case study - fsn network...populations, although government of freedonia (gof) figures are lower....

1

Case Study

Map of Freedonia

2

Case Study

Emergency Food Security Assessment findings

To date, the EFSA assessment identified at least 400,000 people

who were directly affected by the flood across Freedonia. Other

estimates may be higher and include indirectly affected

populations, although Government of Freedonia (GoF) figures

are lower. More than 25,000 houses were either completely

destroyed or made uninhabitable, and more than 1.2 million

hectares of land flooded, with large areas destroyed.

Urban area (Lagaba)

A WFP EFSA in the capital of Lagaba found that many households

who were directly affected by the landslides, as well as the areas

hosting IDPs, were chronically food insecure prior to the flooding. These households have sunk into further food

insecurity as a consequence of the event.

The most food insecure people are those living in camps and municipal buildings (10,000), but also households

sleeping outside their neighbourhoods of origin are food insecure (8,000). Households with partially or

completely destroyed homes are more likely to be food insecure.

There is a large increase of asset-poor households; these households are amongst the most food insecure as

compared to the households that are still currently asset-rich. Households living in camps and collective centres,

such as municipal buildings, have lost most of their assets and their sources of income. They have moved with

the few belongings they have been able to save.

Households have fewer economic activities available and have lost their livelihoods due to the landslides and

flooding. The most food insecure livelihoods include those that rely on unskilled labour and social assistance for

revenue, and those that have no source of revenue currently. Outside the areas directly affected, the burden of

hosting IDP populations has led to an increase in various coping strategies by the host families.

Female headed households are more food insecure than male headed households (70% vs. 45%). Single headed

households, irrespective of their gender, are more vulnerable, particularly those with many dependents.

The assessment found that the share of households with poor/borderline food consumption has nearly doubled

compared to estimated pre-flooding levels. Many households are using unsustainable consumption and non-

consumption coping strategies in response to loss of income, housing, assets, and food access. Many of these

coping strategies threaten their livelihoods. Poor food and water access as well as poor hygiene conditions may

be leading to an increase in child malnutrition, particularly in the camps and collective centres.

Rural areas (Siruma and Alima Districts)

In Siruma and Alima Districts, 150,000 people were affected and the most severely hit were predominantly small

farmers and unskilled labourers. They are among the most vulnerable in rural areas and almost all live below or

just above the national poverty line. More than 60% lost immediate access to their primary livelihood and are

3

Case Study

faced with a drop, by more than half, in their income, which is already low. More than three quarters of the

affected population have access to less than one week’s supply of food. Livestock was severely impacted with,

on average, 20% of livestock lost by flood-affected households. Almost half of the affected population have

unacceptable food intake, in spite of the efforts by the Freedonian army, NGOs, UN and the general public.

Nutrition measurements indicate that the malnutrition situation is deteriorating.

The most vulnerable livelihoods groups have the following characteristics:

Small farmers: own or lease less than 0.5 hectares of land; highly dependent upon their own food production

and own some livestock. They produce milk for sale and consumption, are likely to have seasonal debts and to

return to places of origin as soon as flood waters recede.

Landless agricultural labourers: work seasonally for food or cash; highly dependent upon others for food

production. They own 1-2 livestock (if any); produce milk for consumption and are likely to have year-to-year

debts. They are less likely to return to their places of origin if income earning opportunities or shelter are absent.

4

Case Study

The wheat market system before the floods

Both Aluma and Siruma districts produce more food and animal feed crops than they consume. Yet, at a district

level, only three out of the eight districts in Freedonia produce a crop surplus. The other five districts are either

extremely deficient or deficient in food self-sufficiency. Only 16% of the population is considered to have

acceptable levels of food consumption. Over 80% of the rural populations have agricultural based livelihoods but

less than 60% own land. Working as sharecroppers is a common practice.

Wheat is a primary staple food, contributing to over 45% of the daily calorie food intake. Most of the wheat

consumed in the country is grown in Aluma and Siruma districts, and harvested from July to September. Small

farmers typically grow wheat for household consumption and as seed stock. On average, a household (with five

members) keeps 650 kg per year in stock, with which it partially meets its caloric needs. These subsistence stocks

are usually stored in small grain silos and sent to local mills for grinding as the need arises. Local mills receive a

grinding fee or a small percentage of the flour. Small farmers may also sell a small part of their cereal stock to

the local mills to cover emergency monetary needs. Bigger farmers sell larger amounts of wheat both to the local

mills, which represent the main wheat retailers in the rural areas, and to the Government, which has great

storage capacity and plays a significant role in wheat price control and distribution in urban areas.

National wheat production and wheat imports are highly regulated throughout the year. Each year in late June,

the Government sets the price at which they will purchase the next harvest. The price for the 2016-2017 wheat

grains was FD 1,000 per 40 kg. Most of the purchased wheat stocks are held in Government storage facilities

located in urban areas. Wheat stocks are then released at fixed prices throughout the year to the large flour

mills, whose sale prices are also set. Prior to the floods, the fixed price at the mills was FD 1,040 per 40 kg. The

large mills then sell the flour to district traders, which distribute the commodity to urban retailers within their

respective districts.

