4
Responding to the Crises at the Country Level

Between 2003 and 2008, the world prices of maize and wheat tripled and the price of rice quadrupled (von Braun, 2008). The purpose of this chapter is to describe the range of experiences of various countries in dealing with these dramatic food price spikes as well as with the ongoing economic downturn. Presenters examined the impact of these economic factors on food security and nutrition, and representatives from four countries recounted those countries’ responses to the crises. As described by moderator Ruth Oniang’o of the Kenyan Rural Outreach Program, the following presentations helped workshop participants to understand the range of country experiences with the food price and economic crises and their impact on food security and nutrition, as well as country-level responses to these crises.

THE ROLE OF MINISTRIES IN RESPONDING TO THE CRISES AT THE COUNTRY LEVEL

Ruth Oniang’o, Ph.D., Executive Director

Rural Outreach Program, Kenya


People living in urban centers are most immediately affected by economic shocks and are more likely than rural consumers to turn violent in the face of hunger. Such violence tends to influence governments to act quickly because of the likely political implications. The recent food crisis saw outcries in many countries; there were food riots and demonstrations in a number of cities across the globe. These food riots spurred the respective governments into action. Whether these governments acted because they wanted to tackle poverty and malnutrition



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4 Responding to the Crises at the Country Level B etween 2003 and 2008, the world prices of maize and wheat tripled and the price of rice quadrupled (von Braun, 2008). The purpose of this chap - ter is to describe the range of experiences of various countries in dealing with these dramatic food price spikes as well as with the ongoing economic downturn. Presenters examined the impact of these economic factors on food security and nutrition, and representatives from four countries recounted those countries’ responses to the crises. As described by moderator Ruth Oniang’o of the Kenyan Rural Outreach Program, the following presentations helped work- shop participants to understand the range of country experiences with the food price and economic crises and their impact on food security and nutrition, as well as country-level responses to these crises. THE ROLE OF MINISTRIES IN RESPONDING TO THE CRISES AT THE COUNTRY LEVEL Ruth Oniang’o, Ph.D., Executie Director Rural Outreach Program, Kenya People living in urban centers are most immediately affected by economic shocks and are more likely than rural consumers to turn violent in the face of hunger. Such violence tends to influence governments to act quickly because of the likely political implications. The recent food crisis saw outcries in many coun- tries; there were food riots and demonstrations in a number of cities across the globe. These food riots spurred the respective governments into action. Whether these governments acted because they wanted to tackle poverty and malnutrition 

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0 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS or because they merely wanted to preserve their own survival is an unanswered question. Government Interventions Realizing the implications of rising food prices, many governments instituted food subsidies, imposed price controls, restricted exports, and cut import duties. Some governments increased cash transfers to the hungry, and in some cases there was limited use of feeding and nutrition programs due to their prohibitive costs. Ministries of health are especially linked with nutrition programs. Many work with the United Nations Children’s Fund (UNICEF) to target the vulner- able and severely malnourished, especially children, and provide food rations. Ministries of agriculture are also involved in mitigating the impacts of the global food crisis. These ministries develop long-term strategies to boost agricultural production. In some countries, ministries of agriculture provide subsidies and incentives to farmers and importers of food grains. Ministries of finance have begun temporarily lifting taxes and tariffs on agricultural imports. They can com- bat the negative effects of the food crisis by redesigning their countries’ budgets to meet the new demands of the current emergency. What Countries Need Many poor countries cannot manage the effects of food shortages on their own. International organizations need to become involved. Due to safety con - cerns, such organizations do not engage in places where violence and riots are a reality. When possible, country governments should partner with international organizations to increase targeted programs to the poor and vulnerable; the prior- ity needs to be addressing the emergencies of starvation and destitution. Countries need technical assistance in dealing with these types of emergency situations. The media plays a key role in informing and engaging the global community. In this way, the media can be an ally to country governments when provided with accurate information about the country-specific situation. Developing countries need to take early warnings seriously. In Kenya, for example, government officials know that crops have failed and that there will likely be no rain for the next 6 months. Yet the government is not acting on this information. The capacity of government officials in developing countries need to be built. Officials need to be empowered to use the information at hand to make life better for their citizens. At this time, in order to cushion the poor and the vulnerable, technical sup - port is badly needed in dealing with the food price and economic crises. The min- istries of health, agriculture, and finance need new skills to deal with emerging problems such as climate change and rising food and fuel prices. It is imperative that government officials begin to recognize and analyze gender dimensions. The

