El Niño and Beyond: Policy Options to Increase Resilience to Weather Shocks

While the 2015-2016 El Niño cycle is not expected to significantly reduce global cereal production levels, according to a new IFPRI policy brief, the weather event is creating serious local food shortfalls in many regions of the world, including  Africa south of the Sahara. To address this, the brief calls for careful monitoring of production and prices in the region, the promotion of more transparent international and domestic trade policies, and expanded coverage of safety nets and nutrition programs for poor households, as well as a longer term perspective toward improvements in agricultural production and resilience to guard against future shocks.

Global commodity prices are at their lowest level since 2010, but this does not necessarily mean that domestic prices are safe from weather-driven spikes. Whether or not global prices are transmitted to developing country markets depends on a country’s trade policies, domestic stock levels, and volume of commodities imported or exported. For Africa south of the Sahara, price transmission is mixed and depends largely on the specific commodity and sub-region.

According to the brief, research suggests that global prices have a small effect on domestic markets in the region because Africa south of the Sahara tends to be only weakly integrated with international markets. While this may be good news for poor consumers in the region during times when global food prices are higher, in the current scenario, it means that low global prices may not do much to help moderate price spikes in countries suffering the negative effects of El Niño. Thus, policymakers in the region would do well to focus on other strategies, such as maintaining open borders and transparent trade policies both within their countries and with their neighbors to make sure food supplies are able to move freely from surplus to deficit areas. 

For example, the brief states that Ethiopia can expect net cereal production from the main harvest to fall by 3.3 million metric tons from last year’s harvest. According to a press release from the EU, the number of food insecure people in Ethiopia has spiked from 2.9 million to over 10 million in the last year. Eastern Ethiopia has been particularly hard hit, experiencing the worst drought in over three decades. However, the western region of the country has generally experienced adequate rainfall and relatively normal harvests; current national market prices for maize have remained nearly 25 percent below the three-year average, due largely to government efforts to boost productivity in recent years. This means that the western region of the country could help feed deficit areas in the east, provided that domestic trade is not restricted.

Other areas of Africa south of the Sahara are also facing both production shortfalls and price increases. Crop production in South Africa is forecast to fall approximately 20 percent below the three-year average. White maize will be particularly hard hit, which could have ripple effects throughout the region, as this is an important staple crop and South Africa is typically a key regional exporter. Grain prices in South Africa have increased this season but remain below long-term averages; however, the declining value of the rand will make food imports more expensive and put additional pressure on poor consumers.

Zimbabwe and Malawi are also expected to see significant declines in food production, but grain exports from Zambia are helping to moderate price increases in these countries and ensure adequate food supplies. Again, this points to the importance of easing trade restrictions, such as export bans or import tariffs, to help move food to areas in need.

The brief also emphasizes the need to establish and scale up targeted social safety net programs to help populations most at risk from El Niño- and other weather-driven shocks. It highlights Ethiopia’s Productive Safety Net Programme, which combines food and cash transfers to the country’s poorest and most food-insecure households with a work requirement for able-bodied recipients, as a particularly successful example.

In addition, improved information regarding prices, market availability, and malnutrition levels will allow for the establishment of early warning systems and coordinated communication efforts throughout the region, helping the private sector, governments, and donors conduct effective relief efforts. However, the brief points out that most countries throughout Africa south of the Sahara still need to develop such early warning systems.

Domestic grain stocks can also play a role in mitigating El Niño’s negative effects, but only if they are managed properly. The brief calls for small, timely, and transparent release of public stocks to calm markets and prevent panic purchases and food hoarding. However, as building and maintaining public food stocks can be costly and complicated, governments should be careful to set realistic target stock levels.

Finally, the brief encourages increased investment in rural infrastructure, agricultural research and development, and extension services to help boost domestic food production in the future. Such investments will make farmers better prepared to address the challenges of climate change, including stronger and more frequent El Niño events. Ethiopia’s sustained public investment in improved agricultural technologies and infrastructure is held up as an example; according to the brief, this increased investment has helped improved the country’s ability to cope with food security shocks and has significantly reduced the risk that this year’s El Niño cycle will result in famine like that seen in the 1980s.

By: Sara Gustafson, IFPRI

Photo credit:Flickr: Pablo Tosco/Oxfam