case study - fsn network...populations, although government of freedonia (gof) figures are lower....
TRANSCRIPT
1
Case Study
Map of Freedonia
2
Case Study
Emergency Food Security Assessment findings
To date, the EFSA assessment identified at least 400,000 people
who were directly affected by the flood across Freedonia. Other
estimates may be higher and include indirectly affected
populations, although Government of Freedonia (GoF) figures
are lower. More than 25,000 houses were either completely
destroyed or made uninhabitable, and more than 1.2 million
hectares of land flooded, with large areas destroyed.
Urban area (Lagaba)
A WFP EFSA in the capital of Lagaba found that many households
who were directly affected by the landslides, as well as the areas
hosting IDPs, were chronically food insecure prior to the flooding. These households have sunk into further food
insecurity as a consequence of the event.
The most food insecure people are those living in camps and municipal buildings (10,000), but also households
sleeping outside their neighbourhoods of origin are food insecure (8,000). Households with partially or
completely destroyed homes are more likely to be food insecure.
There is a large increase of asset-poor households; these households are amongst the most food insecure as
compared to the households that are still currently asset-rich. Households living in camps and collective centres,
such as municipal buildings, have lost most of their assets and their sources of income. They have moved with
the few belongings they have been able to save.
Households have fewer economic activities available and have lost their livelihoods due to the landslides and
flooding. The most food insecure livelihoods include those that rely on unskilled labour and social assistance for
revenue, and those that have no source of revenue currently. Outside the areas directly affected, the burden of
hosting IDP populations has led to an increase in various coping strategies by the host families.
Female headed households are more food insecure than male headed households (70% vs. 45%). Single headed
households, irrespective of their gender, are more vulnerable, particularly those with many dependents.
The assessment found that the share of households with poor/borderline food consumption has nearly doubled
compared to estimated pre-flooding levels. Many households are using unsustainable consumption and non-
consumption coping strategies in response to loss of income, housing, assets, and food access. Many of these
coping strategies threaten their livelihoods. Poor food and water access as well as poor hygiene conditions may
be leading to an increase in child malnutrition, particularly in the camps and collective centres.
Rural areas (Siruma and Alima Districts)
In Siruma and Alima Districts, 150,000 people were affected and the most severely hit were predominantly small
farmers and unskilled labourers. They are among the most vulnerable in rural areas and almost all live below or
just above the national poverty line. More than 60% lost immediate access to their primary livelihood and are
3
Case Study
faced with a drop, by more than half, in their income, which is already low. More than three quarters of the
affected population have access to less than one week’s supply of food. Livestock was severely impacted with,
on average, 20% of livestock lost by flood-affected households. Almost half of the affected population have
unacceptable food intake, in spite of the efforts by the Freedonian army, NGOs, UN and the general public.
Nutrition measurements indicate that the malnutrition situation is deteriorating.
The most vulnerable livelihoods groups have the following characteristics:
Small farmers: own or lease less than 0.5 hectares of land; highly dependent upon their own food production
and own some livestock. They produce milk for sale and consumption, are likely to have seasonal debts and to
return to places of origin as soon as flood waters recede.
Landless agricultural labourers: work seasonally for food or cash; highly dependent upon others for food
production. They own 1-2 livestock (if any); produce milk for consumption and are likely to have year-to-year
debts. They are less likely to return to their places of origin if income earning opportunities or shelter are absent.
4
Case Study
The wheat market system before the floods
Both Aluma and Siruma districts produce more food and animal feed crops than they consume. Yet, at a district
level, only three out of the eight districts in Freedonia produce a crop surplus. The other five districts are either
extremely deficient or deficient in food self-sufficiency. Only 16% of the population is considered to have
acceptable levels of food consumption. Over 80% of the rural populations have agricultural based livelihoods but
less than 60% own land. Working as sharecroppers is a common practice.