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL answer to Africa’s food and governance problems lies with the women of Africa because women produce over 80 percent of the food consumed on the continent, yet receive little in terms of training and resources. REVIEW OF NATIONAL RESPONSES TO THE FOOD CRISIS Hafez Ghanem, Ph.D., Assistant Director-General, Economic and Social Deelopment Department Food and Agriculture Organization The crisis of undernourishment in the world is a chronic crisis and a struc- tural problem. Yet in a recent Food and Agriculture Organization of the United Nations (FAO) review of 81 countries’ policy responses to the food crisis, all of the policies reviewed were short term in nature. Unless there is a major change in the way governments address hunger both in developing countries and at the global and international level, the problem will remain unresolved. The Food Security Crisis The real food price index began increasing in 2002 and rose sharply from 2006 until mid-2008. By mid-2008, real food prices were 64 percent above the levels of 2002, but today prices are still above where they were before all this began. Today, the median price of food in a sample of 55 developing countries is 25 percent higher than a year ago in real terms (Food and Agriculture Organiza - tion of the United Nations, 2009a). For many of the poorest people in the world, the food price crisis is still a bleak reality. According to the OECD-FAO Agricul- tural Outlook, jointly published by the Organisation for Economic Co-operation and Development (OECD) and FAO, a decline in real prices is expected (relative to their peak in mid-2008), but over the next decade they are projected to remain above where they were before 2005 by about 10 to 15 percent (OECD and FAO, 2009). There is much uncertainty around this prediction, however, because the future price of oil is unpredictable, and there is now a strong link between oil and food prices (Food and Agriculture Organization of the United Nations, 2008a). The relationship between oil and food prices is very strong. On the cost side, energy represents a significant share of the cost of agricultural production, particularly in developed countries. On the demand side, with increased bio - fuel production, the price of oil now helps set a minimum price for food crops because if the price of agricultural commodities used as feedstocks for biofuel production—for example, corn—falls too much relative to oil, it becomes profit - able to produce ethanol. If it becomes profitable to produce ethanol, there will be more demand for corn. In this sense, the oil price is now setting a floor price for food products. The future of food prices, then, depends a great deal on what happens to oil prices.

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 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS Superimposed on the continuing food price crisis is the financial crisis that brings declining employment, wages, and income. The World Bank and Inter- national Monetary Fund data predict a decline in the global economy in 2009: remittances from developing countries are expected to fall 5–8 percent; global trade is predicted to fall by 5–9 percent; a decline of 32 percent in foreign direct investment in developing countries is expected; a decline of 25 percent in foreign assistance is anticipated; and credit will be harder to access (Food and Agriculture Organization of the United Nations, 2009a). Food prices have fallen, but for many people incomes have fallen even further, reducing their access to food. FAO estimates that more than 1 billion people are hungry in 2009 (Figure 4-1). (These figures consider caloric intake only. They don’t take into account the quality or other nutritional content of the food being consumed.) Viewing the estimated numbers of hungry from 1970 through today, one could argue that it is wrong to talk about a food crisis or an undernourishment crisis. The word crisis implies that it is temporary, and this graph clearly demonstrates that global hunger is not temporary. It is, instead, an inherent structural problem. While this 1100 1000 900 Millions of hungry people 800 700 600 500 400 300 200 100 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Year FIGURE 4-1 The number of hungry people in 2009 (1.02 billion). NOTE: The dotted line indicates the trajectory needed to meet the 1996 World Food Sum - mit goal of reducing the number of hungry people by half by 2015. The FAO measure of food deprivation, referred as the prevalence of undernourishment, is based on a comparison R01545 of usual food consumption expressed in terms of dietary energy (kcal) with minimum energy requirement norms. The part of the population with food consumption below the Ghanem F-1 minimum energy requirement is considered underfed (Food and Agriculture Organization vector editable of the United Nations, 2008a). SOURCE: Food and Agriculture Organization of the United Nations, 2009a.

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL problem has been ongoing since this type of data was first collected, the recent increase in food prices may serve as a call for the international community to realize that something must be done to address the large and growing numbers of hungry people. International Responses In July 2009, the G8 made a commitment to mobilize $20 billion over the next 3 years for a comprehensive strategy focusing on sustainable agricultural development. Prior to this announcement, the international response had been mainly a reaction to a particular short-term crisis. Resources were put into safety nets, feeding hungry people and helping farmers with agricultural inputs. While these short-term measures are important, it is also essential to invest in long-term rural development. The $20 billion committed by the G8 indicates a positive shift in policy toward looking at the long-term issues. The crisis has mobilized others beyond the G8 as well, including other donors and those in the multilateral system. The European Commission gave €1 billion to support inputs of seeds and fertilizers for farmers in developing countries. The initiative grew from the idea that European farmers require fewer subsidies because prices are high; instead, the European Commission chose to subsidize farmers in developing countries. The World Bank also shifted a great deal of resources toward agricultural support, and the World Food Programme’s intervention of food aid was essential as an immediate safety net for the most vulnerable in times of emergency. Developing Country Responses The specific policy interventions adopted by developing countries in response to the food price crisis are grouped into those that are trade oriented, those that are producer oriented, and those that focus on consumers. Of the 81 countries that FAO reviewed, all took some policy measure in response to the increase in food prices. Trade-Related Measures Of the 81 countries reviewed, more than 25 instituted export restrictions (a short-term response). When prices of food crops are increasing, a government should encourage its farmers to produce more food crops. Export restrictions, by contrast, keep domestic prices artificially low and reduce farmers’ incentives to produce food. Further, export restrictions are not long-term solutions; people find ways of bypassing them. Yet export restrictions are legal under the World Trade Organization’s international agreements. Almost all of the countries in the FAO sample that had tariffs or taxes on

