By Elizabeth Blunt
BBC News
Addis Ababa — A UN report says that contrary to popular perceptions inside Ethiopia, greedy traders and speculators are not to blame for recent price rises.
The food assessment report comes just a few days after a special parliamentary session devoted to the economy, and in particular to rocketing food prices.
Prime Minister dictator Meles Zenawi announced the creation of a special task force to monitor and prosecute “greedy” traders.
Traders were now complaining about the farmers’ market power, the report said.
Mr Meles had accused businessmen of profiteering and exploiting the situation.
But the new report by the United Nations agencies concerned with food and agriculture, the Food and Agriculture Organization and the World Food Programme, says the traders are not to blame for the high prices.
Dilemma
As markets get less centralised, and farmers become more sophisticated and better informed, it says the traders are starting to complain about the market power of the farmers.
The one popular perception the report does support is that farmers are now better off, and able to wait and spread their grain sales through the year, rather than having to rush everything to market immediately after harvest when prices are at their lowest.
But the main message of the report is that grain prices in Ethiopia, however much they may have risen, however unaffordable they may be to the urban poor, are still below world prices and below prices in most neighbouring countries.
This, the report says, poses a dilemma in terms of government policy.
Buying grain locally to give to those needing emergency aid might push up domestic prices.
But while importing food from outside and giving it away or selling it cheaply could stop the price from rising, that would then encourage more and more grain to flow out across the borders to other places in the region where the price is higher.
Subsidised wheat targeted at the poorest Ethiopians costs 90 birr ($9.5) for a 50kg bag – less than half the shop price of 4 birr/kg.
4 thoughts on “U.N. says traders not responsible for price rises”
The evil Woyannies will start blaming the economic problems of the nation to the hard working Guragies. Just watch out!
Any layman should understand the consequence of high population growth and proportionally very low expansion of agricultural land. One should not be an economist to understand that food production per head keeps on decreasing. Moreover, increasing production costs (mainly of fertilizer and transportation costs) have discouraged farmers from using productivity enhancing technology. So, there is no solution other than allowing structural transformation in the economy by privatizing agricultural land and investing on job creation in urban areas.
However, ‘woyane’ has resisted these options and wants to monopolize all urban businesses and intends to make the farmers dependent on ‘woyane’ companies for their input supplies and marketing of their products. The ‘commodity exchange’ of Eleni G/Egzi is designed to facilitate this process. The action being taken on traders is an attempt to prepare justification for the ‘commodity exchange’, which has little to do with the needs of Ethiopia. The responsibility for the current problem is of ‘woyane’ and its companies not the traders.
Meles has to admit that the agricultural sector is not producing enough agricultural surplus to match up with the growing demand. There is a huge supply shortage in all goods.
It’s also difficult to buy the argument that farmers are hoarding agricultural products to spread the sell through-out the year. We have not seen ground-breaking storage facilities in rural Ethiopia. I was shell-shocked when I found out one “lomi” costs one Birr in Addis. Everything is expensive, including seasonal and perishable products, during their production seasons, not just off-season. Thus, something is terribly wrong in the supply sector that cannot be explained away by traders and farmers hoarding alone.
While able body labor is forced to join the army to fight his own people and neighbors and the land is converted from grain production and grazing, to produce flowers to decorate European homes and alcohol for energy to to fuel Italians cars, then the supply of local grain and meat has to drop leading to higher prices to the natives. It is sad that Ethiopian students gave their lives in the 60s and 70’s to bring an economy that works only for a handful local rulers and foreigners exposing the majority into poverty and disease. God have mercy to the people!