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Opinions of Saturday, 12 March 2011

Columnist: Food Security Ghana

High Food Prices and Popular Uprisings – Is Ghana at Risk?


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The ongoing popular uprisings in North Africa and the Middle East poses the question if other developing countries, including Ghana, may experience similar or other forms of uprisings in the light of the imminent global food crisis of 2011.

In order to answer this question one needs to look at the underlying drivers for the uprisings in both 2008 and now.
The 2008 Food Crisis
Global riots and unrest
In 2008 riots from Haiti to Bangladesh to Egypt over the soaring costs of basic foods have brought the issue to a boiling point and catapulted it to the forefront of the world's attention.

In April 2008 Jeffrey Sachs, director of Columbia University's Earth Institute said, "This is the world's big story.

In the same month World Bank President Robert Zoellick said that while many are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs, and it is getting more and more difficult every day.

For days running, parts of Haiti erupted into violence triggered by the soaring cost of food. On April 12, 2008, the Haitian Senate voted to dismiss Prime Minister Jacques-Édouard Alexis after violent food riots hit the country.

Food prices, which have risen 40% on average globally since mid-2007, also caused unrest around the world in 2008.

The price rises affected parts of Asia and Africa particularly severely with Burkina Faso, Cameroon, Senegal, Mauritania, Côte d'Ivoire, Egypt and Morocco seeing protests and riots in late 2007 and early 2008 over the unavailability of basic food staples. Other countries that have seen food riots or are facing related unrest are: Mexico, Bolivia, Yemen, Uzbekistan, Bangladesh, Pakistan, Sri Lanka, and South Africa.

Food riots in southern Yemen that began in late March 2008 and continued through early April, saw police stations torched, and roadblocks were set up by armed protesters.

In Egypt, a boy was killed from a gunshot to the head after Egyptian police intervened in violent demonstrations over rising food prices that gripped the industrial city of Mahalla on April 8. Large swathes of the population have been hit as food prices, and particularly the price of bread, have doubled over the last several months as a result of producers exploiting a shortage that has existed since 2006.

Cameroon, the world's fourth largest cocoa producer, saw large scale rioting in late February 2008, in protest against inflating food and fuel prices, as well as the attempt by President Paul Biya to extend his 25-year rule. At least seven people were killed in the worst unrest seen in the country in over fifteen years.

One of the earlier food riots took place in Burkina Faso, on February 22, when rioting broke out in the country's second and third largest cities over soaring food prices (up to a 65 percent increase).

10,000 workers rioted close to the Bangladeshi capital Dhaka, smashing cars and buses and vandalising factories in anger at high food prices and low wages. Dozens of people, including at least 20 police officials, were injured in the violence.
Causes of the 2007 - 2008 food crisis
A lot has been written about the causes for the 2007 – 2008 food crisis. Between 2006 and 2008 average world prices for rice rose by 217%, wheat by 136%, corn by 125% and soybeans by 107%. In late April 2008 rice prices hit 24 cents (U.S.) per U.S. pound, more than doubling the price in just seven months.

Many reasons have been cited for the global food crisis, including:

World population growth - According to Joachim von Braun, of the IFPRI, total food production increases only about 1 to 2 percent per year, while total world population increases approximately 4%. Aggregate cereal grain food production, per capita, had risen yearly from the 1960s to the 1980s but has been in decline since. World population has grown from 1.6 billion in 1900 to an estimated 6.8 billion.

Increased demand for more resource intensive food - The head of the International Food Policy Research Institute, stated in 2008 that the gradual change in diet among newly prosperous populations is the most important factor underpinning the rise in global food prices.

Effects of petroleum price increases - A major IFPRI Report launched in February 2011 stated that the causes of the 2008 global food crisis were similar to that of the 1972-74 food crisis, in that the oil price and energy price was the major driver, as well as the shock to cereal demand (from biofuels this time), low interest rates, devaluation of the dollar, declining stocks, and some adverse weather conditions.

