Maize farmers in particular in SA have been the indirect beneficiaries of regional droughts that have caused grain shortages in neighbouring countries. Aid agencies then buy grain from the nearest (and cheapest) source to ship to the countries in need.
The United Nations Food and Agriculture Organisation (FAO) has for many years run the Food Insecurity and Vulnerability Information and Mapping System (FIVIMS) to help with predicting regional food shortages.
At this stage it is unclear how the FSI will differ from what FIVIMS has to offer as the official launch of the index is on July 10.
The FSI is a dynamic quantitative and qualitative scoring model‚ constructed from over 25 indicators‚ that measures these drivers of food security across both developed and developing countries.
While food security research is the focus of many organisations worldwide‚ this effort is distinct for two main reasons.
First‚ the study looks beyond hunger to the underlying factors affecting food insecurity.
Second‚ the study will employ an adjustment factor for food price fluctuations to examine the risk countries face throughout the course of the year.
For the purpose of this index‚ food security is defined as the state in which people at all times have physical‚ social‚ and economic access to sufficient and nutritious food that meets their dietary needs for a healthy and active life. The overall goal of the study is to assess which countries are most and least vulnerable to food insecurity through the categories of affordability‚ availability‚ and nutritional quality and food safety.
In May‚ DuPont and the Earth Institute of Columbia University announced a collaboration to create a rapid soil information system to aid Ethiopian farmers with an effective way to diagnose soil constraints in the field and receive recommendations to improve crop yields. DuPont will invest $1 million over three years for the pilot project.
It is not only farmers that will benefit from the FSI as food prices are drivers of inflation‚ and therefore monetary policy‚ as well as sometimes leading to popular uprisings such as the French Revolution and the Arab Spring.
Higher grain prices were part of the reason for rising food inflation in 2011‚ even though global economic prospects have turned more bearish on the eurozone sovereign debt crisis since August.
Bread and cereals have a 3.08% weight in the SA consumer price index‚ while grains have a 0.87% weight in the producer price index.
Many central banks around the world such as the European Central Bank raised interest rates in the first half of 2011 due to rising food inflation‚ while many African central banks increased interest rates in the second half.
Of the 90 major central banks‚ 34 made net increases to their interest rates‚ 21 made net reductions to their policy interest rates‚ and 35 (including the South African Reserve Bank) kept their rates unchanged.
The 2011 experience was similar to 2008 when surging oil prices prompted a commodity price boom and the majority of central banks‚ including the South African Reserve Bank‚ tightened monetary policy prior to the peak in July 2008‚ before slashing rates after the global credit freeze caused by the Lehman Brothers bankruptcy in September 2008.
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