the program also creates jobs for the unemployed in water or conservation projects or other plans aimed at improving agricultural productivity.

Smith says that's important, because investing in agriculture is how countries will avoid these problems in the future. But even though 70 percent of the world's extremely poor live in rural areas, Smith says, "Politicians will always err towards choices [that] will pacify urban communities because they're the ones who rise up."

Preventing those uprisings may be the goal in the short term. But Smith says a country's long-term food security lies with its farmers.

You May Like

China May Be Biggest Winner From Ukraine Crisis

Missile sales, oil and gas shipments are among many areas that may drive Beijing and Moscow closer together in coming years More

Obama Faces Chaotic World, Limits of Power

Current foreign policy issues bring into focus challenges for US policymakers who are mindful of Americans' waning appetite for overseas military engagements More

SADC Meeting Lesotho Officials to Resolve Stalemate

Official says regional bloc has been engaged with leaders in Lesotho to resolve political disagreement that led to coup attempt More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid