Global food price crisis: lessons and ideas for relief planners and managers

Summary of published research1

Food prices have increased by an average of 52% between 2007 and 2008. ALNAP2 has recently published a paper which aims to assist those agencies undertaking operational relief and recovery work in the context of high food prices.

The key areas affected by the food price crisis are said to be Asia, sub-Saharan Africa and Central America. Experts do not agree on how long the price crisis will continue. However, most analyses suggest that within 15 months, most of the price spike will disappear. The possible exception is maize prices where the impact of United States (US) ethanol production may still keep prices high. In the medium term, staple food prices are expected to be 20-40% higher in 10 years than they were in 2002 in real terms, owing largely to increased real costs of oil and bio-fuel production. The impact of rising food prices can be seen in places like Kenya. Here the Kenya Food Security Steering Group (KFSSG) has identified a number of effects. These included increased population below the poverty line, diet changes and reduction in meal frequency, informal wage rates declining due to increased demand for casual jobs, rise in school drop outs, civil unrest, distress livestock sales amongst pastoralists, and livelihood crises in urban slums and amongst pastoral, agro-pastoral and marginal agricultural farmers.

A detailed set of policy prescriptions has been laid out in the Comprehensive Framework for Action, developed by the High Level Task Force on the Global Food Crisis3. A number of stakeholders have already begun to address the consequences of the crisis. Actions include reallocation of resources, mobilisation of new funds, nutritional care and support, supporting social safety nets for the most vulnerable, and supply of seeds, fertilisers and other basic inputs to smallholders. In addition, major pledges of support for agriculture have been made by the African, Asian, Islamic and Inter-American Development Banks, as well as bilateral donors and nongovernmental organisations (NGOs). Given all the above, relief managers and planners are faced with a range of challenges, problems and questions and will need to adapt and/or expand humanitarian aid programming to food insecure people. There has already been some evidence of action, in Kenya for example (see Box 1).

Box 1: United Nations (UN) priority areas in Kenya

According to the KFSSG meeting report, FAO, WFP, UNDP, UNICEF and OCHA4 agreed five priority areas of activity in Kenya in response to rising food prices:

  1. An integrated joint programme between WFP and FAO on cash/food for work transfers where appropriate, but focusing on marginalised farmers along river valleys who can improve their productivity from small-scale irrigation projects.
  2. UNICEF/WFP/WHO have agreed to consult around the issue of surveillance and management of both moderate and acute malnutrition through therapeutic and supplementary feeding, with focus on urban/peri-urban poor and pastoralists.
  3. FAO is to consult with partners on urban agriculture projects, including with Solidarites5, on the expansion of their pilot project on vegetable production in slum areas. These activities are proposed for other towns such as Kisumu, Mombassa and Nakuru.
  4. FAO is to consult with other stakeholders and develop a proposal on emergency response to the PPR6 outbreak among small ruminants in pastoral districts.
  5. Provision of assistance to pastoralists who have already been, or are close to being, forced to drop out of pastoralism.

Ideas and lessons

The ALNAP paper suggests a number of ideas and lessons:
Food price rises call for stronger analysis and monitoring of food and other basic commodity prices and markets and their impact on the needs and vulnerabilities of different livelihood groups. Such analysis is necessary to understand what type of assistance is appropriate in which context - food, seeds or cash, for example. However, analysis alone is not sufficient. It is also important to anticipate how the situation might change over time and to build in contingency measures to ensure that a programme can be adapted in response, to undertake evidencebased advocacy and to coordinate efforts. The livelihoods framework provides a tool for analysing people's livelihoods and the impact of specific threats or shocks on livelihood vulnerability.

In the context of livelihoods, it is especially important to develop integrated information strategies that bring together early warning, assessment, targeting and monitoring and evaluation. Here, the Integrated Phase Classification (IPC) work provides invaluable lessons, where bringing together information specialists, managers and local partners has ensured that the benefits of an integrated information strategy have been realised across regions and countries facing high food prices.

In the context of high food prices, it is especially important to analyse the specific vulnerabilities of particular household groups, e.g. agricultural, agro-pastoral, pastoralist and urban poor households.

There are also many reasons why it is valuable for humanitarian agencies to assess and understand markets rapidly in emergency situations, all of which are relevant to food-price rises:

Market analysis by institutions such as CILSS7, FEWS NET8, SIMA9 and the WFP have generated important lessons, e.g. a sub-regional approach is preferable to a purely national approach and assessments should devote more attention to demand factors at the micro-level. Also, market monitoring should be conducted on the basis of an agreed understanding of market structures, conduct and performance, and the analysis should cover flow information as well as prices.

Once analysis of the current situation is complete, it is important to extend it into the future and consider different scenarios (see Table 1). There are several different methods of scenario development, e.g. best to worst approach (self-explanatory), and augmentation or step scenarios that try to set levels at which additional action and response capacity is required. A 'time' approach defines conditions at set points in time starting with the onset of the emergency, while the 'operational resource' approach is based on understanding the types of operation required under different circumstances.

