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| FOOD INDEX ..... ============================= No.3 July 2009 Crop Prospects and Food Situation Highlights COUNTRIES IN CRISIS REQUIRING EXTERNAL ASSISTANCE1 (total: 30 countries) Food emergencies update Global cereal supply and demand brief Special feature: Domestic food prices in developing countries remain very high Low-Income Food-Deficit Countries food situation overview Regional reviews Statistical Appendix Note Highlights Domestic food prices in developing countries mostly remain much higher than before the soaring food price crisis despite a sharp decline in international prices since their peaks in 2008 (see special feature inside). This situation continues to give rise to concern for the food security of low-income vulnerable populations who spend a large share of their incomes on food. FAO's latest forecast points to a 3.4 percent reduction in world cereal production in 2009, mostly on account of lower plantings and yields among developed countries. In developing countries, output is expected to remain unchanged from last year. Despite the lower cereal production envisaged, the outlook for world cereal supply and demand situation in 2009/10 is satisfactory reflecting large carryover stocks and stagnant demand. In the Low-Income Food-Deficit countries, prospects for the 2009 cereal crops are generally favourable and the aggregate production is forecast to increase for the second consecutive year. However, the outlook is uncertain in parts of Western and Eastern Africa as well as Asia reflecting an erratic start of the rainy season. Despite a positive outlook for global cereal supplies in 2009/10, FAO's latest assessment indicates that 30 countries around the world require external assistance as a result of natural disasters, conflict or insecurity, and economic problems. ============================================================= No.3 July 2009 Crop Prospects and Food Situation Highlights COUNTRIES IN CRISIS REQUIRING EXTERNAL ASSISTANCE1 (total: 30 countries) Food emergencies update Global cereal supply and demand brief Special feature: Domestic food prices in developing countries remain very high Low-Income Food-Deficit Countries food situation overview Regional reviews Statistical Appendix Note COUNTRIES IN CRISIS REQUIRING EXTERNAL ASSISTANCE1 (total: 30 countries) Nature of Food Insecurity Main Reasons Changes from last report (April 2009) AFRICA (20 countries) Exceptional shortfall in aggregate food production/supplies Kenya Adverse weather, lingering effects of civil strife Lesotho Low productivity, HIV/AIDS pandemic Somalia Conflict, economic crisis, adverse weather Swaziland Low productivity, HIV/AIDS pandemic Zimbabwe Problems of economic transition Widespread lack of access Eritrea Adverse weather, IDPs, economic constraints Liberia War related damage Mauritania Several years of drought Sierra Leone War related damage Severe localized food insecurity Burundi Civil strife, IDPs and returnees Central African Republic Refugees, insecurity in parts Chad Refugees, conflict Congo IDPs Côte d'Ivoire Conflict related damage Democratic Republic of Congo Civil strife, returnees Ethiopia Adverse weather, Insecurity in parts Guinea Refugees, conflict related damage Guinea-Bissau Localized insecurity Sudan Civil strife (Darfur), insecurity (southern Sudan), localized crop failure Uganda Localized crop failure, insecurity ASIA/NEAR EAST (10 countries) Exceptional shortfall in aggregate food production/supplies Iraq Conflict and inadequate rainfall Widespread lack of access Afghanistan Conflict and insecurity, inadequate rainfall Dem. People's Rep. of Korea Economic constraints Severe localized food insecurity Bangladesh Cyclones Iran, Islamic Rep. of Past drought Myanmar Past cyclone Nepal Poor market access and drought Pakistan Conflict + Sri Lanka Conflict, IDPs Timor-Leste IDPs COUNTRIES WITH UNFAVOURABLE PROSPECTS FOR CURRENT CROPS 2 AFRICA (5 countries) Ethiopia Late onset of belg rains Kenya Inadequate rainfall + Nigeria Inadequate rainfall + Somalia Inadequate rainfall + Sudan Late onset of main season rains + ASIA/NEAR EAST (3 countries) Afghanistan Adverse weather, limited input supplies and high food prices India Delayed monsoon + Republic of Moldova Inadequate rainfall + LATIN AMERICA AND THE CARIBBEAN (1 country) Argentina Inadequate rainfall No change Improving Deteriorating + New entry TERMINOLOGY 1 Countries in crisis requiring external assistance are expected to lack the resources to deal with reported critical problems of food insecurity. Food crises are nearly always due to a combination of factors but for the purpose of response planning, it is important to establish whether the nature of food crises is predominantly related to lack of food availability, limited access to food, or severe but localized problems. Accordingly, the list of countries requiring external assistance is organized into three broad, not mutually exclusive, categories: Countries facing an exceptional shortfall in aggregate food production/supplies as a result of crop failure, natural disasters, interruption of imports, disruption of distribution, excessive post-harvest losses, or other supply bottlenecks. Countries with widespread lack of access, where a majority of the population is considered to be unable to procure food from local markets, due to very low incomes, exceptionally high food prices, or the inability to circulate within the country. Countries with severe localized food insecurity due to the influx of refugees, a concentration of internally displaced persons, or areas with combinations of crop failure and deep poverty. 2 Countries facing unfavourable prospects for current crops are countries where prospects point to a shortfall in production of current crops as a result of a reduction of the area planted and/or adverse weather conditions, plant pests, diseases and other calamities which indicate a need for close monitoring of the crops for the remainder of the growing season. ============================================================= Crop Prospects and Food Situation Highlights COUNTRIES IN CRISIS REQUIRING EXTERNAL ASSISTANCE1 (total: 30 countries) Food emergencies update Global cereal supply and demand brief Special feature: Domestic food prices in developing countries remain very high Low-Income Food-Deficit Countries food situation overview Regional reviews Statistical Appendix Note Food emergencies update In Western Africa, the cropping season has been slow to start with erratic rains in several parts of the Sahel including Guinea-Bissau, southern Niger and Burkina Faso, northern Nigeria and southern Chad, which may affect area planted and potential yield in these countries. Moreover, although a good cereal crop was gathered in most countries in 2008, the food security outlook remains a concern due to persisting high food prices. Coarse grain prices have shown signs of stabilising over the past few months but, as of June, remained above the levels of a year ago. The situation is worse for imported rice, a major staple, whose price is determined by the international market. In Ghana and Niger for example, prices of imported rice were still 23 percent and 35 percent higher respectively in June 2009 than a year earlier in spite of the fall in international prices. This situation will continue to affect consumers' purchasing power and access to food across the subregion. Therefore, safety net interventions, such as targeted distribution, sales at subsidized prices, food for work or cash for work activities, are recommended during the lean season, depending on the extent of food supply in specific areas. In Eastern Africa, an estimated 19.8 million people are in need of emergency assistance due to consecutive seasons of poor harvests, above- average cereal prices, civil strife or combination of these factors. Late and erratic rains throughout most of the region, in particular across eastern parts during the main growing season from March to July, coupled with persistent above average cereal prices, are expected to further exacerbate the situation. In Somalia , the persistent civil conflict continues to negatively impact the food security situation as well as disrupt the distribution of essential food aid. Poor rains during the main "gu" season have intensified drought conditions and worsened livestock conditions. This has severely impacted the food security of about 700 000 pastoralists in Mudug, Galgadud, Nugal, Sool, Sanag and Togdher, whose sources of food and income are inextricably linked to livestock production. Across Somalia, an estimated 3.5 million people require emergency assistance. In Kenya, an estimated 3.5 million people require emergency food assistance; including 870 000 children who are benefiting from the School Feeding Programme and 2.6 million affected by drought. Below-average rains in the south east and coastal regions, in combination with above-average cereal prices that are eroding households' purchasing power,are expected to lead to a deterioration of the food security situation for marginal agriculturalists and pastoralists. In Eritrea, above-average food prices are negatively affecting an estimated 2 million people, with high rates of acute malnutrition (above the emergency threshold of 15 percent) recorded in Gash Barka and Anseba in February 2009. In Ethiopia, an anticipated poor "belg" harvestis expected to aggravate the situation further in the belg dependant areas of SNNPR, as well as parts of Oromyia and Amhara. Localized insecurity in parts is also contributing to the poor food security conditions. It is currently estimated that 4.9 million people require emergency food assistance (early indications from on-going belg assessments imply that this number may increase). In Sudan, the continuation of civil conflict in southern Sudan and Darfur is worsening the dire food security situation already faced by millions. Food aid distributions are targeting 3.8 million conflict- affected people in Darfur, while, overall an estimated 5.9 million people require food assistance in Sudan. In Djibouti, food aid distributions are continuing to maintain basic food supplies in rural inland areas and in Djibouti city. Poor rains from March to May have lead to water deficits, affecting the pastoralist population throughout inland areas. In Uganda, approximately 1.1 million people require food assistance in Karamoja, following successive periods of drought and civil insecurity. Outbreaks of Peste des Petits Ruminants (PPR) and crop diseases, including the Cassava Mosaic Disease, are also contributing to the poor food security conditions. In Southern Africa, despite a generally improved food security situation throughout the subregion following good harvests, some pockets of vulnerability and food insecurity persist. An FAO/WFP CFSAM to Zimbabwe has estimated that some 2.8 million people in the country require food aid amounting to about 228 000 tonnes including 150 000 tonnes of maize and 30 000 tonnes of other cereals. A similar FAO/WFP Mission in Namibia reported that 163 000 people in northern communal areas, where crops and livestock have been severely affected by floods, will require immediate assistance to cover their basic food needs. Assessments by several national Vulnerability Assessment Committees (VACs) are currently underway and the new estimates will be available shortly. Several import dependent countries in the region are also particularly vulnerable to high food and fuel prices domestically and internationally. In Lesotho and Swaziland widespread poverty and the impact of HIV/AIDS have led to serious food insecurity. In the Great Lakes region, the continued uncertain security situation in the north-eastern parts of the Democratic Republic of the Congo affects large numbers of people who require food and agricultural assistance. High food prices of basic staples such as cassava (flour), beans, maize among others, are negatively affecting large numbers of households in Burundi and food and agricultural aid is needed , especially for resettling returnees and IDPs. In the Far East, bumper winter/first rice crops are almost harvested in the major producing countries, and food supply situations are satisfactory in many countries of the subregion. However, millions of people continue to face serious food insecurity due to conflict, civil strife, below-average harvests, cyclones, or a combination of these factors. In Nepal, more than 2 million people face a precarious food situation as a result of crop failure due to winter drought. The food security of more than 4 million people in Bangladesh has been affected by the devastating cyclone Aila, which hit the southwestern coast of Bangladesh on 25 May. Some 3 million people in Pakistan's northwest region have reportedly been displaced due to civil conflict, with an estimated 3 million people currently needing food assistance. Around 300 000 people in Sri Lanka were displaced and have been housed in government-run camps, following the cessation of the conflict between the Liberation Tamil Tigers of Eelam (LTTE) and the government in May. In Myanmar, agricultural assistance continues to be needed for the summer season and the current monsoon season to help small farmers recover their production and livelihoods in the areas affected by cyclone Nargis. The food security situation of more than 6 million vulnerable people in the Democratic People's Republic of Korea is expected to worsen during the lean period before the November harvest due to reductions in food aid deliveries. In the Near East, the effects of last year's severe drought are still being felt in several countries. In Syrian Arab Republic, preliminary conclusions of an FAO/WFP pre-harvest mission in April/May in the areas affected by the drought indicated that the vulnerability of the population is still a concern. The report of a follow up mission in June/July organised by FAO's Emergency Coordination Unit to review the drought impact and identify any assistance required, especially for small holder farmers and livestock herders, is expected soon. An Emergency Operation (EMOP) to assist 40 000 households (200 000 people) affected by drought which is worth USD 5.2 million was extended in time for six months until the end of December 2009 without changes in the budget. The food situation in the Gaza Strip continues to be of concern as much of the population has been affected severely by conflict during the 20-day period starting on 27 December 2008. In view of this, an EMOP was jointly approved by FAO and WFP to provide food assistance to 365 000 most affected people, including social hardship cases, vulnerable groups, internally-displaced people and affected farmers over a period of 12 months (20 January 2009 to 19 January 2010). In Central America and the Caribbean, cereal prices are either stable or declining from the peaks achieved in mid-2008. However, since many countries are in the hunger season, which will last until arrival of the new harvest in August, prices are likely to go up again, with negative impact on the food security of the most vulnerable