There is wide recognition that the recurrent food crises in southern Africa are largely an outcome of growing poverty and vulnerability, compounded by an increasingly uncertain and complex economic environment. In addition, recurrent natural disasters, such as droughts and floods, the erosion of household assets, reduced crop production, exacerbated by the high prevalence of HIV/AIDS across the region, has resulted in extremely high levels of vulnerability across the region.

To respond to this complex situation, SADC recognizes the need to develop a long-term strategy that is cost effective, minimizes risks, and builds the basic foundations for long-term growth. The establishment of a functional SADC Disaster Preparedness Strategy Framework would contribute to enhancing capacity for timely delivery of food supplies to affected populations in emergencies and minimizing disruptions on longer-term agricultural growth and development.

The SADC Disaster Preparedness Strategy Framework is built on the following three closely linked components:

1. An Early Warning and Monitoring component to alert Member States of impending disasters as well as identify and monitor pending emergencies, 

2. Vulnerability Monitoring systems that in the short-term, identify populations and areas most at risk, and in the long-term, monitor livelihoods, vulnerability and poverty mapping and recommend programmes and initiatives linked to poverty reduction, and 

3. A Regional Food Reserve Facility that allows SADC to respond better to food emergencies, that includes an optimal balance between physical and financial reserves as well as national and regional roles and responsibilities for stocking/de-stocking the reserve.

The SADC Secretariat is focusing on developing the third component – Regional Food Reserve Facility, which is considered more as a key component of an integrated Regional Food Reserve System that takes into account linkages with the other components of the Disaster Preparedness Strategy Framework as well as other key food security policies within the SADC Region.

To this end, the SADC Secretariat is, before the end of 2006, engaging a firm of consultants to carry out consultancy services for the establishment of a Regional Food Reserve Facility. In particular, the consultants are to

i) develop a Framework for the Management and Technical Operation of the Regional Food Reserve Facility, and

ii) draft a Memorandum of Understanding (MOU) which elaborates the legal arrangements and outlines specific roles and responsibilities of Member States in the governance and implementation of the Regional Food Reserve Facility.

2 Regional Food Reserve Facility

The need to establish a SADC Regional Food Reserve System has been debated since the 1980s without a convergence on the optimal format of such a system. Following recent food crises in the region, in August 2001, SADC Ministers of Agriculture and Natural Resources agreed that the Food Reserve proposal should be re-visited, with a shift in thinking from national self-sufficiency to a trade-based regional approach that includes both a physical reserve and a financial facility.

The SADC Secretariat in 2003 sought support from the World Bank to design a Regional Food Reserve Facility. As an initial step, the Secretariat requested the World Bank to undertake short case-studies between February and April 2004 in Malawi, Tanzania and Zambia to determine the nature, level and modality of a possible Strategic Food Reserve Facility, drawing on experiences from other regions of the world.

The Secretariat also collaborated very strongly with NEPAD when it commissioned a study in 2004 that reviewed experiences with food reserve systems in a sample of eight countries representative of the Sahel, East and Southern Africa and the Horn of Africa and drew lessons from these experiences that could enhance the effectiveness of existing and future national food reserve systems in SADC.

Finally, the May 2004 Extra-Ordinary Summit on Agriculture and Food Security stressed the importance of disaster preparedness to cope with natural calamities and the Final Declaration instructed the SADC Secretariat to consider the establishment of a Regional Food Reserve Facility and supported the World Bank study.

The World Bank case studies in Malawi, Tanzania and Zambia looked at the following three issues:

- Establishing a Strategic Food Reserve Facility, (over a period of three years based on the findings of the design phase), that allows SADC to respond better to food emergencies, with its optimal level stocks, rules of stocking/de-stocking, strategies to financing it;

- Strengthening Information Systems and building capacity in Member States for forecasting and mitigation of adverse effects of natural disasters, such as drought. The Secretariat is currently developing an Agricultural Information Management System (AIMS) which includes integration and strengthening of existing systems.

- A Risk Insurance Instrument that identifies the risk management strategy and safety-net support and strategies for financing it. Consideration was given to adapting grain futures trading approach and other market guarantee schemes for producers. The presence of a food commodity exchange in South Africa was considered as having potential in providing risk insurance and fostering greater inter-regional trade.

Results of the World Bank and NEPAD case studies were reviewed at a regional workshop in July 2004 where it was agreed to continue with the pilot studies based on the Weather-Based Risk Insurance Mechanism in Malawi and Zambia. The workshop participants supported and adopted the NEPAD study results as the basis for establishing or strengthening food reserve systems in SADC.

