FOOD PROGRAMME / FOOD AND AGRICULTURE ORGANIZATION
A Joint FAO/WFP Report on the Crop and Food Situation in the Country
for the Development Partners Group Meeting of May 2008
Highlights
1. Many parts of the country have been receiving average to above average rains from January. The rains have been beneficial to crop and livestock production in most of the unimodal areas but have caused water logging and flooding in some parts of the bimodal areas.
2. Staple food prices are falling modestly as the new harvests approach. However, the prices are at their highest level during the last ten years in most locations. Such high prices are threatening the food security condition of the low income market dependent households.
3. The Revolutionary Government of Zanzibar (RGZ) approved the Zanzibar Food Security and Nutrition Policy and Programme (ZFSNP&P) last month. A national awareness raising workshop in this regard will be held in early June. The RGZ is now ready to implement the ZFSNP&P. The UN agencies will support this implementation through the Joint Programme (JP5) “Capacity Building Support to Zanzibar”.
4. In response to soaring food prices globally, WFP Tanzania in collaboration with other partners is currently undertaking national level data analysis to identify areas and groups most at risk and provide evidence on the possible impact on household food security.
5. The recent discussion between WFP and Ministry of Agriculture Food Security and Cooperatives (MAFC) on the issue of raising food prices revealed Government’s serious concerns on the trend and the possible impact on food security on both urban and rural consumers. A number of measures are on board to reduce the impact of rising food prices.
6. The government of Zanzibar is in the process to waive tax on rice importation and consequently ban re-exports of the cereal in order to curb the price rising on this staple food.
7. The Government strategic grain reserve (SGR) stocks have dropped significantly from 129,000 Mt reported last month to about 87,600 MT. Despite this reduction, the government remains the largest stock holder in the country.
UN-FAO
1. Seasonal progress
Many parts of the country have been receiving average to above average rains from January. The rains have been beneficial to crop and livestock production in most of the unimodal areas (in the central, western, southern east and southern highland regions of Tanzania) but in some parts of the bimodal areas the above average rains have caused water logging and flooding.
As depicted in Figure 1, the satellite imagery generated Water Requirement Satisfaction Index (WRSI) for maize in both the bimodal and unimodal rainfall areas for dekad 3 of April 2008 is largely between good and very good, indicating potential for good maize harvests. There are, however, some locations where the WRSI is average while in few locations it is mediocre or poor.
Figure 1: Maize Water Requirement Satisfaction Index (WRSI) for Dekad 3, 2008Bimodal areas / Unimodal areas / Legend
Source: United States Geological Survey (USGS)
In terms of growth, cereal crops are at grain formation and maturity, therefore heavy rains may not be desirable any more.
2. Staple food prices
Staple food prices are falling modestly as the new harvests approach. However, comparison of the 10 years prices for March show that this year the prices were at their highest in most locations (Figure 2). The staple price sours are attributed to unfavorable domestic and global conditions. Regarding the former, major factors include poor transport and marketing infrastructure and inflation (taking 2000 as the base year, the National Consumer Price Index increased by 9 percent from 138.2 in March 2007 to 150.7 in March this year). The main factors at the international arena are the skyrocketing fuel prices and increased overall food crop demand for food and non food needs.
The increasing food prices are threatening food security of the low income market dependent households, who may not be able to afford food purchases to meet their needs. Should high food prices persist, rural households that depend on markets, even though partially, will increase their expenditure on food and in the long run may erode their production potential thereby heightening their vulnerability to food insecurity.
Figure 2: Maize wholesale prices in selected marketsSource: Ministry of Industries Marketing and Trade (MIMT)
3. The Zanzibar Food Security and Nnutrition Programme and Policy
On April 8, 2008 the Revolutionary Government of Zanzibar adopted the Zanzibar Food Security and Nutrition Policy and Programme. An inter-sectoral committee oversaw the formulation of both the Policy and Programme, under the leadership of the Ministry of Agriculture, Livestock and the Environment (MALE), and with the assistance of FAO. MALE has been given the mandate for food security by the Revolutionary Council of Zanzibar.
The Policy and Programme have been formulated within the context of MKUZA and together with this Strategy provide a broad and inclusive policy framework aimed at reducing food insecurity and malnutrition in Zanzibar. The Policy clearly states that Government is committed to realizing the right to adequate food for all Zanzibari. Focusing on increasing in sustainable ways food availability and equitable access to safe and nutritious food for all, the Policy and Programme envisage the implementation of integrated and well-coordinated multi-sector measures at all levels of Government, directly involving civil society and the private sector.
The Policy and Programme aim for existing sector policies and budgets to focus on food security and nutrition issues, and to maximize inter-sector synergies to effectively strengthen and protect food security and nutrition in Zanzibar. Efforts are currently underway to strengthen planning capacity at district level to mainstream food security and nutrition in harmony with the Policy and Programme.
UN-WFP
4. Monitoring Soaring Prices and its impact on household food security
In response to soaring food prices globally, WFP Tanzania is currently engaged in undertaking national level data analysis to identify areas and groups most at risk and provide evidence on the impact on household food security. This exercise will include partners such as FAO, IFAD, FEWSNET and key government ministries. Since trends in staple food prices are not uniformly felt across the country, the focus will be to collect and analyze data at sub national level. Tracking the price changes at local level will enable a better understanding of the impact at household level.
Over 95% of food consumed in the country is locally produced and the level of agricultural mechanization for both production and processing is minimal. The observed increase in food prices is therefore closely associated with increased transportation costs due to ever rising fuel prices.
The latter is also compounded by poor and dilapidated rural infrastructure notably roads and railways. On the other hand, reduced food production and market malfunction in some locations have resulted in low food supplies affecting the prices of major staples.
