CONCEPT NOTE ON CREATING DEMAND FOR THE …



CONCEPT NOTE

SETTING UP NATIONAL FOOD SECURITY MANAGEMENT FOR SIERRA LEONE

A. BACKGROUND

1. The UN Millennium Development Goal (MDG) One has the goal of reducing food insecurity and poverty to half by 2015. Food Security in particular is part of the responsibilities of the Ministry of Agriculture, Forestry and Food Security (MAFFS). Food Security itself has a triangular framework in addressing it called the Food Security Triangle (FST):

• Food Availability: This basically has to do with food supply which, itself, is a combination of both domestic production and imports. A country’s best food availability or supply strategy is to promote or boost its domestic supply. This was re-echoed as the main strategy in addressing the hiking global prices of food items. This is particularly so for a country such as Sierra Leone, which has the potential and, in fact, to comparative advantage, to produce its staple, rice, and even export it. Food security through boosting domestic food, especially rice, production is a sine quo non for our country. And, the best catalyst for that to happen is the availability of a market (demand-side) to trigger the supply side. And wherein domestic production and therefore supply is boosted, there is a possibility for a drop in price which, itself, increases access (the purchasing power) of the consumers.

• Food Access has both financial (purchasing power) aspect that is based on incomes and price, as well as the physical (structural) aspect dealing with infrastructure (roads, markets, transportation, etc).

• Utilization is predominantly a health issue but overlaps with issues NSADP on healthy farmers and ensuring clean water in villages.

2. Thus, it is clear from the above that Food Security is multi-sectoral, multi-disciplinary. It has been emphasized in all fora that in the formulation of strategies for food security, boosting domestic production should be the cornerstone of food security. . In Sierra Leone, where the country has the agro-climatic and other factors that gives her the comparative advantage to produce food domestically to feed the population and even export for a good number of food crops, boosting domestic production should the foundation of any food security strategy Fortunately too for Sierra Leone, studies have proven that the has the comparative advantage to produce and even export rice, its staple food

3. The Vision of the Ministry of Agriculture, Forestry and Food Security is to make agriculture the engine of socio-economic growth and development through commercialization and the promotion of the private sector, including the farmers and farmer-based organizations (FBOs). To fulfill this vision, the Government has placed Agriculture as the topmost priority in its Agenda For Change; the country’s second generation PRSP. The broad policy objectives of the agriculture sector is to initially achieve rice self-sufficiency by 2011 and to regain the country’s position as net exporter of rice by 2013.

4. To achieve this, the Ministry has put in place supply-side strategies to increase the productivity and production of rice such as:

• the distribution of high yielding rice varieties including NERICA seeds

• the promotion of a tractorization scheme,

• the provision of agrochemicals

• the provision of research and extension services,

• the provision of rice processing facilities

• serious sensitization of the general public and the farming communities about the need to take agriculture seriously

• (g) the promotion of private sector participation, including farmers and farmer-based organizations (FBOs) in the sector through a package of investment incentives

5. These supply side interventions over the past two years have impacted positively on domestic rice production and there are strong indications that the harvest this year is a bumper one although milling companies are still so limited that most of this rice production will not be able to be consumed in Sierra Leone urban markets in competition with imports but will provide increased availability in some rice growing communities. The situation is compounded by market fragmentation of the country which, in the absence of an effective market information system and marketing system, inhibits the linking of supply with demand. The rice bowls in Sierra Leone lie predominantly along the border coastline Districts of Koinadugu, Kambia, Port Loko, Pujehun and Kono. However, there are mostly unmanned border crossing points through which serious smuggling (illegal and unregulated cross border trade) of Sierra Leone’s produce, especially food items such as rice, palm oil and garri, take place unabated. Although farmers in these districts are benefiting, the neighbouring countries of Guinea and Liberia are also benefiting from the Government’s subsidy programme for agriculture in Sierra Leone Increased production in areas supplying Freetown and district towns is thus required. Still the above developments have seriously negative impacts on the economy of Sierra Leone in terms of:

• undermining the impact of Government’s programme to boost agriculture to ensure year-round food availability (supply) and affordable price. This can trigger discord among the population when price hikes occur especially for politically sensitive commodities such as rice and palm oil;