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 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS imported food products removed them in response to the food crisis. Like export restrictions, these measures further reduce domestic producer prices, but have very little impact on consumers because typically the tax or tariff rate on food is proportionately quite low. For example, if the price has gone up by 60 percent, the removal of a 5 percent tax would not affect consumers much. Import measures did reduce domestic prices and stabilize domestic markets, but the measures have tended to reduce domestic producer prices (although to a reduce smaller degree than export measures) and deplete the foreign exchange of poor countries. Production-Promoting Policies A few countries employed programs to support farmers. While it is impor- impor- tant to help farmers increase productivity, a renewed focus by some countries on achieving domestic food self-sufficiency because of volatility in international markets can be costly. For many countries it may be more cost-effective in the long term to purchase food with earnings from other types of exports. Large Large portions of the world, especially in Asia, the Middle East, and North Africa, will always depend on international trade to ensure food security. There is an increased (and controversial) interest by cash-rich countries in in acquiring land abroad for securing food and fodder. This type of “foreign direct investment in agriculture” can be a very positive, win-win situation if done properly—by partnering with farmers. But if not done in a transparent and par- ticipatory manner, it can have adverse impacts on the food security of developing countries. Other production-promoting measures such as renewed interest in input subsidies, output price support, and grain reserves have been put in place, but many poor countries lack the necessary resources to follow through with these programs. Consumer-Oriented Policies Many countries attempted to support the consumers with new policies, either by providing subsidies to consumers or trying to fix prices. Producers were often adversely affected by these consumer-oriented measures. The subsidies, in many cases, turned out to be quite unsustainable; the prices were so high that the cost of subsidizing consumers was also extremely high. Fixing prices provided a disin- centive for increased production. Targeted transfer programs to vulnerable groups (food stamps, vouchers, and school feeding) were seen to be more efficient than tax reductions and price subsidies.

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL Conclusion Even where they benefit consumers in the short term, the above policy responses do not address the main issues of poverty and food insecurity for the billion people who are undernourished. The last time the world faced a similar situation in such large numbers of undernourished people was in 1974 (when food prices were even higher than in 2008). The world’s response at the time was a huge increase in investment in agriculture—the Green Revolution—including funds from developing countries themselves, especially India and Bangladesh, who put a large portion of their own budgets into agriculture and food security. For decades following the Green Revolution, the number of undernourished people in the world was declining. Today the numbers are increasing; the current food crisis is the result of years of neglect. The policy agenda that lies ahead is an important one. Countries need to design more supportive, sustainable, and long-term food and agriculture policies with expanded investment in food production and research. Governments need to partner with the international community to ensure access to targeted safety nets for vulnerable groups. Additionally, global and national governance around food and nutrition must be enhanced. The recommendations to invest in various programs or policy measures are primarily technocratic solutions. But it is politicians who make decisions. There is a need to empower the institutions and the governance structure that gives voice to farmers, poor people in rural areas, and the hungry in general, wherever they are. THE CASE OF MEXICO Graciela Teruel Belismelis, Ph.D., Professor, Department of Economics Iberoamericana University, Mexico Over the past 20 years, demographic changes have occurred in Mexico. Households have become smaller as people are having fewer children, and there are fewer young children. Total household expenditure has been increasing over time; however, there was a decline in household expenditures in 2008 and 2009. Over time, people have become wealthier, with the exception of the financial crisis that occurred in Mexico in 1996. This presentation focuses on food prices, expenditures, consumption, and nutrition in Mexico. Food Prices and Expenditures In the past 20 years, the National Food Price Index shows that the price of eggs has increased the most of all foods, marked by a rapid price increase in the past 2 years. In addition, increases have been seen in fats and oils, maize, corn,

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 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS legumes, fruits, cereals, and tubers. Sugar and sweeteners have had the lowest increase relative to the food price index; as a result, the relative price of soda and alcoholic beverages has actually decreased over time. At the macro level, Mexican food prices can be compared to international prices. For cereals and grains, the trends are very similar. For fruit and vegeta - bles, prices are slightly higher at the international level. However, the prices of meat, eggs, and milk are much higher internationally. The Mexican government’s response to the food price increases has been focused on supporting food produc- ers and transferring cash to families through Oportunidades and other programs. The government has been setting prices and quotas, giving credit, subsidizing input prices, and distributing food across the nation. Oportunidades is a program that transfers cash to poor families for food—one out of every five families in Mexico is aided by this program. Mexicans spend approximately 70 percent of their money on nonfood items. The remaining 30 percent is spent on food. Since 1996, the amount of food con- sumed inside the home has been decreasing while food consumed outside the home has been increasing. The average Mexican diet consists of meats, maize and corn, cereals, nonalcoholic beverages, vegetables, and milk. The primary expenditure is on meats with a much smaller share on fruits and vegetables. This has been consistent over time and has not changed as a result of the crisis. Since 1992, people have been buying more prepared foods. They are also buying more nonalcoholic beverages, primarily sweetened soda, and more dairy products. As the relative prices of soda are decreasing, its consumption is increasing. Negative trends for food expenditures have been seen as well. Fewer vegetables, eggs, and legumes are being consumed. Impact on Nutrition Overall, Mexico is winning the fight against stunting. For children under 5 years, the prevalence of stunting has decreased from 1988 to 2006. In 2006, only 12.7 percent of children under 5 years were stunted, as opposed to 22.8 percent only 10 years ago. There is, however, disparity in stunting among different regions of Mexico. The south has the highest prevalence of child stunting, while the north has the lowest. Prevalence in the north has not changed over time, likely because of lower initial levels. With respect to geographic regions, rural areas have higher stunting rates, although these are declining over time. Decreased child stunting has also been seen across the deciles of distribution. The highest reductions have been in the first deciles, or the poorest of the poor. The reduction in prevalence of stunting in indigenous people in Mexico has occurred at a much lower level; from 1988 to 2006, the rate of reduction in indigenous populations has been about 50 percent lower than the rest of the population (despite the fact that Mexico had special programs targeting indigenous populations).

