Study: Understanding Food Prices in Kenya

Cover - Understanding Food Prices in Kenya

In recent years, the food price crisis has driven millions of people into poverty, especially from 2008 until 2011. According to the estimations by the Food and Agriculture Organization (FAO), there were one billion people suffering from hunger in 2009. Even though this number has recently slightly decreased, it is still unacceptably high. The aim of this study is to show how food price volatility influences the lives of poor people in Kenya and threatens their food security.

Kenya was chosen as the case study country within the EcoFair Trade Dialogue project. On one hand, Kenya represents the strongest economic player in the Eastern Africa region and the only country not to be classified as a Least Developed Country (LDC); but on the other hand, approximately one half of the Kenyan population lives below the poverty line, while the majority of the people depend on agriculture. In 2011, Kenya also witnessed critical food insecurity during the Horn of Africa crises which caught media attention due to the fact that the United Nations declared a state of famine in neighboring Somalia.

Focusing on volatility of staple food prices will reveal structural and institutional flaws which might be redressed if handled properly. The causes of food price volatility are often addressed from two angles: demand-side constraints and supply-side constraints. Nevertheless, in the globalized world these are no longer the only causes, particularly due to the fact that many developing countries have become net food importing countries, and they are completely dependent on international markets. Kenya is also classified as a Net Food Importing Developing Country (NFIDC). Therefore, the need for a response at all levels is undeniable.