Does Seasonality Continue to Permeate African Rural Livelihoods?

COMMON WISDOM #9: Seasonality permeates rural livelihoods, but is increasingly less considered by analysts and policy makers

SCORE: 4 - Fact

FINDINGS:

• Pre-harvest maize price levels (wholesale) exceed post-harvest price levels on average by 31 percent across seven African countries (ranging from about 55 percent in Malawi and 20 percent in Ethiopia—see figure)
• Seasonality in prices tends to be higher for maize than other cereals, but also varies a lot across regions within countries, and is highest for (perishable) tomatoes. Rice and cassava prices show the lowest seasonal variability.
• For three of the countries studied (Malawi, Tanzania and to a lesser extent Uganda), food consumption reflects these price patterns, and is lower in the pre-harvest hungry months, particularly for poor households.
• Maize price fluctuations are twice those observed on the South Africa Future Exchange suggesting substantial scope for improvement and welfare gains; for example through better access to credit and better coping strategies for households, more secure storage at village level, reduced transport costs, and improved intra-African trade.

POLICY MESSAGES:

Seasonality in prices, and possibly welfare, remains much of an issue in many African food markets.

SUMMARY

The issue

Seasonality (in food prices and consumption) was much studied in the 1990s and shown to be associated with significant fluctuations in hunger and nutrition within a given year. Since then the topic has largely disappeared from the policy debate as well as in project design and the academic literature.

The analysis

Against this background, this study (two papers) systematically revisits the question of seasonality in Sub-Saharan African livelihoods. It examines the extent of seasonal patterns in food prices as observed during 2000-2012 across 196 market locations in seven countries (Malawi, Tanzania, and Uganda, Ethiopia, Niger, Burkina Faso and Ghana) for a range of food products. While essentially descriptive in nature, the papers fill an important empirical void in the current understanding of the evolution of food prices and consumption across seasons. They apply time series econometric methods to administrative market price information to control for price trends; they systematically look across different food crops, markets (wholesale and retail) and agro-ecological settings; and for three countries (Malawi, Tanzania and Uganda); they further exploit the Living Standard Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA) to explore how the seasonal price fluctuations affect (food) consumption patterns.

The Results

Overall, the findings suggest that the current neglect of price seasonality and the inability of households to smooth their consumption fully across months within each year may be premature. Through econometric analysis of monthly food price series across 196 locations in seven countries during 2000–12, it is shown that:

• Averaging across food crops, regular seasonality appears to contribute around 14 percent of overall food price volatility in the seven countries examined, with wholesale prices during the peak months estimated to be 28 percent higher than those during the troughs.
• While some seasonality in food prices is natural given storage costs, the levels observed in the domestic markets of the study countries in this paper are two (maize) to three (rice) times higher than those in the international markets.
• There is a strong negative association between price seasonality and fluctuations in both food and non-food consumption within a given year. This indicates that a large proportion of African households have a limited ability to smooth consumption, and that there are good indications
• that such fluctuations may partly follow from an excessive seasonal behavior of staple prices. 

Policy and Research Implications:

1. The burgeoning literature on food price volatility, much of which focuses on financial and energy market influences on food prices, has largely neglected the more prosaic deterministic seasonal factors most immediately obvious throughout Africa. These could be reduced through better access to financial markets for households, more secure storage at village level, a reduction in transport costs, and increased intra-African food trade.
2. Turning to methodology, poverty measurement is likely to be sensitive to seasonal issues. This should be taken into account in survey design since a sample which is nationally random may fail to be seasonally random.
3. While indicating appreciable welfare gains, the results on consumption are based on limited data and are suggestive rather than conclusive. Future work will bring in further survey waves but may also extend to a wider range of welfare indicators, including indicators of longer term impacts such as child growth and nutrition.