• not fully estimating the contribution of agriculture to GDP since the smuggled items are not accounted for;

• deprivation of serious potential revenue for Government; and

• the marketable surplus not having markets, which could be a disincentive to the production of the very marketable surplus

• MRU level agreements to harmonize trade in food security crops is lacking

6. Also, the import aspect of the availability side of the Food Security Triangle (FST), which has both commercial and humanitarian components, needs to be addressed. Presently, Government still maintains an import subsidy (e.g. reduced import tariff) that adversely affects the competitiveness of Sierra Leone’s rice domestically. Secondly, the steady increase in domestic production and its resultant fall in the price of the domestic rice even below the imported now puts the former in an advantage position/. This will be moreso if the import subsidy is removed.

7. It is self-evident from both the table and graph below that, even though the domestic supply of rice, the country’s staple, has been below the national requirement, its total supply (domestic production plus imports) has been above it! Even though total supply or availability of rice has been and continues to be undermined by border seepages or smuggling, there is need to put in place a system to capture especially domestic production, which has hope to make the country self-sufficient in rice. This will help to curb the very seepages.

| |2006 |2007 |2008 | | | | |

|Requirement |100 |100 |100 | | | | |

|Total Supply |120.3 |123.8 |143.7 | | | | |

|Production |62.2 |63.5 |71.7 | | | | |

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8. Currently, Government succeeded in convincing WFP to purchase domestic rice for its programmes in Siera Leone. In 2010, about 2,000 MT have been targeted under both the Purchase for Progress (P4P) for the smallholders and open market operations (?). Both activities are being jointly implemented by the Ministry of Agriculture and WFP.

9. In terms of ACCESS, incomes are currently low especially for Government employees. Their salaries are not based on a Cost of Living Adjustment (COLA) using the Consumer Price Index (CPI) or inflation as indicators for COLA. The bulk of the population (over 70%) lives below the poverty line or a daily per capita of less than a Dollar. Access based on personal incomes and purchasing power is further compounded by the serious problems of physical access or structural issues such as poor communication (including roads and transportation networks) as well as the lack of markets. Thus, the market is fragmented and surpluses in some areas are difficult to move to areas of deficit. Instead, the country depends on the importation of food items, especially rice, its staple, to feed the nation, including the Forces (Military, Police, Prisons), educational and health institutions. Sierra Leone still ranks bottom in terms of key health indicators. Thus, the utilization of food is inhibited by the situation, coupled with availability and access bottlenecks.

10. Food for work (ffw), training (fft) and cash for work (cfw) are some of the initiatives being used to create employment, increase infcomes and the purchasing power of the beneficiaries in order to improve the food security status. Currently, WFP and NaCSA are the lead agencies in Sierra Leone for the first two and the last one respectively .Another strategy is food for seed (ffs), which is meant to encourage farmers to truly use their seeds for domestic production and have temporary food to be able to do so.

B. PROPOSALS

I. Set Up a National Food Security Management System (NFSMS) for Sierra Leone

11. A two-level NFSMS is hereby proposed: A Policy Advisory Group (PAG) and a National Food Security Unit (NFSU) in the Ministry of Agriculture, Forestry and Food Security (MAFFS)

(i) The Policy Advisory Group (PAG)

12. This should comprise of relevant Ministers, Heads of stakeholder institutions/organizations and other suitably experienced persons in handling the same or similar components:

• Minister of Agriculture, Forestry and Food Security – Chair

• Minister of Health and Sanitation – Member

• Minister of Education, Youths and Sports – Member

• Minister of Defence - Member

• Minister of Trade and Industry – Member

• Minister of Finance and Economic Development – Member

• Minister of Internal Affairs, Local Government and Rural Development – Member

• Two (2) experienced persons appointed by the President based on the recommendation of the PAG

• FAOR – Co-Chair

• WFP Country Director

• EU Delegate - Member

• WB Country Rep – Member

13. The core functions of this body are to:

• Ensure that a long-term National Food Security Framework and Programme (NFSF and NFSP) are implemented in Sierra Leone;

• Provide policy advice on the use of domestic rice for institutional feeding by both the Government and WFP

• Give policy directives on the management of the FBSP T

• Supervise the work of the TMT including, among others, the approval of the Annual Work Plans and Budgets (AWP&Bs), as well as Quarterly and Annual Progress Reports of the Team;

• Keep the President abreast of developments at least on quarterly basis.

