Food Security Reserve Policy in Ethiopia: A Case Study of Experience and Implications

STEPHEN JONES

Food security reserve policy in Ethiopia since 1982 is reviewed in the light of the limited progress made elsewhere in Africa in establishing and maintaining such reserves. While the reserve played some role in dealing with the crisis of 1987/8, donor confidence was eroded by unauthorised drawings from the reserve and other factors. In 1992, the Ethiopian Food Security Reserve Authority was established to provide a system of management more acceptable to donors. This had led to donor pledges to replenish the reserve, though it remains well below the target level. Despite increased government commitment of funds, donor confidence remains fragile and the reseme remains dependent on donor support. The pZace of the reserve in national food security policy is not yet fully defined. Conclusions are drawn for food security reserue policy in Ethiopia and elsewhere in Afrzca.

The maintenance of grain reserves has been identified as one of the most import- ant public sector roles in staple food markets in Africa.' The food crises of the early 1970s and early 1980s led to the donor supported establishment of emerg- ency grain reserves in many countries. Regional organisations such as the Inter- Governmental Authority on Drought and Development (IGADD), the Southern African Development Community (SADC) and the Comitd Permanent Inter-Etats de Lutte Contre la Sdcheresse dans le Sahel (CILSS) have been at times active in promoting the concept of regional reserves. In Southern Africa, the 1992 drought has led to a re-appraisal of govern- ment grain stocking policy in several coun- tries. The need for the maintenance of

some public sector role in staple grain storage is usually accepted even by donors promoting the withdrawal of the state from other marketing functions.

Yet the record of the establishment, maintenance and effective use of such reserves is poor, at both the national and regional levels.' Among the major problems have been the inadequacy of the financial resources provided by govern- ments and donors to enable reserve targets to be reached or reserves to be replenished after use, uncertainty about the role and appropriate size for the reserve (especially the tendency of governments to use local purchases for the food security reserve (FSR) as a means of subsidising pro- ducers), poor management leading to high costs and stock deterioration, and inade-

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Food Security Reseroe Policy in Ethiopia 141

quate links between early warning infor- mation and reserve release decisions.

In this paper I examine Ethiopia’s experience in trying to establish, maintain and use a food security reserve over the last decade, under the Derg and subse- quently the Transitional Government which took power in 1991. The main characteristics of the problem of food insecurity in Ethiopia are sketched, and the history of attempts to establish a reserve described. In the final sections, the major issues for reserve policy in Ethiopia, and general implications for FSR policy are assessed.

FOOD SECURITY IN ETHIOPIA

Grain reserve policy in Ethiopia has been strongly influenced by the evolution of the relationship between donors and govern- ment and by the food security crises of the 1980s. Ethiopia suffers from intense and widespread poverty, especially in rural areas, which is the result of a limited agricultural and natural resource base in relation to its population, extremely inade- quate rural infrastructure, and policies which over the long term have failed to stimulate income growth, especially in the smallholder farmer sector which domi- nates employment and agricultural pro- duction. Approximately 90 per cent of the population is located in rural areas.

After the overthrow of the imperial government in 1974, partly because of its failure to prevent famine, the Provisional Military Government (the Derg) progressi- vely increased state control over all sectors of the economy. Despite land reform which removed the burden of feudal levies, agricultural producer prices were kept low, and a system of quota deliveries to the state marketing board, the Agricul- tural Marketing Corporation (AMC), was introduced to discourage private trading and to ensure low cost food supplies for urban areas and the military. Resources

were diverted to high cost state and collective farms and to massive forced resettlement programmes. While there was some expansion of fertiliser use in the smallholder sector, and macroeconomic instability was generally avoided through strict monetary and fiscal policy, incen- tives and service provision for small farmers remained extremely poor. The cost of increasing military expenditure as the civil war intensified was disproportio- nately borne by the rural sector.