Wheat is a primary staple food, contributing to over 45% of the daily calorie food intake. Most of the wheat
consumed in the country is grown in Aluma and Siruma districts, and harvested from July to September. Small
farmers typically grow wheat for household consumption and as seed stock. On average, a household (with five
members) keeps 650 kg per year in stock, with which it partially meets its caloric needs. These subsistence stocks
are usually stored in small grain silos and sent to local mills for grinding as the need arises. Local mills receive a
grinding fee or a small percentage of the flour. Small farmers may also sell a small part of their cereal stock to
the local mills to cover emergency monetary needs. Bigger farmers sell larger amounts of wheat both to the local
mills, which represent the main wheat retailers in the rural areas, and to the Government, which has great
storage capacity and plays a significant role in wheat price control and distribution in urban areas.
National wheat production and wheat imports are highly regulated throughout the year. Each year in late June,
the Government sets the price at which they will purchase the next harvest. The price for the 2016-2017 wheat
grains was FD 1,000 per 40 kg. Most of the purchased wheat stocks are held in Government storage facilities
located in urban areas. Wheat stocks are then released at fixed prices throughout the year to the large flour
mills, whose sale prices are also set. Prior to the floods, the fixed price at the mills was FD 1,040 per 40 kg. The
large mills then sell the flour to district traders, which distribute the commodity to urban retailers within their
respective districts.
The impact of the floods on the wheat market system
After the floods, many small-scale farmers lost significant portions of their stored grain crops – in some districts
losses are as high as 80%. They mostly depend on food distribution by the Government and humanitarian
agencies because they lack the financial resources to access the flour sold by local mills.
Many small flour mills in villages have been damaged by the floods as well. The Government has chosen local
flour mills with enough storage capacity to receive renewed stocks at subsidised prices. While many local flour
mills in Aluma district have received subsidized wheat, thus far, none in Siruma district have received stocks from
the Grain Board. This policy has caused a strong reaction among the most affected large flour mills, who find
themselves in a disadvantaged situation. It also caused negative reactions among households, who do not have
the financial resources to access the product and are unable to travel long distances along badly damaged roads
to do so.
Wheat flour availability does not seem to be a problem at the urban level. Neither Grain Board warehouses nor
large flour mill facilities were affected by the floods because they are located primarily in the urban centre of
Ambra, therefore, flour mills are still able to supply district traders.
5
Case Study
On the other hand, in Lagaba, more than one third of shops and supermarkets have been damaged, of which
20% are now out of business and 80% are not able to replenish their stocks due to problems of liquidity and
access to credit. The remaining two-thirds of the non-affected retailers are regularly working and would be able
to increase their stock should demand rise. Nevertheless, shop owners report a decrease in the number of clients
and in their level of expenditure. Urban retailers in Lagaba report a decrease in the price of wheat flour. It seems
that traders were selling their stocks fearing that humanitarian agencies and Government distributions would
cause a further drop in demand and prices.
People living in camps have lost their assets and purchasing power and depend on Government and humanitarian
agencies to access food. Government distributions will last for two weeks, while agencies are assessing needs to
design post-emergency plans. Preliminary reports suggest that hosting families are at risk of deeper levels of
food insecurity, as they face increased expenses and access problems.
6
Activity, Food, or Income Source Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Wheat Harvest
Land preparation and wheat planting
Peak rural labor demand
Peak urban construction labor demand
Rainy season
Typical rural lean season
Livestock sales
Milk availability
Labor migration of rural men to Woomali
district to work in timber industry
7
Government restricts
wheat import
The market environment: institutions, rules, norms & trends
The market chain: market actors & their linkages
Key infrastructure, inputs and market-support services
Freedonia Market Information Service (FMIS)
Large Farmers Freedonia Grain
Board
URBAN CONSUMERS
National Wheat/Wheat Flour Market Map: Freedonia: Baseline
Seasonal patterns/ weather
Freedonia Grain Board
policy
Set prices for large urban
mills
Consumer demand and feed demand
Credit for rural and small urban traders
On-farm/rural silos
Grain Board storage Roads/infrastructure
Small farmers and
sharecroppers
RURAL CONSUMERS
(Aluma and Salima)
RURAL CONSUMERS
(All other districts)
Local flour mills (rural: Aluma and Salima districts)
Large flour mills (urban: Ambra)
Rural traders and retailers
District-level traders (urban)
Supermarkets (urban)
Small urban traders and shops
Credit for district-level traders
8
Government restricts
wheat import
The market environment: institutions, rules, norms & trends
The market chain: market actors & their linkages
Key infrastructure, inputs and market-support services
Freedonia Market Information Service (FMIS)
Large Farmers Freedonia Grain
Board
URBAN CONSUMERS
National Wheat/Wheat Flour Market Map: Freedonia: Post-flooding Symbol Key
Critical issue Major disruption Partial disruption
!