Declining world food stockpiles - In the past, nations tended to keep more sizable food stockpiles, but more recently, due to a faster pace of food growth and ease of importation, less emphasis is placed on high stockpiles. For example, in February 2008 wheat stockpiles hit a 60-year low in the United States.

Financial speculation - Destabilizing influences, including indiscriminate lending and real estate speculation, led to a crisis in January 2008, and eroded investment in food commodities.

Commodity Index Funds - Goldman Sachs' entry into the commodities market via the Goldman Sachs Commodity Index has been implicated by some in the 2007–2008 world food price crisis. In a 2010 article in Harper's magazine, Frederick Kaufman magazine accused Goldman Sachs of profiting while many people went hungry or even starved. He argued that Goldman's large purchases of long-options on wheat futures created a demand shock in the wheat market, which disturbed the normal relationship between Supply and Demand and price levels.

Effects of trade liberalization - Some theorists, such as Martin Khor of the Third World Network, point out that many developing nations have gone from being food independent to being net food importing economies since the 1970s and 1980s International Monetary Fund free market economics directives to debtor nations. In opening developing countries to developed world food imports subsidised by Western governments, developing nations have become dependent upon food imports that are cheaper than what local smallholders agriculture produces, even in the poorest regions of the world.

Effects of food for fuel - One systemic cause for the price rise is held to be the diversion of food crops (maize in particular) for making first-generation biofuels. An estimated 100 million tons of grain per year are being redirected from food to fuel. As farmers devoted larger parts of their crops to fuel production than in previous years, land and resources available for food production were reduced correspondingly.

Biofuel subsidies in the US and the EU - The World Bank lists the effect of biofuels as an important contributor to higher food prices. The FAO/ECMB has reported that world land usage for agriculture has declined since the 1980s, and subsidies outside the United States and EU have dropped since the year 2004, leaving supply, while sufficient to meet 2004 needs, vulnerable when the United States began converting agricultural commodities to biofuels.

A World Bank policy research working paper released in July 2008 says that biofuels have raised food prices between 70 to 75 percent.

Idled farmland - According to the New York Times on April 9, 2008, the United States government pays farmers to idle their cropland under a conservation program. This policy reached a peak of 36,800,000 acres (149,000 km2) idled in 2007 that is 8% of cropland in United States, representing a total area bigger than the state of New York.

Agricultural subsidies - The global food crisis has renewed calls for removal of distorting agricultural subsidies in developed countries. Support to farmers in OECD countries totals 280 billion USD annually, which compares to official development assistance of just 80 billion USD in 2004, and farm support depresses global food prices, according to OECD estimates. These agricultural subsidies lead to under-development in rural developing countries including the least developed countries; meanwhile subsidised food increases overconsumption in developed countries. The US Farm Bill brought in by the Bush Administration in 2002 increased agricultural subsidies by 80% and cost the US taxpayer 190 billion USD. In 2003, the EU agreed to extend the Common Agricultural Policy until 2013.

Distorted global rice market – Japan was forced to import more than 767,000 tons of rice annually from the United States, Thailand, and other countries due to WTO rules. This is despite the fact that Japan produces over 100% of domestic rice consumption needs with 11 million tonnes produced in 2005 while 8.7 million tonnes were consumed in 2003–2004 period. Japan is not allowed to re-export this rice to other countries without approval. This rice is generally left to rot and then used for animal feed.

Under pressure, the United States and Japan are poised to strike a deal to remove such restrictions. It is expected 1.5 million tonnes of high-grade American rice will enter the market soon.

Crop shortfalls from natural disasters - Several distinct weather- and climate-related incidents have caused disruptions in crop production.

