New Drought Poses Risks for Ethiopia

According to a new FAO Situation Report, Ethiopia could be facing a new drought in the southeastern regions of the country. Following on the tail of the 2015-2016 El Niño-driven drought, which was the worst drought the country has seen in decades, this new period of dryness could significantly impact the food security and livelihoods of livestock-producing households in the region.

The deyr/hageya rains, which typically last from October to December and make up as much as 35 percent of annual rainfall in some areas, have been low this year. A similar Situation Report from October, prepared by the Federal Disaster Risk Management Technical Working Group (co-chaired by Ethiopia’s National Disaster Risk Management Commission and the UN Office for the Coordination of Humanitarian Affairs), also highlights this lower-than-normal precipitation in the south and southeastern regions. The delayed seasonal rains have led to a shortage of water and pasture and a deterioration in livestock conditions. According to the FAO report, both water trucks and supplementary feed are desperately needed in these southern and southeastern areas. Livestock prices have plummeted as the quality of animals being brought to market suffers, and many livestock-producing households have been forced to sell more animals than usual to meet their consumption needs. This places a strain on these households’ long-term livelihoods and food security.

Crop harvests in many parts of the country began in October and are expected to continue successfully through January. In fact, FAO predicts this season’s harvests to be 20 percent higher than last year’s, which will improve food availability in many areas. However, food insecurity levels remain high throughout the country as households struggle to recover from the last year of drought. The eastern Oromia, Amhara, and Tigray regions, as well as the southern Afar and northern Somali regions, in particular continue to face severe food and nutrition insecurity. In addition, the FAO report emphasizes that post-harvest losses and crop diseases remain a significant challenge for Ethiopia’s food security; in particular, wheat rust disease has been prevalent in the southern and southeastern regions in recent months, and the high cost of fungicides has posed a challenge for management of the disease. Both post-harvest losses and disease should be closely monitored and managed in the coming months to prevent wastage of much-needed food.

According to both reports, as many as 9.7 million Ethiopians need food assistance; this is estimated to cost USD 1.1 billion. In addition, USD 91 million is needed to help Ethiopia’s agricultural and livestock sector recover from these prolonged and recurring droughts. 

While the continued drought clearly has implications for Ethiopia's food security, recent IFPRI research has found some surprising results regarding the drought's impacts on agricultural prices in the country, specifically the price of maize, sorghum, and wheat, three staple food crops. In a working paper released in April by the Ethiopia Strategy Support Program (ESSP), research found that Ethiopia's cereal prices have actually declined since January 2014, despite the drought. In January 2016, the average price  in woredas most seriously impacted by the drought was 8.4 percent lower than two years previously; in all other woredas (i.e., those less heavily impacted by the drought) combined, prices dropped by about 11 percent. Cereal prices followed a similar trend of decline in both drought-stricken woredas and woredas not impacted by the drought, suggesting that cereal markets remained reasonably well-integrated throughout the period. While the price of pulses and root crops increased between January 2014 and January 2016, Ethiopia’s real food consumption basket price declined over the study period. The authors note, however, that these declines were not as prominent  in drought-affected areas as in areas less impacted by the drought. 

In an update to the April working paper, a new ESSP working paper released in November 2016 extends the study period to June 2016 and looks at labor markets in addition to food prices. This new study supports the earlier findings that despite the severity of the recent drought, the cost of cereals in Ethiopia's national food consumption basket was 12.6 lower in June 2016 than in January 2014. Additionally, the new study finds that cereal costs declined most in the areas worst hit by the drought; this could indicate the success of efforts to ramp up cereal imports and direct food aid to these areas. The new paper did confirm the earlier findings that pulse prices have risen since 2014, emphasizing that these increases are due to a combination of reduced domestic supply and higher international pulse prices. 

The updated study also looks at wages for casual, unskilled laborers overthe study period and finds that, overall, Ethiopia has not seen widespread declines in wages between 2014 and 2016. While there have been reports of rapidly falling wages in some areas most affected by the drought, Ethiopia's overall real wage growth rate has continued to increase through the end of 2015. 

Both studies also find that livestock prices (specifically for cows and oxen) fell by 3 to 16 percent over the study period in more drought-affected woredas due to a lack of adequate pasture, deteriorating physical conditions of animals, and losses in agricultural output that are driving increased livestock sales to support households' livelihoods. The study does not find a decline in livestock prices in areas not affected by the drought. The authors argue that this may spell trouble for rural food security, with pastoralist households and small farmers who own livestock facing continued hardship in the coming months.However, the updated study finds that there has been an improvement in livestock-cereal terms of trade, largely because the decline in livestock prices has been slower than the decline in cereal prices. 

Households in drought-affected areas still face livelihood losses due to drops in agricultural outputs and a depletion of assets like livestock. Thus, there remains a strong need for assistance in drought-stricken areas, as well as for open trade policies (such as the removal of import tariffs and export restrictions) to allow surplus grains to move freely from food-surplus to food-deficit areas. This will ensure stable food supply and will help to keep consumer prices low. The situation in Ethiopia also highlights the importance of proper and timely data collection and sharing in order to fully understand food security conditions and price increases or volatility at the local level. 

By: Sara Gustafson, IFPRI

Photo credit:G.S. Matthews