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Poor economy, harvests decrease food security
Famine Early Warning System Network (FEWSNET)
August 09, 2007

http://www.reliefweb.int/rw/RWB.NSF/db900SID/RMOI-75WVWC?OpenDocument&rc=1&cc=zwe

Economic decline, poor harvest cause significant decrease in food insecurity

Protracted economic decline, exacerbated by a poor 2006/07 harvest, as well as current and potential future disruptions of food supply due to recent price controls and eminent restrictions on basic commodity imports have caused a significant decrease in Zimbabwe's food security, especially in the southwest and in urban areas.

This year's cereal production is expected to meet only 55 percent of Zimbabwe's requirements, according to the UN's Food and Agriculture Organization and World Food Programme. The 2006/07 harvest was severely compromised (Figure 1) by poor access to inputs, the underutilization of land and, in the south and west, by El Niño-related drought conditions. In an effort to mitigate the impacts of this year's production deficits, the Government of Zimbabwe's (GoZ) Grain Marketing Board (GMB) intends to procure half of the country's harvest and distribute this, along with 400,000 MT of maize it plans to import from Malawi, in deficit production areas. Unconfirmed reports also indicate that the GMB has secured an additional 200,000 MT of maize from Tanzania. To make up the balance, WFP and C-SAFE tentatively plan to import about 352,000 MT of food aid to feed 4.1 million people. While it is conceivable that maize import requirements could be met, the GMB's ability to distribute maize is a serious concern, as, in the past, GMB distributions have been erratic, and local shortages are common.

To date, the GMB has collected about 70,000 MT of maize from domestic production and has received about 115,000 MT of the Malawian maize. The Malawi contract has performed to GMB expectations to date.

Drought-affected areas of southern and western Zimbabwe produced less than 10 percent of their cereal needs, and these areas are now entirely reliant on the GMB for their maize (Figure 1). While the GMB provides maize at a controlled and comparatively affordable price to deficit areas, this maize is not always available on demand and must be requested by community delegates in advance, then transported from depots to villages at the requesting village's expense. The availability of transport will play a critical role in meeting food needs in the deficit areas.

Figure 1. Production deficits in Zimbabwe after the 2006/07 season

Elsewhere, some farmers have produced enough that they can sell maize directly to rural consumers. The prices in these transactions vary considerably across the country, and have been rising steadily, in line with inflation (Figure 2).

Towards end of June, the GoZ affected price controls on an array of basic commodities. The resultant decline in food availability and food access has been dramatic, particularly in urban areas. Until recently, most basic goods, including maize meal, were available on both formal and parallel markets, albeit at rapidly rising prices. But, the implementation of the June price controls resulted in a run on price-controlled commodities and a decline in their production due to the erosion of profit margins. The formal market can no longer maintain a regular supply of basic goods, and sporadic deliveries of these goods are met with long lines that do not allow for everyone to make it into the store before stocks run out. The run on commodities is having the biggest impact on the poor, who are forced to make frequent purchases in smaller amounts and are not able to buy in bulk when commodities become available. While basic goods can still be found on parallel markets at a substantially higher cost, availability is noticeably declining as restrictions are tightened on imports and the police intensify monitoring operations, driving the parallel market further underground.

The cost of a household's monthly basket, monitored by the Consumer Council of Zimbabwe (CCZ), had risen to ZW$ 12,587,819 for the month of June, before price controls lowered the cost to ZW$ 8,275,859. Inflation has continued unabated, wreaking havoc with the economy and restricting household purchasing power. In most sectors, workers unions have been pushing for wage reviews on a monthly basis because minimum wages continue to trail behind inflation. The minimum monthly wage for the commercial sector, a proxy for the majority of low income earners, only covered about 10 percent of the CCZ monthly basket in June this year. The situation is expected to have deteriorated further in July, given the stagnation of wages and higher basic commodity prices on the parallel market.

Figure 2. Maize price trends from June to July 2007

June 2007

July 2007

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