• Extended drought in Australia, historically the second-largest exporter of wheat after the United States
• The 2006 heat wave in California's San Joaquin Valley, which killed large numbers of farm animals
• Unseasonable 2008 rains in Kerala, India, which destroyed swathes of grain.
• Cyclone Nargis on Burma in May 2008 caused a spike in the price of rice.
• Stem rust that reappeared in 1998 in Uganda (and possibly earlier in Kenya) with the particularly virulent UG99 fungus that by January 2007 had gone across the Red Sea into Yemen and then to major wheat-growing areas in Iran. The disease was expected to spread over China and the Far-East.

Soil and productivity losses - Large areas of croplands are lost year after year, due mainly to soil erosion, water depletion and urbanisation. Additionally, agricultural production is also lost due to water depletion.

Urbanisation is another, smaller, difficult to estimate cause of annual cropland reduction.


Rising levels of ozone - One possible environmental factor in the food price crisis is rising background levels of ozone in the atmosphere. Plants have been shown to have a high sensitivity to ozone levels, and lower yields of important food crops, such as wheat and soybeans, may have been a result of elevated ozone levels.
How the world reacted to the food crisis of 2007 – 2008
The following probably sums up the conclusion reached on the global food crisis:

"Former President Clinton told a U.N. gathering Thursday [Oct 16, 2008] that the global food crisis shows "we all blew it, including me", by treating food crops "like color TVs" instead of as a vital commodity for the world's poor.... Clinton criticized decades of policymaking by the World Bank, the International Monetary Fund and others, encouraged by the U.S., that pressured Africans in particular into dropping government subsidies for fertilizer, improved seed and other farm inputs as a requirement to get aid. Africa's food self-sufficiency declined and food imports rose. Now skyrocketing prices in the international grain trade — on average more than doubling between 2006 and early 2008 — have pushed many in poor countries deeper into poverty."

The following are some of the steps taken by governments and international bodies as a result of the food crisis:

- Temporary ban on the export of rice;
- The removal of customs duty on rice and other basic foodstuff - in 2008 the NPP led government in Ghana scrapped the 20 percent import duty on rice and other foodstuff;
- Announcement of emergency programs designed to achieve food self-sufficiency;
- Buying rice at the high market price and selling rice to the public at a lower subsidized price at food kiosks;
- Pressure on retailers to freeze food prices.

Although food prices eased by the end of 2008, the UN’s Food and Agricultural Organization (FAO) convened a World Summit on Food Security at its headquarters in Rome in November 2009, noting that food prices remain high in developing countries and that the global food security situation has worsened.
The 2010 – 2011 Food Crisis
In January 2011 it became clear that the world was experiencing a second food crisis and that prices have risen to levels close to or above those prevalent in 2008.
Early warnings
At the FAO organized World Summit on Food Security at its headquarters in Rome in November 2009, the organisation said the global food security situation has worsened and continues to represent a serious threat. They also warned that there are 1 billion chronically hungry people in the world and recent reports indicated that this number could grow by 100 million in 2009. Food prices remained stubbornly high in developing countries, while the global economic crisis was aggravating the situation by affecting jobs and deepening poverty.

In the month following this warning, the new NDC led government in Ghana re-introduced the 20 percent import duties on rice and other basic foodstuffs lifting import duties to 37 percent compared to the 12.5 percent in neighbouring Ivory Coast – a step that was regarded as insensitive by both traders and consumers.

