The World Bank Hunger Clock is tracking the number of people who are undernourished in real time. Above is the number of people who were undernourished when I started writing this post at 10:33 am CST on 21 April 2011. I have written a series of posts this week regarding the food crisis in the East and Horn of Africa regions due to drought and rising fuel prices, but I felt like I should draft something that went into more detail about the extent of the crisis.
Global Hunger in 2010
According to the United Nations Food and Agriculture Organization (FAO), global hunger declined in 2010 for the first time in 15 years due to higher yields of cereal harvests. An FAO report from September 2010 stated that there was “better access to food due to improvement in economic conditions, particularly in developing countries combined with lower food prices.”
The FAO measures the number of undernourished people based on a minimum kcal intake of 1800 per day. Not all experts agree on what the minimum caloric intake for an adult should be. On average, adult males should take in about 2500 calories per day and adult females should take in about 1800 calories per day, depending on the level of physical exercise. Combined, these two average to about 2100 calories per day, the most common threshold used by organizations like the World Food Program . The United States Government has attempted to avoid the whole debate and instead offers a simple calorie calculator on the USDA website that is easy to use and estimates recommended daily intake of calories and food groups.
Regardless of how hunger is measured, most of 2010 did see decreases in the number of undernourished people globally.
Food Crisis 2011
Since the shortened rainy season from November 2010 to January 2011, confidence in continued reductions in hunger has waned. This month, the World Bank released a report “Estimating the Short-Run Poverty Impacts of the 2010-11 Surge in Food Prices” which found that poverty has increased by about 1% in developing countries and there has been a net increase of 44 million people below the $1.25 per day poverty line since the surge in food prices.
In February 2011, the World Bank Food Price Watch reported that food prices were soaring, but that local maize prices had remained relatively constant. This sounded like good news for African countries, which rely heavily on maize for their staple food source.
However, the follow-up report for Food Price Watch this month reported that during the first quarter of 2011, global maize prices increased by 17% and most of sub-Saharan Africa experienced double digit increases. In Kampala, Uganda wholesale prices for maize have jumped 114% over the last 12 months, the largest increases worldwide. In the last 3 months alone, Kenya and Uganda have experienced 27 and 25 percent wholesale maize increases respectively. Meanwhile, Chad and Tanzania have experienced 30% and 16% increases in retail prices for rice and Sudan has experienced a 87% increase in retail wheat flour prices.
Why protesting food prices is a bad thing
The recent protests in Uganda and Kenya over rising food prices could actually exacerbate the crisis rather than alleviate it. According to the World Bank, “Conflict can lead to supply and distribution channels being disrupted, contribute to localized shortages and lower output, and feed into higher food prices.”
Policy implications are tough to play on this one. In reality, African farmers should be benefiting from higher world market prices. However, agriculture subsidies currently in place make their products less marketable and a lack of infrastructure for exports makes getting these goods to market difficult or impossible. Instead, African farmers are largely experiencing the same hardship as their compatriots or even worse. Stories like this one are heartbreaking:
In Uganda, for example, inflation has shot up almost two-fold over the last month to 11.1 percent, up from 6.4 percent in February 2011. Fuel prices have increased by over 50 percent from Ugs.2,300 ($1) per liter of petrol to Ugs.4,000 ($1.70) in over two months.
These combined hits have produced desperate measures. Specioza Ndagire, a fruit vendor in Kampala’s Nakasero market is planning to return to the village because she can no longer afford to live in the city. She has been selling local and imported fresh fruits for the past 10 years. Her stall has boxes of imported apples and oranges from South Africa, and local paw-paws, bananas, water melons, and pineapples.
“Food has become extremely expensive and no one is interested in buying it,” she says. “I got my fruits on Monday, but up to now (Wednesday) I have not even sold half of them and yet before, they would only last a day then I ‘d re-stock.”
Ndagire says a box of South African apples has almost doubled in price from Ugs.80,000 ($35) to Ugs.130,000 ($56). This has meant that she has had to increase the price per apple. As a non-essential food item, most people have opted to stop buying, she says
Ndagire is now contemplating closing her business because of the rise in overheads. Her rental costs for a stall in the market have risen from Ugs.100,000 ($43) to Ugs.150,000 ($64) in the last two months. She blames it all on the increased cost of living which has been driven by inflation, increases in food prices caused by both drought and high transport costs, and the increase in fuel prices.
If governments lower taxes to help alleviate fuel and food costs, they will have to compromise important projects under their already constrained, debt-ridden, and aid-dependent budgets. Food aid programs would only make the situation worse, as there are plenty of goods at the market but not enough buyers to meet the high priced supply.
African governments could subsidize local staple foods by offering venders compensation for selling food stuffs at a reasonable local market price. This would meet both the suppliers’ and consumers’ needs for the interim until the market sorts itself out. However, these subsidies would be incredibly expensive and difficult to both implement and remove.
The most likely policy option for African leaders is to maintain the status quo. In cases where budgets will allow temporary tax breaks, governments could offer these as a means to appease the populace and counter unrest. But Kenya has already shown us that there are significant moral hazard issues associated with appeasement in some contexts.
Ultimately, African leaders will have to find a solution that fits their country’s budgetary, political, and humanitarian needs while they weather the present crisis and wait for the invisible hand to sort this whole mess out.
Above is the World Hunger Clock reading when I finished this post at 11:53 am CST on 21 April 2011. The difference (for those of you less math savvy like me) is 4,773 people in 80 minutes.
(H/T Keith Cole for the World Hunger Clock)