people, especially in poor urban areas. In Haiti, the good production of 2008 winter staple foods, coupled with the gradual reduction in market prices and the implementation of safety net programs, is leading to a considerable reduction of the food insecure population. ============================================================== No.3 July 2009 Crop Prospects and Food Situation Highlights COUNTRIES IN CRISIS REQUIRING EXTERNAL ASSISTANCE1 (total: 30 countries) Food emergencies update Global cereal supply and demand brief Special feature: Domestic food prices in developing countries remain very high Low-Income Food-Deficit Countries food situation overview Regional reviews Statistical Appendix Note Global cereal supply and demand brief OVERVIEW World cereal supply remains satisfactory despite lower production in 2009 In spite of an anticipated 3 percent decline in world cereal production in 2009 from the 2008 record, the outlook for world cereal supply and demand situation in 2009/10 is satisfactory. World global cereal supply, consisting of production and carryover stocks, is expected to remain nearly unchanged around the high level of the previous season. With world cereal utilization forecast to expand at a much slower rate than in 2008/09, world cereal stocks by the end of seasons in 2010 may decline only marginally from their high opening level and remain the second largest volume since 2003. World cereal trade in 2009/10 is likely to be marked by a sharp contraction from the 2008/09 record, mostly driven by a massive cut in global wheat imports. The expectation of a second successive year of good crops has already resulted in declines in international prices of major cereals to well below their peaks in 2008. PRODUCTION Latest information confirms smaller global cereal output in 2009 World cereal production in 2009 is forecast at 2 208 million tonnes (including rice on a milled basis), 3.4 percent down from last year's record high but nonetheless the second largest crop ever gathered. Reductions are forecast for wheat and coarse grains while the global rice crop may register another marginal increase. This year's reduction in grain production is partly a result of a return to trend yields after strong productivity gains last year, but also comes from a reduction in overall plantings (mostly wheat) after last year's exceptional level. In several major producing countries farmers have been discouraged by the prospect of reduced returns relative to the previous year's exceptionally high levels because of current lower grain prices but persisting high input costs. Table 1. World cereal production1 ( million tonnes) 2007 2008 estimate 2009 forecast Change: 2009 over 2008 (%) Asia 955.7 968.7 980.2 1.2 Far East 852.3 885.0 884.0 -0.1 Near East in Asia 69.6 55.0 65.6 19.3 CIS in Asia 33.7 28.7 30.5 6.3 Africa 132.9 148.4 156.8 5.7 North Africa 28.5 29.5 37.3 26.6 Western Africa 46.4 54.0 52.8 -2.2 Central Africa 3.2 3.3 3.3 1.4 Eastern Africa 32.6 33.8 34.7 2.7 Southern Africa 22.1 27.8 28.6 2.9 Central America & Caribbean 39.2 41.8 40.4 -3.3 South America 131.8 134.8 116.4 -13.6 North America 461.1 457.0 431.9 -5.5 Europe 389.7 501.8 448.7 -10.6 EU 260.1 314.6 286.8 -8.8 CIS in Europe 115.1 169.3 143.9 -15.0 Oceania 25.4 34.4 35.3 2.5 World 2 134.5 2 285.5 2 208.5 -3.4 Developing countries 1 206.9 1 240.0 1 239.9 0.0 Developed countries 927.5 1 045.5 968.6 -7.4 - wheat 610.9 683.8 655.2 -4.2 - coarse grains 1 082.5 1 142.7 1 093.1 -4.3 - rice (milled) 441.0 459.1 460.2 0.2 1Includes rice in milled terms. Note: Totals computed from unrounded data. World wheat output down in 2009 FAO's latest forecast of global wheat production in 2009 stands at 655 million tonnes, some 4 percent down from last year's record but still well above the average of the past five years. The bulk of the decrease is expected among the world's top producing countries, in particular those in the eastern parts of Europe, and in the United States. Recoveries are forecast in some countries that last year were plagued by dry weather, such as in the Islamic Republic of Iran, Turkey and Syrian Arab Republic, but while important at national/regional level, these will not be sufficient to offset the decline expected at the global level. World coarse grain output to remain relatively large in 2009 despite reduced crops in several regions With most of the main southern hemisphere coarse grain crops already gathered, FAO's latest forecast for world output of coarse grains in 2009 stands at 1 093 million tonnes, 4.3 percent down from last year's record level but still the second largest crop in history. Africa is the only region where output is foreseen to increase in 2009, and most of that reflects a recovery in North Africa after drought last year. Aggregate output in Asia should remain virtually unchanged from last year's satisfactory level but throughout the other regions, smaller crops are expected on account of drought or lower planted area after exceptional high levels last year. Growth in rice production to slow in 2009 after two years of large gains The 2009 rice season is already well advanced following the arrival of monsoon rains in all the major producing areas by the end of June. Preliminary information on plantings and crop development so far indicate a generally favourable start to the season. Assuming a normal rainfall pattern in Asia in the coming months, world rice production in 2009 is forecast to increase fractionally from last year's record level to 689 million tonnes (460 million tonnes, milled equivalent). The relatively small increase expected in 2009 reflects less attractive prospects for producer returns, which would impact on farmers planting and crop management decisions. However, in spite of financial constraints, many governments have maintained their support to the sector through input subsidies, investment programmes and direct price incentives, which, barring any major setback, is likely to sustain production growth. UTILIZATION Total cereal demand expected to stagnate in 2009/10 World cereal utilization in 2009/10 is forecast to grow marginally (by less than 1 percent) from the previous season to 2 217 million tonnes. This is lower than forecast in the June Food Outlook reflecting downward adjustments to forecasts for North America and for major markets of South America. The below-average expansion anticipated in total cereal utilization generally reflects a slowdown in animal feed and industrial sectors growth while consumption of cereals for food is forecast to keep up with the overall growth in world population. Total feed usage of cereals is forecast to remain unchanged at around 771 million tonnes, as a contraction in the developed countries is offset by an expansion in the developing countries. Against the background of continuing economic problems, feed use in many countries is forecast to grow at reduced pace compared to the past and, in many cases, even decline sharply such as in Brazil, Mexico, the United States and several countries in the CIS. Another category which is expected to be adversely affected by current economic prospects is the industrial usage of cereals. In particular, the growth in the leading maize-based ethanol sector in the United States is forecast to be far less pronounced in 2009/10 than in previous years. By contrast and more positively, world food consumption of cereals is likely to keep pace with population growth and increase by 1.2 percent, to 1 042 million tonnes in 2009/10. At this level, average annual global per caput consumption of cereals would remain stable at around 153 kg per person. Table 2. Basic facts of the world cereal situation (million tonnes) 2007/08 2008/09 2009/10 Change: 2009/10 over 2008/09 (%) PRODUCTION 1 Wheat 610.9 683.8 655.2 -4.2 Coarse grains 1 082.5 1 142.7 1 093.1 -4.3 Rice (milled) 441.0 459.1 460.2 0.2 All cereals 2 134.5 2 285.5 2 208.5 -3.4 Developing countries 1 206.9 1 240.1 1 239.9 0.0 Developed countries 927.5 1 045.5 968.6 -7.4 TRADE 2 Wheat 112.8 128.6 114.0 -11.3 Coarse grains 129.5 111.9 112.0 0.0 Rice 30.0 31.0 30.6 -1.4 All cereals 272.3 271.5 256.6 -5.5 Developing countries 84.4 68.8 64.7 -6.1 Developed countries 187.9 202.7 191.9 -5.3 UTILIZATION Wheat 617.6 644.4 649.4 0.8 Coarse grains 1 066.4 1 107.4 1 112.7 0.5 Rice 437.9 449.4 455.3 1.3 All cereals 2 121.9 2 201.2 2 217.4 0.7 Developing countries 1 301.3 1 338.6 1 357.8 1.4 Developed countries 820.6 862.6 859.6 -0.4 Per caput cereal food use (kg per year) 152.9 153.5 153.4 0.0 STOCKS 3 Wheat 151.8 186.8 191.9 2.7 - main exporters4 26.9 44.9 41.5 -7.6 Coarse grains 184.0 217.9 201.0 -7.7 - main exporters4 79.9 90.3 73.3 -18.8 Rice 109.2 119.2 124.3 4.3 - main exporters4 25.8 28.8 28.8 -0.1 All cereals 445.0 523.8 517.2 -1.3 Developing countries 313.8 355.5 367.8 3.4 Developed countries 131.2 168.3 149.4 -11.2 1 Data refer to calendar year of the first year shown. 2 For wheat and coarse grains, trade refers to exports based on July/June marketing season. For rice, trade refers to exports based on the calendar year of the second year shown. 3 Data are based on an aggregate of carryovers level at the end of national crop years and, therefore, do not represent world stock levels at any point in time. 4 The major wheat and coarse grain exporters are Argentina, Australia, Canada, the EU and the United States. The major rice exporters are India, Pakistan, Thailand, the United States and Viet Nam. STOCKS Global cereal stocks remain at satisfactory level despite small decline envisaged this year On the basis of latest forecasts for production and utilization, world end-of-season cereal stocks for crop years closing in 2010 are seen at 517 million tonnes. This would be slightly below the previous forecast and 1.3 percent below their relatively high opening levels. This month's downward adjustment mainly reflects the lowering of the FAO's forecasts for global rice production in 2009, following poorer monsoon rain forecasts in India, and hence lower rice stocks. In spite of this adjustment, the global cereal stock-to-utilization ratio is likely to remain stable at just over 23 percent, significantly above the lows of the previous recent seasons. Among the major cereals, world wheat and rice inventories are forecast to increase but coarse grains are expected to decline, mainly in the United States reflecting the anticipated decline in this year's production in this country. TRADE Declining world cereal trade in 2009/10 driven by reduced import demand for wheat World cereal trade in 2009/10 is forecast to fall to about 257 million tonnes, down 5 percent from the estimated trade volume of 2008/09. The decline mostly reflects a sharp reduction in wheat imports driven by a general recovery in wheat production in several major wheat importing countries such as those in North Africa and in Asia. This season's anticipated decline in wheat import demand coincides with a significant reduction in export supplies in drought-stricken Argentina. By contrast, international trade in coarse grains is expected to remain unchanged with higher maize purchases compensating for declines in imports of all other coarse grains, in particular barley. Larger maize shipments from the United States are expected to compensate for reduced exports from Argentina. World trade in rice is forecast to increase marginally in 2009. PRICES International grain prices weaken considerably in past few weeks but for rice remain firm International wheat prices weakened considerably in the past few weeks, being pushed down by seasonal harvest pressure and good production prospects. In addition to favourable harvest outlooks in the CIS, North Africa, China and India, the return of warm and dry weather in major spring wheat growing areas in the United States coupled with beneficial rains in Australia were among the main factors weighing on wheat prices in recent weeks and offsetting the deteriorating production outlook in Argentina. The export price of US wheat (No.2 Hard Red Winter) was USD 228 per tonne in early July, 33 percent down from the corresponding period last year and by about 50 percent from the peak in 2008. The US maize (No. 2 Yellow, Gulf) price has also fell sharply, to some 45 percent below the corresponding period a year earlier when they were hovering near their record peaks. Weak demand and a return of normal weather in the United States, world's largest maize producer, weighed on maize prices in recent weeks. However, in rice markets, prices have shown more resilience, with rather unfavourable monsoon rain forecasts in India providing support in recent weeks. Table 3. Cereal export prices* (USD/tonne) 2008 2009 July Mar. Apr. May June July United States Wheat 1 341 244 242 265 263 228 Maize 2 267 165 168 180 177 148 Sorghum 2 232 153 149 167 167 141 Argentina 3 Wheat 329 214 211 210 228 230 Maize 252 163 166 186 185 166 Thailand 4 Rice white 5 835 637 592 555 583 590 Rice, broken 6 583 335 337 315 320 325 *Prices refer to the monthly average. For July 2009, one week average. 1 No.2 Hard Red Winter (Ordinary Protein) f.o.b. Gulf. 2 No.2 Yellow, Gulf 3 Up river, f.o.b. 4 Indicative traded prices. 5 100% second grade, f.o.b. Bangkok. 