Average per capita calorie intake was estimated at only 75 per cent of require- ments in 1988. Between 197415 and 198819, value added in agriculture (which accounts for 40-50 per cent of GDP) increased at only 0.2 per cent per annum, while popu- lation growth has been approximately 2.9 per cent (World Bank, 1990). As a result, Ethiopia has become increasingly depen- dent on donor funded cereal imports, even in relatively good production years. Total imports of cereals increased from 177,800 tonnes in 1979/80 (of which 111,400 was food aid) to 1,417,200 in 1988/9 of which 986,300 was food aid. Cereal imports exceeded one million tonnes in every year except one between 198415 and 198819, equivalent to 15 - 20 per cent of total cereal consumption. Per capita consumption of cereals fell only marginally over the 1980s despite the stagnation of production (Gutu, Lambert and Maxwell, 1990).

Before its military overthrow in 1991, the Derg had already begun a process of economic reform which included the aboli- tion of marketing controls and quotas in March 1990. These policies have been considerably extended by the new govern- ment, which has carried out the first currency devaluation since 1973 and began a process of privatisation and economy- wide market liberalisation which has begun to attract a high level of donor support. While harvests in 199213 were expected to be among the best in recent years as a result of good rainfall, substan-

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tially increased cereal producer prices following market liberalisation, and the end of the civil war, almost five million people were identified as in need of relief assistance in 1993 (RRC, 1992).

Chronic poverty has contributed to the vulnerability of the rural population to famines, caused by either drought or civil disruption, both as a result of the severe ecological degradation of much highland agricultural land and the lack of alternative non-agricultural income sources for, or asset ownership by, the rural population. Major famines occurred in 1973/4 and in 1984/5, caused mainly by drought but exacerbated by slow, weak and inadequate government (and donor) response to emerging crisis. Drought and famine vul- nerability have been greatest in the North (Eritrea, Tigray) which have the lowest average and most variable rainfall and where civil war has been most intense, in Wollo and Northern Showa where soil degradation is most severe, and in the lowland areas of the South and East (Webb, von Braun and Yohannes, 1992). The extent to which acute crises have turned into famine has depended largely on the speed and scale of the mobilisation of international relief.

The scale and persistence of internatio- nal food relief operations since 1984/5 have led to the establishment of a permanent early warning and relief response system. The nature of this system was however heavily influenced by political conditions in Ethiopia and relations between govern- ment and donors:

In many respects the international aid community set up a parallel system to government, in terms of EW [early warning], decision-making, and food aid distribution within the country. Government had very little control over any of these domains, nor over the food aid itself. Despite strained relations between government and western donors under the Mengistu regime, their objectives coincided in the general desire to

get food relief into the country (Buchanan- Smith and Petty, 1992).

GRAIN RESERVE POLICY IN ETHIOPIA, 1982 - 91

In 1974, following the famine of the pre- vious year, the Food and Agriculture Organisation of the United Nations (FAO) proposed the establishment of a 50,000 tonne Strategic Grain Reserve and the creation of effective planning and imple- mentation mechanisms to improve government capacity to respond to natural disasters requiring food aid distribution. Little progress was made in implementing this recommendation until a follow-up FA0 mission in 1979 which prepared a project envisaging a stock with an initial target of 60,000 tonnes, to be increased to 180,000 tonnes over four years. The FSR was established as an F A 0 project, sup- ported by the Dutch government and located within the Relief and Rehabili- tation Commission (RRC), with an initial contribution from the World Food Pro- gram (WFP) of 12,000 tonnes of wheat in April 1982. By the time of the crisis of 1984, no further contributions had been made, as donors proved unwilling to support the accumulation of stocks over whose use they could not exercise control. The slow response of government and donors to the RRC relief appeal in March 1984 led to the exhaustion of RRC stocks by July, while grain supplies to support the required major relief effort did not arrive until the last three months of the year (Goyder and Goyder, 1988).

In 1987 donor funded studies attempted to address the uncertainties over the role, size, location and manage- ment of the reserve which had bedeviled earlier attempts to establish it, while incor- porating the lessons of 1984/5. The main recommendations of the WFP led multi- donor study were:

- the FSR should be an emergency, not a

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price stabilisation reserve, with an emergency defined as a ‘situation in which the food production and/or marketing system has broken down to an extent that people will starve if they do not have access to free distribution of food‘;

- the principal target population for the FSR should be people in rural areas who lack both food and money to buy food when catastrophe strikes;

- the FSR should act as a first line of defence at the beginning of a new food emergency assuming no other relief stocks are available, and as a grain bank and a minimum stock during an ongo- ing emergency;

-the FSR should be decentralised at strategic locations, as part of the RRC distribution system, with the Food Security Unit (FSU) guaranteeing the integrity of the reserve; and

- donor contributions should be con- ditional on evidence of more flexible use of the reserve in future, and on the construction and maintenance of adequate storage facilities in the regions (ODNRI, 1987).