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL At the national level, the prevalence of anemia in children under 5 years has decreased from 28 percent in 1999 to 23.7 percent in 2006. There is not a sig - nificant difference between anemia prevalence in urban and rural populations. In the past 20 years, the number of obese and overweight adult women in Mexico has increased dramatically and is becoming an epidemic in Mexico. For example, almost 70 percent—7 out of 10 adult women ages 20–49 years in Mexico—are either overweight or obese. THE GLOBAL FOOD PRICE CRISIS AND FOOD DEVELOPMENT STRATEGY IN CHINA Fangquan Mei, M.S., Ph.D., Standing Vice President State Food and Nutrition Consultant Committee, State Council of China This presentation addresses the impact of the global food price crisis on China’s current food situation and offers policy recommendations for grain and food development in China. China’s Grain Situation China is faced with continued population growth, severe constraints on agricultural resources, a speeding up of market transition processes, and a rapid increase in correlation with the international market. As a result, a series of new problems have emerged regarding China’s grain. From 1996 to 1998, the output of China’s grain rose to 512 million tons. At that time, a series of policy measures were put in place to stabilize grain production. In 2008, grain production was 519 million tons. Currently, China’s grain reserve is at 150–200 million tons, accounting for 30–40 percent of China’s annual grain consumption. The level of the World Food Security Reserve is 17 percent; therefore, China’s grain stocks are double the world average level. During the recent food price crisis, domestic grain reserves were sufficient to maintain domestic food security. However, international grain prices and domestic price inflation could not have been avoided, and grain prices did increase. A solution for rising grain prices is direct subsidies to low-income people who have inadequate purchasing power. Such solutions will continue to be necessary because grain prices are predicted to rise to a new level and stabilize at that higher price. By 2050, the world population will reach 9.5 billion (from the current 6.2 bil - lion); global demand for grain in 2050 will be more than double what it is today. A significant increase in demand for grain will likely lead to another sharp rise in global agriculture and grain prices. This prediction is an important cornerstone of China’s grain policy.

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 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS Next Steps for China’s Grain and Food Development Policy To ensure China’s grain and food security, China needs to implement a series of strategic measures and effective policies. The priorities are discussed in the following sections. Protect Arable Land and Promote Productiity of Farm Lands Strict implementation of the basic farmland protection system must be applied and the quality of farmland must be promoted. At present, the total area of crop land with low productivity accounts for 64.58 percent of total farmland area. Currently, a soil-fertilizing project is being carried out with an expanded irrigation area in order to promote farmland productivity. Increase Utilization Efficiency of Fertilizer and Irrigation Water The level of fertilizer input is relatively high in China, but it is unbalanced in different regions. The utilization efficiency (UE) of fertilizer is far below the world level, and the average UE of nitrogen and phosphor fertilizers is only 30 percent. In the near future, the adjustment of chemical fertilizers will be needed, with a focus on increasing the benefits of the use of this type of fertilizers. Water resources in China are severely lacking. For many years, the effec - tive irrigation area of farmland has been about 55 percent of total farmland area, and the UE of irrigation water is an estimated 45 percent. Future policies should emphasize development of water-saving agriculture. Increase the Fund for Agricultural and Rural Deelopment In recent years, the central government has increased the fund for agriculture and rural development to a great extent. In 2007, it was increased to 431.8 billion Yuan, and in 2008 it increased to 587.7 billion Yuan. The fund for rural infra- structure construction needs to be increased to about 30 percent from its current 15 percent in order to promote basic productivity. Promote Innoation Capacity of Science and Technology for Grain and Food In an effort to promote the innovation capacity of science and technology for grain and food production, the following should be considered a priority: • Establish and improve China’s innovation system for agricultural science and technology. • Improve the system for knowledge dissemination by making efforts to extend key techniques for grain production to farmers. • Enhance the capability for preventing and reducing disasters.

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL Strengthen Safety Controls in the Food Production Process To strengthen safety control in the food production process, the following is recommended: • Implement the Pollution-free Food Action Plan. • Speed up the development of “green” food. • Increase production of agricultural products. • Expedite the construction of a traceability system. • Improve monitoring systems for pesticide and chemicals. Deepen the Reform of Grain Circulation Systems To deepen the reform of grain marketing systems, the following is recommended: • Establish the three-market system: the production area market, the termi - nal market, and the distribution market. • Foster and develop food wholesaler, agent, producer, and circulation associations to enhance the organization and management of food circulation. • Enhance the construction of a network system for grain and food market information at home and abroad to ensure the rapid exchange of supply and demand information. • Build a smooth transportation channel for grain and food to promote the efficiency of grain circulation. • Speed up the pace of grain purchase and sale marketization. Gradually Build a Feasible Grain Resere System Speeding up the construction of a mature grain reserves system is important. The national and local reserve grain system should be constructed respectively, focusing on the construction of grain reserves in grain sale-orientated areas. Scholars have acknowledged the distinct differences in national grain reserve levels, ranging from 85 to 250 billion kg in China. Each individual country should select its grain reserve standard based on its own national conditions. Promote the Regulation Capacity for Grain and Food Import and Export Grain imports are generally controlled at below 5 percent of grain con - sumption. From 2000 to 2003, the production of grain in China continuously decreased, but maize and rice exports increased. In recent years, the amount of imported soybeans has grown to more than 30 million tons, primarily to be used