(ii) The National Food Security Unit (NFSU) in MAFFS

14. This will be the Technical Management Team (TMT) of NFSMS for the country. It will comprise of core professional persons that will be directly recruited from the market through advertisements and are to be paid market rates. It will be headed by a National Coordinator (NC) and to be assisted by:

• A Deputy National Coordinator

• Technical Adviser

• Programmes Officer

• Admin & Finance Officer

• Procurement Officer

• Logistics Officer

• Driver

• Secretary

• Office Messenger

15, The team will be responsible for:

• The development of a long-term National Food Security Framework and Programme (NFSF and NFSP) for Sierra Leone as well as undertaking resource mobilization for same with the approval of the PAG;

• Developing tools, generating data and/or information and producing analyses on the status of Food Security in Sierra Leone, issues and recommendations including programmes to address them;

• Contract for policy research such as on community grain banks and strategic grain reserves Providing policy advice on the use of domestic rice for institutional feeding by both the Government, WFP and other related institution(s) and/or agencies;

• Managing the FBSP;

• Developing Annual Work Plans and Budgets (AWP&Bs), as well as Quarterly and Annual Progress Reports of the Unit;

• Coordinating all relevant stakeholders to ensue joint planning, implementation, monitoring, evaluation and partner mutual accountability (PMA);

• Conducting information, education and communication (IEC) activities in respect of the areas of mandate

16. In addition, the Ministry is further proposing to pursue the following strategies to help create markets to absorb the marketable surplus of initially rice.

II. Marketing Strategies

17. Organizing the fragmented market for domestic rice is a sure way of improving domestic rice marketing and hence, igniting increased rice production. The Ministry is proposing four main marketing strategies to develop domestic rice marketing in Sierra Leone:

(i) Affirmative action to use domestic rice for institutional feeding including regular or occasional rice bags as part of Civil Service salary supplements;

(ii) The creation of a Strategic Grain Reserve Programme (SGRP); and

(iii) Strengthening WFP’s two-tier programmes of Purchase for Progress (P4P) and the promotion of direct open market procurement.

(iv) Reverse the import duty (remove the consumer subsidy) for rice from the current 10 to the original 15% at actual import value. This will not only generate revenue for Government, it will also create a fair competition for the domestic rice. In fact, presently, the domestic rice is cheaper and the reversal of the import tariff will make the domestic rice much cheaper. As production increases to exportable levels, the import duties will need to be revised to ensure competitiveness with sub-regional market prices.

18. The above strategies will seriously create markets for the domestic rice thereby increasing production, improving the quality of the institutional food rations, increasing farmers’ income, potentially reducing the financial burden on Government, promoting serious private sector investment in the agricultural value chain, creating serious employment opportunities through intensive agro-processing and marketing activities and saving the country much needed foreign exchange for rice importation.

(i) Affirmative action to use domestic rice for institutional feeding:

19. The Government of Sierra Leone spends huge sums of money on institutional feeding every year. Institutions like the military, the Police, Prisons, the Hospitals and boarding homes are amongst the most prominent. Let us take the RSLAF for an illustration. The table below shows RSLAF monthly rice distribution per formation using April 2008 figures. Empirical evidence also indicates that Brigade strength within RSLAF can consume 1,249 bags of rice per month. Therefore, the RSLAF, with a current strength of 10,092 personnel, consumes 5,600 bags of rice monthly (2008) through public tender. At a current market price of Le 130,000 per bag, Government spends Le.728 million (about US$182,000) per month or about Le.8.74 billion (about US$ 2.2 million) annually. This picture is similar for the Police, Corrections (Prisons), schools and the hospitals.