Seasonal patterns/ weather
Freedonia Grain Board
policy
Set prices for large urban
mills
Consumer demand and feed demand
!
Credit for rural and small urban traders
On-farm/rural silos
Grain Board storage Roads/infrastructure
Small farmers and
sharecroppers
RURAL CONSUMERS
(Aluma and Salima)
RURAL CONSUMERS
(All other districts)
Local flour mills (rural: Aluma and Salima districts)
Large flour mills (urban: Ambra)
Rural traders and retailers
District-level traders (urban)
Supermarkets (urban)
Small urban traders and shops
!
Credit for district-level traders
!
9
Case Study
The rice market system before the floods
A few big importers (6) bring staple food commodities, primarily imported rice, into Freedonia from neighbouring
countries. They purchase staple commodities like rice from international exporters or from neighbouring
countries’ traders who in turn have connections with international exporters or deal directly in international
markets. Differently from wheat, which is locally produced, most of the other staple food commodities are
imported. Imported food constitutes up to 55% of staple food consumed in Freedonia, the remaining is locally-
produced wheat in Aluma and Siruma districts. However, there is some small-scale wheat production in every
district in the country. Food aid, often from international humanitarian agencies, has been a part of the market
system for years. In ‘normal’ times, food aid accounts for perhaps 5 per cent of total consumption. Importers
tend to deal largely with commodities produced regionally.
A recently increased tariff (around 30%) on imported food commodities affects importers, wholesalers, and
district traders. High international food prices caused an increase in the prices of imported food in local markets.
In 2014 and 2015, the national food price index increased by 20%.
The six import companies sell to 50 wholesalers in Lagaba and other main towns. Both import companies and
wholesalers have access to warehouses for storage. Importers use private delivery companies to transport
imported commodities form the main commercial border to their warehouses in Lagaba. The crossing of the
commercial border involves hours in queues waiting for inspection and frequently involves bribing of corrupted
officials to ease the process. The local government has imposed strict legislation and taxes on imports.
Importers sell to the Grain Board, international humanitarian agencies, and district-level traders. Sales to the
Grain Board from importers take place through public bids. The amount of sales to the Grain Board can represent
10% of all sales. International humanitarian agencies import food aid commodities for social protection
programmes and school canteen projects and also purchase from the Grain Board. District-level traders are
located in the district main town and sell to urban and rural retailers within their respective districts. District
traders can wield a considerable amount of market power, but this varies greatly between districts. They are also
an important source of informal credit to retailers, and in some cases can afford truck transportation. Traders
have their own, well-established trade routes, delivery agents, and customers.
In Siruma, four traders cover almost 90% of the local supply to retailers. One of the district traders has got large
transport capacity while the remaining three traders rely on a network of formal and informal delivery agents.
Siruma district has mainly scattered and remote villages, which hold weekly small rural markets, where retailers
sell food commodities, usually in small amounts. In urban areas, retailers, mostly shops and some traders in open
air markets can buy either from district traders or from wholesalers, depending on their purchasing,
transportation, and storage capacity. Supermarkets tend to have contracts with wholesalers or importers
instead.
In Aluma district, 16 larger district traders cover almost 90% of the local supply to retailers. Several have their
own transport capacity. Many of the rural settlements in Aluma have some permanent retail locations in addition
to weekly markets.