In 1988, a World Bank mission concluded that many lessons from 1984/5 had indeed been learned and incorporated into natio- nal disaster preparedness so that the response to the crisis of 1987/8 prevented famine conditions developing outside the war zone (World Bank, 1990). By 1989, the FSR had reached 92,000 tonnes with 76,000 tonnes held in RRC warehouses in Nazareth (with a total capacity of 100,000 tonnes) and AMC warehouses in Addis Ababa. Almost 32,000 tonnes of grain were drawn from the reserve during 1987/8, 80,500 tonnes having been contributed between 1985 and 1987 (Emergency Food Security Reseme Newsletter, Vol. 1, No. 1, November 1991, and data from the WFP). A further study (UNDP, 1989) of the logistics of handling grain imports required

to deal with a crisis of the scale of 1984/5 (two million tonnes) concluded that a reserve of at least 150,000 tonnes would be needed to bridge anticipated delays in arrivals of food through Assab and Dji- bouti, excluding reserve requirements in the north for areas supplied by Massawa (Eritrea, Tigray and northern Gonder). Despite this, donor commitments to the FSR remained below target, with only a further 10,000 tonnes being contributed by 1990. When donor response to early warn- ing indicators of emerging food crisis in 1991 was slow, the FSR could only release 5,000 tonnes of grain for the Ogaden (Buchanan-Smith and Petty, 1992). By the end of 1992, the physical stock comprising the reserve totalled only 18,400 tonnes, despite a government contribution of just over 8,000 tonnes (Emergency Food Security Resewe Newsletter, Vol. 2, No. 2, January 1993).

The main problems in establishing an effective FSR policy before 1992 have related to disagreements between donors and government about the role, manage- ment, and size and location of the reserve. Government proposals in 1988 to merge the FSR with a price stabilisation reserve directed at urban areas conflicted with donor perceptions of the role of the reserve. The Bank mission also noted the lack of integration between the stocking policy of the AMC and the RRC (through the FSR), and suggested that the govern- ment might carry stabilisation stocks which, while being kept separate from the FSR, would be used to assist FSR turnover (World Bank, 1990).

The management of the Reserve was based on a government funded Food Security Unit (FSU) within the RRC. A project manager handled day to day decisions while a Technical Committee from the FSU, RRC, AMC and WFP submitted recommendations on policy to a ministerial level Food Security Committee. The Technical Committee contained only

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one donor representative (from the WFP), was poorly informed and received poorly formulated requests from the RRC. While on paper the management system could have been adequate to ensure effective autonomy for the reserve and accountabi- lity for its use given sufficient political will, in practice the FSR management was not able to resist government pressure. Initially, temporary withdrawals from the reserve required the depositing of the value of the withdrawn grain, with the money deposit being returned on return of the stock. However, by 1989 this pro- cedure was no longer operational (Agrisys- tems, 1990). The management system also did not permit accurate assessment to be made of the costs of managing the reserve. Until 1992, the reserve relied on rented storage from the RRC and AMC, but fumigation chemicals have been supplied free, and the reserve was subsidised by various other forms of donor assistance.

Donor confidence was finally punc- tured by a removal from the reserve which occurred in early 1990. This took the form of a loan of 16,000 tonnes to the Ah4C which was apparently used mainly for feeding the armed forces, with no arrange- ments in place for how the loan should be repaid. The loan was not authorised by the Technical Committee, which was also not informed that the drawdown had occurred. In addition, warehouses in Nazareth were taken from the FSR for use by the military, although they were later handed back under donor pressure.

Various alternative targets for the reserve have been set, using very different bases of calculation (see Table 1). The Overseas Development Natural Resources Institute (ODNRI) study identified four zones, defined by supply routes between which it was argued that stocks should be divided so as to give an 80 per cent probability of being able to meet the needs of the likely famine affected population (FAP) from the local stock in three of the

zones, with a separate central stock which could be used to increase the probability of meeting requirements in any one of these zones to 95 per cent. The fourth zone, Eritrea and Tigray could not be supplied from the central stock and so its stock level would be set to provide 95 per cent protection. Proposals for decentralising the stock have foundered because of the increase this would have implied in admi- nistrative and storage costs, the possibility of having to move grain back from the North if drought struck in another area, the need to ensure regular stock turnover and failure to reach the planned total level of stocks.

