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Niger
Figure 13 suggests that the strong food price seasonality affecting this country has not
declined during the last decade, but has rather followed a cyclical behavior with a major
spike recorded on occasion of the 2005 food crisis/famine.
Figure 13 - Niger: coefficient of variation of yearly seasonal fluctuations in the millet
price (2000-2010)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
0
0.05
0.1
0.15
0.2
0.25
0.3
Source: authors’ calculations on national price data
As already noted, in Niger the traditional approach to food security pivoted around the state
cereal marketing and food security board (OPVN). After the adjustment policies of the 1980s,
the trading and price stabilization function of OPVN were eliminated, and price stabilization
was entrusted to imports and social assistance. While – as noted - releasing free or low-priced
food during the lean season may in principle help reducing seasonal price volatility, Niger’s
experience showed a clear failure in managing strategic stocks (see later). At the same time, the
overall environment did not facilitate the private sector’s adoption of those instruments that
can reduce the seasonal price fluctuation, such as futures, options and weather-indexed
insurance.
Malawi
In Malawi, maize prices start increasing around September-October, the period when most of
households run out of stock of own food production, and reach their peak in January/March
just before the maize harvest. Unfortunately, as the CFSVA survey shows, the dependence of
poor households on market purchase of maize is higher in February, when the prices are at
their peak, and falls to 8 percent in April (WFP et al. 2009). On the other hand, major price
declines occur between April to June which is the period just after harvest by which time
most households have maize from their own production (Chirwa, 2009). As noted in Tschirley
et al. (2004), despite having the most comprehensive government involvement in maize
marketing of all Southern African countries, between 1994 and 2003 Malawi exhibited the
highest seasonality of increases in retail maize grain prices (90 percent), compared to 50
percent in Southern Mozambique and 65 percent in Zambia. However, it would appear that
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the intra-annual variability of maize prices slightly declined during the latter part of the
decade (Figure 14 – see also Figure 9).
Figure 14 - Malawi: coefficient of variation of intra-annual seasonal fluctuations
in maize prices (2000-2010)
0
0.1
0.2
0.3
0.4
0.5
0.6
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source: authors’ calculations on FEWSNet
6. Food price dynamics, nutritional status and public policies under crisis conditions:
Niger’s 2004-5 and 2009-10, Malawi’s 2001-2 and 2008-9 crises
Niger’s 2005 and 2010 food crises
During the decade under exam, Niger experienced two major food crises which reached
near-famine conditions in about 30 percent of the country. The impact on food security and
child malnutrition have been marked in both of them, with effects on child malnutrition
equally or even more severe than those due to the long term stagnation at low level in millet
output. However, the causes, nutritional impact and responses to these two crises differed
considerably.
The 2005 food crisis
Between March and September 2005, 2.5–3 million people from low income families were
affected by a severe food crisis. Price tensions started emerging in November 2004, following
the poor 2004 harvest, and by July-August 2005 the millet consumer price reached a level 80
per cent higher than the average of the prior five years and twice that of 2004 (Figure 15).
What were the causes of such crisis? The 2004 drought and locust infestation resulted in a
cereal production fall of 24 per cent in the 2004 harvest in relation to the prior year, though
of only 10 percent compared to the prior five-year average). Output fell by more than 25 per
cent in 19 departments (WFP 2005). Yet, the main source of decline in food availability was a
sharp decline in official food imports (mostly from Nigeria) which in 2005 fell by 65 per cent
and were only 16 per cent of those recorded during the 2000–1 food crisis. In addition,
significant amounts of grains were exported unofficially from Niger to Nigeria (CILSS 2006).
This import collapse was due in part to a bad harvest in Niger’s traditional suppliers and a
31
generalized rise in millet prices throughout the region. In addition, import parity prices for
millet from key markets in Nigeria remained above domestic prices for the entire 2004/2005
season. In addition, between January and October the naira appreciated by between 5 and
7.5 per cent, thus reducing the incentives to export cereals to Niger (Terpend et al. 2006).
Figure 15 - Niger: monthly consumer price of millet - CFAF/Kg
(2005, 2004 and average 2000–04)
Note: a one-tail t test of the significance of the monthly changes (year on year) confirms at the 10.9 per cent
probability level the hypothesis that the 2005 prices were significantly higher than those recorded over 1994–
2004. The probability rises sharply if the test is restricted to May–October.
Source: authors’ elaboration on the SIMA Dataset.
An abnormal behaviour of food markets exacerbated the drop in food availability. Indeed,
the rise in consumer prices (Figure 15) was accompanied by a growing divergence between
the producer prices paid in small versus large collector markets and between producer and
consumer markets (Cornia & Deotti 2008, Table 6)
17
. Such growing divergence suggests a
surge in the profits of the fewer than twenty wholesalers who control the marketing process
in Niger. An econometric analysis for 1997–2005 (Michiels et al. 2006) suggested that the
2005 price rise was exacerbated by expectations of price rises, the procurement policies of
aid agencies, and speculation by wholesalers. At the same time, a fuel price shock in 2004
increased transport costs and spatial arbitrage opportunities declined significantly in 2005,
making trade unprofitable across key markets, especially in the most affected areas (Aker
2007).
The price increase and food crisis was exacerbated by a delayed response by donors and by
the Government decision of forbidding free food distributions by aid agencies during the first
seven months of 2005. The Government ability to make use of a Food Security Reserve was
also severely eroded. Indeed, after the SAP of the 1980s and 1990s, food security was no longer
to be achieved by holding a food security stock (or its financial equivalent) but by relying on
17
During the crucial months from October 2004 to January 2005 producers in small markets received on average
82 percent of the price paid in large collector markets, against an average of 91 per cent during 2000–2004.
Second, the 2005 rise in consumer prices was due in part to growing differences between producer and consumer
prices in relation to the 2000–2004 average. Indeed, the average nationwide difference during July–September
2005 (27.4 per cent) was considerably higher than that recorded during the same period of 2000–2004 (12.5 per
cent).
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