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AFGHANISTAN: Drop in wheat price worries farmers, pleases consumers

10 Aug 2009 09:43:14 GMT
Source: IRIN

Background

• Afghan turmoil

• Food and hunger

KABUL, 10 August 2009 (IRIN) - Farmers in Afghanistan's top cereal-producing provinces worry that the decline in wheat prices will push them into poverty, while urban consumers welcome the fall.

Wheat prices have dropped by more than 30 percent over the past year but are still significantly higher than in early 2007, according to the Agriculture Commodity Price Bulletin released by the Ministry of Agriculture, Irrigation and Livestock (MAIL).

"Wheat prices continued declining in Afghanistan, averaging Afghanis 16.9 [about US$0.35] per kg in mid-July, compared to Afs18.2 [about $0.38] in June and Afs 19.2 [about $0.40] in May," the UN Food and Agriculture Organization (FAO) said in the Asia Pacific Food Situation Update in July.

A bumper harvest - more than 6 million MT of cereals - has been forecast this year, largely owing to better rainfall and increased wheat cultivation across the country, according to the FAO. At least 17 of the country's 34 provinces, including Herat and Badghis, will produce 50,000MT surplus cereals, MAIL and FAO have said.

Afghanistan annually needs about 6.5 million MT of cereals to feed its estimated 28 million people, according to the MAIL.

Food prices skyrocketed as the country suffered a severe drought in 2008. Drought and high food prices pushed millions into high-risk food insecurity as UN agencies and the government launched two emergency appeals to feed the most vulnerable.

"We are happy prices are dropping because we can buy food now," said one man in Kabul's main food market.

Stabilizing prices

The government plans to buy 100,000MT of wheat from domestic farmers in a bid to stabilize prices and help protect vulnerable farmers.

"We aim to prevent a major deflation in cereal prices," Saaduddin Safi from the MAIL, told IRIN, adding that the UN World Food Programme (WFP) was also encouraged to buy local cereals.

WFP's food aid programme has millions of beneficiaries across the country but is mainly reliant on imports.

WFP told IRIN it may purchase 7,000MT of wheat from vulnerable farmers through a scheme called "Purchase for Progress", provided the wheat meets international quality standards.

Most Afghan households spend 70 percent of their income on food and have few means to meet other fundamental needs such as health, education and shelter, according to Asif Rahim, the Agriculture Minister.

Indeed, some NGOs have warned that food prices are likely to "increase slightly due to the election in August and the month-long celebration of Ramadan [in August-September], during which people typically spend more money on food"," said the Famine Early Warning Systems Network in its Food Security Outlook. "In the most likely scenario through December, generally food secure conditions will deteriorate to moderately food insecure levels in chronically food insecure zones and provinces where accessibility is an issue due to harsh winter conditions."

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