ISSUES FOR RESERVE POLICY

Recent reforms

As a result of the experience described above, the main donor agencies have insisted, in negotiations with the Transitio- nal Government, on a system being estab- lished which provides more effective autonomy for the management of the reserve, while strengthening donor influ- ence over drawdown and loan decisions. The main requirement has been the formal establishment of the semi-autonomous status of the FSR, and its separation from direct RRC management. The new struc- ture and management system was elabor- ated in a government directive announced during 1992 and gazetted in October of that year.

In addition to the formal granting of semi-autonomous status, donor represen- tation on the Technical Committee was increased from one member to three,3 and the powers of the ministerial committee (the Food Security Reserve Board) over release from the reserve were restricted, so that it can only authorise release on the advice of the Technical Committee. As a result of these moves, donor pledges to replenish the reserve have now been forthcoming. USAID has pledged 50,000

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Food Security Reserve Policy in Ethiopia 145

TABLE 1 Alternative calculations of strategic resene requirements

Source Target (tonnes)

F A 0 (1974)

WFP (1979): Short-term target

WFP (1979): Medium-term target

ODNRI (1987): Based on probability distribution of the famine affected population (FAP) for each region, 1981-7. Target set to provide 95% probability of meeting needs of the FAP for 4 months on daily ration of 400 g. Central stock of 50,500 tonnes, serving 3 zones with combined stocks of 102,300 tonnes. Eritrea and Tigray to be served by stock of 42,800 tonnes.

Ethiopian Government (1988): Long-term target based on feeding 25% of population for 1 year at rate of 500 g per person per day (Emergency Food Reserve Newsletter, 1: 1, November 1991). (Approximate figure, based on this calculation, but not verified from original document .)

Ethiopian Government (1992): Short-term target based on free distribution feeding of 4.2 million at daily rate of 400 g for 4 months (Eritrea excluded) at 10 sites.

Ethiopian Government (1992): Long-term target based on increase in ration per person assisted from 400 g to 600 g per day, implied by curtailment of free grain distribution and replacement by food for work employment safety net.

Policy Framework Paper (Transitional Gout. of Ethiopia, 1992):

50,000

60,000

180,000

204,600

2,160,000

205,000

307,000

'2 months emergency

requirements'

tonnes over two years4 and the WFP has pledged 25,000 tonnes. It is possible that the reduction in forecast emergency requirements for 1993 may provide more opportunities for stock accumulation than has been possible in recent years, although major logistical problems with handling imports are still anticipated.

Financing the reserve

Adequate financing arrangements are lik- ely to be the key in sustaining the auton-

omy and efficiency of the Ethiopian Food Security Reserve Authority (EFSRA). To the extent that it is reliant on government subvention to meet its running costs it may be difficult to maintain incentives for cost control. An accounting system which fully reflects the cost of all resources used by the EFSRA (including donor support) win be required to enable the efficiency of the organisation to be monitored. Under cur- rent arrangements, the EFSRA is heavily dependent on donor and government bud- getary and other support for its running

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costs as well as its fixed capital require- ments and for stock accumulation. In many countries, initially ambitious and well-funded food reserves (usually for stabilisation purposes) have run into crisis when the recurrent costs have been squeezed as a result of pressure on the government budget. Donor funding of recurrent costs is inherently unstable since most donors are only able to commit resources on a year by year basis.

As a demonstration of commitment, the government subvention for the EFSRA in 1992/3 was increased to Birr 16.20 million (US3.3 million at current exchange rates), compared to the previous year’s subvention of Birr 2.2 mi l l i~n .~ While a detailed breakdown of the antici- pated costs of each component is not available, maintaining this level of funding (presumably increasing as the stock nears its target level) would seem to impose a fiscal burden which it will be difficult for government to sustain. Some of the costs of loans from the reserve could in principle be recovered through the charging of interest or fees (either financial or in adjustments to future contribution). It is possible to envisage a system under which the EFSRA would not necessarily require a financial subvention from government to meet all its running costs provided that turnover was sufficiently high.6 In the long run, establishing such a system of direct cost recovery may be the key to ensuring a sustainable financing base for the running costs of the EFSRA, especially if govern- ment faces a need for increased fiscal austerity. Capital subscription will how- ever will be required to establish the reserve.

