Photos: © 2007 C. Hughes/Panos; © 2012 ThinkStockphoto.com


farmers in regions that produced surpluses of wheat and rice exerted significant influ- ence in determining government support prices between 1996 and 2001. During this period, government support prices for wheat rose 25 percent faster than whole- sale prices, and support prices for rice rose 10 percent faster. By lobbying for these high, guaranteed prices, politicians in surplus regions could bring in higher tax revenues, ensure happy constituents (espe- cially if they were large-scale farmers), and improve their chances of re-election.


Stocking Up Right Despite the complexity of operating grain reserves, most countries have such stockpiles. One country that has largely managed to sidestep the pitfalls in the past couple of decades, says Rashid, is Ethiopia. Created in the 1980s, the country’s Emergency Food Security Reserve Administration (EFSRA) has a transparent institutional design that


minimizes the risk of mismanagement and corruption. All withdrawals from the reserve are subject to strict rules. Well- established, reputable relief agencies, such as the World Food Programme, can borrow grain from the reserve’s inven- tory and must replace the grain within an agreed-upon timeframe. During large- scale humanitarian crises and times of widespread shortage, other food security programs, such as government social safety nets and price stabilization pro- grams, can withdraw from the reserve.


Two other important features have contributed to the success of Ethiopia’s grain reserve, according to Rashid’s 2011 discussion paper, Strategic Grain Reserves in Ethiopia. First, Ethiopia has kept stock levels low. Te guiding principle has been to keep a stock large enough to feed the country’s vulnerable popula- tion for three to four months. Tis policy has kept Ethiopia’s subsidy bills from


mushrooming, ensured that private trad- ers are not pushed out of the market, and maintained the quality of the stored grain (lower overall quantity eases the task of rotating old grain out of the stock).


Second, the strategic grain reserve is closely coordinated with the country’s safety net and emergency assistance program, which provides food transfers and cash transfers to vulnerable people. In recent years, as food prices have risen, recipients have begun to prefer food over cash transfers. As a consequence, withdrawals from the grain reserve have jumped. EFSRA’s close ties with the safety net program not only help poor people cope with sudden shocks, but also keep maintenance costs low and ensure that stocks are rotated regularly. And there is potential for more ties of this kind: Rashid points out that linking the reserve to school feeding programs would provide another important safety net.


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