6 A1 super, f.o.b. Bangkok. =============================================================== No.3 July 2009 Crop Prospects and Food Situation Highlights COUNTRIES IN CRISIS REQUIRING EXTERNAL ASSISTANCE1 (total: 30 countries) Food emergencies update Global cereal supply and demand brief Special feature: Domestic food prices in developing countries remain very high Low-Income Food-Deficit Countries food situation overview Regional reviews Statistical Appendix Note Domestic food prices in developing countries remain very high Current food prices remain well above the pre-crisis level despite decline in international prices Earlier this year FAO GIEWS launched the National basic food price data and analysis tool 1 as part of the FAO Initiative on Soaring Food Prices (ISFP) to assist in the monitoring and analysis of domestic food price trends in developing countries. The database covers about 800 monthly domestic retail/wholesale price series of major foods 2 consumed in 58 developing countries, and international cereal export prices. An analysis of the data contained in the database as of early July 2009 shows that domestic prices in developing countries remain generally very high and in some cases are still at record levels. Out of the 780 domestic price quotations (nominal, in local currencies) for all food commodities included in the database, the most recent quotation 3 is the same or higher than in the pre-food price crisis period of 24 months earlier in 94 percent of the cases. Moreover, in 71 percent of these cases, the latest quotations are higher than 24 months earlier by more than 25 percent, indicating that even after largely allowing for inflation over the past two years, basic food prices remain relatively high. In 46 percent of the cases, latest quotations are higher than 3 months earlier, while in 13 percent of the cases, latest price quotations are the highest on record. This is in sharp contrast with developments in international food markets, where prices of all cereals have fallen sharply since their peaks of the first-half of 2008 and are now, with the exception of rice, lower or around the level before the food prices crisis. For cereals (70 percent of the quotations in the database), and the most important staple food in developing countries, the situation is quite similar with latest nominal domestic price quotations more than 25 percent higher than in the pre-crisis period in 77 percent of the price series covered in the database and higher than 3 months earlier in 43 percent of the cases. In 12 percent of the cases, latest cereal prices available in GIEWS by late June were the highest on record. A more detailed analysis by region and main cereals is presented in the figure below. In the sub-Saharan countries in Africa in more than 80 percent of all the local price series analyzed in 27 countries, latest prices are more than 25 percent higher than 24 months earlier. In Asia and Latin America and the Caribbean, prices are monitored in a total of 31 countries and according to cereal type, from 40 to 80 percent of the prices remain more than 25 percent higher than in the pre-food crisis period. In contrast with trends in domestic food prices, international cereal export prices, in spite of some fluctuations in recent months, are lower or marginal higher than in 2007. Latest (first week of July average) maize export prices are 1 percent above the level of 24 months earlier, while for sorghum, and wheat export prices are respectively 10 percent, and 9 lower than 18 months earlier and between 47 and 53 percent below their 2008 peaks. Rice export prices, while having fallen from their 2008 peaks by 39 percent, they were by early July still 75 percent above the pre food-crisis level mainly reflecting governments’ interventions in some major rice exporting countries. -------------------------------------------------------------------------------- 1. The “National basic food price – data and analysis tool” is available on the FAO Website at: www.fao.org/giews/pricetool 2. About 70 percent of the quotations in the database are for cereals and cereal products with the remaining 30 percent represented by beans, potatoes, cassava and some animal products 3. The most recent price quotation refers, with few exceptions, to the period between March ============================================================== No.3 July 2009 Crop Prospects and Food Situation Highlights COUNTRIES IN CRISIS REQUIRING EXTERNAL ASSISTANCE1 (total: 30 countries) Food emergencies update Global cereal supply and demand brief Special feature: Domestic food prices in developing countries remain very high Low-Income Food-Deficit Countries food situation overview Regional reviews Statistical Appendix Note Low-Income Food-Deficit Countries food situation overview1/ Current food prices remain well above the pre-crisis level despite decline in international prices Food prices in LIFDCs have generally declined from their peaks of 2008 but remain much higher than in the pre-food price crisis period two years earlier. In several countries, prices exceed the already high levels of 12 months ago or are still at record levels (see special feature). This is in spite of the sharp decrease in international cereal prices and overall good cereal harvests. The high food price situation continues to give rise to concern for the food security of vulnerable populations in both urban and rural areas, as these groups expend a large share of their incomes in food. Close monitoring of domestic prices of staple foods remains necessary. In Eastern Africa, in Sudan, prices of sorghum in the main growing area of El Gedarif in June 2009 were three times higher than two years ago. In Somalia, Mogadishu, prices of staple sorghum in the same month were three times higher than in June 2007, while in Uganda, Kenya and Ethiopia prices of maize have doubled their levels of 24 months earlier. In countries of Southern Africa, prices of staple maize have declined in the recent months with the 2009 bumper cereal harvests but remain above the pre-crisis levels. In Malawi, maize quotations in Lilongwe in June this year were more than twice those of June 2007. In Western Africa, prices temporarily decreased in late 2008 following good cereal harvests, but resume increasing in 2009. In Senegal prices of imported rice in Dakar in June were 60 higher than two years ago. In Ghana, prices of maize in Accra have more than doubled their levels of June 2007. In Asia, in Pakistan, prices of wheat in Karachi in May 2009 have doubled their levels of two years earlier. Similarly, in Latin America and the Caribbean, in Haiti, prices of local rice in Les Cayes in June this year were almost three times higher than in June 2007. In the same period, in Nicaragua, average price for rice and maize were 61 percent and 58 percent higher respectively. Reasons for the continuous high level of food prices vary according to regions and from country to country. They include, among others, reduced harvests, higher and/or delayed imports, civil conflict, demand in neighbouring countries and regional trade flows, devaluation of national currencies, changes in food and trade policies, increased incomes and demand, and transport constraints and higher transport costs. Favourable prospects for the 2009 aggregate cereal production of LIFDCs In the LIFDCs the 2009 cereal seasons are at different stages, with crops already harvested in some regions, but still to be planted in others. FAO's early forecast of 2009 cereal output for the 77 LIFDCs as a group2/, points to an increase of less than 1 percent from the record level of last year. Excluding China Mainland and India, however, the aggregate output of the rest of LIFDCs is forecast 4.6 percent higher, a significant increase for the second consecutive year. In Northern and Southern Africa countries, bumper 2009 cereal harvests have been obtained following favourable weather and agricultural inputs support programmes, notably in Morocco and Zimbabwe where productions doubled or almost doubled from the reduced levels of 2008. Similarly in Asia, above-average 2009 wheat and first season rice crops have been gathered in China, India, Pakistan, Bangladesh and Sri Lanka. However, prospects for the main season rice crop, still being planted, is uncertain, due to a delay in the start of the rainy season, particularly in India. In the CIS countries of Asia, cereal harvests are underway and overall prospects are favourable. In Afghanistan, this year's cereal production is anticipated to recover substantially from the 2008 poor level. In Western and Eastern Africa, the start of the rainy season has been erratic and late in several countries and more precipitation is urgently needed in the coming weeks. In Central America and the Caribbean, a good 2009 cereal crop is being gathered in Haiti, and planting prospects are favourable in Honduras and Nicaragua. Table 4 . Basic facts on the Low-Income Food deficit countries ( LIFDCs)1 cereal situation ( million tonnes) 2007/08 2008/09 2009/10 Change: 2009/10 over 2008/09 (%) Cereal production 2 910.2 949.0 957.7 0.9 excluding China Mainland and India 296.7 313.5 327.8 4.6 Utilization 954.0 983.9 1 002.6 1.9 Food use 663.3 677.1 685.2 1.2 excluding China Mainland and India 282.2 291.6 297.2 1.9 Per caput cereal food use (kg per year) 156.9 157.8 157.4 -0.3 excluding China Mainland and India 158.8 160.7 160.7 0.0 Feed 167.0 173.9 181.6 4.5 excluding China Mainland and India 44.1 45.4 48.1 5.8 End of season stocks 3 264.2 300.5 316.1 5.2 excluding China Mainland and India 50.4 55.2 56.9 2.9 1 Includes food deficit countries with per caput annual income below the level used by the World Bank to determine eligibility for IDA assistance (i. e.USD 1 735 in 2006). 2 Data refer to calendar year of the first year shown. 3 May not equal the difference between supply and utilization because of differences in individual country marketing years. Cereal imports to increase in 2008/09 despite good 2008 productions The LIFDCs total volume of cereal imports in marketing years 2008/09 or 2009 is forecast to reach some 88.6 million tones, 8.5 percent above the level of the past season in spite of an aggregate record 2008 aggregate cereal output. This mainly reflects a substantial increase in imports in Near East countries affected by 2008 drought-reduced harvests, particularly large importers Iraq, the Syrian Arab Republic and Afghanistan. Similarly, as a result of poor 2008 cereal output import requirements have doubled in Kenya and Somalia. Replenishment of stocks in Asian countries, mainly Pakistan, Philippines and China, following releases last season to limit the impact of soaring food prices, also account for the increase in cereal imports this season. Table 5. Cereal production1 of LIFDCs ( million tonnes) 2007 2008 2009 Change: 2009 over 2008 (%) Africa (43 countries) 117.0 128.7 136.1 5.8 North Africa 22.5 25.9 31.4 21.3 Eastern Africa 32.6 33.8 34.7 2.7 Southern Africa 12.3 11.8 13.9 18.0 Western Africa 46.4 54.0 52.8 -2.2 Central Africa 3.2 3.3 3.3 1.4 Asia (25 countries) 790.4 815.6 817.7 0.3 CIS in Asia 13.6 13.7 13.8 0.7 Far East 761.6 792.5 791.0 -0.2 - China (Mainland) 400.2 419.8 417.7 -0.5 - India 213.2 215.7 212.2 -1.6 Near East 15.2 9.4 12.9 37.2 Central America (3 countries) 1.9 1.8 1.9 5.6 Oceania (5 countries) 0.0 0.0 0.0 0.0 Europe (1 country) 0.8 2.9 2.0 -31.4 Total (77 countries) 910.2 949.0 957.7 0.9 1 Includes rice in milled terms. Note: Totals computed from unrounded data. Table 6.Cereal import position of LIFDCs ( thousand tonnes) 2007/08 or 2008 Actual imports 2008/09 or 2009 Requirements 1 Import position 2 Total imports: of which food aid Total imports: of which food aid pledges Africa (43 countries) 40 223 41 959 2 775 29 981 1 888 North Africa 18 260 18 691 0 18 146 0 Eastern Africa 6 203 6 577 1 718 4 695 1 167 Southern Africa 3 265 3 695 459 3 695 459 Western Africa 10 831 11 187 485 3 023 178 Central Africa 1 665 1 808 113 422 83 Asia (25 countries) 38 974 44 384 2 516 32 318 899 CIS in Asia 3 761 4 547 63 3 208 61 Far East 24 446 24 047 1 652 19 190 506 Near East 10 767 15 790 801 9 920 332 Central America (3 countries) 1 661 1 790 218 1 198 144 Oceania (5 countries) 431 431 0 91 0 Europe (1 country) 336 80 0 79 0 Total (77 countries) 81 626 88 644 5 509 63 667 2 931 1 The import requirement is the difference between utilization (food, feed, other uses, exports plus closing stocks) and domestic availability (production plus opening stocks). 2 Estimates based on information available as of end June 2009. Note: Totals computed from unrounded data. Improvement in the pace of 2008/09 cereal imports, but slow progress in food aid allocations Latest information received in GIEWS by the end of June 2009 indicates acceleration in cereal imports by LIFDCs in recent months. Out of an aggregate import requirement of 88.6 million tonnes in 2008/09, 72 percent have been already covered by commercial imports or food aid. This compares with 70 percent at the same time last year. In particular, in North Africa, where the season has just concluded, virtually all import requirements have been covered. By contrast, in Western and Central African countries, actual imports remained well below requirements. As regards of food aid only 53 percent of the requirements of LIFDCs in 2008/09 have been covered so far. Most affected by the delay in food aid pledges/deliveries are countries in Far East and Near East where the marketing seasons are about to finish. -------------------------------------------------------------------------------- 1. The Low-Income Food-Deficit (LIFDC) group of countries includes food deficit countries with per caput annual income below the level used by the World Bank to determine eligibility for IDA assistance (i.e. USD 1 735 in 2006), which is in accordance with the guidelines and criteria agreed to by the CFA should be given priority in the allocation of food aid. 2. The latest revision of the list of LIFDCs, as of May 2009, excluded five countries: Albania, Belarus, Bosnia & Herzegovina, Cape Verde and Tonga. ============================================================== No.3 July 2009 Crop Prospects and Food Situation Highlights COUNTRIES IN CRISIS REQUIRING EXTERNAL ASSISTANCE1 (total: 30 countries) Food emergencies update Global cereal supply and demand brief Special feature: Domestic food prices in developing countries remain very high Low-Income Food-Deficit Countries food situation overview Regional reviews Africa North Africa Western Africa Central Africa Eastern Africa Southern Africa Asia Far East Near East Asian CIS Latin America and the Caribbean Central America and the Caribbean South America North America, Europe and Oceania North America Europe Oceania Statistical Appendix Note Regional reviews Africa North Africa In North Africa, harvesting of the winter grains (mainly wheat and barley), which make up the bulk of the subregion's cereal crop, is underway and a good harvest is expected after two consecutive years of below average production. FAO's latest forecasts of the subregion's aggregate output of wheat (the main crop) is about 18.6 million tonnes, some 30 percent up from the previous year's level, while that of barley is put at some 5.5 million tonnes, about 138 percent up from 2008 and well above average. The outlook is particularly good in Morocco where a bumper crop is expected following exceptionally favourable weather throughout the winter cropping season. The wheat harvest is forecast at 6.5 million tonnes, 74 percent over last year's level and more than four times the poor crop harvested in 2007. The outlook is also favourable in Egypt, the largest cereal producer of the subregion, where wheat and maize output is expected to be similar to last year's average level. By contrast, a strong recovery in wheat production is not expected in Tunisia, in spite of government incentives to increase domestic production to mitigate the negative impact of high international prices on consumers. This is mainly a consequence of insufficient soil moisture at planting time, causing an area reduction. Although rainfall increased significantly at the end of the cropping season boosting yields, wheat output is provisionally estimated at about 1.19 million tonnes, some 8.5 percent below the average of the previous five years. The barley crop outlook is better with an above-average crop anticipated. The generally favourable crop prospects for 2009 combined with a significant decline in international commodity prices have been favourable in helping to reduce inflation and improve access to food in the subregion. In Egypt, the most affected country, where the year-on-year rate of inflation in urban areas reached 23.6 percent in August 2008 (up from 6.9 percent in December 2007), a downward movement was observed from September with inflation dropping steeply to 11.7 in April 2009. Inflation is driven mainly by price changes in the food sector where the year-on- year rate of inflation dropped from 30.9 percent in August 2008 to 13.8 percent in April 2009. Table 7. Africa