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 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS 80 0 70 0 60 0 50 0 Price ( $ /ton) 40 0 30 0 20 0 10 0 0 Ju 8 Ja 8 Ju 9 Ja 9 Ju 0 Ja 0 Ju 1 Ja 1 Ju 2 Ja 2 Ju 3 Ja 3 Ju 4 Ja 4 Ju 5 Ja 5 Ju 6 Ja 6 Ju 7 Ja 7 Ju 8 Ja 8 09 0 l- 0 0 l- 0 l-9 l-9 9 9 0 l- 0 0 l- 0 0 l- 0 0 l- 0 0 l- 0 0 l- 0 0 l- 0 n- n- n- n- n- n- n- n- n- n- n- n- Ja Month/ Year Wholesale Price Addis Import Parity Addis E xport Parity Addis FIGURE 4-2 Domestic and international wheat prices in Addis Ababa, Ethiopia, 1998–2009. SOURCE: Dorosh and Ahmed, 2009. R01545 Dorosh F-1 vector editable Finally, from July to October 2008, government sales of its own wheat imports successfully reduced domestic market prices. Because this wheat was sold in rationed amounts at prices substantially below market price levels, size - able rents (excess profits) accrued to those with access to wheat imports at official prices. Early Warning Systems and Livelihoods Analysis Although cereal price movements in Ethiopia were largely determined by domestic production and policies, such factors as national and regional produc- tion, income, and price shocks still strongly affected household nutritional out - comes, depending on the structure of household incomes (their livelihoods) as well as their food consumption patterns. To better understand and anticipate the severity of these shocks on food security, the Livelihoods Integration Unit was incorporated within the Ministry of Agriculture and Rural Development as part of the government’s early warning system. Baseline data on various household groups have been gathered for 173 liveli- hood zones using key informant questionnaires. These data are used to estimate potential effects of price and income shocks on household access to food. Such

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL an analysis enables a more disaggregated analysis of household food security that can identify problems that may not be captured in regional analyses. For example, this analysis highlighted the serious effects of production losses of enset and sweet potatoes on some households in pockets of southern Ethiopia in 2008. Safety Nets Ethiopia introduced the Productive Safety Net Program (PSNP) in 2005 as a way to provide access to food for poor households and at the same time, help build public infrastructure and household assets that could raise house - hold incomes in the medium term. Initially, the PSNP was targeted to cover 264 food insecure waredas (subdistricts), primarily in drought-prone areas. A public works scheme was created where it would pay workers in cash or in-kind for their labor on labor-intensive projects designed to build community assets. It also provided direct support to labor-scarce households including those whose primary income earners are elderly or disabled. In addition, a complementary program, the Other Food Security Program, was created to provide at least one productivity-enhancing transfer for service, including access to credit and agri - cultural extension services. In 2006, an evaluation of the Productive Safety Net Program showed that effects varied by household participation (Gilligan et al., 2008). The households that received at least half of the amount of transfers that they should have accord- ing to the design of the program had a reduced likelihood of having a very low caloric intake and increased their mean caloric availability by 183 calories per person per day. However, many people in the program received only a fraction of the normal transfer. For these households, there was almost no effect of par- ticipation in the PSNP. The greatest effect was seen in participants in the Other Food Security Program. For them, the calorie increase was larger (230 calories per person per day), and they were more likely to be more food secure, to borrow for productive purposes, to use improved agricultural technologies, and to oper- ate their own nonfarm businesses. The initial results suggest that programs that not only provide a transfer but also provide assets or some kind of technological assistance can have a significant positive impact on household food security in Ethiopia. Conclusions Over the past two decades, Ethiopia has made impressive progress in enhanc- ing food security by increasing domestic production, investing in infrastructure to improve market efficiency, improving early warning systems, and launching the Productive Safety Nets Program. The recent price shocks in Ethiopia can be traced mainly to domestic factors, including rapidly increasing overall incomes and cereal demand, rather than to shocks in the international market. Moreover, in

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 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS the context of growing per capita incomes and improved cereal market efficiency, these shocks did not represent a major threat to household food security for the vast majority of households in Ethiopia. Nonetheless, many households remain vulnerable to food production shocks caused by droughts or disease that may be specific to small regions within the country. To further enhance food security for households throughout the country, continued high growth in agricultural pro - duction and incomes of poor households will be required, along with expansion of successful household-level interventions such as the Other Foods Security Program and targeted nutrition efforts. BANGLADESH CASE STUDY Josephine Iziku Ippe, M.Sc., Nutrition Manager United Nation’s Children’s Fund, Bangladesh This presentation explores the effects of the global food price crisis and its impact on nutrition, policy responses, and suggested necessary actions in Bangladesh. Background Bangladesh is a country with a population of about 150 million people. The density of the population is around 952 per square kilometer, the highest in the world, except for some city states, including Hong Kong. The rural population comprises about 76 percent of the total population. Even before the spike in food prices the nutritional situation included persis - tently elevated levels of underweight, chronic malnutrition (stunting), and acute malnutrition (wasting), as shown in Figure 4-3. Bangladesh has nearly 9 million stunted children, and it ranks fourth, after India, Indonesia, and Nigeria, out of 36 countries with stunting prevalence greater than 20 percent. These countries total 90 percent of the estimated number of 178 million globally stunted children (Black et al., 2008). In the 1990s, rates of undernutrition reduced progressively; however, the trend was not enough to put Bangladesh in reach of Millennium Development Goal 1, with the target of reducing underweight from 66 percent to 33 percent by 2015. The last nationally representative nutrition survey in Bangladesh occurred before the increase in food prices and was conducted over the period that coin - cides with the monsoon season, a time that corresponds to the lean period in the country (BBS/UNICEF, 2007). The survey found that 41 percent of the children under 5 years were underweight, and 43.2 percent suffered from stunting. Infant and young child feeding practices in Bangladesh are also matters of concern. According to the Bangladesh Demographic and Health Survey (BDHS) 2007, the exclusive breast-feeding of children under 6 months has not improved

