Steady rise in cereal prices continues to erode household food security

Figure 1. Current food security situation FULL-SIZE IMAGE Source : FEWS NET Djibouti   Figure 2. Cost of expenditure basket for very poor households, Djibouti City in ‘000 DJF/month FULL-SIZE IMAGE Source : DISED Djibouti/ FEWS NET Djibouti

The steady increase in cereal prices is likely to elevate the level of household food insecurity in Djibouti’s rural and urban areas. The price increases have been more substantial in rural areas, where they are further influenced by increases in local transportation costs. In urban areas, these price increases coincide with a decline in income-earning opportunities.

Poor households in urban areas have been highly food insecure since November 2006 (see Figure 1), when the cost of the minimum expenditure basket began to rise sharply. The incomes of the poor, who rely predominantly on casual labor and petty trade, have not kept pace with these price increases. For example, prices for cement and other construction materials have been rising since June, reducing the demand for labor in the construction sector, which is normally one of the main providers of casual labor opportunities to poor households. Because poor urban households can no longer afford the full expenditure basket, they are facing potentially significant food deficits (Figure 2). If poorer households have to reduce their daily caloric consumption below the minimum requirement, malnutrition rates will likely begin to rise, particularly among children and pregnant and lactating women.

Inversely, the food security of most pastoralists has improved due to the favorable performance of the July to September karan/karma rains. Milk production is abundant, and livestock body conditions are improving as the availability of pasture and water increases. Due to prevailing trends in international cereal prices and high transportation costs, cereal prices are relatively higher than livestock prices. As a result, terms of trade do not favor pastoralists, who rely on markets for 70 percent of their food. Most pastoralists are, therefore, still moderately food insecure.

Because Djibouti produces virtually no cereal crops, the country’s food security is determined to a large extent by international cereal prices. Because staple food prices are expected to remain high following trends in international cereal markets and higher transport costs due to increased fuel prices, there is a need to raise public awareness of the benefits of utilizing low-cost, regionally available grains like maize, instead of high-cost cereals like imported Asian rice. The increase in bio-fuel production puts additional pressure on the global availability of grains and oil crops.

Ongoing food assistance programs are mainly targeting rural households with general distributions, food for work and school feeding programs and assistance to those with HIV-AIDS and the infirm. Supplementary and therapeutic feeding programs need to be expanded to rural areas, while food or cash for work and/or general distributions are needed to compensate for household food deficits in urban areas.