Control food prices

Starvation is the characteristic of some people not having enough food to eat. It is not the characteristic of there being not enough food to eat.

Nobel Laureate Amartya Sen

Research has found that the majority of Ugandan households are significant net buyers of food. They spend more to purchase food than they receive in sales of the food that they produce, over a given period.

Studies have found that farmers in Uganda are more likely to sell food crops despite low prices after a harvest and pay much higher prices to re-buy its equivalent in times of scarcity, effectively putting them in the same boat as Uganda’s low wage earners.

The most appropriate policies for Uganda, it would follow, would be those that ensure that food prices in Uganda are controlled so that Ugandans are able to buy food at any given time.

In 2011, for example, food inflation rose 262 percent in a period of only four months from 1.5 percent in January 2011 to 39.3 percent in April 2011. A kilogram of sugar which was at Ushs. 1,500 at the beginning of 2011 cost Ushs. 5,000 in May 2011 and Ushs. 8,000 in August.

Assuming an average Ugandan household of five persons consumes four kilograms of sugar per month. At the beginning of 2011 a household spent Ushs. 6,000 of its food budget on sugar; Ushs. 20,000 in May; and Ushs. 32,000 in August 2011.

The Uganda Bureau of Statistics estimates that in 2011 Uganda’s median monthly wages from 18 occupations ranged from Ushs. 55,000 to Ushs. 350,000; and that food, drink and tobacco took up an average of 42 percent of household monthly expenditures. This means that in 2011 households of low wage earners fed on budgets ranging from Ushs. 23,100 to Ushs 147,000 per month.

At the beginning of 2011 it is not likely that a low income Ugandan household spent 26 percent of its food budget on sugar alone; nor is it likely that in May 2011 it spent 86 percent of its food budget on sugar alone.  Sugar is just but one example, pick any food crop and it is likely that the analysis of the inflation trends in 2011 will be similar.

In the case of matooke, the major staple for the largest Ugandan ethnic group, the Baganda, a bunch of matooke was at Ushs. 10,000 at beginning of 2011, Ushs. 15,000 during the 2nd half of 2011 and it is now at Ushs. 25,000.

Fast forward to 2013, “Uganda is winning the battle against inflation” says Bank of Uganda (BoU). The optimism of BoU held true to the extent that overall inflation did come down, food prices had since lowered and the BoU had consequently lowered its policy rates. Nevertheless, the price of sugar did not go back to Ushs. 1,500; it reduced from Ushs. 8,000 to Ushs. 2,500. 

The rapid rise in food inflation in 2011, pushed millions of Ugandans into a food insecurity crisis. Certainly, the majority of Ugandans are still not able to afford sugar and matooke at those prices. Sugar and matooke remain in plenty in shops and markets, but are inaccessible to the majority of Ugandans, hence, Sen’s words of wisdom ring so true for Uganda. 

Sadly, the proposed national budget 2014/2015 seems blind to this status quo and is most definitely going to make the food security situation of Ugandans more insecure. Especially so, the proposed taxes on agriculture, which will undoubtedly increase the cost of production of food and consequently the price of food.

One response to “Control food prices”

Let’s Chat…

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: