Sunday, April 24, 2011

The trouble with walking to work......



.....is, of course, that you have to walk home again.



Or at least, under normal circumstances, it is difficult to think of any other possible objection against this carbon-friendly and healthy alternative to Kampala morning traffic jams. But in Uganda, the "walk to work" campaign has taken on a whole new significance. Led by a loose alliance among the leaders of opposition parties, this apparently innocuous campaign, ostensibly against high food and fuel prices, has provoked a powerful, many say disproportionate, reaction by the Ugandan government. Here's a little piece of visual evidence from the Monitor newspaper. It's certainly a deterrent to leaving the car keys at home.

But leaving aside the muscular response, what's driving the underlying problem of increasing food prices? Global commodity prices, especially oil, are one factor. Increasing regional demand, in particular from South Sudan, is also cited. But the fundamental law of supply and demand is the real driver. Quite simply, there is a supply-side problem, fanned by the increasing demand of a growing population. There's not enough production and, in Uganda at least, there certainly isn't enough storage capacity. I've written before about the remarkable informality of Uganda's food distribution systems and the reliance on fresh products for food - and the lack of buffer stocks of maize and rice in particular - mean that there are no smoothing mechanisms in times of plenty or scarcity

And prices are rocketing upwards, across the board. Matooke, potatoes, maize and beans have all seen increases of between 20-40% in recent months. Not surprisingly, increases in staple foods are also driving up the cost of dairy products, poultry and pork. Fish prices have doubled in the last two years or so, as a result of the depletion resulting from over-fishing in Lake Victoria and Uganda's other major lakes. It's at the bottom of the pyramid, where food costs make up the major part of the household budget, where the impact of inflation is felt the most. When the Ugandan President said, a few weeks ago, that increasing food prices were good for the farmer, he was right, up to a point. Commercial farmers may well make some hay while the sun shines, but the truth is that most small-scale farmers are net consumers, not suppliers, of agricultural products.





"It's the economy, stupid" was Bill Clinton's slogan in his successful campaign against George Bush in the 1992 presidential elections. It's a phrase that could apply to a number of the popular uprisings that have sent shivers down the spines of many longtime autocratic leaders across Africa and the Middle East.

The best response for the nation to the "walk to work" campaign is investment in the agriculture sector. Big fists will only make things worse.

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