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL 60 55 48 48 46.3 50 50 40 45 43 33 30 36.2 16 16.2 20 13 10 10 0 1996-1997 1999-2000 2004 2007 2015 Stunting Wasting Underweight FIGURE 4-3 Trends in nutritional status of children age 6–59 months, 1996–2007, Bangladesh. SOURCE: USAID, 2009. R01545 in the past 15 years; the figure has remained static at 42–45 percent since 1993– Ippe F-2 1994. The nutritional status of women as measured by body mass indices showed vector editable that 30 percent of mothers were chronically malnourished. Although this finding was an improvement from 34 percent, the figure still remains high and implies a high risk for poor nutritional status in their children (USAID, 2009). Nutrition surveys carried out during the past decade all confirm that women in Bangladesh have low-quality diets. Micronutrient deficiencies among children and women in Bangladesh are major public health problems. Findings from the Helen Keller International (HKI)/Institute of Public Health Nutrition (IPHN) national anemia survey in 2004 showed that 68 percent of children aged 6 to 59 months were anemic with the highest prevalences among infants aged 6 to 11 months (92 percent). In this same study, the prevalence of anemia was lower in children who had been dewormed (BBS/UNICEF, 2004). Anemia has been found in 46 percent of pregnant women and 39 percent of nonpregnant women (HKI, 2006) and in more than one-third of adolescent girls (39.7 percent), predominantly a result of depleted iron-stores during pregnancy and lactation, the consequence of repeated infections, and poor intakes of food rich in iron and folic acid. The government has developed various policies, strategies, and organiza- tional structures to address malnutrition among women and children, but the delivery of nutrition services remains weak. Nutrition programming is hampered by a lack of coordination among the many actors involved, limited institutional capacity, and, in most of the country, inadequate linkages between the govern -

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 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS ment’s health care structure and communities. There is presently no national body with full responsibility and authority for coordinating nutrition activities, and there is no overarching framework existing for the many different types of activities that are underway. An important dynamic in Bangladesh that undermines nutritional outcomes is seasonality. Levels of malnutrition (acute and underweight) follow a seasonal tendency, increasing during the summer months and decreasing in the winter months, reflecting increases in morbidity and restricted access to food resources in summer months. Diarrhea and acute respiratory infections are major causes of illness, especially in children. Diarrheal disease has been repeatedly linked to increased risk of malnutrition, underpinned by conditions such as lack of clean water, poor sanitation, and inadequate health services. Therefore, a national nutri- tion policy and integration of nutrition programs is required with more attention to nonfood-based strategies and using a multisectoral approach to coordinate activities. Global Food Price Crisis From 1995 to 2009, there was an increase in food prices; however, there was a sharp peak in January 2007 (Figure 4-4). After this the price dropped. Although the price has stabilized, it is still almost 23 percent higher than it was in 2006. Issues affecting prices at the regional level include trade barriers, especially with India, and export bans. The large flood of 2007 also affected food prices. Despite this, in 2007, the percentage of food grain imports dramatically increased and Real Price (Tk/Quintal) Coarse Rice Wheat FIGURE 4-4 Household Food Security and Nutrition Assessment in Bangladesh: No- Household No- vember 2008–January 2009. SOURCE: The United Nations Children’s Fund (UNICEF)/World Food Programme (WFP)/Institute of Public Health Nutrition (IPHN), 2009. R01545 Ippe F-3 bitmapped fixed image