Place of the EFSRA in national stock policy

Donors have insisted that the principal role of the reserve is to be a cereal bank for agencies wishing to draw on food supplies

in order to bridge import delays. Since its establishment, approximately 75,000 tonnes of grain have been loaned to NGOs or donor agencies. This role is not directly reaffirmed in the directive establishing the EFSRA, although other statements of objectives (for example in the Emer- gency Food Security Reserve Newsletter) do explicitly state it.

The Ethiopian Grain Trade Enterprise (EGTE), formerly the AMC, after a period of uncertainty during which its operations were drastically curtailed following the 1990 liberalisation, has now been given a mandate to carry out some price stabilisa- tion functions, although the mechanisms by which this is supposed to occur and the costs involved remain to be fully worked out (EGTE, 1993). It is envisaged by EGTE management that they will hold a buffer stock of up to 150,000 tonnes which will be used to reduce the impact of grain price rises in urban areas. While the EFSRA stock is envisaged as essentially for free distribution, the EGTE buffer stock is supposed to be for the ‘market dependent population’. It is unclear, however, whether this stock is to be held interan- nually, or whether this represents instead seasonal stock holding to reduce the impact of seasonal price increases in urban areas, with supplies coming principally from food aid.

Government plans have continued to emphasise the expansion of dedicated regional storage capacity. For example, a recent plan identified ten sites at which new warehouses would be established (Emergency Food Security Reserve Newsletter, Vol. 1, No. 2, June 1992). Donor support for the establishment of additional ware- housing facilities seems unlikely, given the existence of underused grain storage facili- ties elsewhere in the system. The EGTE for example, is estimated to possess about 826,000 tonnes of storage capacity (Agri- systems, 1990) while it is currently res- tricted to a maximum of 300,000 tonnes of

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purchases per year (EGTE, 1993). The RRC also possesses over 360,000 tonnes of storage capacity. Overall grain storage warehouse and other capacity was esti- mated at around 2.6 million tonnes for Ethiopia and Eritrea in 198819 (Agrisys- tems, 1990).7

A fully coherent and consistent grain stocking policy, including the role of private storage in the liberalised market context remains to be worked out by the Ethiopian government. The rationale for the EFSRA system is predicted on the limited ability of the marketing system to respond to a food crisis, and the lack of income which means that even if the market is able to respond efficiently to price signals, the poor will not have adequate purchasing power. If reform improves the efficiency of grain markets, this may reduce the need for public sector stocks, and move the focus to interven- tions to increase purchasing power. The possible implications of economic reform (for instance the likely expansion of private sector storage) have not explicitly been taken into account in the recent proposals for the establishment of the

The best insurance of cost-efficiency in storage is likely to be exposure to compe- tition. There are clearly limits in practice to how this might be brought about. How- ever, it is possible to see how competition could emerge or even be encouraged. The function of cereal banking can be inher- ently commercially viable under an appro- priate pricing policy, at least so long as stock levels are not so high that problems are encountered in finding enough loans. There is therefore no reason in principle why the EFSRA should be the only agency engaged in cereal banking, since it may be profitable for the private sector (or other public sector) agencies to fulfil a similar role. The EGTE, for example, which cur- rently has much underused storage space and staff capacity, could fulfil this role

E SFRA

commercially, especially as its survival plan has identified seasonal and long-term storage as the grain marketing functions in which it possesses comparative advantage. Private traders could, in principle, carry out the same functions.

