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Attempts to fix rice prices are not working

Posted by African Press International on May 23, 2012

Attempts to fix rice prices are not working

ABIDJAN,  – Some 320,000 people in Côte d’Ivoire are grappling with hunger partly because they cannot afford the high prices of imported rice, but government efforts to bring down the cost of the staple food are so far not working well.
More than half of the country’s cereal intake is rice, but just half of the national requirement is produced domestically, making Ivoirians heavily dependent on imported rice. Government statistics record some 837,000mt imported in 2010, and 819,061mt in 2009.
In March 2012, the price of imported rice was 68 to 92 US cents per kg – 30 to 50 percent more than the five-year average, depending on where the market was located – while locally grown rice cost 55 to 77 US cents per kg, making it 15 percent more expensive.
The price of manioc – another staple food, also known as cassava – which is heavily consumed in western Côte d’Ivoire, has gone up by 70 percent.
Food insecurity is most severe in the north and west, where hundreds of thousands of people were displaced in the election-related violence that overtook much of the country from 2010 to 2011, when they could not access their fields to plant crops.
Some 260,000 people in the west are moderately or severely food insecure, and 60,000 are food insecure in the north, according to the World Food Programme (WFP). On average these families spend over half of their daily income on food.  
Prices in the north also are coming under increasing upward pressure because many of the available grains are being exported to neighbouring Burkina Faso and Mali, which are experiencing widespread hunger.  
Some 1.1 million people in Burkina Faso and 3.5 million in Mali are food-insecure or malnourished, according to government statistics; while just over half the international aid responses for the two countries are funded – 53 percent for Burkina Faso and 52 percent for Mali – according to the UN Office for the Coordination of Humanitarian Affairs.

The latest nutrition survey in Côte d’Ivoire, carried out in late 2011 – another one will take place in July 2012 – put the global acute malnutrition rate in the west at 4.7 percent, and in the rest of the country at 7.7 percent.
However, chronic malnutrition in children younger than five years ranges from 35 percent in the south to 43.6 percent in the north, which WFP described as “quite alarming”. Because of these figures, WFP is extending its emergency food programmes in Côte d’Ivoire until the end of October of 2012.  
“Rice has become gold”
In early April 2012 the government tried to regulate prices by imposing guidelines: the most widely consumed rice should cost between 207 and 317 cfa (40 to 60 US cents) per kg; semi-luxe rice should be sold at 362 to 543 cfa (70 cents to $1.05); and fragrant rice at 710 to 760 cfa ($1.38 to $1.48) per kg.
But six weeks later these measures have not yet been implemented at most of the main markets in Abidjan, the commercial capital. “Every time the government announces a drop in food prices, when you go to the market two or three days later you see nothing has changed,” said Françoise Etilé, a housewife from the Yopougon area of Abidjan.  
In many markets rice prices have gone up even more. “Rice has become gold,” said Etilé. “Already families are only eating one meal a day, and now we’re heading towards one meal every two days.” Traders say they are not to blame for the high prices, which are experienced globally and dictated by international markets.
“Each time he [Minister of Commerce Dagobert Banzio] accuses of us of causing the rises, but this is not true,” Salif N’diaye, a big rice vendor in Abidjan’s Marcory neighbourhood, told IRIN. He closes his shop for several days each time a new price category is announced, “Otherwise my stock would disappear.”
Price-watching teams

The government is now taking stronger measures and sending monitoring teams to markets to verify prices. “We have given three months for them [traders] to sort this out, to see prices significantly drop. Some show good willing but others still refuse – it’s deplorable,” Banzio told IRIN.
Ginaluca Ferrera, head of WFP in Côte d’Ivoire, welcomed the government’s proactive approach. “The government does not want to wait for foreign aid – it is good that they are trying to help with macroeconomic measures,” he said, but noted that discussions must be held with importers and traders so that compromise solutions can be found.
Fixing rice prices is difficult in today’s globalized marketplace, said Marie Noelle Koyara, head of the Food and Agriculture Organization (FAO) in Côte d’Ivoire, and would probably not be in line with development strategies agreed with the World Bank and International Monetary Fund.  
Likewise, further reducing taxes on rice, which were cut in March, or subsidising prices would be expensive for the state, and would not necessarily lead to a significant drop in prices, given the role of external market forces in raising rice prices, Koyara added.
Rather than setting fixed prices, it would be more effective to clamp down on outside factors like racketeering, which push up the price of cereals, and to significantly boost rice production, the FAO said, noting that the government has put in place a project to boost rice production to 1.9 million mt by 2016, and aims to reach 2.1 million mt by 2018.
At the end of March the government tried to counter the racketeering associated with high prices, but observers say not enough is being done to stop the widespread criminality and banditry in the north and west, where ex-combatants or criminal gangs set up roadblocks to extract money from transporters or to loot their goods.
aa/aj/he source

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