|S/N |FMN/BDE |QTY OF RICE (Bags) |REMARKS |

|1. |FTG |1,019 | |

|2. |3 BDE |1,035 | |

|3. |4 BDE | 597 | |

|4. |5BDE | 677 | |

|5. |Force Troops |1,249 | |

|6. |Training Unit | 365 | |

|7 |Stock Reserve | 658 | |

| |Total |4,942 | |

Source: JFC (J4 Br Log Sp/Tpt Desk)

IT’LL BE FANTASTIC TO CAPTURE SUPPLIES TO THE FORCES (MR. AMARA IDARA SHERIFF) AND OTHER INSTITUTIONS (WFP

20. Given the current boost in rice production in the country, it will be paradoxical for Government to promote the domestic production of food, especially rice, in Sierra Leone and at the same time, seriously promoting the importation of rice at a very huge financial cost to Government. Thus, Government will be ‘blowing hot and cold’: boosting domestic production and importation at the same time. The affirmative action being proposed is for domestic rice to be used for all Government’s institutional feeding support to initially the Forces: RSLAF, SLP, Corrections Department, This will be followed by other institutional feeding arrangements for education and health. Subsidies for quality rice milling at scale may be required for these institutions to utilize domestic rice sources.

(ii) Creation of a Strategic Grain Reserve Programme (SGRP

21. The establishment of this programme will also promote the marketing of domestic rice for a start. Buffer stock will be created through the purchase of a certain percentage of the domestic rice that is produced annually. The rice purchased will be processed and kept in Government stores in each district throughout the country. This buffer stock will be used as a social protection strategy in times of natural disasters such as floods, fire, etc and for national security reasons. The Buffer Stock will also be used as a price stabilization strategy during the hunger season and upsurge in international prices for food.

22. It is proposed that the Government determines the quantum of rice it wants to purchase per year, tenders the procurement of same, purchases and stores it in central District stores. Rice that has been stored for one year should be supplied or sold to the Forces or disposed of in the market and the proceeds used to replace it.

(iii) Strengthen WFP’s Food Purchase Programmes

23. WFP’s Purchase for Progress (P4P) and the promotion of local procurement activities are jointly implemented by the Ministry of Agriculture and WFP. The objective is to assist small farmers to increase their production through organized and efficient processing and marketing systems that enable the small farmers to get a fair price for their products and at the same time allow them to increase their incomes from the business and keep the profit margins that could have gone to the middle men.

(iv) Reversal of reduction in import tariff

24. The Government, through the Ministry of Trade and Industry (MoTI) reduced the import duty for rice from 15 to 10 percent in order to cushion the impact of the then hiking global prices for food commodities, especially rice. Even though the world market prices have reduced and the domestic production of rice has reasonably increased in the country, the tariff has not been reversed. The reversal of the tariff will give our domestic rice a better market leverage..

25 The proposed strategies will seriously intensify the agricultural value chain of input supply, production, agro-processing and marketing, including the potential to export. Even the proposed three (3) strategies are predominantly marketing activities (Ministry of Trade and Industry), the implications are far-reaching, with agriculture expected to play a crucial role in ensuring reliable and possible increase in supplies as well as providing the storage facilities. Also, the propgramme will heavily depend on the Ministry of Agriculture for providing projected potential food supply and distribution each year under its pending Agricultural Early Warning System (based on various factors including agro-climatology).

(III) Indicative Cost

| |Component |Activities |

| | |# |Description |US$ M |% |

|A. |Management |1. |PAG | | |

| | |2 |NFSU Operational costs | | |

| | |3 |National Food Security & Nutrition Studies | | |

| | |4 |Policy formulation | | |

| | | | | | |

|B |Boosting Domestic Production |1 |SHCS (value chain support package) | | |

| | |2 |Supply of domestic rice to: | | |

| | | |2.1 Forces (Military, Police, | | |

| | | |Corrections) | | |

| | | |2.2 Educational and health institutions | | |

| | | | | | |

|C. |Increasing Market Access |1 |FFW | | |

| | |2 |FFT | | |

| | |3 |CFW | | |

| | |4 |Marketing Infrastructure | | |

| | | |4.1 Feeder Roads | | |

| | | |4,2 Large-scale Post-harvest Facilities | | |

| | | |4.3 Market Intelligence | | |

| | | |4.4 IEC Activities | | |

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