The impact of the floods on the wheat market system

After the floods, many small-scale farmers lost significant portions of their stored grain crops – in some districts

losses are as high as 80%. They mostly depend on food distribution by the Government and humanitarian

agencies because they lack the financial resources to access the flour sold by local mills.

Many small flour mills in villages have been damaged by the floods as well. The Government has chosen local

flour mills with enough storage capacity to receive renewed stocks at subsidised prices. While many local flour

mills in Aluma district have received subsidized wheat, thus far, none in Siruma district have received stocks from

the Grain Board. This policy has caused a strong reaction among the most affected large flour mills, who find

themselves in a disadvantaged situation. It also caused negative reactions among households, who do not have

the financial resources to access the product and are unable to travel long distances along badly damaged roads

to do so.

Wheat flour availability does not seem to be a problem at the urban level. Neither Grain Board warehouses nor

large flour mill facilities were affected by the floods because they are located primarily in the urban centre of

Ambra, therefore, flour mills are still able to supply district traders.

5

Case Study

On the other hand, in Lagaba, more than one third of shops and supermarkets have been damaged, of which

20% are now out of business and 80% are not able to replenish their stocks due to problems of liquidity and

access to credit. The remaining two-thirds of the non-affected retailers are regularly working and would be able

to increase their stock should demand rise. Nevertheless, shop owners report a decrease in the number of clients

and in their level of expenditure. Urban retailers in Lagaba report a decrease in the price of wheat flour. It seems

that traders were selling their stocks fearing that humanitarian agencies and Government distributions would

cause a further drop in demand and prices.

People living in camps have lost their assets and purchasing power and depend on Government and humanitarian

agencies to access food. Government distributions will last for two weeks, while agencies are assessing needs to

design post-emergency plans. Preliminary reports suggest that hosting families are at risk of deeper levels of

food insecurity, as they face increased expenses and access problems.

6

Activity, Food, or Income Source Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Wheat Harvest

Land preparation and wheat planting

Peak rural labor demand

Peak urban construction labor demand

Rainy season

Typical rural lean season

Livestock sales

Milk availability

Labor migration of rural men to Woomali

district to work in timber industry

7

Government restricts

wheat import

The market environment: institutions, rules, norms & trends

The market chain: market actors & their linkages

Key infrastructure, inputs and market-support services

Freedonia Market Information Service (FMIS)

Large Farmers Freedonia Grain

Board

URBAN CONSUMERS

National Wheat/Wheat Flour Market Map: Freedonia: Baseline

Seasonal patterns/ weather

Freedonia Grain Board

policy

Set prices for large urban

mills

Consumer demand and feed demand

Credit for rural and small urban traders

On-farm/rural silos

Grain Board storage Roads/infrastructure

Small farmers and

sharecroppers

RURAL CONSUMERS

(Aluma and Salima)

RURAL CONSUMERS

(All other districts)

Local flour mills (rural: Aluma and Salima districts)

Large flour mills (urban: Ambra)

Rural traders and retailers

District-level traders (urban)

Supermarkets (urban)

Small urban traders and shops

Credit for district-level traders

8

Government restricts

wheat import





Large Farmers Freedonia Grain

Board

URBAN CONSUMERS

National Wheat/Wheat Flour Market Map: Freedonia: Post-flooding Symbol Key

Critical issue Major disruption Partial disruption

!

Seasonal patterns/ weather


policy

Set prices for large urban

mills

Consumer demand and feed demand

!

Credit for rural and small urban traders

On-farm/rural silos


Small farmers and

sharecroppers

RURAL CONSUMERS

(Aluma and Salima)

RURAL CONSUMERS

(All other districts)

Local flour mills (rural: Aluma and Salima districts)

Large flour mills (urban: Ambra)





!

Credit for district-level traders

!

9

Case Study

The rice market system before the floods

A few big importers (6) bring staple food commodities, primarily imported rice, into Freedonia from neighbouring

countries. They purchase staple commodities like rice from international exporters or from neighbouring

countries’ traders who in turn have connections with international exporters or deal directly in international

markets. Differently from wheat, which is locally produced, most of the other staple food commodities are

imported. Imported food constitutes up to 55% of staple food consumed in Freedonia, the remaining is locally-

produced wheat in Aluma and Siruma districts. However, there is some small-scale wheat production in every

district in the country. Food aid, often from international humanitarian agencies, has been a part of the market

system for years. In ‘normal’ times, food aid accounts for perhaps 5 per cent of total consumption. Importers

tend to deal largely with commodities produced regionally.

A recently increased tariff (around 30%) on imported food commodities affects importers, wholesalers, and

district traders. High international food prices caused an increase in the prices of imported food in local markets.

In 2014 and 2015, the national food price index increased by 20%.

The six import companies sell to 50 wholesalers in Lagaba and other main towns. Both import companies and

wholesalers have access to warehouses for storage. Importers use private delivery companies to transport

imported commodities form the main commercial border to their warehouses in Lagaba. The crossing of the

commercial border involves hours in queues waiting for inspection and frequently involves bribing of corrupted

officials to ease the process. The local government has imposed strict legislation and taxes on imports.

