By Wario Malicha
Governance and Economic Analyst
Economic Timepiece Associates, ETA
The recent crisis in food prices, which has affected millions of families throughout Kenya, has also brought into limelight the need for the government machinery to strengthen their safety net systems to ensure that the hike in food cost does not elicit an increase in poverty rates.
Policy actions differed widely among countries, and were largely contingent on local scenarios and history. Kenya is a country under siegefrom the enactment of its ad hoc policies over the last five years.
Observations have shown that such impromptu policy mechanisms lead to high inflation rates and backward economic growth which in turn affect the living standards of the middle class and the have-nots and exerts pressure on the investors.
Although some of the policy makers and other government think-tanks attribute the spike increase in food prices to extreme weather events but my argument is contrary to that. My perspective is pivoted on the premise that increase in food prices fluctuations is due to laxity on the government to enact sound and effective public policy measures and trade policies.
The design and implementation of public policy interventions should be considered within a context-specific framework. The following can be policy recommendations that are likely to be relevant to the current policy crises in Kenya.
– Moderating food prices fluctuations through reduce import tariff, release of grain stock, removal of value added tax on food and increase export restrictions. v Consumer food subsidies- compensating selected group of consumers for increased food prices through targeted transfers.
-Reduction of fiduciary costs of short-term interventions-food and fertilizers prices and other compensatory measures.
-v Evidenced based policy design and implementation- strengthening the reliability on the policy options and expected effect on each of the various stakeholders groups.
– Understanding of the global shift in demand-supply scenarios e.g high prices of energy, climate change etc.
The members of nation assembly do not have the sole power to change the price of food just by enacting overnight policy instruments. The price hike is solely the work of invisible hands of DD-SS movements. Lack of knowledge of what constitutes effective policy options in the developing countries is leading the country into what I would term as ‘economic abyss’.
Recovering from this situation is not matter of chitchat but rather getting down to the real nitty-gritty of what entails and comprise of each policy mechanism for specific sector
recommendations. This can’t be done without taking into account the histories of previous policy scenarios of the sector under considerations.
This article solely represents the opinions of the author and not Marsabit Time’s editorial policy.