cereal production ( million tonnes) Wheat Coarse grains Rice (paddy) Total cereals 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast Africa 19.1 21.1 25.1 99.3 110.6 114.9 22.0 25.5 25.6 140.4 157.1 165.6 North Africa 13.2 14.3 18.6 10.5 10.1 13.7 6.9 7.3 7.3 30.6 31.7 39.6 Egypt 7.4 8.0 7.9 7.9 7.7 8.0 6.9 7.2 7.3 22.2 22.9 23.2 Morocco 1.6 3.7 6.5 0.9 1.5 3.9 0.0 0.0 0.0 2.5 5.2 10.5 Western Africa 0.1 0.1 0.1 40.7 46.7 45.5 8.9 11.5 11.5 49.7 58.2 57.0 Nigeria 0.0 0.1 0.1 23.9 26.0 26.0 3.2 4.2 4.3 27.2 30.2 30.3 Central Africa 0.0 0.0 0.0 2.9 3.0 3.0 0.4 0.4 0.4 3.4 3.4 3.5 Eastern Africa 3.5 4.3 4.4 27.9 28.4 29.2 1.8 1.8 1.8 33.2 34.5 35.4 Ethiopia 2.5 3.2 3.2 12.5 12.9 12.9 0.0 0.0 0.0 15.0 16.1 16.1 Sudan 0.6 0.6 0.7 4.7 4.9 5.3 0.0 0.0 0.0 5.3 5.6 6.0 Southern Africa 2.2 2.4 2.1 17.3 22.4 23.4 3.9 4.5 4.6 23.4 29.3 30.1 Madagascar 0.0 0.0 0.0 0.4 0.4 0.3 3.6 4.1 4.2 4.0 4.5 4.5 South Africa 1.9 2.1 1.8 7.8 13.7 12.7 0.0 0.0 0.0 9.7 15.8 14.5 Zimbabwe 0.1 0.0 0.0 1.1 0.8 1.4 0.0 0.0 0.0 1.3 0.8 1.4 Note: Totals computed from unrounded data. Western Africa In Western Africa, the cropping season has been slow to start with erratic rains in several parts of the Sahel including Guinea-Bissau, southern Niger and Burkina Faso, northern Nigeria and southern Chad. Satellite imagery indicates that Northern Nigeria experienced the highest rainfall deficit which may have affected area planted and potential yield in that area. By contrast, in the southern part of coastal countries of the Gulf of Guinea, rains have been regular and widespread since the beginning of the main season in April and prospects for the first maize crop, to be harvested from August, are good in most countries, except in western Côte d'Ivoire where significant rainfall deficits have been reported. These trends are in line with the 2009 annual climate prediction exercise carried out by the African Centre of Meteorological Applications for Development (ACMAD) and the Agrhymet Centre in May. According to their forecast, there is an increased probability this year of normal to below- normal rainfall for the Sahelian region which receives about 80 percent of its annual precipitation in the July-September period. Specifically, the western part of the subregion including Mauritania, Senegal, the Gambia, Guinea-Bissau and parts of Guinea are expected to receive below- average rains in 2009. Coarse grains prices have shown signs of stabilising over the past few months but remained above the levels of a year earlier by June 2009 in most countries in spite of the good cereal crop gathered in the subregion in 2008. For example, in spite of a significant decline from their peak of August-September 2008, wholesale prices of millet in markets of Mali (Bamako) and Niger (Niamey) in June 2009 were still 11 and 12 percent respectively higher than in June 2008. By contrast, retail prices of millet in Senegal (Dakar) during the first quarter of 2009 were slightly lower than their year-ago levels. The different trends between the western and eastern parts of the subregion suggest that demand from the Nigerian food processing and poultry sector may be contributing to market tension in the east. In Ghana (Accra), the retail price of maize in June was 17 percent higher than one year earlier. A contributing factor for the price strength in the eastern part of the region is the demand from Nigerian food processing and poultry sector. Prices of imported rice, a major staple, also remain very high in most countries in spite of the fall in international prices. In Senegal prices of imported rice in April 2009 were still 33 percent higher than a year earlier in spite of the downward movement observed since the beginning of the year. In Ghana and Niger they were 23 percent and 35 percent higher respectively in June 2009 than a year earlier. By comparison, the export price of broken Thai rice in May 2009 was 59 percent lower than its year-earlier level. Rice price inflation in Western Africa has been fuelled to some extent by the steady depreciation of national currencies in response to the impact of the global economic crisis. Most currencies including the CFA (francophone countries), the cedi (Ghana) and the Naira (Nigeria) have depreciated substantially in recent months. These developments are likely to translate into continuously high rice consumer prices with negative impact on access to food, notably in import-dependent countries of the western part of the subregion. Central Africa In Cameroon and the Central African Republic, planting of the main maize crop for harvesting from July 2009 has been completed in the South. Satellite-based rainfall estimates indicate that the crops benefited from adequate rains, and early prospects are favourable provided normal weather conditions persist. By contrast, in the northern part of these countries, precipitation has been erratic and below average since the beginning of the season (in May normally), which may have affected land preparation and plantings of cereal crops. Moreover, in the Central African Republic agricultural recovery continues to be hampered by persistent civil unrest and inadequate availability of agricultural inputs, notably in northern parts where nearly 300 000 people have reportedly been uprooted from their homes over the past two years. Continuing insecurity in both Chad and Sudan (Darfur region) threaten to further destabilize the situation in northern parts of the country. Eastern Africa Below average seasonal rains raise concerns The harvesting of the main season's crops is underway in the United Republic of Tanzania and Uganda, while it is scheduled to commence in August in Kenya and Somalia. The secondary "belg" crops in Ethiopia are currently being harvested, while Sudan's wheat crop was harvested last April. Late and below average rains persisted throughout much of Eastern Africa during the beginning of the main rainy season (March-June), raising the prospects of a below-average harvest if poor rains continue through July. Much of the pastoral areas, including central and north-east Somalia, south-east lowlands and coastal regions of Kenya, inland areas of Djibouti and south-eastern and northern regions in Ethiopia have received below-average rainfall from March to May. The limited water access and availability has lead to worsening livestock conditions and an increase in the mortality rate, particularly affecting poor households with smaller herd sizes. A combination of above-average cereal prices and unfavourable livestock conditions will have a negative impact on food security as a result of the deterioration in the terms of trade of pastoralists, although the seasonal increase in livestock prices might help somewhat. The north-east regions of the United Republic of Tanzania continued to receive below-average rainfall for the duration of the main "masika" season (March-June), with harvesting currently underway. By contrast, average precipitation in unimodal regions from April to May improved production prospects, with harvesting of the "msimu" main crops well underway and scheduled to finish in August in the southern highland zone. However, limited input utilization, due to the high fertiliser costs, is likely to lead to lower yields. Furthermore, in the south-east, poor localised rains in Lindi and Mtwara is expected to reduce the cereal harvest. An FAO-coordinated programme succeeded in containing Red Locust infestations through treating 10 000 ha with bio-pesticide, preventing further production losses. In Kenya, insufficient rainfall during the initial stage of the main cropping season (March-April) is likely to have impeded crop growth, increasing the probability of yet another poor harvest. By contrast, production estimates are favourable in western maize growing regions, bordering Lake Victoria, which received near normal rainfall from March to June. Preliminary forecasts from the Ministry of Agriculture estimate maize production at 2.4 million tonnes for the long rains season, 16 percent below the average of the past five years. Harvesting is scheduled to begin in August. Kenya has imported approximately 1.1 million tonnes of white and yellow maize between November 2008 and mid-June 2009 in efforts to maintain domestic cereal supplies, following low production levels in 2008. Harvesting of the "belg" crop in Ethiopia, which accounts for approximately 10 percent of national cereal production, is currently underway. Low rainfall from March to June and a reduction in the area planted, particularly in the Amhara region and southern Tigray, are expected to result in a lower belg production in 2009. Poor precipitation levels in central Ethiopia during June, which normally marks the start of the main "meher" cropping season, may negatively impact crop germination. However, in the western maize growing regions, the meher season has progressed well. In Somalia, below-average rains during April and May have had a detrimental impact in northern and north-western pastoral areas, creating unfavourable conditions for livestock. However, favourable crop conditions prevail in the southern regions - Bay (sorghum) and Shabelle (maize) - where rains have been near normal from April to mid-June, raising prospects of an improved harvest. By contrast, in central regions, particularly Galgadud and Mudug, the continuation of drought conditions have impeded crop growth and lead to water deficits. In Sudan, the recently harvested wheat crop was above average owing to an increase in the area planted and favourable weather conditions. Preliminary estimates indicate a harvest of around 700 000 tonnes compared to the 642 000 tonnes gathered last year. Prospects for the main coarse grain crop planted in April are mixed. Below-average rains between May and mid-June, in southern regions has led to moisture deficit and has raised concerns about the output of the main season's crops. However, improved rainfall in the border region with the Central African Republic has improved crop conditions in the south west. Late rains in north-east Uganda delayed planting activities, increasing concerns that the main season's harvest will be below average. In the bimodal areas, July marks the start of the dry period, with harvesting expected to commence in the same month. Poorly distributed rains across the bimodal areas resulted in variation in the development of the main crop, but overall average rains were recorded throughout most parts of the country, with the exception of western and central regions, which received below normal rains during April and May. In Eritrea, sowing for the main "kremti" season is underway. However, low cumulative rainfall from March to May, prior to the planting period, has raised concerns that conditions are not suitable for long cycle crops. Prices stabilise, but remain at above-average levels National cereal prices have stabilized and are following normal seasonal trends, with a gradual modest increase prior to the main harvest period from June to August, in contrast to the rapid price increases that occurred in 2008. However, the region continues to experience above-average cereal prices, specifically compared to the pre-crisis level of June 2007, with prices of the region's main staple crops more than double. In particular, sorghum prices in Sudan and Somalia are approximately 190 and 230 percent higher in May 2009, relative to pre-crisis levels. In the United Republic of Tanzania, maize prices have remained relatively stable in 2009; however, prices in Dar es Salam in June were 10 percent higher than last year's prices, at the equivalent of USD 307 per tonne. A surplus maize crop in Malawi is expected to lead to improved market availability and lower prices in southern Tanzania. Despite the import duty waiver on maize (which has been extended until December 2009) in Kenya, prices in Nairobi increased by 27 percent between January and June 2009 and remain 4 percent higher, at USD 391 per tonne, compared to a year earlier. The persistent high prices of maize in 2008/09 in Kenya can be explained by the decline in the national maize production in 2008, by 12 percent and 16 percent, compared to 2007 and the average of the previous five years respectively. The average share of maize imports to domestic production in the previous five years (2003/04-2007/08) was 18 percent. In 2008/09, this grew to more than 45 percent (starting from late last year when world prices were still high), with an estimated 1.1 million tonnes of maize imported between November 2008 and June 2009, predominantly from South Africa. The United Republic of Tanzania, one of the major suppliers to Kenyan markets imposed an export ban on maize. This large volume of imported maize through Mombassa port has lead to congestion and consequently an increase in demurrage costs for importers. Government initiatives in Ethiopia, including export bans, price controls and elimination of domestic taxes on selected items have contributed to reducing the annual food inflation rate to 52.6 percent in May 2009, down from a peak of 61.1 percent in February 2009. Nationally, cereal prices (whose weight is about 23 percent of national CPI) have declined and stabilized since reaching record levels in September 2008. In Addis Ababa, the price of maize, the most widely consumed cereal, decreased by 5 percent over 12 month period April 2008-April 2009 to USD 309 per tonne. Conversely, in Uganda (Kampala), the price of maize in - the country's main staple food - increased sharply in April 2009 to USD 355 per tonne, reportedly as a consequence of large scale purchases for schools, relief aid and institutional requirements. Prices have since decreased to USD 297 per tonne in June 2009 and were 21 percent lower than the high prices recorded during the same month last year. In Ethiopia, the price of sorghum (white) in Addis Ababa, a main staple in most of the lowland areas of the country, declined marginally between January and April 2009 to USD 556 per tonne, though prices were 26 percent higher than the same month in 2008. In Somalia, the retail price of sorghum (red) in Mogadishu has decreased by 30 percent in May 2009, compared to prices recorded in the same period in 2008. The price of other important staple food commodities has also declined during the first half of 2009. For instance, the price of rice (imported) was 33 percent lower in May 2009 compared with the same period in the previous year, reflecting lower international rice prices. In Sudan, the price of wheat in Khartoum in May 2009 was down by about 36 percent at USD 409 compared to the same period in 2008. The fall in international wheat prices, as well as improved domestic market supplies have contributed to this decline. However, the depreciation of the Sudanese Pound (which fell 17 percent against the USD during the period indicated) has meant that domestic prices have not decreased by as much, but still declined by 25 percent in May 2009 to SDG 978 per tonne, compared to SDG 1 311 a year earlier. By contrast, in Ethiopia (Addis Ababa), the retail price of wheat (which is predominantly consumed in urban centres) was 17 percent