Table 1: Advantages and uses of different approaches to scenario development
Scenario/ approach Advantages Best use
Best, most likely, and worst case . Provides a basis for planning for different scales of problems
. Easy to understand
. Planning for a single situation
. When scenario development involves many actors
Augmentation . Good for planning for situations which increase in magnitude over time
. Easy to build plans which allow for expansion of operations
. Displacement situations (internally displaced populations and refugees)
Timeline . Allows planners to adapt operations over time while a crisis evolves . When rapid-onset disasters occur, response needs can change very rapidly in the initial days and weeks
Operationally representative . Allows for a greater focus on operations
. Can be used to develop more flexible plans
. Can be used to identify preparedness actions that help in multiple situations
. Situations that are

Contingency planning can make a significant contribution to improving operational anticipation and flexibility (see example in Box 2). It provides an opportunity to identify constraints and focus on operational issues prior to the onset of a crisis, enables individuals, teams and organisations to establish working relationships, helps reinforce coordination mechanisms by keeping them alive and allows organisations to put in place measures that enhance preparedness. Good contingency planning will include appropriate programming options and triggers for action, as well as predetermined roles and responsibilities amongst different actors. There are two broad approaches in humanitarian contingency planning:

Box 2: WFP index for triggering contingency planning

The WFP has been working on an index for triggering contingency planning when an emergency is detected. This is the Livelihood Protection Cost Index (LPCI), a weather-based index aimed at providing an objective, independently verifiable and replicable indicator of livelihood loss. The index is developed by evaluating historical weather data and determining its correlation to crop yields and revenues. One possible application of the LPCI to pastoral areas is being discussed, whereby weather data could be correlated to grass cover and forage conditions using the Livestock Early Warning System methodology. Similar approaches might usefully be explored in the context of rising food prices.

Coordination and partnerships between humanitarian organisations, development organisations, national and local governments and private firms are vital to an effective response. Coordinated advocacy is especially important in the face of rising food prices, to ensure that the conditions faced by the most vulnerable are addressed in timely and effective manners.

To counteract dramatic increases in costs and demand and bring food prices back to levels that the poor can afford, agriculture needs to make big leaps in productivity. Investments are therefore needed by the private sector. Equally important are good seeds, improved crop varieties and support systems. Water harvesting and water storage systems are needed to reduce stress caused by dry spells and pastoralists need support. It is also important to ensure that financial services, such as insurance and credit, are available to poor farmers.

Careful decisions also have to be made over whether cash or food or a combination of both is needed to support the worst affected. The decision should not be resource driven. Recent experiences with cash programmes have shown that:

Key points to consider when deliberating over a cash-based response are:

Social protection is an umbrella term used to describe a broad range of initiatives and transfers intended to reduce the economic and social vulnerability of the poor and food insecure. Instruments that provide a seasonal safety net, coupled with other options, can offer a livelihood package that can meet immediate needs, while building a buffer for the future. Instruments to offer a safety net include employment-guarantee schemes or conditional cash transfers, microcredit, food for work or cash for work, asset transfer or production support.

Governments, rather than the humanitarian community, should manage and implement social protection. NGO involvement should be geared towards facilitation rather than direct implementation and look to increasing their role in lobbying, advocacy, and capacity building. There is also a role for NGOs to participate in social mobilisation by engaging with civil society to hold states accountable to their social contracts and monitor the extent to which social transfers are carried out and who these are serving.

Different social protection instruments are appropriate for different sources of vulnerability. A mix of different approaches will be needed in different settings (see Table 2).

There is growing concern about the implications of rising food prices for cash-based social protection, given the eroding value of cash transfers in the face of food price inflation. Some argue that this makes the case for index-linking transfers. However, this requires governments or donors to take on the price risk that poor people face all the time and demands a degree of flexibility in planning and budgeting that governments and donors may find daunting.

Table 2: Source of vulnerability and suitability of social transfer instruments
Source of vulnerability Benefit Modality Examples of types of instrument
Chronic poverty . cash
. food
Direct support
Public works
. Conditional/unconditional cash/food transfers
. Micro-finance
Augmentation . cash Direct support . Social welfare grants
. Pensions
Timeline . cash
. inputs
. assets
Conditional transfers (e.g. must have land to utilise inputs . Conditional cash transfers
. 'Starter Packs' (farmers)
. Land reform (women)
. Restocking (pastoralists)
Market failures . cash
. subsidies
. food

Direct support
Public works
Subsidies

. Cash transfers
. Food stamps/vouchers
. Food price subsidies
. Employment guarantees
Inadequate uptake of basic services . food
. cash
. waivers
Conditional transfers, e.g. conditional on attendance . School feeding
. Conditional transfers (health)
. Fee waivers (education and health)

 

Show footnotes

1ALNAP (2008): The global food price crisis: Lessons and ideas for relief planners and managers. Available at www.alnap.org

2http://www.alnap.org/

3CFA Report

4Food and Agricultural Organisation, World Food Programme, United Nations Children's Fund, United Nations Development Programme, Office for Coordination of Humanitarian Affairs

5Solidarites is a humanitarian organisation which provides aid and assistance to victims of war or natural disaster.