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL reached 6 percent of total imports compared to 3 percent in previous years. The The food price shock clearly worsened the food security situation in 2008 with 40 percent of households in Bangladesh reporting that they were greatly affected. of Due to the higher food prices, a majority of households in Bangladesh lost purchasing power. In 2008, the real monthly income per household decreased by 12 percent when compared to 2005 incomes. Real wage rates remained stable while the terms of trade (daily wage/rice price) further decreased in 2008. Moreo- ver, expenditures (particularly for food) increased to an unprecedented level of 62 percent of the total expenditures for households. Overall, about one in four of households nationwide was affected. These households are defined as being food insecure based on food consumption scores. Those livelihood groups that were most affected include nonagricultural laborers, agricultural laborers, and casual laborers. Garment factory workers are included in the nonagricultural laborers group, and because Bangladesh depends very heavily on garment exports, that livelihood group was greatly affected. Impact on Nutrition The joint World Food Programme (WFP), UNICEF, and IPHN Household Food Security and Nutrition Assessment (UNICEF, WFP, and IPHN, 2009) con- ducted from November 2008 to January 2009 to establish the impact of high food prices found that the overall acute malnutrition (13.5 percent) and underweight (37.4 percent) indicators remained high despite the fact that this survey was undertaken during the harvest season (Household Food Security and Nutrition Assessment, in press). Even within this “stable” context, conservative caseload estimates of acutely malnourished children are projected as approximately 2.2 million children, of which more than 0.5 million of these children are severely acutely malnourished and at increased risk for mortality (Black et al., 2008). The Household Food Security and Nutrition Assessment 2009 also found a slight increase in chronic malnutrition or stunting (48.6 percent) when compared to the BDHS 2007 (46 percent). The food price spikes in Bangladesh have meant that vulnerable children and women are not being provided with the essential dietary requirements and micro- nutrients necessary to prevent detrimental effects on their nutrition status. The households’ expenditures on food purchases are insufficient to provide the qual - ity diets necessary to meet optimum requirements for the growth, development, and nutritional well-being of these children and women who are often already nutritionally compromised. In this way, the price increases will have long-term impacts (Sanago, 2009; Save the Children UK, 2009). The assessment found that wasted, underweight, and stunted children were more likely to have a malnour- ished mother, demonstrating the importance having a healthy mother has toward decreasing the risk of undernutrition in children. Children of acutely malnour-

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0 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS ished mothers were 1.8 times more likely to suffer from acute malnutrition, 1.3 times more likely to be stunted, and 1.7 times more likely to be underweight. Policy Responses Bangladesh has an extensive social safety net with multiple programs and objectives. Most programs are administered by the government of Bangladesh, but nongovernmental organizations (NGOs) and other nongovernment bodies also and play significant roles as service providers. Primarily, assistance is in the form of food or cash-based transfers and targeted at poor and vulnerable groups. The largest social safety net programs typically operate in rural areas and are generally food based and government administered. Most are linked to the government’s Public Food Distribution System. Although the Public Food Distri - bution System has numerous programs and channels through which food assist - ance is provided, the majority of assistance (i.e., approximately two-thirds of the total food distributed during fiscal year 2007–2008) is provided through such efforts as Vulnerable Group Development, Vulnerable Group Feeding, Gratuitous Relief, Test Relief, Food-for-Work, and Open Market Sales (Food and Agriculture Organization of the United Nations, 2008a). Through the local consultative group, FAO also coordinated a policy discus- sion with the Bangladesh government that focused on a number of food security, agriculture, and rural development issues, while the government procured addi - tional food stocks and subsidies for farmers, especially fertilizer. Overall, the interventions made in response to the increase in food prices were focused on policy and safety net programs, subsidized food distribution, and limited-scale food aid. There were no interventions that specifically focused on improving the nutritional status of vulnerable groups. Next Steps The following actions can help to address the negative impacts of the global food crisis in Bangladesh: • Enhance the efficiency and effectiveness of the social safety net system; expand coverage in areas of high malnutrition and food insecurity and emphasize better targeting. • Provide cash interventions when food is abundant, accounting for season- ality and market availability; otherwise, targeted food assistance should be provided. • Support investment in food marketing and storage infrastructure (e.g., warehouses for larger stocks). • Promote open trade policies within the region, avoid policies that result in trade barriers, and expand and accelerate social protection programs.

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL • Invest more and build upon existing information systems for monitoring and surveillance and for early warning for early actions. • Address the large numbers of acutely malnourished children by managing acute malnutrition at both the facility and community levels. • Develop local production capacity for ready-to-use food; reduce costs and increase the possibility of future government-allocated resources for sustaining the programs. • Improve optimal infant and young child feeding, emphasizing maternal and community participation. • Emphasize micronutrient-enriched foods and diet diversity in food assis- tance interventions, food security, and nutritional programs. • Strengthen health and hygiene promotion to prevent and treat diarrheal disease, respiratory infections, and fever. • Harmonize, develop, and standardize national survey guidelines to enable data quality and comparability. DISCUSSION This discussion section encompasses the question-and-answer sessions that followed the presentations summarized in this chapter. Workshop participants’ questions and comments have been consolidated under general headings. Case Study Analyses The four country case studies (Mexico, China, Ethiopia, and Bangladesh) presented during the workshop were not comprehensive analyses of any of the countries. The presenters used a framework to look at food price data. Most pre - senters learned that, for the time being, it is too early to glean major nutritional impacts from the data. Typically, the most recent data are from 4 or 5 years ago, or at best 2 years ago, but the acute crisis occurred over the past 1 to 2 years. Before any associations are drawn about nutritional impacts of the food price and economic crises, more data are needed from these particular countries. No Need to Wait for More Data Several speakers and workshop attendees agreed that while the international nutrition community welcomes more data and improved surveillance to determine the nutritional impacts of the current and ongoing food price and economic crises, increased focus could simultaneously be put toward mitigation of hunger and undernutrition. The problems are known, and the Lancet series describes effective strategies for mitigation that should be implemented at all levels—local, national, and global (Bhutta et al., 2008). Some workshop participants argued that the international nutrition com -

