Monitoring software may help stabilise food prices

[KAMPALA] Price-monitoring computer software that will produce monthly updates of staple food prices is being developed for East and Central African countries.

The tool is under development at the Association for Strengthening Agricultural Research in East and Central Africa (ASARECA), whose headquarters are in Uganda.

It is expected to increase competition and resilience to price volatility, and will begin with the monitoring of prices of maize, the major regional staple food.

Michael Waithaka, manager of the Policy Analysis and Advocacy Programme at ASARECA, told SciDev.Net: "We will be giving monthly updates of food prices and balances. We will also be trying out a forecasting model, so that we can be more prepared, but this may take some time to adapt adequately." 

The monitoring tool, to be launched imminently, will use food price indices generated by each country's bureau of statistics every month.

The information gathered by ASARECA through its networks in ten East African countries will be amalgamated, analysed and distributed to the governments of all the relevant countries to create price awareness.

It is hoped the data generated will help to enable the flow of food from surplus to deficit areas, and from markets where the prices are low to where prices are high, thus reducing food shortages.

However, observers have pointed out that the lack of integrated regional markets also needs to be addressed for food security to improve, as high price volatility is associated with the weak integration of food markets.

High food prices have had a negative effect on trade for the African continent, a net food importer that spends about US$20 billion annually on food imports, according to the UN's Food and Agricultural Organization (FAO).

For instance, according to FAO statistics, 45 per cent of rice and 85 per cent of wheat consumed in Africa is imported.

Waithaka warned that the tool will not be the sole solution for food price volatility as causes vary.

Since 2010, the East and Central African region has suffered volatile food prices because of a combination of global causes and region-specific factors. Export bans were the most prominent trade policy measures in 2011.

Joseph Karugia, the coordinator of the Regional Strategic Analysis and Knowledge Support System for Eastern and Central Africa, said: "In the 1970s and 1980s we complained about low prices, but now that they are high we continue to complain. A regional response would be an opportunity to address the food price crisis."

High food prices, he added, would prompt exploitation of regional diversity and facilitate regional trade with priority actions, including removal of export bans, elimination of non-tariff barriers and upgrading infrastructure of main regional trade corridors.

Godfrey Asea, head plant breeder of the cereals research programme at Uganda's National Crops Resources Research Institute, said the tool will equip farmers, traders and consumers with market information for decision making.

The key remaining problems would be how accessible the information is — and adequate infrastructure so that food can move from areas of surplus to areas of deficit, he concluded.