higher in April 2009, at USD 511 per tonne, compared to the same period last year. Southern Africa Good rains in 2008/09 season result in a second consecutive record harvest in southern Africa The region's aggregate 2009 cereal production (including forecasts for small amounts of wheat from the secondary season currently underway in a few countries) is estimated at 30.1 million tonnes, up by about 3 percent from 2008, which already was the highest level since 2000 . Regarding maize, the main staple crop in the subregion, aggregate output is estimated at 21.8 million tonnes, 4 percent higher than last year's bumper outcome (Table 8). In general the region experienced well distributed rainfall during the main cropping season from November 2008 to April 2009. Similarly, seed and fertilizer distribution programmes in Malawi, Zambia, Angola and Madagascar contributed to this result. Increase in the aggregate production is primarily due to a boost in the harvest in Zimbabwe, Namibia, Malawi, Zambia, Swaziland, Mozambique and Botswana. Regional production increased in spite of a drop in the estimated production of maize and total cereals in South Africa, Angola, and Lesotho. No significant change in total cereal production is estimated for Madagascar. Table 8. Southern Africa - Maize and total cereal production in 2009 ( thousand tonnes) Maize Total cereals 2009 forecast 2008 estimate 2004-08 average 2009 over 2008 (%) 2009 over 5-yr avg (%) 2009 forecast 2008 estimate 2004-08 average 2009 over 2008 (%) 2009 over 5-yr avg (%) Increase in total cereals from 2008 Zimbabwe 1 140 647 1 137 76 0 1 431 842 1 452 70 -1 Namibia 57 54 52 5 8 139 106 139 31 0 Malawi 3 662 2 777 2 326 32 57 3 881 2 989 2 484 30 56 Zambia 1 889 1 446 1 263 31 50 2 199 1 714 1 459 28 51 Swaziland 72 64 60 12 20 73 65 61 12 19 Mozambique 1 889 1 709 1 528 11 24 2 617 2 350 2 105 11 24 Botswana 8 7 7 10 13 44 40 33 9 34 Small change in total cereals from 2008 Madagascar 300 390 403 -23 -26 4 511 4 501 3 935 0 15 Decrease in total cereals from 2008 Lesotho 63 69 76 -9 -18 86 88 98 -3 -12 Angola 570 616 621 -7 -8 684 738 771 -7 -11 South Africa 12 120 13 164 9 773 -8 24 14 484 15 834 12 223 -9 18 Total Southern Africa 21 769 20 943 17 248 4 26 30 148 29 267 24 760 3 22 Total excluding South Africa 9 649 7 779 7 475 24 29 15 664 13 433 12 537 17 25 Sources: FAO/WFP CSFAM for Zimbabwe and Namibia; others - national government estimates. Note: Totals computed from unrounded data. Planting of the 2009 wheat crop in South Africa, which accounts for about 90 percent of the region's total wheat production, has been carried out in May-June in southern and central growing areas. Early estimates put the area planted down by about 14 percent from the previous year, continuing the long term negative trend which started in mid-1980s. A consequent decline in production later this year is forecast. This year's reduction in intended plantings is probably due to the significant drop in the international wheat prices in recent months. Wheat production in Zambia, although currently less than 10 percent of the regional output, is on the rise, reflecting the recent development of irrigation facilities in that country. Import requirements for 2009/10 marketing year are estimated to be down Thanks to the bumper crop in several countries in the region, FAO estimates a lower cereal import requirement for the region as a whole in the 2009/10 marketing year (mostly April/March). However, given the forecast for poor wheat crop later in the year in South Africa and a consequent increase in total cereal import requirement there, the decrease in import requirements for the rest of southern Africa (excluding South Africa) is even more pronounced (Table 9 and Figure 12). As a result of the increased production even at the small scale communal farm household level, the aggregate imported cereal food aid import requirement, calculated as a residual uncovered cereal deficit over and above the forecast commercial imports, is estimated to be lower than the actual food aid imports in the recent past. The country-by-country estimates for 2009/10 in comparison with 2008/09 and the average of the previous five years are given in Table 9 and shown in Figure 12 Table 9. Southern Africa - Maize and total cereal import requirements in 2009/10 ( thousand tonnes)1 Maize Total cereals 2009/10 forecast 2008/09 estimate 2004/05-2008/09 average 2009/10 over 2008/09 (%) 2009/10 over 5-yr avg (%) 2009/10 forecast 2008/09 estimate 2004/05-2008/09 average 2009/10 over 2008/09 (%) 2009/10 over 5-yr avg (%) Decrease in total cereal imports from 2008/09 Zambia 0 101 49 -100 -100 21 140 129 -85 -84 Malawi 1 109 162 -99 -99 61 186 252 -67 -76 Botswana 127 283 179 -55 -29 273 469 330 -42 -17 Zimbabwe 480 735 604 -35 -21 681 1 013 785 -33 -13 Namibia 86 154 106 -44 -19 151 193 170 -22 -11 Mozambique 160 302 142 -47 13 813 975 879 -17 -8 Small change in total cereal imports from 2008/09 Swaziland 66 73 77 -10 -14 127 128 132 -1 -4 Mauritius 88 86 87 2 1 314 308 303 2 3 Increase in total cereal imports from 2008/09 Lesotho 117 100 100 17 16 212 203 204 4 4 Angola 153 60 77 155 98 908 834 764 9 19 South Africa 200 27 531 641 -62 2 443 2 165 2 538 13 -4 Madagascar 25 3 5 826 358 260 217 280 20 -7 Total Southern Africa 1 503 2 032 2 120 -26 -29 6 262 6 831 6 766 -8 -7 Total excluding South Africa 1 303 2 005 1 588 -35 -18 3 819 4 666 4 227 -18 -10 1 Marketing year April/March except for Namibia, South Africa, Zambia (May/April) and Mauritius (January/December). Sources:FAO/WFP CSFAM for Zimbabwe and Namibia; others - national government estimates. Note: Totals computed from unrounded data. Current nominal maize prices still higher than the corresponding prices in 2008 in most importing countries The nominal prices of maize are now coming down seasonally during this post-harvest period but are still higher in most cases than the corresponding months in 2007, which was before the soaring price crisis. In some cases, prices remain higher than a year ago. While the price increases over the 24 month period are fairly high, in most cases the increases in nominal prices over the past 12 months are less than the rate of consumer price inflation, implying some reduction in real prices from the peak levels of 2008. The maize surplus countries such as South Africa and Zambia in general have lower local prices than the deficit countries. Maize price in South Africa owing to another bumper harvest this year (although slightly below last year's record output) and high carry over stocks has declined and remained low. Namibian market prices, dependent on South Africa and tied to its currency at one-to-one ratio, follow South African market fairly closely. However, price spikes do occur depending on the timing of imports. Zimbabwe went from a position of having the lowest maize prices in the region, mostly on account of government controls, to the extreme price hikes (even in US Dollar terms) due to reduced domestic production and imports during the hyperinflationary period. With the recent economic reforms, such as the abandonment of the Zimbabwe dollar and adoption of the US Dollar and South African Rand as legal currencies, removal of import restrictions on food, allowing private trade, etc., and a relatively good harvest, prices have come down drastically and are now more in line with the import parity levels. Retail prices of maize in Maputo in southern Mozambique, the main cereal deficit area, are among the highest in the region. This reflects the high cost of moving grain from the surplus north of the country or of imports from South Africa. In Madagascar, the rice price is following the usual seasonal movement and currently is at about the same level as the corresponding months last year, but slightly up from two years back. This price movement is more or less consistent with the estimated level of national paddy harvest for 2009/10. The price of imported rice being influenced by international and domestic prices, has followed similar but less pronounced pattern. Overall food security situation has improved but localized food insecurity and vulnerability persist The overall food security in southern Africa subregion has improved during this post-harvest period and is expected to be much better this year than last few years as majority of the countries in the region have gathered good harvests. In aggregate there is more than enough supply of white maize than the import requirement in the region, which amount to about 1.3 million tonnes (excluding South Africa). South Africa alone is expected to have more than 2 million tonnes of exportable maize surplus. In addition, based on official estimates, Malawi and Zambia are also expected to have surplus maize this year. In the midst of this, however, pockets of vulnerability and food insecurity exist in southern Africa notably in Zimbabwe, Lesotho and Swaziland. Asia Far East Bumper early season cereal crops harvested in the major producing countries Harvesting of the 2008/09 winter wheat and of first season 2009 rice crops is almost complete throughout the subregion, while land preparation and planting of the main rice and coarse grain crops are well advanced. In China (Mainland), harvesting of the winter wheat crop, which accounts for about 95 percent of China's annual wheat production, has virtually been completed in the major wheat-producing provinces. Despite the severe winter drought in the early stage of the season, a bumper output is estimated because of timely rainfalls and increased irrigation supplies supported by the government during late February and March. The country's 2009 aggregate wheat output, which includes some expected 6 million tonnes of spring wheat yet to be harvested, is tentatively forecast at a record 113.2 million tonnes, 0.74 million tonnes above the previous high set last year. Harvesting of the 2009 wheat crop in India is also almost complete and output is preliminarily estimated at 77.6 million tonnes, which is below the previous record set last year (78.4 million tonnes), but much higher compared to the five-year average (72.85 million tonnes). Similarly, in Pakistan a bumper 2009 wheat crop has just been harvested, reflecting the favourable rains and strong government support in maintaining the minimum guaranteed producer price. Harvesting of the winter wheat crop in Islamic Republic of Iran is currently underway. In the northwest region - the main wheat growing area - favourable rainfall was recorded during the growing season, with well-above rains received in April. Wheat production is expected to increase by 38 percent relative to last year's poor harvest, reaching 13.5 million tonnes in total, while barley production is forecast at 2.2 million tonnes. Table 10. Asia cereal production ( million tonnes) Wheat Coarse grains Rice (paddy) Total cereals 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast Asia 285.6 276.0 287.4 268.9 277.2 277.4 601.2 622.6 622.5 1 155.7 1 175.8 1 187.3 Far East 212.0 216.3 218.3 242.7 256.0 253.5 595.5 618.0 617.5 1 050.2 1 090.3 1 089.3 Bangladesh 0.7 0.9 1.0 0.5 0.5 0.5 43.4 47.9 48.0 44.6 49.3 49.5 China 109.3 112.5 113.2 163.6 175.9 172.2 187.4 193.4 194.7 460.3 481.7 480.1 India 75.8 78.4 77.6 40.7 38.0 37.8 145.0 149.0 145.2 261.5 265.4 260.6 Indonesia 0.0 0.0 0.0 13.3 16.3 17.0 57.2 60.3 60.9 70.4 76.6 77.9 Pakistan 23.3 21.8 23.8 3.7 3.7 3.7 8.3 9.8 9.5 35.3 35.3 37.0 Thailand 0.0 0.0 0.0 4.1 4.5 4.5 32.1 31.4 31.1 36.2 35.9 35.6 Viet Nam 0.0 0.0 0.0 3.6 3.7 3.7 35.9 38.6 39.0 39.5 42.3 42.7 Near East 45.9 35.9 43.8 20.6 16.6 19.2 5.0 4.0 4.3 71.4 56.5 67.2 Iran (Islamic Republic of) 15.0 9.8 13.5 5.1 2.9 3.4 3.3 2.6 2.8 23.5 15.3 19.7 Turkey 17.2 17.8 20.0 11.4 10.8 11.7 0.6 0.8 0.8 29.2 29.3 32.5 CIS in Asia 27.6 23.6 25.3 5.7 4.6 4.7 0.7 0.6 0.7 33.9 28.9 30.7 Kazakhstan 16.6 12.5 14.0 3.3 2.3 2.5 0.3 0.3 0.3 20.2 15.1 16.8 Note: Totals computed from unrounded data. Summer crop season already started but prospects are uncertain In India, sowing of the main Kharif coarse grains and rice crops for harvest in September is underway. The early outlook is unfavourable because of the delayed arrival of the southwest monsoon in some major producing regions. By 2 July, all India-area weighted cumulative rainfall since the start of monsoon season (1 June) is 46 percent below the average. However, the final outcome of Kharif season will depend greatly on the development of southwest monsoon rains in July and August. Harvesting of the boro rice crop in Bangladesh was completed in May and a bumper crop is reported. The southwest monsoon is currently active over Bangladesh and this is an indication of a good start for the Aman season crops. In Sri Lanka, the main 2009 maha rice crop, planted in October-November 2008, has been harvested. Total paddy production (Maha and Yala) in 2009 is estimated at 3.6 million tonnes, only slightly below the record of the previous year. Similarly, a record main rice crop is also reported in Indonesia. Governments' new policies on trade and production Several countries have new policies to encourage grain exports and support 2009 food grain production. In view of the expected bumper crops and sufficient cereal supply in 2009/10, China has eliminated export taxes on some grains, including wheat (3 percent), rice (3 percent), and soybeans (5 percent), effective 1 July. China also eliminated special export taxes on some fertilizers. The Government of India has reportedly allowed the export of 650 000 tonnes of wheat following the state procurement of cereal in 2009 of over 24 million tonnes, much higher than in the previous year. The Government is reportedly planning to ease non-basmati rice exports if there will be a marketable rice surplus after meeting the requirements for the country's safety net programme. The Government of Thailand has set the farmers guaranteed price for second-crop paddy at THB 11 800 (USD 332) per tonne under a new intervention scheme starting on March 16 and running through July. The second-crop intervention program has reportedly led to the procurement of 4.1 million tonnes of paddy, valued at THB 46 million (USD 1.4 billion). The Prime Minister of Vietnam reportedly instructed state-owned companies to buy as much as 2 million tonnes of rice to support the production of the second season paddy rice crop. In the first half of this year, the country exported 3.8 million tonnes of rice, up 25 percent over the same period in the previous year. Food prices are still historically high in several countries Food staple prices have continued to decline in some countries in the second quarter of the year. But they remain significantly higher in comparison to the pre-2008 food-crises levels. The price impact on overall food consumption of the vulnerable population is still substantial. In Sri Lanka, the retail price of rice in Colombo was 62.3 Rupee/kg in June 2009, only some 6 percent down from the same month in 2008, but 74 percent over that of the same month two years ago. In Pakistan, the retail price of wheat flour in Karachi was 29.21 rupee/kg in May 2009, 15 percent below the peak in October 2008, but still 