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Workshop Report: Partnerships between government and the private sector to overcome food shortages in Eastern and Southern Africa
edited by Johann Kirsten, University of Pretoria and Andrew Shepherd, FAO, Rome
23 March 2006 - 24 March 2006
Organized by the University of Pretoria and the Agricultural Management, Marketing and Finance Service of FAO

Acknowledgements: FANRPAN acknowledges the FAO as the source of this report: www.fao.org/ag/ags/subjects/en/agmarket/esaworkshop.html


Executive summary

Eastern and Southern African countries are largely dependent on rain-fed agriculture. Inevitably the rains do occasionally fail, with consequent production shortfalls necessitating imports, both for food aid and for commercial purposes. This workshop aimed to discuss how governments, the private sector and food aid agencies could work together to minimise the disruption caused and to ensure that in future all could work together to ensure that no one in the region goes hungry.

The workshop noted that in times of shortage large proportions of populations in the sub-region were still able to make commercial purchases. While the private sector should be in a position to supply that demand through imports from within and outside the sub-region, government, and to a lesser extent, food aid policies often made it difficult for the private sector to function. The workshop was provided with several examples of where policies relating to import and export controls; import duties; price controls on milled and unmilled maize; uncertainty over government imports; and poor targeting of food aid had increased risks faced by the private sector and, consequently, made it reluctant to import. For some governments this became a self-fulfilling prophecy: noting the reluctance of the private sector to import, they became convinced that food supply could not be left to the private sector in drought years.

The participants of the workshop, representing governments, marketing boards, the private sector, aid agencies and international organizations, emphasised the need for improved communication between government and private sector in order to overcome this mutual suspicion and develop an understanding of the different points of view. They felt that countries should establish a national-level forum, such as a Grains Council, in order to promote dialogue. There was also a need for greater dialogue on a regional basis. Participants recommended the private sector to consider developing a regional grains association.

The workshop noted the importance of governments developing consistent grain marketing policies and avoiding ad hoc interventions. Problems caused by inconsistent approaches to food aid were also noted. A coordinated sub-regional approach to droughts, embracing both policy and logistics issues, was also recommended. Participants also noted that poor policies can also have a negative impact in times of surplus, thereby also jeopardising food security. Needless export bans reduce prices to farmers and lower the incentive for them to plant in subsequent seasons.

Participants noted with interest several new approaches that could potentially play an important role in overcoming food shortages. Traders already trade futures on the South African Futures Exchange (SAFEX) but Option trading may be a further possibility, as has been tried by the Government of Malawi in partnership with the World Bank. The use of Warehouse Receipts and Inventory Credit by large farmers and traders in Zambia was also noted, as was a recent proposal by WFP to take out weather insurance in Ethiopia.

The poor quality of crop forecasting in many countries was noted and considered to be a significant problem facing the private sector, which also felt that there was a need for improved information on government stocks, and on trade and SPS regulations. Considerable concern was expressed about the poor quality of road and rail infrastructure in the sub-region and about delays caused at border crossings and at internal road blocks.

Finally, participants were very conscious of the fact that many of the issues discussed at this workshop had been discussed on many other occasions in similar forums, with limited results. Follow-up should be at a high level, possibly involving a meeting of ministers of agriculture. National policy advisory missions were also suggested. Policy reform requires ongoing dialogue and just one meeting is not enough.

For more information please visit: www.fao.org/ag/ags/subjects/en/agmarket/esaworkshop.html

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