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 IMPACTS OF THE GLOBAL FOOD PRICE CRISIS munity should focus more on mitigation than on analysis. They felt that analysis is important, but it should not get in the way of looking at the best strategies to solve problems, including long-term and short-term solutions. One attendee went so far as to say, “Data are no good if you are not going to use it.” Another agreed that continually analyzing, collecting, analyzing, and collecting feels a bit like reinventing the wheel, especially since similar analyses have been done in the past that are still useful today as this is a chronic crisis. It is very important to learn from what has worked and what has not worked in the past. The Role of Different Ministers at the Country Level How can the international nutrition community get the health, agriculture, and finance communities and ministers to talk to each other? At the international level, each works in isolation in responding to nutrition. For example, if FAO goes to a country, it talks to a minister of agriculture while the World Health Organization talks to a minister of health. What can be done to facilitate all the different ministers to work together? To accomplish this goal, it was suggested that political will needs to be mobi- lized at two levels: the country level and the international level. At the country level, governments have neglected the issue of nutrition for years. The people most affected by food scarcity and undernutrition do not have much voice in the political process, so national governments are not pressured to act. At the global level, too, coordination and a global political will are needed. This is challenging because controversial political issues between governments of both the “north” and the “south” arise, such as Organisation for Economic Co- operation and Development subsidies and their effect on developing countries; issues of biofuel policies and their effect on food security and development; export restrictions; issues of public investment and aid to food-insecure areas; codes of conduct for private investment; and land-grab issues. These are important and difficult questions. However, the call by the G8 for a global partnership on food and agriculture is building momentum. Effective coordination among ministries is a challenge in many countries, but with the above focus on both national and international levels, such coordination may be attainable. REFERENCES BBS/UNICEF. 2004. Anaemia Prealence Surey of Urban Bangladesh and Rural Chittagong Hill Tracts 00. Dhaka: Bangladesh Bureau of Statistics and United Nations Children’s Fund. ———. 2007. Child and Mother Nutrition Surey 00. Dhaka: Bangladesh Bureau of Statistics and United Nations Children’s Fund. Bhutta, Z. A., T. Ahmed, R. E. Black, S. Cousens, K. Dewey, E. Giugliani, B. A. Haider, B. Kirkwood, S. S. Morris, H. Sachdev, and M. Shekar. 2008. What works? Interventions for maternal and child undernutrition and survival. Lancet 371(9610):417-440.

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 RESPONDING TO THE CRISES AT THE COUNTRY LEVEL Black, R. E., L. H. Allen, Z. A. Bhutta, L. E. Caulfield, M. de Onis, M. Ezzati, C. Mathers, and J. Rivera. 2008. Maternal and child undernutrition: Global and regional exposures and health consequences. Lancet 371(9608):243-260. Dorosh, P., and H. Ahmed. 2009. Foreign Exchange Rationing, Wheat Markets and Food Security in Ethiopia. Addis Ababa: International Food Policy Research Institute (IFPRI). FAO and WFP. 2008. FAO/WFP Crop and Food Supply Assessment Mission to Bangladesh. Rome: Food and Agriculture Organization and World Food Programme. Food and Agriculture Organization of the United Nations. 2008a. FAO Methodology for the Measure- ment of Food Depriation. Rome: Food and Agriculture Organization. ———. 2008b. The State of Food and Agriculture. Rome: Food and Agriculture Organization. ———. 2009a. Crop Prospects and Food Situation. Rome: Food and Agriculture Organization. ———. 2009b. More People Than Eer Are Victims of Hunger. Rome: Food and Agriculture Organization. Gilligan, D. O., J. Hoddinott, and A. S. Taffesse. 2008. The Impact of Ethiopia’s Productie Safety Net Programme and its Linkages. Washington, DC: International Food Policy Research Institute. Government of Ethiopia. Various years. Household Income Consumption and Expenditure Surey (HICES). HKI. 2006. The Burden of Anemia in Rural Bangladesh: The Need for Urgent Action. Dhaka: Helen Keller International. Household Food Security and Nutrition Assessment. In press (unpublished). WFP, UNICEF, and IPHN. Kedir, M., and E. Schmidt. 2009. Urbanization and Spatial Connectiity in Ethiopia: Urban Growth Analysis using GIS. Addis Ababa: International Food Policy Research Institute (IFPRI). OECD and FAO. 2009. OECD-FAO Agricultural Outlook 00-0. Sanago, I. 2009. Rapid Assessment of the Impact of the Global Financial Crisis in Bangladesh. Rome: World Food Programme. Save the Children UK. 2009. How the Global Food Crisis Is Hurting Children: The Impact of the Food Price Hike on a Rural Community in Northern Bangladesh. London: Save the Children United Kingdom. Schmidt, E., and P. Dorosh. 2009. A Sub-National Food Security Index for Ethiopia. Addis Ababa: International Food Policy Research Institute (IFPRI). UNICEF, WFP, and IPHN. 2009. Household Food Security and Nutrition Assessment (HFSNA). Dhaka: World Food Programme, United Nations Children’s Fund, and Institute of Public Health Nutrition. USAID. 2009. Bangladesh Demographic and Health Surey 00. Dhaka and Calverton, MD: Na- tional Institute of Population Research and Training, Mitra and Associates, and ORC Macro International. von Braun, J. 2008. Food and Financial Crises: Implications for Agriculture and the Poor. Washing- ton, DC: International Food Policy Research Institute.

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