90 percent higher compared to that in May 2007. In the Philippines, the national average retail rice (Regular Milled Rice or RMR) price was 31.46 peso/kg in May 2009, 12 percent below that the peak level in June 2008, but still 43 percent above that in May 2007. Food supply and market access difficulties persist in several countries Despite an overall satisfactory food supply situation in the subregion, vulnerable populations in a number of Asian countries are still affected by serious food supply difficulties. More than two million people in Nepal face a precautious food situation as a result of crop failure due to the 2008/09 winter drought. Crop yields in some districts in Mid- and Far-Western Nepal - which received less than 50 percent of average rainfall during the period from November 2008 to February 2009 - have dropped by more than half based on the recent MOAC, WFP and FAO joint crop assessment report. Cyclone Aila struck the southwestern coast of Bangladesh on 25 May, causing widespread devastation. Over 240 000 homes have been completely destroyed and 370 000 homes partly destroyed, causing food insecurity for over 4 million people. Some 3 million people in Pakistan's northwest region have been reportedly displaced and faced food shortages due to the recent civil conflict.In Sri Lanka, following the cessation of the conflict between the Liberation Tamil Tigers of Eelam (LTTE) and the Government in May 2009, over 300 000 people were displaced and have since been housed in government-run camps. In Myanmar, agricultural and food assistance continues to be needed for the summer season and the current monsoon season to help small farmers recover their production and livelihoods in the areas affected by cyclone Nargis last year. The food situation of more than 6 million vulnerable people in the Democratic People's Republic of Korea is expected to worsen during the lean growing season before the November harvest because of reductions in aid. The World Food Programme has received only 15 percent of the USD 504 million it needs to fulfil its planned emergency assistance needs. Near East Across the subregion, harvesting of the 2009 winter crops is almost complete, with most countries experiencing seasonably dry weather in June. During May, average rainfall across much of Turkey maintained mostly favourable soil moisture for the reproductive to filling stage of the winter wheat and barley crops. Estimates indicate improved cereal production, forecast at about 67 million tonnes, compared to last year's output of 56.5 million tonnes, when extreme drought conditions decimated crops. In Turkey, dry weather during June favoured an early harvest in most growing areas. Barley production is expected to increase by approximately 27 percent, relative to last year's harvest, to 7.5 million tonnes, owing to favourable rainfall. Wheat production is forecast at 20 million tonnes, an average crop, and 12 percent above the previous year. Similarly, Syrian Arab Republic received normal rainfall during the cropping season, with dry spells in June during the harvest period. The winter wheat harvest is expected to be the second lowest of the current decade, even though wheat production is forecast to increase by 53 percent, to 3.2 million tonnes, compared to last year. In spite of this, grain imports will continue to be required to meet domestic needs. Harvesting of the winter barley crop is complete, with production forecast at 700 000 tonnes. In Iraq, accumulated rainfall from September 2008 to April 2009 averaged between 25 and 65 percent of normal levels in the principal wheat growing regions. The below-average rainfall hindered winter crop development, particularly in the northern region, with wheat production expected to increase compared to last year to 2 million tonnes. To stabilise domestic cereal supplies another year of above-average cereal imports will be required in 2009/10. Cereal production in Israel is forecast at 88 000 tonnes, well below average, but about 30 percent up over last year's exceptionally low cereal production. Despite poor rains during the initial stages of the cropping season in Afghanistan, rainfall improved between February and May 2009. Higher wheat prices encouraged farmers to increase the sown area for wheat, with production forecast at 3.5 million tonnes. Harvesting of the winter crops is scheduled to conclude in August. In Lebanon and Jordan, cereal production is forecast to increase compared to a year earlier, with harvesting of the winter crop scheduled to finish in July. Asian CIS In Asian CIS countries, sowing of spring cereals has been completed and harvesting of winter cereals has started, except in Kazakhstan where the harvest season starts in September. Good rainfalls during the spring season have maintained adequate soil moisture levels raising the prospects for a good cereal harvest in the region. Reflecting an increase of the land sown to grains, Azerbaijan is expected to produce an above-average grain output of over 2 million tonnes, with more optimistic forecast, close to 2.5 million tonnes. If those forecasts are confirmed, wheat imports will be significantly reduced in the 2009/10 marketing year. In Georgia, the wheat harvest is forecast to be as good as last year, after two consecutive poor harvests in 2007 and 2006. In Tajikistan, the situation is mixed as heavy rains have damaged spring sown crops, such as cotton and coarse grains, while the winter wheat harvest is expected to partly recover from last year poor output. In Kazakhstan, the area sown to wheat is estimated to have increased to 13.8 million hectares compared to 12.9 million hectares of last year. Provided normal weather conditions prevail during the summer season, the 2009 wheat output could increase to 14 million tonnes from 12.5 million tonnes in 2008. Wheat exports in the current 2008/09 marketing year are estimated to reach 5.5 million tonnes or approximately 30 percent less than the previous year. In view of the large wheat harvest anticipated for this year, export availabilities in 2009/10 could be substantially higher. Latin America and the Caribbean Central America and the Caribbean Weather conditions favour wheat harvest in Mexico Dry weather conditions have favoured rapid maturation and harvesting of the 2009 main winter wheat crop in Mexico's key producing states of Sonora, Guanajuato, Baja California and Michoacán. Seasonal output is tentatively estimated at a record 3.9 million tonnes, mainly due to a substantial increase in planted area that reached 725 000 hectares, exceeding official planting intentions by about 10 percent or some 75 000 hectares. Early outlook for coarse grain production promising Planting of the 2009 first season (mainly rain-fed) coarse grain and bean crops is underway in all Central American countries. In Mexico, after few weeks of dryness, beneficial rains in June in eastern and central sections of the southern plateau, boosted soil moisture for 2009 summer maize and sorghum crops in key growing states of Guanajuato, Jalisco and Michoacán. Plantings are expected to be close to the good levels achieved in 2008, with 6.9 million hectares of summer maize and 1.1 million hectares of sorghum anticipated. In the Caribbean, planting is underway in Cuba, while harvesting has already started in Haiti and the Dominican Republic where production prospects are favourable following well-distributed precipitation throughout the whole growing season. In aggregate subregional coarse grain area is expected to reach the record level of 12.4 million hectares in 2009, slightly above the previous record set last year and continuing the expanding trend started in 2005. Planting of the 2009 main summer season paddy crop is underway throughout the subregion and planting intentions point to a record area of about 710 000 hectares, with an increase of about 20 000 hectares compared to 2008, mainly in Cuba, Haiti and Dominican Republic. Based on the results of harvests already underway and assuming normal conditions and average yields for the crops just being sown, the subregion's aggregate cereal production is tentatively forecast at 41.3 million tonnes, 1.4 million tonnes less than 2008 record output but still 6 percent above the average of the past five years. Table 11. Latin America and Caribbean cereal production ( million tonnes) Wheat Coarse grains Rice (paddy) Total cereals 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast Latin America & Caribbean 27.0 21.1 20.5 127.6 137.7 118.0 24.5 26.7 27.4 179.1 185.4 165.9 Central America & Caribbean 3.6 4.0 4.1 34.0 36.1 34.5 2.5 2.6 2.7 40.0 42.7 41.3 Mexico 3.6 4.0 4.1 29.7 31.9 30.1 0.3 0.3 0.3 33.6 36.2 34.5 South America 23.4 17.1 16.4 93.6 101.6 83.5 22.1 24.1 24.7 139.0 142.7 124.6 Argentina 16.3 8.3 7.0 26.6 27.0 16.8 1.1 1.2 1.2 44.0 36.6 25.0 Brazil 4.1 5.9 5.7 53.9 61.6 53.3 11.3 12.1 12.7 69.3 79.6 71.8 Colombia 0.0 0.0 0.0 1.8 1.8 1.9 2.4 2.6 2.6 4.2 4.4 4.5 Note: Totals computed from unrounded data. Prices remain higher than last year's level in spite of favourable production outlook Since August 2008 wholesale prices of white maize (used to prepared tortillas) and rice in Mexico, have stabilized at high levels of 4 000 and 11 500 pesos per tonne, respectively. On the contrary, wholesale prices of beans have continued to skyrocket: from January 2008 to June 2009, they passed from 7 700 to more than 17 000 pesos per tonne, severely affecting the access of local consumers to this important source of proteins. In all other Central American countries, except Nicaragua, prices of cereals are either stable or declining from the peaks achieved in mid-2008. Since many countries are in the hunger season, which will last until the arrival on markets of first season production in August, prices are expected to go up again, with negative impact on food security of most vulnerable people, especially in poor urban areas. In Haiti, the population with food insecurity is officially estimated to have declined to 2.1 million from 2.8 million at the beginning of the year. This reflects the very good production of 2008 winter staple foods, the gradual reduction in market prices and the implementation of safety net programs based on donor or government-financed labour-intensive works. However, food assistance continues to be required by most food vulnerable groups in poorest urban slums as well as in the departments of North-West, Artibonite, South-East, Nippes, South and the Grand'Anse. South America Significant drop in 2009 maize and wheat aggregate production Cereal production in 2009 is early forecast at 124.6 million tonnes; some 14 percent less than the 2008 record output and 4 million tonnes below the average of the last five years. This is mainly due to the significant reduction in summer maize crop production, whose harvest is almost completed throughout the subregion, and the unfavourable prospects for winter wheat crop that is still at planting stage. Harvesting of 2009 maize crop will be completed in July/August and aggregate production is estimated to drop by almost 20 percent from last year's record of 91.7 million tonnes to 74.5 million tonnes as a consequence of the drought throughout the growing season that affected all major producing areas. In addition, unattractive domestic prices coupled with high costs of inputs and low access to credit have induced farmers to reduce planted area and the application of fertilizers with negative effects on yields. Aggregate production of 2009 wheat crop is early forecast to be very similar to or even lower than the 2008 low level of 17 million tonnes because of the severe dry weather conditions and cold temperatures that are hampering planting operations in Argentina, one of the top five global wheat supplier in recent years and the lead producer of the subregion. Here estimates of planted area have been continuously revised downward in the last few weeks, with only 3 million hectares now expected, the lowest level of last 100 years and some 30 percent below last year's level. However, a different scenario for 2009 wheat crop is reported in Brazil and Uruguay. In Brazil, planted area is early forecast at about 2.3 million tonnes, similar to the 2008 good acreage and, assuming favourable weather conditions persist during the season, an above-average production of 5.7 million tonnes is tentatively forecast. In Uruguay, official planting intentions for wheat point to some 500 000 hectares, about 9 percent above 2008 record acreage and double of the last five year average. This renewed interest for wheat crop is partially due to the increasing investments by Argentinian farmers that prefer to move to Uruguay because of a series of local factors, such as higher domestic prices, better export conditions and access to credit, and cheaper land rent. Positive outlook for 2009 paddy production The subregion aggregate production for paddy, whose harvest is virtually completed, is estimated at a record level of 24.7 million tonnes, about 3 percent above the good 2008 crop. Large productions are reported in some Andean countries, such as Bolivia, Peru and Venezuela, as well as in Brazil and Uruguay. In Bolivia, 2009 paddy production is officially set at the record level of 457 000 tonnes, 20 percent more than in 2008, as a consequence of record plantings in the oriental plains of 200 000 hectares. In Peru, harvesting of 2009 irrigated paddy crop will be completed in July/August. Attractive producer prices at the beginning of the season and adequate water reservoir levels in major northern producing areas have led farmers to plant some 370 000 hectares, an acreage very similar to previous year's record. Assuming average yields, 2009 paddy production is early estimated at the near-record level of 2.7 million tonnes. In Brazil and Uruguay, favourable climatic conditions throughout the growing season have resulted in record yields and to above average productions. Argentine cereal exports are loosing ground The expected shortfall in wheat and maize crop production in Argentina is a major new issue in the subregion. Cereal exports of Argentina are forecast at record low 12 million tonnes in marketing year (July/June) 2009/10, well below the last five year average of almost 20 million tonnes. In particular, exports of maize are forecast at a low of 9 million tonnes, while exports of wheat may only reach 1.5 million tonnes. This situation is opening trade opportunities for other exporting Mercosur countries, such as Brazil for maize and Uruguay and Paraguay for both maize and wheat, but also forcing important wheat importers such as Brazil to look for alternative suppliers outside the subregion such as the Russian Federation and Canada. Food prices continue to decline in main Andean markets In Andean countries, prices of main staple food are declining with the arrival on markets of the new production. In La Paz (Bolivia), compared to one year ago, wholesale nominal prices of rice, potatoes and wheat flour in June were lower by about 28, 40 and 41 percent, respectively. In Peru, the average wholesale price of rice has continued to decline from the peak registered