This step and the tariff differential it created led to widespread smuggling of rice from the Ivory Coast to Ghana and distorted local market conditions.
Popular uprisings
In 2011 riots and protests sprang up worldwide! This, according to analysts, is only the beginning.
The Tunisian Revolution
The demonstrations in Tunisia were precipitated by high unemployment, food inflation, corruption, a lack of freedom of speech and other political freedom and poor living conditions. The protests constituted the most dramatic wave of social and political unrest in Tunisia in three decades and have resulted in scores of deaths and injuries, most of which were the result of action by police and security forces against demonstrators. The protests led to the ousting of President Zine El Abidine Ben Ali14 January 2011, when he officially resigned after fleeing to Saudi Arabia, ending 23 years in power.
The Egyptian Revolution
The 2011 Egyptian revolution in January of 2011 took place following a popular uprising that began on 25 January 2011 which featured a series of demonstrations, marches, acts of civil disobedience, labor strikes, and violent clashes between protestors and security services and supporters of the regime of Hosni Mubarak. Protests took place in Cairo, Alexandria, and other cities in Egypt, following similar events in Tunisia that saw the overthrow of the long time Tunisian president. Millions of protesters from a variety of socio-economic backgrounds and religions demanded the overthrow of the regime of Egyptian President Hosni Mubarak. On 11 February, Mubarak resigned from office following weeks of determined popular protest and pressure.

Grievances of Egyptian protesters focused on legal and political issues including police brutality, state of emergency laws, lack of free elections and freedom of speech, uncontrollable corruption, as well as economic issues including high unemployment, food price inflation, and low minimum wages.

Further Revolutions and Protests
The 2010–2011 North Africa and the Middle East protests or Tunisia effect are an unprecedented revolutionary wave of demonstrations and protests, which have been taking place in the Middle East and North Africa since December 2010.

To date Tunisia, Egypt, and Libya have seen revolutions of historical consequence, Algeria, Bahrain, Djibouti, Iran, Iraq, Jordan, Oman, and Yemen have all seen major protests, and minor incidents have occurred in Kuwait, Mauritania, Morocco, Saudi Arabia, Somalia, Sudan and Syria.

The protests have shared techniques of civil resistance in sustained campaigns involving strikes, demonstrations, marches and rallies, as well as the use of social media such as Facebook and Twitter to organise, communicate, and raise awareness in the face of attempts at state repression and Internet censorship.

Some of these events, notably the uprisings in Tunisia and Egypt, which have ended in regime change, have been called revolutions.

Underlying causes
Numerous factors have led to the protests, including dictatorship, human rights violations, Wikileaks cables which demonstrated government corruption, unemployment, and extreme poverty, coupled with a large percentage of youth within the population. Increasing food prices and rates of famine globally have also been a major reason, involving threats to food security worldwide and prices approaching levels seen during the 2007–2008 world food price crisis.
Ghana at Risk?
The question on everybody’s mind is if the revolutions and protests in North Africa and the Middle East can and will spread to other developing nations, including Ghana.
Similar circumstances in Ghana
It is clear that there are corresponding factors between the countries where the revolutions and protests are taking place and Ghana. Some of these include:

Government corruption – Transparency International as well as the governments of both the Kufuor and Mills administrations have acknowledged that widespread corruption is prevalent in Ghana. Very little, if anything, is being done about this.

Poverty – Although Ghana has been hailed to have made great progress in reducing poverty, 30 percent of its population (approximately 7.8 million people) live on less than US$ 1.25 per day. However, according to the UNDP’s International Human Development Indicators about 46 percent of households are poor or deprived.

The situation where young girls turn to prostitution to make a living in Ghana is an undisputed fact, and is indicative of the true state of poverty in Ghana.

Unemployment and youth representation – The youth in Ghana younger than 30 years make up 60 to 70 percent of the population, while those between 15 and 25 make up 25 percent. With an unemployment rate of more than 25 percent in this segment, it means that Ghana is sitting with more than 6 million young and unemployed people.

The GoG’s stated plan to create jobs for the youth is through the Youth in Agriculture Programme. Statements have been issued by MOFA that between 47,000 and 80,000 new jobs have been created for the youth in this way. Independent investigations by journalist have proved that this is just not true.

Across the globe the youth of the world has lost confidence in the rulers who do not seem to have answers to the problems of employment creation and thus poverty reduction, and are increasingly becoming the drivers behind change.