Transport is essential to the food commodity market, particularly in rural areas, where much is done using three-
10
Case Study
wheeled vehicles, donkeys, or carried on women’s heads. Outside Lagaba, storage conditions, even in the
baseline situation, tend to be mediocre, especially in rural areas. Credit is common but the vast majority seems
to be supplier credit, often from district traders. Only larger actors, such as importers, wholesalers, and district
traders have access to bank credit.
The impact of the floods on the rice market system
Importers have not directly been affected by the disaster and international rice prices are stable.
Two out of 50 wholesalers had their warehouses destroyed and are out of business. The remaining 48
wholesalers are able to supply a volume of commodities that corresponds to 96% of the pre-disaster amount.
Price monitoring shows an increase of wholesalers’ prices ranging from two to five percent.
District traders don’t seem to have had major losses but have been affected by road infrastructure problems that
undermine their capacity to deliver to remote rural areas, especially in Siruma. In Aluma, all traders are regularly
supplying their clients, mainly with stock from Ambra. In Siruma, one out of four traders are able to supply
remote areas, as there are trucks that can reach the most affected areas. Delivery agents working for the other
district traders are not able to access the affected areas with the means available to them (donkeys, three-
wheeled vehicles, etc.)
In Lagaba, more than one third of shops and supermarkets have been damaged, of which 20% are now out of
business and 80% are not able to replenish their stocks due to problems of liquidity and access to credit. The
remaining two-thirds of non-affected retailers are regularly working and would be able to increase their stock
should demand increase. Nevertheless, shop owners report a decrease in the number of clients and in their level
of expenditure. While volumes have decreased, prices have remained stable.
In Siruma, local retailers have partially lost their stocks and some shops have been damaged. The number of local
active retailers has diminished from 120 to 98. As in Lagaba, the main problem for affected retailers is a lack of
liquidity, so traders are not extending credit as there is no certainty that they will be paid back. In Aluma district,
rural and urban retailers are operating with likely less than 10% closing, though retailers report that they expect
credit problems if they are unable to sell to consumers soon.
People living in camps have lost their assets and purchasing power and depend on the Government and
humanitarian agencies to access food. Government distribution will last two weeks while agencies are assessing
needs to design post-emergency plans. Preliminary reports suggest that host families in Lagaba are at risk of
deeper levels of food insecurity as they face increased expenses and access problems.
11
Tariffs
The market environment: institutions, rules, norms & trends
The market chain: market actors & their linkages
Key infrastructure, inputs and market-support services
Freedonia Market Information Service (FMIS)
Importers (6)
Freedonia Grain Board
URBAN CONSUMERS
National Imported Rice Market Map: Freedonia: Baseline
Freedonia
Grain Board policy
International rice prices
Consumer demand
Credit for rural and small urban traders frpm district-level
traders
Grain Board storage Roads/infrastructure
RURAL CONSUMERS
Rural traders and retailers
Wholesalers (50 in Lagaba)
Supermarkets (urban)
Small urban traders and shops
Importer and commercial warehouses
District-level traders (urban)
Siruma – 4 larger Aluma – 16 larger
Humanitarian agencies
Food aid RECIPIENTS AT
SCHOOL CANTEENS or for
SOCIAL PROTECTION
INFRASTRUCTURE OR SERVICE
12
Tariffs
The market environment: institutions, rules, norms & trends
The market chain: market actors & their linkages
Key infrastructure, inputs and market-support services
Freedonia Market Information Service (FMIS)
Importers (6)
Freedonia Grain Board
URBAN CONSUMERS
National Imported Rice Market Map: Freedonia: Post Floods
Freedonia
Grain Board policy
International rice prices
Consumer demand
Credit for rural and small urban traders from district-level
traders
Grain Board storage Roads/infrastructure
RURAL CONSUMERS
Rural traders and retailers
Wholesalers (48/50 in Lagaba)
Supermarkets (urban)
Small urban traders and shops
Importer and commercial warehouses
District-level traders (urban) Siruma – 3/4
Aluma – 14/16
Humanitarian agencies
Food aid RECIPIENTS AT
SCHOOL CANTEENS or for
SOCIAL PROTECTION
Stocks held at rural and urban retailers
Symbol Key
Critical issue Major disruption Partial disruption
! !
!