in October 2008 and this trend is expected to continue due to the good prospects for 2009 paddy production. The price of potatoes has also dropped by about 25 per cent from the record level of January 2009, but it is still 21 percent above the price of 12 months earlier. On the contrary, in Lima, the retail price of wheat flour has remained practically unchanged from the record level of June 2008. After a steady decline from record levels reached in April/May 2008, wholesale wheat prices have started to climb again since the beginning of 2009 in key producing countries such as Argentina, Brazil Paraguay and Uruguay, mainly reflecting the poor prospects for Argentina's production. North America, Europe and Oceania North America Smaller winter wheat crop being harvested in the United States while maize plantings turn out higher than expected In the United States, after a slow start, winter wheat harvesting was well underway in the southern states as of late June. The latest official forecast puts the winter wheat output at some 40.6 million tonnes, about 20 percent down from the previous year. The area sown decreased by 6 percent and lower yields are expected in some parts, especially in Texas and Oklahoma where crops were damaged by adverse weather. Latest indications also continue to point to a smaller spring wheat harvest despite the generally good condition of crops. Any improvements in yields expected compared to last year are unlikely to compensate for the decline in area planted, which is officially estimated to be down by about 3 percent from 2008. Aggregate wheat output is now forecast at 54.9 million tonnes, slightly below earlier expectations and about 19 percent down from last year. Regarding coarse grains, latest official reports estimate that despite wet weather during planting in some parts, the bulk of the maize crop was planted by early June and the total area amounts to about 35.2 million hectares, 1 percent up from the previous year and the second largest area in more than 60 years. Assuming average yields, maize output in 2009 is currently forecast at 303 million tonnes, close to last year's level; but much will still depend on weather conditions in the coming months. In Canada, prospects for the 2009 wheat crop have deteriorated slightly in the past weeks reflecting sowing delays in some parts because of wet weather and unseasonably cold weather that slowed emergence. Although the final area sown to wheat may turn out similar to last year's, which is more than had been expected from farmers' planting intentions earlier in the year, yields are expected to be lower than last year's relatively good levels and the wheat output in 2009 is now forecast at 25 million tonnes, 13 percent down from 2008. Table 12. North America, Europe and Oceania cereal production ( million tonnes) Wheat Coarse grains Rice (paddy) Total cereals 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast 2007 2008 estim. 2009 f'cast North America 75.9 96.6 79.9 378.9 353.8 345.0 9.0 9.2 10.0 463.8 459.7 434.9 Canada 20.1 28.6 25.0 28.0 27.4 25.4 0.0 0.0 0.0 48.0 56.0 50.4 United States 55.8 68.0 54.9 350.9 326.5 319.6 9.0 9.2 10.0 415.7 403.7 384.5 Europe 189.9 247.7 220.4 197.3 251.7 225.7 3.6 3.5 3.8 390.8 502.9 449.9 EU 120.2 150.0 134.7 138.0 162.8 150.1 2.8 2.6 2.9 260.9 315.4 287.7 Serbia 2.0 2.1 2.2 4.4 6.3 6.9 0.0 0.0 0.0 6.4 8.4 9.1 CIS in Europe 64.9 92.5 80.7 49.7 76.3 62.7 0.8 0.8 0.8 115.4 169.6 144.2 Russian Federation 49.4 63.8 59.0 30.1 41.7 35.5 0.7 0.7 0.7 80.2 106.2 95.3 Ukraine 13.7 25.9 19.5 13.8 26.4 20.0 0.1 0.1 0.1 27.6 52.4 39.6 Oceania 13.9 21.7 22.3 11.4 12.7 12.9 0.2 0.0 0.1 25.4 34.4 35.3 Australia 13.6 21.4 22.0 10.8 12.1 12.4 0.2 0.0 0.1 24.6 33.5 34.4 Note: Totals computed from unrounded data. Europe Cereal production forecasts trimmed back following dry weather in parts, especially in the east of the region Although previous forecasts already pointed to lower cereal output this year in the region because of reduced plantings, latest information indicates that reduced yield prospects in some countries could lead to a smaller harvest than earlier expected. In the EU, weather conditions in recent weeks have been generally favourable but reports from some countries indicate that earlier dry weather caused irreversible damage and reduced yield potential. This was particularly the case in Romania and Hungary. The aggregate wheat output of the EU in 2009 is now forecast at about 135 million tonnes, some 10 percent down from last year, while coarse grains output, forecast at 150 million tonnes, would be about 8 percent down from 2008. In European CIS countries, planting of the spring cereals has been completed and harvesting of winter cereals has recently started. Unusual cold and dry whether during the month of April has delayed the spring cereals planting campaign; however warmer temperatures and good precipitations during May and June have promoted spring cereal emergence and improved winter cereal conditions. The outlook for the aggregate cereal production in 2009 is good, with early forecast for the region set at 144.2 million tonnes, 15 percent below the bumper harvest of last year, but still 10 percent above the average of the past five years. The aggregate area sown to cereals for the 2009 harvest is estimated to similar levels, if not slightly above, to those of last year. Yields, however, are expected to be lower than in 2008, reflecting dry and cold weather at the beginning of the spring season. In the Russian Federation, the outlook for the 2009 cereal harvest is good and output could reach its second highest level, after last year's record of 106.2 million tonnes. The aggregate cereal planted area is expected to reach some 46.6 million hectares, about one million hectares more than the previous year. Assuming normal weather until harvest, cereal output in 2009 is tentatively forecast at some 95 million tonnes, including 59 million tonnes of wheat compared to 63.8 million tonnes in 2008. Cereal exports in the new marketing year are anticipated to decline by about 3 to 5 million tonnes from a record 22.9 million tonnes estimated for the 2008/09 marketing year, reflecting increased competition expected in world grain markets. In Ukraine, the outlook for the 2009 cereal harvest is satisfactory, with the early forecast put at some 39.6 million tonnes, approximately 24 percent less than last year's record, but still 3 percent above the past five-year average. Wheat output is forecast to decrease by 6.4 million tonnes to 19.5 million tonnes, as both wheat area and yield will be lower than in 2008. Barley output is also forecast to decrease, from 12.6 to 10.0 million tonnes, despite a larger area sown as yields of spring barley (main crop) are anticipated to be significantly lower than in 2008, reflecting delayed plantings. As a result of the removal of export restrictions, Ukrainian cereal exports in 2008/09 marketing year are estimated to increase to a record 25 million tonnes, about 10 percent of world cereal exports. In marketing year 2009/10 cereal exports from Ukraine are forecast to decline significantly, due to a lower domestic cereal production in 2009 and a weaker demand for wheat from importing countries. In the Republic of Moldova, unfavourable weather has dimmed prospects for the cereal harvest in 2009. A combination of drier-than-normal and unseasonable cold temperatures have affected winter grain development and delayed spring crop planting. Early estimates put 2009 wheat output at 750 thousand tonnes, approximately 45 percent less that the previous bumper year and 14 percent below the past five-year average. Maize output is estimated to decrease by 200 000 tonnes to some 1 million tonnes in 2009. Aggregate cereal production in 2009 may decrease by around 30 percent in comparison to the previous year and 15 percent below the past five-year average. Oceania Late June grain prospects remain favourable but concern is rising over rainfall forecasts for the season As of late June, prospects for Australia's main winter grain crops (mostly wheat and barley) remained generally favourable. Adequate moisture for planting was reported in most of the main growing areas and the overall area sown is now estimated to be close to last year's level. Based on the conditions as of late June, the winter crop output could potentially match last year's relatively good levels of some 21 million tonnes of wheat and about 7 million tonnes of barley, assuming sufficient rainfall during the coming months. However, concern is currently rising over the outlook for rainfall during the current crop season in the country as there is growing evidence of a developing El Niño event. El Niño events are usually (but not always) associated with below-normal rainfall in the second half of the year (from July) across large parts of southern and inland eastern Australia. Should this phenomenon materialize, this could seriously affect cereal yields and production. GIEWS global information and early warning system on food and agriculture ============================================================= by Al Krebs and Karen Lehman Welcome to the global economy - it's on your dinner plate. In a Mexican mountain village, the corn may be home-grown and home-ground, the chicken in the soup fed on scraps in the yard, and the wild greens gathered from the fields nearby - but the cheese in the quesadilla could come from a US commodity programme. In the US, an entire meal could be brought to you by the Philip Morris tobacco company under the misleading brand names of Sungold Dairies, Tombstone Pizza, Lender's Bagel Bakery and Kraft Macaroni and Cheese. If we could accompany our pork and beans on their journey from farm to table, the images of a countryside populated by family farmers calling their animals by name and shipping their produce directly to our supermarket would evaporate. How is it possible, we might ask, that 10 cents of every dollar spent on food in the US winds up in Philip Morris' coffers? That food travels an average of 2000 miles before it lands on our plates? That there are so few farmers left in the United States that the government is considering removing "farming" as a category on the census? That 5000 pigs can spend their entire lives under one roof in what amounts to a pig factory and never see the light of day before they are led to slaughter? That US and European food is so cheap, it is replacing the native diets of peoples in Africa, Asia and Latin America, destroying native agriculture systems and accelerating urban migration? The answers lie in the policies that governments in the world have promoted both domestically and through international trade agreements. Intentionally or inadvertently, they have strengthened the stranglehold corporate agribusiness has on our food system. -------------------------------------------------------------------------------- Food In a Global Economy To have a secure supply of food, both in its quality and safety, has been a primary goal of humankind since the dawn of our species. Food, next to life itself, is our greatest common denominator. Its availability, quality, and price are matters of life and death, and the cultures it nourishes, its moral and religious significance, make it history's "staff of life" as well. The global economy poses threats to food security in several important ways. First, people who eat food are separated from the farms that produce it by great distances that are economic and political as well as physical. Second, the rules of the global economy place the world's food supply under the control of multinational corporations that have no allegiance to countries or their citizens. In the process, the system of family farm agriculture and the rural communities that depend on it are destroyed. Finally, the global economy threatens the biological wealth of the planet. Imagine a system in which a single company sells seed to the farmer, operates the local grain elevator, owns the railroad, owns the port facility, buys the grain from the farmer, and sells the grain to itself to be processed into food. That's the system we have now in grain production in the US and, increasingly, around the world. By eliminating tariffs and making many forms of public support to farmers "illegal", the General Agreement on Tariffs and Trade (GATT) will further increase the control exerted by corporations over all the different stages of the food production process. Under such conditions the farmer is completely at the mercy of the corporation which, in effect, sets the price at which he buys the imports and sells his produce. Corporate agribusiness manufactures and markets over 95% of the food in the United States. As other countries in the world emulate the US model, agribusiness is gaining ground throughout the globe. Multinational corporations have relatively easy access to credit, tax advantages, and the ability to rapidly expand their production. There are three "single overriding corporate objectives" upon which corporate agribusiness is based and upon which it thrives. They are: Substituting capital for efficiency and technology for labour Standardising our food supply Creating synthetic food In pursuing each of these objectives, corporate agribusiness has sought first to diminish the role of family farmers in the production of our food. Second, it has sought to relegate the farm community to a small and select group of economically and politically impotent raw material producers serving a nationwide food manufacturing system. Such a system can thus be controlled from afar by a select number of giant corporations and economically powerful individuals. Between January 1 and January 31, 1995, while most Americans were still figuring out how to break their New Year's resolutions, Philip Morris merged Kraft and General Foods into Kraft Foods; Ralston Purina sold Continental Baking Company to Interstate Bakeries Corporation, the nation's largest bread maker; Perdue Farms Inc., the nation's fourth largest poultry producer, acquired Showell Farms Inc., the nation's tenth largest poultry producer; and Grand Metropolitan proposed to acquire Pet Inc. The brand names are all that's left of the small companies which became huge conglomerates through mergers and acquisitions. Nor is the concentration of agribusiness isolated from the rest of the economy. Wells Fargo Bank, the second largest bank in California, is among the top six shareholders of five major agriculture-related corporations: Tyson (#5), Archer Daniel Midland (#2), ConAgra (#2), Monsanto (#6), and Philip Morris (#2). The largest bank in California, Bank of America, is the nation's largest agricultural lender, including crops and real estate. This accelerated concentration of the food industry has as much impact on the political process as it does on the dinner table. US agribusiness companies, such as Cargill, the world's largest grain trading company, had a disproportionate role shaping the rules in the GATT framework. President Nixon's first trade advisor was William Pearce, a vice president of Cargill. Another Cargill alumnus, Daniel Amstutz, drafted