Tanzania is a net importer of wheat and a significant part of rice on the market is also imported. The prices of these two commodities are likely to be influenced by the global market trends. Poor in-country distribution mechanisms mainly characterized by relatively high import taxes, few capable private traders, inadequate transport and storage facilities adds to the prices of imported commodities.
5. Government Shows Concern on Soaring Food Prices
The recent discussion between WFP and the Permanent Secretary, Ministry of Agriculture Food Security and Cooperatives (MAFC) on the issue of raising food prices revealed Government’s serious concerns on the trend and the possible impact on food security on both urban and rural consumers. According to the comprehensive food security and vulnerability analysis (CFSVA) conducted by WFP and partners in 2006, the report shows that about 15% of rural people are food insecure and another 15% are highly vulnerable to food insecurity. With increasing prices, more people from these categories are likely to become food insecure.
Several measures have been taken by the government to address possible negative impact of rising food prices on the food security situation particularly in areas recently assessed to have pockets of food insecurity. Such measures include:
· Imposing Export Ban
The government imposed an export ban for maize from January 2008. Significant quantities of maize and other staples such as rice and beans have been exported mostly to neighboring countries through formal and informal cross border trade. The export ban imposed in January 2008 had little impact since prices of food commodities have been higher in Tanzania than those of the neighboring countries such as Kenya, Uganda and Zambia. Some total of 145000 MT of food comprised of 30,417 Mt of maize, 654 MT of rice and 113,942 MT of pulses were exported between July and November 2007.
The traditional export ban as a policy tool to discourage free flow of food during food deficits has also been viewed as a dis-incentive to local food producers who are looking for the right price to recover production costs and a profit margin that will enable them to re-invest in the next agricultural production cycle.
· Price stabilisation measures
One of the functions of the government-owned strategic grain reserve (SGR) is to support market supplies and stabilize prices during times of dwindling food stocks associated with price hiking beyond consumers purchasing power. Having noted price escalation, the government, in January 2008, allocated a total of 32,000 MT of cereals from the SGR to regions with food deficits in order to stabilize raising market prices. The release of maize has been through private traders under the coordination of regional authorities who were given a the role of identifying genuine traders and suppling these small traders with grain in their respective regions. The grains have been sold at market prices.
· Subsidized Food Aid for Food Insecure and Vulnerable Populations
In order to address the needs of the food insecure and vulnerable groups, the government released maize and sorghum to be distributed at a highly subsidized price of Tshs 50 per Kg, or at less that 20% of the average prevailing market price. The government allocated a total of 5,139 Mt of maize from SGR for sale at the subsidized price to nearly 214,000 food insecure people assessed in September 2007.
The distribution of the food aid is highly targeted to the eligible groups using community managed targeting and distribution mechanism. Based on the recent rapid vulnerability assessment (RVA) a total of 185,000 people were assessed to be food insecure and in need of food assistance until next harvest in June 2008.
· Waiver of import taxes
The government also supported importation of cereals through private traders by providing a waiver of import duties for 300,000 MT to be imported between January and May 2008. By the end of February, permits to import 142,000 MT were issued to eleven traders and a total of 6,500 Mt of maize were imported during the first two months. While this measure has been considered supportive to local traders, the challenges have remained to the in-country distribution beyond the importing harbour or city of Dar es Salaam to the upcountry markets. High transportation costs and poor infrastructure could pose a serious bottleneck.
6. Monitoring Food Prices and Stocks
The Ministry of Industries Trade and Market (MITM) and the Ministry of Agriculture Food Security and Cooperatives (MAFC) have been monitoring food prices in all the regions on a regular basis. The most recent price data shows a significant increase in wholesale prices for most food commodities including maize, the staple food for many Tanzanians. As seen from the graphs below, the price of maize increased drastically from the months of August and September, the time when the market season normally picks up.
The observed price increase much above the 5-year average is largely attributed to high prices of transport costs as a result of fuel prices as well as general inflation. Localised food shortages in some areas, particularly in the nine regions assessed to have pockets of food shortages (Arusha, Lindi, Kilimanjaro, Manyara, Mwanza, Shinyanga, Morogoro, Mbeya and Singida) and grain export through cross border trade. These could result to reduced market supplies and hence an increase in food prices.
Regarding food stocks, the government has proportionately the highest stock in the country. The current stocks stands at 87,600 MT comprised of maize and some sorghum. There are relatively few private traders involved in food imports and exports. These traders had a total of about 45,000 MT of cereals in February compared to 25,000 MT in January 2008. However, in February 2007 the stocks were as high as 69,700 MT.
Comparison between April 2007-March 2008 Maize Wholesale prices with 5 year Average in selected markets.Source: Ministry of industries Trade and Marketing
7. Impact of rising food prices on food security situation in Zanzibar.
The Zanzibar Food Security and Nutrition Analysis (ZFSNA) supported by FAO in 2006 and the Household Economy Analysis (HEA) done earlier by WFP, both revealed that proportionately, Zanzibar food supplies relies much on food importation. Most of the rice, wheat and vegetable oil consumed in Zanzibar are imported by private traders. With higher food prices in the world market, compounded by the already rising fuel prices, the market dependent consumers are likely to pay more now and in the future unless some measures are taken to address the situation.
According to the latest report, Zanzibar is in the process of waiving taxes on rice and consequently ban re-exports of the cereal in order to curb looming food shortages in the isles. According to the ZNFSNA report, the Zanzibar annual requirement for paddy (rice) is estimated at 108,263 MT, with national production providing only about 20% of the annual requirements.
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