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	High food prices exacerbate crisis in drought-affected Horn of Africa by United Nations News   August 2011   The prices of grains and milk in the drought-hit Djibouti, Ethiopia, Kenya and Somalia have risen to record highs, exacerbating hardship for the estimated 12.4 million people in the region who are facing severe food shortages and famine in some parts of Somalia, the United Nations reported today.   According to the August food price monitor of the UN Food and Agriculture Organization (FAO), the high prices of cereals such as sorghum and maize in the Horn of Africa have resulted from a combination of factors, including drought, reduced secondary season harvests earlier this year and high fuel prices that have driven up transport costs.   In Somalia, where famine has been declared in five areas in the south-central region, prices of domestically produced staples, sorghum and maize were 150 and 200 per cent higher, compared to July last year, according to the FAO report.   The prices of milk in Somalia in the southern region where some areas are experiencing famine conditions, milk prices in June were twice the levels of the similar period year earlier.   In Kenya, prices of maize, the country’s staple food, rose sharply last month, reaching new peaks. Maize prices are currently double what they were a year ago. The high prices are a consequence of a poor 2010-2011 secondary season maize production and an anticipated reduction of the 2011 main “long rains” crop, to be harvested beginning later this month, following the late onset of the rains in many areas.   In Ethiopia, the prices of maize rose again last month in most of the monitored markets, with increases from June of 23 per cent in the Bahirdar main growing area and of nine per cent in the capital, Addis Ababa.   Maize prices have been on the rise since February, and the July quotations were generally well above their levels a year earlier (from 50 to 75 per cent up), although still below the peaks reached during the 2008 food price crisis.   Prices of wheat in Ethiopia in June were 76 per cent higher than at a similar period last year. A spike in the fuel prices and transport costs has contributed to keeping food prices high. The price of diesel in Ethiopian was 69 per cent higher in June compared to a similar period last year. The price of milk, a key staple in the drought-affected pastoralist areas, has surged with the deteriorating conditions of the livestock in recent months.   In Djibouti, wheat flour prices were 67 per cent higher than a year ago and similar to the peaks of July 2008 during the global food price crisis. The sharp increase is mainly attributable to higher international wheat prices.   Internationally, the prices of wheat – which had fallen in May and June – remained 45 per cent higher than a year earlier, although they were below the 2008 peak. Export prices of maize declined somewhat in July, with the benchmark US maize price averaging $304 per ton, still 89 per cent above its level of a year ago.   Export prices of rice increased for the second consecutive month in July. The benchmark Thai rice price six percent higher than in June and 20 per cent above its level in July 2010.
	IMF’s loan conditions still punish the poorest, Oxfam says by European Civil Society Round Up   With fuel costs on the rise and global food prices set to more than double by 2030, poor people are being hit hardest. Oxfam has major concerns about strings currently attached to IMF loans, especially for low income countries. Oxfam’s concerns, outlined in a submission to the IMF’s 2011 Review of Conditionality, are:   * An increasingly apparent return to “fiscal consolidation” and tighter fiscal targets after the crisis, which are preventing countries from accelerating progress to the MDGs   * Reduction in flexibility on inflation targets, requiring countries to take increasingly tough monetary and fiscal measures to offset the impact of renewed food and fuel price rises   * Evidence that social spending floors are not being taken seriously in program reviews and therefore having little effect on government spending   * Use of overall wage ceilings (in which social sectors are evidently included as they absorb most of the government wage expenditure in low income countries)   * Very slow and limited progress on the introduction of social protection measures, especially in low income countries   * Continued insistence in some countries on rapid abolition or reduction of fuel or food subsidies, before offsetting social protection measures are in place   * The continued introduction of regressive taxation measures (VAT, sales taxes)   * The lack of systematic analysis of the social incidence of tax and spending changes, as well as fuel and food price rises, on inequality and poverty   Oxfam is urging the IMF to:   * Increase fiscal space for spending in low income countries, by allowing fiscal deficits to remain in the 3-5% of GDP and inflation to remain in the 5-10% range   * Base its macroeconomic (fiscal and inflation) targets and social spending floors on spending levels which would allow the maximum number of countries to attain the MDGs. Analyze at the earliest stage the impact of the social spending floors, including whether they will be sufficient to meet the MDGs, and why they are or are not being implemented.   * Assess and present transparently to its Board the impact of overall wage ceilings on social sector real wage levels and bills across all low income countries with programs   * Conduct Poverty and Social Impact Analyses. A systematic analysis of the social incidence of tax and spending changes, as well as fuel and food price rises, especially their combined effects on inequality and poverty, especially the incomes and spending power of the poorest citizens, as well as the ability of countries to reach the MDG income and food poverty reduction targets   * Dramatically accelerate the introduction of social protection measures and increases in social protection spending, especially in low income countries   * Delay the abolition or reduction of fuel or foods subsidies until offsetting social protection measures are in place, and use increased levels of its own funding and other budget support to finance temporary resulting deficits   * Increase tax revenues by introducing more progressive taxation, focusing on tax avoidance by large corporations and high-income earners, and avoiding wherever possible the introduction of regressive tax measures (or exempting the basic foodstuffs consumed by the poor from such measures) Visit the related web page
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