The study provided a clear distinction between the role of national systems and the complementary role that could be played by regional bodies such as the SADC Secretariat. Some of the key issues identified in the NEPAD study to ensure a functional food reserve system include:

· Need for clarity of objectives and clear linkages to agriculture, food-security, and trade policies, three primary objectives being:

o Price stabilization for the benefit of producers and consumers,

o Support for national safety net programmes, and

o Support for emergency-relief programmes,

· Need for clarity of management and accounting procedures for physical reserves,

· Clearly defined management authority and decision-making procedures for physical reserves,

· Enhanced food security information systems and early warning,

· Adequate transport, storage and communications infrastructure,

· Clearly articulated costs and funding arrangements.

Lessons were also drawn from another study by FAO presented at the FAO’s 2004 Africa Regional Conference that highlighted the high cost and logistical constraints associated with a physical regional reserve and made recommendations for key policy issues to consider, including:

· Application of an integrated food security reserve system approach,

· Development of regional food security networks within natural trading areas or market sheds.

· Maximization of reliance on local production for supplying local markets and safety net programmes.

The main development objective is to establish an effective Regional Food Reserve Facility aimed at preventing, better anticipating and preparing for future adverse impacts and shocks to food security in a manner that will minimize disruptions on longer-term agricultural growth and development for the region.

Specific activities will be undertaken under the following areas, with close coordination between them. The activities include ensuring a consultative process with Member States as well as enhancing the necessary skills and support that will ensure sustainability of a Regional Food Reserve Facility. 

(a) Coordination of National Stocks (Collective Food Stockpiling): 

Based on a thorough review of the current literature and various case studies, extract key issues of importance in the context of SADC, and develop a draft framework for an integrated Regional Food Reserve Facility, including: 

· Clearly defined objectives with linkages to appropriate agriculture, food-security, and trade policies, especially with regards to:

o Price stabilization for the benefit of producers and consumers,

o Support to national safety net programmes, and

o Support to emergency-relief programmes,

· Management and accounting procedures for physical and financial reserves,

· Clearly defined management authority and decision-making procedures,

· Adequacy of transport, storage and communications infrastructure.

In addition, this draft framework should provide specific recommendations regarding:

co-ordination of national stocks with provisions to keep a specific percentage over and above the national needs to meet regional commitments;

mutual assistance during emergencies, including provision of food or cash grants, currency or food loans, sale of food to the affected country; and assistance in providing transport facilities,

establishing other modalities, such as crop or price insurance schemes, and use of futures markets. 

(b) Strengthening Information systems and building capacity for forecasting: 

Develop and implement capacity building and training to help build awareness and ensure sustainability of the food reserve system. The draft framework developed above will require a consultative process with Member States - through a regional workshop - to ensure Member States are in agreement with the proposed system and that it is adequately adapted to individual country situations. 

Designing an efficient system to collect, store and process such data to regularly produce and disseminate information on food emergency risk among Member States. 

(c) MOU 

Draft an MOU that elaborates the legal arrangements within and between Member States and outlines specific roles and responsibilities to ensure successful implementation of the food reserve system. 

Develop strategies and projects that are linked with the other key components of the Disaster Preparedness Framework. As stated above, the Regional Food Reserve Facility is only one component of the overall Disaster Preparedness Framework. Therefore, rather than develop this component in isolation, joint projects and programmes will be developed to design more effective preparedness plans that are linked to longer-term development issues.

Draft MOU for managing the food reserve system finalized and ready for consideration and approval by Member States.

Proposals developed to support and link the Regional Food Reserve Facility in the context of the broader Disaster Preparedness Strategy Framework and other programmes. 

ii) Beneficiaries 

The Regional Food Reserve Facility is expected to ensure adequate levels of grain/funds for mitigation against future food crisis in SADC region. In the short term this will benefit the most vulnerable people in the Member States as well as ensure longer-term stability in agriculture growth and poverty alleviation in SADC. 

Effective capacity for managing the Regional Food Reserve Facility should lead to better planning and implementation of food security strategies and capacity to ably and efficiently manage climatic, famine and other disasters. The main risk is that an effective system will depend on the cooperation of all Member States to ensure adherence to the framework and MOU that is adopted. However, this risk is seen as low, as this proposal is based on priority directives from the Member States.

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