Importers sell to the Grain Board, international humanitarian agencies, and district-level traders. Sales to the

Grain Board from importers take place through public bids. The amount of sales to the Grain Board can represent

10% of all sales. International humanitarian agencies import food aid commodities for social protection

programmes and school canteen projects and also purchase from the Grain Board. District-level traders are

located in the district main town and sell to urban and rural retailers within their respective districts. District

traders can wield a considerable amount of market power, but this varies greatly between districts. They are also

an important source of informal credit to retailers, and in some cases can afford truck transportation. Traders

have their own, well-established trade routes, delivery agents, and customers.

In Siruma, four traders cover almost 90% of the local supply to retailers. One of the district traders has got large

transport capacity while the remaining three traders rely on a network of formal and informal delivery agents.

Siruma district has mainly scattered and remote villages, which hold weekly small rural markets, where retailers

sell food commodities, usually in small amounts. In urban areas, retailers, mostly shops and some traders in open

air markets can buy either from district traders or from wholesalers, depending on their purchasing,

transportation, and storage capacity. Supermarkets tend to have contracts with wholesalers or importers

instead.

In Aluma district, 16 larger district traders cover almost 90% of the local supply to retailers. Several have their

own transport capacity. Many of the rural settlements in Aluma have some permanent retail locations in addition

to weekly markets.

Transport is essential to the food commodity market, particularly in rural areas, where much is done using three-

10

Case Study

wheeled vehicles, donkeys, or carried on women’s heads. Outside Lagaba, storage conditions, even in the

baseline situation, tend to be mediocre, especially in rural areas. Credit is common but the vast majority seems

to be supplier credit, often from district traders. Only larger actors, such as importers, wholesalers, and district

traders have access to bank credit.

The impact of the floods on the rice market system

Importers have not directly been affected by the disaster and international rice prices are stable.

Two out of 50 wholesalers had their warehouses destroyed and are out of business. The remaining 48

wholesalers are able to supply a volume of commodities that corresponds to 96% of the pre-disaster amount.

Price monitoring shows an increase of wholesalers’ prices ranging from two to five percent.

District traders don’t seem to have had major losses but have been affected by road infrastructure problems that

undermine their capacity to deliver to remote rural areas, especially in Siruma. In Aluma, all traders are regularly

supplying their clients, mainly with stock from Ambra. In Siruma, one out of four traders are able to supply

remote areas, as there are trucks that can reach the most affected areas. Delivery agents working for the other

district traders are not able to access the affected areas with the means available to them (donkeys, three-

wheeled vehicles, etc.)

In Lagaba, more than one third of shops and supermarkets have been damaged, of which 20% are now out of

business and 80% are not able to replenish their stocks due to problems of liquidity and access to credit. The

remaining two-thirds of non-affected retailers are regularly working and would be able to increase their stock

should demand increase. Nevertheless, shop owners report a decrease in the number of clients and in their level

of expenditure. While volumes have decreased, prices have remained stable.

In Siruma, local retailers have partially lost their stocks and some shops have been damaged. The number of local

active retailers has diminished from 120 to 98. As in Lagaba, the main problem for affected retailers is a lack of

liquidity, so traders are not extending credit as there is no certainty that they will be paid back. In Aluma district,

rural and urban retailers are operating with likely less than 10% closing, though retailers report that they expect

credit problems if they are unable to sell to consumers soon.

People living in camps have lost their assets and purchasing power and depend on the Government and

humanitarian agencies to access food. Government distribution will last two weeks while agencies are assessing

needs to design post-emergency plans. Preliminary reports suggest that host families in Lagaba are at risk of

deeper levels of food insecurity as they face increased expenses and access problems.

11

Tariffs





Importers (6)


URBAN CONSUMERS

National Imported Rice Market Map: Freedonia: Baseline

Freedonia

Grain Board policy

International rice prices

Consumer demand

Credit for rural and small urban traders frpm district-level

traders


RURAL CONSUMERS


Wholesalers (50 in Lagaba)



Importer and commercial warehouses


Siruma – 4 larger Aluma – 16 larger

Humanitarian agencies

Food aid RECIPIENTS AT

SCHOOL CANTEENS or for

SOCIAL PROTECTION

INFRASTRUCTURE OR SERVICE

12

Tariffs





Importers (6)


URBAN CONSUMERS

National Imported Rice Market Map: Freedonia: Post Floods

Freedonia

Grain Board policy

International rice prices

Consumer demand

Credit for rural and small urban traders from district-level

traders


RURAL CONSUMERS


Wholesalers (48/50 in Lagaba)



Importer and commercial warehouses

District-level traders (urban) Siruma – 3/4

Aluma – 14/16

Humanitarian agencies

Food aid RECIPIENTS AT

SCHOOL CANTEENS or for

SOCIAL PROTECTION

Stocks held at rural and urban retailers

Symbol Key

Critical issue Major disruption Partial disruption

! !

!

case study - fsn network...populations, although government of freedonia (gof) figures are lower....

Documents