6Peste des petits ruminants (PPR), is an acute or sub acute viral disease of goats and sheep characterized by fever, stomatitis, gastro-enteritis arid pneumonia.

7Permanent Interstate Committee for Drought Control in the Sahel

8Famine Early Warning System, http://www.fews.net/

9Niger government's système d'informations sur les marchés agricoles

More like this

FEX: Emergency Food Security and Livelihoods Project in Amhara and Oromia regions

By Sarah Coll-Black and Matt Hobson Sarah Coll-Black is a Social Protection Specialist working with the World Bank in Ethiopia and Kenya. She has been involved with Ethiopia's...

FEX: Food insecurity and mental health among community health volunteers in Ethiopia

By Sarah Coll-Black and Matt Hobson Sarah Coll-Black is a Social Protection Specialist working with the World Bank in Ethiopia and Kenya. She has been involved with Ethiopia's...

FEX: Swaziland Cash and Food Transfer Programme

By Rosie Jackson Rosie Jackson currently works for Save the Children UK as an Emergency Food Security & Livelihoods Advisor. Based in London, she provides technical support to...

en-net: Potential Negative Impacts of Cash Transfers on Nutrition Status

Dear All I am looking for information on the potential negative impacts of cash transfers on the nutrition status. I would grateful if you can share with me...

FEX: Cash transfers in emergencies: a review of recent experiences

Summary of Review1 Recent programmes have been based on the idea of helping people recover livelihoods, rather than simply supporting survival. Above a women trading, Kinsha...

FEX: Comparing cash and food transfers: findings from a pilot project in Sri Lanka

By Lili Mohiddin (Oxfam GB), Manohar Sharma (IFPRI), Anette Haller (WFP Rome) Lili Mohiddin, Manohar Sharma & Anette Haller Lili Mohiddin has been an Emergency Food Security...

FEX: Has financial speculation in food commodity markets increased food prices?

By Noemi Pace, Andrew Seal, Anthony Costello Noemi Pace is research fellow at University College London, Centre for International Health and Development. She was previously a...

FEX: Cash-based responses in emergencies

Summary of published research1 A recent study explores the suitability of cash and vouchers in the full range of emergency contexts and finds that such responses are possible,...

FEX: Support for primary production (Special Supplement 3)

7.1 Introduction This section focuses on supporting agricultural production, in particular farming and livestock production, as livelihood strategies. Production support can...

FEX: Income and employment support (Special Supplement 3)

5.1 Introduction The provision of cash as an emergency response has the potential to impact on all elements of the livelihoods framework by providing the means to protect or...

FEX: Addressing urban food security through electronic cash transfer in Kenya

By Sumananjali Mohanty Sumananjali Mohanty has been working with Oxfam Kenya programme for the past four and half years, initially as the Urban Food Security and...

FEX: Review of urban food security targeting methodology and emergency triggers

Summary of report1 People queuing at an Oxfam feeding programme in Mbare, Harare A recent report compiled by Oxfam GB, Concern Worldwide and Action Contre la Faim (ACF)...

FEX: Emergency Market Mapping and Analysis (EMMA) tool

By Lili Mohiddin and Mike Albu Lili Mohiddin has been an Emergency Food Security and Livelihoods Advisor with OXFAM GB since September 2005, based in the UK. Mike Albu is an...

FEX: Cash transfers protecting dietary diversity during food crisis

Summary of working paper1 A village scene in Indonesia In 1998, during the financial crisis in Indonesia, the value of the rupiah (Rp) depreciated dramatically from around Rp...

FEX: Impact evaluation of cash, food vouchers, and food transfers among Colombian refugees and poor Ecuadorians in urban Ecuador

Summary of evaluation1 Evaluation headlines: Levels of food insecurity and associated anaemia are high amongst Columbian refugees and poor Ecuadorians in the northern...

FEX: Grounding Food Security Monitoring in an Understanding of the Local Economy: Understanding differences – and making a difference

This article was written by Philippa Coutts of The Food Economy Group, using an illustration from Darfur and work of Yousif Abubaker, Abdel Rahmin Nor Hussein and Mohamed Salih...

FEX: Access to markets and services (Special Supplement 3)

6.1 Introduction In emergencies, access to markets may be lost for a number of reasons. Since most people live in a cash economy, restoring and maintaining adequate access to...

FEX: Sectoral integration ‘on the cheap’ with cash based programming

By Holly Welcome Radice Holly Welcome Radice has worked for 15 years in food security programming in Africa and Latin America. She was the Head of Food Security and...

FEX: Market-based contracts protect against price rises in Malawi alliance initiative

Summary of research1 Getting water in the drought affected landscape in Malawi Commodity options contracts are typically used to hedge against price volatility. They operate...

FEX: Household threat of escalating food prices and recovery policies

Summary of working paper1 An elderly woman shopping in Colombia, one of the countries that experienced price rises A recent working paper by UNICEF briefly reviews possible...

Close

Reference this page

Global food price crisis: lessons and ideas for relief planners and managers. Field Exchange 35, March 2009. p8. www.ennonline.net/fex/35/global