MAPUTO, Mozambique, Jan 31 – African governments have been called upon to urgently implement various instruments that would ensure food price stability in their countries.
Alliance for Common Trade in Eastern and Southern Africa (ACTESA) boss Cris Muyunda said it was time that governments walked the talk and urgently executed strategies that would not only increase production but those that ensure that both farmers and consumers are not exploited.
“We have talked too much in the past and now it’s time to implement. We have to work together as a team and implement these strategies,” he told Capital Business after the third Food Policy Seminar in Mozambique.
Mr Muyunda said such measures should include the construction of storage infrastructure, development of quality standards and warehouse receipt systems, and commodity exchanges, which can go a long way in modernising production and trade structures.
“They would also be those that enable economic actors to cover themselves against risks linked to price variability through future contracts, harvest risks through crop insurance and weather index insurance,” he said.
Like many nations around the globe, many African countries have in the last few years been grappling with a food crisis which has seen prices go up by approximately 40 percent.
Recent studies indicate that a 10 percent increase in food prices leads to a 2.3 percent rise in poverty levels in COMESA. Currently, the commercial food demand in Africa’s urban market is $50 billion and this is expected to rise to $150 billion by 2025.
He has emphasised the need to invest more in agriculture, which accounts for 32 percent of COMESA’s GDP and also putting in place Public Private Partnership initiatives that can help promote the sector’s growth.
While considering these options, the ACTESA Chief Executive Officer argued that the best solutions for issues of food security and bringing down food prices were in regional trade, which would enable surplus food supplies to effectively move across the borders and in turn motivate farmers to produce more.
This has prompted the implementation of the commodity exchanges in several countries in the COMESA bloc, to help link smallholder farmers to reliable commodity markets and thus improve trade in regional staple crops.
“We are happy for the countries that have piloted the national commodity exchanges. What we would like to do is help such exchanges to go regional and may be we can connect them so that members from other countries can be able to trade on that particular platform,” the CEO said.
The Maputo seminar, which brought together regional and national policy makers, researchers and private sector representatives sought to come up with workable policy solutions to the current food price problems.
Mr Muyunda however maintained that the policies to be adopted must be reflective of the functioning of the food markets and the effectiveness of different policies.
“The solutions should attack the problem at its root. Fundamentally, stabilisation instruments must be foreseeable, realistic, transparent and credible,” he added.
For this plan to be effective though, African countries must ensure that there’s good infrastructure to ensure that countries that have food surplus are able to move them freely to areas where there are deficits.
In Africa, the number of kilometres of paved road per one million people is 60kilometers compared to 1,000km in Brazil and India and 20,000km in the developed world.
Poor infrastructure causes the continent to lose billions of shillings in revenues.
“We are putting in place deliberate efforts to work within SADC (Southern African Development Community) and EAC (East African Community) to make sure that our infrastructure is working from the ports to the hinterland,” Mr Muyunda assured.