Facing El Niño: Policy Options For Improved Resilience
The current El Niño cycle is being called the one of the strongest on record, and it is already having serious impacts on local food production in many developing countries around the world. Production shortfalls, and subsequent food price hikes, will be particularly harmful for the world’s poorest consumers, who research shows spend 50-70 percent of their incomes on food. A new IFPRI brief examines some of these impacts and discusses policy options to improve countries’ resilience and food security in the face of weather- and climate-related shocks.
Most of the areas suffering from this year’s El Niño are experiencing significantly reduced rainfall, which has delayed planting and impact harvests and livestock activities. On the African continent, eastern Ethiopia is experiencing its worst drought in over 30 years, with main harvests forecast to decrease by as much as 14.1 percent compared to last season; crop and livestock losses in the country are expected to leave about 10.2 million people in need of food assistance, according to the UN Office for the Coordination of Humanitarian Affairs. Crop production in South Africa is also expected to decline by 20 percent below the three-year average; this is likely to impact other countries in the region as well, as South Africa is a key regional maize exporter.
In Central America, drought has been widespread, impacting as many as 3.5 million people; in Haiti, 560,000 people are currently in need of food aid. Honduras may lose up to 80 percent of its coffee crop, and coffee-growing regions in Guatemala are facing increased malnutrition rates as a result of decreased production according to FAO. A recent virtual dialogue on the effects of El Niño in Central America noted that actions are needed at multiple levels to increase the resilience of agriculture. India is also facing reduced cereal yields due to drought and high temperatures; however, high domestic stocks (an estimated 55 mmt) should help smooth this loss.
The report points out that El Niño’s effects are heterogeneous, however, and that some regions will actually benefit from more favorable agricultural conditions. This could boost regional and global stocks and help soften the blow to food security for some populations. For example, according to FAO, Mexico is forecast to increase cereal production by about 7 percent, which will help alleviate food insecurity in Central America despite the fact that cereal production is expected to decline in El Salvador and Guatemala by approximately 14 and 5 percent, respectively.
The report emphasizes the fact that El Niño’s negative effects on economies and welfare depend largely on countries’ domestic food, trade, and social safety net policies. One of the report’s first recommendations is the creation and scaling up of targeted safety net programs such as Ethiopia’s Productive Safety Net Programme (PSNP), which combines food and cash transfers to the poorest households with work requirements for the able-bodied.
A removal of trade restrictions for agricultural and food products is also necessary to ensure the free flow of grains and other crops from surplus to deficit areas, within countries, within regions, and globally. World commodity prices are at their lowest level since 2010, but to take advantage of these low prices, governments need to make it easier for food to enter their countries. This will include policies to streamline customs procedures, remove foreign exchange restrictions, reduce tariffs, and establish more transparent, frequent communication with private traders. In addition, governments should avoid the use of policies like export restrictions which, while they may protect domestic supplies in some cases, end up hurting poor producers and discouraging production.
Grain stocks will also play a major role in managing domestic food insecurity. As highlighted earlier, India’s high domestic stocks should help protect its population from increased hunger; however, the report emphasizes that for this to be the case, proper stock management is needed. Hoarding by traders needs to be discouraged and this can be accomplished by the timely, transparent release of small amounts of public stocks that would serve to calm markets. However, public stock programs can also be expensive, and governments need to set realistic target levels to ensure that storage does not cost more than importing the same amount of food.
Finally, from a longer-term perspective, countries need to invest more in agricultural research and development, extension services, and rural infrastructure. Such investment can help farmers better adapt to weather- and climate change-driven events and can increase the timely flow of information regarding weather conditions, prices, and production. This will make developing countries’ food systems and food security more resilient to future weather- and climate-related shocks.