High food prices – Despite the government’s denial, food prices in Ghana have been spiraling upwards. This trend will increase due to the latest global food crisis and due to the fact that Ghana is highly dependent on imports of especially cereals such as rice.

Injustice – Studies on corruption and thus the practice of injustice in the judiciary of Ghana are well documented. This means that the rich gets “justice” through bribery of the judiciary, while the poor have no hope for justice.

Myth that democracy equals caring – One of the major causes of the revolutions and protests in North America and the Middle East was the search for freedom from dictators who do not care for the people. Democratically elected governments can also be “uncaring”.

The NPP government was toppled through a “revolution” at the ballot box in 2008 exactly because they were seen as an arrogant, selfish and uncaring government.

The mood of many people in Ghana is therefore not dissimilar from the mood of the people in Tunisia, Egypt, Libya and other countries currently experiencing popular protests and uprisings.
High food prices – The straw on the camel’s back in Ghana?
There is little that any government can do about food price volatility and food crises such as the 2008 and 2011 crises – the last of which will hit Ghana in the soon. The 2011 food crisis is a global problem that requires both long-term strategies and short-term initiatives.
Long-term strategies
The world agrees that the best protection for developing countries is to become self-sufficient (as far as possible) in terms of food production. The GoG stated that they are pursuing this objective, and plans to make Ghana self sufficient in terms of rice production within two to three years.

The above statement is but one of many deceitful statements made by the NDC government as facts and the reality shows. Local production only caters for between 10 to 30 percent (no one really knows the true status) of local demand. To produce the deficit of 70 to 90 percent locally within two to three years is just not possible due to various factors.

Despite claims by MOFA that rice production has increased by 30 percent in 2010, all indications are that it actually decreased due to adverse weather conditions, failing of irrigation systems such as Afife and late or no fulfillment of promises to support farmers with fertilizers and tractors.

The truth is that the dream of self sufficiency can only be reached in ten or more years if, and only if, massive commercial farming is introduced and millions more is invested in the agriculture in terms of:

- Quality seeding programmes;
- Irrigation systems;
- Mechanisation;
- Farmer education;
- Fertilization;
- Creation of markets.
Short-term initiatives
In a situation where the majority of foodstuff such as rice has to be imported to ensure food security, the most important intervention by government has to be to keep the cost of these imports as low as possible. The only way to do this is to keep the cost of importation low through import tariffs.

In 2008 the then NPP led government scrapped the 20 percent import duties to support consumers when food prices skyrocketed.

In November 2009 the FAO issued a warning that the food crisis is not over and that a new wave of high prices is imminent. A month later the NDC led government, under pressure to generate income, re-introduced the 20 percent import tariffs to “protect the local industry”.

The above step created an import differential between Ghana and the Ivory Coast of 24.5 percent that led to massive rice smuggling from the Ivory Coast as reported by Anas. The combined effect of this move by the NDC led government was:

- Loss of millions of dollars in revenue to the state;
- Distortion of markets that threatened both legal importers of rice and local producers, and
- An increase in the cost of living for Ghanaians who were already reeling under high utility rates and fuel costs.

Conclusion
The conclusion that must be reached is that Ghana is indeed at risk.

Ghana sits with millions of unemployed youth without hope, millions of people are reeling under high food, utility and fuel prices, corruption in the government and judiciary continues as a matter of course and the government seemingly does not care.

The chance of a revolution similar to those in Tunisia, Egypt and Libya is slim. Uprisings in a so-called democracy such as Ghana is much more likely to take the form of more and more activists who will come forward to expose the non-caring character of the NDC led government, peaceful demonstrations and eventually a silent revolution at the ballot box.

Ghana will be going to the polling booths again in less than two years. High food prices and the lack of political will by the government to support its people will definitely play a major role in the outcome of the 2012 elections.

Will Ghana see the first ever four-year rule by a political party in 2012?



Issued by:

Food Security Ghana
http://foodsecurityghana.com
info@foodsecurityghana.com

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