National food security policy

While the EFSRA is seen as a central component of national food security policy, the latter is still in the process of being developed and it is planned that both the National Food Security and Nutrition Strategy and the National Disaster Prevention and Preparedness Strategy, which have existed in draft for several years, should be finalised during the current year (Maxwell, 1992). Most recent attention has focused on the design of safety net systems for the urban popula- tion, who are regarded as having been particularly disadvantaged by the econ- omic reforms, especially the recent large devaluation. As a result, a system of food vouchers was designed though not imme- diately implemented which it was intended should cover the poorest 30 per cent of the urban population, initially in Addis Ababa (World Bank, 1992). A recent review has noted that the complexity of the current policy-making environment (especially the important role of ad hoc policy task forces and special committees operating outside the normal ministerial structure) has not favoured coherence in policy making, and that there is no effec- tive focal point for food policy design (Maxwell, 1992).

As a result, the place of the EFSRA in a rural safety net is not yet fully defined. A possible direction favoured by some donors would be to link the reserve explicitly to a permanent employment scheme which could be stepped up in response to crisis. This would provide a mechanism by which stock turn over could be guaranteed. A closer link to a rural

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safety net policy may be required for a future stepping up or maintenance of donor support to the reserve.’

Implications of strengthened regional government

A high priority for the Transitional Government of Ethiopia is the develop- ment of a federal structure based on the establishment of ten regional govern- ments. These have been modelled on the Tigray Regional Government, which func- tioned effectively under the control of the Tigray People’s Liberation Front during the civil war. The other regional govern- ments are only now being established and their capacity is likely to be very limited in the short term. It is envisaged that man- agement of the EFSRA and the RRC will remain centralised. The possibility of the new regional governments establishing their own food reserves and relief systems is not, however, precluded. It is also envisaged that regional governments are likely to have power to regulate marketing and other economic activity, and it has also been argued that strengthening their role in early warning and response should be a priority (Maxwell, 1992).

MAIN CONCLUSIONS AND LESSONS

Some tentative conclusions can be drawn about the Ethiopian experience, which may have applications for other countries.

(1) The most striking feature is the long period which it has taken and continues to take to establish a credible and sustainable system for managing and operating the FSR, in the context of an almost complete reliance on donors for funding the estab- lishment and replenishment of the reserve.

(2) The key to attracting and retaining donor support is probably the establish- ment of management systems which remove the FSR from direct government

control, while giving the donor community an effective veto over decisions about the FSR. This is likely to preclude, however, decentralised management of release decisions on all but a small scale, although the need to make both information and response systems more sensitive to loca- lised needs has been emphasised as one of the main requirements for improving the relief system (Buchanan-Smith and Petty, 1992).

(3) FSR policies lack credibility when they are based on large stock accumu- lations which are not linked to a plan for use and replenishment and the accumu- lation of stocks becomes an end in itself. As a result, there are often problems in building up to, and sustaining, target levels for the stock.

(4) In determining the appropriate location of stocks, there is a need to trade off closeness to the most likely need with the ability to turn over stock when it is not being drawn down, the costs of manage- ment, which are likely to increase as decentralisation increases and the possibi- lity of having to relocate stocks involving back haulage.

(5) Financial arrangements are crucial to the sustainability of the reserve. A range of management options is possible in principle. These include management or performance contracts, direct encourage- ment of additional (competing) stock holders, and the use of both public and private sector agents.

(6) While the physical and institutional integration of stocks held for different purposes may not be desirable, especially for maintaining donor confidence, an inte- grated national stock holding policy is required to maintain credibility and avoid duplication and the development of excess storage capacity.

In some countries, it may be argued that the principal role of the FSR has been to provide an opportunity for govern- ments to carry out market interventions in

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Food Security Reserve Policy in Ethiopia 149

the absence of alternative channels of market influence following market liberali- sation and the donor promoted reduction in the role of grain parastatals. The pur- chasing policy of the Strategic Grain Reserve in Tanzania, for example, has been used as a way of maintaining pro- ducer prices in the remote Southern High- lands, although this pattern of purchases has not been appropriate or cost effective for meeting later relief needs (Beynon and Wood, 1993), while in Malawi transactions with the strategic reserve appear to have been used on occasion as a means of channeling subsidies to the marketing board, ADMARC (FSG, 1992). In some Southern African countries, the better than expected success in overcoming con- straints on import supply during the 1992 drought may support an argument that FSRs are redundant.