the US agriculture proposal for the GATT for President Reagan. -------------------------------------------------------------------------------- Exports, Imports, and the Family Farm Those who promote the global economy say that the rules for trade should be based on comparative advantage. In its simplest form, the logic of comparative advantage dictates that countries should buy low and sell high regardless of a product's importance to the local culture and economy. Thus, if Mexico can buy corn more cheaply elsewhere than it can be raised domestically, it should abandon domestic corn production, buy corn elsewhere, and sell products like tomatoes to countries that can't produce them as economically. Such reasoning is at the root of international trade agreements like the GATT and the North American Free Trade Agreement (NAFTA). At first, this looks good on the plate, because theoretically, food would be cheaper for all of the world's consumers. There are two primary problems with the pursuit of markets based on comparative advantage. First, it leads to dependence on foreign suppliers for food - and the international trading companies that serve them. Second, countries will implement policies that are destructive to their own citizens to maintain their comparative advantage in a given market. In times of war and in times of famine, the lack of domestic production for local consumption in food importing countries has had disastrous consequences as food producing nations suddenly designate their production for their own populations, at the expense of those who have become accustomed to constant supplies. In 1973, for example, the US decided to restrict exports of soybeans because of a drought-related shortage in the US. This created problems for European farmers who were using US soybeans in their animal feed - and made meat more expensive at European dinner tables. Europe has learned its lesson and become more aggressive in local cereal production to ensure a constant supply. Furthermore, international trade's dependence on multinational corporations poses a threat to food security. Two companies, Cargill and Continental, shared 50% of US grain exports in 1994. This is important to the rest of the world, given that in the same year, the US exported 36% of the wheat traded worldwide that year, 64% of the corn, barley, sorghum and oats, 40% of the soybeans, 17% of the rice, and 33% of the cotton. By controlling the flow of these volumes of agricultural products, these companies are capable of manipulating prices and supplies throughout the globe. When farmers have attempted to bypass these companies and market their grain directly to foreign countries, as the American Agriculture Movement did in the late 1970s, the companies can retaliate as Cargill did in 1984 by importing 1 million bushels of Argentinian wheat. This degree of control has serious long term implications. These huge companies now have the power to shift comparative advantage simply by their decisions on where to build warehouse, transport and processing facilities. Our food system is very close to being totally managed - without citizen involvement. Governments, too, pursue strategies to improve their comparative advantage with effects that can be disastrous for the domestic population. For example, the US, in its efforts to maintain its dominance as the world's most important supplier of grains like wheat and corn, has driven down prices below the cost of production to increase exports - a policy which has devastated farmers in both the US and developing countries. Between 1987 and 1992, 38,500 farms per year were eliminated, and the country's newspapers were filled with stories of suicide, spouse abuse, bankruptcy, and armers applying for food stamps - a federal program to help the poor buy food. Other countries, unable to compete with this low priced grain, tried in some cases to protect their farmers by imposing tariffs or quotas on the cheap grain. This is the poor country's form of agricultural subsidy. By making imported grain more expensive with a tariff, or tax, the government makes domestically produced grain more competitive in local markets. Mexico is a case in point. Until Carlos Salinas de Gortari became President in 1988, Mexico attempted to protect its corn production system from artificially cheap US corn. Corn is the Mexican food staple and is produced by 2,500,000 small farmers, mostly of Mayan and other indigenous descent. Half of the land under cultivation in Mexico is dedicated to corn, and is as important culturally as it is economically. The Congressional Budget Office Report on Agriculture in the North American Free Trade Agreement stated that Mexico's corn program had been a "de facto rural employment and anti-poverty program." But to ensure the passage of NAFTA, Mexico promulgated a series of reforms in the agriculture sector, including the breakup of the cooperative farms (ejidas) and signed away its right to protect corn in NAFTA. As a result, economists predicted that as few as 700,000 and as many as ten million farmers could be displaced during the decade after NAFTA took effect. This is a pattern repeating itself all over the world, creating problems of overpopulation in the Thrid World's megacities where rural people migrate to seek nonexistent jobs. The world's governments could change global trade policy to favour domestic food security over comparative advantage marketing. But that would require controlling corporate behaviour to a degree most governments have lacked the courage to do. Countries, with a few notable exceptions, don't generally engage in trade. Corporations do. The countries' role in the process is to set the rules by which corporations conduct their business. Unfortunately, they have structured the rules to benefit multinationals at the expense of domestic food systems. -------------------------------------------------------------------------------- The Death of the Family Farm Already, agriculture statistics read like tombstones for family farmers and tabloid headlines for agribusiness corporations: In the past 50 years, the number of farms has declined by two-thirds in the US, while the area in farmland has remained about the same. In 1994, three packers controlled the slaughter of over 80% of the beef in the US. In 1994, 73% of all US farms accounted for 9% of the annual total cash farm commodity and food sales, while 2% of the farms accounted for 50% of the total sales. The average farm operator household in 1990 earned 14% of its income from the farm and the rest from off-farm employment. In that same year, 22% of US farm operator households had incomes below the official poverty threshold, twice the rate of all US families. Implicit in these statistics are the stories of corporate concentration, the foreclosure of family farms that have been in families for four generations, and the reduction of real choice and quality on US dinner tables. The numbers also chronicle the deaths of rural communities, where family farm dollars paid to equipment dealers, grocery stores and gas stations circulated through the local economy four times. With the family farms went many rural community businesses, and the main streets across the upper Midwest in the United States are full of empty storefronts and empty schools. Some startling figures developed by Dr Stewart Smith, a senior economist for the Congressional Joint Economic Committee, vividly illustrate how agriculture has shifted from a system based on farmers to one based on agribusiness. In a study released in October 1992, he examined the economic activity of agribusiness' three basic economic sectors - farming, inputs and marketing. Viewing the economic activity with agribusiness sector by sector, he found that farming suffered a shocking descent from 41% in 1910 to 9% in 1990, while the input sector rose from 15% to 24% and the marketing sector climbed from 44% to 67% in the past 80 year period. Equally shocking was the fact that while the value of the marketing sector in real dollars increased from $35 billion to $216 billion and the input sector went from $13 billion to $58 billion, farming shrank from $24 billion to $23 billion. US agriculture has been transformed from a one-time integral sector of the nation's economy to a dependent labour arrangement in which family farmers are merely providers of raw materials for a giant food manufacturing industry where technology is being substituted for labour, and capital for efficiency. As countries around the world seek to replicate the US agriculture system, similar dynamics are being integrated into their farm sectors. During the postwar boom of the 1950s and 1960s, there was ample employment in urban areas for the many American farmers who left the land. This is not the case today, and the haemorraging from the countryside continues, not only in the US but in Canada, France, Mexico, Japan, and Somalia. Many urban problems are the results of bad agriculture policy and the global economy, if anything, is exacerbating them. Unless there is a reversal in the decline of family farms and rural communities, our increasingly urban societies will be entirely dependent on multinational corporations that will someday own the farm land and hire "farm managers" to work it. -------------------------------------------------------------------------------- Threats to Biological Diversity The global economy has another impact on the food that will be produced in the future. For the first time, multinational corporations are within reach of controlling the planet's genetic wealth through a global legal framework established under the World Trade Organisation. Companies can patent living organisms and the genetic information that determines their nature and development. For centuries, seeds moved freely across the continents on the wind, in birds' bellies, in traders' caravans, conquerors' pockets, and immigrants' knapsacks. They were available to all, the sole property of none, the common heritage of the planet earth. The common misunderstanding about the world's food seeds is that they are naturally occurring. But behind every food crop seed there is a long line of farmers who literally created them through a process the Mende people of Sierra Leone call hungoo, literally meaning innovation or invention. Just as the yucca moth and the yucca cactus have evolved together, so have the world's people and its grains. Early on, the forerunners of agribusiness disrupted this relationship when they transplanted bananas and sugarcane from Asia and coffee from Africa to Latin America and produced them in heavily policed plantations for export to European countries. The French outlawed the export of indigo seed from Antigua and the Dutch destroyed all of the nutmeg and clove trees in the Molucca Islands after they had established their own plantations. By separating the seed from its cultural root, the colonisers changed it forever from the living symbol of a community's hisotry into a commodity. The United States is known as the breadbasket of the world - yet of the food and industrial crops so abundantly harvested each fall, only one, the sunflower, is native to this continent. All 15 US food crops worth $1 billion or more depend on genetic material from other countries: corn, potatoes, tomatoes and cotton from Latin America; rice and sugar cane from Indonesia; soybeans and oranges from China; wheat, barley, grapes and apples from West Central Asia. In the early 1960s, the United States passed a law granting plant breeders the rights to patent seeds, thus preventing others from selling the same variety. Corporations made billions of dollars on seeds developed in US labs from germ plasm that farmers in other lands had carefully bred over generations. With the passage of the GATT, farmers all over the world will be forced to adhere to US-style law and pay royalties to companies that hold patents on the genetic material they or their ancestors helped to shape. This new form of genetic piracy has an interesting name, "intellectual property rights", which are defined as rights to protection of innovation. Intellectual property rights would only be recognised when they generated profit, which occurs when a worker pulls a gene out of a seed in a Boston laboratory, but not when a Mende farmer saves some seeds and rejects others. Intellectual property rights are also only represented when the innovation is capable of industrial application. Pioneer Hi-Bred can be protected when it mass produces seed varieties, but the Indian farmer who collects and saves seeds for next year's planting cannot. This means that innovation that took place in communities over centuries, or even innovation in plant varieties that takes place in the present in a communal fashion, is not eligible for protection. As more power is concentrated in the hands of the corporate gene manipulators, the genetic diversity that has been tended by farmers in millions of fields around the world is lost. On October 2, 1993, 500,000 Indian farmers demonstrated against the GATT and vowed to protect their right to produce and protect their own seeds. They created a charter of farmers' rights, especially the right to conserve, reproduce, and modify seed and plant material. They speak for the rest of the farmers of the world who want to continue their partnership of hungoo with the vegetable kingdom. Resistance to the piracy of the earth's diversity could ensure that for future generations, seeds will continue to be the fruit of our common heritage and not the exclusive property of the gene splicers. [For a full discussion of Indian farmers' resistance to GATT and the US intellectual property rights initiative, see chapter by Vandana Shiva and Radha Holla-Bhar.] -------------------------------------------------------------------------------- Re-Rooting the Local Economy Actions like those taken by the Indian farmers to challenge the hegemony of global corporations are one important response to the destruction of local economy and culture. In addition, people in countries all over the world are challenging the practises of export dumping, in which food is sold at prices less than production costs. There are other approaches, however, that don't involve challenges to the global institutions themselves, but instead regenerate local food systems. These approaches will be different in every community, in every region, and in this diversity lies their strength. Peasants in a Mexican mountain village can continue to grow corn and urban dwellers in the United States can make connections directly with farmers who grow their own food without the aid of a multinational corporation. Replacing corporate products with local produce on the dinner plate is a small first step in relocalising the economy. -------------------------------------------------------------------------------- Reproduced with the permission of Edward Goldsmith, co-editor with Jerry Mander, of The Case Against the Global Economy and For a Turn Towards the Local - Sierra Club Books; fax 1-415-957-5793. ========================================================== |