But the case for a pre-positioned stock of the order of magnitude envisaged for the FSR to deal with frequent and recur- rent crises in the absence of adequate transport infrastructure is likely to remain strong in Ethiopia for some time, although if the improvement in domestic cereal production is sustained, the scope for local purchase may become important and the system may be less tied to food aid. As private trading expands, the case for food rather than cash as a form of relief will be strengthened and the size of required public sector stocks may fall. The recent reforms, and probably more importantly the change of regime and the end of the civil war, are likely to lead to conditions which may enable the FSR to become an important part of an improved system of early warning and response. But donor confidence, on which the system con- tinues crucially to depend, remains fragile and will be rapidly overturned if the EFSRA does not prove to be an effective and efficient organisation, or if the ope- ration of the reserve is not in line with donor objectives. Several major donors

have been unwilling to subscribe to the reserve until it has an established track record, and it still seems unlikely that sufficient honoured pledges will be made from donors to enable the short-term target of 205,000 tonnes to be reached in the immediate future. Unless the reforms prove successful, Ethiopia’s capacity to respond rapidly to acute food crisis will remain limited in important ways.

Notes

This paper is based on information collected during a visit to Addis Ababa in February 1993. It was undertaken as background for a study of Strategic Reserve Policy in Southern Africa by the Natural Resources Institute, in collabor- ation with the Food Studies Group (FSG). Funding has been provided by the Overseas Development Administration Natural Resources and Environment Department under the Adap- tive Research Initiative. Particular thanks are due to the WFP Representative in Ethiopia, Mr Allen Jones, and Mr Wolfgang Herbinger, of the WFP, for assistance in arranging the visit and providing introductions to government agen- cies. Thanks are also due to the Commissioner of the Relief and Rehabilitation Commission, and the General Manager of the Ethiopian Food Security Reserve Administration; Simon Max- well of the Institute of Development Studies of the University of Sussex; and to two anony- mous referees and the editor of Disasters for comments on an earlier version of the paper. All views expressed and errors are the author’s. Note that European convention has been used in abbreviating Ethiopian names. 1. ‘Food security reserves’ here refers to a

bridging stock to meet consumption require- ments during the time taken to arrange alternative supplies (e.g., from imports). Stocks may also be held by the public sector as an instrument for price stabilisation, or for commercial reasons. These distinctions are often not made explicit or not recognised by policy makers (Beynon and Wood, 1993).

2. See KSU (1992) and Beynon and Wood (1993) for descriptions of experience in various African countries.

3. The WFP representative is permanent while

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the other two posts will rotate between donor agencies, presumably in relation to the amount of support they are providing. The initial donor members are USAID and CIDA.

4. It appears likely, however, that some pro- portion of this will be diverted, at the request of the government, to other commo- dities, especially cotton.

5. The subvention is intended to cover the purchase of 5,000 tonnes of grain as a government contribution to the reserve, transport for 49,800 tonnes from Assab, handling expenses at EFSRA warehouses, surveys and preparatory technical work on the design and construction of five EFSRA warehouses of 5,000 tonnes capacity each, rental for other warehouse space, project management and supervision costs for staff, and maintenance for vehicles, equipment, warehouses and offices and insurance premiums.

6. It was indeed originally proposed by the WFP in 1987 that borrowings from the agency should be repaid with an amount of grain 10-20 per cent higher than the amount borrowed. Where such loan transac- tions are the only way of recycling the FSR, however, one for one replacement may be required (ODNRI, 1987). In practice, loans have been repaid on a one for one basis.

7. A radically different proposal for the whole stock to be sited in silos in Assab so as to avoid relocation of stocks was recently sug- gested by one donor. This has now been rejected because of the climatic unsuitability of Assab for grain storage in silos. The proposals as reflected in the government budget for 1992/3 are for a regional EFSRA warehouse capacity of 210,000 tonnes to be established at five sites.

8. See Lirenso (1993) and Jones (1993) for discussion of the impact of marketing reform and the main policy issues for the manage- ment of liberalised grain markets in Ethiopia.

9. The scope for an employment based safety net in Ethiopia is discussed in detail in Herbinger (1993) and Maxwell (1993).

References

Agrisystems (1990) Study of Traditional Farm Storage and Food Reserues at Different Levels in the lGADD Region: Volume 3 County Reports - Ethiopia, IGADD, Djibouti.

Beynon, J. and J. Wood (1993) Food Security Reserves for Southern Afrrca. Natural Resources Institute, Chatham.

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